View PDF

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

BLS Handbook
of Methods







Library of C ongress C ataloging in Publication Data
U n ite d S t a t e s .
B ureau o f L abor S t a t i s t i c s .
BLS h a n d b o o k o f m e t h o d s f o r s u r v e y s a n d s t u d i e s .
O r ig in a lly is s u e d u nder t i t l e :
T e c h n iq u e s o f
p r e p a r i n g m a j o r BLS s t a t i s t i c a l s e r i e s .
I n c lu d e s b ib lio g r a p h ie s .
S u p t. o f D o cs, n o . :
L 2.3
1.
L a b o r and la b o r in g c l a s s e s — U n ite d S t a t e s —
S t a t is t ic a l s e r v ic e s .
2.
I n d u s tr ia l s t a t i s t i c s .
I.
T itle .
H

D

8 o

6 U

. U

5 1f

1

9

7

6

3

3

1

' . 0

9

7

3

7

6

- 6

0

8

0

3

2

BLS Handbook
of Methods
for Surveys and Studies
U.S. Department of Labor
W. J. Usery, Jr., Secretary
Bureau of Labor Statistics
Julius Shiskin, Commissioner
1976
Bulletin 1910




For sale by the Superintendent of Documents, U.S. Government Printing Office
Washington, D.C. 20402 - Price $3.50
Stock No. 029-001 -0 1 9 3 6 -0

Chapter revisions may be published from time-to-time before another complete
revision of this Handbook is made. I f you have a specific interest and wish to make
sure that the chapter you want is the latest available, please check with the nearest
BLS Regional Office listed on the inside back cover of this bulletin.




P refa ce
The BLS Handbook of Methods for Surveys and Studies is a well-established tradition in the
Bureau of Labor Statistics. The first edition, BLS Bulletin 993, issued in 1950, was a compendium
of articles culled from the Monthly Labor Review. Its popularity, however, soon dictated that it
become a publication in its own right. Subsequent editions — Bulletin 1168 in 1955, Bulletin 1458 in
1966, and Bulletin 1711 in 1971 — broadened the coverage and refined the explanations of the
methods the Bureau uses in its many programs of collecting, analyzing, and presenting its
statistical data.
This edition carries on in that tradition. During the few years since the fourth edition was
published, new series have been added and surveys undertaken to widen our understanding of the
Nation’s economy and its changing composition. The new series explained in this Handbook
include measures of unemployment in States and local areas, employment and wages data for
workers covered by unemployment insurance laws, occupational employment statistics collected
under the Federal-State cooperative program, international prices, an employment cost index, and
workers covered by employment benefit plans. In addition, many of the chapters for the “ older”
series have been updated to reflect the continuing improvements in the Bureau’ s methods and
statistical techniques.
For each major program there is a brief account of how it came into being and what it attempts to
do. Where the basic data come from is noted, terms are defined, and the concepts adopted are
outlined. Occasionally, for further clarification a form, a table, or a mathematical formulation is
shown. Sources of additional information, some more technical, some more popular, are listed at
the end of most chapters. The purpose is always to give the reader a clear understanding of the
nature of the statistical data the Bureau produces.
BLS statistics are used for many purposes, and sometimes the data well suited to one purpose
may have limitations for another. The chapters in this Handbook contain the information neces­
sary for the user to evaluate the suitability of the statistics for the various uses to which they may be
put.
The chapters for the Handbook were written by members of the staffs of the various program
offices of the Bureau and prepared for publication in the Office of Publications, Division of Special
Publications, under the direction of Eugene H. Becker.
Material in this publication is in the public domain and may be reproduced without permission of
the Federal Government. Please credit the Bureau of Labor Statistics and cite the name and
number of this publication.




in




Contents
Page

Introduction

.............................................................................................................................................. 1
Current Employment Analysis

Chapter:
1. Labor force, employment, and unemployment .....................
5
2. Projections of the labor force ..................................................................................................... 24
Employment Structure and Trends
3.
4.
5.
6.
7.

8.
9.
10.

Employment, hours, and earnings .............................................................................................. 26
Labor turnover .......................................................................................................................... 43
Occupational outlook ................................................................................................................. 49
National industry-occupational matrix ....................................................................................... 53
Occupational employment statistics ............................................................................................ 56
Occupational employment statistics survey ........................................................................... 57
The national/State industry-occupational matrix system ....................................................... 59
State and area occupational projections ................................................................................ 61
Measurement of unemployment in State and local areas ............................................................. 62
Employment and wages covered by unemploymentinsurance laws .............................................. 66
Characteristics of the insured unemployed.................................................................................. 74
Prices and Living Conditions

11. Consumer expenditures and income ...........................................................................................
12. Family budgets ..........................................................................................................................
13. Consumer prices ....................................................................
14. Wholesale prices .....................................................................................................................
15. Industry price indexes ................................
16. Spot market prices......................................
17. International price indexes .......................................................................................................

77
82
87
109
123
127
130

Wages and Industrial Relations
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.

Occupational pay and supplementary benefits ...........................................................................
Union wage rates ........................................
Current wage developments .......................
Measuring collective bargaining settlements ..............................................................................
Wage chronologies and salary trend reports ..............................................................................
Annual earnings and employment patterns of private nonagricultural workers ...........................
Employer expenditures for employee compensation*..................................................................
The Employment Cost Index .......................
Employee benefit plans ...............................
Work stoppages ..........................................
Collective bargaining agreements.................
Union and association membership ..............

135
146
154
161
167
170
175
184
192
195
203
207

Productivity and Technology
30.
31.

Productivity measures: Private economy and major sectors ..................................................... 219
Output per employee hour-measures: Industries and the Federal Government .......................... 225




v

Contents— Conti nu ed
Page

32.
33.
34.

Technological change ..........................................................
Construction labor requirements .........................................
Foreign labor statistics and trade research ...........................

. 233
• 238
• 241

Occupational Safety and Health
35.

Occupational safety and health statistics ..............................

245

Economic Trends
36.

Economic growth studies .....................................................

256

Systems and Standards
37.

258

Data processing at BLS

Appendixes:
A.
B.
C.

272
279
281

The BLS seasonal factor method
Industrial classification ............
Geographic classification..........




vi

I n t r o d u c t i o n

c
p
e
T h e c o u n t r y i s h u n g r y f o r i n f o r m a t i o n ; e v e r y t h i n og m o lf e t a n e s s , a n
s t a t i s t i c a l c h a r a c t e r , o r e v e n o f a s t a t i s t i c a l a p p e a rt a e i cr e r ei sp o r t s a t
h n
t a k e n u p w i t h a n e a g e r n e s s t h a t i s a l m o s t p a t h e t i c ; t h se h o uo lm ­ n h a n c e a
c
d
e
m u n it y h a v e n o t y e t le a r n e d t o b e h a lf s k e p t ic a l a n d c r it ic a l
o f t h e
c o l l e c t i n g
e n o u g h in r e s p e c t t o s u c h s t a t e m e n t s .
F u
o
W

i t h

t h e s e

w

o

r d

s

G

e

n

.

F r a

n

c

i s

A

.

W

a

l k

e

r

f

l l

u

t h e

n

B

d

u

r r o

t h e

l l

M

W

r i g

h

a s s a c h

t

u

i n

1 8

7 3

s e t t s

B

,

u

a s

r e

D

a

r .

u

W

r i g

h

t

a s s u m

o

f

S t a t i s t i c s

n

e

r

e d

a n d

c h a r g e

L a

b

o

r .

o

A

n

f r o

m

a p p r a i s a l

a

h

e

n

,

f i r s t

a s

a n

n u

t a b l i s h
t o
f

. S

a l

e d

h i s

o

U

.

r e

t h

e

p

p

o

o

o

r e a d e r s

t h e

C

m

r t

l i c

p

f

M

o

o

r e

i s s i o

i n

y

a n d

f i g u r e s

m

s e

a

r c

h

e x p

f

l a

i n

t e

d

.

F

f

L a

1 8 8
i n

s e e k i n g
n

o

t o

o

e

,

v o

x a

o

C

h i s

a

r

6

g

b

r ,
r r o

a

h e
l l

i s s u e d
W

r i g

s t a t i s t i c a l

i d

m

p

l e

m

i s i n
,

m

g

d

g

e

d

o

n

a

n

i n

g

L a

o

t

n

d

c
o

b

r a c y

i v e

i m

y .”
f

o

h

i c

h

e

.

T h

i n

i s h

m

a

y

b e

i s

t h e

i n

h

c a n d

e

r e n

i d

s c i e n t i f i c

p

o

t

i n

l i c y

p r e s t i g e

2

t h e
r

w

t i m

n

s t a t i s t i c a l

S t a t i s t i c s

s e r i e s

i s

n

o

t

a n d

s t u d i e s

b e

g a i n e d

t o

h

d e t a i l e d

o

d e s c r i p t i o n

s

o

f

t h

e

m

,

b

u

t

a l s o

f

t h e

p

h

n

i l o

e

s o

p

h

y

a n

d

a p

p

r o

a

c h

o

f

t h e

L a

b

o

B

f r o
u

r e

m
a u

d
o

f

t h e

m

a n

r

i n

w

h

i c

h

i t

f u

n

c

t i o

a

u

n

s .

h i s

t

e s ­

e t h o d

t e r p

h e

a c c u

y

f

a n d
w

u

n

g r e e t e d
s o l e l y

C

a

i n

a

f

e r s t a n

r e

d

s

B ackground

r e t a t i o n

s a i d

:
T

h

e

h

i s t o

r y

o

f

t h e

F e

d

e

r a

l

B

u

r e

o

f

r

d a t e s

t o

8
I n s t a t i n g t h e f a c t s a s t h e y h a v e b e e n f o u n d b y t h e a g e1 n t8 s4 .o Bf e f o r e t h e c r e a t i o n o f t h e c a b i n e t p o s t o f S e c r e ­
r
t h e B u r e a u , m a n y t e r m s a r e u s e d w h i c h a r e c a p a b l e o f t va a yr i o d L a b o r , t h e B u r e a u f o r a t i m e w a s k n o w n a s t h e
e f
a p p l i c a t i o n — s o m e e v e n a r e o f d o u b t f u l m e a n i n g w h e n D c o n rs t i m­ e n t o f L a b o r . F r o m t h e B u r e a u ’ s b e g i n n i n g s i n
e p a
d e r e d m e t a p h y s i c a l l y , b u t a l l s u c h t e r m s a r e u s e d t h i en a d hm i s n i s t r a t i o n o f P r e s i d e n t A r t h u r u n t i l i t b e c a m e a
t
i
r e p o r t in t h e ir c o m m o n a c c e p t a t io n ; a s , f o r in s t a n c e , t h e t e r m
p a r t o f a
c a b i n e t d e p a r t m
e n t u n d e r P r e s i d e n t W
i l s o n , i t
“ o v e r p r o d u c tio n ”
is u s e d t o i n d i c a t e t h a t c o n d i t i o n
o f a
a c c u m
u l a t e d
n e a r l y
3
d e c a d e s
o f e x p e r i e n c e
i n
c o l l e c t ­
lo c a lity , s ta te , o r c o u n try w h e n m o r e g o o d s h a v e b e e n p r o ­
i n. g . ,
i n . t* e r p r e t i n g ,
a n d
p r e s e n t i n g
f a c t s
c r u c i a l
t o
t h e
d u c e d th a n a r e s u ffic ie n t t o m e e t th e o r d in a r y d e m a n d
.
w

9

l i d

0

s a m

i t y

) ,

a n

o

d

f

e

r e

p

o

f i g u r e s

r t

t h e r e

( p .

r e

s t r i c t i o

s

a s

n s

1 4

o

a r e

1 ) ,

n

p

c o

s t a t e m

r o

v e

b

r a

l e

g

e

o

m

f

e n t s

s

o

f

n

o n

t e s t i n g

o n r e s p o n

( h e a d n o t e s

t o

a v a i l a b l e

f o

l f a r e

l s e

d

a r n

i n

g

t o

i n

a d e q u

a c i e s

i n

r m

c

c u

r

f r e

i n

q

u

i t i a l

e

r e

n
p

t l y .
o

D

r t ,

u

r i n

t h e

d

g
e

t h e

f i n

9 0

i t i o

n

y e

s ,

a r s

m

e

w

t h

h

o

i c

d

h

s ,

f o

t i o

l l o

a n d

w

e

h

w

o

s u

f

t h e

d

a t a

c c e s s o r ,

p

u

t h e

b

B

l i s h

u

r e

e

a

d

u

b

o

y

f

t h

L a

e

b

B

o

r

u
S

r e

t a

a

u

o

f

L a

t i s t i c s ,

h

l i m

b

o

x p

m

l a

e

i n

r e

e

d

l y

a g a i n

t o

m

a n

a k e

d

a g

t h e

a i n

.

T

h

e

r e a d e r s

r e

“

s

k

a s o n

e

p

t i c

o

f

f o
a

r

r

l ,”

“

c

e

t s

r s

e

r e

.3

H

o

w

e

r o

g

r a

m

.

D

e

o

f

t a
l a

r ,

i l s

i n

o

t e

f

e

r

a

y e

r l y
a

B

r s

u
a

r e

a

r e

u

h

i s t o

r y

b

t o

f o

e

a n d
u

v

e

d e s c r i b i n

g

t h e

v a

r i o

u

s

n

d

s t a t i s ­

h

l e d

s 4

t o

t h e

i n

a r e

r e

d

t h i s
e

v e

v o

l o

p

l u

m

d

.

e

m

A

n

e
t

,
o

s o m
f

p

a

e

o

r t i c u

f

t h e

l a r

e v e

n t s

s t a t i s t i c a l

e a s u r e s

c o

n

t e

t h e

u

p

g

a

i n

s t

t h i s

h i s t o r i c a l

b

a

c

k ­

­
r o
u

u

n

d

a

u

e m

e r g e s

h

i l o

s o

p

h

y

a n

d

p

o

s t u

r e

o

f

t h e

a n d

a v e

t h i s

n

d

i t a

r e

o

f

L a

b

o

r

S t a t i s t i c s

a s

t h e

i m

p a r t i a l

o

b

s e

r v e

r

a n d

b e e n
i n

e

e

p

i c

B
i t s

r k

m

n

g
t i o n s

o

p

l e s ) .
a

m
t h e

o

( p .

w
o

w

l o

h

e

t i c a l
W

f

v e

t h e

s e

t a b

f

e

v a

t h e

e

o

I n

i s

n

r i t i c

a

o

t e

r p

r e

t e

r

o

f

t r e n d s

i m

p

o

r t a

n

t

t o

t h e

w

e l f a r e

o

f

w

o

r k

-

t

l ,”

C o m m it t e e o n G o v e r n m e n t S t a t is t ic s a n d I n f o r m a t io n S e r v i
1937, p . 5 3 . R e c o m m e n d a tio n # 1 6 o f
t h e C o m m i t t e e s t a t e s : “ C o n t in u e d c r it ic i s m a n d a n a ly s is s h o u ld b
m a d e o f ( a ) s t a t is t ic a l d e f in it io n s , s p e c if ic a t io n s , a n d c la s s if ic a t io n
( b ) c o v e r a g e o f s u p p o s e d ly c o m p le t e s u r v e y s a n d o f s a m p le s u s e d f o
c u r r e n t r e p o r t in g ; ( c ) t im in g o f p e r io d ic s u r v e y s a n d c u r r e n t r e p o r t s
c o m p o n e n t ite m s a n d w e ig h t in g s y s te m s o f in d e x n u m b e r s ; a n d (
m e t h o d s a n d p r a c t ic e s in th e p r e s e n t a t io n o f d a ta . . . . F r a n k a
p r a is a ls o f c o m p a r a b ilit y , c o m p le t e n e s s , a n d a c c u r a c y s h o u ld
p u b l i s h e d . ” (p p . 4 8 - 4 9 ).
F o r a r e it e r a t i o n o f th is p h i l o s o p h y , s e e a ls o , O f f i c e o f M a
p o w e r a n d B u d g e t , C ir c u la r N o . A - 4 6 , E x h ib it B ( r e v is e d ), M a y
1974.
3 S e e , f o r e x a m p l e , t h e S e c r e t a r y o f L F i b sot r ’ n n u a l R e p o r t ,
a r A s
1 9 1 3 , f o r h i s t o r y 1 8 8 4 - 1 9 1 3 ; a n d U . S . D e p a r t m e n t o fTL e A n v , l
ha b o r i
a n d th e P lo w , 1 9 6 4 ; p a g e s 4 - 5 , 1 9 - 2 0 , 4 9 - 5 1 (1 9 1 3 - 3 0 ) ; p p . 6 3 - 6 4 , 8 7 - 9 0 ,
1 1 7 -1 1 9 , 1 3 6 -1 3 7 , a n d 155 (1 9 3 0 - 4 8 ); p p . 1 7 2 -1 7 3 , 1 8 7, 2 0 6 -2 0 7 , a n d
2 3 0 -2 3 4 (1 9 4 9 - 6 3 ).
2

a n

d

a

w

a l s o

t o

a n

d

t o

o

b

s e

b

a r e

r e e d
y

b

n

a

v o

a n

d

r o

p

h

e

n

.

r e
i d

u

a

b

r
e

a t i o

t r a l

a g

y

f o
T

f r a

d

t h

v e

c o

T

h

c y

k

m

e

m

m

f i d

o

o

t i o

i t t e

i m

B

p

a p p r a i s a l s

e
e

o

o

a

c e

o

n

n

c

t h e

b

f t e

e

n

o
t

v e

u

b

e
r n
d

e

o

e

f

x t e

p

u

n

t

r k

o

e

f o

t

,

f r a n

w

d

i n

h

o

f o

e

n

t i o

o

n

r c e

n

e

e s s

t i o

c

t
n

t

a b
e

d

t o

s u r ­
o

f f e
i n

t h i n g s

a n

t h a t

e a c h

n

c

x p

s i t e

u

u
c

t
t ,

t h e

c

r y ­

.

a g o

o

e

k n

o p p

r e

t

b

b e e n

s t a t i s t i c a l

S t a t i s t i c s

l i c a

a

i g

e

h

r m

a v e

a

t h e

r g e

n

h

m

i s

i n

n

f

i n

t

y e a r s
u

b

o

a r i s e

3 9

t h e

n

t i o

l a
e

u l d

s h o

c

t s

m

a s i z e

f

s t a t i s t i c s ,

u

b

o

x p

o

o n

a

h a s

w

t h e

s t a n d a r d s

t

r f e

“

r d

f

o

p

o

d

u s e

r

r e a s

f

o

n

s

r

e

u

t h e

v e

G
h

o

n

e

p

h e
d

r e
i n

r a

p

r t a

o

o

p

r o

w
f

a r e

m

o

,

c k

r o

p

o

m

g

i t a t i o
p

t

t

n

l a

n

a

r e

u

e n

l i m

t h e

t h

o s t

a

n

i n

i t s

r v i c e s

t h e

w

r m
m

g

m
n

S t a t i s t i c a l

n

m

e

a

n

e
l a

e

e

t h

r t h

o

d e f e c t s

x p
o

S

n

a l i n

l e

l i c

C
n

k

r t a i n

b

e

e
t h

c t

F u

c e

c e s s .

i n g

m

s t r u

a

v e

f

a s s u r e

r v e

u

p

i n

o

b

o

m

y

p

d

t h e

I n
C

e

r ­
n

­

c o l l e c t i n g

a g e n c i e s

a

f o

r a

b

i l i t y ,

o

f

i n

-

S e e I n d u s t r i a l D e p r e s s io n s , T h e F i r s t A n n u a l R e p o r t o f t h e
C o m m is s io n e r o f L a b o r , M a r c h 1 8 8 6 , p p . 1 5 - 1 6 .
1




G o v e r n m e n t S t a t is t i c s , A p r i l

4 F o r a h a n d y r e f e r e n c e t o B L S p r o g r a m s , s h o w in g t h e ir p r in c ip a
c h a r a c t e r is t ic s , s e e U . S . D e p a r t m e n t o f L a b o r , B u r e a u o f L a b
S t a t i s t ic sM a jo r B L S P ro g ra m s ( is s u e d a n n u a l ly ) .
,

1

B L S H A N D B O O K OF M ETH O DS

2

e r s .

f i d

V

e

o

l u

n

t a

t i a

n

l

n

a t u

r e

o

f

L

t e r i s t i c s

r y

B

r e

p

o

f

S

o r t i n

r e

p

p

r o

g

a n

d

t h e

o r t e d

g

r a

m

p

a t a

a r e

d

r e

s e

r v i n

i m

p

g

o

o

r t a

f

t h e

n

t

c

c h

o

n

­

C

a r a c ­

e

n

s u

s u b m

s .

p

o

w

e

s i o n

w

V o lu n t a r y R e p o r t in g a n d
C o n f id e n t ia lit y
I n

t h e

h a s
a l s

t o

p

1 - y e

h

v i d

a n

a v e

a

u n

r o

a f f a i r s
h

9

a s k e d

d

r

h

i s t o

d r e d

e

i n

t h

e i r

s u p p l i e d

r y

o

o

t h

o u

s a n

n

c l o s e l y

s

f o

f

r m

a

t i o

f

p e r s o n a l

t h e

t h e

l i v e

d e s i r e d

i n

B

d

r e

o

s .

f o

u

s

f

u

o

o

s o m

a

t i o

n

e

r a

d

t i o

i n

t o

e

,

p

a n

d

o

f

t h

B

u

,

e

a

u

a

m

r e

d

d

o

j e

z e

n

t

o

c

b e e
m

b

o

r

e

m

a

r e

d

n
.

T

h

e

y

a

t h e

g
i n

e

r e

t h a t
e

t r i b

e

u

i n

t h

p

m

l o

s

e

c

i r

d

o

.

o

r

t

u

t h e s e
u

n

d

e

p

d

,

i n

a

t e r m

r o

n

d

d

i m

r

p

o

r t a

e

y

r s u

i m

p

n

n

i s

f

g

p

i t s .

T

p

e

i m

o

h

T

d

e

h

r e

A

n

y

l t i m

o

a

v o

t

f o

e

h

o

t

n

y

y

o

f

n

b

i n

i n

o

t

i d

e

­

a

t

r u

n

i t y ,

o

f

w

i t h

d

u

c e

c o

m

s p

o

n

d

e

r t e

d

b

n

t s

s u

m

y

i s

m

t h e

d

l e

i f f e

m

r e

e

n

t

n

t e

d

b

y

c o

s o u r c e s

a n

m

g

t h e

i s s u i n g

d

t h e

n

p

o

o

t h

r t s

e

f o

r

w

r m

b e

o

f

a

p e

p
u

t s

t o

a l s

“

b

r e

h

o

c e

u s e d

w

w

a

k

a

d

w

e

r e

w

i l l i n

a

n

s .

”

n

g
f o

t h i s
t e

g

d

i v e
r

n

r e

s p

o

n

s t a t i s t i c a l

p

o

l i c

y ,

a c c e s s

t o

s u c c e s s f u l l y

o

s e

t i m

i s

t h e

e

e

t i c s

o

v e

r n

m

e

n

g o

r e

c a s e

t

i t s
t o

t o

b

y

t o

t h e

s i s t e

i n

s e e k s

f i l e

a

c

W
o

h

r e

i l e
r e

w

h

c o

i c

u

o

p

y

r t

o

s t a t i s t i c a l

i t

c a

n

n

l i a b l e

o

o

t h
o

e

e
t h

i r

s t a f f ’s

i r
e

e x p
r

F e

e
d

o

d

d
p

o

d
c o

.5 A

h

n

a n

e
u

a

r g

n

t s

i s

d a t a

t h

r p o s e s

a n

t a

i z a

i n

u r t s

o

t h

a d

a c t i o

f
a

i n
g

e

f o
n

t

b e

p

r o

v e

s t a t i s t i c s ,

r i e
e

r a

v e

n
l

r

c e

t h

u

c o l l e c t i n

l y

u

u

o

r e

o

g

r i t y

l y

r e

u

p

o

r e

a

s t a t i s t i c a l

l

a g e n c i e s
f

e

n

i n

o

m

i n

t h e

l t

i f

f o

n

L a

v o

k

r m

s

o

r

t a

t i s t i c s ,

b

o

n c y
n

a

m

i n

f o

o

f

c o
r

v e

p

l u

r m

t o

e

a g e

v o

c o l l e c t i n

a

t a

t i o

g

S

a s
r y

n

p

p

r e

c o

o

e l

t h e

e

t h i s

f

s u a ­

s c r i b

p

e

e d

r a t i o

n

.

a n d

o

l y

m

m

i s s u i n g

p

d

e

c

i f f e

f o

n

s

b e

w

o

e

q

l l

u

r

d

,

o

y e

s t a t i s ­

d

e

e

n

T h

b

o

,

a n

e

i n
t s

a

a n

w

h

l l y

y
s

r

a n

e

m

m

h

L

u

r ­

g

e ­
b

e

a l s o
i m

d

­

g e n e r a l
n e e d s

i t

a n

p

r

a ­

s t a t i s ­

e e t

d

f

f o

s o m

S

t h e

a k e s

o

e s ­

s i t u

x i s t i n
B

A

d

i c

e

e

h

d

i s t r a t i v e

t h

d

a

T

n c i e s ,

m

t s .

o

e d
8

n e e d s

l i c

a g e

e a s u r e s

r s t o

y .”

d s

t h
n

i s

c

t h e
u

t i v e

r m

e

t e r m

t r e n

t

m

m

n

s t a t i s t i c s .

e a c h

a l l .

n

u

a d

n

a l

i r e

g

p

n s t r a i n

n

t h e

u

c

e

c o

m

f

x e

s o m

l i z e

f r o

i d e a l

e

t i e s

r e

r

a r a c t e r i s t i c s

i t a t i o

i a

a

s e r v e

s o c i a l

r a t i o

a t a

t o

d

t h e

e

b e e

g e n e r a l

d

c l o s e
o

s p

i s

d

a n

a n

h a s

l l e c t i o n

t h e

s e r v e

d

d

c o

a r e

i c

t h e
a n

t o

s t a t i s t i c

p

s s ,

f r o

s o c i a l

e

S t a t i s t i c s

r e

r e

t a

q u i t e
d

g

n

d

s

n

r

i s t r a t i v e

m

a n

p

n

f r e e

f r o

c h

l i m

o

e c o

a r e

o

s t a t i s t i c a l

C

n

b

a r e

r ,

o

l i k

t h e

s i b l e

o

L a

s e

a d

f t e

a r e
n

o

r a t i o n

e
o

,

b

y

i c

e

a

r p

i l e

m

t

t h

p

o

o

o

r t a

e i r

f

v e

p

r

n

o

t

s ­

.

­

l

Staff

g

r e

h

e

B

u

r e

a

u

’ s

w

o

r k

e

x t e

d

s

a

n

t a

.

e

s

b

e

y o

n

d

t h e

i n i t i a l

c o

s

u

l l e c ­

­
n

a n

d

p r o

e

c

c e s s i n

g

o

f

d

e

t i m

I t s

a c t i v i t i e

f r e

q

,

t h

e

n

t l y

i n g s
f l u
r m

a

o

t

n

t h

l y .

h a s

n

e

,

a

n

d

s o

m

a r e

c

r u

c

i a

l

y .

O

v

a

n

a

o

t o

t h

e

d

o

t i o

u

r

n

s

o

r

t o

m

e
i n

r

f o

n

t o

c o

t h i s

i s t r a t i v e

m

p

e l

r m
c

a

t i o

n

p

r o

a

v i d

t h

t h

e

a

y e a r s

t

i t

a g e n c i e s

i s

g

a n

d

l o

s h a p i n g

p

o

f

p

u

b

l i c

p

o

l i c

e

r

t h e

y e

e

a

­

r s ,

i n

d

e

v e

e

d

a

s t a

f f

o

f

p r o

f e

s s i o

n a l

l y s t s ,

t r a i n

e d

t ­
d

t h

e

d i s c i p l i n e s

o

f

e c o n o

m

i c s

a n d

e

r

s o c i a l

s c i ­

i ­
c e s ,

t o

t h e

w

i t ,

h

p

r o

b

r

s e a r c h

a g e

c o

m

e

d

l e

o
o

f

u

t

w

t h e
o

i m

r k e

p

r s

l i c a t i o n
a n

d

t o

s

o

f

s u

r v e

s e

p r e

n t

t h

y

f i n

e m

d

i n

a s

g

c o

s
g

n

t l y

a n

d

a s

p

r o

m

p

t l y

a s

p o s s i b l e

i n

w

r i t t e

n

a n

d

­

o r a l

m

c y

o

a

i n

l f a r e

a v e

n

p

e

n

r m

.

H

o

d s

g

r e

w

s u c c e s s f u l l y

t h i s

c a n

b e

a c c o m

p

l i s h

e d

d

e

­

t o

y

f

c

o

n

f

t h

e

i r

a t l y

s u

p

u

p

o

n

t h e

r t i n

o

p

g

p

c o

e

m

r s o

p

n

n

e t e

e

n

c e

o

f

t h e

a n

a l y s t s

a n d

l .

f i ­
B

L

S

c

o

,

n

a n

a l y t i c a l

a n

d

s t a t i s t i c a l

w

o

r k

i s

p

e

r f o

r m

e

d

y . 6

d
B

i n

p o s s e s s i o n

s e c u r e
r m

i n

e i r
A

t h
u

a

t

r e

a

u

t h e s e
C

o

p o l i c i e s

m

m

i s s i o

n

r e s u
e

r s

l t

h

a

s o .

v e

I t

b e e n

i s

( e s p e c i a l l y

n

c o

n

o t a b

t h e

B

v i n

l e
u

c e

t h
r e

a

d

f r o

a t
u

s o m
o

f

y

e

o

m

i s

t s

w

,

i t h

s

t a

t i s

t i c

i a

n

s

,

a

n

d

m

a

t h

e

m

a

t i c

a

l -

i n

a n d

s t a t i s t i c i a n s
p

t h

B

r e l i e d

o

h

o p

t i m

b

m

u

t o

e

r a

n

a r e

I n
c e

a

s e

h

u

u

r e s u

u s e r s

o
r e l e a s e
d e n

T

e

l a

t h

n

c o n

p e n
g

a
r a

o o

.

a s

i t h

r t s ,

a

t i o

s ,

e s

t w

f o
t a k e s

n

y s

i n

w
o

c h

w

s

f i g u r e s

W

t i o

e
b e e n

y

o

a

p

d

t h e

r m

f o
a n

’ s
s s ,

c i a l l y

e n
v i d

n

d

t h e

t i f y i n

f i n d

u
e

f o

i n
t e m

e

r

e
r e

.

a s s u r a n

i l l

p

r e

u

r e

i t

A
r e

r y

i p

t h

n t s

F e
B

s i n

t e

a

g

u

i n
i n

n

u

t i o
o

o

B

T
r e
p

u

u

a l w

n d e

t h e

t h
­

n

u s e f u

n

o

c t i o

e r a l - p

e
f

e i r

r e s u l t s

r ,

n

g e n

p
­

m

t h
g

­

a

e

d

s u c c e s s

r v e

s p o

s ,

i n

o

i n

t h

p

a r e

l i d

l y

­

i d

r m

n

a r e

t h a t

a t e

l o
a w

p

o

t h

t h a n

v a

m

s u

l i c

c

a r e

c o

r e

t o
i n

e
t o

h a s

, 7

b

k e e p

t h e

v e r s e

o

p

,

“

h a s

i s

t o

t h

f u

q

B L S R o le , S t a f f , a n d O r g a n iz a t io n

o

s u b ­

i t

t h e

r t a

t h e

e

r e

g

e

n

e

p l e d g e

a s

s .
n

n

t a k e n

a d

T

e

a d e

a s u

p

.

h

m

s t a t i s t i c a l

o

u

w
n

l y i n

r i l y

s p

d

e

t h e

c t i o n

t h

h

r e

n

a

l l - e

c e r t a i n

i l a r

w

­

p e r h a p s

s a m

f

h a s

r e s p o n s e

y e e s

f

t a

r e

f i n

o

u
n

s a n

y

p

l o

l a p s e

l u

t o

a

s u
p

t h e
e

e e

m

a n d

n
h

v e
b

,

c a r e

l e s s

i n

t h e

t

m

a l l

m

d

T

e

s m

e

o

.

g r e a t

e

o

n

n

h a s

r s o

v o

t e l l

p

u

s

d

t i o

t i o

s i t y ,

s i n g l e

e

t i m

r t

o

t a

l e g a l

t o

t h

a t

n

v i d

e

i s

a

r o

u

r s t a n

n

p

e

a

a

a

f f o

n

i r d

r m

t h e

r e

v e

u

e
e

I n

t h e
B

t h

r m

n

t o

r t h

t h

w

l e

e

y e

f o

f o

e

e

f

a r e

a n

g

n

o

t i o

i n

a b

t h a t

o

l i e d
p

n

y

a

a

i n

d u

i s

t

t e

w

r m

t i o

r v e

d

d e e p

a t e r

f o

t

r o
a

f

i t s

f i r m

c

o

,

s u s t a i n e d

a s o n

e n c e s

s u p

n

r e

e

l a t e r
s

i n

a

i v e

t i m

r
e

l e

t

t h e

p

f o

t y p

a

f a

v e

c o n s e q u

t h

g

e

t o

h

s ,

w

r k a b

c e

t i f y i n

n

s u

e

e

t h

r e

s e l v e s

m

n

r e q u e s t s

t i o

t h

s e c o n d

t i m

e

b

e r a t i o n
i d

a

f

f o

r e

m

t h e

c k

s
r

n

e

a

R

i t s

l a

t i c
g o n e

e

o

i l y

w
u

f

w

i t

i v i d

t h e i r

t h e

n

y

o

’ s

s

r .
s i m

h i l e

b

r e l a t e d

T

r m

a

f i r m

s ) ,

i t t a l

r o

g

r a

m

m

e

r s ,

t h e

a i d

s y s t e m

s

a

o
n

a

f

a n

e

l y s t s ,

x p

e r i e n

a n d

o

t h

c e d
e

r

c o r p s

p

r o

f e

o

f

n

­

r k

,

s s i o

m

e

t h e

a l s ,

e c o n o
C

5 F o r
e x a m p l e , sN o r w e g i a n N i t r o g e n C o m p a n y v . U n i t e d
ee
S t a t e s , 2 8 8 U . S . 2 9 4 ;n i t e d S t a t e s v . K o h l e r , 13 F e d . R u l e s S e r v .
U

a s

i v i l

v a

l e

p

r a b

a

n

w

m

e

l l

i s t s

S

e

t

t o

l e

a s

a t

r v i c e
a

r e

s t a t i s t i c a l

e
C

o

v e

n

m

m

c o l l e g e

q

u

i r e

m

t h

l o

i s s i o

m

e

e

c l e

a

n

j o

t s

r

w

n

e
r e

i n

f o

r k s .

r

e

s t

o

t h

o

r

g r a d e

q u
c o

F

i r e m
n

o

e

l e

e n

m

r

a n

r o

v e

t s

i c s .

p

a l y t i c a l

f e

l

r o

T h

e

m
u

g

r e

s s i o

n

w

o

u

s t

m

h

l y

e

q

u

c

o

m

T

h

a r e

a

l s .

e e t
i ­
­

e

3 3 . 3 3 3 ( E . D . , P a 9 4 9 ) ; H a w e s v . W a ls h , 2 7 7 F e d . 5 6 9 , t h e C o u r t o f
1.
A p p e a l s f o r t h e D i s t r i c t o f C o l u m b i a . I n a l l o f t h e s e c a s e s , t h e c o 7Er x sc e r p t s f r o m 2 9 U . S . C . 1 , a c t s o f J u n e 2 7 , 1 8 8 4 , c h . 1 2 7 , 2 3 S t a t
u t
s u s t a i n e d t h e p o l i c y o f p r o t e c t i n g t h e c o n f i d e n t i a l i t y o f i n f o r m 0a ; t iJounn e 1 3 , 1 8 8 8 , c h . 3 8 9 ,
6
1, 2 5 S ta t. 18 2; F e b . 14 , 1 9 0 3 , c h . 5 5
g i v e n v o l u n t a r i l y a n d i n c o n f i d e n c e t o a n a g e n c y o f t h e F ,e d e3 r2a S t a t . 8 2 6 ; M a r . 1 8 , 1 9 0 4 , c h . 7 1 6 , 3 3 S t a t . 1 3 6 ; M a r . 4 , 1 9 1 3 , c
l
4
G o v e rn m e n t.
141, 3,
37 S ta t. 73 7.
6 S e e S u p r e m e C o u r t o f th e U n it e d
S tt a tRe e g is P a p e r C o m ­
S .
s,
8
O f f i c e o f M a n p o w e r a n d B u d g ae t tis t i c a l S e r v ic e s o f t h e U n ­
St
,

p a n y , P e titio n e
http://fraser.stlouisfed.org/ r , v . U n i t e d S t a t e s , N o . 4 7 , O c t o b e r t e r m , 1 9 6 1 . i t e d S t a t e s G o v e r n m e n t ( r e v i s e d e d i t i o n ) , 1 9 7 5 , p . 9 .

Federal Reserve Bank of St. Louis

3

IN T R O D U C T IO N
g r e a t e s t
s e n

e

i o r s ,

i n g

f f o

M

a

r t

i s

t e

r ’ s ,

s

r e s e a r c h

b u s i n e s s
p

r o

v i d

g

r o

u

a b

e

n

s

f r o

e

t o
o

f
u

t h

e

i r

i n

k n

a n d

p

t i o

n

o

t

u

o

f

a

h

r i e

n

p r o

l o c a t e

.

n

t i o

g

t o

. D

c e

n

,

i n

a n

s ,

d

e e d e d

i n

t h

n

o

r s ,

a n d

e

u

- t h

l d

n

e

n

s .

b

t o

t a i n

i n

t h o s e

a i d

a

v ­

h

g

o

s

i l i n

t h e

g

d

r i s k

d

o

f

f f ,
g

a

e

s p e c i a l

o

t h e

a t a

l p

a l w

u

a s

r e

b

a

a

u

c

k

i g h e r

b e s t

e

t h e

n i q u

f

t e c h

s t a t i s t i c s ,

t o

c u

e x c e

r r e

e d i n

n

g

t

p

s o

r o

t h e

f f o

r t

t h

b

l e

l i m

i s

e s

a

t

m

m

s

i t s

m

a d e

u s e d

l e v e

a

x i m

c a n

o

f

u

a d

l

a p

m

p

p

a d e

y s

f

i t h

­

o

r d

v i c e

4

7 .

e

r

v

i s

o

u

n

t e c h

o

w
d

e

T

h

e

s t a t i s t i c a l

p

r o

g

r a

m

s

o

f

t h

e

B

u

r e

a

u

w

e

r e

d

e

f

v e

l o

p

e

d

e

, f o

o n

r

t h e

c h

m

o

s t

p

a

r t ,

a r a c t e r i s t i c s

i n

d

e

p

e

s u i t e d

n

d

n

t l y

t h e

t o

e

r e

o

f e a c h

o

q u i r e m

t h

e

s u b j e c t

a s

o

r g

a

u

n

n

d

i z e

e

d

r

o

b

s e

r v a

a c c o r d

i n

t i o

g

n

.

t o

A

s

s u

a

b

r e

s u

j e c t - m

l t ,

t h e

a t t e r

o

B

u

r e

n

g

e m

t i n

u

e n

e

t

d

w

h

v e

o

r

i c

h

h a s

t h e

p

y e

r o

a

v e

r s .

d

e f f i c i e

E x p

e

r t i s

n

t

e

a n d

i n

h a s

t e

c h

e c o

n

j e

o

o

m

i c

a n

c t - m

a

l y s i s ,

r

l i n e s

a t t e

a n

w

d

o

a s

t h

a d

e

r

s t a

d e d

t o

f f

p

a c t i v i t i e

r o

v i d

e

b

p
e

B

u

r e

a

u

’ s

B

u

r e

s o

u

s

t h e

r e

a

i q

u

e

o f f i c e

s

m

m

i n
n

i s t r a
t i o

t i o

n

o

n

o

f

’ s

c o

e r e

f

l l e c t i o n

a c t i v i t i e

e s t a b l i s h e d

t h e

t h e

r

u s e

o

t a

a n

t e

f i e

o f f i c e

d

t o

f u

r n

a g e n c i e s

l d

s

i s h

a n

p

b

e

o

e

r t a

n

n

t h

t

d

a s p e c t

s

i n

c r e

a s e d

,

r e

n

i q

e

u

f u

e s

n

c

w

p

w

r o

a s

t e c h

o
o

t i o

h

i c

C

o

m

r y

a v e

m

i s

­

u

c

p

i l

r o

n

o

a n

l e

w

b

d

u

t h

e

t h e
o

l t

o n

u

r e

h

e

T

e

u

r e

p r o

a l s o

a

t t e

i t t e

p e r s o n s

r

e

e m

i n

d

r c

u

s t r y

e

s e

d

v

r c h

t o

r a

m

i s

s ,

a n

l a t i o n

p l i s h
m

n

r

e s

m

r e

o

a r e
b

e i r

i t t e

a

l a

d
t o

t h

m

i p s

o

i n

a

r y

r e

o

b e r s h

f i r s t
e s

o

c o

s

r

A

a c c o m

l d

e

r e s p e c t

g

h

n

R

i n

g

t i c i ­

s e e k

i t t e

h

r o

s

u

a n

t o

m

i t h

p

r o

f i e

m

i n

a

g r a m

t h

m

e s s

w

u

a n d

i s s i o

c o

s e

a

t

a n d

m

u s i n

c o u n c i l s

t - m

m

m
r y

a c i t y

B

u

a n d

c

m

a

R

n

u p s

o

B

r
p

B

j e

C

v i s o

c a

n

o

d

r r e

g r o

t h e
a

b

s u

c u

r

L a

r s .

b

C

r

s ,

o

r y

s e s s i o n s
s

m

b

c a l l e d

n

o
e

t h e

l a

v i s o

c o

m

i t h

t h e

s ,

e

b

d
a

e c t i v e s
m

w

d

r e s e a r c h

a n

m

h

a n

o

a u

g ­

r

w

h

o

o

t

c o

u n

c i l

m

e

m

b

e

r s ,

h

a v e

c o

s p e c i a l

m

p

e

,

­

e

c o u n

s

o

r

r e

c i l s
c o

m

m

a

y

e

n

d

a

c

t i o

m

t a k e
a t i o

f o

n

s

r m

o

n

a

m

l

a c t i o

a t t e r s

n

t h

r o

r e g a r d

u

g

e d

h
a s

a

d

f o

v i s

r

o

s u c h

r y .

