Straight-time hourly earnings are used in the Employment Cost Index as a
Proxy for a measure of wage and salary rates. All occupational wage and salary
data are collected as, or converted into, straight-time hourly earnings for the
survey occupations. Straight-time earnings are total earnings before deductions,
excluding premium payments for overtime and for work on weekends and holidays and
shift differentials. Production bonuses and cost-of-living allowances are included
in straight-time earnings. Data pertain to the pay period including the 12th of
the survey months of March, June, September, and December.

The Index occupations conform to the Bureau of Census occupational classifica~
tion system which consists of 441 occupations grouped into 12 broad occupational
categories. Nine of these groups are now in the scope of the survey. These major
occupational groups are:

Professional and technical workers

These occupations are concerned with the theoretical or practical aspects of
such fields as art, science, engineering, education, medicine, law, and business
relations. Included are such highly trained personnel as teachers, dentists,
accountants, attorneys, chemists, engineers, physicians, and the clergy. Computer
specialists, political scientists, writers, artists, and entertainers are also in
this category.

Managers and administrators

This group includes those positions charged with the direction and responsibility

of a given activity. Top and middle management, and all other supervisory personnel

above first-line supervisory level, are included.


data do not correspond to actual average pay levels at any point in time. However,
because of interest expressed in the statistical design of this series, average pay
levels have been computed for the overall and component published series for
September 1975. These levels are available upon request.

In addition to the industries shown in the table, published statistics cover
mining and finance, insurance, and real estate, but insufficient data preclude separate.
publication of these results. Series for which statistics are published comprise over
90 percent of the total sample. The relative importance of the industrial and other
component submeasures, as of December 1977, and estimates of relative sampling errors
are also available on request.

The regional coverage is as follows: Northeast--Connecticut, Maine,
Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and
Vermont; South--Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia,
Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, :
Tennessee, Texas, Virginia, and West Virginia; North Central--Illinois, Indiana,

Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio,
South Dakota, and Wisconsin; West--Arizona, California, Colorado, Idaho, Montana, |
Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming.

A description of the survey design is provided in the chapter on the Employment
Cost Index in the BLS "Handbook of Methods", BLS Bulletin 1910.

Releases are scheduled for.February, May, August, and November--2 months
after each quarter. Statistics in these releases pertain to the preceding quarter
and the 12-month period ended in that quarter. The Employment Cost Index statistical
series, from September 1975, is available in Current Wage Developments, a BLS

monthly periodical.


Description of Employment Cost Index

The Employment Cost Index is designed to measure changes in the rate of
compensation of a standardized mix of labor services, much like the fixed weight
market basket of the Consumer Price Index. The Index is a measure of change in the
price of labor, not of the level of well-being of workers.

The scope of the measure will be expanded to total compensation, covering
employee benefits as well as wages and salaries, and to broader industrial coverage,
resulting in an index of changes in all compensation. Publication of compensation
statistics including employee benefits is scheduled to begin in 1979, followed by
statistics for the total civilian economy in subsequent years. A long-term program
objective is to increase the amount of detail for industries, occupations, and
areas and the frequency of publication. Seasonally adjusted statistics will become
available as soon as sufficient experience is accumulated to compute adjustment
factors.

The Employment Cost Index statistics are now computed from over 9,000 occupa-
tional wage and salary observations collected quarterly from approximately 2,000
respondents representing, with certain exclusions, the occupational employment
composition of the private nonfarm economy. Each observation may cover from 1 to
several thousand workers. Data are collected covering nearly a half million employees.
Respondents in the quarterly survey are establishments or groups of establishments
comprising a reporting unit. Establishments of all sizes are within the scope of
the survey. The major exclusions are the self-employed, unpaid family workers,
private household employees, and workers in Alaska and Hawaii. Except for the self-
employed and unpaid family workers, these exclusions are temporary. It is intended

that agricultural employees will also eventually be within the scope of the survey.


Sales workers

These workers include sales clerks as weli as insurance and real estate
agents, stock and bond sales agents, and manufacturing sales representatives.
Clerical workers

Within this category are workers who type, operate computer and office
machines, keep records, take dictation, and deliver mail.
Craft_and kindred workers

Work activities in this group primarily involve fabricating, processing,
inspecting, or repairing material, products, or structural units. Included are
a variety of occupations such as carpenters, tool and die makers, instrument
makers, jewelers, electricians, and type-setters. Apprenticeship is usually a
prerequisite for entry into these occupations.

Operatives, except transport

Operatives in this grouping are engaged in such activities as assembling
goods in factories, operating or tending machinery, and photographic processing.
Occupations such as solderers, welders, meat cutters, and gas station attendants
are also included.

