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NOILYSNAdWOO


Data are collected tor the pay period including the 12th day ot the survey months ot March,
June, September, and December. ECI statistics are neither annualized nor adjusted tor seasonal
intluences. For example, the 1.8 percent change in wage and salary rates tor "private industry
workers" in September 1982 (table 3) is the actual percent change in straight-time average
hourly earnings trom the pay period including the 12th day ot June 1982 to the comparable pay
period in September 1982.

More detailed intormation on the ECI is available in several articles and publications.
These include a chapter in the BLS Handbook ot Methods (Bulletin 1910), "The Employment Cost
Index." Two articles also appeared in the Monthly Labor Review: "Employment Cost Index: a
measure ot change in the ‘price ot labor'," July 1975; and "How benetits will be incorporated
into the Employment Cost Index," January 1978. Reprints ot these articles plus several other
descriptive pieces are available upon request.


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United States
News:
of Labor : ‘

Bureau of Labor Statistics Washington, D.C. 20212

Judith Finger: (202) 523-1165 USDL: 82-415

Kathryn Hoyle: (202) 523-1913, FOR RELEASE: 10:00 A.M. E.S.T.
. Wednesday, November 10, 1982

EMPLOYMENT COST INDEX - SEPTEMBER 1982

The Employment Cost Index (ECI), which measures changes in employer compensation costs,
increased 2.4 percent in the 3 months ended in September 1982, the U.S. Department of Labor's
Bureau of Labor Statistics reported today. Wages and salaries alone increased 2.2 percent,

The index stood at 110.1 for compensation costs (wages, salaries, and employer costs for
employee benefits), based on June 1981=100. The ECI covers private industry and State and local
government workers but excludes farm, household, and Federal government employees. The inden is
not seasonally adjusted.

The 2.4 percent change in compensation costs reflected the heavy concentration of wage and
benefit adjustments typical for State and local government workers in the third quarter. Com-
Pensation costs rose 4.6 percent in State and local governments from June-September 1982. This
was lower than the corresponding change of 5.3 percent in 1981. The slowdown in compensation
costs was evident in wages as well. Wages increased 4.4 percent for these workers in the third
quarter of 1982, compared with 5.0 percent a year earlier.

Wage increases for the 12 months ending in September 1982.were 8.1 percent for State and
local government workers. Similar increases were recorded for private sector workers with
comparable chatacteristics to those in State and local government. In private industry, for
example, wage increases for professional and technical workers averaged 8.2 percent and those
in service industries, 8.6 percent..

For private industry employees, rates of increase in compensation costs and wages decel-
erated substantially for the year ended in September 1982, 7.2 and 6.9 percent, compared with
10.0 and 9.1 percent a year earlier. The slowdown was particularly sharp in industries and
Secupations with relatively high unemployment. Construction industry wage gains dropped from
9.0 percent in September 1981 to 5.9 percent in September 1982.

In the manufacturing sector, 12-month percent changes in wages were 6.6 percent in the
September 1981-82 period, down from 9.1 percent in September 1981, .

Similarly, compensation cost increases for blue-collar workers over the year dropped more
sharply than those for white-collar workers. For the 12 months ended in September 1982, compen-
sation costs rose 6.7 percent for blue-collar and 7.6 percent for white-collar workers. A
year earlier, compensation costs increased 10.0 percent for both blue~ and white-collar workers.

Wages rose 6.1 percent for blue-collar workers in the September 1981-82 period, whereas
white-collar workers’ pay advanced 7.5 percent. A year ago, corresponding wage gains were
virtually the same--9.1 percent and 9.2 percent.

Compensation costs for union workers rose 7.9 percent in the year ended in September 1982,
contrasted to 10.9 percent a year ago. Slowdowns were also recorded for nonunion workers with
compensation costs advancing 6.7 percent in the year ended in September 1982--down from 9.6 per-
cent last year.


EXPLANATORY NOTE

The Employment Cost Index (BCI) is a quarterly measure of the change in the price ot labor,
free from the influence of employment shifts among occupations and industries. The ECI wage and
salary series is limited to changes in wage and salary rates, detined as straight-time average
hourly earnings. Straight-time earnings are total earnings betore payroll deductions, excluding
premium pay tor overtime, work on weekends and holidays, and shift differentials. Production
bonuses, incentive earnings, commission payments, and cost-of-living adjustments are included in

straight-time earnings, whereas nonproduction bonuses (such as Christmas or year-end bonuses)
are excluded. Also excluded are such items as payments-in-kind, tree room and board, and tlps.

The compensation series includes employer costs for employee benefits as well as wages and
salaries. Benefits covered by the ECI include:

Hours related benefits - Premium pay tor overtime and work on
weekends and holidays, paid holidays, paid vacations, paid
sick leave, and other paid leave;

Supplemental pay ~ Shift ditferentials, nonproduction bonuses,
severance pay, and supplemental unemployment plans;

Insurance benefits - Lite, health, and sickness and accident
msurance 5

Retirement and savings benetits - Pension and other retirement
plans and savings and thrift plans;

Legally required benefits - Social security, railroad retirement

and supplemental retirement, rallroad unemployment insurance,
Federal and State unemployment insurance, workers' compensation,
and other legally required benetits such as State temporary
disability insurance; and

Other benetits - Merchandise discounts in department stores

The ECI collects data tor both the private and public sectors, which are published
separately and also combined as the total civilian economy. The private sector Includes the
total private economy, excluding tarms and households. The public sector covers State and local
governments, but excludes the Federal government.

Each quarter, straight-time average hourly earnings and benefit cost data (cents—per-hour-
worked) are collected trom a probability sample ot about 10,000 occupations within 2,000 sample
establishments in the private sector and about 3,700 occupations within 750 sample establishments
in State and local governments.

Occupations were classitied according to detinitlons used in the 1970 Census. Within an
establishment, specitic job categories are selected to represent broader occupatlonal def initlons.
The sample establishments were classitied in industry categories based on the 1972 Standard
Industrial Classitication (SIC), as defined by the U.S. Office of Management and Budget. Within
the private sector sample, establishments are designated by a 2-digit SIC, whlle in State and
local governments, industrial categories vary trom a more specitic 3-diglt SIC such as elementary
and secondary schools to a broader major industry division such as public administration. Each
establishment is also classified by owmership--State, local, or private.

Fixed employment welghts trom the 1970 Census are used each quarter to calculate the most
aggregate indexes—civlilan, private, and State and local governments. These fixed welghts are
also used to derive all of the industry and occupation series Indexes. For the serles based on
bargaining status, region, or area size, however, employment data are not available from the
Census. The 1970 employment welghts are reallocated within these series each quarter based on
the current sample. The indexes tor these series, consequently, are not strictly comparable to
those tor the aggregate, industry, and occupation series, A fuller explanation ot the calcula~
tion ot index numbers appears in an article, "Estimation procedures tor the Employment Cost
Index," in the May 1982 issue of the Monthly Labor Review.


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