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The Employment Cost Index:
recent trends and expansion
Beth Levin
After nearly a decade of developmental work, the Bureau of Labor Statistics Employment Cost Index (ECI) today tracks labor cost trends for nearly 88 million workers in the civilian nonfarm economy. There were two noteworthy expansions of the series in 1981 —the inclusion of State and local government workers and the introduction of index numbers.
Last year, increases in the Employment Cost Index for private nonfarm workers were nearly the same as in 1980. (See tables 1 and 2) The compensation index was up 9.8 percent in both years, while the wage and salary index increase of 8.8 percent in 1981 was slightly below the 9.0-percent increase in 1980. In contrast, the Consumer Price Index for Urban Wage Earners and Clerical Workers rose 12.5 percent in 1980 compared with 8.7 percent in 1981. Consequently, real wages increased slightly in 1981, while they fell in 1980. The last year prior to 1981 in which real wages increased was 1977.
All of the ECI compensation series published set record high increases in the first quarter of 1981.1 However, in the remaining quarters of the year, compensation gains were generally below the pace set in the same periods in 1980. Legislated increases in the minimum wage and in the social security tax rate and earnings ceiling pushed up the March gains. The social security changes accounted for 0.5 percentage point of the 3.6-percent rise in compensation for all private nonfarm workers during the first quarter.
This excerpt is from an article published in the May 1982 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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1 Data are collected for the pay period including the 12th day of the last month of each quarter—March, June, September, and December.
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