Compensation and Working Conditions Winter 1997 12

T

he Employment Cost Index

(ECI) survey provides two

different types of information—indexes of compensation cost

change, and cost levels that show the

structure of compensation.1 This

article reviews both types of information by major occupational groups

and other occupational groupings.

The occupational groups currently specified for the ECI are from

the 1990 Census of Population. The

Census defines 14 major occupational groups, of which 11 are within

the scope of the ECI.2 (See the box

for examples of occupations found in

each of the major occupational

groups.) These major groups are

combined into three occupational

categories: White-collar, blue-collar,

and service workers. The occupational groups and categories, and the

percent distribution of 19903

employment in private industry, are

shown in table 1.

Table 1. Percent distribution of private

industry employment among major

occupational groups, 1990

 All private industry

 workers ........................... 100.0

White collar ............................... 55.1

Professional specialty

 and technical ........................ 12.5

Executive, administrative,

 and managerial .................... 10.5

Sales ...................................... 13.1

Administrative support

 including clerical ................... 19.0

Blue collar ................................. 29.8

Precision production, craft,

 and repair ............................. 11.6

Machine operators, assem-

 blers, and inspectors ............ 8.6

Transportation and material

 moving .................................. 4.4

Handlers, equipment

 cleaners, helpers, and

 laborers ................................ 5.2

Service ...................................... 15.2

As a way to report on compensation cost levels and trends, the

ECI surveys white-collar workers, blue-collar workers, and

service workers. The ECI suggests that there are substantial

differences among these occupational groups in the structure of

compensation and in the pattern of change in compensation over

time. These differences can be explained by the nature of the

work done in the three job groups.

Differences Among

Private Industry

Occupational Groups in

Pay Levels and Trends

Albert E. Schwenk is an economist in the Division of Compensation Data Analysis and Planning, Bureau of Labor Statistics. Telephone (202)

606-6203.

Occupational category/group

BY ALBERT E. SCHWENK

Percent
13 Compensation and Working Conditions Winter 1997

The review of ECI and cost levels

data in this article suggests that

there are substantial differences

among occupational groups. These

differences are found in the structure

of compensation and in the pattern

of compensation cost change over

time. Furthermore, the white- and

blue-collar categories combine occupations that are relatively similar in

structure of compensation and the

pattern of change over time.

The major occupational groups

examined in this article are defined

for convenience in data analysis.

Those groups include a variety of

occupations that may have different

levels of compensation cost and rates

of compensation cost change.

The structure of compensation

In March 1996, compensation

costs per hour worked were higher

for white-collar workers ($21.10)

than for blue-collar workers ($17.04)

and service workers ($8.61). (See

table 2.) Costs for white-collar

occupations varied from $14.34 for

sales workers to $33.12 for executive, administrative, and managerial

occupations. Costs for blue-collar

workers ranged from $12.07 for

handlers, equipment cleaners,

helpers, and laborers to $22.12 for

precision production, craft, and

repair occupations. No breakdown

in compensation costs for various

service occupations was available.

Occupational groups do not show

a consistent relationship between the

level of compensation costs and the

proportion benefits make up of total

compensation costs. While the

occupational groups with the highest

compensation costs—professional

specialty and technical; and executive, administrative, and managerial—were below average in benefit

costs as a percentage of total compensation costs, the occupational

group with the lowest compensation

costs—service occupations—also

had among the lowest proportion of

benefit costs to total compensation

costs.

There does, however, appear to be

a systematic difference between

white-collar and blue-collar occupations in the proportion benefits

make up of total compensation.

Benefits make up a larger proportion of compensation costs for

blue-collar workers (31.9 percent)

than for white-collar workers (26.8

percent) and service workers (24.1

percent). This relationship held

when occupational groups within

the blue-collar and white-collar

categories were compared. Benefit

costs as a percent of total compensation ranged from 22.7 percent to

28.4 percent for white-collar

occupations and from 29.7 percent

to 34.0 percent for blue-collar

occupations.

Blue- and white-collar workers

also differed in the prevalence of

some individual benefits, as demonstrated in table 3.

Paid leave and nonproduction

bonuses were relatively more important for white-collar workers than

for other types of workers. For bluecollar and service workers, premium

pay and legally-required benefits

were the relatively more important

benefits.

