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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
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 EC] is available in several sources. These include an
annual bulletin, Employment Cost Indexes and Levels, 1975-92, (Bulletin 2413); 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.O. Box 2145, Chicago, Illinois 60690. Reprints of the
articles plus other descriptive pieces and a complete historical listing are available upon request.
ECT 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, TDD Message Referral Phone Number: 1-800-326-2577.


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, United States Zi
Department >
of Labor

Bureau of Labor Statistics Washington, D.C. 20212

Technical, historical contact: USDL: 93-141

Wayne Shelly (202) 606-6199

TRANSMISSION OF MATERIAL IN
Media contact: THIS RELEASE IS EMBARGOED UNTIL
Kathryn Hoyle — (202) 606-5902 8:30 A.M. (EDT), TUESDAY, APRIL 27, 1993

EMPLOYMENT COST INDEX--March 1993

The Employment Cost Index (ECT) increased 1.2 percent before seasonal adjustment in the
3 months ended March 1993, the U.S. Department of Labor's Bureau of Labor Statistics reported
today. The March 1993 level of 117.5 June 1989=100) was 3.5 percent higher than in March 1992.
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, ECI compensation costs rose 1.0 percent in the December
1992-March 1993 period, about the same as the 0.9 percent increase in September-December 1992.
ECI wages and salaries rose 0.7 percent in December 1992-March 1993, about the same as the 0.8

percent increase for the previous period. Corresponding increases in benefit costs were 1.4 percent
and 1.2 percent. (See Table A.)

Table A. Percent changes in Employment Cost Index for civilian workers

Seasonally adjusted Unadjusted
Compensation 3-months ended 12-months
component 199] 1992 1993 ended

June Sep, Dec. Mar. June Sep. Dec, | Mar, | March 1993
Compensation costs 12, 09 09 10 07 09 09 1.0 3.5
Wages and salaries 10 07 07 08 06 O05 08 0.7 27
Benefits 16 #14 12 1300612 #15 12 14 5.4

-the- han.

Compensation costs (not seasonally adjusted) increased 3.5 percent for the year ended March
1993--the same as for the year ended December 1992.

March 1992-93 wage and salary increases averaged 2.7 percent for private industry workers,
compared with 3.0 percent for State and local government workers. These increases were similar to


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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
Tates.

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.

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


or NO RH DNV WD O

Changes in wages and salaries and benefit costs, private industry, 1980-93
t2-month percent change -month percent change

a

ee ee ee a fot it 1 it

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993

Pee ee
or NUN WO FR

or NO fF OA ON DO O



2

those in the December 1991-92 period. The two groups of workers showed markedly different
patterns of benefit cost gains, however.

State and local government workers’ benefit cost increases slowed (4.8 percent in March
1992-93, down from 5.4 percent in December 1991-92). Benefit cost rises were dampened because
several jurisdictions decreased payments into employee retirement funds during December 1992-
March 1993.

Benefit cost increases in private industry, on the other hand, accelerated (5.6 percent in March
1992-93, up from 5.2 percent in December 1991-92). The higher rate of increase resulted from
growth in nonproduction bonuses, State unemployment insurance costs, and contributions to savings
and thift plans, along with continued higher-than-average gains in employer costs for health and
workers’ compensation insurance.

For the year ended in March 1993, compensation cost increases in private industry were
higher for goods-producing industries than for service-producing industries (4.0 percent compared
with 3.2 percent). Compensation cost gains in goods-producing industries ranged from 3.6 percent in
nondurable goods manufacturing to 4.3 percent in durable goods manufacturing. Within the service-
producing industries, compensation cost increases varied from 0.8 percent in finance, insurance, and
real estate to 4.3 percent in public utilities and in health services.

Over-the-year compensation cost increases in private industry were about the same for white-
collar (3.5 percent) and blue-collar workers (3.6 percent) and were slightly lower for service workers
(3.3 percent). White-collar gains ranged from 1.2 percent for sales workers to 4.4 percent for
professional specialty and technical workers. Blue-collar compensation cost increases ranged from
3.2 percent for transportation and material moving occupations to 3.9 percent for precision
production, craft, and repair occupations.

Compensation cost gains over the year ended March 1993 were higher for union (4.2 percent)
than for nonunion workers (3.3 percent). This pattern held for both the goods-producing and service-
producing industries, although the difference was more pronounced in the service-producing
industries.

ECI data for June 1993 will be released on Tuesday, July 27, 1993 at 8:30 A.M. (EDT)


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