March 2000 Employment Cost Index

Historical release narrative reproduced from the official public-domain source. Statistical tables, standard technical appendices, administrative material and attendance rosters are omitted; formatting is adapted for reading. Figures retain the release's historical context and may have been revised. Consult the linked source for the complete document.

The Employment Cost Index for March 2000 was 146.5 (June 1989=100), not seasonally adjusted, an increase of 4.3 percent from March 1999, the U.S. Department of Labor's Bureau of Labor Statistics reported today. The Employment Cost Index (ECI) measures changes in compensation costs, which include wages, salaries, and employer costs for employee benefits.

Quarterly changes, seasonally adjusted

On a seasonally adjusted basis, the 3-month increase in compensation costs for civilian workers (nonfarm private industry plus State and local government) was 1.4 percent during the December 1999-March 2000 period, following a gain of 1.0 percent in September-December 1999. Wages and salaries increased 1.1 percent during the December 1999-March 2000 period; in the September-December 1999 period, it was 0.9 percent. Benefit costs rose 2.0 percent during the March 2000 quarter, following a 1.2 percent increase in the December 1999 quarter.

The 3-month increase in compensation costs for private industry workers was 1.5 percent during the December 1999-March 2000 period. The gain in wages and salaries was 1.2 percent in the March quarter; in the December period, it was 0.9 percent. Benefit costs showed a strong 3- month increase of 2.3 percent during the March 2000 quarter, compared with a 1.1 percent increase during the December 1999 period. (See tables A and 1.) The increase in private industry benefit costs was due, in part, to increases in health insurance, supplemental pay, and paid leave.

Compensation costs for State and local government workers increased 0.8 percent during the December 1999-March 2000 period; in the September- December 1999 period, it was 1.1 percent. Wages and salaries rose 0.9 percent in March, following a gain of 1.0 percent in December. Benefit costs increased 1.0 percent in the March quarter; in December, the increase was 1.2 percent.

Over-the-year changes, not seasonally adjusted

Compensation costs for civilian workers (not seasonally adjusted) increased 4.3 percent for the year ended in March 2000. This compares with over-the-year increases of 3.0 percent in March 1999 and 3.3 percent in March 1998. Compensation costs in private industry rose 4.6 percent in the year ending March 2000, following increases of 3.0 percent for March 1999 and 3.5 percent for March 1998. In State and local government, compensation costs increased 3.6 percent for the year ended March 2000; over-the-year increases were 2.9 percent in March 1999 and 2.5 percent in March 1998. (See tables B, 2, and 3.)

Nonfarm private industry

In private industry, wages and salaries rose 4.2 percent for the year ended March 2000, up from a 3.3 percent increase in the year ended March 1999. (See tables B and 6.) Benefit costs for private industry workers increased 5.5 percent for the year ended in March 2000, a significant increase from 2.2 percent in March 1999. (See chart A and tables B and 8.) As with the over-the-quarter increases for private industry, the rise in benefit costs was due, in part, to higher payments for health insurance, supplemental pay, and paid leave.

In private industry, over-the-year compensation cost increases were 4.8 percent for white-collar occupations, 4.2 percent for blue-collar occupations, and 3.2 percent for service occupations. Among the occupational groups, changes in compensation costs ranged from 3.2 percent for service occupations to 6.7 percent for sales occupations. (See table 3.)

For the year ended March 2000, the private industry compensation cost increase was 4.6 percent for service-producing industries, up from 3.1 percent for the year ended March 1999. The over-the-year increase in compensation costs for goods-producing industries was 4.2 percent, up from 2.8 percent the previous year. Among industry divisions, March 1999-to- March 2000 changes ranged from 2.6 percent in transportation to 9.3 percent in banking, savings and loan, and other credit agencies. (See table 3.)

Over-the-year compensation costs for both union and nonunion workers increased significantly, 3.6 percent and 4.7 percent, respectively. In service-producing industries, union compensation increased 2.4 percent and nonunion compensation increased 4.9 percent. In goods-producing industries, the increase for union workers was 4.8 percent and the increase for nonunion workers was 4.1 percent. Compensation in blue- collar occupations rose 4.1 percent for union workers and 4.2 percent for nonunion workers. (See table 4.)

State and local government

In State and local government, the March 2000 over-the-year increase in wages and salaries was 3.8 percent, as compared with a 2.9 percent increase in March 1999. Benefit costs in March 2000 increased 3.2 percent. In March 1999, the increase was 2.8 percent. (See tables 5 and 8.)

This release includes annual revisions in seasonally adjusted Employment Cost Index (ECI) data for total compensation, wages and salaries, and benefit costs. Seasonally adjusted data for 1995-1999 were revised to reflect updated seasonal factors. The new seasonal factors and historical listing containing revised seasonally adjusted indexes are available on the Internet site (http://stats.bls.gov/ecthome.htm) or upon request.

In June 2000, the Bureau of Labor Statistics plans to expand the definition of nonproduction bonuses in the ECI to better represent the compensation packages offered to employees. In addition to the traditional types of nonproduction bonuses, such as attendance bonuses and lump sum payments, the ECI will include hiring and referral bonuses. Hiring bonuses are payments made by the employer to induce an individual to accept employment; referral bonuses are made by the employer to an employee for recommending an applicant who is hired by the establishment.

As part of its ongoing research program, the Bureau of Labor Statistics is currently conducting research on stock option plans. This research will be completed in stages. BLS has begun testing the incidence of stock option plans across all industries and occupations. The prevalence of these plans, based on test results and the potential impact on compensation costs, will determine the next stage of research. The results of the incidence survey will be published in late 2000.

ECI data are available on the ECI home page (http://stats.bls.gov/ecthome.htm). To access data using Anonymous FTP, use the Internet address (ftp://ftp.bls.gov).

For technical assistance in using the BLS Internet site, send e-mail to (labstat.helpdesk@bls.gov). For ECI data requests, send e-mail to (ocltinfo@bls.gov).

The ECI news release is now available through an e-mail subscription service. Please see the subscription link on (http://stats.bls.gov/ecthome.htm) or (http://stats.bls.gov/newsrels.htm).

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