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18

Fixed employment weights are used each quarter to calculate the most aggregate
indexes--civilian, private, and state and local governments. These fixed weights
are also used to derive all of the industry and occupation series indexes. Since
June 1986, employment counts from the 1980 Census have been used as weights. Prior
to June 1986, employment counts from the 1970 Census were used.

For the series based on bargaining status, region, or area size, employment
data are not available from the Census. The employment weights are reallocated
within these series each quarter based on the current ECI sample. The indexes for
these series, consequently, are not strictly comparable to those for the aggregate,
industry, and occupation series. A fuller explanation of the calculation of index
numbers appears in an article, "Estimation procedures for the Employment Cost
Index," in the May 1982 issue of the Monthly Labor Review.

Beginning with the March 1990 ECI release, indexes were rebased to June
1989=100. A description of the rebasing is included in the article “Employment Cost
Index Rebased to June 1989," in the April 1990 issue of the Monthly Labor Review.

Beginning with the December 1990 ECI release, seasonally adjusted data are
available for selected ECI series. Seasonal adjustment removes the effects of
events that follow a more or less regular pattern each year. These adjustments make
nonseasonal patterns easier to spot.

The costs per hour worked of compensation components, based on March 1992 data
from the ECI, are published in a separate news release titled "Employer Costs for
Employee Compensation - March 1992." A description of the cost levels is provided
in the article "Analyzing employers' costs for wages, salaries, and benefits" in the
October 1987 issue of the Monthly Labor Review. The cost levels, which are
published annually in mid-June, are calculated with current employment weights,
rather than the fixed 1980 Census weights used in computing the ECI. Therefore,
year-to-year changes in the cost levels will usually differ from those in the ECI.

More detailed information on the ECI is available in several sources. These
include an annual bulletin, Employment Cost Indexes and Levels, 1975-92, (Bulletin
2413); a chapter in the BLS Handbook of Methods (Bulletin 2414), "The Employment
Cost Index;" and several articles published in the Monthly Labor Review. The annual
bulletin is available from the Superintendent of Documents, U.S. Government Printing
Office, Washington, D.C. 20402, or Bureau of Labor Statistics, Publications Sales
Center, P.O. Box 2145, Chicago, I1linois 60690. Reprints of the articles plus other
descriptive pieces and a complete historical listing are available upon request.

ECI historical data are also available on data diskettes.

Information in this release will be made available to sensory impaired
individuals upon request. Voice phone: 202-606-7828, Telecommunications Device for
the Deaf (TDD) phone: 202-606-5897, TDD Message Referral Phone Number: 1-800-326-
2577.


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6


United States
Department

of Labor

Washington, D.C. 20212

News

Bureau of Labor Statistics

oY

Technical, historical contact:
Wayne Shelly (202) 606-6199

USDL: 93-28

TRANSMISSION OF MATERIAL IN
THIS RELEASE IS EMBARGOED
UNTIL 8:30 A.M. (EST),
TUESDAY, JANUARY 26, 1993

Media contact:
Kathryn Hoyle (202) 606-5902

EMPLOYMENT COST INDEX - DECEMBER 1992

The Employment Cost Index (ECI) increased 0.6 percent before seasonal adjustment
in the 3 months ended December 1992, the U.S. Department of Labor's Bureau of Labor
Statistics reported today. The December 1992 ECI level of 116.1 (June 1989=100) was
3.5 percent higher than in December 1991. The ECI measures changes in compensation
costs, including wages, salaries, and employer costs for employee benefits.

Quarterly changes, seasonally adjusted

On a seasonally adjusted basis, ECI compensation costs rose 0.9 percent in the
September-December 1992 period, the same as in the June-September 1992 period. (See
box below.) ECI wages and salaries rose 0.8 percent in the September-December 1992
period, above the 0.5 percent increase for June-September but in line with quarterly
increases over the last few years. Benefit costs rose 1.2 percent in September-
December 1992, below the 1.5 percent change for June-September and also below most
quarterly increases over the last few years. (See table A.)

Table A. Percent changes in Employment Cost Index for civilian workers
Seasonally adjusted Unadjusted
Compensation 3-months ended 12-months
component 1997 1992 ended
Mar. June Sep. Dec. | Mar. June Sep. Dec. Dec. 1992
Compensation costs.. 1.1 1.2 0.9 0.9] 1.0 0.7. 0.9 0.9 3.5
Wages and salaries. 1.0 1.0 0.7 0.7] 0.8 0.6 0.5 0.8 ' 2.7
Benefit costs...... | 1.4 1.6 1.4 12] 13 12 15 12° 5.3

FI IK KI IKI III IKI II IAAI III SII ISI IIS SAI II SII III III III ISI I III III III IAA

This release includes annual revisions in seasonally adjusted
Employment Cost Indexes for compensation costs, wages and salaries,
and benefit costs. Seasonally adjusted indexes for 1988-92 were
revised and are available upon request. The seasonal factors for
1992 will be published in the March 1993 issue of the BLS periodical,

Compensation and Working Conditions.
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17
EXPLANATORY NOTE

The Employment Cost Index (ECI) is a measure of the change in the cost of
labor, free from the influence of employment shifts among occupations and
industries. The compensation series includes changes in wages and salaries and
employer costs for employee benefits. The wage and salary series and the benefit
cost series provide the change for the two components of compensation.