Examples of occupations included

White-collar:

Professional specialty Engineers, mathematicians, chemists, physicians, registered nurses

Technicians and related support Dental hygienists, licensed practical nurses, mechanical engineering

 technicians, airplane pilots

Executive, administrative, and managerial Financial and other managers, accountants and auditors

Sales Insurance sales, cashiers

Administrative support including clerical Computer equipment operators, secretaries, hotel clerks, bookkeepers,

 mail clerks, insurance adjusters

Blue collar:

Precision production, craft, and repair Air conditioning mechanics, carpenters, electricians, tool and die makers,

 butchers, power plant operators

Machine operators, assemblers, and Metalworking machine operators, assemblers, production inspectors

 inspectors

Transportation and material moving Truck drivers, railroad conductors, operating engineers

Handlers, equipment cleaners, helpers, Construction laborers, freight, stock, and material handlers

 and laborers

Service Guards, waiters and waitresses, nursing aides, janitors, barbers

Examples of occupations found in major occupational groups within the scope of ECI

Major occupational group
 Compensation and Working Conditions Winter 1997 14

Trends in rates of change in

labor costs

When examining labor cost

changes over time, total compensation rather than simply wages and

salaries is usually emphasized.

However, in this analysis, wage and

salary changes are discussed first

because they have a longer data

history than compensation costs.

ECI data on wage and salary

changes are available for most major

occupational groups beginning in

September 1975, while ECI data on

compensation costs are only available since December 1985 for most

occupational groups.

Over the entire September 1975-

March 1997 period, wages and

salaries rose 193.9 percent for whitecollar workers and 172.7 percent for

blue-collar workers. As shown in

chart 1, during the late 1970s, bluecollar pay rose more rapidly than

white-collar pay. It was not until

June 1985 that cumulative pay gains

for the two groups of workers were

almost equal.

As chart 2 suggests, wage

increases in private industry have

shown substantial changes over

time, with pattern differences

between white-collar and blue-collar

workers. Blue-collar pay rose

relatively more rapidly than whitecollar pay during 1975-81, while

white-collar pay has usually risen

more rapidly than blue-collar pay

since 1981.

During the late 1970s, blue-collar

pay increased 8.5 percent a year and

white-collar pay rose at an annual

rate of 7.7 percent. In contrast,

between June 1981 and June 1991

white-collar wages increased, on

average, 4.9 percent annually, while

blue-collar pay rose 3.8 percent

annually. (See table 4.) This pattern

continued into the 1990s, although

the differences between the two

occupational groups were not as

large. Between June 1991 and

March 1997, white-collar pay

increased at an average annual rate

of 3.1 percent, while blue-collar pay

rose 2.8 percent a year. Between

September 1975 and March 1997,

white-collar pay rose 5.1 percent a

year, on average, and blue-collar pay,

4.8 percent.

Over the 1975-81 period, average

annual pay increases for blue-collar

occupational groups ranged from 8.3

percent to 8.8 percent. White-collar

increases ranged from 7.0 percent a

year to 7.9 percent annually.

During the June 1981-June 1991

period, both white-collar and bluecollar occupations showed a substantial slowdown in the rate of wage

increase compared with the September 1975-June 1981 period. This was

due in part to a fall in the rate of

increase in consumer prices.4 However, the slowdown was more dramatic for blue-collar occupations. This

partly reflected the influence of increased foreign competition on manufacturing industries and deregulation on transportation industries.

Data on compensation cost

changes in private industry, even for

broad occupational categories, are

available only from December 1979.

These cost changes are consistent

with the pattern of wage and salary

changes. (See chart 3 and table 5.)

During the June 1981-June 1991

period, white-collar compensation

rose 5.2 percent a year, while bluecollar compensation rose 4.4 percent

a year. The difference between the

two occupational categories during

the June 1991-March 1997 period

was 3.3 percent for white-collar

occupations and 3.1 percent for bluecollar occupations.

Data for occupational groups are

available only for the December

1985-March 1997 period. Again, the

data show systematic differences

among occupational groups. (See

table 6.)

