Transmission of material in this release is embargoed until USDL-09-1303 8:30 a.m. (EDT) Friday, October 30, 2009 Technical information: (202) 691-6199 NCSinfo@bls.gov http://www.bls.gov/ect Media contact: (202) 691-5902 PressOffice@bls.gov *** (NOTE: Employment Cost Index data from June 2009 through September 2010 have been found to contain errors in several data series and will be corrected in the public database available on the BLS website. This news release will not be corrected. The primary errors are in wage and salary data for State and local government public administration. Additional series are subject to correction as well. For further information see: www.bls.gov/bls/eci_corrections_111910.htm.) *** EMPLOYMENT COST INDEX - SEPTEMBER 2009 Compensation costs for civilian workers increased 0.4 percent, seasonally adjusted, for the 3-month period ending September 2009, the U.S. Bureau of Labor Statistics reported today. Both components of compensation--wages and salaries (which make up about 70 percent of compensation) and benefits (which make up the remaining 30 percent of compensation)-- increased the same amount, 0.4 percent. Civilian Worker Data Compensation costs for civilian workers increased 1.5 percent for the 12-month period ending September 2009. This was smaller than the 2.9 percent increase for the 12-month period ending in September 2008. Wages and salaries increased 1.5 percent for the current 12-month period, slowing from a 3.1 percent increase for the 12-month period ending in September 2008. Benefit costs rose 1.6 percent, down from a 2.6 percent increase for the 12-month period ending September 2008. Private Industry Worker Data Compensation costs, wages and salaries, and benefit costs decelerated for private industry workers for the 12-month period ending September 2009, registering the smallest increases since each series began, but the differences were not statistically different from last quarter. Compensation costs increased 1.2 percent, the smallest percent change published since the series began in 1980. The wage and salary series, which began in 1975, increased 1.4 percent for the current 12-month period. The cost of benefits, which have been measured since 1980, increased 1.1 percent for the 12-month period ending September 2009. Employer costs for health benefits increased 4.7 percent for the 12-month period ending September 2009. In September 2008, the 12-month percent change was 3.9 percent. Among occupational groups, compensation cost increases for private industry workers for the 12-month period ending September 2009 ranged from 0.8 percent for sales and office workers to 2.1 percent for service occupations. Among industries, compensation cost increases for private industry workers for the current 12-month period ranged from 0.7 percent for information to 2.1 percent for education and health services. The Employment Cost Index for December 2009 is scheduled to be released on Friday, January 29, 2010, at 8:30 a.m. (EST). _____________________________________________________________________________________________________________________________ Beginning with this release, estimates for selected metropolitan areas, previously published only online, are now incorporated into table 13 of this release. Information in this release will be made available to sensory impaired individuals upon request--Voice phone: (202) 691-5200; Federal Relay Service: (800) 877-8339. For detailed information on the Employment Cost Index, see Chapter 8. National Compensation Measures of the BLS Handbook of Methods at: www.bls.gov/opub/hom/pdf/homch8.pdf. BLS news releases, including the ECI, are available through an e-mail subscription service at: www.bls.gov/bls/list.htm. _____________________________________________________________________________________________________________________________ Table A. Major series of the Employment Cost Index (Percent change) Category 3-month, seasonally adjusted 12-month, not seasonally adjusted June 2009 Sep. 2009 Sep. 2008 Dec. 2008 Mar. 2009 June 2009 Sep. 2009 CIVILIAN WORKERS(1) Compensation(2) 0.4 0.4 2.9 2.6 2.1 1.8 1.5 Wages and salaries 0.4 0.4 3.1 2.7 2.2 1.8 1.5 Benefits 0.3 0.4 2.6 2.2 2.0 1.8 1.6 PRIVATE INDUSTRY Compensation(2) 0.2 0.5 2.8 2.4 1.9 1.5 1.2 Wages and salaries 0.2 0.5 2.9 2.6 2.0 1.6 1.4 Benefits 0.2 0.3 2.4 2.0 1.6 1.3 1.1 STATE AND LOCAL GOVERNMENT Compensation(2) 1.0 0.0 3.4 3.0 3.1 3.2 2.4 Wages and salaries 1.0 -0.1 3.5 3.1 3.0 3.0 2.1 Benefits 1.0 0.3 3.3 2.9 3.4 3.6 3.2 (1) Includes private industry and state and local government. (2) Includes wages and salaries and benefits.