Transport equipment operatives

Truck, bus, and taxi drivers fall within this group.
Nonfarm laborers

Laborers move, lift, and carry materials and tools in work-places. These
include freight and material handlers, longshore workers, and

construction laborers.


United States
. News Department &}
of Labor

Bureau of Labor Statistics Washington, D.C. 20212

R. Schumann (202) 523-1548 USDL: 78-169
K. D. Hoyle (202) 523-1913 FOR RELEASE: 10:00 A.M. E.S.T.
: Home: 333-1384 Tuesday, March 7, 1978

EMPLOYMENT COST INDEX-~DECEMBER 1977

Wage and salary rates measured by the Employment Cost Index rose 1.7 percent
for the 3 months ended in December 1977, the Bureau of Labor Statistics of the U.S.
Department of Labor reported today. In the 12 months ended in December 1977, wage
and salary rates rose 7.0 percent. (See table.)

September 1977-December 1977

Smaller increases in the rate of pay in manufacturing, construction, and
services contributed to a decline in the rate of increase in the fourth quarter.
These smaller increases were partially offset by increasing rates of pay in wholesale
and retail trade, transportation and public utilities, and finance, insurance, and
real estate (not shown separately in the published statistics). The 1.4 percent
increase in construction, down from 1.8 percent in the third quarter, reflects the
seasonal pattern of collective bargaining which concentrates settlements and deferred.
increases in the spring and summer. In manufacturing, the industry with the most
influence on the overall index, the increase was 1.8 percent, down from 2.2 percent
in the third quarter. Workers in services experienced the lowest rate of increase,
0.7 percent, about the same as in the fourth quarter of 1976. In transportation and
public utilities, the fourth quarter increase was 2.1 percent, about the same as in
the third quarter, and was partially attributable to negotiated and deferred increases
for pilots in the airline industry. In wholesale and retail trade, the increase was

1.5 percent, up from the third quarter.


-7-

Service workers.

This group includes those who maintain law and order, and serve individuals in
institutional, commercial, and other establishments. Some of the occupations are
janitors, bartenders, waiters, dental assistants, practical nurses, flight attendants,
barbers, and police and fire fighters. Private household workers are excluded.

A complete listing of ECI occupations may be found in the "Employment Cost
Index--Occupation Classification System Manual,” Bureau of Labor Statistics, January
1975.

The published industry and occupational statistics do not pertain to mutually
exclusive groups of employments. Workers from all industry divisions may be represented
in a major occupational group; conversely, workers from all occupational groups may
be represented in a major industry division. For example, statistics for the industry
"Services" are based on occupational pay data for professionals, managers, clerical
workers, service workers, etc. Similarly, statistics for the occupational group
"Service workers" cover such workers as janitors, waiters, practical nurses, flight
attendants, and guards; these may be found in real estate, retail trade, transportation,
and other industries as well as services. ‘

The Employment Cost Index statistics, although computed from levels of occupational
Pay, are measures of change. The pay level data collected from sample reporting
units are weighted into occupational averages, by industry, using weights essentially
derived from a-1974 occupational employment survey. These industry pay averages are
aggregate. for index computation using fixed weights obtained from the 1970 decennial
census. Average pay levels for the overall measure and its components are not
explicitly calculated as part of the computational Process. Although pay levels can be

obtained by dividing the wage and salary aggregates by the fixed index weights, these


Among the occupations, pay increased at a lower rate for service workers, 1.0
Percent, than for white~ and blue-collar workers, whose pay rose 1.8 percent.
Managers and administrators had the smallest increase among white-collar workers for
the second consecutive quarter, while sales workers had the largest, reflecting
seasonal earnings variation among stock and bond brokers. Among blue-collar workers,
operatives (except transport) had the largest increase, 2.2 percent, while transport
equipment operatives had the smallest at 1.0 percent. .

For the third consecutive quarter, pay for workers in occupations covered by
collective bargaining agreements advanced at a faster rate than pay for workers not
covered. Pay for workers in metropolitan areas advanced at a faster rate than for
workers outside of metropolitan areas, a reversal of the previous 3 quarters.
Workers in the North Central region recorded the largest gains, 2.4 percent, while
workers in the South had the smallest, 1.2 percent.

December 1976-December 1977

Over the 12 months ended in December 1977, pay increases for blue-collar
workers outpaced those for both white-collar and service workers. Among the white-
collar occupations, managers and administrators had the smallest 12 month increase _
for the third consecutive quarter.

Pay increases for workers in manufacturing and transportation and public
utilities exceeded the national average, as did the pay increases for workers in
occupations covered by collective bargaining agreements. During this period, pay
rates increased the most for workers in the West and the least for workers in the

Northeast,


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