Employment Changes in Jobs and Their Effect on the Employment Cost Index

The Employment Cost Index for wages and salaries is based on a comparison of the average wage rates
for the same set of jobs across a three‐month interval.  Employment for the majority of the jobs remains
the same over the three months.  However, if the index were based solely on the jobs for which their
number of workers decreased, it would have shown wage growth of over 50 percent from December
2001 to December 2011.  Conversely, if the index were based solely on the jobs for which their number
of workers increased, it would have almost no wage growth over the same ten years.  Therefore, this
article describes how the jobs are defined and chosen for the ECI sample, and it explores how such high
wage growth for jobs losing workers, along with such low wage growth for jobs gaining workers,  affects
the growth in the Employment Cost Index for wages and salaries overall.
I thank Tony Barkume, Keenan Dworak‐Fisher, Maury Gittleman and Tom Moehrle for comments.  The
views expressed in this paper are those of the author and do not necessarily reflect the views or policies
of the U.S. Bureau of labor Statistics.

http://www.bls.gov/ore/pdf/ec120040.pdf

©2012 ALL RIGHTS RESERVED THE AUTHOR(S) AND THE PUBLISHER

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