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17

the aerospace industries, employment estimates for 4-digit industries such as
aircraft manufacturing were used.)

The employment data from these 2-digit groups (or 4-digit industries) were
distributed to major occupational groups (such as executives, administrators, and
managers or machine operators, assemblers, and inspectors), using the relative
importance of the groups as estimated by the ECI sample. Because the ECI
establishment sample is completely replaced, industry by industry, on a 4-year
cycle, the major occupational group employment counts from the ECI are, on
average, 2 to 3 years old. However, comparisons of cost level estimates showed
that differences of a few years in the age of the occupation data within
industries have a negligible impact on the estimates.

More information on the cost levels, including how the costs are calculated,
appears in the article “Analyzing employers' costs for wages, salaries, and bene-

fits" in the October 1987 issue of the Monthly Labor Review. The published cost
levels for March 1987 also appear in that article.

An annual bulletin is issued from the ECI program. The most recent bulletin,
Employment Cost.Indexes and Levels--1975-90 (Bulletin 2372), provides complete
historical data on ECI indexes and Tevels, and measures of the precision of the
two series through June 1990. It also includes an explanation of survey methods
and discussion of the published information. The next annual bulletin, to be
issued later this year, will include this material as well as complete historical
ECI data and measures of precision through June 1991.

The Relative Standard Errors

Because the data are based on a sample survey, the compensation cost esti-
mates probably differ from the figures that would be obtained from all units cov-
ered by the survey. To determine the precision of each cost level estimate, a
standard error was calculated.

The standard error defines a range (confidence interval) around the cost es-
timate. The approximate 95-percent confidence interval is the estimate plus or
minus twice the standard error. The standard error can also be expressed as a
percent of the cost estimate, or the relative standard error. For example, the
95-percent confidence interval for a cost estimate of $10 with a relative standard
error of 1.0 percent would be $10.00 plus or minus 2.0 percent (2 times 1.0 per-
cent) or $9.80 to.$10.20. We can be 95 percent confident that the "true" cost
falls within the confidence interval.

The relative standard error is shown with the cost estimates for some series
in the appendix. Relative standard errors for all published estimates are
available upon request. They also will appear in the 1991 ECI annual bulletin to
be published later this year. A fuller explanation of the relative standard
errors is provided in the article “Analyzing employers' costs for wages, salaries,
and benefits" in the October 1987 issue of the Monthly Labor Review.



. _ United States
Department ¢
P of Labor ;

Bureau of Labor Statistics Washington, D.C. 20212

Technical contact: USDL: 91-292

Brenda Rogers (202) 523-1165

Media contact: FOR RELEASE: Immediate
Kathryn Hoyle (202) 523-1913 Wednesday, June 19, 1991

EMPLOYER COSTS FOR EMPLOYEE COMPENSATION ~ MARCH 1991

Employer costs for employee compensation in private industry
averaged $15.40 per hour worked in March 1991, the U.S. Department
of Labor's Bureau of Labor Statistics reported today. Straight-
time wages and salaries--72.3 percent of the costs--averaged
$11.14, while benefit costs--the remaining 27.7 percent-~averaged
$4.27.

Legally required benefits (e.g., social security, workers'
compensation, unemployment insurance) averaged $1.40 per hour
worked--the largest cost to employers among the benefit categories.
Legally required benefits accounted for 9.1 percent of total
compensation.costs and about a third of all benefit costs. Social
security, the largest legally required benefit, cost employers, on
average, 92 cents per hour worked--6.0 percent of all compensation
costs and about a fifth of all benefit costs. (See table 1.)

Other important benefit categories and their average costs per
hour worked were: Paid leave ($1.05), insurance ($1.01), retirement
and savings (44 cents), and supplemental pay (36 cents), which
includes premium pay for overtime, shift pay, nonproduction
bonuses, and lump-sum payments provided in lieu of wage increases.
{See chart on page 3.)

Compensation costs varied widely by industry and occupational
group, union status, and geographic region.

Compensation costs averaged more for workers in goods-
producing industries ($18.48 per hour worked) than for those in
service-producing industries ($14.31). Among service-producing
industries, compensation costs ranged from $8.81 in retail trade to
$22.09 in transportation and public utilities. In goods-producing
industry groups, compensation costs ranged from $16.36 in
nondurable goods manufacturing to $19.59 in durable goods
manufacturing. (See table 4.)



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Relative importance of components of employer costs
for employee compensation, private industry, March 1991

Wages and Legally required
Salaries . benefits
72.3% : a 9.1%

Paid leave
6.8%

Insurance
6.5%

Retirement and savings

2.9%
Supplemental pay

2.3%



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