M

e

m

b

e

n

r s

,

b

o

f

u

t

s u c h

t h e

c o

r e

u n

s o

c i l s

l u t i o n

a n

d

t h

s

a r e

e

s u b ­

e s

s e r v e

t a t i v e s

i n

o

f

t h

t h

e

i r

e i r

i n

o

d

r g

i v i d

a

n

a

l

t i o

u

i z a

n

c a p

a c i t i e s ,

n

o

t

a s

R

e

o

u

s .

h

e

m

a r e

e m

b e r s

d e s i g n

o

f

t h e

b

a t e d

y

L a

b

t h e

o

C

r

o

m

m

s e

a

r c h

i s s i o

n

A

e

r

d

o

v

c

r e

t o

f

i s

o

r

L a

r y

b

o

C

r

S

t a

n

­

t i s ­

u

i n

1 9 4 3

t o

p

r o

v i d

e

g

r a

t o

m

s

a n

d i s s e m

d

i n

s t a
a t e

f f .

d

A

n

a t a

m

t h

e

n i c a l

r

c o

o p

a d
e

v i c e

r a t i n

a n

g

o

d

r g

n

i z a

t i o

f

t h e

n

o

w

f

o

e

r k

x p

o

l a

f

i n

t h e

i n

r e g i o n a l

h

t h e

B

u

r e

a

u

g

t h

e

u s e s

c

o

n

c o

i n

t h

n

e

c

e

p

p

r

a

m

i n

u

I O

t h

.

a

o

r i z a

t i o

n

t i o

s

n

b

b

y

t h

y

e

t h e
D

S

e

i r e

c

t a r y
o

o

f

f

R

L a

e

i n

t e

s

e

b

a

o

r ,

r c

h

F

L

—

C

A

l l

r e

s e

a r c h

d

i r e

c t o

r s

o

f

r n

a

t i o

R

a

n

,

a

l

r
n

i o

n

b

s

r e

p r e s e n

r

o

E

e

A

c

u

t e

d

e

s

t i v

i n
’

t h e

A

s

s

A

o

F

i a

c

t i o

L

—

C

n

I O

,

a

,

a t t e

n

n

t h e

d

t h

e

i l w

a

y

i l r o

r a

a

d

r a t i n

g

u

n

i o n

s

a r e

i n

v i t e

d

t o

d

t h e

g e n e r a l

m

e e t ­

n
o

f

t h e

t o

c o

u

n

c i l .

T

h

e

c o

u n

c i l

p

r o

v i d

e

s

g e n e r a l

d

i r e

c ­

h a s

t s

i l i n

x

t o

s .

s t a f f s

m

e
o

l o c a l

a s s i s t a n c e

a

d
n

a d ­

o

t o

n

­

a n
g

n

t h e

a

d

v i s o

r y

a c t i v i t i e

s

o

f

t o

u

t r a d e

r e

a

u

u

n

i o

n

r e s e a r c h

d
d

t e c h

h

i t t e

t i o

p

c

l e

o

r i a t e

l y

i n g s
i m

t o

s ,

b a s i s .

n

r e s e n

o p e
S

t h e

h

f

L a
u s e r s

f

v e

y

a c r o s s

e t t e

u
c

p

t o

y

h
T

m

p

A

f u

o

l i c

u r c e s .

u

w

i l i t y

o

s ,

f r o
g i o n a l

i n

i n

b

d

b

g

r o

t i c s
A

t e

l u t i o n

r e

c i l
t h e

s i b

p

b e e n

n

s

a

c e .

T
b

n

e r e f o r e

u

r e

s u

o

t h

a n

c o
c o

n

t e d

s o

m
a r r a n

s p

a n d

s t a t i s t i c a l

f

a

a r e a s ,

r e

d

o n

r ,

e n t s

a p
w

s o u n

­

r e
t h e

n

e i r

c i a l i z e d

e n

u

g e n e r a l

i g

t e n
g

u

r o

t h

i n

s

a l t h

t a k i n

f i n a l

b u s i n e s s

r o

p e r s p

o

r k

g
o

p

e

m

b e e n

d e c i s i o n s

s t a n d i n g

C

n i c a l
e

f

s e r v e

s p

Organization

,

k e e p

o

s e

i l ,

v i d

o

a l l y

t e c h n i c a l

r y

c

n e e d s

s i g n i f i c a n c e .

s u

r s e

t h e

t o

o n

T h

d

r o

u

b e e n

n e e d s

A

p

u

c o

e r .

C

g

l i c a ­

w

h a s

O

e s t a b l i s h e d

a r t

l l e c t i n

m

b e

t h e i r

i m

c o

l .

p a t e d

r e s u l t s

t o

i n

a

I n

­

f e s s i o n a l s

h

f u

s i o n

B

1 9

t a

l e

w

e

e

h

t h e

h

a g e n c i e s ,

T

p r o

g

s t a t i s t i c s ,

g r a d u a t i n g

s k i l l s ,

k e e p

a n d

o b

f

S t a t e

i o

- j o

t o

s ,

i n

b e s t

l d

r

t s ,

f i e

n a l s

o

n

n

o

l l e g e s ,

b

o

e

e i r

s s i o

r

m

h

c o
l a

f o

a s s i g

f e

t h e

d e g r e e

s t a f f s .

t r a i n

m

e

i z a

i n

t i v e

d e t a i l e d
c o

x p

n

c h a n g e s

c

I n

a

a d e
P

s p e c i a l

x e

m

e

r g

t r a i n

d

r e a s t

a n d

o

m

i r e c t o r s

i n

r e

l a t i o

n

t h e

B

.

t h e
T

h

e

m

e m

b e r s

o

f

t h e

B

u

s i n

e s s

R

e

s e

a

r c

h

A

d

v i s

o

r y

s t a t i s t i c s .
C
S p

e c i a l

r e

c o

g

n

i t i o

n

o

f

t h e

c o

m

p

e t e

n

c e

o

f

t h e

B

u

r e

a

o

t h e

f i e l d

o

f

s t a t i s t i c s

w

a s

g

i v e

n

b

y

t h e

S

e

c

r e

t a

r y

n

o

r i z a

f

r e

r

L a

i n

b

v i e

o

w

1 9 5 5
r

S

i n

g

w

h

e

n

h e

t a t i s t i c s
a l l

o

f

d e l e g a t e d

t h e

t h e

r e

s p

o

n

t o

s i b

s t a t i s t i c a l

p

t h e

i l i t y

r o

g

r a

C

f o
m

o

r

s

m

m

c o
o

n

i s s i o
t i n

f

t h e

n

d

u

o

D

e

p

a t i o

n

n
u

i t h
. S

b

o

o

e

n

t

o

f

L a

b

o

r

a n

d

o

f

m

a k i n

g

r e

c o

m

m

e

e i r

i m

p

r o

v e

m

e

n

r o

s

a

C

a

d

s t e

o

f i t s

r i l i t y

d a t a

a n

d

m

r o

a

s t a

n

e

i n

a

s s ,
d

d

v i c e

l a

i v i d

a d

v i c e

c e

i v e

u

d

b
a

o
l

g

n

g

y

n

p

d

a

n

r ,
m

t h e
o

a n

e m

r a

m

f a i l
a

t o

i n

t i o

n

C
o

o
l i c

i d e a s

d

a

b e r s

m
y

m

o

a

a

m

f

t h e

t i o
b

l y

r e

p

i n

e

e

t a

S

n

a

r

l

o

c
A

f

r e

C

s s o

t h e
r y

o

c

m

o

o

i a

m

t a t i v e

r e s e n

t h

e

o

f

r e

a

t a t i v e s
h

e

c

o

n

o

a n

d

m

o

i t s
,

m

p

u

t h e

B

d

c i p

r i n

c h

a l

u

r e

a

e t a c h e

d

m

n

i s s i o

u

c o

n

t i n

f r o

.
u

T
o

m

i r

i n

t h

o
u

a v o
s l y

i n

­

e

n

o

i d

c

f r o

a d
o

i s s i o

a n d

Digitized for aFRASER e l a t i n g t o
p
r t i e s ,
r


e

f

m

t h e
n

t e c h
t h e

m

e

r

u s e r s

i c

o

p

u

o

f

n i c a l
c o

r g

b

l i c

L a
m

a n d

a

b

n
.

l l e c t i o n

i z a
O

o

a t t e

e

v

r

t i o
e

r

n

e r t s

s

t h e

a n
y e

S t a t i s t i c s

r s
a n

x p

f r o
d

m

a n

i n

b

d
a

u

C

o

m

m

i s s i o

n

e

r

r

u

c o

n

d

e

r

a

f

L a

b

o

r ,

a f t e

n

s u

u

­

l t a t i o n

e

t i o

r c

n

e

o

f

M

a

a n

,

d

o

t h

n

u

f a

r

o

e

c

t u

r g

r e

a n

r s

,

i z a

t h e

t i o

f

A

m

e

r i c

a

n

b

u

s i n e s s .

M

e

m

b

n

e

s

r s

d

e

i r

i v i d
c o

u

a

p

a n

o

f t e

m

l

c

a

i e

p

a

c

i t i e

s ,

n

o

t

a s

r e

p

r e

­

s .

h a s

o

f

e

r s ,

t o

r e

o

B

e i t h

o

f

c

c u

a r i s e s

s i o n a l

I t

m

u

w

r e

a

a c c e p

i n

f o

r c e

i s

a

f u

p

h

r o

n

s e e k s

e r

i n

t h

f e

s s i o

n

e i r
a l

v i c e

s c i e

i n

a

n

i z a

p r o

a

l

f e

e

d

s s i o

u

c a

c a p a c i t i e s

t i o

n

s .

T

h

i s

i s

n

a

t u

a l

o

r

t h e o

c o

n s i d e r e d

f u

n

a

m

e

l

t o

a

s p

e c i a l i z e d

f i e

h

e

b

y

t h e

t h e

B

f i n d

u

r e

i n g s

a
o

u

d

n

t a

l d

d

o

r k

i n

w

d

e p

e n

d

e n

r e

w

p

o

r o

f i e l d
t

a s
o s t

q u e s ­

t h e

t h a t

i n

f a n

a n

w

’ s

,

r s ,

r

m

r e t i c a l

i s

n a l

t o
o

h

f

c e p

u

f

w

o

n

i v i d

r g

o

d

o

n t i s t s ,

h

t a n c e

c o

a d

r

i n

e

t h e

s o c i a l

i c

u

d

r e

o

u

n

s t a t i s t i c a l

t h e
­

r e s p o n s i b l e
a l y s i s

l y

u

s t a t i s t i c i a n s ,

a n

r k

f e
m

s ­
a

y

a l y s t .

s i ­

f r o
r s ,

t h

t h e

f

u

i s t s ,

b e r s

t i o

t h e

B

m

o

e m

b e
v i t e s

n
N

h

r v e

l i k

u s e s

y

t .

C o n s u lta tio n a n d A d v ic e o n S ta tis tic a l
P rogram s
p

b

r

T

s t a t i s t i c a l

a t e d

r t ­
f o

e

A

t i o

t h e
.

s e n
t h

d e s i g n

s l y

s e
m

a r e

r

w
b

i l

f

e

o

U

L a

c

u
t h

i n

u

r

p

s t a t i s t i c a l

t h

B

L

S

k e e p

p

d

a m

e

o

r a c t i t i o n

t h

e

i r

e

n

r a c t i c e

k n

o

r y .
e

l e

l

b e

T

r s

w

t a

h

e

a r e
d

g

e

o

b

b

u

o b

j e

c

i l t

j e

s o

p

o

u

n

c t i v e

t r a i n
u

t i v e

t o

e d
d

f
d

u

c a n
i n

a

t h e
l y

t e

b e

B
p

u

o

r e

r e

n

F

o

r

u

t h a t

a l i z e

s t a t i s t i c s
.

a

i t s

e s t a b l i s h e d

t h i s

a n

d
d

o

n

i f

r e a s o n

l y
t h

i f
e

y

t h e

4

B L S H A N D B O O K O F M ETH O D S

B

u

r e

t h e

e

d

o

a

p

t h

u

u

e n c o u r a g e s

r o

c a
e

f e

s s i o

t i o

r

e

n

n

r e

m

e

i n

r g

g

t h e i r

s o c i e t i e

a

n

l y

c e s

t h
i z a

s o

o

e i r

f

o

a

t h

n

t

e

a

r t i c i p

t h

e i r

a n d

d

t i o

t h

p

s ,

s t a t i s t i c s ,

r t s
o

i t t i n

e x p e r i e n

a l

i n

x p

s t a t i s t i c a l
u

n

e

c o

n

i s c i p l i n e

s ,

p

L

S

B

u

b

l i c

m

a

a

t i o

f f o

i n

g

T

i n

i m

e

p

r i v a
b e n

d

r e

p

r o

o

f

p

l o

y e

e i r

p

r o

d

w

v e

i t h

a

p

c o n t a c t s

h

a p

a n

s
t h

a c t i v i t i e

t o

u

t i n
s .

y

n

r t s

e

f f o r t s
t e

,

o

f

a r e

e f i t s

o

s t u

f r o

t h

e

p

m

T

h

d i e d

m

t h e

a n

r s .

w

T

o

r k

e

e

e

r e

u

s

r e

a

u

e

t ’ s

,’ ’ 1 0

e

d e s c r i p t i o n

S ta n d a r d D e fin itio n s
W

h

e

r e

a c r o s s

S

u

O

r e

s t a
p

o

t a t i s t i c s

t h e

B

r e

G

f f i c

a

o

f

n

d

a

b

T

o

i n

h

e

s t

o

e

t i o

m

p

—

p

r i m

d

e

n

T

h

i n

l o

y m

a

i s

n

g

r

w

e

r y

t h e

b

u

t o

e

d

m

g

e

n

f

c u

r e

a

t

u

m

n

t

f f o

x i m

u

o

f

t h e

B

d

g

o

b

f o

e

e

p

r

d

u

r t

t o

r m

t e
d

t h

s

f i n

i t i o

B

n

r o

g

r a

u

m

a n

e

,

a

e

t )

a c r o s s

s

t h

e

s

o

u s e

h

e s t a b

p

t ,

e

r a

i t

r y

h

u

o

f i r s t

f

i n

i t

i s

c o

m

r c h

l l y

m

o

l i s h

m

e n

s o u r c e

s e

i c

n

n

u

g

i t i o

c t o

n

u

t

r e

a

u

e

e

x t e

t ’ s

t a

f

t

f

L a

r m

e

r l y ,

h e r e n

x i m

o

m

c

m

e n

r

t o

­

i s

t

m

a

p

r g

t e g




a

l e

s e

a i n

n

o

t h e

f

h a s

d

f i r s t

t e

s ,

t a

t

r e

e

i z a

t i o

r a t e d

l e

d

t a

l e

.

s ,
T

n

l ,

a

f

g

f o

r

—

e

m

e

r

c

o

i . e

s ,

u

n

d

s t

i n

i n

. ,

p

v e

n

l i s h

r o

a

m

b

i n

a

t i o

b e

o

r g

u

c

r i e
e n

e

n

t h e

d u s t r i a l

d

t o
m

b u s i n e s s

o

t o

b u s i n e s s

e s t a b

t h

o

n

o

l

s

e

i n

v e

w
h

e e

f o

v e

c o r d

s a l e

i n

a

b

a n

i ­

t i o

n

e

t c .

s ,

t

i s

c

o

n

,

o

f

,

t h e

o

e

m

m

y

­

u

9

s t r i a l

S ee

t o

t h e

p

o

d

e

f i n

d

f o

a

r d

f e

t h e

l l o

i t i o

u s e s

r e
f

n

B

d

u

L

i z e

c

t i o

S

n

o

p r o

d

d

e

f

a

r e l a t e d

g r a m

f i n

i t i o

s

i n

n

o

g

w
f

h

r o

i c

t h e

u

p

h

o

i t

f

i s

e s t a b

­

e

t

. 9

a l s o

i s

s

d

d

a n

r

s t a

e

r o

I n

t h

r r e

w

s

n

d

t h e

s t a n d a r d

t o

a p

s t a n d a r d s

c l a s s i f i c a t i o n

a n

p

f f i c

f

“

e

“

O

o

d

p

f o

g e o

r o

e

d

u

n

d

l l o

w

o

f

c

e

t i o

n

p

a

i x e
e

g r a p h

d

i c

M

y r o

s

a

l l

B
w

n

a n

i t h

p

a

g

d

e

a n
r e

m

e

n

r e l a t e d

r i o

d

d

. ’ ’ 1 1

C

s p e

f o
c t

r

t o

c l a s s i f i c a t i o n

.

app. B .

S ta n d a rd D e fin itio n s o f T y p e s o f W o rk e rs , B u r e a u o f t h e B u d g e t ,

N o v e m b e r 7 , 1944. “ P r o d u c t io n a n d r e la t e d w o r k e r s a r e d e fin e d
in c lu d e w o r k in g f o r e m e n a n d a ll n o n s u p e r v is o r y w o r k e r s (in c lu d in
l e a d m e n a n d t r a i n e e s ) e n g a g e d in f a b r i c a t in g , p r o c e s s i n g , a s s e
b lin g , in s p e c t io n , r e c e iv in g , s t o r a g e , h a n d lin g , p a c k in g , w a r e h o u
in g , s h ip p in g , m a in t e n a n c e , r e p a ir , ja n it o r ia l, w a t c h m a n s e r v ic e
p r o d u c t d e v e lo p m e n t , a u x ilia r y p r o d u c t io n f o r p la n t ’ s o w n u s e ( e . g

t h e

o

d

10

r

i n

c e

u

l i s h

e s t a b

o

b

p o s s i b l e

a d

a

l i n e s

o

( f o

i n

m

o

n

m

t .

e
e

n

a

B

b e c a u

f o

e

a

f i n

s a t i s f a

a r e

a n

M

b u s i n e s s

s t a t i s t i c s

z a

f

d

p

s t a t i s t i c s

m

t h e

i l i t y .

c a s e

r d

r n

o p e r a t e s

o

r a

a

m

c o

e

u

l a t e d

v e

i n

d

t h e

u

g

a d

t e

s e r v i c e s .

,

i s

d

r s

r

l e

t

B

u

v o

o

b

n

e

B

d

t s

e

d

h

s

c

l i c a

l i s h

r

e

u

p o w e r p la n t )a n d r e c o r d - k e e p in g a n d o th e r s e r v ic e s c lo s e ly a s s o c ia te
w ith th e a b o v e p r o d u c tio n o p e r a tio n s . E x c lu d e d a r e s u p e r v is o
e m p lo y e e s (a b o v e th e w o r k in g fo r e m e n l e v e l ) a n d th e ir c le r
s ta ffs .”
11

S t a n d a r d D e f in it io n o f P a y r o ll P e r io d s f o r E m p lo y m e n t R e p o r ts ,

B u r e a u o f t h e B u d g e t , M a r c h 2 8 , 1 9 5 2 . “ I n o r d e r t o m a in ta in
c o o r d in a te d s y s te m o f e m p lo y m e n t r e p o rts a n d t o r e d u c e th e r e p o r
in g b u r d e n o n r e s p o n d e n t s , r e q u e s t s m a d e t o e m p lo y in g e s t
lis h m e n t s f o r s t a t is t ic a l i n f o r m a t i o n f r o m t h e ir p a y r o l l r e c o r d s o n t h
n u m b e r o f e m p lo y e e s , p a y r o lls , h o u r s w o r k e d , o r r e la t e d it e m
s h o u ld r e f e r t o t h e p a y r o l l p e r i o d c o n t a i n i n g t h e 1 2 th o f t h e m o n t h . ”

C u r r e n t

Chapter 1.

E m

p l o y m

e n t

Labor Force, Employment, and Unem ploym ent

B ackground

t u a l

h e

E a

c

h

m

s t a

p

y

o

l o

f i e

e

m

e

d

b

c o

n

o

d

f r o

u

T

i s

h

C

o

a

r e

s e

n

o

f

r e

p

l a

t i o

n

S

p

e

u

n

t a

d

e

o

f

t h

o

b

j e

c

t i v

e

m

p

l o

y m

e

d

1 9 3 0 ’ s

c e

n

s u

n

u

m

u

n

e

b

r

a

v a

,

e

r

l o

n

r i e

o

f

o

a

a d

t i n

p

l o

q

u e

s

u

w

T

o

h

s

d

d

e

d

n

c

o

“

i l l i n

t

w

n

c

g

n

d

t

u

o

p

i n

u

a s

t

d

o

e

t i o

n

t h

e

i n

g

h

o

t ,

a

t

m

f

a

l o
s .

f

e

i n

w

s ,
g

u

m
o

a

r c

r e

“

w

i d

n

s a m

i c

L

u

o

y

p

o

p

u

­

f

u

n

d

s

, ”

t o

t a t i o

n

m

e

d

a

e

e

a n

l t

n

n

d

a p

i b

o

p

a t t i t u

d

m

f

o

e

r o

u

D

p
e
r

,

u

n

o

w

l i e d

a n

o

o

p

o

o

f

o

e

e

r i m

i n

A

c

c

o

i n

d

r d

e

t h e
i n

i v i d




t a

t i o

t o

a

l

d

t h

e

p

s e t

o

1 9 3 0 ’ s

l a t e

g

u

n

t o

m

e

c o

n

p

r i n

e

n

n

n

,

e

d

a

w

e

d

f

p r e c i s e

d

h

e e t
c

e

c

p

i p

t h e s e
t s ,

a

t h

l l y

e

f

n
e

s o

.

g

t h

a l t h

d

i n

g

P

u

r o

1 9

g

l a

b

h

a

d

e

, r e
o

t h

s p

r

o

f o

e

C

e

t h

n

n

r c

e

n

e

e

e

s

d

a s

r

a c ­

a t i o n a l

o

r k

s

o

n

r

t h e

h

o

s u

s

t h e

l d

o

o

n

t h

e

v a

w

“

l y

a s

C

r e

r ­

l a t e

t i t l e

m

i d

s u

i n

M

y

c t

r

a

a s

r e

r t

f o

u

r ­

a c c u

r i e

t y

a

n

a

l y z i n

t r a n

u

s f e

c o

g

f

o

f

a n d

r r e

n t i n u

­

o

a r a c t e r i s t i c s

f o

w

u

s e
n

w

c h

t a

B

o

p r e s e n t

a

i l i t y

u
e

f l e

r

i c

a

w

e

W

p

o

t h e

f o

e

r v e

r e

m

s

n

n s i b l e

t o

u

t o

s i b

. ,

t h

e

C

e

t o

o

s u

h

t h

t i m

h

R

e

f

s o u r c e

c o

i . e

o

t h e

l y

r

,

t h

y

s p o

—
e

d

i n

r

b

r e

o

T

r d

f o

d

t h

u

.

d

n

t h a t

e

o

a s

t h

l a t e

i n

a n

9

a t

a

1 9 4 8

”

l e

5

S

o u

t a b

y

r e

r c

i n

e

c i a l ,

I n
C

F o

u

g e d

r

—
r v

B

a n

o

r e
u

d

,

,

t o

t

i n

r i o

p

e

e

“

A
n

r i o

u

h i s

P

r m
t

S

o

p

e

o

r i v e
n

o

c h

c

e

i l d

f

,

l d

d

m

­

e

h

n

T

s

a c ­

i n

h

t a

d

t o

e s

t o

s t a t i s t i c s .

e

o l d

C

p l e

J u

l y

s

P

t i t u

S t a t e

h

u

s e h

i s

a

p

c o

p

r o

t h

o

r d

e

r

a n

d

t h

w

i l l

s

s

g

l a

w

d

t i o

n

g

n

a

l

,

,

,

a

s a m

t o

p

e

r o

D
n

i s

o

t

m

u

,

c u

d

t u

b

p

u

l a

t e

b

e

u

a n

4

p l e

v i d

w

e

t r i c

m

o

0

a s

n u

o

C

f

u s e d

0

e n

a n

t

l o

n

w

m

i s

n
h

e

s

e

t h
o

u

a

d

n

m

o

m

b

i a

.

i t a

p

a

d

e

r t ­
t o

r

1 6

r v e

a t t e

f

­

n

t h e

s u

o

y
n

­

t h e s e

( S e p a r a t e

d

1 5

i s

f

o

d

o o l

a n

o

e

n

t h e

h

m

h

r

o

b

a t i o n

u

s

a t e s
a n

s

g

1 4

i c

f r o

b

D

o s t

i n

r

n

e

s t i t u

r e

y e

a l s o

e

p e n a l

r i u

m

s

a

r

x ­

a n d

,

a n

d

y .

s e

l a

n

t

h

i n

u

”

i n

a t e s

l a r g e d

l u
r

,

i n

n

a l

o

f o

s

r k

o

f o

e

s c h

n

d

t h

r c

e

v e

n

e s t i m

r y

w

f

d

7 ,0

r e

o

F i g

m

r s o

g

e

t i o

o

P e

r a

n

r .

S

f o

l s o

m

l i s h

,

e a c h
l y

u

P

r

. ”

p

r c

f r o

o

n

v e

C

v e

p

f r o

u

f i r m

n

m

p

o

b

c o

s t o

l y

l a

m

o

e

t i o

o

c

d

t h
t h

m

c i v i l i a

a n

n

c o n s i s t s

i n

b e

o

l a

f r o

p

t h e

t o

S t a t e s

l l e c t e d

x i m

e

p

s

a n

e

s

d

d

n

a g e

t o t a l

d

s o c i a l

r a

e

o

e

o

f

e d

“

p

d

r

i t e

t i o

,

o l d

o

n

a

7 5

i n

b

v e

t h e

S
f

a l

s t i t u

c o

s

r

o

n

x c l u

e
d

e

l l e c t e d

1 9

5 0
o

i n

m

i n

f o

t h

g e n e r a l

e

a d

f

l a

o

b t a i n

t i o

U

a r s

a r e

e

c o

y e

o

a r e

t h e

s t a t i s t i c s

( o

)

s t i t u

a r e

h

s

s e

i l d

i n

l

n

s

1 6

a t e s

i n

d

f r o

e s

h

f e

c h

T

e d

o m

e

e

n

r e n

s ) .

c l u

r c

e

n

a g e

a n

v i d

t i o

F o

D

s e

n

r o

l a

e s t i m

t o t a l

a

p

u

d

f

o

o

n

n

d

C

p

s t a t i s t i c s

c l a s s i f i ­

n

i c

t i o

a n

e

a l

e

d

. ”

n c e p t s

v a

e

o

n

S

b e c a u

o

o

h

e

p e r s o n s

c o

a

i n

L

y e a r s

s p e c i f i c

t o

t h

­

t h
m

t h e

r k

i n

­

m

w

c r i t e

i n

d

f

a

e

l a

l l e c t

T

e c e s s a r y

a t

u

o

e

r i o

a s

w

s t a t i s t i c s ,

t h

e

1 9 4 0 .

o

A

t e

i n

M

P

p

i t i a t e

)

e

W

e

A

p

­

a s

f

t h o s e

h

h

l i s h

t i o n

s e r i e s

o s t

t o

p

p

B

r ­

e

e

a

c o

x p

c h

S

n

n

s a m

y e
f

b

e

r a

g

o

e

a s

s ,
x p

w

m

u

p

i t s

m

t i o

r c

t o

b

e

o

i n

P

t h

t h

f o

L a

( W

d

n

d

a s

e

c e

l a

r

r r e

w

t h

n

u

e

o

e

e

n

a d

s

e

e n g a g e d

D e s c r ip t io n o f S u r v e y

i s

a r .

d

o

t h

n

o

p

b

h

o l d

r

a s s

b a s e d

o

m

o

l a

r m

w

s f e

t i o

r e

w

t i m

o

n e e d

p

n

l y

e

P

t

u

,

t h e

t

t

T

e

f

p

n

n

.

l e

o

t e

p

d

t h e

s t a n d a r d s

r e

e

n

r a

e

t

f

a m

o

g e d

n

t h

.

d

a n

n

r t

t e

n

o

r k

e

s e h

l l y

o

f

a t e d

o

t s

i s t r a

e

w

c e p

i n

m

r

h

d

t r a n

I t s

o

s a m

e

e

p

c h

d

r e

a

r e

t h e

a b l e

e

t

m

a s

e

t ,

g

o

t h e

w

o

a t t e

I n

d

m

f o

t

t i o

l o

d

y m

n

g

p

l .

a t

b e g a n

l a

n

d e c e n n i a l

a p

a n

m

t i m

t a n

u
,

e

s t a g e s

a d e

e

e a n s

u

l o

h

a n

p

r

e

a t e s

t s ,

o

f i n

f

w

m

y m

e

B

m

t o

e e t

i n

o

p

e

g

p

m

.

t h e

l o

y s

m

f e

o

y

l e

r e

n

p

y

m

s

r k

l o

f

l o

c r e a s e d

e

e

d

t

e

r i o

b e

e

n

o

n

a s

1 9 4 3 .

R

c o

d e s i g n

f o

A

c t i o
w

a

g

y

a

l l e

s ,

s e

y m

p

i n

k i n

r v e

l o

v e

d

l d

e

o

u

i n

c o

c t e

h

T h

s

i t h

l o

,

m

.

S

?

w

g

r i g

e

i s

h

B

n

s

i n

r e s s

O

U

t i v i t y

r k

p l e

P r o g

d

d

a l

t t e

r e s e a r c h

i v i d

n i c i a n

o

r e

n

d

r r i v e

b

e s t i m

r v e

b

d

o

p

v e

m

i l l i n

e

r p

a

c

o

t i v i t i e

­

r i v e

s e

p

l a

a

o

a s

r e

p

o

n

s

m

e

h

n

u

m

e

e

i n

y

n

e

e

m

w

g

n

u

i n

l

w

w

o

e

l ,

d

t h e

t i o

e

t o

e

e

t h

t i o

w

d

f l y

e

r n

s

r

t o

t h

t s

f

v e

t o

i n

b e g a n

v e
o

l a
f o

d

t e c h

n

c l a s s i ­

i a

) ,
r

h

,

v a i l a

t i n

e s

y s

r

r ,

u

,

c o

f

d

d

f l i c
u

l e

x p

e

e

S

s t i t u

a

e

v e

o

t e

w

y

p

y e

c

i s

o

e

s o m

h

e a c h

v e

e a r e d

p

a n

t

e

a b l e

r v i e

u

d
a l

o

e

o

f o

n

n

e n

t h e s e

b

l o

n

o

o

t i o

b l i s h e

a r e

P

s

r c

1 9 3 0 ’ s

i q

r v e

t o

e

w

t h

p

t h i s

v e

o

d

t h

l a

T

n

n

I n
p

p
b

m

e r

a p

n

t e

.

s u

f o

u

i n

s .

c o

t h

s u

e

r

s l y

r e m

r l y

i c i p

e

o

f

u

t s

n

a

l y

e

n

t h

f

n

r k

t h

s ,

c r i t i c i s m

c a

u

p

a n

t i o

w

e

o

e

c t

o

v i o

p

t e c h

t i o

c h a n g e s

a

O

t

e
o

e

d r e s s e d

e i t h

r

s i t u

b e i n g

i r e
l a

t s

e a s u

r s o

s

( C

n

i n

i e

e

n

b

h

m

,

u

t ,

r c

f o

i c

p
n

a

w

r e

c

e

m

n

,

r e

u

o

e

n

m

u

p

u

t h

r e

e

n

o

t i v i t y

e a s u

d

n

c

p

m

r

p l e

u

e

i d

l a

d

m

c t

u

p

e

1 9 3 0 ’ s

e

e

o

y

C

o

n

b

h

r v e

t r o

r e

w

d

o

a d

,

o

t i m

e

r

s

o

c

j e

w

o

y s

r e

d

u

s a m

l a

i n

p

c l a s s i f y

,

t h

t h e s e
a n

r e

p

d

m

y

s t a t i s t i c s

e

p

t h e

t h

i r e

e

l a

r a

a n

l o

s .

e

s s

a n

f

a t t e

i n

i n

S
t h

s

p

e

g

n

t e

e

c t

t

t a

m

s e

f

t h

l y z e

e

o

e

c i v i l i a

w

m

m

o

r e

i r e

l e

p

e

a

t h

t i o

f

o

f

n
,

i n

T h

u

o

S

w

n

l a

e

t

u

b

i t h

e

s t i o n

i s

b

w

t h
t o

r v e

e

m

y

g

f

e

n

n

t e

S

t

d

a

a
e

s e l e c t e d

d

o

a

i t h

m

e

f r o

f

u

y

t h

e

w

o

f

j o

y m

t y

a s

n

r v e

i t e

e

o

t a

e

u

t h

s t a t i s t i c s ,

p l e s

r e

n c e p t s

m

t

s a t i s f i e d

i m

p

u

o

a s i d e

p

l l

o

y m

w

e

P

u
r c

o

f

B

e p r e s s i o n

s e s ,

m

f o

l o

n

a

f o

n

o

t

n

c o

e

t y

t i f i c a l l y

U

e

r e

r

n s

e

t i v e

p

e r s o

n

s

n

t h e

m

u

o

t h

l y

i f i c

a n

r i e

y

s c i e

c

a

r r e

t h

B
b

a r a c t e r i s t i c s .

b

n

g

e
l a

p

u

d

t h
e

d

v

c h

e

,

t h

a

c t e

m

u s i n

t h

a n

i c

t h

n

n

t ,

y

m

m

c o

n

n

o

t i s t i c s

A n a l y s i s

y

f o

.

a

H
a l

l d

p

1 1 ,0

r c

o

e

w

r o

b

a

B

s .

e

g

i n

n

i n

0

0

o

u

s e

d

e

e s t i m

a

v

h

t a

e

b

f o

r ,

a t e s

i l i t y

r

g

­

a l l

t h e s e
u n

t i l

5

BLS HANDBO O K OF METHODS

6
J a

n

u

t i o

a

n

f o

r y

o

b

r

t h e

t h e

1 9

s u

p

h

e

b

d

r v e

t

o

t

a c c i d

i n

f o

c o
d

e

w

e

e

e

i n g

t h

n

.

n

n

b

w

r i o

d

d

a

y

t h

t h

e

y

o

f

.

T

h

e

e

e

k

,

w

t h

a

a

t

t h

e

o

h

l s .

A

n

t a

t

2

p

a v e

.

e

d

c

t

r a

g

e

d

a

b

o

m

o

n

t h

e

e

.

S

a

h a s

o

b

n

u

f o

r m

o

l t h

o

a

n

­

a r e

l y

u

g

w

h

o

n

i c

h

i s

t h

e

e

e

d

a r

a
c e

n

J u

a

y

,

n

e

( b

n

t

r

s c h

a

t i m

o

r

t a

k

n

n

d

e

u

c t e

n

c o

n

t a i n

t h

e

i n

c l u

e

i c

d

e

k

d

h

a s

d

u

t h

i n

r i n

o

s l y

t ”

o

f

u

e

r

t h

e

A

t h e s e

e

f e

a r i t h
e

c e

g

t h

e

1 9

t h

l l o

d

a

y

t o

J o

n
h

e

c r i t e

r i a

u s e d

i n

c l a s s i f y i n

g

p e r s o

n

s

o

n

t h

e

b a s i s

o

b

i r

l a

b

o

r

f o

r c

Employment.

e

a

c

t i v i t y

a r e

a s

f o

l l o

w

s

h

o

,

d

p

u

l o

r i n

y e

e

w

g

E m

p

l o

n

s u

y e

r v e

d

p e r s o n s

w

e

y

e

c o

m

, d

i d

a

n

y

u

k

p

s i n

e

s s ,

r i s e

w

t h

u

e

i r

n

o

a

i d

p

a l l

t h

s

,

o

w

o

o s e

i n

r m

f a

r

,

r k e

w

h

t h

o

r s

o

e

r

w

i n

d

i r

a

i d

n

o

h

b

w

m

t

n

o

f a

o

w

o

o

r k

i l y - o

w

o

r k

e

p

b

d

e

1 5

r a

u

t

t e

h

p

h

( 1 )

r k

d

r o

o

a t

j o

f e

u

e n

a d

a l l

n

j

a d

w

h

w

i c

e

a

h

t h

t h

e

e

r ,

y

w

v a

e

c

r e

a

t e

t i o

n

m

,

p

o

r a

b

o

r - m

l a

r i l y

o

r

n

p

a

o

r

o

o

r e

r i o

u

s

p e r s o

n a l

r e a s o n s

—

w

h

e

r

o

d u

e

t o

e

n

t

d

d

( 2 )

i s p

n

o

e

m

r

e

o

b

y

t

t h

e

s o n

i s

n

o

t h

y

e

i r

w

e

e

m

r e

p

l o

y e

r s

s e e k i n g

f o

r

t h

o

e

t h

e

r

T

h

t i m

j o

b

s

e

.

o

E a

r

f f

a n

h

e

c

k s

n
f

e

a

j o

n

t

e

k i n

g

e

o

e

r o

d

m

p

l o

t h

A

v e

a

d

c a

r

l u

r k

,

n

y m

k

.

e

n

t e

.

t

e

b

h

o

u

n

t e

d

o

n

l y

o

n

c

e

.

o

s e

w

h

o

o

k i n

g

g

e

t

i l l n

t h

e

u

t e

y

e

d

w

m

h

p

r

b

u

w

f o

r

w

o

r k

t

o

w

i n

n

i n
h

g

e

d

a t

h

t o

n

o

n

o

w

l o

e

o

v e

r

l o

t h

y e

,

o

e

e

e

j o

b

a r e

c

n

m

c l u

d

e d

u

i n

o

u

b

n

e

t e

d

i n

o

f

h

r

t h e

t o t a l

t h e

o

u

j o

b

d

u

r s

a r e

e

m

a t

w

r i n

p

h

g

l o

i c

h

h

e l d

t h

t h e

e

o

u

n

t r i e

s ,

t e

m

p

o

r a

r i l y

i n

t h e

U

y e

n

d

s u

m

e

y

w

r v e

o

n

S

d

s ,

t a

f

a l l

h

e

c i v i l i a n

t o
A

e

r

a

g

o

n

t h

e

p r e m

i s e s

o

f

a n

E m

b

a

s

s

t a

l

r m
b

l a

e

r o

t h

e r s o

n s

w

h

o

s e

o

n

l y

a

c

t i v i t y

c o

n s i s t e

t e

y

.

d

e

k

r

( 3

a

e

i r

o

w

n

h

o

m

e

( s u c h

a s

h

o

u

s

e

w

o

r k

o

s

r k

e

o

w

f

h

E x c

o

,

d

a

o

i n

g

,

e

q

u

n

e

t c

s i m

. )

o

r

i l a r

v o

l u

r g

o

a

n

t e

e

r

n

w

h

o

l o

o

k i n

t h

e

T

h

o

o

f o

r e

n

e

w

h

r e

t

w

r

f e

p

u
a

b
p

g

n

s

o

p
f

i d

r e

t h e

a

d

c e d

l i c
p

o

l i c

w

o

c

h

i n

o

r

a

t i o

p

o

t i o

U

Unemployment.
w

i z a

n

m

r k

r k

e

a t

,

p

a d

m

a d

- w

e

g

4

r i v a
n

,

e

r i o

t e

c a n

d

o

r k

f o

r

r e

p

l i g

l o

d

y e

u

w

e

d

e

p

x c

m

e

r e

p

l o

p


t o
b e
l o o k i n g
f o r
w
o


r k

.

e

r s o

t h e

t

f o

e

d

y m

g

a v a i l a

e

r i o

v a s s i n

p

r i n

s p e c i f i c

k

t i n

w

l o

e

r s o

u

­

t i o
e

e

y m

k s

e

n

n

w

f

t .

a s

t i n

u

i t y

u

r a

t i o

t i o

n

b

y

s i n g l e

r d

i n

g

t o

u

o

n

n

t h

i s

e

a n

a c c o

t o

n

a r e

p

e r s o

d

w

o

h

o

o

o

a r e
n s

t h

f o
e

w

m

e

l a

h

y o

e

r w

m

d

o

i a

t e

t e

e

d

r
d

s e

f f .

i s e

i m

d

k

i v i d

n

o

a n

o

d

i m

s e

r

r i l y

t

l o

e

t h

i t

a n

y m

t h e

l y

( 2 )

r m

i a

i ­

n

t r a

e

n

j o

t s

a r e

p

e r s o

t e

n s

w

l y

h

t

o

w

o

r k

d

a t

f

t h

e

( 4 )

N

e

e

d

l u

.