During the December 1985-June

1991 period, white-collar compensation rose, on average, 4.5 percent a

year, while blue-collar compensation

increased 3.9 percent a year. For

white-collar workers the compensation increases for major occupational

groups ranged from 4.5 to 4.7 percent a year.5

 Comparable increases

for blue-collar major occupational

groups ranged from 3.6 to 4.2

percent per year.

During the June 1991-March

1994 period, the compensation cost

increase for white-collar occupations

was similar to that for blue-collar

occupations (3.6 percent and 3.7

percent per year, respectively).

Between March 1994-March

1997, however, compensation cost

increases were again larger for

white-collar occupations than for

blue-collar occupations. White-collar

occupations compensation costs rose

3.1 percent annually compared to 2.5

percent annually for blue-collar

occupations. However, during that

period the differences for occupational groups within the occupational categories were not systematic. Among white-collar

occupations, increases ranged from

2.6 to 3.5 percent; for blue-collar

occupations the range was from 2.1

to 3.4 percent.

—ENDNOTES—

1

 This article examines only data not adjusted

for seasonal variation. Because for some of the

time periods covered the beginning and ending

dates are different months of the year, ideally the

analysis would use seasonally adjusted data. However, it was decided to use not seasonally adjusted

data because for most of the series examined data

are not available seasonally adjusted, and even

where such data are available there is little seasonal variation.

2

 For the ECI, four of these occupational

groups are combined: professional specialty with

technicians and related support occupations, and

protective service occupations with service occupations, except protective and household. For

some cost level tabulations, professional specialty

and technical occupations are shown separately

as well as combined.

3

 The data are shown for 1990, rather than a

more recent year, because that is the date of the

fixed employment weights for the ECI.

4

 For a discussion of some of the factors leading to the slowdown in the rate of wage and salary

gain in the early 1980s, see Albert E. Schwenk,

“Trends in the differences between union and nonunion workers in pay using the Employment Cost

Index,” Compensation and Working Conditions,

September 1996, pp. 27-33.

5

 As noted in the footnote to the table, separate data were not available for sales workers.
15 Compensation and Working Conditions Winter 1997

Table 3. Percent distribution for components of benefit cost, by occupational category, private industry, March 1996

Total benefits ................................................. 100.0 100.0 100.0 100.0

Paid leave ......................................................................... 22.8 26.5 17.5 17.4

Supplemental pay ............................................................. 10.0 9.5 11.6 6.8

Premium pay .......................................................... 4.1 2.1 7.5 3.4

Shift pay ................................................................. 1.2 1.1 1.3 1.4

Nonproduction bonuses ......................................... 4.9 6.5 2.8 1.9

Insurance .......................................................................... 23.2 22.6 24.4 21.7

Retirement and savings .................................................... 11.2 11.7 11.4 6.3

Legally-required benefits ................................................... 32.4 29.0 34.4 48.3

Table 2. Total compensation costs per hour worked and benefits as a proportion of those costs, by occupational

category/group, private industry, March 1996

All private industry ....................................................................... $17.49 28.1

White-collar occupations ...................................................................................... 21.10 26.8

Professional specialty and technical ............................................................ 29.19 27.2

 Professional specialty ................................................................................ 30.80 27.0

 Technical .................................................................................................... 24.84 27.9

Executive, administrative, and managerial ................................................... 33.12 27.3

Sales ............................................................................................................. 14.34 22.7

Administrative support including clerical ...................................................... 14.93 28.4

Blue-collar occupations ........................................................................................ 17.04 31.9

Precision production, craft, and repair.......................................................... 22.12 31.7

Machine operators, assemblers, and inspectors ......................................... 15.48 34.0

Transportation and material moving ............................................................. 16.96 31.5

Handlers, equipment cleaners, helpers, and laborers .................................. 12.07 29.7

Service occupations ............................................................................................. 8.61 24.1

Benefit cost

as a percent of

compensation

Total

compensation

Occupational category/group

Blue- collar

workers

Service

workers

White- collar

workers

All

workers Benefit component

Table 4. Average annual percent changes in wages and salaries by occupational category/group in private industry,

selected periods, 1975-97

 All private industry workers.................................. 8.1 4.4 3.0 5.0

White-collar occupations .................................................. 7.7 4.9 3.1 5.1

