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10

1970 Census Category 1980 Census Category

Managers and administrators Executive, administrative, and
managerial occupations

Professional and technical Professional specialty and

workers technical occupations

Sales workers : Sales occupations

Clerical workers Administrative support
occupations, including
clerical

Craft and kindred Precision production, craft,

workers and repair occupations

Operatives, except Machine operators, assemblers,

transport and inspectors

Transport equipment Transportation and material

operatives moving occupations

Nonfarm laborers Handlers, equipment cleaners,

helpers, and laborers
Service workers Service occupations

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.

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 sample. The indexes for these
series, consequently, are not strictly comparable to those for the aggregate, in-
dustry, 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.

More detailed information on the ECI is available in several articles and publica-
tions. These include a chapter in the BLS Handbook of Methods (Bulletin 2134-1),
"The Employment Cost Index." Two articles also appeared in the Monthly Labor |
Review: "Employment Cost Index: a measure of change in the 'price of labor',
Suly 1975; and "How benefits will be incorporated into the Employment Cost Then, *
January 1978. Reprints of these articles plus several other descriptive pieces
and a historical listing of ECI data are available upon request.


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SAIYVIVS GNV S39VM


9

EXPLANATORY NOTE

The Employment Cost Index (ECI) is a measure of the change in the price of labor,
free fran the influence of employment shifts among occupations and industries.

The ECI wage and salary series is limited to changes in wage and salary rates,
defined as the hourly straight-time wage rate or, for workers not paid on an hourly
basis, earnings divided by the corresponding hours. Straight-time wage and salary
rates are total earnings before payroll deductions, excluding premium pay for over-
time and for work on weekends and holidays, and shift differentials. Production
bonuses, incentive earnings, commission payments, and cost-of-living adjustments
are included in straight-time wage and salary rates.

The compensation series includes employer costs for employee benefits as well as
wages and salaries. Benefits covered by the ECI are: Paid leave (vacations, holi-
days, sick leave, and other leave); supplemental pay (premium pay for overtime,
shift differentials, and nonproduction bonuses); insurance benefits (life, health,
and sickness and accident); retirement and savings benefits (pension and other re-
tirement 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, supplemental unemployment plans, and merchandise discounts
in department stores).

The ECI provides data for both the private and public sectors, which are published
separately and also combined as the total civilian economy. The private sector in-
cludes the total private economy, excluding farms and households. The public sector
covers state and local governments, but excludes the Federal government.

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 about
15,000 occupations within 2,600 sample establishments in private industry and about
3,500 occupations within 700 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. ECI statistics are neither annualized nor
adjusted for seasonal influences.

The sample establishments are classified in industry categories based on the 1972
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. Beginning in June 1986, the jobs are classified according
to definitions used in the 1980 Census. Prior to June 1986, they were classified
according to the 1970 Census. The titles of the published 1970 and 1980 occupation
groups are listed below for comparison. 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.


United States
2 Department >
p of Labor

Bureau of Labor Statistics Washington, D.C. 20212

Technical, historical contact: USDL: 86-432
(202) 523-1165
Media contact: (202) 523-1913 FOR RELEASE: 10:00 A.M. E.S.T.

Tuesday, October 28, 1986

EMPLOYMENT COST INDEX ~ SEPTEMBER 1986

The Employment Cost Index (ECI) increased 1.1 percent in the 3 months ended in
September 1986, the U.S. Department of Labor's Bureau of Labor Statistics reported
today. For the year ended in September 1986, the ECI rose 3.6 percent. The
September 1986 ECI level stood at 133.0 for compensation costs, based on June 1981=
100. The ECI measures changes in compensation costs, which include wages, salaries,
and employer costs for employee benefits. It is not seasonally adjusted.

The 1,1 percent increase in compensation costs in the June-September period was
below the 1.6 percent gain in the same period a year ago. This slowdown occurred
for both private industry workers (0.7 percent, down from 1.3 percent) and state
and local government workers (2.8 percent, down from 3.4 percent). Compensation
cost changes for state and local government workers are heavily concentrated in
the June-September quarter, whereas those for private industry workers are more
widely dispersed throughout the year.

The 3.6 percent increase in compensation costs for the year ended in September
1986 was below the 4.9 percent gain a year earlier. A lower rate of increase was
found for both private industry workers (3.2 percent, down from 4.7 percent) and
state and local government workers (5.2 percent, down from 6.0 percent).

RRKKKRK ERR KERERERERRRIRER III HIRE IBRERERII AIA IARI KIRA II IAI ISIS.

* This release presents, for the first time, estimates of quarterly *
* change in compensation costs, and in wages and salaries only, for *
workers in hospitals. Data are provided for hospital workers in ‘*
private industry, and in the private and state and local government*
sectors combined. These series are part of the Federal govern- *
ment's effort to improve statistical programs for service-producing*
industries. Also shown for the first time are measures of compen- *

sation cost change for sales occupations and for workers in © *
wholesale trade.

*
*
*
counts from the 1980 Census of Population rather than from the *
1970 Census. ECI estimates for the period March 1985 to March *
1986 were recalculated, using the 1980 Census weights. The recal- *
culations, which are available upon request, provide a one-year *
overlap for BCI estimates based on 1970 and 1980 weights. *

*

7

*
*
*
*
*
*
*
*
_* Beginning in June 1986, ECI measures are based on fixed employment
*
*
*
*
*
*
RR KKKRKKKKER ERE RRR EKER IRE IRE IR IRA RIK EER EIR EERIE ARIAS IAI IAI A


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2

Wages and salaries alone rose 3.5 percent over the year ended in September 1986,
below the 5.0 percent gain a year earlier. The increases were higher for state
and local government workers (5.4 percent) than for private industry workers
(3.1 percent), who make up a great majority of employees covered by the ECI.

The 3.1 percent pay increase was the lowest over-the-year pay gain recorded for
private industry workers since this ECI series began in 1976. Other private in-
dustry series with record low wage and salary increases included white-collar
workers (3.7 percent), blue-collar workers (2.3 percent), service workers

(2.1 percent), workers in goods-producing and service-producing industries

(both 3.1 percent), union workers (2.3 percent), and nonunion workers

(3.4 percent).

Although the September 1985-86 pay increases in private industry averaged the
same in service~producing as in goods-producing industries (3.1 percent), pay
gains declined more dramatically in the former compared with the year ended in
September 1985, when the gains were 5.3 and 4.1 percent, respectively.

Pay increases for nonunion workers (3.4 percent) exceeded those for union workers
(2.3 percent) during the September 1985-86 period. This relationship held in

goods-producing industries (3.8 percent compared with 1.9 percent), as well as in
service-producing industries (3.1 and 2.7 percent, respectively). (See table 6.)

ECI data for December 1986 will be released on Tuesday, January 27, 1987,
at 10:00 a.m. E.S.T.

ECI news releases for the remainder of 1987 will be published on the following
schedule:

Reference Month Release Date
March 1987 April 28, 1987
June 1987 July 28, 1987

September 1987 October 27, 1987