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Employment Cost Trends
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Employer Costs for Employee Compensation
Changes to NAICS and SOC

The Employer Costs for Employee Compensation (ECEC), which measures employers' costs per hour worked for total compensation, switched to new industry and occupation classification systems with the release of the March 2004 data. The 2002 North American Industry Classification System (NAICS) is now used to classify industries and the 2000 Standard Occupational Classification (SOC) system is used to classify occupations. These systems replace the 1987 Standard Industrial Classification System (SIC) and the Occupational Classification System (OCS) that were formerly used in the ECEC. Estimates using SIC and OCS will no longer be produced.

The United States adopted NAICS and SOC as the standard industrial and occupational classification systems to be used by all Federal statistical agencies to provide a means of comparing data across agencies. A U.S. Office of Management and Budget mandate requires all statistical agencies to make this change to NAICS and SOC. In addition, NAICS is designed to provide comparability between statistical systems of the United States, Mexico, and Canada, the three partners in the North American Free Trade Agreement (NAFTA).

NAICS focuses on how products and services are created while SIC focuses on what is produced. Establishments using similar raw material inputs, similar capital equipment, and similar labor are classified in the same industry. There are also changes in the composition of various SOC classifications, as well as the introduction of new occupations.

The ECEC, one of the products of the National Compensation Survey (NCS), measures employers' costs per hour worked for total compensation, and costs as a percent of total compensation. Total compensation consists of wages and salaries and the cost of employee benefits. The data cover all civilian workers, defined by NCS as those employed in private industry and State and local government. Other National Compensation Survey products provide comprehensive measures of occupational earnings, compensation cost trends, benefit incidence, and detailed benefit provisions. Detailed occupational earnings are available for localities, broad geographic regions, and the nation. The index component of the NCS, the Employment Cost Index (ECI), measures changes in labor costs. Finally, data are available on the percentage of workers with access to, and participating in, employer provided benefit plans and the detailed provisions of selected benefit plans.

Because the ECEC uses employment estimates from the Current Employment Statistics Survey, which has converted to NAICS and SOC, it will be the first NCS product to be published using NAICS and SOC. The other NCS products, not dependent on the Current Employment Statistics survey, will not change at this time but will be converted to the NAICS and SOC systems during the next two years. Although the ECEC is derived from data collected for the ECI, BLS is changing the ECEC first because the ECI estimation system will take longer to revise. The Employment Cost Index will continue to be computed on an SIC and OCS basis until early 2006. For a schedule of dates for conversion of National Compensation Survey products, see NAICS and SOC implementation schedules.

The primary NAICS and SOC categories published in the ECEC are as follows:

The NAICS industry structure in ECEC

  • Goods-producing
    • Construction
    • Manufacturing
  • Service-providing
    • Trade, transportation, and utilities
    • Information
    • Financial activities
    • Professional and business services
    • Education and health services
    • Leisure and hospitality
    • Other services
    • Public administration

The SOC occupational structure in ECEC

  • Management, professional, and related occupations
    • Management, business, and financial
    • Professional and related
  • Service occupations
    • Sales and office occupations
      • Sales and related
      • Office and administrative support
    • Natural resources, construction, and maintenance occupations
      • Construction and extraction
      • Installation, maintenance, and repair
    • Production, transportation, and material moving occupations
      • Production
      • Transportation and material moving

    For more detail on NAICS and SOC categories in the ECEC, see tables 1 and 2, below.

    Published tables contain estimates for total compensation, wages and salaries, total benefits, and detailed benefit categories. Data continue to be presented by economic sector for civilian, private industry, and State and local government. In addition, occupations within health care and social assistance are published. Title changes have been made in some cases. For example, "OASDI" has been renamed "Social Security," "Social Security" has been changed to "Social Security and Medicare," and "Premium" has been renamed "Overtime and premium." In all cases the definitions are unchanged. As indicated below, some characteristics are published with more detail than before.

    • Private industry
      • Union and nonunion
      • 4 Regions
      • 9 Census Divisions
      • Metropolitan and non-metropolitan
      • Establishment size:
        • 1-99 workers
          • 1-49 workers
          • 50-99 workers
        • 100 workers or more
          • 100-499 workers
          • 500 workers or more
      • All full-time and all part-time workers
      • Full-time and part-time workers by goods producing and service providing

    Comparability

    With the ECEC change to NAICS and SOC, specific industry and occupational classifications have changed and cost per hour worked estimates differ, in some cases by substantial amounts. In some instances, such as for wholesale trade and for retail trade the titles may be the same but the estimates are not comparable because the NAICS or SOC definition is very different. Consequently, caution should be used when comparing industry and occupation estimates across surveys or over time. When users need percent changes in employer costs, we recommend the Employment Cost Index be used instead of the ECEC. The Employment Cost Index holds employment constant over time; while the ECEC reflects changing employment structure.

