Southwest Information Office

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Tuesday, May 1, 2014

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Changing Compensation Costs in the Houston Metropolitan Area –
March 2014


Total compensation costs for private industry workers increased 1.8 percent in the Houston-Baytown-Huntsville, Texas metropolitan area for the year ended in March 2014, according to the U.S. Bureau of Labor Statistics. Regional Commissioner Stanley W. Suchman noted that one year ago, Houston experienced an annual gain of 2.0 percent in total compensation costs. Locally, wages and salaries, the largest component of total compensation costs, advanced at a 2.4-percent pace for the 12-month period ended in March 2014. Nationwide, both total compensation costs and wages and salaries rose 1.7 percent over the same period. (See chart 1 and table 1.)

Chart 1. Twelve-month percent changes in the Employment Cost Index for total compensation and for wages and salaries, private industry workers, United States and the Houston area, not seasonally adjusted, March 2012 to March 2014


Houston is 1 of 15 metropolitan areas in the United States, and 1 of 5 areas in the South region of the country, for which local compensation cost data are available. Among these 15 largest areas, San Jose experienced the highest percent change in both total compensation costs and in wages and salaries from March 2013 to March 2014. Over-the-year rates of change in total compensation costs ranged from a 3.6-percent increase in San Jose to a 1.2-percent increase in Atlanta; for wages and salaries, annual gains ranged from 3.4 percent in San Jose to 0.7 percent in Atlanta. (See chart 2.)

The annual increase in total compensation costs in Houston in March 2014, at 1.8 percent, compared to gains ranging from 2.2 to 1.2 percent in the four other metropolitan areas in the South (Atlanta, Dallas, Miami, and Washington). Houston's 2.4-percent gain in wages and salaries over this 12-month period compared to rates ranging from 2.7 to 0.7 percent in the four other southern localities. (See table 2.)

Locality compensation costs are part of the national Employment Cost Index (ECI), which measures quarterly changes in total compensation costs, including wages, salaries, and employer costs for employee benefits. In addition to the 15 local estimates provided in this release, ECI data for the nation, 4 geographical regions, and 9 geographical divisions are available. (Geographical definitions for the metropolitan areas mentioned in this release are included in the Technical Note.)

Chart 2.  Percent change in the Employment Cost Index for total compensation and for wages and salaries, private industry workers, United States and localities, not seasonally adjusted, March 2013 to March 2014

In addition to the geographic data, a comprehensive national report is available that provides data by industry, occupational group, and union status, as well as for both private, and state and local government employees. The ECI for the nation, regions, and divisions for June 2014 will be released on Thursday, July 31, 2014 at 8:30 a.m. (ET). Information from the Employment Cost Index program is available to sensory impaired individuals upon request. Voice phone: 202-691-5200; Federal Relay Service: 1-800-877-8339.

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 total compensation series includes changes in wages and salaries and employer costs for employee benefits.

Wages and salaries are defined as straight-time average hourly earnings 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, work on weekends and holidays, and shift differentials. Production bonuses, incentive earnings, commission payments, and cost-of-living adjustments are included in straight-time earnings, whereas nonproduction bonuses (such as Christmas or year-end bonuses) are excluded. Also excluded are such items as payments-in-kind, free room and board, and tips.

Selection of areas

Based on available resources and the existing ECI sample, it was determined that estimates would be published for 15 metropolitan areas. Since the ECI sample sizes by area are directly related to area employment, the areas with the largest private industry employment as of the year 2000 were selected. For each of these areas, 12-month percent changes and associated standard areas were computed for the periods since December 2006. (Note: The Seattle-Tacoma-Olympia, Wash. area was added to the list in September 2009.) The metropolitan area definitions of the 15 published localities are listed below.

Definitions of the four geographic regions of the country are noted below.


