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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 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.0. 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, TOD Message Referral Phone Number: 1-800-326-
2577.


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6


United States eS
Department Y
; of Labor
Bureau of Labor Statistics Washington, D.C. 20212

Technical, historical contact: USDL: 92-686
Wayne Shelly (202) 606-6199
TRANSMISSION OF MATERIAL IN
Media contact: THIS RELEASE IS EMBARGOED
Kathryn Hoyle (202) 606-5902 UNTIL 8:30 A.M. (EST),
TUESDAY, OCTOBER. 27, 1992

EMPLOYMENT COST INDEX - SEPTEMBER 1992

The Employment Cost Index (ECI) increased 1.1 percent before seasonal adjustment
in the 3 months. ended in September 1992, the U.S. Department of Labor's Bureau of
Labor Statistics reported today. The September 1992 ECI level of 115.4 (June
1989=100) was 3.5 percent higher than the index in September 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, compensation costs as measured by the ECI rose
0.7 percent in the June-September 1992 period, about the same as. the 0.8 percent rise
in the previous 3-month period. A deceleration in the rate of wage and salary
increase (0.4 percent in June-September, down from 0.6 percent in March-June) was
about offset by an acceleration in the rate of benefit cost increase (1.5 percent, up
from 1.1 percent). .

Table A. Percent changes in ECI for civilian workers

Seasonally adjusted Unadjusted

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

Dec.| Mar. June Sep. Dec. | Mar. June Sep. { Sep. 1992
Compensation costs.. | 1.0 1.1 41.3 0.8 0.9 0.9 0.8 0.7 3.5
Wages and salaries. | 0.9 1.1 0.9 0.6 0.9 0.7 0.6 0.4 2.7
Benefit costs...... | 1.5 1.4 1.5 1.6 1.2 1.300 1.1 1.5 5.2

Over-the-year changes, unadjusted

Compensation costs (not seasonally adjusted) increased 3.5 percent for the year
ended in September 1992, about the same as the 3.6 percent gain for the year ended in
dune 1992. Compensation cost gains for private industry workers averaged 3.4 percent,
down from 3.7 percent, and for State and local government workers they averaged 3.5
percent, up from 3.3 percent. .


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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.


ra es
or NWO FO

or NUN OF HN ON DO

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

sere

Wages and salaries

1 forereren L 4 1 Pe L 1 1 n

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

BPR Pe ee
or NO AO

or VN WO FH DN DO



2

The acceleration in the rate of compensation growth for State and local
government workers primarily reflected benefit cost increases (5.1 percent in
September 1991-92, up from 4.3 percent in June 1991-92). The benefit cost gains were
boosted by higher payments for health insurance.

Compensation cost changes for State and local government workers are heavily
concentrated in the June-September period, whereas those for private industry workers
are spread throughout the year.

The slowdown in compensation cost increases for private industry workers (3.4
percent in September 1991-92, down from 3.7 percent in June 1991-92) reflected smaller
gains in both wages and salaries and benefit costs. Wages and salaries rose 2.7
percent in September 1991-92, down from 3.0 percent in June 1991-92. Corresponding
increases in benefit costs were 5.2 percent and 5.5 percent.

For the year ended September 1992, compensation cost increases in private
industry were higher in goods-producing industries (3.9 percent) than in service-
producing industries (3.1 percent). Compensation cost gains varied widely within both
the goods-producing and service-producing industries.

Over-the-year compensation cost increases in private industry were higher for
blue-collar workers (3.7 percent) than for either white-collar or service workers (3.3
and 3.5 percent, respectively). Compensation cost gains among blue-collar occupations
ranged from 3.4 percent for precision production, craft, and repair occupations to 4.1
percent for machine operators, assemblers, and inspectors. Within white-collar
occupations, compensation cost increases ranged from 1.8 percent for sales workers to
4.6 percent for professional specialty and technical occupations.

Compensation cost increases over the year ended September 1992 were higher for
union (4.6 percent) than for nonunion workers (3.1 percent). This pattern held in
both goods-producing and service-producing industries.

FRIAR ARIA IARI II IAAI IAAI AIA IIIA ISA IAI IIIS IIIS SII SII SISA IAIN ASIII IISA I ISSA ISIS IRIE

* The agreement with the Aerospace Industries Association to fund special *
* indexes for the aerospace industries has been modified. Indexes for *
* aircraft engines and parts manufacturing are being discontinued after this *

* release. Indexes for aircraft manufacturing will continue to be published. *
IKI IAI AIA IIA III AA AAA IAAI AAI AAI IIASA IAI AISI AI AI AIA IIA IIIA IRIE IIASA IIR.

ss data for December 1992 will be released on Tuesday, January 26, 1993, at 8:30 A.M.
EST)


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