ry

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 occupa-
tions. 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 pericd including the 12th of the
survey months of March, June, September, and December.

The Index occupations conform to the Bureau of the Census occupational classifi-
cation system, which consists of 441 occupations grouped into 12 broad occupational
categories. Nine of these groups are now in the scope of the survey. Farmers and
farm managers, farm laborers and foremen, and private household workers are currently
excluded.

The published industry and occupational statistics do not pertain to mutually
exclusive groups of employees. Workers from all industry divisions may be repre-
sented 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 group "Service
workers, except private household", covers 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 Frployment 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 aogredated for index computation using Fixed weights obtained from the


Description of Fimployment 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 Employment Cost Index is a measure
of change in the price of labor. It is not intended as a measure 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 expected to begin in about a year,
followed by statistics for the total civilian economy in subsequent years. A
long-term program objective is to increase the amount of industry, occupation, and
area detail and the frequency of publication. Seasonally adjusted statistics will
become available as soon as sufficient experience is accumlated to compute adjust-
ment factors. :

The Employment Cost Index statistics are now computed from occupational wage
and salary data collected quarterly from approximately 2,000 respondents repre-
senting, with certain exclusions, the occupational employment composition of the
private nonfarm economy. Respondents in the quarterly survey are establishments
or groups of establishments composing 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.


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 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 new
series, average pay levels have been computed for the overall and component published
series for September 1975, and these are available upon request.

In addition to the occupational groups and industries shown in the table,
published statistics cover sales workers, mining, and finance, insurance, and real
estate, but insufficient data preclude separate publication of these results.
Augmentation is now underway to enable publication of statistics for sales workers.
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 1976, and estimates of relative sampling errors are also available on
request.

The regional coverage is as follows: Northeast——Connecticut, Maine, Mass-
achusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and
Vermont; South--Alabara, 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,
Towa, Kansas, Michigan, Minnesota, Missouri, ‘ebraska, North Dakota, Ohio, South
Dakota, and Wisconsin; and West--Arizona, California, Colorado, Idaho, Montana,
Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming.

A cescrintion of the survey Jesion is proviced in the chapter on the Employment
Ccst In’ex in the PIS liandbook of Methods, BLS Bulletin 1910.

Releases are scheculed for Telruary, May, August, aml Movember--2 months after


_ _
7 ONS United States
News =" «
“Of Labor

Bureau of Labor Statistics Washington, D.C. 20212

A. Sackley (202) 523-1165 USDL-77-188
K. D. Hoyle (202) 523-1913 FOR RELEASE: 11:00 A.M. (EST)
Home: 333-1384 Thursday, March 3, 1977

EMPLOYMENT COST INDEX--December 1976

Wage and salary rates measured by the Employment Cost Index rose 1.9 percent
for the 3 months ended in December 1976, it was reported today by the Bureau of
Labor Statistics of the U.S. Department of Labor. In the 12 months ended in
December 1976, wage and salary rates rose 7.2 percent. The fourth quarter increase
was up from the 1.5 percent reported for the Preceding quarter in 1976 and 1.8
percent in the fourth quarter of 1975. (See table.)

tember-to-December 1976

faa

Nearly all of the higher percentage rise in the Employment Cost Index in the
fourth quarter was the result of accelerated increases in the pay of operatives
(except transport), nonfarm laborers, and service workers, and a jump in commission
earnings for salesworkers, not shown separately in the published statistics.

' Higher rates of pay increases in manufacturing, transportation and public
utilities, and wholesale and retail trade and smaller percentage increases in wages
and salaries for employees in construction and services were reported in the
September-to-December period. The implementation of collective bargaining settle-
ments in the automobile industry contributed to the higher rate of wage change in
manufacturing.

On the other hand, pay increases for workers in construction, where seasonal
factors have a dampening effect on wage changes in the fall and winter months,
declined from 2.6 to 1.1 percent in the September-to-December period. ‘The rate of
increase in the pay of workers employed in the services industry division also
slowed from 1.7 to 0.6 percent.

Among regions, wage gains were highest in the North Central States--2.6 percent,


-7-

each quarter. Statistics in these releases pertain to the Preceding quarter and
12-month period ended in that quarter. The Employment Cost Index statistical series,

from September 1975, is available in Current Wage Developments starting with the
February 1977 issue.


-2-

up from 1.5 in the prior 3-month period. The higher pay changes in the North Central
region were due in part to settlements affecting the pay of workers in the autono-
bile industry.

Pay of workers in occupations covered by collective bargaining agreements
advanced 2.0 percent compared with 1.8 percent for workers not covered. Wage and
salary rate gains for workers in metropolitan areas rose 1.9 percent in the fourth
quarter, compared with 1.7 percent in the third quarter; the rate of advance for
workers in other areas climbed from 0.9 to 1.8 percent.

December 1975 to December 1976

Over the 12 months since December 1975, increases in the rate of pay for the
white-collar occupations--professionals, managers, and clerical workers--have been
smaller than percentage increases for other workers. The rates of pay increases
for workers in the services industry division, and in the Northeast, also have
been well below the all private nonfarm measure of change. On the other hand, pay
increases of 8 percent or more were received by operatives (except transport),
workers in transportation and public utilities, those employed in the West, and in

, occupations covered by collective bargaining agreements.


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