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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 ECT release, indexes were tebased 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 1993 data from
the ECI, are published in a separate news release titled “Employer Costs for Employee
Compensation - March 1993." 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 ECL
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, Empl. -92, (Bulletin 2413); a chapter in the
@ulletin 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, Ilinois 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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_ United States
News 6
of Labor

Bureau of Labor Statistics Washington, D.C. 20212

Technical, historical contact: USDL: 93-295

Wayne Shelly (202) 606-6199

TRANSMISSION OF MATERIAL IN
Media contact: THIS RELEASE IS EMBARGOED UNTIL
Kathryn Hoyle (202) 606-5902 8:30 A.M. (EDT), TUESDAY, JULY 27, 1993

EMPLOYMENT COST INDEX - JUNE 1993

The Employment Cost Index (ECT) increased 0.7 percent before seasonal adjustment in the
3 months ended in June 1993, the U.S. Department of Labor's Bureau of Labor Statistics reported
today. The June 1993 ECI level of 118.3 June 1989=100) was 3.6 percent higher than the index in
June 1992. 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, the ECI rose 0.9 percent in the March-June 1993 quarter,
about the same as the rise in the December 1992-March 1993 quarter. The quarterly increase in

wages and salaries was 0.6 percent, also about the same as in the previous quarter. Benefit costs
rose 1.4 percent for the second consecutive quarter. (See table A.)

Table A. Percent changes in ECI for civilian workers

Seasonally adjusted Unadjusted.
Compensation 3-months ended. 12-months
component 1991 1992 1993 ended
Sep, Dec. Mar. June Sep, _ Dec. Mar. June _| June 1993
Compensation costs 09 09 10 07 09 O09 10 09 3.6
Wages and salaries 0.7 0.7 08 06 05 08 0.7 0.6 2.8
Benefit costs 1.4 12 13 12015 1.2 14 14 5.5

Compensation costs (not seasonally adjusted) increased 3.6 percent for the year ended in
June 1993, about the same as the gain for the year ended in March 1993. The changes were the
same for private industry workers, but differed slightly for state and local government workers (3.4
percent, down from 3.6 percent). (See tables 4 and 5.)


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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
Tates.

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.

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 us

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


12-month percent change

15

14

13

12

a

10

N @ ©

no

=

Changes in wages and salaries and benefit costs, private industry, 1980-93

2
=
= =

4,

vent

RS

Benefit costs

Wages and salaries

i 1 i i ! 1 1 4 J 1 1 i

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993

12-month percent change

15
14
13
12
WW

10



2

The slowdown in compensation cost increases for State and local government workers was
found for both wages and salaries (2.8 percent, down from 3.0 percent in the year ended March
1993) and benefit costs (4.4 percent, down from 4.8 percent). Benefit cost rises were dampened
because several jurisdictions decreased payments into employee retirement funds during December
1992-June 1993.

Benefit cost increases in private industry, in contrast, moved up (5.8 percent in June 1992-
93, up from 5.6 percent in March 1992-93). The higher rate of increase reflected growth in
nonproduction bonuses, workers’ compensation and State unemployment insurance costs, and
retirement plans, along with continued higher-than-average gains in employer costs for health
insurance.

For the year ended June 1993, compensation gains in private industry were higher in goods-
producing industries (4.2 percent) than in service-producing industries (3.3 percent). In goods-
producing industries, compensation gains ranged from 3.7 percent in nondurable goods
manufacturing to 4.5 percent in durable goods manufacturing. In service-producing industries, the
increases varied from 1.2 percent in insurance to 5.5 percent in banking, savings and loan, and
other credit agencies.

June 1992-93 compensation cost increases in private industry were higher for blue-collar
workers (3.8 percent) than for white-collar workers (3.6 percent) and service workers (3.3 percent).
Compensation gains for blue-collar occupational groups ranged from 3.4 percent for transportation
and material moving occupations to 4.0 percent for precision production, craft, and repair
occupations. Increases for white-collar occupations varied from 1.4 percent for sales occupations
to 4.2 percent for professional specialty and technical occupations and for administrative support,
including clerical occupations.

Compensation cost increases over the year ended June 1993 were higher for union (4.5
percent) than for nonunion workers (3.4 percent). The pattern of higher union gains held for both
the goods-producing and service-producing industries.

ECI data for September 1993 will be released on Tuesday, October 26, 1993, at 8:30 A.M. (EST).


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