I n

r e

i g

a r e

d

f

w

o

r k

a

i n

t i n

n

e

d

,

i o

u

s ,

c h

l a

b

o

r

g

f o

2

r c

w

e

e

e

p

k s

o

r i o

o

r

r

t o

o

r

r k

e

.

a

f u

e

w

l l - t i m

e n

e

j o

t r a n

b

t s

a r e

l a s t i n

g

2

p

w

e

r ­

e e k s

h

e

c i v i l i a n

l a

b

o

r

f o

a s

e

m

i n

a

d

d

i t i o

p

t i o

n

e

d

r c e

l o

c o m

y e

d

p r i s e s

a n

d

u

n

e

t h e

m

p

t o t a l

r

f o

r c

r c

e

e

,

n

,

i n

c l u

d e s

m

e m

l o

y e

d

.

o

b e r s

f

s

s t a

e i t h

e

r

i n

p

t h e

l o

U

n

i t e

d

n

t

S t a t e s

r a t e

.

T

h

e

e

m

p

m

e a s u

n

u

n

l a

b

o

u

s

w

o

r k

o

c

m

b

e

r

o

f

u

u

n
l o

e

m

y e

d

y m

a s

e

a

p

e

r c e

n

r e

t

p

o

f

t e

d

r e

­

t h e

r

f o

r c

e

.

T

h

r o

u

p

s

i s

r e

i s

a l s o

c

o

m

p

u

f o

r

­
r i o

e

r

g

s u c h

a s

b

y

s

e

x ,

a g

e

,

t i o

r a

c

e

,

i n

d

u

s ­

n

o

,

c

u

p

a

t i o

n

,

e

t c

. ,

o

r

f o

r

c o

m

b

i n

a

t h

e

r e

n

s

o

f

c

o

t h e s e

t
a r a c t e r i s t i c s .

H

o

w

e

v

e

r ,

b e c a u

s e

i s

n

o

m

p

a

r ­

a r e

a r o

g

l a s t i n

t h e

k

f o

o

b

u

n

r e

p

l a

b

o

r

f o

r c

e

,

t h

e

j o

b

- l o

s

e

r ,

j o

b

- l e

a

v e

r ,

r e

e

n

t r a

n

t ,

d
d

n

e

w

e

n

t r a n

t

r a t e s

a r e

e a c h

c a l c u

l a t e d

a s

a

p

e

r c e

n

t

o

f o

r

t h e

f

t

r a

a i r ­

a r i t a

b

l e

t o t a l

c i v i l i a

n

l a

b

o

r

f o

s

e q u a l s

r c

e

,

t h

e

s u m

r a

l l

o

f

t h

e

r a t e s

e

m

p

l o

y m

,
u

r

g

r o

u

p

s

t h u

t h e

o

v e

u

n

e

n

t e

.

s .

e

d

e

e

p

a l l

a n

e

n

l l

p

p

d

b e g

g

t a

e

n

f o
d

d

l o

a n

i n

l l - t i m

u

c l a s s i f i e d

o

F o

d

e

t h e

a n

r a

f u

m

a

e

y
p

d

l u

) R

f u

r e

f o

w

T

s

b

t h

a n
t h

o

g

i s t r i b

e

r i l y

Unemployment Rate.

a n

a b l e
p

c

n

u

r

r ­

c h
l i v i n

n

e
r a

f

o

f

h

r

o

p

r e

w

y

c i t i z e

i t e

h

c

d

o

i c

r .

Labor Force.

t r y
c

i c

h

r e

r

d

g

c i v i l i a

n

g r e a t e s t

h

t h

f f ,

o

e

g

w

s s ,

w

e

l o

s l y

v a

o

t

b

.

g

n

o

f f

j o

l e n

r i n

e e

r

r i z e

m

s e n t s

c

e

y s

e

u

y

c e n

l o s e r s

o

v o

o

t h

n

c l u

w

n

g

e

t a

i n

s

r k

m

u

( 1 ) J o

v o

p e r s o

a

d

l a

b

a

t h

)
b

n

w

r k

t i m

o

w

g

r e

f r o

f o

i n

r

r i n

b

d

e

s .

u

m

r e

o

b e

s ”

p

e d

f o

e

u

d

u

s t

k

a d

o

n

o

t s

e

h

s

d

o

r y

t .

t h
n

e

m

r e

t e
n

t h

i r

w

y

a t

t s

e

t o

u
e

a

a s o

g

n

p

m

s

a r e

i r

m

r e
r

o

y m

t

n

“

m

e r e d

l o

n

p e r s o

t h

r

o

f

s e e k i n g

p

e

s e

o

c o

m

y m

p r e s e n

n

s i d

o

e a n

n

m

t h

w

o
p a i d

e

e

r e

3 0

l a i d

s a l a

y

t o

n

b u s i n e s s e s

s e n t

t h

t i o

w

m

l o

l o

v i o

t h e
v a

t

a

e e
r

g

a s

a n

r p r i s e

s

a

g

n

b
o

r v e

i t i n

i d

,

m

a b

a n

2

u

r

u

r e

o

b

e

i n

y m

r m

e

l o

T

f r o

l o

a d

e

d

r k

n

h

g

s u

a

a g e

i n

w

n

w

e

w

y

p r e s e n

y

r e

t h o s e

a l l a s

s s i o

r s

t e

b

l o

r e

y e

y m

o

m

r v e

t h

e

w

w

p

f

u

s o n s
e

t

u

g

w

f

l o n

t h e

n

s

t

r i n

:

b e g
w

n

l l o

p e r s o

f

o

d

e

y m

f o

e

w

r

l e a v e r s

a t e

e

u

( a )

t h
e

m

T h

p

e

n

e

p

b e g a n
t h

h

a

o

t i c

m

l o

l o

i c

t h

i n

h
t o

d

d

F

d

o

b e g a n

w

a n

r t

o

r r e

a l l

,

n

p

e

f o

p

c u

a t

r k

.

d

.

m

e

e

m

p

i t h

r k

o

u

c o

r k

r e

w

r

i s

o

f r o

t o

f o

r i o

w

b

o

w

a s

p

t

s t a t u s

p

n

w

r

o

g

e

f

C o n c e p ts

u

t

f o

k i n

y e

e

j o
g

t h

f

n

m

f

h

o

­

o

o

g

d

k s

U

w

n

t e

m

e

a

o

l e

s t a r t

e

n

n

b

c l a s s i f i e d

o

m

l o

w

t o
i t i n

t h

s e

i d

k

r i o

p

t h e

r e n

f o

m

p r e

d

a

t o

r o u

s

e

e

d a r

d e s

e

p

c
w

t i o

l o

n

a

l e d

n

s i n c e

e a s i l y

r e

t h

u

n

c a l e n

e

g

o

o

a v a i l a

r e

( t h

p e r s o

t h

b

e

r a

s t

i n

d

u

e

u

r r e

r

s

a n

h

f i n

u

w

e d u

t h e

m

l f i l l s

t

i s

a s

o

t i o

f u

i e

c

y s

1 9 5 5

w

d

n

c

y

)

h

r e

c a l l e d

o

r v e

“

a

w

e

b e

u s e d

a r e

l i d

e

v e

l y

r d

o

f l u

w

c o

d

h

f

d

w

r c e

e

s u

r i o

,

i n

h

w

l e n

c o

e

t a i n

o

l y

o s e

k

s i s ,

e

T

e

a

.

m

t h

e

b

r y

s e l e c t e d

p

e r r a t i c

e e

i s

a s

e

c e

t u

b

y

w

t h

t a

g

i n

S

k

r r e

c a

h

e

s e

c a u s e

b e i n

r v e

t h

e

a

c u

A

a s

u

s e d

l u

b e c a u

t h

t h

s

i n

u

t a

w

n

o

a l l

i s

t o

a r

g

t

d

v o

s t r i c t l y

d

u

a

a n

D

d

t i m

t h

t i a l

a

l e n

d

n

.

r i o

i g

e

s t a t i s t i c a l

n

v e

f i d

i n

r o

a l

g

o

d

e

f

m

a c t u

i n

r e

l l

o

n

c
d

a s s u r e d

n

v e

t

i n

e

a r e

c o

n

m

e

u

h

t h

a

t a

a s

d

o

e

t s

o

s

t s

l y

c

s o

t h

n

t e

c t e

c a

r t

e

t i o

p

h

v e

r o

A

u

S

a

k
w

e

e

d

l e

u

p

c e

g

o

p

d

p

,

d

e

o u

n

p

d

c e

k

s h

t i o

d

k

1 2 t h

w

a

i t i o

f i n

e

e n

f
n

r i o

r e n

e n t a l

d

e

e

f e

s o

r m

n

e

o

m

e r a t e

i n
p

w

r t

o

n

o

o p

i t s

r e

s p

c o

c o

c o

e

a r

y

s h

u

t o

t i m

c a l e n

b e

s e

i s

s i n c e

T

s u

o

y

e

i s

r p

u

e

R

d

r v e

r e f u s a l s

l e s s

7 7 .

t a i n

f f o

—

b

r

e

n

f o

r

w

t

A

l s

o

i n

a
o

s

l e

r t

i n

r v e

c l u

y

w

f o

t e

s u c h

g

n

s u

r

w

p

o

r a

m

t o

f i n

a s

g

e

n

c

r k

,

e

t c

c l u

d

e

d

b

y

y ,
.

d

o

a s

o

u

t h

k

r k

,

d

o s e

w

u

e

r i n

i l l n

e

w

i t h

r k

g

g

n

s i d

n

m

p

l o

w

d

h

e

o

a r e

f i n

e

e

r

a t

s i c a l

d

n

d

r t h

f u

s

e r e d

y e

Not in Labor Force.

i n

l e t t e r s

c o

e

r e

s s .

g i s t e r i n g

r i t i n

a r e

e

e

r y

w

r e

w

d

e

c

h

o

o

o

o

“

a s

“

r

m

n

“

o

t h

e

r ”

g

o

r k e

r s

f o

a n

u n

e n

w

s e a s o n

l l

c l a s s i f i e d

o

t

i n

c l a s s i f i e d

l ,”

A

t

r o

d

r

a b

p

h

h

o

o

w

e

“

t o

i l l n
i n

w

w

l e

t a l
u

t h

a s

e

b

o

o

p

r

e

n

f o

1 6

y e

r c

e

. ”

o

w

t i r e

d

v o

l u

u

t

r e

e

r v e

p

o

a r s

o

i n

r e

t h

y e

d

b e c a u

s

o

s

l o

”

“

d e s

r e

m

r k

s s ,

t h

e

l a

e

e n g a g e d

w

c l u

m

c i v i l i a n

a s

y

r t e

d

f

e

e

o

u

o

f

l o

d

a g e

m

p

s e

h

t a

e

n

a n

,
n

o

u

T h

n

s e

”

w

r

e

a s

l o

o

o

l l

o

r k

- t e

g

l e

i n

k i n

g

o

d

e
,

r ”

r

a r e

,”

“

p

.

v e

a r e

n s

r m

t h

i d

f e

w

d

y e

e r s o

e

n

“

r i l y

k

p

s

a n

l o

i n

h

T

y

h

­

e

s e a s o n a l

a n

f o

“

r

o

f f ”

w

o

r k

,

LABOR FORCE, EM PLOYMENT, AND UN EM PLO YM ENT
and persons w ho did not lo o k fo r w ork because they
b elieved that no jo b s w ere available because o f personal
factors — age, lack o f education or training, etc. — or
because o f the p revailing jo b m arket situation. Persons
doing on ly incidental unpaid fa m ily w ork (less than 15
hours during the su rvey w e e k ) are also classified as not
in the labor fo rce.
In addition to students with no current interest in
labor fo rc e a ctivity, the ca tego ry “ not in labor fo rce —
in sch o ol” includes persons attending school during the
su rvey w e e k w ho had n ew jo b s to w hich they w ere
scheduled to report within 30 days. It also includes
students lookin g fo r jo b s fo r som e period in the future,
such as the summer months. A ll persons — w hether or
not attending school — w h o had new jo b s not scheduled
to begin until after 30 days (and w h o w ere not w orking
or lookin g fo r w o r k ) are also classified as not in the
labor fo rce.
F o r persons not in the labor fo rce , detailed questions
are asked about previous w o rk experience, intentions
to seek w ork , desire fo r a jo b at the tim e o f in terview ,
and reasons fo r not lookin g fo r w ork. T h ese questions
are asked only in those households that are in the fourth
and eighth months o f the sam ple, i.e., the “ ou tgoin g”
rotation groups, those w hich had been in the sample fo r
3 previous months and w ou ld not be in fo r the sub­
sequent month. P rior to 1970, the detailed not-in-labor
fo rc e questions w ere asked o f persons in the first and
fifth months in the sample, i.e. the “ in com ing” groups.
(See S am pling.)

Sampling
The Survey Design
T h e C PS national sample is located in 461 areas co m ­
prising 923 counties and independent cities w ith c o v ­
erage in e v e r y State and the D istrict o f Colum bia. In all,
about 57,000 housing units and other livin g quarters are
designated fo r the sample each month, o f w hich about
47,000, containing 100,000 persons 16 years and o v e r,
are occu pied b y households eligible fo r in terview . N o t

7

cities is d ivid ed into 1,931 prim ary sam pling units
(P S U ’ s). W ith som e m inor exceptions, a P S U consists
o f a county or a number o f contiguous counties. Each o f
th e 238 sta n d a rd m e tr o p o lit a n s ta tis tic a l a rea s
(S M S A ’ s ) 1 in existen ce at the tim e o f the 1970 Census
constituted a separate P S U . Outside S M S A ’ s, counties
norm ally are com bined, ex cep t w h ere the geographic
area o f the single county is excessive. B y com bining
counties to form P S U ’ s, greater h eterogen eity is ac­
com plished. M o re o v e r, another important considera­
tion is to have the P S U su fficiently com pact in area so
that, with a small sample spread throughout, it can be
efficien tly canvassed without undue travel cost. A ty p i­
cal prim ary sampling unit, fo r exam ple, includes both
urban and rural residents o f both high and lo w econom ic
levels and encom passes, to the extent feasible, d iverse
occupations and industries.
T h e P S U ’ s are grouped into 376 strata. A m o n g these
P S U ’ s, 146 o f the largest S M S A ’ s ( i n c l u d i n g all those
having o v e r 250,000inhabitants)and lO oth er areas (not
S M S A ’ s ) are separate strata representing them selves.
In general, h o w eve r, a stratum consists o f a set o f
P S U ’ s as much alike as possible in various characteris­
tics such as geograph y, population density, rate o f
grow th in the 1960— 70 decade, proportion o f blacks
and oth er m inorities, principal industry, number o f
farm s, and so on.
E x cep t fo r the 156 areas m entioned above, each o f
w hich is a com plete stratum, the strata are established
so that their sizes in terms o f 1970 population are ap­
proxim ately equal. F ro m each stratum a single P S U is
selected to represent the entire stratum. In the 156
strata in w hich there is on ly a single P S U (the 146
S M S A ’ s and 10 special cases), the single P S U automat­
ically falls in the sample. W hen the stratum has more
than one P S U , the sample P S U is selected in a random
manner in such a w a y that its p robability o f selection is
proportion ate to its 1970 population. F o r exam ple,
within a stratum the chance that a P S U having a popula­
tion o f 50,000 w ou ld be selected is tw ice that fo r a unit
having a population o f 25,000.

S election o f S am ple H o u seh o ld s. T h e sample design

reflected in these counts are the sample areas and

calls fo r a sampling ratio w hich depends on the p re­

households added beginning July 1975 to produce an­

determ ined total sample size. F o r 1976, it is roughly 1

nual estim ates fo r all 50 States and the D istrict o f C o l­

household fo r e v e ry 1,500 households in each stratum.
T h e sampling ratio is m odified slightly each month, as

umbia. T h e rem ainder are units found to be vacant,
co n verted to nonresidentia! use, containing persons
w ho reside elsewhere, or ineligible fo r other reasons. O f

the size o f the sample is held relatively constant despite

the occu pied units eligible fo r enum eration, about 3 to 5

used within each sample P S U depends on the propor­
tion that the population o f the sample area was o f the

percent are not in terview ed in a given month because

the o vera ll grow th o f the population. T h e sampling ratio

the residents are not found at hom e after repeated calls,
are tem porarily absent, refuse to coop erate, or are un­

stratum population at the tim e o f the 1970 Census. In a

available fo r other reasons.

w ith in -PS U sampling ratio that results is 1 in 150.0,

sample area which was one-tenth o f the stratum, the
thereby ach ievin g the desired ratio o f 1 in 1,500 fo r the

S electio n o f S am ple A re a s. T h e entire area o f the U n it­
ed States
 consisting o f 3,146 counties and independent


^ e e appendix C.

BLS HANDBO O K OF METHODS

8

stratum. F o r each P S U that is a stratum representing
o n ly itself, the sampling ratio is 1 in 1,500 regardless o f
the size o f the P S U .
W ith each o f the 461 sample P S U ’ s the number o f
households to be enumerated each month is determ ined
by the application o f the w ith in -PS U sampling ratio
rather than through the assignm ent o f a fix ed quota.
Th is procedu re makes it possible to reflect, on a current
basis, population changes within the sample area. C o n ­
sequently, the sample as a w h o le properly reflects the
changing distribution o f the population and avoids the
distortion w hich w ou ld result from the application o f
fix ed quotas o f households o r persons based on the
population at an earlier date.
W ithin each designated P S U , several stages o f sam­
pling m ay be used in selecting the units to be enum er­
ated. T h e first step is the selection o f a sample o f census
enum eration districts (E D ’ s), w hich are adm inistrative
units used in the 1970 Census and contain, on the a ver­
age, about 300 households. T h ese are selected sys­
tem atically fro m a geogra p h ica lly arranged listing, so
that the sample E D ’ s are spread o v e r the entire P S U .
T h e probability o f selection o f any on e E D is prop or­
tionate to its 1970 population.
T h e next step is to select a cluster o f approxim ately
fo u r households to be enum erated within each desig­
nated E D . Th is selection is made w h e reve r possible
fro m the list o f addresses fo r the E D com piled during
the 1970 Census or, i f the addresses are incom plete or
inadequate, b y area sampling m ethods. T h e address
lists are used in about tw o-thirds o f the cases, prim arily
in urban areas, and area sampling is applied in the
rem ainder. In using the census lists an e ffo rt is made to
have all small multiunit addresses (2-4 units) included
w ithin the same segm ent. Th is im p roves the ability o f
the in te rview er to c o v e r all units designated fo r the
sample. Subject to this restriction, clusters consist o f as
geograph ically contingent addresses as possible.
Th is list sample is supplem ented b y a selection o f the
appropriate proportion o f units n ew ly constructed in
the P S U since the census date. T h e addresses o f these
units are obtained m ainly fro m records o f building per­
mits m aintained b y the o ffic e s responsible fo r issuing

in terview s at all housing units in the segment but uses a
system atic sampling pattern so as to ach ieve the equ iva­
lent o f a 4-household cluster w hich is canvassed co m ­
pletely. T h e rem aining housing units in the segment are
then available fo r future samples.

R o ta tio n o f S am ple. Part o f the sample is changed each
month. A prim ary reason fo r rotating the sample is to
avoid the problem s o f uncooperativeness which arise
w hen a constan t pan el is in te rv ie w e d in d efin itely.
A n o th er reason fo r replacing households is to reduce
the cum ulative e ffe c t o f biases in response that som e­
tim es occu r w hen the same persons are in terview ed
indefinitely. T o accom plish this rotation o f the sample
on a gradual basis, maps and other materials fo r several
samples are prepared sim ultaneously. F o r each sam ple,
eight system atic subsamples (rotation grou ps) o f seg­
ments are identified. A given rotation group is inter­
vie w e d fo r a total o f 8 months, d ivid ed into tw o equal
p eriod s. It is in the sample fo r 4 consecu tive months one
year, leaves the sample during the fo llo w in g 8 months,
and then returns fo r the same 4 calendar months o f the
next year. In any 1 m onth, one-eighth o f the sample
segm ents are in th eir first m onth o f en u m eration,
another eighth are in their second month, and so on; the
last eighth are in fo r the eighth tim e, the fourth month o f
the second p eriod o f enum eration. U n d er this system ,
75 percent o f the sample segments are com m on from
month to month and 50 percent from year to year. This
procedure provid es a substantial amount o f month-tomonth and year-to-year o verla p in the panel, thus re­
ducing discontinuities in the series o f data, w ithout
burdening any specific group o f households with an
unduly lon g period o f inquiry.

Collection M ethods
Each m onth, during the calendar w eek containing the
19th day, in terview ers contact som e responsible person
in each o f the sample households in the C P S . A t the tim e
o f the first enum eration o f a household, the in terview er
visits the household and prepares a roster o f the house­

perm its in that area. A special procedu re is also fo l­

hold m em bers, including their personal characteristics

lo w e d to include units in the sample that had been
m issed in the Census. In those enum eration districts
w h ere area sam pling m ethods are used — m ainly rural

(date o f birth, sex, race, marital status, educational

a re a s — the E D ’ s are subdivided into segm ents, that is,
small land areas having w ell-defin ed boundaries and in
general an ex p ected “ siz e ” o f about 8 to 12 housing
units o r oth er livin g quarters. F o r each subdivided E D ,

attainment, veteran status, origin or descent, e tc .) and
their relationship to the household head. Th is roster is
brought up to date at each subsequent in terview to take
account o f new o r departed residents, changes in mari­
tal status, and sim ilar item s. T h e inform ation on p er­
sonal characteristics is thus available each month fo r

one segm ent is designated fo r the sam ple; the probabil­

identification purposes and fo r cross-classification w ith

ity o f selection is proportionate to the estim ated “ s iz e ”

econ om ic characteristics o f the sam ple population.

o f the segm ent. W h en a selected segm ent contains

Personal visits are required in the first, second, and

about 4 households, fo r exam ple, all units are included
in the sample. In cases w here the “ s iz e ” o f the segm ent

fifth month that the household is in the sample. In oth er
months, the in terview m ay be conducted b y telephone

is several tim es 4 units, an in te rview er does not conduct



i f the respondent agrees to this procedu re. A ls o , i f no

LABOR FORCE, EM PLOYM ENT, AN D U N EM PLO YM ENT
one is at hom e w hen the in terview er visits, the respon­
dent m ay be contacted by teleph one after the first
month. A p p ro x im a tely 50 percent o f the households in
any given month are in terview ed by telephone.
A t each m onthly visit, a questionnaire is com pleted
fo r each household m em ber 16 years o f age and o ver.
T h e in terview er asks a series o f standard questions on
eco n om ic a c tiv ity during the p reced in g w e e k , the
calendar w eek containing the 12th day o f the month,

9

recruited and have either direct o r hom e study training
each month, b efore the survey. M o re o v e r, through edit­
ing o f their com pleted questionnaires, repeated obser­
vation during enum eration, and a system atic reinter­
v ie w o f part o f their assignments by the field supervi­
sory staff, the w ork o f the in terview ers is kept under
control and errors o r deficien cies are brought directly to
their attention.

called the “ su rvey w e e k .” T h e prim ary purpose o f
these questions is to classify the sample population into
the three basic econ om ic groups — the em ployed, the

Estimating Methods

u nem ployed, and those not in the labor fo rce. (S ee

T o increase the reliability o f the labor fo rc e statistics
d erived from the sample, the estim ation procedure uses
tw o stages o f ratio estim ates and a “ com posite esti­

facsim ile o f the C PS standard questionnaire on page
13 o f this bulletin.)
A ddition al questions are asked each month to help
cla rify the inform ation on labor fo rc e status. F o r the

m a te.” A ch ievem en t o f this rather com plicated pro­
cedure is made rapidly and autom atically because o f the

em p loyed , inform ation is obtained on hours w orked
during the survey w eek , together with a description o f

T h e principal steps in vo lv ed are as fo llo w s:

the current jo b . F o r those tem porarily aw ay from their
jo b s , the enum erator records their reason fo r not w o rk ­
ing during the su rvey w eek , w hether or not they w ere
paid fo r their time o ff, and w heth er they usually w ork
full or part tim e. F o r the u nem ployed, inform ation is
obtained on (1) m ethod (s) used to find w ork during the 4

availability o f high-speed electron ic digital com puters.

A d ju s tm e n t f o r H o u se h o ld s N o t I n te r v ie w e d . T h e
w eights fo r all households in terview ed are adjusted to
the extent needed to account fo r units occu pied by
persons eligible fo r in terview but fo r w hich no in terview
was obtained because o f absence, impassable roads,
refusals, o r other reasons. Th is adjustment is made

w eeks prior to the in terview , (2) the reasons the unem­
p loyed persons had started to lo o k fo r w ork, (3) the
length o f tim e they had been lookin g fo r w ork , (4)
w hether they w ere seeking full- or part-time w ork and

group o f households (urban, rural nonfarm , rural farm ).

(5) a description o f their last full-tim e civilian jo b . F o r
those outside the labor fo rce , their principal a ctivity

T h e adjustment is made separately within each indi­
vidual rotation group. T h e proportion o f sample house­

during the su rvey w e e k — w hether keeping house, going
to school, o r doing som ething else — is recorded. In

holds not in terview ed fo r the a b o ve stated reasons
ranges from 3 to 5 percent.

addition, fo r all households in the outgoing rotation
groups, questions on the w ork h istory, reasons fo r non­

R a tio E stim a te s . T h e distribution o f the population

participation, and jo b seek in g intentions o f individuals
not in the labor fo rce are asked.
Th e questionnaires containing the inform ation ob ­
tained fo r each person in the sample are subjected to a
field edit b y clerks in each o f the 12 regional o ffices o f
the Census Bureau. T h e field edit serves to catch om is­
sions, inconsistencies, illegib le entries, and errors at
the point w here c orrection is still possible. M an y o f the
error correction s made in the field edit preven t delays in

chance, fro m that o f the N a tio n as a w h ole in such basic
characteristics as age, race, sex, and farm -nonfarm
residence, am ong other things. T h ese particular popu­
lation characteristics are clo sely correlated with labor
fo rc e participation and other principal measurements
made fro m the sample. T h ere fo re, som e o f the sample
estim ates can be im p roved substantially when, by ap­
propriate w eighting o f the original returns, the sample

further processing o f the questionnaires in W ashington.

population is brought as clo sely into agreem ent as pos­

A fte r the field edit, the questionnaires are forw arded

sible w ith the know n distribution o f these characteris­

to the J e fferso n ville, Indiana o ffic e o f the Census

tics in the entire population. Such w eighting is accom ­
plished through tw o stages o f ratio estimates:

Bureau. A ll o f the questionnaires are received in J effer­
sonville by the end o f the w e e k after enumeration. H ere
the raw data are transferred to com puter tape and

separately b y groups o f P S U ’ s and, within these, fo r
each race (w h ite or black and oth er) and residence

sele cted fo r the sam ple m ay d iffe r so m ew h a t, b y

1.

F irst S ta g e . T h e first stage o f ratio estimates takes

transmitted b y w ire to the com puters in the Census
Bureau’ s W ashington o ffic e w h ere they are checked fo r

into account differen ces in the distribution at the tim e o f

com pleteness and consistency.

tion, estim ates from the sample P S U ’ s and that o f the
total population in each o f the fou r m ajor regions o f the
country. H o w e v e r, independent distributions o f the

T h e in terview ers on the C P S are ch iefly part-time
w orkers, although most o f the staff at any tim e consists
o f persons w ho have had several years experien ce on
the survey. T h e y are given intensive training w hen first



the last Census, b y race and residence o f the popula­

total population b y residence, cross-classified b y race,
are not available on a current basis. Instead, using 1970

BLS HANDBO O K OF METHODS

10

census data, estim ated population totals b y race and
residen ce fo r a given region are com puted from popula­

month, based upon that part o f the sample w hich is
com m on to both months (75 percen t). A lthou gh the

tion counts fo r P S U ’ s in the C P S sample. Ratios are
then com puted betw een these estim ates (based on sam­

w eights fo r the tw o com ponents o f such a com posite

ple P S U ’ s) and the actual population totals fo r the re­

instance the w eights used fo r com bining these tw o

estim ate do not necessarily have to be equal, in this

gion as shown by the 1970 census. Such a ratio estim ate

estim ates are each one half. Equal w eights in this case

does not im ply that the ratio existing in 1970 w ou ld be
unchanged at a current date. In derivin g these ratios,

satisfy the condition that fo r virtu ally all item s there w ill
be som e gain in reliability o v e r the estim ation p ro ­

P S U ’ s that made up entire strata and w ere selected with
certainty (usually referred to as “ self-representing”

cedure after the first tw o stages o f ratio estim ates.

P S U ’ s) are exclu ded from the com putations, since they
re p res en t o n ly th e m s e lv e s . In ta b u latio n s o f the
m onthly results from the C P S , the w eights fo r all sam­
ple households from non-self-representing P S U ’ s in a
given region are m ultiplied by the population ratio fo r
that region fo r the appropriate race-residence group.

T h e com posite estim ate results in a reduction in the
sampling error b eyon d that w hich is ach ieved after the
tw o stages o f ratio estim ates described; fo r som e items
the reduction is substantial. T h e resultant gains in relia­
b ility are grea test in estim ates o f m onth-to-m onth
change, although gains are also usually obtained fo r
estim ates o f le v e l in a given month, change from year to
year, and change o v e r oth er intervals o f tim e.

2.

S e c o n d S ta g e . T h e second stage o f ratio estim ates

takes account o f current d ifferen ces betw een the popu­
lation distributions o f the sample and that o f the N a tio n
as a w h ole b y age, race, and sex. Independent esti­
mates o f the entire population, b y these characteristics,
are prepared each month. P rior to January 1974 they
w ere calculated b y carrying fo rw a rd the most recent
census data (1970) to take account o f subsequent aging
o f the population, births, m ortality, and migration b e­
tw een the U n ited States and oth er countries.
Beginning in 1974, the “ in flation -deflation ” m ethod
o f derivin g independent population controls was intro­
duced into the C P S estim ation procedures. In this pro­
cedure, the m ost recent census population adjusted to
include estim ated net census undercount b y age, race,
and sex (i.e ., “ in flated” ) is carried fo rw a rd to each
subsequent month and later age b y adding births, sub­
tracting deaths, and adding net m igration. Th ese postcensal population estim ates are then “ d efla ted ” to cen ­
sus le v e l to reflect the pattern o f net undercount in the
m ost recent census b y age, race, and sex. T h e actual
percent change o v e r tim e in the population in any age
group is p reserved. T h e C P S sample returns (taking into
account the w eights determ ined after the first stage o f
ratio estim ates) are, in e ffect, used to determ ine on ly
the percen t distribution w ithin a giv en age-race-sex
group b y em ploym en t status and oth er characteristics.
In d evelop in g statistics, these sample distributions are
m ultiplied b y the ratio o f the independent population
estim ate fo r the appropriate age-race-sex group.

Presentation and Uses
T h e C P S p rovid es a large amount o f detail on the
econ om ic and social characteristics o f the population.
It is the source o f m onthly estim ates o f total em p lo y ­
ment, both farm and nonfarm ; o f nonfarm self-em ­
p lo yed persons, dom estics and unpaid helpers in non­
farm fa m ily enterprises, as w ell as w a ge and salaried
em p loyees; and o f total u nem ploym ent, w hether o r not
c o v e re d b y u n em ploym en t insurance. It is a c o m ­
p reh e n siv e sou rce o f in fo rm a tio n on the p erson a l
characteristics such as age, sex, race, origin o r d e­
scent, educational attainment, and the marital and fa m ily
status o f the total civilian population (not in institutions
16 years o f age and o v e r) and o f the em ployed, the
u nem ployed, and those not in the labor force.
It provid es distributions o f w orkers by the number o f
hours w ork ed , as distinguished from aggregate o r a ver­
age hours fo r an industry, perm itting separate analyses
o f part-tim e w orkers, w orkers on overtim e, etc. T h e
survey is a com preh en sive current source o f inform a­
tion on the occu pation o f w orkers, w hether teacher,
stenographers, engineers, laborers, etc. It also provid es
lim ited statistics on the industries in w hich they w ork.
In form ation is available from the su rvey not o n ly fo r
persons currently in the labor fo rc e but also fo r those
w h o are outside o f the labor fo rc e , som e o f w h o m m ay
be considered to be a “ labor re s e rv e .” T h e characteris­
tics o f such persons — w hether m arried w om en w ith or

C o m p o site E stim a te . T h e last step in the preparation o f
estim ates makes use o f a com posite estim ate. In this

w ithout young children, disabled persons, students, re­
tired w orkers, etc. — can be determ ined. A ls o , through

procedu re, a w eigh ted average o f tw o estim ates is o b ­

special inquiries, it is possible to obtain inform ation on

tained fo r the current month fo r any particular item.
T h e first estim ate is the result o f the tw o stages o f ratio

their skills and past w o rk exp erien ce, i f any.
Each month, a significant amount o f basic inform a­

estim ates described above. T h e second estim ate con ­
sists o f the com posite estim ate fo r the p recedin g month

E m p loym en t a n d E arnings. T h e detailed tables in this

to w hich has been added an estim ate o f the change in

report p rovid e inform ation on the labor fo rc e , e m p lo y ­

each item
 betw een the precedin g m onth and the present


ment, and unem ploym ent b y a num ber o f characteris­

tion about the labor fo rc e is analyzed and published in

LABOR FORCE, EM PLOYMENT, AND UN EM PLO YM ENT
tics, such as age, sex, race, marital status, industry,
and occupation. Estim ates o f the labor fo rce status o f
selected population groups not published on a m onthly
basis, such as persons o f Spanish origin, p o verty and
n on poverty residents o f the N a tio n ’ s m etropolitan and
nonm etropolitan areas, special data fo r V ietn am -era
veterans, etc., are published e v e ry quarter. A p p ro x i­

11

m ately 50 times as large as the present sample. Publica­
tion o f sub-national data d erived from the C P S is limited
to annual estim ates fo r regions, all States (e ffe c tiv e with
1976 data, based on the special supplementation in­
itiated in July 1975 — fo r prior years, lim ited to large
states), large S M S A ’ s, and selected central cities.

m ately 300 o f the m ost im portant estim ates from the

S ou rces o f Errors in the Su rvey E stim a tes. Th e esti­

C P S are presented each month on a seasonally adjusted
basis. Since 1973, the Census B ureau’ s X - l l m ethod
has been used to seasonally adjust labor fo rce data.2

mates from the su rvey are subject to sampling errors,

T h e C P S is used also fo r a program o f special in­
quiries to obtain detailed inform ation from particular
segments, or fo r particular characteristics o f the popu­
lation and labor fo rce . A p p rox im a tely 8 to 10 such

that is, errors arising from the fact that the estimates
each month are based on inform ation from a sample
rather than the w h ole population. In addition, as in any
su rvey w ork , the results are subject to errors made in
the field and to errors that occu r in the process o f
com pilation.

special surveys are made each year. T h e inquiries are

Classification errors in labor fo rce surveys may be

repeated annually in the same month fo r som e topics,

particularly large in the case o f persons with marginal

including the earnings and total incom es o f individuals
and fam ilies (published by the Census Bureau), the
extent o f w ork experien ce o f the population during the

attachments to the labor fo rce . Th ese errors m ay be
caused by in terview ers, respondents, or both, or m ay

calendar year, the extent o f overtim e w ork at premium

continuous quality control program , in terview ers may

pay, usual w e e k ly earnings o f w a ge and salary w orkers,

not alw ays ask the questions in the prescribed fashion.

and the prevalen ce o f multiple job-h oldin g. T h e y also
include marital and fa m ily characteristics o f w orkers,
the em ploym en t o f school age youth, the em ploym en t

T o the extent that varying the w ordin g o f the question
cau ses d iffe re n c e s in re sp o n se , erro rs o r la ck o f

o f high school graduates and dropouts, the em ploym en t

arise from faulty questionnaire design. In spite o f a

uniform ity in the statistics m ay result. Sim ilarly, the
data are lim ited by the adequ acy o f the inform ation

o f recent co llege graduates, and the educational attain­
ment o f w orkers. Surveys have been made period ically
on subjects such as jo b m obility, jo b tenure, job-search

possessed by the respondent and the willingness to
report accurately.

activities o f the u nem ployed, and the intensity o f the jo b

other types o f errors beyon d those already mentioned.
Som e o f these are:

search.
G en erally, the persons w ho p rovid e inform ation fo r

Th e estim ates from the survey are subject to various

the m onthly C P S questions also answ er the supplem en­

1. N o n resp o n se. A b o u t 3 to 5 percent o f occupied

tal questions. O ccasion ally, the kind o f inform ation
sought in the special su rvey requires the respondent to
be the person about w h om the questions are asked.

units are not in terview ed in a typical month because o f

In form ation obtained through the supplemental ques­
tions is com bin ed with data in the regular schedule to
p ro vid e tabulations o f all the desired personal and
econ om ic characteristics o f the persons in the special
survey. R ep orts on these special surveys are first pub­
lished in the M on th ly L a b o r R e v ie w . Reprints o f the
articles, together w ith technical notes and additional
tables, are published as S p e c ia l L a b o r F orce R e p o r ts .

is m ade in w eights fo r in terview ed households to ac­
count fo r n on interview s, they still represent a possible
source o f bias. Sim ilarly, fo r a rela tively fe w house­
holds, som e o f the inform ation is om itted because o f
lack o f kn ow led ge on the part o f the respondent or
because the in terview er fo rg o t to ask certain questions
o r record the answers. In processing the com pleted
questionnaires, entries usually are supplied fo r om itted
items on the basis o f the distributions in these items fo r

tem porary absence o f the occupants, refusals to co o p ­
erate, o r various other reasons. A lthou gh an adjustment

persons o f similar characteristics.

Limitations
2. In d ep en d en t P opu lation E stim a tes. T h e indepen­

G eograph ic. T h e C P S is designed to produce reliable

dent population estim ates used in the estim ation pro­

n ational estim ates. It is n ot d es ign ed to p rod u ce

cedure m ay also p rovid e a source o f error although, on
balance, their use substantially im p roves the statistical

m onthly estim ates fo r States and areas. A sample which
could produce State estim ates as reliable as those now
published fo r the N a tio n w ou ld have to be approxi-

2F or a detailed descrip tion o f the X - 11 m eth o d , se e T ech nical Paper
N o . 15, T he X - l 1 Variant o f the C en su s M eth od 11 S eason al A d just­
m ent Program , B ureau o f the C en su s 1967.




reliability o f many o f the important figures. (S ee dis­
cussion under “ R atio E stim ates.’ ’ ) Errors m ay arise in
the independent population estimates because o f under­
enum eration o f certain population groups o r errors in
age reporting in the last census (w hich serves as the
base fo r the estim ates) or similar problem s in the com ­

BLS HANDBO O K OF METHODS

12

putations, h o w eve r, do not incorporate the e ffe c t o f
response bias, that is, any system atic errors o f response
— fo r exam ple, those that w ou ld occur if, by and large,
respondents tended to overstate hours w orked. R e ­
3.
P ro cessin g E rrors. Althou gh there is a quality con ­ sponse biases occu r in the same w a y in a com plete
trol program on coding and a close control on all other
census as in a sample, and, in fact, they may be sm aller
phases o f processing and tabulation o f the returns,
in a w ell-conducted sample su rvey because fo r the rela­
som e processing errors are alm ost inevitable in a large
tiv e ly small sample it is feasible to pay the price neces­
statistical operation o f this type. H o w e v e r, the net error
sary to co llect the inform ation m ore skillfully.
arising from processing is probably fa irly negligible.
Estim ates o f sampling and response variability co m ­
bined are p rovid ed in E m ploym en t an d E arnings and in
M easu rin g the A c c u ra c y o f R esu lts. M odern sampling
other reports based on C P S data, thus perm itting the
user to take this fa cto r into account in interpreting the
theory provid es methods fo r estim ating the range o f
data. In general, the sm aller figures and small d iffer­
errors due to sampling w here, as in the case o f the C PS
sam ple, the probability o f selection o f each m em ber o f
ences b etw een figures are subject to relatively large
the population is know n. M eth ods are also available fo r
variation and should be interpreted with caution. Th e
determ ining the e ffe c t o f response variability in the
availability o f high-speed electron ic com puters makes
C P S . A measure o f sampling variability indicates the
possible con siderably m ore detailed estim ates than
range o f d ifferen ces that m ay be e x p ected because only
w ere possible earlier.
a sample o f the population is surveyed. A measure o f
Estim ation o f response bias is one o f the m ost d if­
response variability indicates the range o f d ifferen ce
ficu lt aspects o f su rvey and census w ork. S ystem atic
that m ay be exp ected as a result o f com pensating types
studies on this subject are n ow an integral part o f the
o f errors arising from practices o f differen t in terview ers
C P S , but in many instances available techniques are not
and the replies o f respondents; these w ou ld tend to
su fficiently precise to p rovid e satisfactory estim ates o f
cancel out in an enum eration o f a large enough popula­
response biases. Considerable experim entation is in
p rogress w ith the aim o f d e v e lo p in g m ore p recise
tion. In practice, these tw o sources o f error-sam pling
and response variability, as defined a b o ve — are esti­
measurements and im proving the overa ll accuracy o f
the series.
m ated jo in tly from the results o f the survey. T h e co m ­
ponents o f population change (m ortality, im m igration,
e tc .) since that date.

Technical References
N um ber

1.

2.

3.

