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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, 1975-91, (Bulletin
2389); a chapter in the BLS Handbook of Methods (Bulletin 2285), "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.0. Box 2145, Chicago, Illinois 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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N CWS United States
_ Department 6
of Labor Y

Bureau of Labor Statistics Washington, D.C. 20212

Technical, historical contact: USDL: 92-471
Wayne Shelly (202) 606-6199

TRANSMISSION OF MATERIAL IN
Media contact: THIS RELEASE IS EMBARGOED
Kathryn Hoyle (202) 523-1913 UNTIL 8:30 A.M. (EDT),

TUESDAY, JULY 28, -1992

EMPLOYMENT COST INDEX - JUNE 1992

The Employment Cost Index (ECI) increased 0.6 percent before seasonal
adjustment in the 3 months ended in June 1992, the U.S. Department of Labor's Bureau
of Labor Statistics reported today. The June 1992 ECI level of 114.2 (June
1989=100) was 3.6 percent higher than the index in June 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, the ECI rose 0.8 percent in the March-June 1992
quarter, about the same as the rise in the December 1991-March 1992 quarter. The
quarterly increase in wages and salaries was 0.6, also about the same as in the
previous quarter. Benefit costs rose 1.1 percent in March-June 1992, their smallest
quarterly increase since 1987.

Table A. Percent changes in ECI for civilian workers

Seasonally adjusted Unadjusted

Compensation 3-months ended 12-months
component 1990 1991 1992 ended

; Sep. Dec. | Mar.” June Sep. Dec. | Mar. June | June 1992
Compensation costs..| 1.1 1.0 1.1 1.3 0.8 6.9 0.9 0.8 3.6
Wages and salaries.| 1.0 0.9 1.1 0.9 0.6 0.9 0.7 0.6 2.9
Benefit costs......) 1.5 1.5 1.4 1.5 1.6 1.2 1.300 1.1 5.3

Over-the-year changes, unadjusted

Compensation costs (not seasonally adjusted) increased 3.6 percent for the year
ended in June 1992, down from 4.0 percent for the year ended. in March 1992. This
pattern held for private industry workers (3.7 percent, down from 4.2 percent), but
not for State and local government workers (3.3 percent, up from 3.0 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 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 4,500 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.


ee ee ee
or MNO ek OH

or UO FT DY DO

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

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

ee es
oF NO ek OH

or MUO FAD O O



2

The acceleration in the rate of compensation growth for State and local
government workers primarily reflected benefit cost increases. Several
jurisdictions that last year decreased or temporarily suspended payments to employee
retirement funds, restored part of those payments. In most of these cases, however,
the payments were less than 1990 levels.

The June 1991-92 deceleration in the rate of compensation cost increase for
private industry workers reflected a slowdown of gains in both wages and salaries
(3.0 percent, down from 3.4 percent in March 1991-1992) and benefit costs (5.5
percent, down from 6.3 percent). Benefit cost increases were held down by a decline
in employers' pension costs along with a slowdown in the rate of increase in health
insurance and workers' compensation costs.

For the year ended June 1992, compensation gains in private industry were
higher in goods-producing industries (4.1 percent) than in service-producing
industries (3.5 percent). In goods-producing industriés, compensation gains ranged
from 2.9 percent in construction to 4.5 percent in durable goods manufacturing. In
service-producing industries, the increases varied from 1.2 percent in finance,
insurance, and real estate to 4.8 percent in private colleges and universities and
health services. .

June 1991-92 compensation cost increases in private industry were about the
same for blue-collar workers (4.0 percent) and service workers (3.9 percent)--and
were higher than those for white-collar workers (3.5 percent). Compensation gains
for blue-collar occupational groups ranged from 3.5 percent for transportation and
material moving occupations to 4.8 percent for machine operators, assemblers, and
inspectors. Increases for white-collar occupations varied from 2.2 percent for
sales occupations to 4.8 percent for professional specialty and technical
occupations.

Compensation cost increases over the year ended June 1992 were higher for union
(4.8 percent) than for nonunion workers (3.4 percent). The pattern of higher union
gains held for both the goods-producing and service-producing industries. Until
about a year ago, nonunion increases had exceeded those for union workers almost
without exception for nearly a decade.

PIII IR III TAI II IIIA IAI III IIA I IIIS ISI III SAIS III III I III ISIS III I IIIA

This release includes, for the first time, wage and salary
and compensation cost changes for workers in private nursing
homes.

The agreement with the Aerospace Industries Association to
provide special indexes for the aerospace industries will be
phased out in September 1992. Indexes for Aircraft Parts and
Auxiliary Equipment and for Guided Missiles and Space Vehicles
have been discontinued with this release. The remaining
aerospace industry indexes will be discontinued after the

September 1992 release.
GAIA AIA AAAI IAAI AI AI IAI ASIII IIIS AIS AIA SAIS ASIII III ISA A IAI AIAI IAS.

a ee 2
ee ee eo

ECI data ” September 1992 will be released on Tuesday, October 27, 1992, at 8:30
A.M. (EST).


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