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Employment Cost Index series to replace Hourly Earnings Index.



Early in 1989, the Bureau of Labor Statistics Bureau of Labor Statistics (BLS)

A research agency of the U.S. Department of Labor; it compiles statistics on hours of work, average hourly earnings, employment and unemployment, consumer prices and many other variables.
 will replace the Hourly Earnings Index with an Employment Cost Index (ECI ECI Employment Cost Index
ECI Election Commission(er) of India
ECI Enterprise Content Integration
ECI Early Childhood Intervention
ECI Environmental Change Institute
) series that has the same occupational coverage as the Hourly Earnings Index. The new ECI series is part of a broader initiative that will provide occupational indexes by industry sector-such as for blue-collar workers blue-collar worker nobrero/a

blue-collar worker nouvrier/ère col bleu

blue-collar worker n
 in the goods-producing and service-producing sectors-from the ECI program. The Bureau is making the change because, over the last decade, the ECI has become a major economic indicator economic indicator

Statistic used to determine the state of general economic activity or to predict it in the future. A leading indicator is one that tends to turn up or down before the general economy does (e.g.
 and has several advantages in measuring wage change, and because recent cuts in the Bureau's budget make it impractical im·prac·ti·cal  
adj.
1. Unwise to implement or maintain in practice: Refloating the sunken ship proved impractical because of the great expense.

2.
 to maintain both series.

The Employment Cost Index, a quarterly series first published in 1976, is a fixed employment weighted index. It is designed to measure changes in employer expenditures for employee compensation and the two components of compensation-wages and salaries and benefit costs. The ECI provides indexes for State and local governments, private industry, and occupational and industry groups, as well as by collective bargaining collective bargaining, in labor relations, procedure whereby an employer or employers agree to discuss the conditions of work by bargaining with representatives of the employees, usually a labor union.  status, region, and area size.

The Hourly Earnings Index was developed in 1971 to approximate wage rate change using average hourly earnings from the Bureau's monthly Current Employment Statistics Program. The earnings index, which covers production and nonsupervisory workers in private industry, approximates wage rate changes for broad industry groups by eliminating the impact of employment shifts among industries.

Some advantages of the ECI over the Hourly Earnings Index as a measure of wage change include the following:

Employment coverage. The ECI covers all workers in private nonfarm industry (excluding private households) and State and local governments. The Hourly Earnings Index excludes State and local government workers, nonproduction Non`pro`duc´tion

n. 1. A failure to produce or exhibit.
 workers in goods-producing industries (mining, construction, and manufacturing), and executive, administrative, and managerial occupations-one of the fastest growing groups in the labor force-in the service-producing industries.

Compensation coverage The ECI includes wages and salaries as well as the employers' cost of employee benefits. The Hourly Earnings Index covers only hourly earnings ftom establishment payrolls, and excludes employee benefits and lump-sum payments, a growing compensation practice.

Wage change. The EC) measures the change in wages and salaries and benefit costs, excluding the effects of employment shifts among industries and occupations with different wage and compensation levels. The ECI program collects wage rates and benefit cost data for narrowly defined jobs within each establishment. Changes in wage rates and benefit costs are aggregated using fixed employment weights so that the index reflects only wage- and compensation-rate changes. The Hourly Earnings Index is based on the average earnings (rather than on wage rates) of all covered workers in an industry, and reflects changes in the occupational mix of employment, as well as changes in wage rates.

Overtime payments. The ECI eliminates fluctuations that occur as the number of overtime hours worked changes. The Hourly Earnings Index is adjusted to eliminate fluctuations arising from overtime in manufacturing industries manufacturing industries nplindustrias fpl manufactureras

manufacturing industries nplindustries fpl de transformation

.

Detailed series. The ECI publishes more than 160 detailed indexes for State and local governments, total private industry, occupational and industry groups, and by collective bargaining status, region, and area size. The number of indexes will increase to nearly 200 with the publication of indexes for occupations by industry sector. The Hourly Earnings Index provides separate data for only eight broad industry groups, in addition to data for durable and nondurable non·du·ra·ble  
adj.
Not enduring; being in a state of constant consumption: nondurable items such as paper products.

n.
A consumable item: nondurables such as food. 
 manufacturing and for nonmanufacturing Non`man`u`fac´tur`ing

a. 1. Not carrying on manufactures.
.

Data users who wish to continue to monitor wage and salary change for production and nonsupervisory workers in private industry can do so with the new ECI series. Incorporating the index for production and nonsupervisory workers into the ECI system allows analysts to compare wage rate changes with compensation cost changes for that group of workers, and also to determine how the wage-rate changes for that group compare with those for other groups, such as all workers in private industry or all private and State and local government workers. In addition, users will be able to examine wage changes by industry sector. For example, wage changes for production workers in the goods-producing sector can be compared with those for nonsupervisory workers in the service-producing sector.