P resid en ts C o m m ittee to A p praise E m p loym en t and U n em ­
p lo y m e n t S t a t i s t i c s , M e a s u r i n g E m p l o y m e n t a n d
U n e m p lo y m e n t (1962).
A rev iew o f all F ed eral statistical series on em p loym en t and
u n em p lo y m en t and a com p arison o f th e sou rces and u ses o f
e a ch series. T h e d isc u ssio n o f labor fo r ce statistics inclu des a
b rief h istory o f their d ev elo p m en t, an evalu ation o f current
c o n c ep ts and tech n iq u es, and recom m en d ation s for further
research and im p rovem en ts, several o f w h ich w ere inaugu­
rated in January 1967.
U .S . D e p a r tm e n t o f C o m m e r c e , B u rea u o f th e C e n s u s ,
T e c h n ic a l P a p e r N o . 6 , “ T h e Current P opulation S u rvey
R ein terv iew Program — S om e N o te s and D isc u s sio n ” (1963).
A sum m ary o f p roced u res and results o f the Current Popu­
lation S u rv ey R ein terview Program from 1955 through 1961
and so m e interp retation s and com p arative results from other
stu d ies.
___________ , T e c h n ic a l P a p e r N o . 7, “ T h e Current Population
S u rv ey — A R eport on M eth o d o lo g y ” (1963).
A b rief h istory o f the Current P opulation S u rvey (C PS)
from its in cep tio n (1940) to the p resen t. A detailed descrip tion




N um ber

is given for both the sam p le d esign and su rvey proced u res.
A lso inclu ded is a d etailed d isc u ssio n o f the variou s m od ifica­
tion s in d esign and p roced u res and th e resultant gain in p reci­
sion .
4.

U .S . D epartm en t o f L abor, B ureau o f L abor S tatistics and U .S .
D epartm en t o f C om m erce, B ureau o f th e C en su s, C o n c e p ts
a n d M e th o d s U s e d in M a n p o w e r S t a t i s t i c s f r o m th e C u r r e n t
P o p u la tio n S u r v e y , B L S R eport 313 and the Current P opula­

tion R ep orts, S eries P -23, N o . 22 (1967).
A c o n c ise d escrip tion o f th e m eth od ology u sed in obtaining
labor fo rce inform ation from sam ple h ou seh o ld s. L abor fo rce
c o n c ep ts and d efin ition s are set forth. T he ad eq u acy o f labor
force data and qu ality co n trols are d isc u sse d , and m ajor im ­
p ro v em en ts in th e Current P op u lation S u rv ey are listed
ch ron ologically.
5. ----------------- H o w th e G o v e r n m e n t M e a s u r e s U n e m p lo y m e n t,
R eport 418 (1973).
A sh ort n o n tec h n ic a l d is c u s s io n o f th e c o n c e p ts and
m eth od s u sed in obtainin g labor force sta tistics from the
Current P opulation S u rvey.

LABOR FORCE, EM PLOYM ENT, AN D UN EM PLO YM ENT
FORM CPS-1

INTERVIEWER CHECK ITEM

U.S. DEPARTMENT OF COMMERCE

13

CONTROL NUMBER

\ l i j 5 J y " URCAU ° F ™E CEN5US
O nly CPS-1 for h o u seh o ld . . . .

t

F irs t CPS-1 of con fin u o tio n h 'h o l d . . [

)

Second CPS-1 of co n tin u atio n h 'h o ld . |

1
1
1
1
1

|

T hird, fourth, and 5th C P S -1 . . -

•

n

L INE NO. O F H’HOLD R E S P.
NON H'H O LD R E S P O N D E N T .............. ..........□
(Specify and Send Intercom*)
/
\

INTERVIEW
ANY ENTRY O THER THAN

f Yes [ ~ ]

NEVER WORKED IN ITEMS
2 3 A -E IN THIS C P S -1 ............ 1 No

____
□

NONINTERVIEW
T Y P E A ........................................... ......... □
T Y P E B ........................................... ..........□
T Y P E C ........................................... ......... □




C M B B S IN ?

26.1:1

y ® S > ( U iM ] @ J Q

S M B '; S t
Form Approved
O.M.B. No. 41-R1202-14

PSU

|

SEGMENT

SERIAL

BLS HANDBOOK OF METHODS

14
25. LINE NO.

2 6 . R E LA TIO N SH IP TO HEAD O F HOUSEHOLD
(Control Card Item 14b)

2 7 . AGE ( Mark one 29. RACE
circle only)

3

o

9 o

O ther

2

£

o

10 o

3

3

2

3

O th er r e la tiv e ........................................

o

3
4

6

5 o

N o n re la tiv e -ow n re ls . in h o u s e h o ld ...............

5

a?
LU

11

o

12 o

o

■

no own r e la tiv e s in h o u se h o ld

(Control Card Item 14b)

I

C h i l d ........................................................

O

1

O

3 O

11

3
5
3

3

O

2

3

O ther r e la tiv e ........................................

O

r
N o n re la tiv e -own r e ls . in h o u s e h o ld ...............
m

no own re la tiv e s in h o u se h o ld

White

25. LINE NO.

O ther

3 0

o

O
O

10 O
H O

5 0

26. RELA TIO N SH IP TO HEAD O F HOUSEHOLD
(Control Card Item 14b)

a

0

12 O

6

30. SEX

13 O

0

O

F e m a le

O

N egro

0

1

I

O ther

U

2

2

3

O

3

3

7 O

10

5
X
u
X

o

11 0
12 O

o

30. SEX

13 O

6

M a le ..
F em ale

■

O
0

2 7 . AGE (Mark one 2 9 . RACE
circle only)

C h i l d ........................................................
O ther r e la tiv e ........................................

O
O

0 O
1 o

7 O

White

8 O

Negro O

2

0

8 O
9 0

5 o
O

o

9 O

O ther

3

o

10 O

4

z
>

N o n re la tiv e -own re ls . in h o u se h o ld ...............

5

5 o
o

12 O

o

?

O
O

30. SEX

13 O

6

G

M a le ..
m

O

F e m a le

■

N onre la tiv e -no own re la tiv e s in h o usehold

O

O

o

9

26. RELA TIO N SH IP TO HEAD O F HOUSEHOLD
(Control Card Item 14b)

C h ild ...................................
3

o




2 7 . AGE (Mark one 29. RACE
circle only)
0 o
i o
2

2

3

Negro O

9 0

M a le ..

0

2

White

8 0

0

■

o

N o n re la tiv e -

8

O

7 0

1 O

4 0

0 O
1 O

G
?

3
N onre la tive -own r e ls . in h o u se h o ld .,

2 7 . AGE (Mark one 29. RACE
circle only)

4

5

i—

3

2

C h i l d ........................................................

2 7 . AGE (Mark one 2 9 . RACE
circle only)

o

2 6 . RELA TIO N SH IP TO HEAD O F HOUSEHOLD

I

13 O

M a le ..
F em ale

0

I
2

O

O

(Control Card Item 14b)
0

12 O

6 O

0 O
I

13 O

O

O

10 o
11 o

2

I

O ther

o

N o n re la tiv e -

2 5 . LINE NO.

.D

12 O

6

O ther

O

O

(Control Card Item 14b)

10 o

5 O

O

N o n re la tiv e -own re ls . in h o u s e h o ld ...............

9 O

O

3

O

N on re la tiv e —

Negro
9 O

4 O

O ther r e la tiv e ........................................

no own re la tiv e s in h o u se h o ld

O

O

White

o

N egro O

5 O

N onre la tive -own r e ls . in h o u se h o ld ...............

2 7 . AGE (Mark one 29. RACE
circle only)

20

White

8 O

0
no own r e la tiv e s in hou se h o ld

0O

0

I

O

7 O

1 o
2

o

2 6 . RELA TIO N SH IP TO HEAD O F HOUSEHOLD

0

O ther r e la tiv e ........................................

30. SEX

Fem ole

■

N o n re la tiv e --

O

4 O

M a le ..

8
g

C h i l d ........................................................

13 o

6

6
?

O

27. AGE (Mark m
circle only)

0o

X I

0 O
1 o

O

0

White

Negro C

O

3

0

7 O

C h i l d ........................................................

0

(Control Card Item 14b)

8 o

X I
2 2

0

26. RELA TIO N SH IP TO HEAD O F HOUSEHOLD

O ther r e la tiv e ...........................

0

3

o

5 0

o

o

6

(Control Card Item 14b)

White

0

0

Negro

I

I

o
o

O

o

7 O

White

8 o
9 o

N egro O

3 o

O

n re la tiv e s in hou se h o ld

O

O

O
O

11 o

5 o
o

O ther

10 o

4 o

M a le ..
N o n re la tiv e —
no own re la tiv e s in h o u se h o ld

0 O
1 o
2

13 O

o

2 7 . AGE (Mark oi
circle only)

M a le ..
F e m a le

O ther

10 0
11 0
12 n

4 o
N o n re la tiv e -own re ls . in h o u s e h o ld .,

7 0
8 G
9 G

26. RELA TIO N SH IP TO HEAD O F HOUSEHOLD

12 o

o

13 o

6

LABOR FORCE, EM PLOYM ENT, AN D U N EM PLO YM ENT

92 7
0 5

2 .1
6 :1




15

BLS HANDBO O K OF METHODS

16

!0. Did . . . do any work a t all
LAST WEEK, not counting

8. LINE NUMBER

work around the house?
(Note: If farm or business
operator in kk., ask about
unpaid work)
j

19. What w as . . . doing most o
LAST WEEK -

No O (Co to 21)

Yes 0
( Working
< Keeping house
V Going to school
or something e lse?

20A. How many hours
_

q

q

^

did . . . work

j

LAST WEEK

21. (If I in 19, skip to 21A.)

22. (If LK in 19, skip to 22A.)

Did . . . have a job or

during the p a st'd weeks?

was temporarily absent or
on layoff LA5T WEEK?^
No O (Co to 22)

Y es C

/■
21A. Why was . . . absent
from work LAST WEEK?
Own ill n e s s -----

O

Bad w eother___

O

Labor d ispute . .

O

P0* employ, agency O
3-

Going to sc h o o l........................ S O
Unable to work (Skip to 24). U O
R e tired ........................................R O
Other (Specify)...................... OT O

\

20B. INTERVIEWER
CHECK ITEM
+
49

'

1-34 O

(Skip to
item 23)
(Co to 20C)

(Coto20D)
-------20D. Did . . . lose any time oi
take any time off LAST
35-48 o

WEEK for any reason
such a s illn ess, holiday
or slack work?
20C. D oes . . . USUALLY work 35
hours or more a week at th is job?
Yes O

Y es O

( Correct 20A if lost time
not already deducted;
if 20A reduced below 35,
correct 20B and fill XC;
otherwise, skip to 23.)

What is the reason . . .
USUALLY works le s s
than 35 hours a week?

o 1

Other (Specify). .

job LAST WEEK?
Yes O

How many extra

(Correct 20A and 2 a:
OB
necessary if extra hours
not already included and
skip to 23.)

O

On v o c a tio n ...............................
Too busy with housework,
school, personal bus., e tc.

24B. Why did . . . leave that job?
Personal, family
(Incl. pregnancy) or School.. .

26. RELATIONSHIP TO HEAD OF
HOUSEHOLD
O
O
O

3

3

2) How many weeks
ago did . . . start
looking for work?
3) How many weeks

Slack work or b u siness conditions O
non seasonal job com pleted. . . O
U nsatisfactory work
arrangements (Hours, pay, etc.) O

D on't know. .

& G
? ?

Part O

e

not take a job LAST WEEK?
( Already has a job........ O

O
\J

OCCUPATION

0 0
I x

A O

?

C o

G

D a
E O
F O

c
3

B O

3 3

\

S
?
y
8
(Skip to 23 and enter job worked
at last week)

o

?
8
r

0 0 0
X I I
£ £ £
3 3 3

Q o
R O

G G G
5 3 3

o
T O

G O
H O

G 6
? l

J
K
L
M

8
9

0
O
O
O

G

8
9

Ref. O

N O
P o

O

Temporary i l l n e s s ___

O

| Going to sc h o o l............ O
O L Other (Specify in notes) O

Married - c ivilian
spouse present O

24D. What are the rea sons . . . is not looking
for work?
(Mark each reason mentioned)
• B e lieves no work available
in line of work or a re a ................ O

X I
c
3
3

?

9

Married •
Armed F a rce s
spouse present O
Married •
spouse a bsent ~
finclude separated) Q

3

?

9

• Other pars, handicap in finding job O

29. RACE

• C a n 't arrange child c o re ..................... O
• Family r e s p o n s ib ilitie s ....................

• III health, physical d is a b ili ty ___

■
■

White
O

O

• Other (Specify in notes).......................

O

U O
V o
w o

X o
Y O
z o

Never worked ot a ll..............................

O

(Skip to 23 and enter last full-time civilian
job lasting 2 weeks or more, job from which
laid off, or "Never Worked")_____________

of any kind in the next 12 months?
Y e s ................ ........................

O

(N efcomany, bsesorganizationooeepyr
a o p un ,
m
is
r t rm e
h lo )

23B. What kind of b u sin e ss or industry is this? (For example: TV and radio mfg., retail shoe store, State Labor Dept., farm.)

: electrical engineer, stock clerk, typist, farmer.)

20Wetsr. t.'sposf isrtantoce.) or duties? (Freap: tp,kpaonbosf ssllsc
Z.oat werein gms,imoecn t
h
o xm ye e sc ut ok, ile, e <
le s e c
pa p .in rst inh activities
re
e p s re

Never married . .

O

30. SEX AND
VETERAN STATUS
Mole
Vietnam E ra O
Korean War..

O

World War II

O

World War 1..

O

Other
O

s

(Month and year)
Before 1970 ........................................... O
Nev. worked full-time 2 wks. or more O

O

O

O

24E. Does . . . intend to look for work

Widowed
or divorced . .

Negro

O

• Don't know.............................................

1970 or later (Write month and yen) • . O

c
3

• C ouldn't find any w o rk .................... o
• L ocks nec. schooling
training, sk ills or e x p e r ie n c e .. O
• Employers
think too young or too o ld ......... O

a In school or other tr a in in g ................ O

22F. When did . . . la st work at o
full-time job or b u siness lasting
2 consecutive w eeks or more?

28. MARITAL STATUS

>(Skip to 24E)

Other Service O
N onveteran.. O Fem ole................

O

31. HIGHEST 32. GRADE 33.
COM­ ORIGIN
GRADE
AT­
PLETED

It depends (Specify in notes) O
No .

TENDED

D on't know.............................. <

E H C

0 0

I

I I
c 8

(If entry in 24B, describe job in 23)

23. DESCRIPTION OF JOB OR BUSINESS

23C. What kind ot work w as . . . doing? ( For e
>

O

27. AGE

0

22E. Is there any reason why . . . could

No

INDUSTRY

> (Co to 24D)
O J

or part-tim e work?
Full o

(Skip to 23 and enl
held last week)

O
O

N onrelative of head with
no own relatives in h 'hld.

Maybe - it depends
(Specify in notes)

22D. H as . . . been looking for full-time

O FFICE USE ONLY

Other reason (Specify)................. 3




Other relative of head . . . . . .
Non-rel. of head with own
rels. (incL wife) in h 'h ld .,

either full- or part-tim e?

off?

at th is job?
mm

O

Wife of h e a d .

24C. D oes . . . want a regular job now,

j

ago was . . . laid

Y es

O

2 A F r wo d . . . wrk
3 . o hm id
o ?

H ead with other rela tiv e s
(incl. wife) in h'hld............. O
Head with no
other rela tive s in h'hld. .

g

q

O

Did not wont full-time work . .
Full-time
work week under 35 hours

j
g

O
O

O
O

Y es O

O

Bad w e o th e r ..............................

O

looking far work?

21C. Does . . . usually work
35 hours or more a week

O

Own ill n e s s ................................

O

1) How many weeks
h as . . . been

Self-em ployed O

hours did . . . work?

Could find only part-tim e work O
Holiday (Legal or religious). . .

22C.

salary for any of the
time off LAST WEEK?

No O

Labor d is p u t e ...........................

L ost job.........................
Quit jo b .........................

21B. Is . . . getting wages or

Y e s ..................

9

Job terminated during week . .

O
Q y ’ (Skip to 24C)

Seasonal job com pleted..................

or quit a job at that time (papse)
or was there some other reason?

time or at more than-one

O

New job started during week .

O

Retirem ent or old a g e .....................

L eft s c h o o l................... O
Wanted temporary work O

No <

G

O

3 up to 4 years a g o ..
4 up to 5 years a g o . .
5 or more years ago.
J0"
Never worked

H e a lth ................................................

O

N o ....................

Material s h o r ta g e .....................

O

22B. Why did . . . sta rt looking for
work? Was it because . . . lost

/

20E. Did . . . work any ov e r­

P lan t or machine repair...........

0 0
1 I

24A. When did . . . lo st work for pay a t a
regular job or b u siness, either full- or
part-tim e?
Within pa st 12 months O
1 up to 2 years a g o .. O
2 up to 3 years a g o . . O ^ (Go to 24B)

O
O

” *

Indefinite layoff
f 22C3)
(30 days or more or O J
no def. recall date)

(Hark the appropriate reason)
Slack w o rk..................................

Placed or answered a d s ..................

Temporary layoff

25. LINE NUMBER

Other (Specify in notes) O

hours LAST WEEK?
No O

O

Nothing (Skip to 24)...........................
Other (Specify in notes, e.g., MDTA,
union or prof, rlgister, etc.).........

take off?

What is the reason . . .
worked le ss than 35

O

friends or relatives

New |ob to begin
(Skip to
within 30 days O 22B and

How mony hours
did . . .

O

employer directly . .

®

i

O 2, 3, 4 , 6 , 7 or 8 (End questions)
O l o r 5 (Co to 24A)

No O (Co to 24)

pvt. employ, agency

O

With o job but not at work . . J
Looking for w o rk ..................LK G
Keeping h o u s e .......................... H G

/

22A. What has . . . been doing in the la st
4 weeks to find work? (Mark aU
methods used; do not read list.)
^^with

O

On v a c a tio n -----

Yes O

at all jobs?
Working (5k,p to 20A)......... WK

24. INTERVIEWER CHECK ITEM
Unit in rotation group:
(Mark one circle only)

H as . . . been looking for work

b u sin ess from which he

j 2 E Wsth p rs n
3 . a is e o
t
A em lo of PR A C
n p yee
IV TE o.,
i
b s o in iv u l for w ges, sa ry o c m . .. P O
u., r d id a
a
la r o m
]
A F D R L g v rn e t em
E E A o e mn ployee..................F O
A S TE g v rn e t em
TA
o e mn ployee......................S O
A LO A g v rn e t em loyee..................... L O
C L o e mn p
Self-empl. in OWN bu s., prof, practice, or farm
Is the b u siness incorporated

/ Y e s ........................... I O
VNo (or farm)----- SE O

Wrk g W H U PAY infa . b s o farm
o in IT O T
m u. r
........ W O
P
N V RW R E ...............................N V O
EE OK D
E

I I

3

3




LABOR FORCE, EM PLOYM ENT, AN D UN EM PLO YM ENT

17

I

?
&
5
3

I

BLS HANDBO O K OF METHODS

18

18. LINE NUMBER

20. Did . . . do any work a t all
LAST WEEK, not counting
work around the house?
(Note: If farm or baeimete
operator ia kk., aak about
uapaid work)
j

19. What w as . . . doing most of
LAST WEEK -

No O (Co to 21)

Y es O

S20A. How many hours
did . . . work

Going to school

0

0

X I

LAST WEEK

something e lse?

21. ( I f ) ia 19, ekiptoSlA.)
Did . . . have a job or
b u sin e ss from which he

22. (If LK ia 19, ,kip to 22A.)

aw,a.watwea.yr

w as temporarily absent or
on layoff LAST WEEK?
Y es O

No O (Co to 22)

/ 21A. Why w as . . . absent
from work LAST WEEK?
Own ill n e s s ----On v a c a tio n -----

O

Bad w eather-----

O

« "pl°y- agency O

O

Labor disp u te . .

No O (Co to 2t)

Y es O

at all jobs?

pvt. employ, agency

Working TSkip to 20A)......... WK O
With a job but not a t w ork. . J

O

Looking for w o rk ..................LK
Keeping h o u s e ......................... H

O
O

Going to sc h o o l....................... S

O

Unable to work (Skip to 24). U

O

R e tire d .......................................R
Other (Specify)...................... OT

O
O

\

20C. D oes . . . USUALLY work 35
hours or more a week at th is job?
Y es O

20B. INTERVIEWER
CHECK ITEM

5 5
G G

(Skip m
4 9 + O ' ■ 23)

S S

?

(Go to 20C)

9

Y es O

O

9

/

How many hours

Quit jo b .........................
L eft sc h o o l...................

USUALLY works le ss
than 35 hours a week?

21B. Is . . . getting w ages or
salary for any of the

22C. 1) How many weeks
has . . . been

q

j

j

looking for work?

g
3

O

P lan t or mochine repair...........

O

New job started during week .

How many extra

O

Job term inated during week . .

job LAST WEEK?
Y es O

No O
(Correct 20A aad 20B a
a
aeceeeary if extra kom
re
aot already iacladed aad

O
O

(Skip to 23 aad eater fob
held latl week)

Did not wont full-time work . .
Full-tim e
work week under 35 hours

O

Other reason (Specify)............

O

O

1

\

?

?

8
9
(Skip to 23 and eater job w
at last week)

C O
D O
E O
F O

3 3
* °r
5 5
6 6
8
9

Ref. O

?
8
9

G O
H O
J O
K O
L O
M O

OCCUPATION
0 0
1 I

N O

£ £
3 3

Q O
R O

* °e
5 5 5
G G G

J
*
9 9

0

Part O

e

O

I Temporary i l l n e s s ___

O

I
£
3

P O

U O

0

?

?

V

8
9

W O
X 0
Y O

O
O

Nonrelative of head with
no own relatives in h’hld.

O

27. AGE

}(Skip (p 24E)

28. MARITAL STATUS
Married - civilian
spouse present O

g

24D. What are the reasons . . . is not looking
for work?
(Mark each reatoa meatioaed)
B elieves no work available
n line of work or a r e a ..

X I
£ £
3 3
X q.
J.
5

• Couldn’t find any w o rk .................... o
• L acks nec. schooling.
training, sk ills or e x p e r ie n c e .. O
• Employers
think too young or too o ld ......... O
• Other pers. handicap in finding job

O

• Family r e s p o n s ib ilitie s ...............

5

Widowed
or divorced . .

White
O

O
O

Other
O

• Don’t know........................................ O

Z O

of any kind in the next 12 months?

Never worked a t a l l ..............................

O

(Skip to 23 aad eater last full-time civiliaa
fob lottiog 2 week, or more, fob from which
laid off, or "Never Worked” ) _____________

^

Y e s .........................................

O

It depends (Specify ia aote,) O
No .
Don’t know.............................
(If eatry ia 24B, describe job ia 23)

j 2 E Wsth p rs n
3 . a is e o
A em lo of PR A C
n p yee
IV TE o.,
b s o in iv u l for w ges, sa ry o cA n .. P O
u ., r d id a
a
la r w .
i
A F D R L g v rn e t em
E E A o e mn ployee....................F O
i
A S TEg v rn e t em
TA o e mn ployee....................... S O
j
A LO A g v rn e t em
C L o e mn ployee....................... L O

1
1
|
j
,

u booh,, file*, tell, ci

j
|

Self-empl. in OWN bu s., prof, p ractice, or farm
. . L
J / Y e s..................... I O
Is th e busin e ss incorporated ^
^ farm)
^ Q

Wrk g W H U PAY infa . b s o farm
o in IT O T
m u. r
..........W O
P
N V RW R E .............
EE OK D
NVO
E

O

World War II

O

World War 1..

O

24E. D oes . . . intend to look for work
Before 1970 ........................................... O
Nev. worked full-time 2 wks. or more O

O

30. SEX AND
VETERAN STATUS
Male
Vietnam Era O
Korean W ar..

Negro

• O ther (Specify ia a ote,)................. O

iMouth oad year)

O

Never married . .

29. RACE
■
■

• Can’t arrange child c a r e ............... O

Married Armed Forces
spouse present O
M arriedspouse absent —
(iaclude teparated) O

? ?
8 8
9 9

• III health, physical d i s a b ili ty _ O

1970 or later (Write mouth em yen) ■. O
d

: electrical eagiaeer, ttock clerk, typist, farmer.)

. . ’s m ost important a c tiv itie s o r d u ties? (For example: typo,, keep, •

Other relative of h e a d ............
Non-rel. of head with own
rels. (iacL wife) in h’h ld ..

O

Other Service O
N onveteran.. O
F em ale................

S O

8
9

Bef. O

O

Wife of h e a d .

O

e In school or other tr a i n in g .........

full-time job or busin e ss lasting
2 consecutive weeks or more?

23B. What kind of b u sin e ss or inAlStry is th is? (For exam
pie: TV aad radio mfg., retail ,koe note. Stale Labor Depu, fan




J

22F. When did . . . la st work at a

T O

0

O

0

f Already ha s a job.........

23. DESCRIPTION OF JO B OR BUSINESS
. work? (Nome of compoay, batiae,,, orgamiatioa or other employer)

2 3 C What kind of work w as . . . doing? (For a
s

Don’t know . .

Going to sc h o o l............ O
Other (Specify ia aote,) O

A O
B O

H ead with other relatives
(iucL wife) in h’hld............
Head with no
other relatives in h’hld. .

O 1
;
O j

N o..................

5 3

not take a job LAST WEEK?

\

0 0
I I
c £

Y e s ...........................
Maybe • it depends
(Specify ia aote,)

22E. Is there any reason why . . . could

O FFIC E USE ONLY
INDUSTRY

HOUSEHOLD

or part-tim e work?
Full O

Y es O

On v a c a tio n ................................ O
Too busy with housework,
school, personal b us., e tc . O

26. RELATIONSHIP TO HEAD 0 F

O ther....................................................

_ _
G o

off?

O

Own i ll n e s s ................................ O

(Skip to 24C)

24C. D oes . . . want a regular ji
either full- or part-time?

q

22D. H as . . . been looking for full-time
_

.. . O /

Slack work or b u siness conditions O
Temporary
nonseesonal job com pleted. . . O
U nsatisfactory work
arrangements (Hour,, pay, etc.) O

* <F

3) How many w eeks
ago wos . . . laid

21C. D oes . . . usually w
35 hours or more a <
at th is job?

O

Labor d is p u t e ...........................

ago did . . . sta rt
looking for work?

Self-em ployed O

Y es O

Could find only part-tim e work O
Holiday (Legal or religioaa). . .

2) How many weeks

N o ..................... O

Materiol s h o r ta g e .....................

|

Retirement or old age . . .

3

Y e s ................... 0

O

\ (Go to 24B)

O
O \

Seasonal job com pleted..

g

time off LAST WEEK?

20E. Did . . . work any over ­

1

24B. Why did . . . leave that job?
Personal, family
(lacl. pregamcy) or school. ■.

Wanted temporary work O
Other (Specify ia note,) O

(Mari tko appropriate reatoa)
Slack w o rk ..................................

Never worked

O

take off?,

What is the reason . . .

for pay at a
either full- or

3 up to 4 years a g o .. O
4 up to 5 years a g o . .
jo
5 or more years ago...

O

did . . .

(Correct 20A if loet time
aol already deducted;
if 20A reduced below 35,
correct 20B oad fill 20C;
otkerwiee, skip to 23.)

25. LINE NUMBER

Placed or answered a d s ................... O

35-48 O (Coto20D)

What is the reason . . .

Bad w e a th e r ..............................

friends or relatives

24A. When did . . . la s t work
regular job or b u siness,
part-tim e?
Within pa st 12 months O
1 up to 2 years ago.-. O
2 up to 3 years a g o .. O

O

Nothing (Skip to 24)........................... O
New job to begin
(Skip to
Other (Specify ia aole,, e.g., MDTA,
within X days O 228 aad
union or prof. regi,ter, etc.)......... O
t
.
xx
22C2)
Temporary layoff
Wader 30 day,) O ^
^ 22B. Why did . . . sta rt looking for
20D. Did . . . lose any time oi
take any time off LAST
Indefinite loyoff
f 22C3)
work? Was it because . . . lost
(30 day, or more or O J
WEEK for any reason
or quit a job a t that time (pause)
ao def. recall dote)
such a s illn ess, holiday
or w as there some other reason?
Other (Specify).. O
or slack work?
L ost job......................... O

1-34 O

worked le s s than 35
hours LAST WEEK?
No O

?

O

employer directly . .

®

i

O 2, 3, 4 , 6 , 7 or 8 (Bad factious)
O 1 o r 5 (Go to 24A)

22A. What ha s . . . been doing in the la st
4 w eeks to find work? (Mark gU
method, uted; do aot read lieu)
^"wirth*

O

24. INTERVIEWER CHECK ITEM
U nit in rotation group:
(Mark oue circle ouly)

H as . . . been looking for work

O

31. HIGHEST 32. GRADE 33.
COM
ORIGIN
GRADE
AT­
PLETED
TENDED
E H C

I I I
£ £

8
3

3 3
0

°
r
l

l'

?
8

None

0 0

I I
£ £
3 3




LA BO R FO RCE, E M PL O Y M EN T, A N D U N E M P L O Y M E N T

19

I

9
?
G

3
8

I

I
0

9
•
G
5
3

I

B L S H A N D B O O K O F M E TH O D S

20. Did . . . do any work a t oil
LAST WEEK, not counting
work around the house?
(Note: If farm or basinets
operator in hk., ask about
unpaid work)
j
No O (Go to 21)

Y es O

20A. How many hours

0 0
1 I

LAST WEEK
at all jobs?

21. (If l in 19, skip to 21A.)

during the p a st 4 weeks?

/

was temporarily absent or
on layoff LAST WEEK?
No O (Go to 22)

Y es O

/21A. Why was . . . absent
from work LAST WEEK?
Own ill n e s s -----

O

Bad w eather___

O 2, 3, 4 , 6 , 7 or 8 (End questions)
O 1 or 5 (Go to 24A)
22A. What has . . . been doing in the la st
4 weeks to find work? (Mark all
methods used; do not read list.)
Checked

O

pub. employ, agency O

O

Labor dispute . .

1-34 O (Go to 20C)
35-48 O (Go to 200)

--------------- f -----20D. Did . . . lose any time or
take any time off LAST
WEEK for any reason
such a s illn ess, holiday

O
O

5 or more years o g o .. O \
Never w orked.............. ^ W

friends or relatives

O

New job to begin
(Skip to
within 30 days O 22B and
Temporary layoff
(Under 30 days) O

Nothing (Skip to 24)...........................
Other (Specify in notes, e.g., MDTA,
union or prof, register, etc.).........

3 up to 4 years a g o ..

O
O

24B. Why did . . . leave that job?
Personal, family
(Incl. pregnancy) or school.........
H e a lth ................................................

L ost jo b .........................

Slack work or busin e ss conditions O
Temporary
non seasonal job c om pleted. . . O
U nsatisfactory work
arrangements (Hours, pay, etc.) O

O
O

Left s c h o o l.................. O
Wanted temporary work O
Other (Specify in notes) O
q

q

looking for work?

g

ago did . . . sta rt
looking for work?

Self-em ployed O

21C. D oes . . . usually work
35 hours or more a week
at th is job?
hours did . . . work?
Y es O
No O
_

3) How many weeks

0

1

6

3
G

?

?

8
9

8
9

N O

1970 or later (Write stontk and year) . • C

8
9

Ref. O

J o
K o
L o
M o

U O

?

V o

8 8
9

W O
X o
Y O

Ref. O

z o

9

2

5

e
b
3
8

O

• C ouldn't find ony w o rk ..................... O
• L ocks nec. schooling.
training, sk ills or e x p e r ie n c e .. O
• Employers
think too young o* too o ld ......... O
• Other pers. handicap in finding job

O

• Can’t orrange child c o re ..............

•
?
6

5
+
3
8

■

O

• Family r e s p o n s ib ilitie s ..............

I
0
9

O

e In school o r ^ h e r tr a i n in g ......... O

P O
Q O

I

3 3 3
*r cr *
5 3 5
G 6 G
?

O

| Going to sc h o o l............ O
Other (Specify in notes) O

I

8 8 8

I

O

I Temporary i l l n e s s ___

00

0

G o
H o

?

Port O

22F. When did . . . la st work at a
full-time job or b u siness lasting

C o
D o
E o
F o

3 3
<- °r
1
5

OCCUPATION

A O
B o

I

in line of work or a re a ................

( Already h a s a job.........

No O

INDUSTRY

8 2

9 9

not take a job LAST WEEK?

\

I

24D. What are the reasons . . . is not looking
for work?
(Mark sack reason mentioned)

22E. Is there any reason why . . . could

O FFIC E USE ONLY

,

or part-time work?

Y es O

0

?
°

off?

O \

Don’t know .............. O I * * - * *

22D. H as . . . been looking h
Full o

(Correct 20A and 20B at
jtecessary if extra hours
not already included and
skip to 23.)

3

ago was . . . laid

How many extra

No..............................

^ ^
. r
G fc>

?
G

■

Y e s........................... O ’j
Moybe - it depends
> (Go to 240)
(Specify in notes) O )

3 3
0 c

2) How many w eeks

9
8

I

24C. D oes . . . want a regular job now.
either full- or part-time?

O
O

job LAST WEEK?

O

O ther....................................................

g

time off LAST WEEK?

20E. Did . . . work any ov e r­
time or at more than o n e

Yes O

1) How many w eeks

21B. Is . . . getting w ages or
salary for any of the

N o....................

O

or was there some other reason?

take off?

Y e s ..................

O

Seasonal job com pleted..................

Quit jo b .........................

No O

O

Retirement or old a g e .....................

or quit a job at that time (pause)

How many hours
did . . .

(Correct 20A if lost time
not already deducted;
if 20A reduced below 35,
correct MB and fill 20C;
otherwise, skip to 23.)

*» 24C)

O

22B. Why did . . . sta rt looking for
work? Was it because . . . lost

Indefinite layoff
(30 days or more or O
no def. recall date)

I

4 up to 5 years o g o .. O J

Placed or answered a d s ..................

Other (Specify). . O

or slack work?

O

employer directly . .

®

5 5
G G

(Skip to
item 23)

i

24A. When did . . . la s t work for pay a t a
regular job or business, either full- or
part-tim e?
Within p a st 12 months O
1 up to 2 years a g o .. O
2 up to 3 years a g o . . O ^ (Go to 24B)

pvt. employ, agency

208. INTERVIEWER
CHECK ITEM

Y es O

24. INTERVIEWER CHECK ITEM
Unit in rotation group:
(Mark one circle only)

H as . . . been looking for work

b u sin e ss from which he

On v a c a tio n -----

+ n
49 °

22. (If LK in 19, skip to 22A.)

Did . . . have a job or

• III health, physical d is a b ili ty _ O

consecutive weeks or more?

R O
s o
T O

• Other (Specify in notes)................. O
• Don’t know.......................................

(Month and year)
Before 1970 ........................................... O
Nev. worked full-time 2 wks. or mare O
Never worked at o i l ..............................

O

(Skip to 23 and enter last full-time civilian
fob lasting 2 weeks or more, fob from which
laid off, or “Never Worked")_____________

O

24E. D oes . . . intend to look for work
of any kind in the next 1 2 months?
m

Y e s ..........................................

O

®

It depends (Specify in notes)
N o ...........................................
Don’t know.......................

O
O

(If entry in 24B, describe job in

23. DESCRIPTION OF JOB OR BUSINESS

2 A F r wo d . . . w rk
3 . o h m id
o ?

(N efcmnbsesoaist nroeepyr
a o opy un , r na o t r m e
m a, i s g io h lo )

23B. What kind of b u sin ess or industry is th is? (For example: TV and radio mfg., retail shoe store. State Labor Dept., fan

. doing? (For example: electrical engineer, slock clerk, typist, farmer.)

2 D Wa w . . .’s ms imo n activities o d ties?
3 . ht ere
o t p rta t
r u

oetsr t grs,f isecne.)
pa p inp s inksoc t
r e in e
re




(Freap: tp,kpaonbk f ssllscr,
o xm ye e sc ut o sile, e a
le s e c o ,
s

[ 2 E Wsth p rs n
3 . a is e o
i
A em lo of PR A C .,
n p yee
IV TE o
i
b s o in iv u l for w ges, sa ry o
u ., r d id a
a
la
. .. P O
A F D R L g v rn e t em
E E A o e mn ployee................... F O
AS A g v rn e t em
T TE o e mn ployee.......................S O
A LO A g v rn e t em loyee...................... L O
C L o e mn p
Self-empl. in OWN b us., prof, practice, or farm
• , ,
/ Y e s ........................... I O
Is the bu s,n e ss mcorporated ^
^ /am>
SE Q

Wrk g W H U PAY info . b s o form
o in IT O T
m u. r
.........W O
P
N V RW R E ................................N V O
EE OK D
E

I




L A B O R FO R C E , E M P L O Y M E N T , A N D U N E M P L O Y M E N T

22

B L S H A N D B O O K O F M ETH O D S

18. LINE NUMBER

21. ( I f f in 19, skip to 21A.)

20. Did . . . do any work a t all
LAST WEEK, not counting

Did . . . have a job or

work around the house?
(Note: If farm or business
operator in kk., ask about
unpaid work)
j

19. What was . . . doing most of
LAST WEEK -

Y es O

* --------------------------did . . . work

f r

LASTWEEK

3
3

J

5

5
G

at all jobs?

Own ill n e s s ___

so+ o

Going to sc h o o l....................... S
Unable to work (Skip to 24). U

6

m23)

u

take any time off LAST

Y es O

(Under 30 days) O

|

New job started during week .

Bad w e o th e r..............................

(Correct 20A and 20B a,
necessary if extra hours
not already included and
skip to 23.)

O

On v a c a tio n ...............................

0 0
j

e

22E. Is there any reason why . . . could
not take a job LAST WEEK?
( Already h as a job..........

No

O

O

I Temporary i l l n e s s ___

O

O

Did not w ant fu lltim e work . .
Full-time
work week under 35 hours

INDUSTRY

0

O

°

1

3 3
G-

?
9
(Skip to 23 and enter job worked
at last week)

Ref.

?
S
9

0

00

I
a

1 I
a a

P o
Q o
R o
S o
T o

D O
E O
F O
G O
?
8

o

H O
J O
K O
L O
M O

3 3 3
°r °r °t
3 5 5
G G G
? ?

8
9
Ref.

8

U o
V o

9

w o
X o

O

Y o
o

z

• Couldn’t find any w o rk ....................
• L ocks nec. schooling.
training, sk ills or experien c e . .
• Employers
think too young oc too o ld .........

(Month and year)
Before 1970 ........................................... O
Nev. worked full-time 2 wks. or more O

• Can’t arrange child c a re ..................

O

• Family re s p o n s ib ilitie s ..................

O

III heolth. physicol d is a b ili ty ___

(N efcmn bsesoaizt nroeepyr
a o opy un , r na o t r m e
m a, i s g io h lo )

23B. Whot kind of b u sin e ss or industry is this? (For example: TV and radio mfg., retail shoe store. State Labor Dept., farm.)

23C. Whot kind of work w as . . . doing? (For example: electrical engineer, stock clerk, typist, farmer.)

2 D Wo w . . .'s ms imo n activities o d ties?
3 . ht ere
o t p rta t
r u

oetsr t grs,f isecne.)
pa p inp s inh oc t
r e in e s r e




(Freap:
o xm
le

24E. D oes . . . intend to look for work
of any kind in the next 1 2 months?
Y e s .........................................

O

(Specify in notes) O
Don’t know.............................

C

Widowed
or divorced . .

o

Never married . .

o

O

30. SEX AND
VETERAN STATUS
Male
Vietnam Era o
Korean W ar.. o
o
World War II
World War 1.. o

Other

®

Other Service o
N onveteran.. o

White
O
Negro

O

O

Fem ale................

TENDED
E H C
Yes

O

|2 E Ws th p rs n
3 . a is e o
i
A em lo of PR A C .,
n p yee
IV TE o
i
b s o in iv u l for w ges, sa ry o c m . .. P O
u ., r d id a
a
la r o m
j
A F D R L g v rn e t em
E E A o e mn ployee..................F O
AS A g v rn e t em
T TE o e mn ployee..................... S O
A LO A g v rn e t em loyee.....................L O
C L o e mn p
Self-empl. in OWN b us., prof, practice, or farm

... I O
(or farm)....SE O

Wrk gW H U PAY infa . b s o farm
o in IT O T
m u. r
........ W O
P
N V RW R E ...............................N V O
EE OKD
E

o

31. HIGHEST 32. GRADE 33.
COM­ ORIGIN
GRADE
AT­
PLETED

(If entry in 24B, describe job in 23)

Is the b u siness incorporated
types, keeps account books, files, sells cars.

9 9
29. RACE

O
O

?

8 8

O

O

(Skip to 23 and enter last full-time civilian
job lasting 2 weeks or more, job from wkick
laid off, or " Never Worked")_____________

?

O

Married Armed Forces
spouse present o
Married spouse a bsent (include separated) o

5 5
G G

O

• Other p ers. handicap in finding job O

• Other (Specify in notes).....................

■

I I
£■ a
3 3

O

23. DESCRIPTION OF JOB OR BUSINESS

2 A F r wo d . . . wrk
3 . o hm id
o ?

28. MARITAL STATUS
Married - civilian

o

e

id yen) .

Never worked ot o il..............................

27. AGE

24D. What are the reasons . . . is not lookin
for work?
(Mark each reason mentioned)
• B elieves no work available
in line of work or a re a ................ O

• Don’t know...........................................

1970 or later (Write *

O

O ,

e In school or other tr a in in g .............

| Going to s c h o o l............ O
{ Other (Specify in notes) O

22F. When did . . . la st work at a
full-time job or b u siness lasting
2 consecutive w eeks or more?