TECHNICAL 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 changes 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. Production bonuses, incentive earnings, commission payments, and cost-of-living adjustments are included in straight-time wage and salary rates. Benefits covered by the ECI are: Paid leave--vacations, holidays, sick leave, and personal leave; supplemental pay-- premium pay for work in addition to the regular work schedule (such as overtime, weekends, and holidays), shift differentials, and nonproduction bonuses (such as year-end, referral, and attendance bonuses); insurance benefits--life, health, short-term disability, and long-term disability; retirement and savings benefits--defined benefit and defined contribution plans; and legally required benefits--Social Security, Medicare, federal and state unemployment insurance, and workers compensation. The ECI provides data for the civilian economy, which includes the total private nonfarm economy excluding private households, and the public sector excluding the federal government. The private industry series and the state and local government series provide data for the two sectors separately. Sample establishments are classified by industry categories based on the 2007 North American Industry Classification System (NAICS). All industries are classified into two sectors--goods-producing and service-providing. Within a sample establishment, specific job categories are selected and classified into about 800 occupational classifications according to the 2000 Standard Occupational Classification (SOC) system. Individual occupations are combined to represent one of ten intermediate aggregations, such as professional and related occupations, or one of five higher-level aggregations, such as management, professional, and related occupations. Both the NAICS and the SOC classification systems are defined by the U.S. Office of Management and Budget (OMB). For more detailed information on NAICS and SOC, including background definitions, see the BLS Web sites: www.bls.gov/bls/naics.htm and www.bls.gov/soc/home.htm. To be included in the ECI, employees in occupations must receive cash payments from the establishment for services performed and the establishment must pay the employers portion of Medicare taxes on that individuals wages. Major exclusions from the survey are the self-employed, individuals who set their own pay (for example, proprietors, owners, major stockholders, and partners in unincorporated firms), volunteers, unpaid workers, family members being paid token wages, individuals receiving long-term disability compensation, and U.S. citizens working overseas. Data for the September 2009 reference period were collected from a probability sample of approximately 62,700 occupational observations selected from a sample of about 13,200 establishments in private industry and approximately 11,700 occupations from a sample of about 1,900 establishments in state and local governments. The state and local government sample, which is replaced less frequently than the private industry sample, was replaced in its entirety in September 2007. The private industry sample is rotated over approximately 5 years, which makes the sample more representative of the economy and reduces respondent burden. Data are collected for the pay period including the 12th day of the survey months of March, June, September, and December. The sample is replaced on a cross-area, cross-industry basis. Fixed employment weights are used each reference period to calculate the most aggregate series--civilian, private, and state and local government. These fixed weights are also used to derive all of the industry and occupational series indexes. Beginning with March 2006 estimates, 2002 fixed employment weights from the Bureaus Occupational Employment Statistics survey were introduced. For the series based on bargaining status, census region and division, and for series excluding incentive paid occupations, fixed employment data are not available. The employment weights are reallocated within these series for each reference period based on the current ECI sample. The nursing care facilities indexes in private industry are estimated using fixed-employment weights derived from staffing patterns estimated from the four-digit industry NAICS group 6231, nursing care facilities, a sub-industry of the larger industry group, nursing and residential care facilities (NAICS 623). The indexes for these series, consequently, are not strictly comparable with those for the aggregate, occupational, and industry series. A fuller explanation of the calculation of index numbers appears in chapter 8 of the BLS Handbook of Methods, at the web site www.bls.gov/opub/hom/pdf/homch8.pdf. Beginning with the release of the March 2006 data, indexes were rebased to December 2005=100 from June 1989=100. The percentage changes shown in the current- and constant-dollar historical tables were calculated from