Wages and salaries are defined as the hourly straight-time wage rate or, for
workers not paid on an hourly basis, straight-time earnings divided by the
corresponding hours. Straight-time wage and salary rates are total earnings before
payroll deductions, excluding premium pay for overtime and for work on weekends and
holidays, shift differentials, and nonproduction bonuses such as lump-sum payments
provided in lieu of wage increases. Production bonuses, incentive earnings,
commission payments, and cost-of-living adjustments are included in straight-time
wage and salary rates.

Benefits covered by the ECI are: Paid leave (vacations, holidays, sick leave,
and other leave); supplemental pay (premium pay for overtime, shift differentials,
and nonproduction bonuses such as lump-sum payments provided in lieu of wage
increases); insurance benefits (life, health, and sickness and accident); retirement
and savings benefits (pension and other retirement plans and savings and thrift
plans); legally required benefits (social security, railroad retirement and
supplemental retirement, railroad unemployment insurance, Federal and state
unemployment insurance, workers' compensation, and other legally required benefits
such as state temporary disability); and other benefits (severance pay and
supplemental unemployment plans).

The ECI provides data for the civilian economy, which includes the total
private economy and the public sector--excluding farms, households, and the Federal
government. The private industry series and the State and local government series
provide data for the two sectors separately.

Each quarter, straight-time average hourly wage and salary rates and benefit
cost data (cents-per-hour-worked) are collected from a probability sample of over
23,000 occupations within over 4,600 sample establishments in private industry and
about 7,000 occupations within 1,000 sample establishments in state and local
governments. Data are collected for the pay period including the 12th day of the
survey months of March, June, September, and December.

The sample establishments are classified in industry categories based on the
1987 Standard Industrial Classification (SIC), as defined by the U.S. Office of
Management and Budget.

Within an establishment, specific job categories are selected to represent
broader occupational definitions. Since June 1986, the jobs have been classified
according to definitions used in the 1980 Census. Prior to June 1986, they were
classified according to the 1970 Census. Differences between the two classification
systems are slight, as indicated in the article "Introducing new weights for the
Employment Cost Index," in the June 1985 issue of the Monthly Labor Review.


3

The schedule for the remainder of 1993 is as follows:

Reference Month Release Date

June 1993 July 27, 1993
September 1993 October 26, 1993
December 1993 January 25, 1994

or MVD O PF AANY OOO
T

Changes in wages and salaries and benefit costs, private industry, 1980-92
%-month percent change

Wages and salaries

L

1 1 ot L n L L L 1

1980 1981

1982 1983 1984 1985 1986 1987 1988 1989 1990 1991

1992

ie-month percent change 15

or NO Rh ND YD O



Over-the-year changes, unadjusted

Compensation cost increases (not seasonally adjusted) averaged 3.5 percent for the
year ended December 1992, down from 4.3 percent for the year ended December 1991. This
pattern held for private industry workers (3.5 percent, down from 4.4 percent) but not
for State and local government workers, whose gains were about the same as a year
earlier (3.7 percent and 3.6 percent, respectively).

For private industry workers in the year ended December 1992, a slowdown occurred
in both wage and salary increases (2.6 percent, down from 3.7 percent) and benefit cost
gains (5.2 percent, down from 6.2 percent). (See chart.)

For State and local government workers in the year ended December 1992, a slowdown
in wage and salary increases (3.0 percent, down from 3.5 percent) about offset an
acceleration in benefit cost gains (5.4 percent, up from 3.9 percent). Benefit cost
increases were boosted by gains in health insurance, pensions, bonuses, and workers'
compensation costs.

For the year ended in December 1992, compensation cost increases in private
industry were higher for goods-producing industries than for service-producing
industries (3.8 percent compared with 3.2 percent). Compensation cost gains in goods-
producing industries ranged from 3.5 percent in construction to 4.1 percent in durable
goods manufacturing. Within the service-producing industries, compensation cost
increases varied from 1.2 percent in finance, insurance, and real estate to 4.7 percent
in hospitals.

Over the year, 1992 compensation cost increases in private industry were higher
for blue-collar workers (3.6 percent) than for either white-collar (3.3 percent) or
service workers (3.1 percent). Blue-collar gains varied from 3.5 percent for handlers,
equipment cleaners, helpers, and laborers to 3.8 percent for machine operators,
assemblers, and inspectors. White-collar compensation cost increases ranged from 2.0
for executive, administrative, and managerial occupations to 4.5 percent for
professional specialty and technical occupations.

Compensation cost gains over the year ended December 1992 were higher for union
(4.3 percent) than for nonunion workers (3.2 percent). This pattern held for both the
goods-producing and service-producing industries.

FEI I I III TI II III II IIR III I IIIA AKITA III IASI I IAI SISSIES ISAS ISIS SASS SIA SSSI SII IS IIIA

* Beginning with this release, indexes for benefit costs are available for union *
* and for nonunion workers. (See table 10.) Historical data are available upon *
* request. x
* *
* Bue to a change in the agreement with the Aerospace Industries Association to *
* provide special indexes for the aerospace industries, indexes for aircraft *
* engines and parts manufacturing have been discontinued.

KKK KK EKKIKEK KEE KKK KKK AE KEKE KKK KKK HII A KIKI IKI IAAI IIASA SI SSSA

ECI data for March 1993 will be released on Tuesday, April 27, 1993, at 8:30 A.M. (EDT)


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