N o

B O
C O

5 5
G G

\

OCCUPATION

A O

0

I I
C C

O

Other reoson (Specify)............

\

(Skip to 23)

O

0

or part-tim e work?

O

O

g

ago was . . . laid
off?

Y es

> (Go to 24D)
O J

Don’t know ..............

5 5

22D. H as . . ■ been looking for full-time

(Skip to 23 and enter job
held last week)

Other relative of h e a d ............

N onrelative of head with
no own relatives in h’hld.

Maybe - it depends
(Specify in notes)

G G,

Part O

O

Non-rel. of head with own
rels. (incL wife) in h’h ld ..

O

either full- or part-tim e?

3) How many weeks

Full O

O

Wife of h e a d .

3 3

at th is job?

O FFIC E USE ONLY

Too busy with housework,
school, personal bus., e tc . °

Head with other relatives
(incl. wife) in h'h ld............
Head with no
other relatives in h’hld. .

2 4 C Does . . . want a regular job now,

3 3
c_ 0

ogo did . . . start
looking for work?

mm
a

O ther....................................................

j

2) How many w eeks

No O

O

Own ill n e s s ................................

O

looking for work?

O
O

21C. D oes . . . usually work
35 hours or more a week

Yes O
No O

O
O

O

1) How many w eeks
has . . . been

Self -employed O

hours did . . . work?

Could find only part-tim e work O

Labor d is p u t e ...........................

How many extra

22C

time off LAST WEEK?

O

Holiday (Legal or religious). ..

L ost job...........................

21B. Is . . . getting wages or
salary for any of the

O

Job terminated during week . .

Y es O

O

Slock work or busin e ss conditions O
Temporary
non seasonal job completed . . . O
U nsatisfactory work
arrangements (Hours, pay, etc.) O

L eft s c h o o l.................... O
Wanted temporary work O

20E. Did . . . work any o v e r­
time or ot more th an en e
job LAST WEEK?

O

Seasonal job com pleted..................

s

O
O

Retirement or old o g e .....................

I
l

Material s h o r ta g e .....................
P lan t or machine repair...........

O

Y e s..................
N o ....................

HOUSEHOLD
O

or was there some other reason?

Quit jo b ...........................

--------2

No Q

26. RELATIONSHIP TO HEAD GF

i

O

24B. Why did . . . leave that job?
Personal, family
(IncL pregnancy) or sc h o o l.. .

Other (Specify in notes) O
(Correct 20A if lost time
not already deducted;
if 20A reduced below 35,
correct 20B and fill 20C;
otherwise, skip to 23.)

„

O

or quit a job at that time (papse)

How many hours

(Hark the appropriate reason)
Slock w ork..................................

O J

O

H e o lth ................................................

did . . .

worked le ss than 35
hours LAST WEEK?

USUALLY works le ss
than 35 hours a week?

O

22B. Why did . . . sta rt looking for m
work? Was it because . . . lost

Indefinite layoff
(30 days or more or O
no def. recall date)
Other (Specify). .

3 up to 4 y e trs a g o ..
4 up to 5 years a g o . .

5 or more years a g o .. O \
N e v e rw o r k ^ ...
. C

Nothing (Skip to 24)...........................
Other (Specify in notes, e.g., MDTA,
union or prof, register, etc.).........

take off?

Whot is the reason . . .

Whot is the reason . . .

2C)
22

t
Temporary .
layoff

--------------- >

such a s illn ess, holiday
or slack work?

'j
I
> (Go to 24B)

O

Ploced or answered a d s ..................

O

25. LINE NUMBER

for pay at a
either full- or

O

friends or relatives

New job to begin
(Skip to
within 30 days O 22B « u

20D. Did . . . lose any time or

20C. D oes . . . USUALLY work 35
hours or more a week at th is job?

O

Labor d ispute . .

WEEK for any reason

24A. When did . . . la st work
regular job or business,
part-time?
Within post 12 months G
T up to 2 years a g o .. C
2 up to 3 years ogo. . O

employer directly . .

®

fU
S,

35-48 O (Got, 20D)

\

No O

Bad w eather___

1-34 O (Go to 20C)

R e tired .......................................R
Other (Specify)...................... OT

22k. What h as . . . been doing in the last
4 weeks to find work? (Mark qU
methods used; do not read list.)

pvt. employ, agency
O

1

O 2, 3, 4 , 6 , 7 or 8 (End questions)
C . I or 5 (Go to 24A)

No O (Go to 24)

O

On v a c a tio n ___
20B. INTERVIEWER
CHECK ITEM

Looking for w o rk ..................LK
Keeping h o u s e ......................... H

Yes O

->

Working (Skip to 20A) ..
With a job but not ot work . . J

Y es O

No O (Go to 22)

/21A. Why w as . . . absent
from work LAST WEEK?

q

q

/

during the past 4 weeks?

was temporarily absent or
on layoff LAST WEEK?

No O (Go to 21)

Y es O

20A. How many hours

24. INTERVIEWER CHECK ITEM
Unit in rotation group:
(Mark one circle only)

22. (If LK in 19, skip to 22AJ
Has ■ . . been looking for work

b u sin ess from which he

> 3 3

-

°°
rr

£ 2
3 3




23

LA BO R FO R C E, E M PL O Y M E N T , A N D U N E M P L O Y M E N T

I

?
6
5
3

I

•
0

9
?
&
3
3

I

Chapter 2.

Projections of the Labor Force

B a ckg ro u n d and U ses

T h e
la b o r

P r o je c t io n s
n e e d e d
a

fo r

g r o w th

fu tu r e

e c o n o m

y

s e ttin g

h e lp

a n d

n u m b e rs

tr y ,

a n d

a n d

p e r s o n n e l

tio n s ,

to

e s tim a te
p la n s ,

p a r tm e n t

g a in

fo r

la b o r

fo r c e

b e tw e e n

th e

b a s is

fo r

c h a r a c te r is t ic s

la b o r

fo r c e

a p p ly

m a r k e tin g
U .S .

In

to

th e

tr a in in g

s u p p ly

a n d

th e

b y

o u r

c r e a t e d

a

s e r ie s

to

th e

s e p a r a te

o f

th e

a g e - s e x

la b o r

g r o u p s

d a te s u s u a lly f o r a b o u t
p r e p a r in g
p a r t,

to

th e

th e

o f w o r k in g
a n d

1 9 9 0

r o u n d

a g e .

w e r e

o f

L a b o r fo r c e

s o c ia l

c o n d it io n s
t io n s .
b a s ic

G e n e r a lly ,

tic ip a tio n
e c o n o m
le v e ls

w o u ld

y

o f

a s s u m p t io n

is

s ig n ific a n t

m ig h t
o f

tr e n d

to w a r d

fo r c e
p o r te d

o f

th e

in c r e a s e d
le v e l,
o f

y o u n g

s tu d e n ts .


http://fraser.stlouisfed.org/
24
Federal Reserve Bank of St. Louis

th e

a n d
th e

o f

a lte r
It

th e

a ls o

h a s

a

a n d

th e

th e

a n d

d is c o u n t

p r e p a r e d

a n a ly z in g

th e

r a te s

w o u ld

s e r ie s

a ffe c t

y e a r s

a h e a d ,

th e

o f

o f

th e

p r o je c t in g

le v e l

s in c e

o f

th e

o v e r ) a t th a t fu tu r e d a te
p r o je c t io n s
a

b e a r in g

o n

r a te s

m o th e r s

o n e

a r e

o f

m a d e .

o f

in d ir e c t e ffe c t ,

F o r c e s
p a t­

s e r ie s
in

Reports,

to

4 9

“ D

d e g r e e

d iffe r e n t

s u p ­
to

th e s e

o f

la b o r

o f

th e

w h ic h

a ls o

th e

th e

r a te s .
n o t

d i­

y e a r s

b o r n

w h e n

r a te s

la b o r fo r c e
w o m

e n ,

lik e ly

to

w h ic h

15

(1 6

b ir t h

d o

p a r tic i­
b e c a u s e

w o r k .

to

B e ­

s e le c t th e

s e e m e d

m o s t

c h o s e n

p r o je c t io n s

a s

b e h a v io r
a ffe c t

la b o r
th e

th e

th e

p u b ­

b a s e

s e r ie s .

o f w o m e n

fo r c e

is

o f th e

16

b u ilt

u p

s e r ie s

b y

a g e

is n e e d e d

fo r

e a r lie r , b u t a ls o b e c a u s e th e

a n d

S o m e
o f

b a s is

c o m p o s itio n

p a r tic ip a tio n

g r o u p s ,

v a r y .

o n

o f

p r o je c ­

Current Population

to ta l la b o r fo r c e

n o te d

fo r c e

a g e - s e x

r a te s

e x p la in
r a te s

d o e s

a g e

th e

p o p u la t io n

m a d e

b e c a u s e

m a n y o f th e p u r p o s e s

th e

a id

w e r e

s iz e

s e x , n o t o n ly

th e

a n d

o f th e

b ir t h

F . ”

“

o v e r a ll

b e y o n d

la b o r

4 9 3

p r e ­

o n

r e c e n t la b o r fo r c e

w a s

e s tim a te s

p r o ­

in d e p e n d e n t e v a lu a tio n

F o r

th e

tr e n d s .
in

n e c e s s a ry

p r o je c t io n s
o f a n

N o .

P -2 5 ,

o f a g e

th a t

o n

it w a s

B u r e a u ’ s

a n d

”

le s s

o n

d e a th

p r o je c t io n s

w o r k in g

C e n s u s

y e a r s

T h e
a n d

b a s is

E ”

th e

A lte r n a t e

a r e

th e

C e n s u s

r a te s

m a r r ie d

c h ild r e n

s e r ie s o f p o p u la t io n

th e s e

h a s a lr e a d y b e e n

y o u n g e r

y o u n g

r a te s ,

th e

fo r c e

o f th e

a p ­

p r o je c t in g

r e s p e c t to

H o w e v e r ,

p r o je c t io n s

a s

fa c to r s

p r o je c t io n s

b ir t h

o f

o f

u n c e r ta in ty
o f

la b o r

e v e r y o n e

c o v e r e d

o f th e C e n s u s

p r o je c t in g
m o s t

p a r tic i­

1 9 4 7 , a n d

p e r io d s .

b ir t h

p o p u la t io n

o f

o r

o r its

o r c u r v e

o d ifie d ,

in

in

B u r e a u

th e

lis h e d

u s u a l

tr e n d s

th e

a n d

tio n s ,

w a r

g r o u p

e ffe c t

s h o r t

a s s u m p t io n s w it h

u n c e r ta in ty

r e c t ly

th e

a n

e a c h

p e r io d

m

u s e d

a n d

p o s e

“

c o n tin u e ,

s ta ff,

p a s t

p o p u la t io n ,

s e v e r a l

p a r ­

w ith

to

in

s in c e

th e
is

th e B u r e a u

n e t im m ig r a tio n
b ir t h

in to

o n ly

b y

r a te s .

th e

fo r c e

a n d

la b o r fo r c e

y e a r s

te m p o r a r y

fo r

b ir t h

h ig h

o f

t h a t is

la b o r

d a te ,

a g e - s e x

th e

th e

p r o je c t io n s

in

w o r k

b e a r in g

th e

p a s t tr e n d s

th a t

e d

fo r

c u r v e

th e

o n

th e

is t o f i t a l i n e

p r o c e d u r e

p r o je c ­

m a jo r

e n r o llm e n t

o r

T h e

o n

A n o th e r

A r m

lin e

r e a s o n a b le

m a in ta in

p r e v io u s

fa c ilitie s ,

s u p ­

s u b g r o u p

p o p u la t io n

a g iv e n

r e p r e s e n tin g

a b o u t

fo r c e

p r e s u p p o s e s

p e r s o n s ,

s c h o o l

n o

th e

m a d e

c o n s is te n t

d ir e c t

n e w

fo r

th a t g r o u p

a r e

c a u s e o f th is

fo r c e

fu tu r e ,

b e

1 9 8 5 ,
a

B u r e a u ’ s

p r o p o r tio n

fu tu r e

p r o c e d u r e

o p e r a tiv e

o f

r a te s ,

p a tio n

o n

m a d e

la b o r

p e r c e n t.

s iz e

s c h o o l

w h ic h

a d e q u a te

b e e n

w o u ld

th e

fo r

b e

b a s is

h a v e

a ffe c t

h a v e

e x p a n d

in

1 9 7 5 .

la b o r

4

s ta n d a rd

to

la b o r fo r c e

1 9 8 0 ,

t o b e

in

th e

o w in g ,

o r k

o f

in to

a b o u t

th e r e
in

n e e d

tr e n d s

to

p r o je c t io n s

p o p u la t io n

p o p u la t io n

fo r
W

la te

o p p o r tu n ity

p o p u la t io n .

a c t iv it y
b y

r a te
th a t

o f th e

fa c to r s

s e t

p a s t

s u b s ta n t ia lly

th e

s c h o o l

a n y

c o n tin u e

c h a n g e

te r n s

h ig h

th a t

e m p lo y m e n t

u n e m p lo y m e n t

w h ic h

e c o n o m ic

c o n tin u e

w o u ld

in

o f

s c h e d u le f o r

ir r e g u la r

1 9 7 3 .

b e g u n

a n d

q u in q u e n n ia l

a h e a d . T h e

J u ly

p r o je c t io n s

a s s u m p t io n s

w h o le
fo r

b e e n

a s s u m p t io n s

s u r r o u n d in g

a

p r o je c t io n s

in

w a s

a n d

o f la b o r , c e r ta in

a s

p r o je c t io n s

p u b lis h e d

p r o je c t io n s

B e c a u s e
p ly

o f n e w

h a s

e x p e c t e d

b a s is o f v a r y in g

m a d e

15 y e a r s

p r o je c t io n s

tim in g

a r e

th e

o f p o in ts

to

T h e

p a r e s

fo r c e

o r

i.e .,

to

p r o je c t io n .

ju d g e d

T h e
P r o je c t io n s

fo r c e ,

s p e c ifie d

e x tr a p o la te

je c t in g

M eth od

la b o r
th e

th e

th e

g r o u p

r a te s

r a te s

S in c e

te c h n o lo g y .

a g e - s e x

th e

p r e p a r in g

p r o je c t

a t

m a k in g

p a tio n

D e ­

w ith

in

in

to

r a te

s u b g r o u p , th e

p r o p r ia t e ,

to

e a c h

is

g r o u p .

u s e d

a r e

b e

th e s e

b y

T h e

la b o r

to

in

p a r tic ip a tio n

p r o je c ­

c o n c e r n e d

e x p e c t e d
a n d

f o r in d u s ­

d e v e lo p

p r o g r a m s .

p a r tic u la r ly

s k ills

o n e

e x p e c te d

u s e d

p r o je c t io n s

th e p o p u la t io n

g r o w th

e d u c a t io n , tr a in in g ,

p r o d u c ts ,

th e

h ig h

r e s o u r c e s .

p r o je c t io n s ,

e x p a n s io n
is

p r o v id e

m a in ta in

th e

a d d itio n ,

p o p u la t io n
f o r

to

a v a ila b le

fo r

a re

e m p lo y m e n t

o f h u m a n

in t o

im p lie s

w ith

o f

a s

w ill b e

In

v a r io u s

c h a n g in g

in s ig h t
w h o

p o lic ie s .

L a b o r

r e la tio n s h ip
n e e d

to

e v a lu a te
o f

s e r v e

fu ll u tiliz a tio n

d e m a n d

a n d

g e n e r a te

w h a t th is

to g e th e r

th e

fo r a g e n e r a l e c o n o m ic

o f w o r k e r s

s e e

o f

a m o u n t

T h e y

g o a ls

c o n s is te n t w ith

P r o je c t io n s

th e

m u s t

o f e m p lo y m e n t.
in

s iz e

o f p la n n in g p u r p o s e s . T h e y

e s ta b lis h in g

th e

a p p r o a c h
r a te

th e

fo r a v a r ie t y

b a s is

le v e ls

o f

g e n e r a l a p p r o a c h
fo r c e

th e

v a r ie s

o f th e fa c to r s

th e

p a r tic u la r

t e n d a n c e , m a r it a l s ta tu s , b ir t h

a m o n g

h is to r ic a l

la b o r
g r o u p s

fo r c e

w h ic h

h e lp

in
t o

p a r tic ip a tio n

in c lu d e

r a te s , a n d

th e

tr e n d s

s c h o o l

a t­

th e a v a ila b ility

25

PROJECTIONS OF THE LABOR FORCE
o f social security b en efits, and the expansion o f private
pension plans. The m ethod o f projecting the labor force
participation rates for the various age-sex groups takes
into account the influence o f the more important o f
th ese sp ecific dem ographic and social factors. For ex ­
am ple, the population o f married w om en in ages 20 to
49, is grouped by th ose w ho are exp ected to have chil­
dren o f p reschool age and th ose w ith no children under
5, on the basis o f projected trends in fertility and child
spacing.
For each o f the dem ographic subgroups, the pro­
jected labor force participation rates are applied to their
respective future populations and the resulting labor
force sum m ed to provide the total labor force for each
age-sex group and for all ages.

S o u r c e s o f D a ta
The source o f the basic historical data on labor force
participation rates by age and sex used to project the

labor force is the m onthly statistics on the labor force.
T hese data are published by the Bureau o f Labor Statis­
tics and are based on the Current Population Survey o f
the Bureau o f the C ensus. H istorical data on labor force
activity by various categories within several o f the agesex groups are obtained from the recurring supplem en­
tary labor force surveys also based on the Current
Population Survey. T hese include information from the
O ctober su rveys o f the em ploym ent o f sch ool-age
youth and the March surveys o f the marital and fam ily
characteristics o f workers.
The population projections are the latest available
projections made by the Bureau o f the Census and
published in their C u r r e n t P o p u l a t i o n R e p o r t s , Series
P-25. Data used in projecting the proportion o f w om en
in each age group w ho will have children under age 5
years include published and unpublished data on birth
rates, by age o f m other and order o f birth, from the
D ivision o f Vital Statistics o f the Public H ealth Service;
fertility and marriage data from reports o f the Bureau o f
the C ensus, C u r r e n t P o p u l a t i o n R e p o r t s , Series P-20,
and data from the decennial cen su ses o f population.

T e c h n ic a l R e f e r e n c e s
Number
1.

Nu m b e r

J o h n s to n ,

D e n is

F.

“ T h e

U .S .

Monthly Labor Review,

1 9 9 0 ,”

as S p e c ia l L a b o r F o r c e

L a b o r

F orce:

P r o je c t io n s

1 9 8 5 ,”

R ep o rt N o .

156.

4.

Monthly Labor Review,

p r in te d

to

J u ly 1 9 7 3 , p p . 3 - 1 3 , r e p r in t e d

a s S p e c ia l L a b o r F o r c e

.

__________________ “ E d u c a t i o n

o f

W o rk ers:

Monthly Labor Review,

P r o je c t io n s

to

1973,

pp.

pp.

3 -1 2 ,

re­

119.

1 9 7 0 -8 0

C Monthly Labor Review,

F eb ru ary

1965,

1 9 9 0 ,”
pp.

N o vem b er

1970,

C o o p e r , S o p h ia , a n d D e n is F . J o h n s to n , “ L a b o r F o r c e P r o je c ­
tio n s f o r

2

M a y

R ep o rt N o .

2 2 -3 1 ,

1 2 9 - 1 4 0 , r e p r in te d

as

S p e c ia l L a b o r F o r c e

R ep o rt N o .

re­
49.

p r in te d
3.

T r a v is ,

a s S p e c ia l L a b o r F o r c e

S o p h ia

C .,




“ T h e

U .S .

R ep o rt N o .

L a b o r

F orce:

160.
P r o je c t io n s

5.
to

Population and Labor Force Projections for the U.S., 1960 to
1975 ( B L S B u l l e t i n 1 2 4 2 , 1 9 5 9 ) .

Employment Structure and Trends
C h a p te r 3 .

E m p lo y m e n t, H o u rs , a n d E a r n in g s

B ackground
The first m onthly studies o f em ploym ent and payrolls
by the Bureau o f Labor Statistics (B L S) began in O c­
tober 1915 and covered four manufacturing industries.
Before that year, the principal sou rces o f em ploym ent
data in the U nited States w ere the cen su s surveys — the
decennial C ensus o f Population, and beginning in 1899,
the quinquennial C ensus o f M anufactures. N o regular
em ploym ent data had been com piled b etw een the C en­
sus dates.
B y N ovem b er 1916, the B L S program had been e x ­
panded to cover 13 manufacturing industries, and this
number rem ained unchanged until 1922. The d epres­
sion o f 1921 directed attention to the im portance o f
current em ploym ent statistics, and in 1922 C ongress
granted additional funds to provide for program expan­
sion. B y June 1923, the num ber o f manufacturing indus­
tries covered by the m onthly em ploym ent survey had
in creased to 52. In 1928, co n cern o v er increasing
unem ploym ent induced C ongress to provide additional
appropriations for the program. In the next 4 years, 38
m anufacturing and 15 nonm anufacturing industries
were added to the list o f industries for w hich the Bureau
published m onthly inform ation on em ploym ent and
payrolls.
The on set o f the Great D epression in 1930 and the
deepening econom ic crisis im pelled President H oover
to appoint an A dvisory C om m ittee on E m ploym ent
Statistics to study the need for expanded data in this
field. The C om m ittee made its report in the spring o f
1931 w ith a number o f recom m endations for exten sion
o f the program. The m ost important o f th ese called for
the develop m en t o f series on hours and earnings. For
the fiscal year 1932, C ongress granted the Bureau a
substantial increase in the appropriation o f the pro­
gram. In January 1933, average hourly earnings and av­
erage w eek ly hours for the first tim e w ere published for
all manufacturing, for 90 manufacturing industries, and
for 14 nonm anufacturing categories.
D u rin g th e G rea t D e p r e s s io n w h e n m a ss u n ­
em ploym ent threatened to b ecom e a continuing aspect
o f A m erican life, there w as much con troversy am ong
various authorities concerning the actual number o f the
unem p loyed. T h ese d iscu ssion s pointed up the fact that
no relia b le m e a su res o f e ith er u n e m p lo y m en t or
em ploym ent ex isted . In the early years o f the R o o sev elt
adm inistration, the Secretary o f Labor frequently refer­
red to the value o f the B ureau’s em ploym ent estim ates
as an indirect m easure o f unem ploym ent. This interest



stim ulated efforts to d evelop com preh en sive estim ates
o f total wage-and-salary em ploym ent in nonagricultural
industries, and in 1936, the Bureau first published such
a figure.
T h e p rep a ra tio n o f th e s e e s tim a te s o f o v e r a ll
em ploym ent totals on a m onthly basis w as contingent
on the develop m en t o f benchm ark data. It w as recog­
n iz e d , e v e n in th e 192 0 ’s , th a t m o n th -to -m o n th
e m p lo y m e n t tr e n d s d e r iv e d fro m a sa m p le o f
esta b lish m en ts m ight be fairly a ccu ra te for sh ort
periods, but over long intervals o f tim e the series w ould
not represent the true m ovem ent o f em ploym ent, un­
less they w ere adjusted periodically to reasonably com ­
plete cou n ts o f em ploym ent, called benchm arks. The
first such adjustm ent w as m ade in 1935, w hen the
B ureau’s em ploym ent series in manufacturing w ere ad­
ju sted to totals from the C ensus o f M anufactures for
1923, 1925, 1927, 1929, and 1931. T hese series were
subsequently adjusted to the su cce ssiv e biennial C en­
su ses o f M anufacturers, through that o f 1939. For non­
manufacturing industries, benchm arks w ere d evelop ed
from various sou rces, including the C ensu ses o f B usi­
n ess taken at intervals from 1929 on.
From 1915 to the beginning o f W orld War II, interest
in em ploym ent statistics for States and areas w as grow ­
ing constantly. E ven before the Bureau o f Labor Statis­
tics en tered the field in 1915, th ree S tates (M as­
sach u setts, N ew Y ork, and N e w Jersey) w ere prepar­
ing em ploym ent statistics. A s early as 1915, N ew York
and W isconsin had entered into “ co-operative” agree­
m ents w ith the B ureau, w hereby sam ple data collected
by the State agency w ere to be used jointly with the
Bureau o f Labor Statistics for the preparation o f State
and national series. B y 1928, five other States had en­
tered into such com pacts, and another five w ere added
by 1936. O ver the years, the am ount o f published data
on em ploym ent and payrolls for States and areas un­
derw ent a constant expansion. In 1940, estim ates o f
total nonagricultural em ploym ent for all 48 States and
the D istrict o f C olum bia w ere published for the first
time.
The on set o f World War II in 1939, follow ed by the
entry o f the U nited States after the assault on Pearl
Harbor in D ecem b er 1941, placed additional dem ands
upon the B ureau’s E m ploym ent Statistics program.
The added responsibilities pointed up the need for great­
er uniform ity among the various programs o f estab ­
lishm ent statistics on em ploym ent and related subjects
w hich w ere being prepared by the B L S , the Bureau o f
the C ensus, and the agencies adm inistering the em erg­

EM PLOYM ENT, HOURS, AND EARNINGS
ing social security programs. W hile m ost im provem ents
had to await the end o f the war, several important
advances took place during those years.
T he m o st far rea ch in g d e c is io n w a s to u se as
em ploym ent benchm arks the data on em ploym ent co l­
lected primarily for adm inistrative purposes by the
new ly organized social insurance programs. Tabula­
tions o f such materials becam e available about 1940
from the unem ploym ent insurance program and they
soon becam e the preferred sources o f benchm ark data.
T hey covered several industrial categories not covered
by the C ensus o f M anufacturers and B u sin ess, respec­
tively, and they w ere available annually. After 1939,
these w ere taken only at 5-year intervals.
A s the unem ploym ent insurance program d evelop ed ,
the feeling grew that the proper place to estim ate State
and area em ploym ent w as in the State agencies rather
than in W ashington. B y 1949, all States had join ed the
system , and since that year the industry em ploym ent
statistics program has been a fully integrated FederalState project w hich provides em ploym ent, hours, and
earnings inform ation on a national, State, and area basis
in considerable industrial detail. This cooperative pro­
gram has as its formal base o f authority a C ongressional
act o f July 7, 1930 (ch. 8 7 3 ,4 6 S ta t. 1019; 2 9 U .S .C .2 ).
In 1975, coop erative arrangem ents w ere in effect within
47 States and the D istrict o f Colum bia and with 3 State
labor departm ents.

D e s c r ip tio n o f t h e S u r v e y
The Bureau o f Labor Statistics coop erates in co llect­
ing data each m onth on em ploym ent, hours, and earn­
ings from a sam ple o f establishm ents in all nonagricultural a ctivities including governm ent. In 1975, this
sam ple included over 160,000 reporting units. From
th ese data a large num ber o f series on em ploym ent,
hours, and earnings in considerable industry detail are
prepared and published m onthly for the U nited States
as a w h o le, for each o f the 50 States and the D istrict o f
Colum bia, and for m ost o f the m etropolitan areas. The
data include series on total em ploym ent, production or
n o n su p erv iso ry w ork er em p lo y m e n t, w o m en em ­
p lo y e d , a v era g e h ourly ea rn in g s, a verage w e ek ly
hours, and average w eek ly overtim e hours (in m anufac­
turing). For many series, season ally adjusted data also
are published.

Concepts
A n establishm ent is defined as an econom ic unit
w hich produces good s or serv ices, such as a factory,
m ine, or store. It is generally at a single physical loca­
tion and it is engaged predom inantly in on e type o f
econom ic activity. W here a single physical location
en com p asses tw o or m ore distinct and separate ac­
tivities th ese are treated as separate establishm ents,
 that separate payroll records are available and
provided
http://fraser.stlouisfed.org/ criteria are m e t.1 In the collection o f data
certain other
Federal Reserve Bank of St. Louis

27

on em ploym ent, payrolls, and hours, the B LS usually
requests separate reports by establishm ent. H ow ever,
w hen a com pany has more than one establishm ent en­
gaged in the sam e activity in a geographic area, these
establishm ents may be covered by a com bined report.
Industry em ploym ent statistics published by BLS
and the cooperating State agencies represent the total
number o f persons em ployed either full-tim e or parttim e in n o n a g r ic u ltu r a l e s ta b lis h m e n ts d urin g a
specified payroll period. In general, data refer to per­
sons w ho worked during, or received pay for, any part
o f the pay period that includes the 12th o f the month.
H ow ever, at the national lev el, data for Federal G ov­
ernm ent establishm ents generally refer to civilian per­
sonnel w ho worked on, or received pay for, the last day
o f the m onth, plus interm ittent em ployees w ho worked
any tim e during the month (e .g ., Christmas temporary
em ployees o f the postal service).
E m ployed persons include both perm anent and tem ­
porary em p loyees and th ose w ho are working either
full- or part-time. W orkers on an establishm ent payroll
w ho are on paid sick leave (w hen pay is received di­
rectly from the em ployer), on paid holiday or paid vaca­
tion, or w ho work during only a part o f the specified pay
period are counted as em ployed. Persons on the payroll
o f more than one establishm ent during the pay period
are counted in each establishm ent which reports them ,
w hether the duplication is due to turnover or dual
jobholding. P ersons are considered em ployed if they
receive pay for any part o f the specified pay period, but
are not considered em ployed if they receive no pay at all
fo r th e p a y p e r io d . S in c e p r o p r ie to r s , th e
self-em ployed, and unpaid fam ily workers do not have
the status o f “ paid em p lo y ee s,” they are not included.
D om estic workers in h ouseholds are excluded from the
data for nonagricultural establishm ents. G overnm ent
em ploym ent statistics refer to civilian em ployees only.
The figure which includes all persons w ho iheet these
specifications is designated “ all em p lo y ee s.” Major
categories o f em ploym ent are differentiated from this
overall total, primarily to ensure the expeditious co llec­
tion o f current statistics on hours and earnings; these
groups o f em ployees are designated production work­
ers, construction w orkers, or nonsupervisory w orkers,
depending upon the industry.
In manufacturing industries, data on em ploym ent,
hours, and payrolls are co llected for production w ork­
ers. This group, in general, covers th ose em ployees, up
through the level o f working supervisors, w ho are en­
gaged directly in the m anufacture o f the product o f the
establishm ent. A m ong the exclu sion s from this cate­
gory are persons in ex ecu tive and managerial positions,
and persons engaged in activities such as accounting,
sales, advertising, routine office w ork, professional and
technical functions, and force account con struction.2
Standard Industrial Classification Manual
a n d B u d g e t, E x e c u tiv e

O ffic e

(O ffic e o f M a n a g e m e n t

o f th e P r e s id e n t,

1 9 7 2 ), p . x .

2 F o r c e - a c c o u n t c o n s t r u c t io n is c o n s t r u c t io n w o r k p e r f o r m e d b y a n

e s ta b lis h m e n t, p r im a r ily
s t r u c t io n , f o r its o w n

engaged

in

som e

a ccou n t and u se b y

b u s in e s s o t h e r th a n c o n ­
its o w n

e m p lo y e e s .

28

BLS HANDBOOK OF METHODS

Production workers in mining are defined in a similar
manner. A more detailed description o f the classes of
e m p lo y e e s in c lu d ed in the p r o d u c tio n and n o n ­
production w orkers categories in m anufacturing is
show n on the facsim ile o f the B L S 790 C schedule on p.
37 and 38 o f this bulletin.
In con tract co n str u c tio n , th e term co n stru ction
workers covers w orkers, up through the level o f work­
ing supervisors, w ho are engaged directly on the con ­
struction project either at the site or working in shops or
yards at job s ordinarily perform ed by m em bers o f con ­
struction trades. E xclu sion s from this category include
ex ecu tiv e and managerial personnel, professional and
technical em p loyees, and routine office workers.
Data on the em ploym ent, hours, and payrolls o f nonsupervisory workers are co llected from establishm ents
in the transportation, com m unication, and public utility
industries, in retail and w h olesale trade, in finance,
insurance, and real estate, and the service industries.
N onsup ervisory w orkers include m ost em p loyees e x ­
cept th ose in top execu tive and managerial positions.
(S ee facsim ile o f B L S 790 E, the reporting form for
w holesale and retail trade, p. 39 and 40.)
The series on hours and earnings is based on reports
o f gross payroll and corresponding paid hours for pro­
duction w ork ers.3 To derive th ese series, B L S collects
the follow ing data: (See facsim ile o f B L S 790 C on p.
37 and 38.)
1. T he num ber o f full- and part-tim e production
workers w ho w orked during, or received pay for, any
part o f the pay period including the 12th o f the month.
2. Total gross payrolls for production workers be­
fore deductions for old-age and unem ploym ent insur­
ance, group insurance, w ithholding tax, bonds, and
union dues. The payroll figures also include pay for
overtim e, shift prem ium s, h olid ays, vacation s, and sick
leave paid directly by the firm to em p loyees for the pay
period reported. T hey exclu d e b onu ses (unless earned
and paid regularly each pay period) or other pay not
earned in the pay period concerned (e .g ., retroactive
pay). Tips and the value o f free rent, fuel, m eals, or
other paym ent in kind are not included.
3. Total hours w orked (including overtim e hours)
during the pay period, hours paid for standby or report­
ing tim e, and equivalent hours for w hich em ployees
received pay directly from the em ployer for sick leave,
for holidays, vacations, and other leave paid to these
em p loyees. O vertim e or other prem ium paid hours are
not con verted to straight-time equivalent hours.
4. O vertim e hours for w hich prem iums w ere paid
b ecau se the hours worked w ere in ex c e ss o f the number
o f hours o f either the straight-time workday or work­
w eek. Saturday and Sunday hours ( or 6th and 7th day
hours) are included as overtim e only if overtim e pre­
miums w ere paid. H oliday hours w orked as overtim e
are not included u nless they are paid for at more than
the straight-tim e rate. H ours for w hich only shift differ­
3 U n le s s

o t h e r w is e

in d ic a te d ,

th e

Digitized for o d u c t i o n w o r k e r s a p p l y l i k e w i s e
p r FRASER
http://fraser.stlouisfed.org/ c a t e g o r i e s .
n o n s u p e r v is o r y
Federal Reserve Bank of St. Louis

to

r e fe r e n c e s
th e

in

th is

c o n s t r u c tio n

c h a p te r
w o rk er

to

pnd

ential, hazard, incentive, or similar types of premiums
were paid are excluded from overtim e hours.
Overtime hours data are collected only from estab­
lishm ents engaged in manufacturing industries. For
governm ent organizations and private educational in­
stitutions, payrolls collected relate to all em ployees.
Data relating to hours paid for are not collected .
Industrial C la ss ific a tio n
All national, State, and area em ploym ent, hours, and
earnings series data are classified in accordance with
the S t a n d a r d I n d u s t r i a l C l a s s i f i c a t i o n M a n u a l , O ffice
o f M anagem ent and Budget, 1967. (S ee appendix B o f
this bulletin for a detailed description o f this system .)
Reporting establishm ents are classified into signifi­
cant econom ic groups on the basis o f major product or
activity as determ ined by the establishm ents’ percent o f
total sales or receipts for the previous calendar year.
This information is collected on ce each year on an
“ Industry C lass Supplem ent” to the monthly report
form. (See p. 41 for a facsim ile o f this form .) All data
for an establishm ent making more than one product or
engaging in more than one activity are classified under
the industry o f the m ost important product or activity,
based on the percentages reported.
T im e P erio d
E m ploym ent, hours, and earnings are measured for
the pay period including the 12th o f the m onth, w hich is
standard for all Federal agencies collecting em ploy­
ment data on an establishm ent basis.

Data Sources
S a m p le D ata
Each month the State agencies cooperating with the
Bureau co llec t data on em ploym ent, payrolls, and
hours from a sam ple o f establishm ents. The respondent
extracts these figures from his payroll records. T hese
data are readily available as the em ployers must main­
tain such records for a variety o f tax and accounting
purposes. A response analysis survey o f the reporting
practices o f a scientifically selected sample o f reporting
establishm ents in manufacturing industries show ed that
the reports were made out alm ost exclu sively from their
payroll records. The survey also show ed that w hile a
number o f em ployers did not report precisely the data
requested on the schedule for all item s, th ese deviations
were not all in the sam e direction. On balance, they
tended to offset each other, and the net effects o f in­
correct reporting w ere quite insignificant.4
4

Y ou n g,

D u d le y

p lo y m e n t S e r ie s

Review,

E .

and

G o ld s te in ,

S id n e y ,

“ T h e

a n d M a n u fa c t u r in g R e p o r t in g P r a c t ic e s ,”

N o vem b er

1957,

1 3 6 7 -1 3 7 1 .

B L S

E m ­

Monthly

EM PLOYMENT, HOURS, AND EARNINGS
Participation in the industry em ploym ent statistics
program is entirely voluntary on the part o f the report­
ers. H ow ever, in many industries, particularly in man­
ufacturing, em ployers w ho have a high percentage o f
total em ploym ent in the industry supply reports regu­
larly, and many have done so over a long period o f
years.

Benchmark Data
An em ploym ent benchm ark is defined as a rea­
sonably com plete count o f em ploym ent. The estim ates
are adjusted periodically, annually if p ossib le, to new
benchm ark lev els. Since 1939, the basic sources o f
benchmark information for “ all em ployees” have been
periodic tabulations o f em ploym ent data by industry
and, beginning with 1959, by size o f establishm ent.
T hese are com piled by State em ploym ent security
agencies, according to uniform procedures specified by
the B L S from reports o f establishm ents covered under
S ta te u n e m p lo y m e n t in su r a n c e la w s . T he S ta te
em ploym ent security agencies receive quarterly re­
ports, from each em ployer subject to the law s, showing
total em ploym ent in each month o f the quarter, and
total quarterly w ages for all em p lo y e e s.5 If the em ­
ployer has more than 50 em p loyees and operates more
than one establishm ent in a State, he is required to make
separate reports for each area (e .g ., county) in which he
operates and for each establishm ent in different indus­
tries. E m ploym ent is reported for the pay period o f the
month including the 12th, and reports are classified
industrially according to the Standard Industrial C las­
sification. The State em ploym ent security agencies
cooperate clo sely with the Bureau o f Labor Statistics in
the assignm ents o f industry classification s, so there is a
high degree o f uniformity in this respect betw een the
benchm ark and sam ple data.
With the expansion o f U I coverage in 1972, 97 per­
cent o f em p loyees on payrolls o f p r i v a t e nonagricultural
establishm ents w ere included in the U I tabulations. For
the few remaining industries exem pt from mandatory
U I coverage, the Bureau o f Labor Statistics uses other
sources for benchm ark inform ation. D ata on em ployees
covered under social security law s as published by the
Bureau o f the C ensus in C o u n t y B u s i n e s s P a t t e r n s , are
used to augment the U I data for nonoffice insurance
sales workers and private educational services. Data
for interstate railroads are obtained from the Interstate

5

T h e

S ta te e m p lo y m e n t s e c u r ity a g e n c ie s a r e r e q u ir e d

ta b u la tio n s o f th e s e r e p o r t s

to th e B L S

t io n s a r e d u e in t h e W a s h i n g t o n o f f i c e
fifth

m o n th

a fte r

th e

q u a rte r

o f

t o s u b m it

e a c h q u a r te r . T h e s e ta b u la ­
o f th e B L S

r e fe r e n c e .

F o r

b y th e e n d o f th e
e x a m p le ,

th e

29

Com m erce Com m ission; benchm arks for private ele­
mentary and secondary schools are derived from data
obtained from the U .S . O ffice o f Education and the
National Catholic Welfare A ssociation. These sources
have been used for benchmarking for a number o f
years.
E m ploym ent figures for religious organizations are
obtained from data provided by the N ational Council o f
Churches and recent surveys o f churches conducted by
several State agencies.
In benchmarking the governm ent sector, the Bureau
has for many years used the monthly em ploym ent data
com piled by the U .S . Civil Service C om m ission (Fed­
eral G overnm ent) and the C ensuses and Surveys o f
G overnm ents conducted by the Bureau o f the Census
(State and local governm ents). Data on State and local
governm ent are based on surveys and cen su ses con ­
ducted by the Bureau o f the C ensus. H ow ever, since
about 80 percent o f State governm ent em ployees are
currently covered by unem ploym ent insurance and
several States are in the p rocess o f expanding coverage
further, it is expected that U I contributions data will be
used as a benchmark source for the State governm ent
portion in the near future. Since U I data are available
for each m onth, the quality o f the benchmark data will
be greatly im proved.6
Special efforts are made to classify establishm ents
into the sam e industrial groupings for benchm ark pur­
p oses as they are for m onthly reporting. W herever p os­
sible, em ploym ent for the standard midmonth pay
period for March is used as the benchmark.

C o lle c t io n M e t h o d s
The primary collection o f the current sample data is
conducted by State agencies which have cooperative
agreem ents with the B L S. In m ost States, this is the
e m p lo y m e n t se c u r ity a g e n c y , a ffilia te d w ith th e
E m ploym ent and Training Adm inistration (formerly,
the M anpower A dm inistration), the organization which
administers the State unem ploym ent insurance pro­
gram. In a few cases the State departm ent o f labor acts
as the agency. The agencies mail schedules to a sample of
establishm ents in the States each month. A “ shuttle”
schedule is used (B L S form 790 series); that is, one
which is subm itted each month in the calendar year by
the respondent, edited by the State agency, and re­
turned to the respondent for use again the follow ing
month. The State agency u ses the information provided
on the forms to develop State and area estim ates o f
em ploym ent, hours, and earnings, and then forwards
the data, either on the schedules th em selves or in ma-

fir s t

q u a r t e r ta b u la tio n , w h ic h p r o v id e s th e b a s is o f th e B L S b e n c h m a r k s ,
is

due

on

A u gu st

31.