the rebased indexes. Thus, changes may differ from those originally published because of rounding. The ECI state and local government sample consists of 152 areas that represent the Nation's 361 metropolitan statistical areas and 573 micropolitan statistical areas as defined by OMB in December 2003 and the remaining portions of the 50 states. The private industry estimates started the conversion to December 2003 OMB areas definitions in the December 2008 reference period with replacement of one-fifth of the sample under the new area definitions. Seasonally adjusted data for selected ECI series began with the December 1990 ECI release. Seasonal adjustment removes the effects of events that follow a more or less regular pattern each year. These adjustments make nonseasonal patterns easier to identify. The seasonal adjustment factors are recalculated once per year. The March release contains data reflecting the newly updated seasonal adjustment factors. The historical data for the last five years are then revised based on the newly estimated factors. The seasonal factors for 2009 and revised seasonally adjusted indexes for the past 5 years are available at www.bls.gov/ect/ectsfact.htm or upon request. Because the ECI is a sample survey, it is subject to sampling errors. Sampling errors are differences that occur between the results computed from a sample of observations and those computed from all observations in the population. The estimates derived from different samples selected using the same sample design may differ from one other. A measure of the variation among these differing estimates is the standard error. It can be used to measure the precision with which an estimate from a particular sample approximates the expected result of all possible samples. The chances are about 68 out of 100 that an estimate from the survey differs from a complete population figure by less than the standard error. The chances are about 90 out of 100 that this difference would be less than 1.6 times the standard error. The statements of comparisons appearing in this publication are significant at a 1.6 standard error level or better, unless otherwise indicated. This means that for differences cited, the estimated difference is greater than 1.6 times the standard error of the difference. The ECI uses standard errors to evaluate published series. To assist users in ascertaining the reliability of series, the standard errors for all estimates (excluding seasonally adjusted series) are available on the BLS Web site at www.bls.gov/ect/ectvar.htm shortly after the publication of the news release. When determining data to be used in contract negotiations, it is important to note that differences by bargaining status may be due to factors other than union status, such as occupational and industry mix. An important consideration when choosing a series for escalation is the sampling error. For more information, see www.bls.gov/ect/escalator.htm. More detailed information on the ECI is available from several sources. These include a chapter, "National Compensation Measures," (www.bls.gov/opub/hom/pdf/homch8.pdf) from the BLS Handbook of Methods, and several articles published in the Monthly Labor Review and Compensation and Working Conditions. The articles and other descriptive pieces are available at www.bls.gov/ect/#publications, by calling (202) 691-6199, or sending e-mail to NCSinfo@bls.gov. Historical ECI data, using industry categories based on the Standard Industrial Classification (SIC) System and classifying jobs into occupational classifications according to the Census of Population, are available dating from the first publication of each series to December 2005 at: www.bls.gov/web/echistry.pdf. Data are also available for series based on the 2002 and 2007 North American Industry Classification Systems (NAICS) and the 2000 Standard Occupational Classification (SOC) beginning in March 2001, using December 2005=100 as the base period at: www.bls.gov/web/echistrynaics.pdf. A new historical listing, providing continuous occupational and industry series using SIC-Census of Population and NAICS-SOC classifications is available at www.bls.gov/web/ecicois.pdf. It provides the official series from the beginning of the ECI in 1975 through the current quarter. For more information on the criteria used in defining continuous series, see the following article published in the Monthly Labor Review at www.bls.gov/opub/mlr/2006/04/art2full.pdf. In addition, constant-dollar ECI series derived from the Consumer Price Index for All Urban Consumers (CPI-U) are available. The constant-dollar series are calculated by converting the CPI-U to the same base as the ECI. The ECI for each reference period is then divided by the converted CPI-U for the same reference period. The CPI