Occupational pay rates from the quarterly survey are weighted to obtain average
pay rates for occupational-industry cells. These survey weights were obtained from
an occupational employment survey conducted in 1974. Occupational-industry employment
from the 1970 Census are then applied to the survey cell averages to compute the ECI
measures of change.

The published statistics cover the major occupational groups and industries
shown in the table plus the major industries of Construction, Mining, and Finance,
Insurance, and Real Estate and the major occupational group of Salesworkers. Insuffi-
cient data from the survey sample preclude publication, at this time, of the industries
and of the occupational group not shown separately. The industries for which statis-
tics are published comprise about 85 percent of the total sample.

The regional coverage is as follows: Northeast--Connecticut, Maine, Massachu-

setts, 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; and West--Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico,
Oregon, Utah, Washington, and Wyoming.

Initial releases of Employment Cost Index data will show percent changes in rates
of pay. After sufficient data have been accumulated, survey results will be presented
in the form of index numbers.

The publication of the Employment Cost Index is a major step forward in the
measurement of compensation. It provides, for the first time, a measure of pay change
unaffected by shifts in relative employment levels in different industries, occupa-—

tions, and regions and in the volume of overtime and other premium paid work.


Description of Employment Cost Index

The Euployment Cost Index (ECI) 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 initial statistics published here cover only
wage and salary rates in the private nonfarm economy. The Employment Cost Index will
be expanded gradually to include outlays for employee benefits and to broaden indus—
trial coverage, resulting in an index of changes in all compensation--wages and sala-
ries plus benefits--covering the total civilian economy. There also will be
increases in the amount of industry, occupation, and area detail released and in 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 is now computed from occupational wage and salary data
collected quarterly from approximately 2,000 respondents representing, with certain
exclusions, the occupational employment composition of the private nonfarm economy.
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.

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 Employment Cost Index occupations conform to the Bureau of the Census occupa-
tional classification system which consists of 441 occupations, grouped into 12 broad
occupational categories. Respondents in the quarterly surveys are establishments or

group of establishments comprising a reporting unit.


~6-

It is not, however, an all-purpose measure and has, in common with other statistical
series, its limitations. The Employment Cost Index is not -

* a measure of levels of compensation;

* a measure of the total cost of employing labor;

* a measure of change or level of well-being or workers;

* a pure wage rate measure.


, United States .
Department S
of Labor

Office of Information Washington, D.C. 20210
Bureau of" Labor Statistics
Washington, D.C. 20212 USDL 76-940
A. Sackley (202) 523-1165 FOR RELEASE: 11:00 A. M. (EDT)
K, D. Hoyle (202) 523-1913 Friday, June 18, 1976
home? 333-1384

THE BUREAU OF LABOR STATISTICS INTRODUCES THE FIRST MEASURE OF
WAGE AND SALARY RATE TRENDS FROM ITS NEW EMPLOYMENT COST INDEX

A new measure of national pay trends shows that wage and salary rates rose
1.9 percent between December 1975 and March 1976, about the same increase as in the
prior 3 months. The new measure, the first component of the Employment Cost Index
(BCI), was introduced today by the Bureau of Labor Statistics of the U. S. Department
of Labor. The Employment Cost Index, when fully developed, will be ‘a comprehensive
measure of changes in both wages and the cost of benefits. Collection of benefit data
is scheduled to begin later this year.

Over the 6~month period, September 1975 to March 1976, wage and salary rate
percentage increases in the private nonfarm sector were generally larger for blue~
collar than for white-collar workers. (See table.) Among industry divisions for
which statistics are published, pay increases ranged from 3.3 percent in services
to 4.6 percent in transportation and public utilities. Workers in the Western States
received the largest increase from September to March-~5.5 percent; workers in the
Northeast, the least--2.4 percent. During the same period, pay rates for workers in
occupations covered by collective bargaining agreements went up 4.1 percent compared
with 3.7 percent for other workers. The rate of increase in pay was about the same
for workers in and outside of metropolitan areas over the 6 months ended in March 1976.

The overall change in the Employment Cost index showed little difference in the
fourth quarter 1975 and first quarter 1976 periods, as accelerated pay increases for
some index components were offset by declines in the rate of increase for others.
Among occupational groups, the rates of increase in pay for operatives, except trans-
port, rose from 2.2 to 2.8 percent, while the rate of increase for service workers

fell from 3.3 to 1.9 percent from the fourth quarter to the first quarter. Wages and


salaries in trade rose ata faster pace in the first quarter compared with the prior
3-month period; there was a slowing in the rate of increase for pay rates in the other
industries for which Employment Cost Index statistics are published. Accelerated
increases in pay rates for workers in the West and South in first quarter 1976 were
largerly counterbalanced by declines in the rate of increase for workers in the North
Central and Northeastern States.’ In the first quarter of 1976 occupational pay rates
for workers covered by collective bargaining agreements advanced less rapidly than for
workers not covered by such agreements, 1.6 and 2.0 percent, respectively, reversing
the pattern of the prior 3 months.

Pay rates for workers in metropolitan areas increased at the same rate, 1.9 per-
cent, in the fourth quarter 1975 and first quarter 1976 periods; the rate of increase
for workers in nonmetropolitan areas went up from 1.6 to 2.2 percent. Additional

detail is provided in the table.


Wage and salary rate changes in Employment Cost Index,
September 1975 to March 1976

Percent change for

Series 3 months ended in-| 6 months ended in-
December March | March
1975 1976 1976
All private nonfarm workers ....__1.8 1.9 3.8

Workers, by occupational ‘group

Professional, technical, and
kindred workers .......... 1.7 1.4 3.1
Managers and administrators,
except farm ...........44. 1.3 1.3 2.6
Clerical and kindred
workers ..... 1.8
Craft and kindred workers... 1.8
Operatives, except trans-
port .
Transport equipment
operatives. ...........02. °° Le
Laborers, except farm ...... 2
Service workers, except H
private household......... 3.3 1.9 5.3

Workers, by industry division
Manufacturing ...eccseseeeee 2.
Transportation and public

utilities.........eeee eee 2
Wholesale and retail trade.. 1.
Services . 1

Workers, by region
Northeast

South ...........
North Central
West .......05

Workers, by bargaining status
Occupations covered by
collective bargaining
agreementS .......eeeeeeee 2.4 1.6 4.1
Occupations not covered by
collective bargaining
agreementS ........e..000 1.6 2.0 3.7

Workers, by area

Metropolitan areag........ . 1.9
Nonmetropolitan areas ...... 1.6

NB
No

NOTE: Statistics are not annualized or seasonally adjusted.