R e v ie w

and

e d itin g

o f th e s e

ta b u la tio n s

and

6

F o r a m o r e d e ta ile d

p r e p a r a t io n o f n a tio n a l s u m m a r ie s f r o m th e m r e q u ir e s s e v e r a l m o n t h s

G lo r ia ,

a d d itio n a l

B en ch m a rk L e v e ls ,”

w o rk

on

th e


c o m p le t e d .


p art

o f

th e

B L S

b e fo r e

th e

b en ch m ark

is

8 -1 3 .

“ B L S

d e s c r ip tio n

E s ta b lis h m e n t

o f th e b e n c h m a r k , s e e G o in g s ,

E s tim a te s

R e v is e d

Employment and Earnings,

to

M arch

1974

O c to b e r 1975, p p .

30

BLS HANDBO O K OF METHODS

chine readable form , to the W ashington, D .C ., office o f
the Bureau o f Labor S tatistics, w here th ey are used to
prepare estim ates at the national level.
The shuttle schedule has been used in this program
since 1930, but there have been substantial changes in
its design and in the data co llected over the period. All
asp ects o f the sch ed u le, its form at, the wording o f the
requested item s and d efinitions, and the con cep ts em ­
bodied therein have b een subjected to a continuing and
intensive review over the entire period, not only by the
staff o f B L S and o f the State agen cies, but also by other
governm ent agen cies and by num erous p ersons in pri­
vate busin ess and labor organizations. The report form s
are not exactly alike for every industry, but m ost o f
them request data on total em ploym ent, num ber o f
w om en em p lo y ees, num ber o f production w orkers (in
manufacturing and m ining), construction workers (in
contract construction industries), or nonsupervisory
workers (in other nonm anufacturing industries), and,
for th ese w orkers, data on payroll, paid hours, and for
m anufacturing, overtim e hours. The schedule contains
detailed instructions and definitions for the reports.
T here are several variants designed to m eet the specific
problem s o f different industries. (S ee facsim iles o f B L S
790 C and B L S 790 E, pp. 37, 38, and 39.)
The technical characteristics o f the shuttle schedule
are particularly important in maintaining continuity and
co n sisten cy in reporting from m onth to month. The
design exhibits autom atically the trend o f the reported
data during the year covered by the schedule, and there­
fore, the relationship o f the current figure to the data for
the previous m onth. The sch ed u le also has operational
advantages; for exam ple, accuracy and econ om y are
obtained by entering identifying co d es and the address
o f the respondent on ly o n ce a year.
All sch ed u les are carefully edited by the State agen­
cies each m onth to m ake sure that the data are correctly
reported and that th ey are co n sisten t within them ­
selv es, w ith the data reported by the establishm ent in
earlier m onths, and with th ose reported by other e s­
tablishm ents in their industry. This editing p rocess is
carried out in accordance with a detailed manual o f
instructions prepared b y the Bureau o f Labor Statistics.
W hen the reports are sent to W ashington, they are
screened by u se o f a com puter to d etect processing
errors and reporting errors w hich m ay have escaped the
first editing. Q uestionable c a ses d iscovered at ^ny stage
o f the editing p rocess are returned, if n ecessary, to the
respondent for review and co rrectio n .7

S a m p li n g
Sam pling is u sed b y B L S in its industry em ploym ent
statistics program for collecting data in m ost industries,
7
M en
 d e l s s o h n , R u d o l p h C . “
S t a t i s t i c s , ” Monthly Labor Review,


M a c h in e
M a y

M e th o d s

in

E m p lo y m e n t

1 9 5 5 , p p . 5 6 7 -5 6 9 .

since full coverage w ould be prohibitively costly and
time consum ing. The sampling plan for the program
must: (a) provide for the preparation o f reliable m onthly
estim ates o f em ploym ent, hours o f w ork, and w eek ly
and hourly earnings w hich can be published promptly
and regularly; (b) through a single general system , yield
considerable industry detail for m etropolitan areas,
States, and the Nation; and (c) be appropriate for the
existing fram ework o f operating procedures, adm inis­
trative practices, resource availability, and other in­
stitutional characteristics o f the program.
In developing the sample design, the universe o f
establishm en ts w as stratified first by industry and
within each industry by size o f establishm ent in terms o f
em ploym ent, using six standard size classes. Within
each industry, an optimum allocation design w as ob­
tained by sampling with probability proportionate to
average size o f establishm ent within each o f the strata.
A total size o f sam ple n ecessary to produce satisfactory
estim ates o f em ploym ent had to be distributed among
the size-class cells on the basis o f average em ploym ent
per establishm en t in each cell. In p ractice, this is
eq u iv a len t to distributing the pred eterm in ed total
number o f establishm ents required in the sample among
the cells on the basis o f the ratio o f em ploym ent in each
cell to total em ploym ent in the industry. Within each
stratum, the sam ple mem bers are selected at random.
Under this type o f design, large establishm ents fall
into the sam ple with certainty. In nearly all industries,
establishm ents with 250 or m ore em ployees are in­
cluded in the sam ple with certainty and in many indus­
tries the cu toff is low er. The sizes o f the sam ples for the
various industries w ere determ ined em pirically on the
basis o f experience and o f co st considerations. In a
manufacturing industry in w hich a high proportion o f
total em ploym ent w as concentrated in a relatively few
large e s ta b lis h m e n ts , a high p e r c e n ta g e o f to ta l
em ploym ent had to be included in the sam ple. C on se­
quently, the sam ple design for such industries provides
for a com plete censu s o f the larger establishm ents with
only a few ch osen from among the smaller establish­
m ents, or none at all if the concentration o f em ploym ent
in the larger establishm ents is great enough. On the
other hand, in an industry w here a large proportion o f
total em ploym ent is in small establishm ents, the sample
design calls for inclusion o f all large establishm ents, and
also for a substantial number o f the smaller establish­
m ents. M any industries in the trade and service divi­
sions fall into this category. In order to keep the sample
to a size w hich can be handled with available resources,
it is n ecessary to accep t sam ples in these divisions with
a smaller proportion o f universe em ploym ent than is the
case for m ost manufacturing industries. Since indi­
vidual establishm ents in these nonm anufacturing indus­
tries generally show less fluctuation from regular cy cli­
cal or seasonal patterns than establishm ents in man­
ufacturing industries, th ese sm aller sam ples (in terms o f
em ploym ent) generally produce reliable estim ates.

EM PLO YM ENT, HOURS, AN D EARNINGS
Th is sam ple design, although aim ed prim arily at
m eeting the needs o f the national program , provid es a
technical fram ew ork within w hich State and area sam­
ple designs can be determ ined. Since the estim ates fo r
States and areas gen erally are not prepared at the same
degree o f industry detail as the national estim ates, the
national design usually provid es sufficient reports fo r
the preparation o f State and area estim ates.8

E s t im a t in g P r o c e d u r e s

E m p lo y m e n t

T a b l e 1.

31

N o n a g r ic u lt u r a l p a y r o ll e m p lo y m e n t e s t i­

m a te s , by industry division , a s a p e rc e n t o f the b e n c h ­
m ark fo r 1971,1973, a n d 1974
Ind u stry d ivision
T o ta l ..............................
M in in g .......................................
C o n t r a c t c o n s t r u c t i o n. . . . . . . . . . . . . . . . .
M a n u f a c t u r i n. . . . . . . . . . . . . . . . . . . . . . . . . . . .
g
Tra n sp o rta tio n and public
u tilitie s ..................................
W h o l e s a l e a n d r e t a i l t r a .d . . . . . . . .
. e
Finance, in surance, and
real e s t a t e .............................
S e r v i c e s ......................................
G o vern m en t ................................
12

1971

19731

100.2

1974

9 8 .4

9 9 .9

9 9 .8

9 6 .5

9 6 .9
1 0 0 .4

9 0 .4
9 8 .9

1 0 0 .9
10 0 .3

9 9 .3
9 7 .8

100.0
100.1

100.2

97.

100.6

9 9 .5

10 0 .4

100.0

9 9 .9

9 8 .9
99 .1

9 9 .5

99 .3

100.6

-year revis ion.

T h e “ all e m p lo y e e ” estim ates by industry are based
on reasonably com plete em ploym ent counts or “ bench­
m a rk s.” T o obtain e m p lo y m en t estim ates fo r the
individual estim ating cells, the fo llo w in g three steps are
necessary:
1. A total em ploym en t figure (benchm ark) fo r the
estim ating cell, as o f a specified month, is obtained from
sources w hich p rovid e a reasonably com plete count o f
em ploym en t fo r the cell.
2. F o r each cell, the ratio o f em ploym ent in one
month to that in the precedin g month (i.e ., the link
re la tive ) is com puted fo r sample establishments w hich
reported in both months.
3. Beginning with the benchm ark month, the esti­
m ate fo r each month is obtained b y multiplying the
estim ate fo r the p reviou s month b y the link relative fo r
the current month.
A p p lica tio n o f the estim ating procedure in preparing
a series is illustrated b y the fo llo w in g exam ple: Assu m e
that total em ploym en t fo r a given series was 50,000 in
July. T h e reporting sample, com posed o f 60 establish­
ments, had 25,000 em p loyees in July and 26,000 in
August, a 4-percent increase. T o d erive the August
estim ate, the change fo r identical establishments re­
ported in the July-August sample is applied to the July
estim ate:

50,000 x

< 104> =
or

5 2 ’ 0 0 0

This procedu re fo r estim ating current em ploym en t is
know n as the benchm ark and link-relative tehcnique. It
is an efficien t technique, taking advantage o f a reliable
com plete count o f em ploym en t and o f the high correla­

p lo yees in August, reported an August productionw ork er figure o f 19,500 resulting in a ratio o f 1^’ ^

or

2 6 ,0 0 0

.750. U sing this ratio, produ ction-w orker em ploym ent
in A ugust is estim ated to be 39,000 (52,000 m ultiplied by
.750 = 39,000). A similar ratio m ethod is used to esti­
mate the number o f w om en e m p lo y e d .9
T h e estim ates fo r each type o f series (all em ployees,
production w orkers, and w om en em p loyees) fo r indi­
vidual estim ating cells are summed to obtain the co r­
responding totals fo r broader industry groupings and
divisions.
A ppropriate revisions, based on n ew benchmarks,
are introduced into the em ploym en t series as required
to correct fo r classification changes and fo r deviations
resulting from the use o f sample trends. In general, the
benchm ark month is M arch. T h e em ploym en t esti­
mates w hich had been published previou sly fo r that
m onth are com pared with the new benchmark data. Th e
amount o f adjustment in the published em ploym ent
inform ation is indicated b y this com parison. Th e all
em p loyee series, fo r months betw een the current and
the last preceding benchmark, are adjusted by w edging
or tapering out the d ifferen ce b etw een the current
benchm ark and the estim ate fo r the benchmark month
back from the current benchm ark to the last previous
benchm ark. This differen ce is assumed to have ac­
cumulated at a regular rate. T h e series fo r months sub­
sequent to the benchm ark month are revised by project­
ing the le v e l o f the new benchm ark by the trend o f the
unadjusted series.
A com parison o f the revisions made in recent years is
presented in table 1.

tion b e tw e e n le v e ls o f em p lo y m e n t in su cce ssive
months in identical establishments.
In addition to estim ates o f total em ploym en t by in­

Hours and Earnings

dustry, the Bureau publishes data on production, con ­
struction, or nonsu pervisory w ork er em ploym ent. F o r

Independent benchmarks are not available fo r the

this purpose, the sample ratio fo r the current month o f

hours and earnings series. C onsequently, the levels
shown are d erived from the B L S reporting sample.

production w orkers to total em ploym en t is used. F o r
exam ple, the 60 sample firm s w hich had 26,000 em-

9

If perm anent ch an ges in the co m p osition o f the sam ple take pla ce,

the “ produ ction-w ork ers, all e m p lo y e e ” ratios and the “ w o m e n ”
8
F or
 the national sam p le, additional reports n eed ed for S tate and ratios calcu lated from the sam ple are m odified b y a w edging tech ­
area sam p les are
nique describ ed in this chapter under “ H ours and E arn in gs.”
http://fraser.stlouisfed.org/ added to th o se required b y the national design .

Federal Reserve Bank of St. Louis

32

BLS HANDBOOK OF METHODS

S in ce 1959, w hen benchm ark data stratified by
e m p lo y m e n t s iz e b e c a m e a v a ila b le th rou g h the
em ploym en t security system , estim ates o f e m p lo y ­
ment, hours, and earnings have been prepared by a cell
structure w hich makes use o f size and in some cases
regional stratification. E x p erien ce in the preparation o f
current estim ates shows that the six size classes as
described under the sampling design can be com bined
into a maximum o f three size classes fo r the purposes o f
preparing current estim ates o f hours and earnings,
w hen stratification by size is n eed ed .1 W h en ever a new
0
national benchm ark becom es available, national esti­
mates o f average w e e k ly hours and average hourly
earnings using eight size strata and fou r regional strata
(N orth east, N o rth Central, South, and W est) are pre­
pared. T h ese estim ates are used as a standard against
w hich the published averages are com pared. In some
cases, this com parison indicates that som e m odification
o f the pattern o f stratification is needed. I f this is the
case, a change is introduced into the estim ating struc­

Table 2. Number of industries for which “Prim ary”
series are published under the B LS Industry Em ploy­
ment Statistics Program -em ploym ent, hours, and earn­
ings, January 1975
Industry division

Total' .........
Goods-producing ..
M ining....................
Contract
construction ....
Manufacturing ....
Service-producing .
Transportation and
public utilities .
Trade .....................
Finance, insurance,
and real e s ta te .
Services .................
Government ...........
Total p rivate.........
Total non­
agriculture ........

All
Production
employees workers1
419
1
12

Average
Hours and
overtime
earnings2
hours

363

402

366

11

9

11

11
278
1

11
277

11
278

11
277

25
36

16
32

21
35

19
32

15
23
15
1

9
6

15
22
9
1

10
6

1

.

Women

1

196

192

4
1

1

ture at the tim e o f the next benchm ark revision.
1 Production workers in m a n u fac t ur in g and mining; construction workers in c o n tract
nonsupervisory
divisions.
a.
A v e ra g e w eekly hours a n d g ro ss hourly earnings. construction; hourly earnings, workers,g e all other hours, and a v e ra g e weekly earn in gs.
2 Ave rag e
a v e ra weekly
T o obtain average w e e k ly hours fo r an individual es­
tim ating cell, the sum o f the hours reported by the
plants classified in that cell is divided by the total
number o f production w orkers reported fo r the same
establishments. Sim ilarly, in com puting average hourly
earnings, the reported payroll is divid ed by the reported

w om en with regard to changes in the com position o f the
sample betw een successive months.

hours.
T h e first ratio estim ates o f average hourly earnings

ed averages o f the figures fo r com ponent cells and
industries. T h e average w eek ly hours fo r each estim at­
ing cell are m ultiplied by the corresponding estim ate o f
produ ction-w orker em ploym en t, to d erive aggregate
hours. Payroll aggregates are the product o f aggregate
hours and average hourly earnings. Payroll and hour
aggregates fo r industry groups and divisions represent
the sum o f aggregates fo r com ponent industries.
A v e ra g e w eek ly hours fo r industry groups are o b ­
tained b y dividing the hour aggregates by the corres­
ponding p rod u ctio n -w o rk er em p loym en t estim ates.
A v e ra g e hourly earnings fo r groups are com puted by
dividing the payroll aggregates b y the hour aggregates.

and average w e e k ly hours are m odified at the estim at­
ing cell leve l by a w edging technique designed to com ­
pensate fo r changes in the sample arising mainly from
the volu ntary character o f the reporting.
F o r exam ple, a first estim ate o f average hourly earn­
ings fo r the current month, U i, is obtained from aggre­
gates fro m a matched sample o f establishments report­
ing in the current and previous month. Sim ilarly an
estim ate o f average hourly earnings, Do, fo r the p revi­
ous m onth is calculated from the same matched sample.
H en ce, D i —Do is a measure o f absolute change be­
tw een the 2 months.
N o te is then taken o f the published estim ate o f a ver­
age hourly earnings fo r the previou s month, say Vo.
Because the panel o f establishments reporting in the
sample is not absolutely fix ed from month to month,
there m ay be differen ces betw een Vo and D o .1 A final
1
figure fo r the current month is obtained by making use
o f both p ieces o f inform ation; the estim ate is
V i = (0.9 Vo + 0.1 t/o) + ( D i ~ Do)
T h e procedu re, reflected in this last equation, accepts
the advantage o f continuity from the use o f the matched
sample, and at the same tim e tapers or w edges the
published estim ate tow ard the leve l o f the latest sample
average. T h e same procedure is used to adjust the p ro ­

du ction-w orker all em p loyee-ratio and the ratios fo r


W e e k ly hours and hourly earnings fo r industries and
groups a bove the basic estim ating cell leve l are w eigh t­

This method is equivalent to w eighting w e e k ly hours b y
estim ated u n iverse p rod u ctio n -w o rk er em p loym en t
and hourly earnings b y estim ated universe hours.
10 T h ese com b in ation s o f size c la s se s have b een m ade b eca u se o f
operational e co n o m ie s. In particular, the prelim inary estim a tes are
based on less than full sam p les, and if th e estim ation o f prelim inary
estim ates w as attem pted u sin g th e full stratification pattern, there
w ou ld be a num ber o f cells for w h ich there w ere no sam p les. E x p eri­
m ents and tests over several years ind icate that e stim a tes o f hours
and earnings prepared from the B L S sam ple u sin g a m axim um o f
three size strata gen erally d o not differ significan tly from th o se co m ­
puted w ith four size strata or m ore.
11 If the d ifferen ce b etw een the estim ate and the average co m ­
puted from the sam p le (Vo—U o ), is to o great, the sam ple average is
accep ted o n ce it has b een estab lish ed that the d ifferen ce is du e to a
perm anent change in the co m p o sitio n o f the sam p le, and the series is
regarded as d iscon tin u ou s at that p oin t. In general, a differen ce
greater than 3 p ercen t is con sid ered as defining a d iscon tin u ity or
“ b reak .”

EMPLOYMENT, HOURS, AND EARNINGS

For all levels, from individual estimating cells to
major industry divisions, average weekly earnings are
computed by multiplying average hourly earnings by
average weekly hours.
b. Overtime Hours. To obtain average weekly over­
time hours in manufacturing industries, the sum of the
overtime hours reported is divided by the number of
production workers in the same establishments.
c. Spendable Average Weekly Earnings. (For work­
ers who earn the average weekly earnings.) Before the
majority of workers in low'er income brackets were
subject to Federal income and social security taxes,
gross average weekly earnings were a satisfactory mea­
sure of trends in weekly earnings available for spend­
ing. After Federal income taxes began to affect the
spendable earnings of an appreciable number of work­
ers, a method w'as developed for approximating spend­
able earnings by deducting these taxes from gross
earnings.1
2
The amount of individual income tax liability de­
pends on the number of dependents supported by a
worker as well as on the level of his gross income.
Spendable earnings for workers by major industry divi­
sion are computed and published for a worker who
earns the average amount and has no dependents or
who has three dependents.
Gross and spendable weekly earnings also are com­
puted and published in terms of 1967 dollars, to give an
approximate measure of changes in “ real” gross and
spendable weekly earnings, that is, in purchasing power
since that base period. This series is computed by divid­
ing the weekly earnings average (in current dollars) by
the BUS Consumer Price Index for the same month.
d. Average hourly earnings, excluding overtime, in
manufacturing are computed by dividing the total pro­
duction-worker payroll for the industry group by the
sum of total production-worker hours and one half of
total overtime hours, wTiich is equivalent to payrolls
divided by straight-time hours. This method excludes
overtime earnings at Wi times the straight-time rates;
no further adjustment is made for other premium pay­
ment provisions.
e. Indexes of aggregate weekly hours and payrolls
are prepared by dividing the current month’s aggre­
gates by the average for 1967.
f. Indexes of diffusion of changes in the number of
employees on nonagricultural payrolls measure the
percent of industries which posted increases in
employment over the specified time span. The indexes
are calculated from 172 unpublished seasonally ad­
justed employment series (two-digit nonmanufacturing
industries and three-digit manufacturing industries)
covering all nonagricultural payroll employment in the
private sector. A more detailed discussion of these in­
1
2
Utter, Carol, “ The Spendable Earnings Series: A Technical
 its Calculation,” E m p lo y m e n t a n d E a r n in g s a n d M o n th ly
Note on
http://fraser.stlouisfed.org/ e L a b o r F o r c e , February 1969. pp. 6-13.
R e p o r t o n th

Federal Reserve Bank of St. Louis

33

dexes appears in “ Introduction of Diffusion Indexes,”
in the December, 1974 issue of Employment and Earn­
in g s .

Reliability of Estimates
Although the relatively large size of the BUS
establishment sample assures a high degree of accu­
racy, the estimates derived from it may differ from the
figures that would be obtained if it were possible to take
a complete census using the same schedules and pro­
cedures. As discussed previously a link relative tech­
nique is used to estimate employment. This requires the
use of the previous month’s estimate as the base in
computing the current month’s estimate. Thus, small
sampling and response errors may cumulate over sev­
eral months. To remove this accumulated error, the
estimates are adjusted annually to new benchmarks. In
addition to taking account of sampling and response
errors, the benchmark revision adjusts the estimates for
changes in the industrial classification of individual
establishments (resulting from changes in their product
which are not reflected in the levels of estimates until
the data are adjusted to new' benchmarks). In fact, at the
more detailed industry levels, particularly within man­
ufacturing. changes in classification are the major cause
of benchmark adjustments. Another cause of differ­
ences, generally minor, arises from improvements in
the quality of the benchmark data.
One measure of the reliability of the employment
estimates for individual industries is the root-meansquare error (RMSF). The measure is the standard de­
viation adjusted for the bias in estimates.
RMSF = / (Standard Deviation)2 + (Bias)2
If the bias is small, the chances are about 2 out of 3 that
an estimate from the sample would differ from its bench­
mark by less than the root-mean-square error. The
chances are about 19 out of 20 that the difference w'ould
be less than twice the root-mean-square error.
The hours and earnings estimates for cells are not
subject to benchmark revisions, although the broader
groupings may be affected slightly by changes in
employment weights. The hours and earnings esti­
mated, however, are subject to sampling errors which
may be expressed as relative errors of the estimates. (A
relative error is a standard error expressed as a percent
of the estimate.) Measures of root-mean-square errors
for employment estimates and relative errors for hours
and earnings estimates are provided in the “ Technical
Note” of Employment and Earnings.
Seasonally Adjusted Series
Many economic statistics, including employment and
average weekly hours, reflect a regularly recurring sea­

34

B L S H A N D B O O K OF M ETH O D S

sonal m ovem ent which can be measured on the basis o f
past experience. B y elim inating that part o f the change
which can be ascribed to usual seasonal variation, it is
possible to ob serve the cyclical and other nonseasonal
m ovem ents in these series. Seasonal adjusted series are
published regularly for selected em ployment, hours, and
earnings series.
T h e seasonal adjustm ent m ethod used fo r these
series is an adaptation o f the standard ratio-to-m oving
average m ethod, with a provision fo r “ m o vin g ” adjust­
ment factors to take account o f changing seasonal pat­
terns. A detailed description o f the m ethod is given in
appendix A o f this bulletin.
T h e season ally adjusted series on gross average
w e e k ly hours, average o vertim e hours and average
hourly earnings are com puted by applying factors di­
rectly to the corresponding unadjusted series, but sea­
sonally adjusted em ploym en t totals fo r all em ployees
and production w orkers b y industry divisions are o b ­
tained by summing the seasonally adjusted data fo r
com pon ent industries. S elected seasonally adjusted
series also are prepared fo r aggregate w eek ly hours.

P re s e n ta tio n a n d U s e s

A t the national leve l, the program produces each
month a total o f o v e r 2,600 separate published series.
Tables 2 ,3 , and 4 provid e a summary o f the detail w hich
is published currently. T a b le 2 describes the “ prim a ry”
series produced b y the program , that is, those co m ­
puted directly from the sample and benchm ark data.
T a b le 3 indicates the “ special” series w hich are o b ­
tained from the prim ary series by application o f special
adjustments, w hile table 4 lists the seasonally adjusted
series b y typ e and industry division.
In addition to the series published on a current
m onthly basis, a single annual figure fo r em ploym en t in
M arch o f each year (based on benchm arks) is published
fo r a num ber o f industries fo r w hich m onthly estim ates
do not currently m eet established standards fo r pub­

Table 3. Number of industries for which special se •
are published under the B LS Industry E m p lo y m ^
Statistics Program -em ploym ent, hours, and earninn
January 1975
9S’
Index o f Index o f
Gross
Average
a g g r e ­ a g g r e ­ S p e n d a b le weekly
h ou rly
average
In d u stry d iv is io n
gate
gate
earn in gs e a rn in g s
w eekly
w eek ly w eek ly
e a r n in g s 1 (1967
(ex clu d in g
h ours pa y ro lls
d o lla rs) overtim e)
Total p r i v a t e .
1
1
1
1
G o od s-p rod u cin g ....
1
1
M i n in g ..................
1
1
1
1
C ontract
c o n s t r u c t i o n ......
1
1
1
1
M a n u f a c t u r i n.......
g
24
24
1
1
Ofl
S e r v ic e - p r o d u c i n g ...
1
1
Tran sportation and
p u b l i c u t i l i t i e s . ..
1
1
1
1
T r a d e. . . . . . . . . . . . . . . . . . . . .
3
3
1
1
Fin an ce , in s u ra n c e ,
a n d r e a l e s t a t e . ..
1
1
1
1
.
S e r v i c e s. . . . . . . . . . . . . . . .
1
1
1
1
1 In current and 1967 dollars.

appear in several B L S publications. The summary data
are first published each month in a press release which
contains prelim inary national estimates o f nonagricul­
tural em ploym en t, w e e k ly hours, and gross average
w eek ly and hourly earnings in the preceding month, for
m ajor industry categories. T h e release also includes
sea so n ally adju sted data on em ploym en t, average
w e e k ly hours, and a verage overtim e hours. The pre­
lim inary estim ates are based on tabulations o f data for
less than the full sample to perm it early release o f fig­
ures. Th is release norm ally is issued 3 weeks after the

lication. In 1975, follow ing revision to the 1974 bench­

w eek o f referen ce fo r the data. Th e press release also
includes a b rie f analysis o f current trends in em ploy­
ment, hours, and earnings, pointing up current de­
velopm ents as com pared w ith those fo r the previous
month and the same month in the preceding years.
N ation al estim ates in the detail described in tables 2,
3, and 4 are published in the monthly report E m ploy merit an d E arnings. This publication is issued about 5
w eeks after the w e e k o f reference. Em ployment data
fo r total nonagricultural em ploym ent and for the major

mark, data for 239 such industries w ere published.

industry divisions, as w ell as hours and earnings for all

In June 1975, em ploym en t, and hours and earnings
statistics w ere available fo r 50 States, the D istrict o f

E m ploym en t a n d E arnings 1 month later than those for

C o lu m b ia , and 220 a re a s . A p p r o x im a t e ly 8,700
em ploym en t series and hours and earnings series fo r
about 3,400 industries w ere published fo r these States
and areas b y the State agencies. T h e em ploym en t series
usually c o v e r e d total nonagricultural em p loym en t,
m ajor industry division s (e .g ., contract construction,

manufacturing, are published fo r States and areas in
th e N a t io n .

S p e c ia l a r tic le s

a n a ly ze lo n g -te rm

econ om ic m ovem en ts o r describe technical develop­
ments in the program . M a n y o f the national series are
republished in the M on th ly L a b o r R eview with data
shown fo r each series fo r the most recent 13 months.
F o llo w in g each benchm ark revision, an historical
vo lu m e ca lled E m p lo y m e n t a n d E arn in gs, U n ited

manufacturing), and m ajor industry groups (e .g ., textile
m ill products, transportation equipm ent, retail trade)
fo r each State and area. A d dition al industry detail fr e ­

S ta te s is published. Th is p rovid es historical data,

quently is p rovid ed fo r the larger States and areas,

o f each series, in a fe w instances as far back as 1909. A

particularly fo r industries w hich are lo ca lly important in

com panion volu m e, E m ploym en t and Earnings, S tates
an d A rea s, provid es historical data (annual averages)

Digitized forthe various jurisdictions.
FRASER
http://fraser.stlouisfed.org/ on em ploym en t, and hours and earnings
Th e series
Federal Reserve Bank of St. Louis

m onthly and annual averages, from the beginning date

on all em p loyees and on production-w orker hours and

35

E M P L O Y M E N T , H O U R S, A N D E A R N IN G S
T a b le 4.

N u m b e r o f s e a s o n a lly a d ju s te d s e r ie s p u b lis h e d u n d e r the B L S Industry E m p lo y m en t S tatistics P r o g r a m -

e m p lo y m en t, h o urs, a n d e a r n in g s , J a n u a ry 1975
S e a s o n a lly a d ju sted s erie s
In du stry d ivision

T o t a l n o n a g r i c u l t u r e. . . . . . .
T o ta l p r iv a te .................
G o o d s - p r o d u c in g.......................
M i n i n g ................................
C o n tr a c t c o n s t r u c t i o n ..........
M a n u f a c t u r i n g .....................
S e r v i c e - p r o d u c i n .g. . . . . . . . . . . . . . . . . . . .
.
T ra n sp o rta tio n and public
u t i l i t i e s ............................
T r a d e .................................
F in an ce , in s u ra n c e , a n d real
e s t a t e ..............................
S e r v ic e s .............................
G o v e r n m e n. t . . . . . . . . . . . . . . . . . . . . . .
.

All
em ployees

Produ ction
workers

1
1
1
1
1

1
1
1
1
24

1

1

1

1

3

1

Average
hou rly
ea rn in gs

Average
w eekly
hours

1

1

1

1
1
1

1
1
24

3

1
1

3

1
1

1
1

1
1

Average
overtim e
h ours

Hour
index

1

24

5
3

Average
w eek ly
earn in gs

Index o f
em p lo ym en t

1
1
1
1
1
1

3

1
1

1
1
1
1
24

3

1
1

1
3

1
1

3

earnings series published by State agencies fo r States

agreem ent; “ escalation clauses” m ay be included in

and areas back to the beginning o f these series, in some
instances to 1939. This volu m e is published annually.
D etailed industry rates are available m onthly in re­
leases published by the coop erating State agencies.
T h e data are dissem inated also through the publica­

the contracts, w hich perm it an increase or a low erin g o f
the settlem ent price depending on the m ovem en t o f
average hourly earnings in a selected industry. W id e

tions o f many other F ederal agencies; e.g ., the D epart­
ment o f C om m erce, the B oard o f G overn ors o f the
F ederal R es erve System and the Council o f E con om ic
A d v is o rs republish all or part o f the data. T h ey are also
regularly republished in summary form or fo r specific
industries in many trade association journals, the labor
press, and in general referen ce w orks.
T h ese series are used b y labor unions, business firm s,
universities, trade associations, private research o r­
ganizations, and m any governm en t agencies. Research
w orkers in labor unions and industry, as w ell as others
responsible fo r analyzing business conditions, use the
tren d s r e fle c t e d in th e se p a rtic u la r sta tis tic s as
econ om ic indicators. T h e average w eek ly hours series
are u tilized as lead indicators o f swings in the business
cy cle. L a b o r econom ists and oth er social scientists find
these series to be an im portant indicator o f the N a tio n ’ s
econ om ic a ctivity, as w ell as a measure o f the w e ll­
being o f the m illions o f A m ericans w h o depend on
salaries and w ages. Industrial grow th and progress m ay
be assessed by using the em ploym en t and hours series
in conjunction w ith other econ om ic data to yield m ea­
sures o f produ ctivity.
A nalysts study em ploym en t trends to detect changes
in industrial structure, and to ob serve grow th and de­
cline p roclivities o f individual industries. T h e y also are
used in the Bureau’ s O ccupational O u tlook program as
a basis fo r projection o f future trends.
E x ecu tives use the em ploym en t, earnings, and hours
data fo r guidance in plant location, sales, and pur­
chases. A ls o , firms negotiating long-term supply or
construction contracts often u tilize series on average
hourly earnings as an aid in reaching an equitable



need has been dem onstrated b y both labor and business
fo r industry series on hourly earnings and w e e k ly
hours, to p rovid e a basis fo r labor-m anagem ent negotia­
tions. T h e y not on ly furnish current and historical in­
form ation on a given industry but provid e com parative
data on related industries.

L im it a t io n s

Employment
T o ta l em ploym en t in nonagricultural establishments
from the “ p a yro ll” su rvey is not d irectly com parable
w ith the B ureau’ s estim ates o f the number o f persons
em p loyed in nonagricultural industries, obtained from
the m onthly “ h ou seh old” s u rv e y .1 T h e “ p a y ro ll”
3
series excludes unpaid fam ily workers, domestic ser­
vants in private hom es, proprietors and other self-em ­
p lo yed persons, all o f w hom are co vered b y the house­
hold survey. M o re o v e r, the “ p a y ro ll” series counts a
person em p loyed by tw o o r m ore establishments at
each place o f em ploym en t, w hile the “ household” sur­
v e y counts him on ly on ce, and classifies him according
to his single m ajor a ctivity. Certain persons on unpaid
lea ve are counted as em ployed under the “ household”
su rvey, but are not included in the em ploym en t count
d erived from the “ p a y ro ll” series. In addition to these
differen ces in concept and scope, the surveys em ploy
d ifferen t co llectio n and estim ating techniques. T h ere­
fo r e , a lth ou gh ea ch s u rv e y m easu res ch an ges in
em ploym en t, direct com parability should not be e x ­
pected. H o w e v e r, o v e r tim e, the trends are similar. Th e
household su rvey places its prim ary emphasis on the

1 See ch. 1 for a description of this survey.
3

36

BLS HANDBOOK OF METHODS

employment status of individuals and also provides a
great deal of information on the demographic charac­
teristics (e.g., sex, age, race) of the labor force. The
survey is not well suited to providing detailed informa­
tion on the industrial and the geographic distribution of
employment. The establishment survey, while pro­
viding limited information on personal characteristics
of workers, is an excellent vehicle for obtaining these
detailed industrial and geographic data, and in addition,
it provides hours and earnings information which is
directly related to the employment figures. The payroll
and household surveys therefore may be regarded as
complementary.
Employment estimates derived by the Bureau of the
Census from its quinquennial censuses and from the
annual sample surveys of manufacturing establish­
ments may differ from BLS employment statistics. The
most important reason for difference stems from the
degree to which multiproduct establishments file sepa­
rate or combined reports in one survey but not the
other, which may result in different industrial classifica­
tion of employment. There is also a significant differ­
ence at the more detailed industry levels, since Census
classifies auxiliary units and central and district ad­
ministrative units on the basis of the most appropriate
2-digit major group, while BLS codes these units to the
most appropriate 4-digit industry. For broad categories,
however, the two surveys do show similar levels and
trends.

Hours and Earnings
The workweek information relates to average hours
paid for, which differ from scheduled hours or hours
worked. Average weekly hours reflect the effects of
such factors as absenteeism, labor turnover, part time
work, and strikes.
The gross average hourly earnings series reflect ac­
tual earnings of workers, including premium pay. They
differ from W
cige rates, which are the amounts stipu­
lated for a given unit of work or time. Gross average
hourly earnings do not represent total labor costs per
hour for the employer, for they exclude retroactive
payments and irregular bonuses, various welfare be­
nefits, and the employer’s share of payroll taxes. Earn­
ings for those employees not covered under the pro­
duction worker and nonsupervisory-employee
categories are, of course, not reflected in the estimates.




The series on spendable weekly earnings measure the
net earnings of workers who earn the average gross
weekly earnings, have the specified number of depen­
dents, and take the standard deductions for Federal
income tax purposes. Spendable earnings reflect de­
ductions only for Federal income and social security
taxes (calculated on the basis of total annual liabilities),
and thus represent only a rough approximation of dis­
posable earnings.1 They do not take into account
4
payroll deductions for such purposes as State income
taxes, union dues, or group insurance, and they do not
reflect such factors as total family income or tax deduc­
tions above the standard amount.
The “ real” earnings data (those expressed in 1967
dollars), resulting from the adjustment of gross and
spendable average weekly earnings by means of the
Bureau’s Consumer Price Index, indicate the changes
in the purchasing power of money earnings as a result of
changes in prices for consumer goods and services.
These data cannot be used to measure changes in living
standards as a whole, which are affected by other fac­
tors such as total family income, the extension and
incidence of various social services and benefits, and
the duration and extent of employment and unemploy­
ment.
To approximate straight-time average hourly earn­
ings, gross average hourly earnings are adjusted by
eliminating only premium pay for overtime at the rate of
time and one-half. Thus, no adjustment is made for
other premium payment provisions such as holiday
work, late-shift work, and premium overtime rates
other than at time and one-half.
The ultimate goal of the program is to provide current
estimates of employment, hours, and earnings for all
nonagricultural industries in the Nation as a whole, and
also for all significant industries in all States and all
Standard Metropolitan Statistical Areas, as defined by
the Office of Management and Budget. While very sub­
stantial progress toward this objective has been made
o ver the years, and particularly since the end of World
War II, there remain some important areas where the
goal is yet to be realized. Efforts constantly are being
directed toward strengthening the sample so that series
for employment, hours, and earnings for additional in­
dustries may be published, and also toward developing
series for additional standard metropolitan areas.
1 For a complete analysis of the difference between spendable and
4
disposable earnings, see Paul Schwab, “ Two Measures of Purchasing
Power Contrasted,” M o n th ly L a b o r R e v ie w , April 1971.

EM P L O Y M E N T . H O U R S, A N D E A R N IN G S
BLS 790 C

37
Office of Management and
Budget No. 44-R745
Approval expires January 31, 1978

M A N U F A C T U R IN G

M O N T H L Y REPORT ON
EMPLOYMENT, PAYROLL, AND HOURS
U.S. DEPARTMENT OF LABOR
B U R E A U O F L A B O R STA TISTIC S
W A S H I N G T O N , D.C.

20212

(Change N a m e and Mailing Address If In correct

-include Z I P Code)

S ML C P
A P E OY
Retui*n promptly each month in the enclosed envelope which requires
no postage

EXPLANATIONS FOR ENTERING DATA ON REVERSE SIDE

Columns 2 and 3. PAY PERIOD DATES.—
Enter the beginning and
ending dates of your pay period which includes the 12th of the month.
Columns 4 and 5. PAY PERIOD-NUMBER OF DAYS.-Enter in
column 4 tor the entire pay period reported the number of days on which
the majority of production and related workers performed work plus the
number of holidays and vacation days during the period for which the majority
were paid. When the period is longer than a week, enter in column 5 the num­
ber of such reported days worked or paid for during the 7 consecutive day
period which includes the 12th of the month and falls entirely within the
period reported in columns 2 and 3.
Column 7. ALL EMPLOYEES-BOTH SEXES.-Enter the total num­
ber of persons on the payroll(s) covered by this report who worked full- or
part-time or received pay for any part of the period reported. Include salaried
officers of corporations and executives and their staffs, but e clu e proprie­
x d
tors, members of unincorporated firms, and unpaid family workers. Include
persons on vacations and sick leave for which they received pay directly from
your firm for the period reported but e d persons on leave without com­
xclu e
pany pay the entire period and pensioners and members of the Armed Forces
carried on the rolls but not working during the period reported.
Column 8. ALL EMPLOYEES-WOMEN ONLY.—
Report number of
women employees included in column 7.
Column 9. NUMBER OF PRODUCTION AND RELATED WORKERS.
Enter the number of production and related workers, both full- and part-time,
on your payroll(s), whether wage or salaried, who worked during or received
pay for any part of the pay period reported. Include persons on vacations or
on sick leave when paid directly by your firm.
The term "production and related workers" includes working supervisors
and all nonsupervisory workers (including group leaders and trainees) engaged
in fabricating, processing, assembling, inspection, receiving, storage, handling,
packing, warehousing, shipping, trucking, hauling, maintenance, repair, janitorial,
guard services, product development, auxiliary production for plant's own use
(e.g., power plant), and recordkeeping, and other services closely associated
with the above production operations.




The term "production and related workers" excludes employees en­
gaged in the following activities: Executive, purchasing, finance, accounting,
legal, personnel, cafeterias, medical, professional, and technical activities, sales,
sales-delivery (e.g., delivery and route workers), advertising, credit, collection,
and in installation and servicing of own products, routine office function,
factory supervision (above the working supervisors'level); and force account
construction employees on your payroll engaged in construction of major
additions or alterations to the plant who are utilized as a separate work force.
(Employees in the above activities should be excluded from column 9 but in­
cluded in column 7, All Employees.)
Column 10. PAYROLL.—
Enter amount of pay earned during the pay
period by the production and related workers reported in column 9. Payrolls
should be reported before deductions for old-age and unemployment insurance,
group insurance, withholding tax, bonds, and union dues. Include pay for over­
time and for holidays, vacations, and sick leave paid directly by your firm to
employees for the pay period reported.
Exclude bonuses (unless earned and paid regularly each pay period), or
other pay not earned in pay period reported (e.g., retroactive pay), and value
of free rent, fuel, meals, or other payment in kind.
Column 11. TOTAL HOURS.—
Enter the sum of (1) hours worked
(including overtime hours) during the pay period by the production and related
workers reported in column 9, (2) hours paid for stand-by or reporting time,
and (3) equivalent hours for which employees received pay directly from the
employer for holidays, vacations, sick leave, or other leave paid to these
workers. Do not convert overtime or other premium paid hours to straighttime equivalent hours.
Column 11Y. OVERTIME HOURS.-Enter the number of hours in­
cluded in column 11, for which premiums were paid because the hours were in
excess of the number of hours of either the straight-time workday or workweek,
Include Saturday and Sunday hours (or 6th and 7th day hours) only if over­
time premiums were paid. Holiday hours worked by employees should be in­
cluded only if payment for these hours is at more than the straight-time rate.
Exclude hours for which only shift differential, hazard, incentive, or other
similar types of premiums were paid. If none, enter "0" in column 11Y.

u>
00

BLS Codes
S ta t e

R ep o rt N o .

