Employment Cost Index for the Regions – March 2008 (PDF)

Total compensation costs for private industry workers rose 3.5 percent in the West for the year ended March 2008, according to the Bureau of Labor Statistics of the U.S. Department of Labor.  The South and the Northeast followed closely with increases of 3.4 and 3.3 percent, respectively, during the same period, while the Midwest recorded a 2.6-percent advance.  (See charts A and B.)  Denis M. McSweeney, the Bureau’s regional commissioner, noted that all four regions experienced little or no change in their rates of gain for the year ended March 2008 compared to those recorded in March 2007.  Nationally, total compensation costs rose 3.2 percent during the last year, identical to the gain registered in March 2007.  (See Technical Note for regional definitions.)

Chart A.  Percent change in the ECI for private industry workers, total compensation versus wages and salaries, United States and regions, March 2007-March 2008

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.  In addition to regional estimates, ECI data for nine smaller geographical divisions are also available.  Growth rates for total compensation costs ranged from 3.7 percent in the West North Central division to 2.2 percent in the East North Central division. In New England, the growth rate for total compensation costs was 3.0 percent.   (See table 1.)  The ECI for wages and salaries (a component of the total index that excludes benefit costs) exhibited a similar geographical pattern, as rates of gain ranged from 3.9 percent in the West North Central division to 2.1 percent in the East North Central division. In New England, the rate of gain in the ECI for wages and salaries was 3.4 percent.

Chart B.  Over-the-year percent change in the ECI for total compensation in the regions,
private industry workers, 2003-2008

Among the regions, the annual change in the ECI for wages and salaries ranged from 3.4 percent in the Northeast to 2.6 percent in the Midwest for the year ended March 2008.  Wages and salaries rose 3.3 percent in both the South and West for the same period.  (See chart C.)  Compared to a year ago, annual wage and salary gains were little changed in the Northeast and South, but were lower in the Midwest and West.  Nationally, wages and salaries rose 3.2 percent during the last year, compared with the 3.6-percent gain registered in March 2007.

The ECI for total compensation in the West rose 3.5 percent in the year ended March 2008, comparable to the 3.6-percent increase recorded in March 2007.  However, the latest over-the-year gain in the regional ECI for wages and salaries, at 3.3 percent, was lower than the year-ago rate of 4.1 percent.  Retail prices in the West, as measured by the Consumer Price Index for All Urban Consumers (CPI-U), increased 3.7 percent during the year ended March 2008.  (See tables 2 and 3.)

Total compensation costs in the South rose 3.4 percent for the year ended March 2008, about the same as the 3.3-percent gain registered during the year ended March 2007.  The wage and salary ECI in the South rose 3.3 percent during the last 12 months compared to a 3.6-percent increase recorded a year ago.  Retail prices in the South advanced 4.4 percent during the year ended March 2008.

From March 2007 to March 2008, total compensation costs in the Northeast rose 3.3 percent, compared to a 3.1-percent increase recorded in the previous year.  Wages and salaries in the Northeast increased 3.4 percent for the year ended March 2008, close to the 3.2-percent gain reported in March 2007.  Retail prices in the Northeast increased 3.9 percent during the year ended March 2008.

In the Midwest, total compensation costs advanced 2.6 percent during the year ended March 2008, identical to the increase registered during the previous 12-month period.  On the other hand, the recent 2.6-percent advance in the ECI for wages and salaries in the Midwest was lower than the 3.2-percent over-the-year increase posted last March.  Retail prices in the Midwest increased 3.7 percent from March 2007 to March 2008.

For the United States as a whole, private industry compensation costs rose 3.2 percent for the year ended March 2008, matching the over-the-year increase reported in March 2007.  During the latest 12-month period, wages and salaries also advanced 3.2 percent nationwide, below the year-ago gain of 3.6 percent.  (See chart D.)  The national CPI-U rose 4.0 percent from March 2007 to March 2008.

Chart C.  Over-the-year percent change in the ECI for wages and salaries in the regions,
private industry workers, 2003-2008

Chart D.  Over-the-year percent change in the ECI for private industry workers, total compensation versus wages and salaries, United States, 2003-2008

Further information:

In addition to the geographical data, a comprehensive national report is available that provides data by industry, occupational group, union status, and all metropolitan and non-metropolitan areas combined.  This report also presents data for both private and state and local government employees.  The report on the Employment Cost Index and further technical information may be obtained from the U.S. Bureau of Labor Statistics, New England (Boston) Information Office by calling (617) 565-2327.  The release is available on the Bureau’s Web site at www.bls.gov/ncs/ect/.  Current and historical information from other Bureau programs may be accessed via our regional homepage at www.bls.gov/ro1/.  The ECI for June 2008 is scheduled to be released Thursday, July 31, 2008 at 8:30 a.m. (ET).  Information from the Employment Cost Index program is available to sensory impaired individuals upon request.  Voice phone: 617-565-2072, Federal Relay Services: 1-800-877-8339.

Technical Note

The Employment Cost Index (ECI) is a measure of the change in the cost of labor, free from the influence of employment shifts among occupations and industries.  The compensation series includes changes in wages and salaries and employer costs for employee benefits.

Wages and salaries are defined as the hourly straight-time wage rate or, for workers not paid on an hourly basis, straight-time earnings divided by the corresponding hours.  Straight-time wage and salary rates are total earnings before payroll deductions, excluding premium pay for overtime and for work on weekends and holidays, shift differentials, and nonproduction bonuses such as lump-sum payments provided in lieu of wage increases.  Production bonuses, incentive earnings, commission payments, and cost-of-living adjustments are included in straight-time wage and salary rates.

Beginning with the release of the March 2006 data, indexes were rebased to December 2005 = 100 from June 1989 = 100.  The percentage changes shown in the historical tables were calculated from the rebased indexes.  Thus, changes may differ from those originally published because of rounding.  More information on rebasing is included in the article, "Changes affecting the Employment Cost Index" in the April 2006 issue of the Monthly Labor Review.

Seasonally adjusted data for 2002-2007 were revised with the March 2008 estimates to reflect updated seasonal factors.  The new seasonal factors and historical listings containing revised seasonally adjusted indexes are available on the Web site www.bls.gov/ncs/ect/ectsfact.htm.

Regional and divisional definitions:

Northeast Region: Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont.

New England Division: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont.

Middle Atlantic Division: New Jersey, New York, and Pennsylvania.

South Region: Alabama, Arkansas, Delaware, the District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia.

South Atlantic Division: Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, and West Virginia.

East South Central Division: Alabama, Kentucky, Mississippi, and Tennessee.

West South Central Division: Arkansas, Louisiana, Oklahoma, and Texas.

Midwest: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin.

East North Central Division: Indiana, Illinois, Michigan, Ohio, and Wisconsin.

West North Central Division: Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota.

West: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming.

Mountain Division: Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, and Wyoming.

Pacific Division: Alaska, California, Hawaii, Oregon, and Washington.