Professional specialty and technical ........................... 7.9 5.2 3.2 5.4

Executive, administrative, and managerial .................. 7.0 4.9 3.2 5.0

Sales ........................................................................... (

1) 4.2 2.9 (1)

Administrative support including clerical ..................... 7.9 4.8 3.3 5.2

Blue-collar occupations .................................................... 8.5 3.8 2.8 4.8

Precision production, craft, and repair ........................ 8.3 4.0 2.9 4.8

Machine operators, assemblers, and inspectors ........ 8.8 3.9 2.9 4.9

Transportation and material moving ............................ 8.5 3.1 2.6 4.4

Handlers, equipment cleaners, helpers and laborers ... 8.7 3.6 3.0 4.8

Service occupations ......................................................... 8.2 4.3 2.8 4.9

1

 Data for sales workers were first available in March 1977.

Sep. 1975-

Mar. 1997-

Sep. 1975-

June 1981-

June 1991-

Mar. 1997-

June 1981-

June 1991-

Occupational category/group
 Compensation and Working Conditions Winter 1997 16

Table 6. Average annual percent change in compensation costs by occupational category/group in private industry,

selected periods, 1985-97

All private industry workers .................................... 4.3 3.6 2.9 3.7

White-collar occupations ................................................... 4.5 3.6 3.1 3.9

Professional specialty and technical ............................ 4.7 4.3 2.6 4.1

Executive, administrative, and managerial ................... 4.5 3.2 3.4 3.9

Sales ............................................................................ (

1) 2.4 3.5 (1)

Administrative support including clerical ...................... 4.6 4.0 3.0 4.0

Blue-collar occupations ..................................................... 3.9 3.7 2.5 3.4

Precision production, craft, and repair ......................... 3.8 3.6 2.5 3.4

Machine operators, assemblers, and inspectors ......... 4.2 3.8 2.3 3.6

Transportation and material moving ............................. 3.6 3.6 2.1 3.2

Handlers, equipment cleaners, helpers and laborers ... 3.8 3.5 3.4 3.6

Service occupations .......................................................... 4.0 3.4 2.5 3.5

 

1

 Data for sales workers are available only from March 1986.

Table 5. Average annual percent change in compensation costs by occupational category in private industry, selected

periods, 1979-97

All private industry workers ................................. 10.2 4.8 3.2 4.2

White-collar occupations ................................................ 10.3 5.2 3.3 4.4

Blue-collar occupations .................................................. 10.4 4.4 3.1 3.9

Service occupations ....................................................... 10.5 4.9 2.9 4.1

Dec. 1979-

June 1981-

June 1981-

June 1991-

Dec. 1979-

Mar. 1997-

June 1991-

Mar. 1997 Occupational category

Dec. 1985-

June 1991-

June 1991-

March 1994-

Dec. 1985-

Mar. 1997-

Mar. 1994-

Mar. 1997-

Occupational category/group
17 Compensation and Working Conditions Winter 1997

19 76 19 77 19 78 19 79 19 80 19 81 19 82 19 83 19 84 19 85 19 86 19 87 19 88 19 89 19 90 19 91 19 92 19 93 19 94 19 95 19 96 19 97

0

2

4

6

8

10

12

Pe rc en t

1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997

100

150

200

250

300

350

L oga rti hmic sc ale

Chart 1. Cumulative percent change in Employment Cost Index, private industry, wages

and salaries, by occupational category, 1975-97

Logarithmic scale

350

300

250

200

150

100

1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997

White collar

Blue collar

12

10

8

6

4

2

0

Percent

1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

Chart 2. Percent wage and salary changes from the Employment Cost Index for 12-month

periods ending March, June, September, and December, private workers by occupational

category, 1976-97

White collar

Blue collar
 Compensation and Working Conditions Winter 1997 18

1 980 1 981 1 982 1 983 1 984 1 985 1 986 1 987 1 988 1 989 1 990 1 991 1 992 1 993 1 994 1 995 1 996 1 997

0

4

8

12

P ercen t

12

8

4

0

Percent

Chart 3. Percent changes in compensation from the Employment Cost Index for 12-

month periods ending March, June, September, December, private industry workers

by occupational category, 1980-97

White collar

Blue collar

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997