Form BLS 7 9 0 C

In d .

LOCATION OF ESTABLISHMENT(S) COVERED IN THIS REPORT
( N u m b e r o f e s t a b lis h m e n t s )

( C it y )

(C o u n ty )

(S ta te )

The Bureau of Labor Statistics and the State agencies cooperating in its
statistical programs will hold all information furnished by the respondent
in strict confidence.
Before entering data see explanations on other side
PAY PERIOD

F ro m —

Throu gh

(B o th d a te s in c lu s iv e )

(1)

(2 )

(3)

E n te r th e n u m b er o f
d a y s w o r k e d p lu s
p a id h o l i d a y s a n d
p a id v a c a t io n d a y s
f o r m a jo r it y o f
p r o d u c t io n w o rk e rs .
( N e a r e s t V2 d a y )

D u r in g
th e
e n t ir e
pay
p e r io d
(4 )

D u r in g
th e
7-conse
cutiveday
p e r io d
w h ic h
in c lu d e s
th e 1 2 th
(5)

DO
NOT
USE
L /P
(6 )

NUM BER
I n c lu d e a ll p e r s o n s w h o
w o r k e d d u r in g o r r e c e iv e d
p a y f o r a n y p a r t o f p e rio d
r e g a r d le s s o f t y p e o f w o r k
p e rfo rm e d .

E n t e r in c o l u m n s 9 , 1 0 , a n d 1 1 t h e n u m b e r o f p r o d u c t i o n a n d r e la te d
w o r k e r s w h o w o r k e d d u r in g o r re c e iv e d p a y f o r a n y p a r t o f t h e
p e r io d r e p o r t e d , t h e p a y e a r n e d ( b e f o r e d e d u c t io n s ) , a n d a ll h o u r s
w o r k e d o r p a id f o r . I n c lu d e p a y a n d h o u r s f o r o v e r t im e , s ic k le a v e ,
h o li d a y s , a n d v a c a t io n s .
E n t e r in c o l u m n 1 1 Y t h e t o t a l n u m b e r o f h o u r s f o r w h i c h o v e r t im e
p r e m iu m s w e r e p a id .
O v e r tim e

W om en
o n ly

N um ber of
p r o d u c tio n
w o rk e rs

(7 )

(8 )

(9 )

19 7 5
D ec.

T o t a l p ro d u c t io n
w o rk e r ho urs
in c lu d i n g o v e r ­
t im e h o u r s

p r o d u c t io n w o rk er h o urs
in c lu d e d in
c o lu m n 1 1

(O m it c e n ts )

B o th sex es

T o t a l p r o d u c tio n
w o r k e r p a y r o ll
in c lu d i n g o v e r ­
t im e p a y

(O m it fr a c tio n s )

(O m it
fr a c tio n s )

(10 )

(ID

(11Y )

E n t e r in c o l u m n 1 3 t h e m a in f a c t o r s r e s p o n s ib le fo r
s ig n if ic a n t m o n t h -t o -m o n t h c h a n g e s in e m p l o y m e n t ,
a v e ra g e h o u r s w o r.k e d ( c o l . 1 1 “ c o l . 9 ) , a v e r a g e h o u r ly
e a r n in g s ( c o l . 1 0 “ c o l . 1 1 ) , e t c ., as in d ic a t e d b y t h is
r e p o r t . E x a m p le s a r e :
M o r e b u s in e s s
T e m p o r a r y s u m m e r h e lp
W a g e r a te in c r e a s e
L a y o ff fo r r e to o lin g

DO
NOT
USE
E x p l.
Code
(12 )

If a n y g e n e r a l w a g e -r a t e c h a n g e s ( n o t in d iv id u a l
c h a n g e s f o r le n g t h o f s e r v ic e , m e r it , o r p r o m o t io n )
h a v e o c c u r r e d s in c e la s t m o n t h ’s r e p o r t , n o t e th e
a m o u n t o f in c r e a s e o r d e c r e a s e (a s + 2 % , — 5 g ) , th e
e f f e c t iv e d a t e o f t h e c h a n g e , a n d t h e a p p r o x im a t e
n u m b e r o f p r o d u c t io n w o rk e rs a f f e c t e d .
(13 )

$ ____________________

19 7 6
Jan .
Feb.
M ar.
A p r.
M ay
Ju n e
J u ly
Aug.
S e p t.
O ct.
N ov.
D ec.

(Person to be addressed if questions arise regarding this report)




(Position)

O v e r tim e
S tr ik e
F ir e
W e a th e r

(Telephone No.)

B L S H A N D B O O K O F M ETH O D S

YEA R
AND
M O NTH

E n t e r b e g in n in g
a n d e n d in g d a t e s
o f p a y p e r io d
w h i c h in c lu d e s
th e 1 2 t h of th e
m o n th .

YOUR COMMENTS

PRODUCTION AND RELATED WORKERS

ALL EMPLOYEES

EM PLO YM ENT, HOURS, AN D EARNINGS
BLS 790 E

M O N TH LY REPO RT ON
EM PLOYM ENT, P A Y R O L L, AN D HOURS

TRADE

39
Office of Management and
Budget No. 44-R745
Approval expires January 31, 1978

U.S. DEPARTMENT OF LABOR
B U R E A U O F L A B O R S T A T IS T IC S
W A S H IN G T O N , D .C . 2 0 2 1 2

( C h a n g e N a m e a n d M a ilin g A d d r e s s If I n c o r r e c t —I n c lu d e Z I P C o d e )

r~

n

S ML C P
A P E OY
Return promptly each month in the enclosed envelope which
requires no postage

L_

EXPLANATIONS FOR ENTERING DATA ON REVERSE SIDE

Columns 2 and 3. P A Y PERIOD D A T E S .—Enter the beginning
and ending dates of your pay period which includes the 12th of the
month.
Columns 4 and 5. P A Y P E R I O D -N U M B E R O F D A Y S .-E n te r
in column 4 for the entire pay period reported the number of days
on which the majority of nonsupervisory employees performed work
plus the number of holidays and vacation days during the period
for which the majority were paid. When the period is longer than a
week, enter in column 5 the number of such reported days worked
or paid for during the 7 consecutive day period which includes the
12th of the month and falls entirely within the period reported in
columns 2 and 3.
Column 7. A L L E M P L O Y E E S - B O T H S E X E S .-E n te r the
total number of persons on the payroll(s) covered by this report
who worked full- or part-time or received pay for any part of the
period reported. Include salaried officers of corporations and exec­
utives and their staffs, but ex clu d e proprietors, members of unin­
corporated firms, and unpaid family workers. Include persons on
vacations and sick leave for which they received pay directly from
your firm for the period reported but ex c lu d e persons on leave
without company pay the entire period and pensioners and members
of the Armed Forces carried bn the rolls but not working during the
period reported.
Column 8. A L L E M P L O Y E E S - W O M E N O N L Y .—Report
number of women employees included in column 7.
Column 9. N U M B E R O F N O N S U P E R V IS O R Y E M P L O Y ­
E E S .—Enter the number of nonsupervisory employees, both fulland part-time, on your payroll(s), whether wage or salaried, who
worked during or received pay for any part of the pay period re­
ported. Include persons on vacations or on sick leave when paid
directly by your firm.
The term "nonsupervisory employees" includes employees
such as salespersons, shipping and receiving clerks, stock clerks,
general office clerks, office-machine operators, cashiers, waiters,
waitresses, bartenders, kitchen help, dining room attendants, enter­
tainers, parking lot attendants, drivers, installation and repairers,
elevator operators, janitors and guards, and other employees below
the supervisory level, whose services are closely associated with those
of employees listed above. Included in the nonsupervisory category
are employees who may be "in charge" of a group of employees but




whose supervisory functions are only incidental to their regular
work.
The term "nonsupervisory employees" excludes officers of
corporations, principal executives such as buyers, department heads,
managers and others who are primarily engaged in planning and
directing the work of subordinates. (Employees listed above should
be excluded from column 9 but included in column 7, All Employees.)

Column 10. P A Y R O L L .—Enter amount of pay earned during
the pay period by the nonsupervisory employees reported in column
9. Payrolls should be reported before deductions for old-age and
unemployment insurance, group insurance, withholding tax, bonds,
and union dues. Include pay for overtime and for holidays, vacations,
and sick leave paid directly by your firm to employees for the pay
period reported.

E x c lu d e commissions reported in column 10A. Exclude bonuses
(unless earned and paid regularly each pay period) or other pay not
earned in pay period reported (e.g., retroactive pay). Exclude tips
contributed by the customer, value of free meals, rent, fuel, or other
payment in kind, or traveling or other expenses of salesmen.

Columns 10A, 10B, and 10C. COMMISSIONS O F N O N S U P ER ­
V IS O R Y E M P L O Y E E S .—Enter commissions (not drawing accounts
or basic guarantees) paid to nonsupervisory employees reported in
column 9. If commissions are paid monthly or for* a shorter period,
enter in column 10A, the amount of commissions earned during a
period as close to the pay period reported as possible, and in columns
10B and 10C, the beginning and ending dates of the period during
which the commissions were earned. If commissions are paid at
longer intervals, enter the total commissions paid since the last
report and the beginning and ending dates of the period during
which they were earned.

Column 11. H O U R S .—Enter the sum of (1) hours worked
(including overtime hours) during the pay period by the nonsuper­
visory employees reported in column 9, (2) hours paid for stand­
by or reporting time, and (3) equivalent hours for which employees
received pay directly from the employer for holidays, vacations,
sick leave, or other leave paid to these workers. Do not convert
overtime hours or other premium paid hours to straight-time equiv­
alent hours.

BLS Codes
S ta te

R e p o rt N o .

O

Form BLS 7 9 0 E
B e f o r e e n t e r in g d a t a see e x p la n a t i o n s
o n o t h e r s id e

In d .

L O C A T I O N O F E S T A B L IS H M E N T ( S ) C O V E R E D IN T H IS R E P O R T
( N u m b e r o f e s t a b lis h m e n t s )

( C it y )

(C o u n ty )

(S ta te )
T h e B u r e a u o f L a b o r S t a t i s t ic s a n d t h e S t a t e a g e n c ie s c o o p e r a t in g in
its s t a t is t ic a l p r o g r a m s w ill h o ld a ll in f o r m a t io n f u r n is h e d b y t h e
r e s p o n d e n t in s t r ic t c o n f id e n c e .

P A Y P E R IO D

Year
and
m o n th

E n t e r b e g in n in g
a n d e n d in g
d a te s o f p a y
p e r io d w h i c h
in c lu d e s t h e
1 2 t h o f th e
m o n th
F r o m — ^ T h ro u g h

(1)

(2 )

(3)

D u r in g t h e
7 co n secu­
D u r in g
t iv e d a y
t h e e n t ir e
p e r io d
pay
w h ic h in ­
p e r io d
c lu d e s t h e
12 th
(5)
(4 )

NUM BER
DO
NOT
USE

I n c lu d e a ll p e r s o n s w h o
w o r k e d d u r in g o r re c e iv e d
p a y f o r a n y p a r t o f p e rio d
r e g a r d le s s o f t y p e o f w o rk
p e rfo rm e d

B o th sexes

L /P

W o m e n o n ly

E n t e r in th e s e c o l u m n s t h e n u m b e r o f n o n s u p e r ­
v is o r y e m p lo y e e s w h o w o r k e d d u r in g o r r e c e iv e d
p a y f o r a n y p a r t o f t h e p e r io d r e p o r t e d , t h e p a y
e a r n e d ( b e f o r e d e d u c t io n s b u t e x c lu d i n g c o m ­
m is s io n s ) , a n d a ll h o u r s w o r k e d o r p a id f o r . I n ­
c lu d e p a y a n d h o u r s f o r o v e r t im e , s ic k le a v e ,
h o li d a y s , a n d v a c a t io n s
N u m b e r of
n o n su p e r­
v is o r y
e m p lo y e e s

N o n s u p e r v is o r y e m p lo y e e p a y r o ll
( e x c lu d in g c o m ­
m is s io n s re p o r t e d
in c o l . 1 0 A )

T o ta l n o n su p erv is o r y -e m p lo y e e
ho urs

C o m m i s s io n s o f n o n s u p e r v is o r y
e m p lo y e e s

A m o u n t of
c o m m is s io n s
(O m it c e n ts)

(O m it fr a c tio n s )

P e r io d in w h ic h
earne d

(8 )

(10 )

(9 )

19 7 5
D ec.

$

H.

E x p l.
code

( 10 x )

( llx )

(12 )

(B o th d a te s
in c lu s liv e )

(10 C )

(10 B )

(10 A )

(ID

P .R .

F r o m — !T h r o u g h

(O m it c e n ts )

(7)

(6 )

DO N O T USE

$

19 7 6
Jan .
Feb.
M a r.
A p r.
M ay
Ju n e
J u ly
—

—

—

—

—

—

Aug.
S e p t.
O ct.
—
N ov.

-------- ------------------------------------ —

—

—

—

D ec.
.

Y O U R C O M M E N T S O N C H A N G E S IN E M P L O Y M E N T , P A Y R O L L , O R W A G E R A T E S

E n t e r in c o l u m n 1 3 t h e m a in f a c t o r s r e s p o n s ib le f o r s ig n if ic a n t m o n t h -t o -m o n t h c h a n g e s in t h e r e p o r t a b o v e . E x a m p le s a r e :

W a g e r a te in c r e a s e , m o r e b u s in e s s , fir e , te m p o r a r y s u m m e r h e lp , o v e r ti m e , s tr ik e ,

w e a th e r .

I f a n y G E N E R A L W A G E - R A T E C H A N G E S ( n o t in d iv id u a l c h a n g e s fo r le n g th o f s e r v ic e m e r it , o r p r o m o t i o n ) h a v e o c c u r r e d s in c e la s t m o n t h 's r e p o r t , n o t e t h e a m o u n t o f in c r e a s e o r d e c r e a s e (a s + 2 % , —5 £ ) , th e
t h e e f f e c t iv e d a t e o f t h e c h a n g e , a n d t h e a p p r o x im a t e n u m b e r o f n o n s u p e r v is o r y e m p lo y e e s a f f e c t e d .
(13 )

(13 )

19 7 6
Jan

19 76

Feb.

Ju n e

M a r.

Jul

(13)

M av

A p r.

(Person to be addressed



19 7 6

O ct.
N ov.

V

Aug.

if questions arise regarding this report)

S e D t.

D ec.

(Position)

(Telephone No.)

BLS H ANDBO O K OF METHODS

(B o th d a te s
in c lu s iv e )

N O N S U P E R V IS O R Y E M P L O Y E E S

A L L EM PLO YEES

E n te r th e n u m b e r of
d a y s w o r k e d p lu s
p a id h o l i d a y s a n d
p a id v a c a t io n d a y s
f o r m a jo r it y o f n o n ­
s u p e r v is o r y e m p l o y ­
e e s. ( N e a r e s t Va d a y )

E M P L O Y M E N T , H O U R S , A N D E A R N IN G S
BLS 790 Industry Class Supplement

41
O ffic e of M a n a g e m e n t and
Budget No. 44-R745

M A N U F A C T U R IN G

U .S. D E P A R T M E N T

OF

R e t u r n th is f o r m

L A B O R

B U R E A U O F LA B O R STA TISTIC S
W A S H I N G T O N , D .C.

A p p r o v a l e x p ires Ja n u a r y 3 1 , 19 7 8

S T A T E M E N T OF PRODUCTS

as s o o n a s p o s s i b l e in t h e

en closed e n v e lo p e w h ich

req u ires n o p o s ta g e .

20212

S ML C P
A P E OY
T h e B u re a u o f L a b o r S tatistics an d
in its s t a t is t ic a l

the S ta te a gen cies c o o p e r a tin g

p r o g r a m s w i l l h o l d all i n f o r m a t i o n f u r n i s h e d b y

t h e r e s p o n d e n t in s t r i c t c o n f i d e n c e .

L O C A T IO N
(C ity)

(C ou n ty)

BLS CODES

Ul
P roposed S IC

State

R eport N o.

1967 SIC

E m p l.

Codes

ID E N T IF IC A T IO N

Su pp l. C od es

Yr.

M o.

Account No.
1967 SIC

1972 SIC

T h is r e p o r t w ill b e u sed t o in s u re t h e p r o p e r in d u strial c la s s ific a t io n o f y o u r reg u la r M O N T H L Y

(S tate)

Aux.

R E PO R T

1967 S IC

1972 SIC

Own

O N

E M PL O Y M E N T , P A Y R O L L , A N D

H O U R S

and sh o u ld c o v e r th e e n tire a c tiv ity o f th e sa m e esta b lish m en t.

C la s s if ic a t io n w i l l b e b y in d u s t r y o n t h e basis o f t h e p r in c ip a l p r o d u c t o r a c t i v i t y o f y o u r e s t a b l i s h m e n t d u r i n g th e c a le n d a r y e a r 1 9 7 5 . D e s c r i b e y o u r p r o c e s s e s
or goods produced

i n y o u r o w n w o r d s , m a k i n g t h e d i s t i n c t i o n s r e q u e s t e d o n t h e l i s t o f s p e c i a l c h a r a c t e r i s t i c s p r o v i d e d o n t h e e n c l o s e d s h e e t . T h i s l i s t is n o t c o m ­

p le te b u t rep resen ts th e k in d o f in fo r m a t io n w h ic h sh o u ld b e rep o rte d .

PRINCIPAL PRODUCTS OR ACTIVITIES DURING
1975
(List items separately)
(a)
1A. Manufacturing (Specify below)

Percent of
total sales
value or
receipts
during 1975
(b)

PRINCIPAL MATERIALS USED
(For each product listed in column (a))
(c)

W material
as
used produced
in this
establish­
ment?
(d)
No
Yes

%
%
%
%
%
1B. Nonmanufacturing (Specify below)

4.

%
%
%
C o m b in e d T o t a l
100%
2. Type of ownership (check one)
□ Private
D Government
□ Corporate
□ Federal
□ Non-corporate
□ State
□ Local
3. Is this establishment part of a multiunit company? (To be completed only
by reporters in the private sector.)
□ Yes
□ No
If "Yes,” enter name and location of controlling company?

(P e rs o n to b e addressed




i f q u e s t i o n s aris e r e g a r d i n g t h i s r e p o r t )

Is the establishment primarily engaged in performing services for other
units of the company?
□ Yes
□ No
If "Yes," indicate nature of activity of this establishment:
1. □ Central administrative office
2. □ Research, development, or testing
3. D Storage (warehouse)
4. □
Other (Specify , powerplant, etc.)

5. Union Status: Are the majority of production workers in this establish­
ment covered by collective-bargaining agreements? D Yes 1
D No 2
6. Space for your comments.

(P ositio n )

(T elep h on e N o .)

42

BLS H ANDBOOK OF METHODS

Technical R eferences
N um ber

N um ber
1.

A rm k n e c h t,

Paul A .

J r .,

“ The

S p e n d a b le E a r n in g s S e r ie s ,”

C a lc u la t io n

and

U ses

o f th e

M o n th ly L a b o r R e v ie w ,

1962, p p .

A p ril

A

1966, p p . 4 0 5 -4 0 9 .
2.

B L S e m p lo y m e n t b e n c h m a r k s .

E a r l y , J o h n F . , “ F a c t o r s A f f e c t i n g T r e n d s in R e a l S p e n d a b l e

M o n th ly L a b o r R e v ie w ,

E a r n in g s ,”
3.

E a r ly ,

4.

G o in g s ,

John

F .,

“ In tr o d u c t io n

E m p lo y m e n t a n d E a r n in g s ,
G lo r ia ,

“ B L S

M ay

of

9.

1 97 3, p p . 1 6 - 1 9 .

D iffu s io n

M a r c h 197 4 B e n c h m a r k L e v e l s , ”

E s tim a te s

R e v is e d

The

E ffe c t

of

b le e a rn in g s a n d re a l p e r c a p ita d is p o s a b le in c o m e .

E m p lo y m e n t a n d E a r n in g s ,

10.

N o te

th e

Tax

R e d u c tio n

Act

of

A

11.

J u n e 1975, p p . 9 - 1 5 .

M o n th ly L a b o r R e v ie w ,

d e s c r ip tio n

o f th e

on

its C a l c u l a t i o n , ”

E m p lo y m e n t a n d E a r n in g s

use

A

E a r n in g s S e rie s a s A p p lie d to P ric e

M o n th ly L a b o r R e v ie w ,

d is c u s s io n o f th e u s e o f B L S

12.

W y m e r , J o h n P ., “ T h e R e v is e d a n d E x p a n d e d P r o g r a m o f C u r ­
r e n t P a y r o ll E m p lo y m e n t S t a t is t ic s ,”

ro rs.

in g s ,

P r e s id e n t ’ s C o m m it t e e
p lo y m e n t

S t a t is t ic s ,

p lo y m e n t,

to A p p r a is e

used

E m p lo y m e n t a n d E a r n ­

N o v e m b e r 1 96 1, p p . i v - v i i .
d e s c r ip t io n o f the im p a c t o f a m a jo r b e n c h m a r k a d ju s t ­

m e n t a n d o f i m p o r t a n t t e c h n ic a l i n n o v a t i o n s o n t h e i n d u s t r y

196 2.

e m p l o y m e n t s t a t i s t ic s s e r i e s .

by

v a rio u s

F ed e ra l

G o v e rn m e n t

program s

p r o v i d i n g s t a t i s t ic s o n e m p l o y m e n t , u n e m p l o y m e n t , a n d t h e
l a b o r f o r c e in t h e U n i t e d S t a t e s .
8.

A

E m p lo y m e n t a n d U n e m ­

M e a s u r in g E m p lo y m e n t a n d U n e m ­

A c o m p r e h e n s i v e r e v i e w a n d c rit iq u e o f th e m e t h o d s a n d
c o n c ep ts

J u ly 195 2, p p . 5 7 - 5 9 .

a v e r a g e h o u r ly e a rn in g s

p a r tic u la r r e fe r e n c e to s c r e e n in g e m p lo y e r s ’ re p o rts f o r e r ­

7.

and

1969, p p .

s e r i e s in e s c a l a t i o n c l a u s e s in c o n t r a c t s .

d a t a -p r o c e s s in g

e q u i p m e n t in t h e p r e p a r a t i o n o f e m p l o y m e n t s t a t i s t ic s , w i t h

W e in b e r g , E d g a r, “ B L S
E s c a la t io n ,”

M a y 1 95 5, p p . 5 6 7 - 5 6 9 .

o f e le c t r o n ic

F eb ru ary

11- 2 1 .

1 9 7 5 ,”

M e n d e l s s o h n , R u d o l p h C . , “ M a c h i n e M e t h o d s in E m p l o y m e n t
S ta t is t ic s ,”

U t t e r , C a r o l M . , “ T h e S p e n d a b le E a r n in g s S e r ie s : A T e c h n ic a l

M o n th ly R e p o r t o n th e L a b o r F o r c e ,

E m p lo y m e n t a n d E a r n in g s ,
6.

A p r i l 197 1, p p . 3 - 1 4 .

to

G r i m e s , J a n e t , “ C h a n g e s in t h e S p e n d a b l e E a r n i n g s S e r i e s f o r
1975:

M o n th ly L a b o r R e v ie w ,

A n e x a m i n a t i o n o f t h e d i v e r g e n t t r e n d s in r e a l n e t s p e n d a ­

D e c e m b e r 1 97 4, p p . 7 - 1 1 .

E s t a b lis h m e n t

S c h w a b , P a u l M . , “ T w o M e a s u r e s o f P u r c h a s in g P o w e r C o n ­
t r a s t e d ,”

In d e x e s ,”

O c t o b e r 1975, p p . 8 - 1 3 .
5.

1 3 8 5 -1 3 9 2 .

d e t a ile d d e s c r ip t io n o f th e s o u r c e s a n d c o n s t r u c t io n o f




M o n th ly L a b o r R e v ie w ,

Y o u n g , D u d le y E . a n d S id n e y G o ld s t e in , “ T h e B L S
m ent

D ecem ber

S e rie s

and

M a n u fa c t u r in g

M o n th ly L a b o r R e v ie w ,
A

S c h e c h t e r , S a m u e l , “ T h e 1 95 9 B e n c h m a r k s f o r t h e B L S P a y r o l l
E m p lo y m e n t S t a t is t ic s ,”

13.

R e p o rtin g

N o v e m b e r 1957, p p .

E m p lo y ­

P ra c tic e s ,”
1 3 6 7 -7 1 .

d i s c u s s i o n o f t h e f i n d i n g s in a s u r v e y a n a l y z i n g t h e r e ­

s p o n s e p a t te r n s o f m a n u fa c t u r in g e s t a b lis h m e n t s c o o p e r a t in g
in t h e i n d u s t r y e m p l o y m e n t s t a t i s t ic s p r o g r a m .

Chapter 4 .

Labor Turnover
D escription of the S urvey

B ackground
L a b o r tu rnover, as used by the Bureau o f L a b o r

L a b o r turnover actions are divided into tw o broad

Statistics, refers to the gross m ovem en t o f w age and

groups: accessions or additions to em ploym ent, and

salary w orkers into and out o f em ploym en t status with

separations or term inations o f em ploym ent. Th ese tw o
broad groups are further divid ed; accessions into new

respect to individual establishments during the month.
T h e labor tu rnover program has been in existence fo r
many years. In January 1926, the M etropolitan L ife
Insurance C o. began the co llection o f labor turnover
data fro m a sm all sam ple o f manufacturing estab­
lishments. B y Febru ary 1927, the sample included 175
establishments with 800,000 em p loyees, which w as es­
timated to be about 8 to 10 percent o f total manufactur­
ing em ploym en t at the tim e. T h e original purpose o f this
series was to provid e personnel managers with national
figures on labor tu rnover rates fo r manufacturing indus­
tries against which they could measure the experience
o f their ow n plants. B etw een N o v e m b e r 1927 and July
1929, the M etrop olita n L ife Insurance C o. published
labor tu rn over rates fo r total manufacturing. B y the
latter date, the com pany felt the project was sufficiently
successful and w ell established to warrant turning it
o v e r to the Bureau o f L a b o r Statistics fo r further de­
velopm ent. A decade later, in D ecem b er 1939, series on

hires, recalls, and other accessions, and separations
into quits, discharges, la yoffs, and other separations.
L a b o r tu rnover is expressed in the B L S series as a
m onthly rate per 100 em ployees. Separate rates are
com puted fo r each o f the com ponent items.
Th e prim ary differen ce betw een types o f separations
is w hether action is initiated by the em ployee or em ­
p lo yer, i.e., w hether it is voluntary on the e m p lo y ee’ s
part or involuntary. V olu n tary a c tio n s - q u its - a r e in­
itiated by the em p loyee fo r an almost unlimited variety
o f reasons, financial, personal, or social, (e.g ., lack o f
housing and transportation, p o or com m unity facilities,
etc.). In volu ntary actions either may be initiated by the
em p loyer or be beyond the control o f both em ployer
and em p loy ee; these actions m ay arise from econom ic
causes such as business co n d itio n s, p h y sio lo g ica l
reasons such as aging, or perform ance reasons such as
incom petence.

labor tu rn over rates w ere being published fo r 30 man­
ufacturing industries, and the sample upon w hich the
rates fo r all manufacturing w ere based contained 5,500
establishm ents and nearly 2,600,000 em ployees.
F o r a number o f years, State em ploym ent security
agencies affiliated w ith the E m ploym en t and Training
Adm inistration had co llected labor tu rnover inform a­
tion fo r use in jo b m arket analysis and as a guide fo r the
operations o f the State em ploym en t services. C o o p era ­
tive arrangem ents b etw een these agencies and the
Bureau o f L a b o r Statistics fo r the jo in t collection o f
labor tu rnover data began with an agreem ent with C on ­
necticut in 1954. B y 1964, the coop era tive program had
been extended to c o v e r all 50 States and the D istrict o f

sons w ho have quit or been taken o ff the rolls fo r
reasons such as la y o ff, discharge, retirem ent, death,
m ilitary service exp ected to last m ore than 30 consecu­
tiv e calen dar days, p h ysical d isa b ility , etc Since
J a n u a ry 1959, tra n s fe r s o f e m p lo y e e s to o th e r
establishments o f the same com pany also have been
classified as separations.
Quits are term inations o f em ploym ent initiated by
em ployees fo r any reason excep t retirem ent, transfer to
another establishment o f the same firm , or service in the

Concepts
Separations are term inations o f em ploym ent o f per­

Colum bia. B y 1975, h o w eve r, three States — C a lifo r­

A rm ed F orces. Included as quits are persons w ho failed

nia, N e w M e x ic o , and W est V irgin ia — w ere no longer

to report after being hired ( if p reviou sly counted as

participating in the cooperative program, and labor turn­

accessions), and unauthorized absences which, on the
last day o f the month, have lasted m ore than 7 consecu­
tive calendar days.

o v e r inform ation fo r sample establishments in these
three States was being co llected by the B L S .
In June 1975, these agencies published about 8,700

L ayoffs are suspensions from pay status (lasting or

labor tu rnover series in manufacturing and mining in­

ex p ected to last m ore than 7 consecu tive calendar

dustries fo r States and areas. Th ese rates w ere based on
a sample o f approxim ately 37,000 reports in manufac­

days), initiated b y the em p loyer without prejudice to
the w ork er, fo r reasons such as lack o f orders, model

turing and about 800 in mining.

ch a n ge-over, term ination o f seasonal or tem porary




43

44

BLS H A N D B O O K O F M E T H O D S

em ploym ent, inventory-taking, introduction o f labor
sa vin g d e v ic e s , plant b rea k d o w n , or sh ortage o f
materials.
»
D ischarges are terminations o f em ploym ent initiated
by the em p loyer fo r such reasons as incom petence,
violation o f rules, dishonesty, laziness, absenteeism ,
insubordination, failure to pass probationary period,
etc.

O ther separations include terminations o f em p loy­
ment fo r m ilitary duty lasting or expected to last more
than 30 days, retirem ent, death, permanent disability,
failure to m eet the physical standards required, and
transfers o f em p loyees to another establishment o f the
com pany.

A c c e ssio n s are all permanent and tem porary a d d i­
tions to the em ploym ent roll, whether o f new or rehired
em p loyees. Transfers from another establishment o f
the same com pany also are counted as accessions (b e ­

sample o f establishments drawn from a list o f those
subject to State unem ploym ent insurance programs.
(S ee chapter 3 p. 26 o f this bulletin.) Th e respondent
extracts the figures largely from his personnel records,
though some smaller establishments w hich do not main­
tain special personnel records use their payroll records
in making out the reports. R esponse analysis surveys,
which analyzed the reporting practices o f a scientifi­
cally selected sample o f the establishments in the labor
turnover panel, show ed that w hile som e em ployers did
not report the figures fo r all items precisely as requested
on the schedule, the e ffect o f these deviations on the
published data appeared to be quite insignificant, par­
ticularly fo r the broader classes, such as total acces­
sions and total separations.

C ollection M ethods

ginning with January 1959).

N e w hires are perm anent and tem porary additions to
the em ploym en t roll o f persons w ho have n ever before
been em p loyed by the establishment, and form er em ­

L a b o r tu rnover data are collected prim arily at the
State le v e l by em p loym en t security agencies fro m
cooperating em ployers via the medium o f a mailed

ployees rehired although not specifically recalled by the
em p loyer. This category excludes transfers from other

“ shuttle” schedule, U .S . D epartm ent o f L a b o r form
1219. (S e e .pp. 45 and 46 fo r a fa c s im ile o f this

establishments o f the same com pany and em ployees
returning from military service or unpaid leaves o f

schedule.) T h e same form is returned to the respondent
each month o f the year fo r the entry o f current data. Th e

absence.

R ecalls are permanent or tem porary additions to the

respondent reports the number o f actions fo r each turn­
o v e r ite m d u rin g th e c a le n d a r m o n th and to ta l

em ploym en t roll o f persons specifically recalled to a jo b
in the same establishment o f the com pany fo llow in g a
period o f la y o ff lasting m ore than 7 consecu tive days
(beginning with 1976).
O t h e r a c c e s s i o n s in clu d e all a d d itio n s to the

em ploym ent. T h ese em ploym en t figures, w hich are the
bases used to com pute the rates, represent the number
o f persons w ho w orked o r received pay fo r any part o f
the pay period (usually 1 w e e k ) which includes the 12th
o f the month.

em ploym en t roll other than new hires and recalls.

T h e State agency uses the inform ation p rovid ed on
the schedule to d ev elo p labor turnover rates fo r the
States and fo r m etropolitan areas, and forw ards the
data to W ashington, w here they are used by the Bureau
o f L a b o r Statistics to prepare rates at the national level.

Industry Classification
Th e classification system used fo r com piling and pub­
lishing rates is that described in the 1967 S tan dard
Industrial Classification M anual issued by the O ffic e o f
M anagem ent and Budget. (S ee appendix B o f this bulle­
tin fo r a detailed description o f this system .)
R ep ortin g establishments are classified on the basis
o f m ajor product or activity as determ ined by annual
sales data fo r the p re v io u s c a len d a r y e a r. M o s t
establishments in the labor tu rnover sample also report
em ploym en t, hours, and earnings under the Bureau’ s
industry em ploym en t statistics program , and are as­
signed the same industry classification in both p ro ­
grams. Further discussion o f industry classification in
the tw o program s is given under the heading, Industrial
C lassification in chapter 3 o f this bulletin.

D ata S ources
Each month cooperating State em ploym en t security
agencies
 co llect data on labor tu rnover actions from a


S am pling
Sam pling is used by B L S fo r collectin g data in its
labor turnover statistics program , since full co vera g e
w ould be proh ib itively costly and time consuming. T h e
sampling plan fo r the program must: (a ) P rovid e the
preparation o f reliable monthly estimates o f labor turn­
o v e r rates which can be published prom ptly and regu­
larly; (b ) through a single general system , yield consid­
erable industry detail fo r m etropolitan areas, States,
and the N a tio n ; and (c ) be appropriate fo r the existing
fra m ew ork o f operatin g p rocedu res, adm inistrative
prac
s, resource availability, and other institutional
characteristics o f the program .
In d evelop in g the sample design, the universe o f
establishm ents w as stratified first b y industry and
w ithin each industry by size o f establishment in terms o f
em ploym ent. W ithin each industry, an optim um alloca-

LABOR TURNO VER

45
O.M.B. No. 44-RI004

D L 1219

Approval expires Jan. 31. 19 7N

State

Report No.

Ind.

M ONTHLY REPORT ON

U.S. DEPARTMENT OF LABOR
Bureau of Labor Statistics
and
The Manpower Administration
Washington, D.C. 20212

LABOR TURNO VER

Enter the data requested and return in the
enclosed envelope as soon as the informa­
tion is available each month.

__(Change name and mailing address if incorrect—
include ZIP code)

r

n

L

j

The Bureau of Labor Statistics, the Manpower Administration, and
the State agencies cooperating in their statistical programs will hold
ail information furnished by the respondent in strict confidence.

LOCATION
_ (fa ta ____

YEAR
AND
MONTH

YEAR

AND
M ONTH

I. LABOR TURNOVER DURING CALENDAR MONTH
ALL EMPLOYEES
SEPARATIONS (during calendar month)
ACCESSIONS (during calendar month)
Total separa­
Total acces­
New
Other
Other sions (sum of
Through tions (sum of
Recalls
Discharges Layoffs
Quits
hires
accessions
separations cols. 10 - 12)
cols. 5 thru 8)
(12)
(10)
(5)
(6)
(7)
(8)
(3)
(4)
(U )
(*)

PERIOD
COVERED
(Col. 4 through 12)
From-

(1)
1975
Dec.
1976
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.

(2)

(County)

(State)
II. EMPLOYMENT
(one pay period)
DO
TOTAL NUMBER NOT
who worked during USE
or received pay for
any part of the pay Expl.
period which in­
cludes the 12th of code
the month.
(14)
(13)

III. YOUR COMMENTS
Enter main factors responsible for any significant month-to-month changes in SECTIONS I and II. Examples are: more business, strike, fire, weather,
temporary summer help, seasonal increases, etc.

_______________________________________________________________________ LLD________________________________________________________________________________________

197 5

Dec.
1976

Jan,

Apr.
May

July
Aug.
Sept.
Oct..
Nov.
Dec.
Person to be addressed if questions arise regarding this report




Position

Telephone no.

46

B L S H A N D B O O K O F M ETH O D S

INSTRUCTIONS FOR COMPLETING THIS FORM
I.

LABO R TU R N O V ER

PERIOD COVERED -Information on labor turnover, columns 4 through
12, is requested for the most recent entire calendar month specified in
column 1, or, if this is not possible, for a period, which most closely covers
that calendar month. In either case, enter in column 2 and 3 the beginning
and ending dates for the monthly period for which turnover data are
reported.

SEPARATIONS (ALL EMPLOYEES)

Column 10 NEW HIRES -New hires are temporary and permanent
additions to the employment roll of (1) anyone who has never before
been employed in this establishment, or (2) former employees you did not
call back. Persons transferred from other establishments of the company
should be reported in “other accessions.”
Column 11 RECALLS -Recalls are permanent or temporary additions to
the employment roll of persons specifically recalled to a job in the same
establishment of the company following a period of layoff lasting more
than seven consecutive days. Employees called from a layoff in a different
establishment of the company are to be classified as a transfer and reported
in column 12 -OTHER ACCESSIONS.

Column 4 TOTAL SEPARATIONS -E nter the sum of columns 5 through
8.

Column 5 QUITS -A quit is a termination of employment initiated by
the employee for any reason except to retire, to transfer to another
establishment of the same firm, or for service in the Armed Forces. Include
a person who fails to report after being hired (if previously counted as an
accession) and an unauthorized absence if on the last day of the month the
person has been absent more than 7 consecutive calendar days.
Column 6 DISCHARGE -A discharge is a termination of employment
initiated by the employer for such reasons as incompetence, violation of
rules, dishonesty, laziness, absenteeism, insubordination, failure to pass
probationary period, etc. Inability to meet organization’s physical stan­
dards should be reported in other separations, column 8.
Column 7 LAYOFFS -A layoff is a suspension from pay status (lasting or
expected to last more than 7 consecutive calendar days without pay)
initiated by the employer without prejudice to the worker for such rea­
sons as: lack of orders, model changeover, termination of seasonal or tem­
porary employment, inventory-taking, introduction of labor saving devices,
plant breakdown, shortage of materials, etc.; include temporarily fur­
loughed employees and employees placed on unpaid vacations.
Column 8 OTHER SEPARATIONS -Include only terminations of em­
ployment for military duty lasting or expected to last more than 30 calen­
dar days, retirement, death, permanent disability, failure to meet required
physical standards, and transfers of employees to another establishment of
the company. NOTE: If you include any other types of separations in this
column, mention the number and type under Comments. Employees in­
volved in labor-management disputes should not be counted as separations.

Column 12 OTHER ACCESSIONS -Include all additions to the employ­
ment roll other than new hires and. recalls. This includes transfers from
other establishments of the company, and former employees returning
from military leave or other absences without pay who have been counted
as separations. Employees involved in labor-management disputes should
not be counted as accessions when they return to work.

II. EM PLOYMENT

PERIOD COVERED-Employment information, column 13 is requested
for one pay period (preferably one week) which includes the 12th of the
calendar month for which labor turnover data are reported.
Column 13 TOTAL NUMBER -E nter the total number of persons on the
payrolls of the establishment(s) covered in this report who worked full- or
part-time or received pay for any part of the pay period (preferably one
week).
Include salaried officers of corporations, executives and their staffs, and
employees engaged in force-account construction but exclude proprietors,
members of unincorporated firms, and unpaid family workers. Include
persons on vacations and sick leave if they received pay directly from
your firm for the pay period covered.
Exclude persons on leave without company pay the entire period and pen­
sioners and members of the Armed Forces carried on the rolls but not
working during the pay period covered.

ACCESSIONS (ALL EMPLOYEES)
Column 9 TOTAL ACCESSIONS -A n accession is any permanent or tem­
porary addition to the employment roll whether of new or former em­
ployees, or transfers from another establishment of the company. Enter in
column 9 the sum of columns 10 thru 12. Employees involved in labormanagement disputes should not be counted as accessions when they re­
turn to work.




III.

COM M ENTS

Column 15 YOUR COMMENTS -E nter the main factors responsible for
significant month-to-month changes in Labor Turnover (columns 4
through 12) and Employment (column 13).