Average hourly earnings in dollar terms will continue to be published monthly with full industry detail. This series may be used for monthly analysis of earnings trends.

The new ECI wage and salary series and the Hourly Earnings Index are presented in table I and charts 1 and

2. The data show that the two measures were almost always within 1 index point of each other ftom September September: see month.  1975 to June June: see month.  1983, but ftom September 1983 on, the Hourly Earnings Index began moving up at a slower pace than the ECi-reaching a 5.1 -point differential by December December: see month.  1987.

(Although not directly comparable with the Hourly Earnings Index, the ECI compensation series was recalculated with Hourly Earnings Index coverage, and is shown in table 2.)

Most of the difference between the new ECI wage and salary series and the Hourly Earnings Index is probably the result of changes in the occupational mix of the employed labor force. The ECI measures the change in wage rates only, while the Hourly Earnings Index is also influenced by changes in the occupational mix. The period since 1983 has been one of dynamic employment growth. This growth, fueled by both an expanding labor force (as participation rates increased) and a declining unemployment rate, has led to profound and complex changes in the structure of employment. Some of the changes would cause the Hourly Earnings Index to increase more than the ]CI wage and salary series, and other changes would lead it to increase less. The net impact of the change in the mix of employment has been to cause the Hourly Earnings Index to increase at a slower rate than the ECI wage and salary series and to underestimate the change in wages for workers in its limited coverage.

It is possible to identify any number of shifts, and explain how, if considered in isolation, each would affect the relationship between the change in the Hourly Earnings Index and that in the ECI. In fact, all of the shifts are interrelated in·ter·re·late  
tr. & intr.v. in·ter·re·lat·ed, in·ter·re·lat·ing, in·ter·re·lates
To place in or come into mutual relationship.



in
 and are the result of powerful, complex, and dynamic demographic and economic forces; empirically it is not possible to determine which of the many possibilities are, in fact, responsible for the differences. All that can be known at this point is that the two indexes give different measures of change because of their fundamentally different characteristics: the ECI estimates the change in wages; the Hourly Earnings Index gives an approximation approximation /ap·prox·i·ma·tion/ (ah-prok?si-ma´shun)
1. the act or process of bringing into proximity or apposition.

2. a numerical value of limited accuracy.
 to wage change that does not eliminate changes in the occupational mix of employment.

An uneasy partnership

The relationship between working-class laundry Laundry can be:
  • items of clothing and other textiles that require washing
  • the act of washing clothing and textiles
  • the room of a house in which this is done
History of laundry
Before industrialization
 workers and the middle-class women who espoused their welfare was not, however, without ambiguity Ambiguity
Delphic oracle

ultimate authority in ancient Greece; often speaks in ambiguous terms. [Gk. Hist.: Leach, 305]

Iseult’s vow

pledge to husband has double meaning. [Arth.
 and tension. Informed by a feminist consciousness, groups such as the National Federation of Women Workers and the Women's Industrial Council brought together women of diverse backgrounds to advance the economic and industrial rights of women. This forging of a common cause achieved, as we have seen, considerable success in enacting better legislation, advancing unionization, and educating laboring women as to their rights in the workplace. At the same time, the bourgeois women who were the leading members of these organizations, though radical in their feminism feminism, movement for the political, social, and educational equality of women with men; the movement has occurred mainly in Europe and the United States. It has its roots in the humanism of the 18th cent. and in the Industrial Revolution. , accepted other aspects of the dominant culture at face value. These values could sometimes be at odds with the goal of bringing about economic independence for working women. Predictably, many such women were advocates of ventures such as penny banks, Working Girls' Clubs, Temperance Temperance
Alcoholics Anonymous (AA)

organization founded to help alcoholics (1934). [Am. Culture: EB, I: 448]

amethyst

provides protection against drunkenness; February birthstone.
 Unions, and other uplifting endeavors consistent with social and economic self-help Redressing or preventing wrongs by one's own action Without Recourse to legal proceedings.

Self-help is a term in the law that describes corrective or preventive measures taken by a private citizen.
 .In fact, moral influence was deemed to be of such importance that the job of laundry superintendent was recommended to educated women by one author as social work -the opportunity to extend "a guiding kindly hand"--as much as a means of earning a living. Though perhaps alien to some working-class cultural norms, these ventures did not undermine broader social and economic objectives and benefited some working women.
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Author:Wood, G. Donald
Publication:Monthly Labor Review
Date:Jul 1, 1988
Words:1331
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