March 2005 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 increased 0.7 percent from December 2004 to March 2005, seasonally adjusted, virtually unchanged from the 0.8 percent gain from September to December 2004, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Benefit costs rose 1.2 percent, outpacing the gain for wages and salaries of 0.6 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 civilian workers (nonfarm private and State and local government).

Rises in benefit costs accounted for nearly 60 percent of the increase in compensation costs for civilian workers from December 2004 to March 2005. Among private industry workers, benefit costs contributed approximately 60 percent of compensation gains during the quarter, with health insurance costs and nonproduction bonuses accounting for nearly one- third of the gain in compensation costs. Among State and local government workers, benefit costs comprised a little over half of compensation cost gains during the December to March period, with health insurance costs accounting for one-fourth of the gain in compensation costs.

Quarterly changes, seasonally adjusted

Compensation costs for the private sector rose 0.6 percent from December 2004 to March 2005, after advancing 0.8 percent in the prior quarter. For State and local government workers, compensation costs rose 1.0 percent in March, compared with a gain of 0.9 percent for the quarter ended in December. (See tables A and 1.)

Benefit costs advanced 1.2 percent for civilian workers in the March 2005 quarter, following a gain of 1.6 percent in the December 2004 quarter. Private sector benefit costs rose 1.1 percent for the March quarter, moderating from the 1.6 percent gain in the previous quarter. Benefit costs for State and local government workers increased 1.5 percent in the March quarter, unchanged from the prior quarter.

Wages and salaries for civilian workers increased 0.6 percent during the March 2005 quarter, virtually unchanged from a gain of 0.5 percent in December 2004. Wages and salaries for private industry workers rose 0.6 percent for the March quarter, compared with a 0.4 percent gain during the prior period. Wages and salaries in State and local government advanced 0.8 percent during the December 2004 to March 2005 period, following an increase of 0.6 percent change in the previous quarter.

Over-the-year changes, not seasonally adjusted

Annual compensation costs for civilian workers increased 3.5 percent for the year ended March 2005, compared with a 3.8 percent over-the-year increase for March 2004. Compensation costs in private industry rose 3.4 percent in the year ended March 2005, compared with a 3.9 percent increase in March 2004. Compensation costs increased 3.6 percent for State and local governments for the year ended March 2005, compared with an over-the- year gain of 3.3 percent in March 2004. (See tables B, 2, and 3.)

The components of compensation showed differences in the rate of change. While increases in wages and salaries continued at a moderate pace, benefit costs continued to rise more rapidly. For civilian workers, wages and salaries rose 2.4 percent in the year ended March 2005, nearly identical with a gain of 2.5 percent in March 2004. Wages and salaries for private industry workers also rose 2.4 percent for the 12 months ended in March 2005, compared with an increase of 2.6 percent in March 2004. Benefit costs gained 5.9 percent for civilian workers for the period ended March 2005, compared with an increase of 6.9 percent for the year ended March 2004. (See tables B, 5, 6, and 8.)

Nonfarm private industry

For the year ended March 2005, compensation costs in private industry increased 3.9 percent for goods-producing industries, compared with an advance of 4.5 percent for the year ended March 2004. Compensation costs for manufacturing advanced 3.8 percent in March 2005, compared with the 4.7 percent gain in March 2004. Compensation costs for construction rose 2.7 percent in March 2005, compared with a 3.5 percent rise in March 2004. (See table 3.)

The over-the-year increase in compensation for service-producing industries was 3.2 percent, compared with a 3.6 percent gain for the year ended March 2004. Among service-producing industries, compensation costs rose modestly for retail trade and transportation and public utilities, increasing 2.5 percent and 2.8 percent, respectively, in March 2005. (See table 3.)

Over-the-year compensation cost increases were 3.6 percent for white- collar occupations, 3.2 percent for blue-collar occupations, and 2.4 percent for service occupations for the year ended March 2005. Among white-collar occupational groups, compensation cost changes ranged from 2.3 percent for sales workers to 4.3 percent for professional specialty and technical employees. Among blue-collar occupational groups, compensation cost increases ranged from 2.7 percent for machine operators, assemblers, and inspectors to 3.6 percent for precision production, craft, and repair occupations. (See table 3.)

Compensation costs for union workers advanced 3.6 percent over the year ended March 2005, compared with a 3.4 percent increase for nonunion workers. Among blue-collar workers, compensation costs advanced 3.5 percent for union workers, compared with the gain of 3.1 percent for nonunion workers. In manufacturing industries, compensation cost gains for union workers slowed sharply, rising 3.2 percent for year ended March 2005, significantly less than the 7.8 percent increase for the year-ended March 2004. For nonunion workers in manufacturing, compensation costs rose 3.4 percent for the year ended March 2005, compared with an over-the year gain of 3.6 percent in March 2004. (See tables C and 4.)

Wages and salaries for union workers rose 2.3 percent for the 12 months ended in March 2005, compared with an over-the-year increase of 2.4 percent for nonunion workers. Benefit costs for union workers rose 5.6 percent for the year ended March 2005, slowing sharply compared with the gain of 11.2 percent in March 2004. Benefit costs for nonunion workers advanced 5.8 percent over the year ended March 2005, compared with an increase of 6.0 percent in March 2004. (See tables C, 7, and 8.)

Among the four geographic regions, increases in compensation costs ranged from 3.0 percent in the Midwest to 3.7 percent in the South for the year ended March 2005. Compensation costs rose 3.5 percent in the Northeast and West. In the West, gains in wages and salaries slowed to 2.1 percent for the year ended March 2005, significantly less than the 3.4 percent gain for the year ended March 2004. Among the remaining regions, wages and salaries rose 2.2 percent in the Midwest, 2.5 percent in the Northeast, and 2.8 percent in the South for the year ended March 2005. (See tables 4 and 7.)

State and local government

Wages and salaries for State and local government workers rose 2.3 percent in the year ended March 2005, compared with the gain of 2.1 percent for March 2004. Benefit costs rose 6.6 percent for the year ended March 2005, compared with the gain of 6.2 percent for the year ended March 2004. (See tables B, 5, and 8.)

For the year ended March 2005, compensation costs increased 3.1 percent for educational services, compared with the 2.9 percent increase for the year ended March 2004. Within educational services, compensation increases were 3.3 percent for elementary and secondary schools and 2.6 percent for colleges and universities. Among occupational groups, compensation costs of service workers rose 4.3 percent for the year ended March 2005, compared with gains of 3.5 percent for white- and blue-collar workers. (See table 2.)

This release incorporates annual revisions in seasonally adjusted Employment Cost Index (ECI) data for total compensation, wages and salaries, and benefit costs. Seasonally adjusted data for 2000-2004 were revised to reflect updated seasonal factors. The new seasonal factors and the historical listing containing revised seasonally adjusted indexes are available on the Internet site http://www.bls.gov/ncs/ect/home.htm, by e- mail request at ocltinfo@bls.gov, or by telephone (202) 691-6199.

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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