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10

1970 Census Category

Managers and administrators
Professional and technical
workers

Sales workers

Clerical workers

Craft and kindred
workers

Operatives, except
transport

Transport equipment
operatives

Nonfarm laborers

Service workers

1980 Census Category

Executive, administrative,
managerial occupations

and
Professional specialty and
technical occupations

Sales occupations

Administrative support
occupations, including

clerical

Precision production, craft,
and repair occupations

Machine operators, assemblers,
and inspectors

Transportation and material
moving occupations

Handlers, equipment cleaners,
helpers, and laborers

Service occupations

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.

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 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.

More detailed information on the ECI is available in several articles
and publications. These inciude a chapter in the BLS Handbook of
Methods (Bulletin 2134-1), "The Employment Cost Index." Two articles
also appeared in the Monthly Labor Review: “Employment Cost Index: a
measure of change in the ‘price Of labor’," July 1975; and "How benefits
will be incorporated into the Employment Cost Index," January 1978.
Reprints of these articles plus several other descriptive pieces and a
complete historical listing of ECI data are available upon request.



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Saruvivs aNY S39¥M


9
EXPLANATORY NOTE

The Employment Cost Index (ECI) is a measure of the change in the price
of 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, defined as the hourly straight-time wage rate or,
for workers not paid on an hourly basis, 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, and shift differentials.
Production bonuses, incentive earnings, commission payments, and cost-
of-living adjustments are included in straight-time wage and salary
rates,

The compensation series includes employer costs for employee benefits as
well as wages and salaries. 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); 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, supplemental
unemployment plans, and merchandise discounts in department stores).

The ECI provides data for both the private and public sectors, which are
published spearately and also combined as the total civilian economy.
The private sector includes the total private economy, excluding farms
and households. The public sector covers state and local governments,
but excludes the Federal government.

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 about 15,000 occupations within 2,600 sample
establishments in private industry and about 3,500 occupations within
700 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. ECI statistics are neither
annualized nor adjusted for seasonal influences.

The sample establishments are classified in industry categories based on
the 1972 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. Beginning in June 1986, the
jobs are classified according to definitions used in the 1980 Census.
Prior to June 1986, they were classified according to the 1970 Census.
The titles of the published 1970 and 1980 occupation groups are listed
below for comparison. 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.


United States
Department “9
of Labor FF

Bureau of Labor Statistics Washington, D.C. 20212

Technical, historical contact: USDL: 87-39
Felicia Nathan (202) 523-1165

Media contact: (202) 523-1913 FOR RELEASE: 10:00 A.M. E.S.T.
Tuesday, January 27, 1987

EMPLOYMENT COST INDEX - DECEMBER 1986

The Employment Cost Index (ECI) increased 3.6 percent for the year ended
in December 1986, down from 4.3 percent for 1985, the U.S. Department of
Labor's Bureau of Labor Statistics reported today. The December 1986
ECI level stood at 133.8, based on June 1981=100. The ECI measures
changes in compensation costs: Wages, salaries, and employer costs for
employee benefits. It is not seasonally adjusted.

Compensation costs rose 0.6 percent during September-December 1986,
matching the gain in the same period a year ago. Compensation cost
increases in the fourth quarters of 1986 and 1985 were similar for both
private industry workers (0.6 percent in both periods) and state and
local government workers (0.8 percent and 0.7 percent, respectively).

Wages and salaries alone increased at a lower rate over the year ended
in December 1986 compared with a year ago (3.5 percent, down from 4.4
percent). This slowdown was concentrated in private industry where
workers had a 3.1 percent pay gain compared with 4.1 percent a year ago.
The increase for state and local government workers (5.4 percent) was
very similar to last year's increase (5.6 percent).

In the private sector, over-the-year pay gains in service-producing
industries (3.0 percent) were not much different from those in goods-

TORR ITOK ITOK RTO KIRK RIK RRR RK KR IR RAR KR RRRI RRR IKK ARR RAK KER

This release provides, for the first time, additional index
series that exclude sales workers from goods-producing
industries; service-producing industries; and finance,
insurance, and real estate. (See tables 3 and 4.) The new
series permit examination of compensation and wage trends,
free from the influence of sales workers pay which reflects
volatile changes in commission earnings.

Beginning in June 1986, ECI measures are based on fixed em-
ployment counts from the 1980 Census of’ Population rather
than from the 1970 Census. ECI estimates for the period
March 1985 to March 1986 were recalculated, using the 1980
Census weights. The recalculations, which are available
upon request, provide a one-year overlap for ECI estimates

based on 1970 and 1980 weights.

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2

producing industries (3.2 percent). This is in contrast to 1985, when
pay increases in the service-producing sector (4.7 percent) greatly
exceeded those in the goods-producing sector (3.5 percent). In 1986,
pay gains in service-producing industries were dampened by small
increases in transportation and public utilities, including agtual pay
decreases in airlines.

Pay gains in two other service-producing industries--finance, insurance,
and real estate and retail trade--also declined substantially from a
year ago, primarily due to lower earnings of sales workers, In finance,
insurance, and real estate, for example, pay increases dropped from

9.2 percent to 2.8 percent when sales workers are included, whereas pay
gains rose from 4.3 percent to 4.4 percent when these workers are
excluded. (Pay trends for sales workers in this industry are heavily
influenced by commission earnings of stock and bond brokers,)

Nonunion workers in private industry had wage and salary increases of
3.5 percent compared with 2.0 percent for union workers, the lowest
over-the-year pay gain recorded for union workers since this ECI series
began in 1976. Other record low wage and salary increases covered
workers in--

the Northeast region (3.9 percent)

white-collar occupations (3.4 percent)
service-producing industries (3.0 percent)

retail trade (2.1 percent)

transportation and public utilities (1.8 percent)
laborer occupations (1.3 percent)

ee

Although the Northeast region registered record low pay gains for the
year ended in December 1986, the 3.9 percent pay increase for that
region exceeded those of the other three regions. (See table 6.)

ECI data for March 1987 will be released on Tuesday, April 28, 1987, at
10:00 a.m. E.D.T.