September 2003 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.

Total compensation costs for civilian workers rose 1.0 percent from June to September 2003, seasonally adjusted, virtually unchanged from the 0.9 percent gain from March to June, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Benefit costs increased 1.5 percent and continued to outpace the gain in wages and salaries for civilian workers in September, 0.7 percent. The Employment Cost Index (ECI), a component of the National Compensation Survey, measures quarterly changes in compensation costs, which include wages, salaries, and employer costs for employee benefits for nonfarm private and State and local government workers.

Over 40 percent of the increase in compensation costs was attributable to changes in benefit costs during the September quarter. Among private industry workers, benefit costs accounted for over one-third of the gain in compensation during the June to September period. Among State and local government workers, benefit costs accounted for over 55 percent of compensation gains during the quarter, with health insurance and defined benefit retirement costs accounting for nearly half of the rise in compensation costs in State and local government.

Quarterly changes, seasonally adjusted

Compensation costs for private sector workers rose 1.0 percent from June to September, compared with a gain of 0.8 percent in the prior quarter. For State and local government workers, the increase in compensation costs moderated to 0.7 percent in September, compared with a gain of 1.0 percent for the quarter ended in June. Gains in private sector compensation costs were led by increases in retail trade and white- collar workers. Private sector compensation gains were dampened by transportation and public utilities and service workers. (See tables A and 1.)

Benefit costs advanced 1.5 percent for civilian workers (nonfarm private industry and State and local government) in the September 2003 quarter, following a gain of 1.4 percent in the June quarter. In the private sector, benefit costs rose 1.4 percent for the September quarter, following a 1.3 percent gain in the previous quarter. By contrast, the benefit increase for State and local governments jumped to 2.0 percent in the September quarter, following a more modest 1.3 percent increase in June 2003.

While gains in wages and salaries showed little change from the prior quarter for civilian workers, increasing 0.7 percent during the September quarter following a gain of 0.6 percent in June, the gains for private industry and State and local government workers varied widely during the quarter. After advancing 0.8 percent during the March to June quarter, the gain in State and local government wages and salaries slowed to 0.1 percent during the June to September period. In contrast, wages and salaries for private industry workers rose 0.9 percent for the September quarter, following a more modest 0.6 percent gain during the prior quarter. Private sector wage gains were led by service-producing industries, especially retail trade. Increases in wages and salaries in the private sector were slowed by nondurable manufacturing and transportation and public utilities.

Over-the-year changes, not seasonally adjusted

Annual compensation costs for civilian workers (not seasonally adjusted) increased 3.9 percent for the year ended September 2003, compared with a 3.7 percent over-the-year increase for September 2002. Compensation costs in private industry rose 4.0 percent in the year ended September 2003, compared with a more modest increase of 3.7 percent in September 2002. State and local government compensation costs increased 3.6 percent for the year ended September 2003, compared to an over-the- year gain of 3.8 percent in September 2002. (See tables B, 2, and 3.)

Although over-the-year compensation gains remained relatively constant for the years ended September 2002 and September 2003, the components of compensation continued to show significant differences. While increases in wages and salaries slowed, benefit costs rose sharply during the year ended September 2003. For private industry workers, wages and salaries rose 3.0 percent in the year ended September 2003, compared with a gain of 6.5 percent for benefits. Wages and salaries rose a modest 2.3 percent for State and local government workers, while benefits increased 6.7 percent for the year ending September 2003. (See tables B, 5, 6, and 8.)

Nonfarm private industry

For the year ended September 2003, compensation costs in private industry increased 4.5 percent for goods-producing industries, higher than the 3.6 percent advance for the year ended September 2002. Compensation costs for manufacturing advanced 4.7 percent in September 2003, after increasing 3.8 percent in September 2002. Compensation costs for construction rose 3.8 percent in September 2003, compared with a 3.0 percent rise in September 2002. (See table 3.)

The over-the-year increase in compensation for service-producing industries was 3.7 percent, the same as the gain for the year ended September 2002. Among service-producing industries, the 12-month increase for finance, insurance, and real estate was 7.3 percent for the year ended in September 2003, led by a large increase in banking, savings and loan, and other credit agencies. Compensation costs rose modestly in retail trade, increasing 2.5 percent in the year ended September 2003.

Over-the-year compensation cost increases were 4.0 percent for white- collar occupations, 4.2 percent for blue-collar occupations, and 3.0 percent for service occupations for the year ended September 2003. Among white-collar occupational groups, compensation changes ranged from 3.5 percent for professional specialty and technical employees and for sales workers to 4.8 percent for executive, administrative, and managerial employees. Among blue-collar workers, compensation cost increases ranged from 3.8 percent for transportation and material moving workers to 4.6 percent for machine operators, assemblers, and inspectors. (See table 3.)

Compensation costs for union workers advanced 4.8 percent over the year ended September 2003, greater than the 3.8 percent increase for nonunion workers. Compensation costs among blue-collar union workers rose 5.1 percent, higher than the gain of 3.6 percent for blue-collar nonunion workers. In goods-producing industries, a 5.4 percent increase for union workers was greater than the 4.1 percent advance for nonunion workers. (See tables C and 4.)

Wages and salaries for union workers rose a modest 2.6 percent for the 12 months ended in September 2003. This compares with an over-the-year increase of 3.1 percent for nonunion workers. Benefit costs for union workers rose sharply, 8.5 percent, greater than the increase of 5.9 percent for nonunion workers in September 2003. (See tables C, 7, and 8.)

Among the four geographic regions, increases in compensation costs ranged from 2.7 percent in the South to 5.0 percent in the Midwest for the year ended in September 2003. Compensation costs rose 4.0 percent in the Northeast and 4.6 percent in the West. (See table 4.)

State and local government

Employer costs for wages and salaries among State and local government workers rose 2.3 percent for the year ended September 2003. Wage and salary increases for State and local government workers from September 1982 through September 2002 ranged from 2.7 in September 1992 and September 1997 to 8.2 percent in September 1982. Benefit costs rose 6.7 percent for the year ended September 2003. Benefit increases from September 1992 through September 2002 ranged from 1.5 percent in September 1997 to 5.6 percent in September 2001.

For the year ended September 2003, compensation costs increased 3.2 percent for educational services, compared with 3.3 percent for the year ended September 2002. Among educational services, over-the-year gains were 3.4 percent for elementary and secondary schools and 2.7 percent for colleges and universities. Among occupational groups, compensation costs of service workers rose 4.1 percent for the year ended September 2003, compared with gains of 3.5 percent for white-collar workers and 3.3 percent for blue-collar workers. (See tables B, 5, and 8.)

Supplemental data from the ECI, providing 12-month percent changes in employer costs for health insurance in private industry from June 1982 to September 2003, will be available shortly after publication of this news release on the Internet site http://www.bls.gov/ect/home.htm, by e-mail request ocltinfo@bls.gov, or by telephone (202) 691-6199.

The costs per hour worked of compensation components, based on data from the ECI, were published on August 26, 2003, in a news release titled "Employer Costs for Employee Compensation-June 2003."

ECI data are available on the Compensation Cost Trends page at http://www.bls.gov/ncs/ect/home.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 webmaster@bls.gov. For ECI data requests, send e-mail to ocltinfo@bls.gov.

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