Table 1. Employment Cost Index for total compensation and for wages and salaries, private industry workers, United States, South region, and the Houston area, not seasonally adjusted
Area Total compensation Wages and salaries
12-month percent changes for period ended: 12-month percent changes for period ended:
Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec.
United States

2006

2.6 2.8 3.0 3.2 2.4 2.8 3.0 3.2

2007

3.2 3.1 3.1 3.0 3.6 3.3 3.4 3.3

2008

3.2 3.0 2.8 2.4 3.2 3.1 2.9 2.6

2009

1.9 1.5 1.2 1.2 2.0 1.6 1.4 1.3

2010

1.6 1.9 2.0 2.1 1.5 1.6 1.6 1.8

2011

2.0 2.3 2.1 2.2 1.6 1.7 1.7 1.6

2012

2.1 1.8 1.9 1.8 1.9 1.8 1.8 1.7

2013

1.9 1.9 1.9 2.0 1.7 1.9 1.8 2.1

2014

1.7 1.7
South Region

2006

2.1 2.3 3.1 3.5 2.1 2.3 3.2 3.6

2007

3.3 3.6 3.2 3.1 3.6 3.9 3.5 3.3

2008

3.4 3.0 2.8 2.4 3.3 3.3 3.1 2.8

2009

1.9 1.5 1.4 1.3 2.1 1.5 1.4 1.4

2010

1.5 1.7 1.7 1.9 1.4 1.5 1.4 1.7

2011

1.7 2.1 2.0 2.0 1.6 1.8 1.9 1.6

2012

2.3 2.2 2.2 2.3 2.0 2.0 2.0 2.3

2013

2.2 2.1 2.1 2.0 2.3 2.2 2.0 2.0

2014

1.7 1.7
Houston-Baytown-Huntsville

2006

3.8 3.8

2007

3.1 3.0 3.3 2.6 3.3 3.6 4.2 3.2

2008

2.9 2.4 2.4 2.5 3.6 2.6 2.5 3.0

2009

2.1 1.8 1.0 0.6 2.3 2.1 1.2 0.8

2010

0.8 1.1 2.5 3.1 0.8 1.1 2.5 3.4

2011

3.3 3.2 2.1 1.4 3.7 3.0 2.4 1.1

2012

1.7 2.0 2.5 2.7 1.5 1.9 2.2 2.8

2013

2.0 2.1 1.9 2.0 2.1 2.5 2.5 2.3

2014

1.8 2.4


Table 2. Employment Cost Index for total compensation and for wages and salaries, private industry workers, United States, geographical regions, and localities, not seasonally adjusted
Area Total compensation Wages and salaries
12-month percent changes for period ended: 12-month percent changes for period ended:
Mar. 2013 Dec. 2013 Mar. 2014 Mar. 2013 Dec. 2013 Mar. 2014

United States

1.9 2.0 1.7 1.7 2.1 1.7

Northeast

1.9 2.0 1.5 1.6 1.8 1.5

Boston-Worcester-Manchester

1.6 2.0 2.0 1.5 2.2 2.2

New York-Newark-Bridgeport

2.2 1.8 1.4 1.7 1.3 1.2

Philadelphia-Camden-Vineland

2.3 2.2 1.6 2.5 1.7 1.4

South

2.2 2.0 1.7 2.3 2.0 1.7

Atlanta-Sandy Springs-Gainesville

4.3 2.0 1.2 4.1 1.5 0.7

Dallas-Fort Worth

1.6 3.3 2.2 1.8 3.5 2.7

Houston-Baytown-Huntsville

2.0 2.0 1.8 2.1 2.3 2.4

Miami-Fort Lauderdale-Pompano Beach

1.9 1.9 1.7 1.8 2.4 2.3

Washington-Baltimore-No. Virginia

2.2 1.7 1.5 2.2 1.8 1.4

Midwest

1.5 1.6 1.7 1.5 1.8 1.6

Chicago-Naperville-Michigan City

1.7 1.6 1.6 1.4 2.2 1.8

Detroit-Warren-Flint

1.9 1.7 1.8 2.5 2.0 1.1

Minneapolis-St. Paul-St. Cloud

1.4 2.0 1.6 1.2 1.6 1.4

West

1.6 2.4 2.1 1.5 2.4 2.0

Los Angeles-Long Beach-Riverside

2.0 1.7 1.3 1.7 1.7 1.1

Phoenix-Mesa-Scottsdale

0.9 1.5 1.4 2.1 2.0 1.2

San Jose-San Francisco-Oakland

2.7 2.6 3.6 2.8 2.4 3.4

Seattle-Tacoma-Olympia

3.3 1.7 1.7 2.1 1.8 1.7

Last Modified Date: May 1, 2014