    NAICS and SOC series with the same title as SIC or OCS may not be comparable. The higher level occupational and industry definitions, such as civilian workers and private industry workers, are the same for both classification systems; however, the more detailed occupational and industry classifications may differ. NAICS and SOC classification systems frequently yield series with different definitions than the previous classification systems resulting in many NAICS and SOC series that are not comparable to the SIC or OCS classification systems.

    A series in the ECEC is defined as comparable if it met three criteria. First, the proportion of workers in a given industry or occupation series was examined. For industry classes, a series was comparable if 90 percent or more of the employment was shared in both the NAICS to SIC and SIC to NAICS comparisons. Similarly, for occupational series, the 90 percent threshold was applied to both the SOC to OCS and OCS to SOC comparisons. If a series met these first criteria of comparability, the second test comparing the average wage of the old and new series was conducted. The third test was similar to the second, but compared average rates of compensation. The attached tables identify series that met all three criteria for comparability, as well as those that are new or failed the tests. Series that did not meet the comparability criteria are annotated as "breaks in series."

    Sources of information

    Data are available at www.bls.gov/ncs/ect/, by email request, or by telephone (202) 691-6199.

    For detailed information on classification systems, see NAICS and SOC.

    Table 1. ECEC industrial comparability between NAICS and SIC

    NAICS
    (sector in parentheses)
    Series meets definition of comparability Break in series or new series
    Goods-producing industries X  
         Construction (23) X  
         Manufacturing (31-33) X  
    Service-providing industries[1] X  
         Information (51)   X
         Trade, transportation, and utilities (42,44,45,48,49,22)   X
            Wholesale trade (42)   X
            Retail trade (44,45)   X
            Transportation and warehousing (48,49)   X
            Utilities (22)   X
         Financial activities[2] (52, 53) X  
            Finance and insurance (52)   X
               Credit intermediation and related activities (522)   X
               Insurance carriers and related activities (524)   X
            Real estate and rental and leasing (53)   X
         Professional and business services (54,55,56)   X
            Professional and technical services (54)   X
            Administrative and waste services (56)   X
         Education and health services (61, 62)   X
            Educational services (61) X  
               Elementary and secondary schools[3] (611110) X  
               Junior colleges, colleges, and universities[4] (611210, 611310) X  
            Health care and social assistance (62)   X
               Hospitals (622110 and 622210) X  
               Nursing and residential care facilities (623)   X
         Leisure and hospitality (71, 72)   X
            Accommodation and food services (72)   X
         Other services (81)   X
         Public administration (92)   X
    [1] Previously titled service-producing industries.
    [2] Previously titled finance, insurance, and real estate.
    [3] Previously titled elementary and secondary education.
    [4] Previously titled higher education.

     

    Table 2. ECEC occupational comparability between SOC and OCS

    SOC
    (group codes in parentheses)
    Series meets definition of comparability Break in series or new series
    Management, professional, and related (11-29)   X
         Management, business, and financial[1] (11-13) X  
         Professional and related[2] (15-29) X  
            Teachers (25-1000,25-2000,25-3000) X  
            Primary, secondary, and special education teachers (25-2000)   X
            Registered nurses (29-1111) X  
    Service (31-39) X  
    Sales and office (41-43)   X
         Sales and related (41) X  
         Office and administrative support[3] (43) X  
    Natural resources, construction, and maintenance (45-49)   X
         Construction and extraction (47)   X
         Installation, maintenance, and repair (49)   X
    Production, transportation, and material moving (51-53)   X
         Production (51)   X
         Transportation and material moving (53)   X
    [1] Previously titled executive, administrative, and managerial.
    [2] Previously titled professional specialty and technical.
    [3] Previously titled administrative support, including clerical.

    Highlights About the Change to NAICS and SOC

    Questions and Answers

    Comparing Current and Former Industry and Occupation ECEC Series (PDF)

     

    Last Modified Date: February 7, 2020