LABOR TURNOVER
tion design was obtained by sampling with probability
proportionate to average size o f em ploym ent within
each o f the strata. Th e total size o f sample regarded as
n e c e s s a r y to p r o d u c e s a t is fa c t o r y e s tim a te s o f
em ploym ent was distributed am ong the size cells on the
basis o f average em ploym en t per establishment in each
cell. In practice, this is equivalent to distributing the
predeterm ined total number o f establishments required
in the sample am ong the cells on the basis o f the ratio o f
em ploym en t in each cell to total em ploym ent in the
industry. W ithin each stratum, the sample members are
selected at random.
U n d er this type o f design, large establishments fall
into the sample with certainty. Establishments with 250
or m ore em ployees are included in the sample with
certainty, although in som e cases the cu to ff is low er.
T h e sizes o f the samples fo r various industries w ere
determ ined em pirically on the basis o f experience.
Th e sample design, although aim ed prim arily at m eet­
ing the needs o f the national program , provides a tech­
nical fram ew ork within w hich State and area sample
designs can be determ ined. Since, h o w eve r, the rates
fo r States and areas are not generally prepared at the
same degree o f industry detail as the national rates, the
national design usually provid es sufficient reports fo r
the preparation o f State and area ra tes.1

E stim ating P ro ced u res
L a b o r tu rnover rates are estim ates o f ratios. F o r
individual industries, tu rn over rates are com puted by
divid in g the number o f tu rnover actions o f each type, as
reported by the sample establishments, by the total
num ber o f em p lo y ees rep orted by those establish­
ments. T h e result is multiplied by 100. In an industry
sam ple, fo r ex a m p le, 623 em p lo y ees quit b etw een
January 1 and 31, w h ile 30,062 em ployees w orked or
re ceived pay during the w eek o f January 11-17. Th e
January quit rate fo r the industry is:

T u rn o ver rates fo r industry groups are com puted by

47

Seasonally Adjusted Series
M any econ om ic statistics, including labor turnover
rates, reflect a regularly recurring seasonal m ovem ent
which can be measured on the basis o f past experience.
B y elim inating that part o f the change which can be
ascribed to usual seasonal variation, it is possible to
observe the cyclical and other nonseasonal m ovem ents
in these series. Seasonally adjusted labor tu rnover rates
are published at the all manufacturing industry level.
L a b o r turnover rates are seasonally adjusted by ap­
plying appropriate seasonal factors to the rate. Th ese
factors are derived by the Census X -l 1 method using the
trading day option. A s a result, these series are adjusted
fo r the number o f tim es each day o f the w eek occurs in a
given month, as w ell as fo r the month o f the year.

P resen tatio n
T h e B L S publishes, on a national basis, monthly
series o f labor tu rnover rates fo r selected industries.
Th ese series are currently published fo r the manufac­
turing division , the durable and nondurable goods sub­
divisions, 21 m ajor industry groups in manufacturing,
191 in d iv id u a l m a n u fa c tu rin g in d u s trie s , and 7
categories in mining and com m unications. Rates are
available fo r all manufacturing from January 1930 and
fo r telephone and telegraph from 1943. F o r industry
groups and individual industries in the manufacturing
and mining divisions, all series begin with January 1958.
Rates fo r certain highly seasonal industries, fo r exam ­
ple canning and preserving, are not now published
separately but are included in the com putation o f rates
fo r the m ajor m anufacturing groups. B efore 1958, these
industries and the printing, publishing and allied indus­
tries m ajor group w ere not included in the rates fo r all
m anufacturing. Th e rates fo r all m anufacturing fo r
years prior to 1958 w ere revised, h o w eve r, to reflect the
influence o f these industries.
M onth ly rates fo r total accessions, new hires, total
separations, quits, and la yo ffs are shown fo r manufac­
turing and mining industries. E xcept fo r the new hire
rates, the same items are published fo r the telephone
and telegraph industries.

w eigh ting the rates fo r the com ponent industries by the

Prelim in ary tu rnover rates fo r the 21 major industry

estim ates o f total em ploym en t, prepared b y the B L S

groups in manufacturing are published m onthly in a

industry em ploym en t statistics program . Th ese esti­
mates, w hich c o v e r the pay period including the 12th o f

B L S press release about a month after the reference
month, and in the M onthly L a b o r R e v ie w 3 months after

the month, are described in chapter 3 o f this bulletin.
Rates fo r “ all m anufacturing” and fo r the durable and

the referen ce month. Prelim inary turnover rates for

nondurable goods subdivisions o f manufacturing are

both detailed industries and broad categories are pub­
lished in E m p lo y m e n t a n d Earnings about 2 months

w eigh ted b y em ploym en t in the m ajor industry groups.

after the month o f reference.

^ o r the national sam p le, additional reports n eed ed for S tate and
area sam p les are added to th o se required by the national design .

selected States and m etropolitan areas are published
each month in E m p lo y m e n t a n d Earnings. M o re d e­

L a b o r tu rn o v e r rates fo r all m a n u fa ctu rin g fo r




48

BLS HANDBOOK O F M ETHODS

tailed inform ation is available in releases issued bv the
cooperating State agencies.
National labor turnover rates (m onthly data and an­
nual averages) back to the beginning o f each series are
published in the annua! volum e called Em ploym ent ami
Earnings, U nited S tates, N e w editions o f this volum e
are published annually, fo llo w in g each adjustment o f
the B ureau’ s industry em ploym en t statistics series to
new benchmark levels.

Uses and Lim itations
T h e tw o m ajor causes o f change in labor turnover
rates are industrial expansion and contraction. In pros­
perous times, quit rates and new hires are high because
o f jo b availability; in periods o f econom ic recession,
high la y o ff rates are coupled with lo w quit and acces­
sion rates. T u rn o ver rates are, therefore, regarded as
go o d eco n om ic indicators and are w id ely used by
econ om ic analysts in both governm en t and private in­
dustry.
L a b o r tu rnover rates by industry are also valuable fo r
personnel planning and analysis. E m ployers use these
rates as a yardstick against which to measure the per­
form ance o f their plants. F o r exam ple, they consider
lo w quit rates to be an indication o f efficien t operations
and g o o d labor-m anagem ent relations. A consideration
o f turnover is essential fo r scheduling production and
fo r planning the orderly recruitm ent and maintenance
o f an adequate m anpow er supply. L a b o r turnover rates
are also w id ely used by State em ploym ent services to




plan and appraise their operations.
The use o f turnover rates to interpret changes in the
B L S monthly em ploym ent series is limited fo r the fo l­
low ing reasons: (1) Th e labor tu rnover series measures
changes during the calendar month, w hile the em p lo y­
ment series measures changes from midmonth to m id­
month ; and (2) em ployees on strike are not counted as
tu rn over actions, although such em p loyees are e x ­
cluded from the em ploym en t estim ates if the w ork
stoppage lasts throughout the report period including
the 12th o f the month.
Th e Bureau publishes annual averages o f labor turn­
o v e r rates, w hich are com pu ted as the arithm etic
means o f the 12 m onthly rates. Th ese can p rovid e a
useful measure if a 1-month rate is not suitable fo r some
purposes, as fo r exam ple when the rate fo r a specific
month is considered to be unusual or a ffected strongly
by seasonal in flu ences.2

2
B ecau se they are liable to m isinterp retation , the Bureau d o e s not
prepare cum ulative annual rates o f labor turnover. F or ex a m p le, an
annual quit rate could be obtained by d ividing the total num ber o f
quits during the year by average em p loym en t during the year. A n
approxim ation o f this figure can be obtained b y cum ulating the 12
m onthly rates. Su p p ose the annual rate thus obtained am ounted to 50
per 100 em p lo y ee s. T his m ight seem to im ply that 50 percent o f all
em p lo y ees in January voluntarily left their jo b s by the end o f D e ­
cem b er. H o w e v er , m any jo b s in a given estab lish m en t are vacated
and refilled m ore than o n ce during the year. T he Bureau d o e s not
have inform ation on the num ber o f em p lo y ees w h o rem ained w ith the
estab lish m en t during the entire year. O ver short period s o f tim e, labor
turnover rates probably include relatively little rep etitive counting o f
e m p lo y ees w h o h ave held the sam e jo b s , w h ile o v er a period o f as lon g
as a year there is con sid erab le d u plication.

C h a p te r 5.

O c c u p a tio n a l O u tlo o k

B a ckgro und
The occupational outlook program stem s from a re­
port of the A dvisory C om m ittee on Education ap ­
pointed by President R oosevelt. In 1938, the com m ittee
recom m ended that an occupational outlook service be
set up in the Bureau of Labor Statistics to conduct
em ploym ent studies and provide career guidance in­
form ation for individuals and for the use of those re­
sponsible for planning education and training program s.
In 1941, the O ccupational Outlook Service was o r­
ganized under a specific authorization of the Congress.
Although prelim inary studies were begun in 1941, it was
not until after World W ar Ii that the occupational out­
look staff was able to focus its efforts on the preparation
of occupational reports for use in career guidance. In
m id-1946, a manual of occupational outlook inform a­
tion was prepared for use in the V eterans A dm inistra­
tion (VA) counseling and rehabilitation program .
T h e firs t ed itio n o f the O c c u p a tio n a l O u tlo o k
H andbook was published in 1949 in response to a formal
resolution by the National Vocational Guidance As­
sociation, as well as the requests of other groups and
private individuals calling upon the Congress to au­
thorize the developm ent of career guidance inform ation
fo r sale. T he public reacted favorably to the first
H a ndbook and the Bureau decided to issue in 1951 a
revised and enlarged edition with the backing of the
V eterans A dm inistration.
A fter the end of hostilities in K orea, there was a sharp
increase in public recognition of the key role o f voca­
tional guidance in channeling w orkers into essential
occupations and effectively using the N ation’s labor
resources. As a result, in 1955, Congress provided for
publication o f the O ccupational O utlook H andbook and
its related m aterials on a regular, continuing, up-to-date
basis. In 1957, the third edition of the O ccupational
O utlook H andbook was published; also in that year, the
O ccupational O utlook Quarterly was introduced as a
com panion piece to the H andbook to report on the
em ploym ent outlook in emerging occupations and to
describe changes in the em ploym ent situation in estab­
lished career fields.
The cu rrent, 1976-77 H andbook is the twelfth edi­
tion o f this m ajor product of the occupational outlook
program .

Description of Program
T hrough the o ccu p atio n al outlook program , the
Bureau o f L ab o r Statistics conducts research in, and



produces inform ation on, future occupational and in­
dustrial em ploym ent requirem ents and resources. The
program provides inform ation on em ploym ent oppor­
tu n itie s by o c c u p a tio n fo r use by c o u n s e lo rs ,
educators, and others helping young people choose a
field o f work, it also provides inform ation for local and
national training authorities for use in developing pro­
grams of education and training. The results of the re­
search are published in the O ccupational O utlook
H a n d b o o k, the O ccupational O utlook Quarterly, and
special bulletins, reports, and pam phlets.
Through the years, the occupational outlook program
system atically has accum ulated, analyzed, and distri­
buted considerable inform ation about changing indus­
try and occupational needs. R esearch topics have in­
cluded assessm ents of em ploym ent trends in m ajor in­
dustries and occupations, as well as investigations into
the em ploym ent effects of a great num ber of long-term
program s of governm ent agencies, including loose for
defense, highways, m ass transit, scientific research,
pollution abatem ent, space technology, medical care,
and education.
The program ’s m ajor function of anticipating and
reporting on the nature of tom orrow ’s job m arket in­
cludes developing projections of em ploym ent require­
m ents for broad industry and occupational groups.
These data are published regularly,1 and when com ­
bined with the exam inations of more detailed jo b areas
presented in the O ccupational O utlook H andbook,
constitute a fairly thorough labor force coverage.
M ost career descriptions published in the Occupa­
tional Outlook H andbook include inform ation on: N a­
ture of w ork, places of em ploym ent, education and
training requirem ents, em ploym ent outlook for about
10 years ahead, and earnings and working conditions.
The outlook statem ents for industries give information
on the nature and location of each industry as well as a
discussion of the industry’s m ajor occupations
In presenting the em ploym ent outlook for an o ccupa­
tion, inform ation is
led on the dem and for w ork­
ers and also on poteu
apply. Persons enter the job
m arket from many sources— schools and other training
institutions, tran sfers from o th er occupations, and
reentries to the labor force. It is the balance between
supply and dem and that determ ines the nature of job
com petition facing young people in the years ahead.
1O c c u p a tio n a l M a n p o w e r a n d T r a in in g N e e d s , B L S
T h e U .S . E c o n o m y in 1 9 8 5, B L S B u l l . 1 8 0 °

B u ll.

1824.

S e e a ls o ,

49

50

BLS HANDBOOK OF METHODS

In addition to overall labor force and detailed indus­
try and occupational projections d evelop ed for the
H a n d b o o k , special em ploym ent and training studies are
prepared as part o f the occupational outlook program.
T hese provide inform ation, generally narrower in scope
and greater in depth than in the H andbook on such labor
force topics as the dem and for w orkers with a Ph.D .
d egree and a n a ly se s o f th e current and p rojected
em ploym ent situations for scien tists and engineers,
tech n icia n s, and w orkers in library and com puter
o ccu p a tio n s.2 Other special studies provide technical
inform ation to assist em ploym ent researchers in other
agencies and outside o f governm ent, or are offered as
guidance to th ose establishing training programs in both
the public and private sectors. A prime topic o f such
studies is the supply o f skilled labor for particular o ccu ­
pations. The occupational ou tlook program has issued a
special report on the status o f labor supply research
m ethods and regularly publishes data on training com ­
pletions by field o f stu d y .3

Sources of Data
The occupational ou tlook staff u ses a variety o f data
sou rces in d evelop in g em ploym ent p rojections and
other em ploym ent inform ation. The basic statistics on
current and past em ploym ent in occup ation s are from
the Bureau o f Labor Statistics Current Population Sur­
v ey (CPS). T hese data, collected m onthly by the C en­
sus Bureau for B L S , outline em ploym ent with occup a­
tional definitions used in decennial cen su ses. This rela­
tionship b etw een CPS and C ensus data con cep ts allow s
one series to com plem ent the other. The C ensus pro­
vides reliable benchm ark estim ates each 10 years, while
occupational m ovem en t in the intervals b etw een cen ­
su ses are gauged through the CPS program.
The Bureau o f Labor S tatistics also produces the
major source o f industry em ploym ent data used in the
occupational outlook program. The B ureau’s Current
E m ploym ent Statistics program reports on industry
em ploym ent lev els in E m ploym ent and Earnings, a
monthly B L S publication. W hen th ese industry data are
system a tica lly com bin ed w ith C P S /C en su s o ccu p a ­
tional data as w ell as data from a num ber o f alternate
sources for selected industries and occup ation s, the
result is a com p reh en sive set o f data on industryoccupational relationships or patterns. (T hese patterns
are th e su b ject m atter o f the B u r ea u ’s IndustryO ccupational Matrix program d escribed later under
M ethods o f A n alysis and also the subject o f chapter 6 in
this H a n d b o o k.)

A num ber o f alternate data sources also are used to
m easure em ploym ent. T he O ccupational E m ploym ent
Survey, initiated by the Bureau in 1971, obtains wage
and salary establishm ent em ploym ent data by occupa­
tion. (S ee chapter 7 for a description o f this program.)
Scientific and technical personnel surveys conducted
by the Bureau contain detailed inform ation on scien ­
tists, engineers, and tech n ician s.4 T he C ensu ses o f
B usin ess and M anufacturing published by the C om ­
m erce D epartm ent provide additional industry detail.
Information from the Civil S ervice C om m ission is used
for data on F ed eral G o v ern m en t w ork ers. T h ese
sou rces o f occu p ation al and industry em ploym ent
statistics are further augm ented by data from Federal
regulatory agen cies, such as the Federal A viation A d­
m inistration and Interstate C om m erce C om m ission. In
som e ca ses, em ploym ent and other data are obtained
from unions, industrial firm s, trade association s, and
p ro fessio n a l so c ie tie s . In g en eral, h o w ev e r, th ese
statistics serve to estim ate em ploym ent in fields not
covered by governm ent surveys.
In developing analyses o f past and projected changes
in em ploym ent requirem ents — w hich will be described
later — the outlook program u ses statistics o f output,
hours o f w ork, and output per worker hour. The major
sources o f th ese data are Bureau o f Labor Statistics
studies o f productivity and technological developm ent,
Federal R eserve Board production in d exes, and U .S .
Departm ent o f C om m erce output data from the A n n u a l
S u r v e y o f M a n u fa c tu r e s and th e C e n su s o f
M anufacturers . Industry association s and unions also
may provide similar statistics.
E stim ates o f the past and probable future supply o f
workers use different sources o f inform ation. U .S . Of­
fice o f E ducation data on graduates from high sch ools,
junior or com m unity co lleg es, and 4-year colleges and
universities, as w ell as Bureau o f A pprenticeship and
Training statistics on apprenticeship, provide input into
the supply analysis. H ow ever, there are m any gaps in
the available data. The outlook program u ses informa­
tion from a num ber o f other sou rces, often research o f a
one-tim e nature, to study the supply o f trained workers.
A m ong th ese sources are the occupational m obility
studies and tables o f working life d evelop ed by the
Bureau o f Labor Statistics. Further, the program has
begun to collect data on training in private industry,
w here large num bers o f workers historically have re­
ceived job sk ills.5
Earnings inform ation that appears in many o f the
outlook publications is drawn primarily from w age and
earnings surveys conducted by the Bureau o f Labor
Statistics. T hese data are supplem ented with informa­
tion from Federal regulatory agen cies, studies o f union

2
Ph.D. Manpower: Employment Demand and Supply, 1972-85,
B L S B u ll. 1860; Library Manpower: A Study of Demand and Supply,
B L S B ull. 1852; Computer Manpower Outlook, B L S B ull. 1826.
3 Occupational Supply: Concepts and Sources of data for Man­
power Analysis B L S B u ll. 1816; Occupational Manpower and Train­

ing Needs, P L S B u ll. 1824.



4 T h e se su r v e y s, fu n d ed b y the N a tio n a l S c ie n c e F o u n d a tio n
(N S F ) but d iscon tin u ed in 1970, are b ein g resu m ed b y the B ureau o f
the C en su s again w ith N S F su pport.
5 H . J a m e s N e a r y , “ T h e B L S P ilo t S u r v e y o f T r a in in g in
In d u stry,” Monthly Labor Review, F ebruary 1974, pp. 2 6 —32.

OCCUPATIONAL OUTLOOK
w age sca les, and reports by professional so cieties, and
other groups.
Filling in gaps in the various types o f statistics used is
inform ation obtained from (1) personal interview s with
em ployers or others clo sely associated with an industry
or occupation; (2) reports and interview s with profes­
sional or trade association s and licensing agencies; (3)
union publications and officials; and (4) periodicals,
trade journals, annual reports, and related m aterials.

Methods of Analysis
The projections o f requirem ents and resources de­
velop ed for the occupational outlook program rely, as
indicated ab ove, on input from a w ide variety o f data
sources and are derived as part o f a multi-program
effort to provide a com preh en sive view o f tom orrow ’s
econom y and its industrial and occupational em ploy­
m ent requirem ents. A broad system atic m ethod o f
a n a ly s is is u se d to p ro v id e an o v e r a ll e c o n o m ic
fram ework for the occupational and industry projec­
tions. H o w ev er, ex ten siv e in-depth studies also are
prepared both to supplem ent and to ch eck this more
global ty p e o f a n a ly sis sin c e m any secto rs o f the
econ om y are better studied independently, particularly
industries and occup ation s that operate under special
conditions or are affected by their ow n com plex set o f
factors.
C onstruction o f the projection fram ew ork begins
w ith the statistics d evelop ed by the Bureau o f the C en­
sus o f total population in the target year, and its com ­
position by age, se x , and color. T h ese, in term, are used
to d ev elo p projections o f the labor force by age, sex ,
and color on the b asis o f changing labor force participa­
tion rates for each o f th ese g rou p s. T he changes reflect a
variety o f factors, including changing educational stan­
dards, retirem ent practices, and size o f fam ilies. (S ee
“ Projections o f the L abor F o r c e ,’’ chapter 2.)
Labor force projections then are translated into the
level o f gross national product (G N P) that can be pro­
duced by a fully em p loyed labor force. G N P is derived
by subtracting unem ploym ent from the labor force and
multiplying the result by an estim ate o f output per
worker in the target year (o f the projection.) A llow ­
ances are m ade for productivity grow th and exp ected
changes in hours o f w ork.
The n ext step is to distribute this potential growth in
real G N P am ong the major com ponents o f G NP: C on­
sum er and governm ent expenditures, business invest­
m ent, and net foreign dem and. Projections are then
d evelop ed for each o f the major dem and categories,
such as the am ount spent by consum ers for food , cloth­
ing, rent, autom obiles, drugs, co sm etics, trips abroad,
m edical ex p en ses, and other good s and services.
O nce estim ates are d evelop ed for the product or ser­

vice to be purchased, the production load is allocated to


51

the various industries w hich m ake the final product and
to the interm ediate and basic industries which provide
new materials, com ponents, transportation, electric
pow er, and other goods and services required in making
final products. This is done by m eans o f an input-output
table, d evelop ed by the Departm ent o f C om m erce, that
show s transactions and effects o f such transactions
am ong industries.
Estim ates o f production in each industry are then
translated into em ploym ent requirem ents by projecting
changes in output per em ployee hour in each industry
and dividing this figure into outp ut.6 Changes in output
per em p loyee are develop ed through studies o f produc­
tivity and technological trends in all industries. These
studies provide inputs to a ssess such things as potential
com petition among products, potential em ploym ent
and econom ic effects o f new technologies and inven­
tions, and the effect o f technological change on the
occupational structure o f industries.
A s an independent check and to develop more de­
tailed industry em ploym ent projections than allow ed
for by input-output tables, a regression analysis is co n ­
ducted relating production and em ploym ent in various
industries to the levels o f final demand and other key
variables. In addition, the occupational outlook staff
c o n d u c ts d eta iled in-depth stu d ies for a selec ted
number o f industries. T hese result in projections o f
requirem ents based on a regression analysis o f a variety
o f e c o n o m ic v a ria b les. R e su lts o f the reg ressio n
analysis and input-output m odel are evaluated along
with detailed industry analyses to d evelop final industry
em ploym ent projections.
Projections o f industry em ploym ent requirem ents
are then translated into occupational requirem ents. The
calculations are made through the use o f occupational
com position patterns for all industries in the U nited
S ta te s , w h ic h are su m m a riz ed in an in d u str y occupational matrix. This matrix, which is divided into
201 in d u stry s e c to r s , s h o w s th e c o m p o sitio n o f
em ploym ent in about 420 occupations. T hese patterns
are applied to current em ploym ent estim ates and to
projected requirem ents by industry to estim ate current
em ploym ent and future requirem ents by occupation. In
developing th ese projections, allow ance is made for
changing occupational structures based on studies o f
the w ay each industry has changed in the past and is
likely to change in the future. To arrive at a total for the
econ om y, future em ploym ent requirem ents for each
occupation are aggregated across all industries. (See
The N ational Industry-O ccupational M atrix, chapter

6.)
For m any occupations, requirem ents are projected
on the basis o f relationships to certain independent
variables rather than on proportional representation in
each industry. This m ore narrow focus o f analysis is
particularly useful w hen projecting em ploym ent re6
F or a m ore detailed d escrip tion o f h o w this industry fram ew ork is
d e v e lo p ed s e e , The Structure of the U.S. Economy in 1980 and 1985,
B ull. 1831, Bureau o f L ab or S ta tistics, 1975.)

BLS HANDBOOK OF METHODS

52

quirem ents for an occupation that is affected by its own
com plex set of factors. For exam ple, em ploym ent re­
quirem ents for autom obile m echanics are projected on
the basis of the expected stock o f m otor vehicles and
th e ir m ain te n a n c e re q u ire m e n ts , and ele m e n ta ry
school teachers on trends in pupil-teacher ratios applied
to projected school attendance. Inform ation is col­
lected on changes in law, buying patterns, technology,
governm ent policy, em ployer hiring practices, and
other factors and an assessm ent is made of how these
changes may affect the dem and for w orkers in various
occupations. E m ploym ent projections then are d e­
veloped b y 'a m ethod tailored to best Fit the available
data and the nature of the occupation under study.
P rojections developed through these independently
conducted studies are then m eshed with other occupa­
tional d ata in the m atrix.
Projections of changes in em ploym ent requirem ents
by occupation and industry provide only one part of the
needed inform ation on jo b openings to be filled in the
years ahead. In m ost occupations the majority of jo b
opportunities arise either as a result of experienced
w orkers transferring to other occupations, or because
o f retirem ents and deaths.
To estim ate the total num ber of openings likely to
arise in a field, the occupational outlook staff has de­
veloped a num ber o f working tools that help to describe
general patterns of labor force separations. F or exam ­
ple, tables o f working life, which are similar to the
actuarial tables o f life expectancy used by insurance
com panies, provide a basis for estim ating future rates of
r e p la c e m e n ts n e e d s re s u ltin g fro m d e a th s an d
retire m en ts.7 T hese in turn are affected by differences
in the sex and age distribution of w orkers in a given
occupation.
To appraise the future em ploym ent situation in an
occupation, estim ates also m ust be made of the supply
of personnel. This type of analysis is limited to those
fields w here the supply is identifiable. Statistics on high
school and college enrollm ents and graduations are the
chief source of inform ation on the potential supply of
personnel in m any professions and in occupations re­
quiring extensive form al education. D ata on num bers of
apprentices and graduates of vocational and technical
training program s provide some inform ation on new
entran ts into skilled trades. H ow ever, in m any occupa­
tions, w orkers learn on the jo b , through com pany train­
ing program s. Special studies of training in industry are
now being conducted to account for this source of skil­
led w o rk e rs.8
N o t all persons who com plete formal training or edu­
cation in a particular field en ter that field upon com ple­
tion of : :ir courses. As a result, special surveys also
are used to provide additional inform ation qn the actual
net supply o f w orkers from a training program o r a field
o f study. T hese include studies of em ploym ent plans of

college seniors, jo b placem ents of college graduates,
and jobs entered after com pletion of governm ent train­
ing program s, as well as other types of training.
The net effects of interoccupational transfers are not
known in any system atic fashion. Except for a few
occupations where limited data are available, transfers
out of an occupation are assum ed to equal transfers in .9
Estim ates of the future dem and in an occupation then
are com pared to estim ates of future supply to develop
insights into the em ploym ent outlook for various fields
of work. This inform ation is provided to policy m akers,
educators, and others along with descriptions of the
im plications of these relationships.

P r e s e n t a t i o n

The O ccupational O utlook H andbook is the major
p u b licatio n o f the o cc u p atio n al o u tlo o k program .
O riented tow ard career guidance, the H andbook is a
basic reference source, published every other year,
which includes com prehensive and non-technical jo b
inform ation on approxim ately 850 occupations and 35
m ajor in d u stries, covering the en tire sp ectru m of
w hite-collar, blue-collar, and service occupations. An
occupational outlook report series provides reprints of
individual statem ents from the H andbook.
The O ccupational O utlook Quarterly provides a con­
tinuous flow of current occupational and job inform a­
tion betw een editions of the H andbook, together with
the m ost recent inform ation available on earnings,
training requirem ents, and other related topics.
The O ccupational O utlook fo r College G raduates
co n tain s in fo rm atio n , ex c e rp te d from the regular
H andbook, on m ore than 100 jo b s for which an educa­
tion beyond high school is necessary or useful.
O ccupational M anpow er and Training N eeds, which
is published on a regular b asis,10 presents both general
and detailed inform ation on the relationship betw een
occupational requirem ents and training needs.
Two other sets of regularly published m aterials are a
series of five Education and Job L eaflets that list jobs
that require specific levels of education, and a series of
10 M otivational Leaflets, each of w hich discusses the
types of jobs that may be available to persons having an
interest or proficiency in a particular academ ic subject
or field. In addition to these publications, developed
mainly for use in vocational guidance and/or education
planning, the occupational outlook program conducts
technical and detailed studies on specific occupations
and in d u strie s in o rd e r to fu rn ish in fo rm atio n to
em ploym ent experts, educational planners, personnel
departm ents, and others interested in the m ore tech ­
nical aspects of the N ation’s future em ploym ent needs.
9 W o r k to d e v e lo p m o r e c o m p r e h e n s iv e e s tim a te s o f o c c u p a t io n a l
m o b i l i t y c u r r e n t l y is b e i n g c o n d u c t e d b y t h e B L S u s i n g d a t a c o l l e c t e d

7 F o r d e ta ile d in fo r m a tio n s e e

11, B u l . 1 6 0 6 (
Digitized for lFRASERB u r e a u o f L a b o r
8
n o


T o m o r r o w ’s M a n p o w e r N e e d s ,
S ta tis tic s , 1 9 6 9 ).

V o l.

in t h e

1 9 7 0 D e c e n n ia l C e n s u s .

10 F o r t h c o m i n g i s s u e s o f t h i s p u b l i c a t i o n w i l l b e t i t l e d

tio n a l P ro je c tio n s a n d T r a in in g D a t a .

Occupa­

C h a p te r 6.

N a tio n a l I n d u s tr y - O c c u p a tio n a l M a trix

Background
The B ureau o f L abor Statistics has developed a com ­
prehensive set of data on the occupational em ploym ent
com position of all industry sectors in the econom y.
Presently, industry-occupational m atrices are available
for 1970, 1974 and 1985. These data are set up to form a
m atrix, or table showing estim ated em ploym ent in
specific occupations, plus groupings of occupations,
cross-classified by industry sector. Thus, the occupa­
tional p attern o f each industry sector is shown, i,e., the
proportion of each occupation to total em ploym ent in
an industry. L ooked at another way, the tabulation
show s how total em ploym ent in an occu p atio n is
distributed by industry.
Initially, work on the Industry-O ccupational M atrix
grew out of concern by the D epartm ent of Defense for
anticipating the econom ic problem s that might arise
from various defense program s. The first set of tables
related to 1950 and w ere prepared by the Bureau as a
p art of the inter-industry program sponsored by the
U .S. D epartm ent o f the Air F orce. T hat program was
term inated in 1953, but the 1950 m atrix and its succes­
sors continue to provide the basic inform ation for
em ergency em ploym ent planning, now carried on by
the F ederal P reparedness Agency. In recent years, a
strong interest has developed in determ ining occupa­
tional needs for other purposes including training new
w orkers, retraining w orkers displaced by autom ation,
and providing S tate and sub-State occupational infor­
m ation to high school counselors, em ploym ent c o u n ­
selors, students, and other persons making career deci­
sions. The Industry-O ccupational M atrix provides a
system atic approach to developing the desired inform a­
tion.

Sources of Data
D ata for the In d ustry-O ccupational M atrices are
brought together from a wide variety of sources. A
m ajor source for the developm ent of the 1970 m atrix
was the O c c u p a t i o n b y I n d u s t r y report from the 1970
C ensus of Population. The C urrent Population Survey
(CPS) is the source for data on total em ploym ent,
em ploym ent for broad occupational groups, and for a
few large, specific occupations. O ther sources of occu­
pational em ploym ent d ata included the B ureau of
L abor S tatistic’s annual surveys of occupational wage
rates in m etropolitan areas and selected industries; reg­
ulatory agency statistics on em ploym ent by occupation



in the telephone, railroad, and air transportation indus­
tries; U .S. Civil S ervice C om m ission statistics on
em ploym ent by occupation in the Federal G overnm ent;
statistics on selected professional occupations based on
licensing data and m em bership records of professional
societies; and surveys of em ployers by the B-ureau and
other agencies to obtain estim ates of em ploym ent in a
limited num ber of highly im portant occupations such as
scientists, engineers, teachers, and policeofficers.
Specific estim ates from sources other than the C en­
sus were incorporated into the cells of the matrix; the
remaining details in the matrix were derived by forcing
1970 population census estim ates for detailed cells
(published in Occupation by Industry) into agreem ent
with control totals for occupational groups and indus­
tries from sources other than the C ensus. The occupa­
tional control totals were average annual em ploym ent
by occupational group taken from the CPS. M ost of the
industry em ploym ent totals were based on BLS esti­
m ates of private wage- and salary-w orkers adjusted to
include the self-ernployed, unpaid family w orkers, and
governm ent w orkers, and to exclude the secondary
jobs of dual jo b holders. Total em ploym ent in agricul­
ture and private households was based on CPS esti­
m ates. The adjustm ents of the m atrix to consistency
with CPS estim ates of total em ploym ent and industry
em ploym ent estim ates, derived as described above,
brings the m atrix for 1970 into agreem ent with data used
as the b asis for the B u re a u ’s p ro jectio n s o f total
em ploym ent and occupational em ploym ent by indus­
try. The B u rea u ’s occupational projections are re­
flected in, and developed in part through, m atrix tech ­
niques. (See section on analysis and uses.) The 1985
m atrix was developed by exam ining a variety of histori­
cal statistics on the changing occupational structure of
industries including data from the 1950, 1960 and 1970
C ensuses, and evaluating the factors likely to influence
changes in the future such as expected new technology,
changes in product mix, and the general organization of
industries.
The 1970 m atrix provided the base for the 1974 and
1985 m atrices. W here available occupational data from
other sources, such as those cited above, were incorpo­
rated into the updated m atrices as fixed cells. F or the
remaining cells, first approxim ations of the occupa­
tional patterns for 1974 were made by interpolating
betw een the patterns of the 1970 and the 1985 m atrices.
The resulting patterns (in mining and m anufacturing)
w ere then brought into consistency with data on p ro­
duction w orker trends available from the B ureau’s C ur­
rent E m ploym ent S tatistics program . The pattern s

53

BLS HANDBOOK OF METHODS

54

were then applied to individual industry em ploym ent
controls and sum m ed to arrive at occupational totals.
T hese occupational control totals w ere then com pared
to data from the CPS and other sou rces o f information.
W hen n ecessary, certain occup ation s (excep t for fixed
cells) w ere then forced on a prorated basis to predeter­
m ined occupational control lev els. This iterative forc­
ing procedure w as repeated until the internal matrix
cells w ere con sisten t with both the industry and the
occupational controls. T hus, both the 1974 and the 1985
industry-occupational m atrices w ere con sisten t with (a)
national em ploym ent by industry, (b) broad occupa­
tional em ploym ent lev els from the C PS, (c) trends in
production (and nonproduction) worker em ploym ent
by industry, (d) anticipated trends in occup ational
structure within industries, and (e) reliable estim ates o f
detailed occupational em ploym ent available from the
CPS and other sou rces.

Analysis
A basic ob jective o f the project is to have available a
c o m p r e h e n s iv e se t o f d ata on n a tio n a l in d u stryoccupational relationships that can be u sed in project­
ing em ploym ent requirem ents by occupation. Although
statistics on em ploym ent by occup ation are relatively
thin, particularly betw een decennial c e n su ses, there is a
great deal o f inform ation on total em ploym ent in d e­
tailed industries. Each industry u ses a unique com bina­
tion o f occupational skills, together w ith other factors
o f production, in its efforts to ach ieve least co st for its
output. O ccupational patterns m ay be m arkedly differ­
en t from o n e in d u stry to a n o th er. F or e x a m p le ,
em ploym ent in the insurance industry is primarily o f
w hite-collar workers such as insurance agents, clerical
w orkers, actuaries, and others. In contrast, the work
force in restaurants is largely m ade up o f food service
workers, c o o k s, and ow ner-m anagers. O ver periods o f
5 years or less, the occupational structure o f many
industries remain relatively stable. C onsequently, if
good inform ation is available on the occupational com ­
position o f individual industries for a base period, it can
be used together with the available statistics on chang­
ing em ploym ent in each industry to develop estim ates
o f current em ploym ent by occup ation for later periods.
Further, if projections o f output and em ploym ent are
available by industry, the base period occupational
ratios applied to the industry em ploym ent projections
will yield initial estim ates o f em ploym ent requirem ents
by occup ation for future periods.
Although the occupational patterns o f many indus­
tries are relatively stable over periods o f less than 5
years, it is clear that occupational patterns change with
the advance o f tech n ology and changes in the supply o f
workers in each occup ation . H en ce, inform ation on
how tech n ology and labor supply are changing the o c ­
cupational pattern in each industry is used to m odify the
initial estim ates. This im proves the estim ates o f current

em ploym ent by occup ation and o f future em ploym ent


requirem ents by occupation d evelop ed by applying
base period industry-occupational ratios to industry
em ploym ent estim ates. Changing technology and other
factors that affect skill requirem ents are constantly
being studied to estim ate the future occupational struc­
ture o f each matrix industry. The adjusted occupational
patterns are then used , together with projections o f
em ploym ent by industry, to prepare estim ates o f future
em ploym ent requirem ents to 1985.

Uses and Limitations
The N ational Industry-O ccupation M atrix is a key
tool used in the developm ent o f national occupational
em ploym ent estim ates and projections. T he output o f
this project is reflected in the B ureau’s O ccupational
O utlook Program, w hich is designed to provide infor­
mation for u se in the field o f career counseling. It has
proved to have many other u ses, including studies o f
the changing utilization o f workers by industry over
tim e, the analysis o f changing occupational skills by
industry, the analysis o f occupational skill require­
m ents resulting from the im pact o f establishing new
industries in specific geographic areas, and market re­
search. R ecen tly, the industry-occupational matrix has
been used in various im pact studies designed to m ea­
sure the occupational effects o f changes in the level o f
expenditures by the Federal G overnm ent for specific
programs. In th ese studies, the indirect effects o f vari­
ou s ex p en d itu re le v e ls are traced th rou gh out the
e c o n o m y u sin g th e B u r e a u ’s in p u t-o u tp u t ta b le.
E m ploym ent lev els in each industrial sector are then
specified by using the appropriate input-output coeffi­
cients. Staffing patterns derived from the industryoccupational matrix are then applied to the estim ates o f
total em ploym ent in each industry, and sum m ed up to
determ ine the ind irect occu p ation al effec ts o f the
changes in expenditures.
The data included in the industry-occupation m at­
rices are derived from several sources including the
Census o f Population, specifically data for a sam ple o f
the respondents; surveys conducted by the Bureau o f
Labor S ta tistics and others coverin g occu p ation al
em ploym ent, as w ell as licensing, and data enrollm ents
in professional so cieties. The inform ation obtained
from the CPS and other surveys is subject to the re­
sponse and sampling lim itations typical o f surveys (S ee,
for exam ple, the section on lim itations o f the Current
Population Survey in chapter 1 o f this B ulletin.) In
addition, since, in som e ca se s, the occupational defini­
tions and con cep ts o f the surveys frequently differ, data
stem m ing from surveys must be adjusted and are sub­
je c t to error resulting from analytical adjustm ents. The
matrix data then indicates the general level and position
the estim ates hold in relation to the other occupational
estim ates within each major industry group. C on se­
quently, the occupational estim ates in the m atrices

N A T IO N A L IN D U ST R Y -O C C U P A T IO N A L M ATRIX
should be used with caution and should not be view ed
as precise m easurem ents. In general, the sm aller the
occupational estim ates the less the reliability. In terms




55

o f data u se, the current N ational Industry-Occupation
Matrix is limited in scope to about 420 specific occup a­
tions and 201 industry sectors.

Chapter 7.

Occupational Employment Statistics

Background
T he O ccu p ation al E m p lo y m en t S ta tistics (O E S)
Program is a Federal-State coop erative program d e­
signed to produce State and area data on current and
projected occupational em ploym ent for use in planning
education and training activities. It provides a system a­
tic, con ceptually and m ethodologically con sisten t ap­
proach for the d evelop m en t o f th ese data among the
cooperating State em ploym ent security agen cies and is
an important elem ent in the system o f labor market
inform ation being d evelop ed by the E m ploym ent and
Training A dm inistration (formerly the M anpower A d­
m inistration).
For m any years the Bureau o f L abor Statistics has
been receivin g requ ests, on a recurring b asis, to provide
current, reliable national and local data on job skills in
industry. H ow ever, the m agnitude and significance o f
the need for this data w as not fully realized until the
President’s C om m ittee to A ppraise E m ploym ent and
U n em p lo y m en t S ta tistics (the G ordon Com m ittee,*
1962) m et to evaluate all the available statistical data
collected at that time. The results o f the com m ittee’s
e ffo r ts w e re p u b lish e d in its re p o r t, M e a s u r i n g
E m p l o y m e n t
a n d
U n e m p l o y m e n t .
T his report d e ­
scribes both the specific data n eed s and the possible
applications th ese data w ould have for ascertaining and
perform ing intelligent labor market analysis.
The com plete lack o f substantive and com prehensive
occupational data at the time the Gordon Com m ittee
report w as prepared is aptly d escribed in the follow ing
excerp t from the C om m ittee report:
“ Except in a general way, we know relatively little about
current changes in the number o f workers employed in each
important occupation and in the occupational structure of
industry as a whole. It is apparent that the economy is
undergoing changes that are significantly affecting the oc­
cupational structure of the labor force. Available job oppor­
tunities are diminishing for unskilled workers and even for
many types o f skilled workers. At the same time there is a
rapid increase in the number o f young people coming into
the labor market each year. One-third o f the labor force of a
decade hence is now in school. Data on the numbers em­
ployed and trends in employment for specific occupations
can provide a basis for estimating future occupational re­
quirements and job opportunities and thus greatly aid in
planning educational and training programs and in voca­
tional counseling.”

Interest in the collection and u se o f occupational em ­
ployment data increased very rapidly following the Gordon

56


C om m ittee’s report. In fact, legislation soon follow ed
that enhanced the need for gathering detailed occup a­
tional data by industry b ecau se it called for training
programs to reflect the needs for trained w orkers, an
o b jectiv e that recogn ized hum an resou rces as the
N a tio n ’s m ost valuable asset. Section 103 o f the Man­
p ow er D ev elo p m en t and Training A ct o f 1962, as
am ended, for exam ple, stipulates that “ The Secretary
o f Labor shall d evelop , com pile, and make available, in
such manner as he deem s appropriate, information re­
garding skill requirem ents, occupational outlook, job
o p p o r tu n ities, lab or su pp ly in v ariou s sk ills and
em ploym ent trends on a national, State, area, or other
appropriate basis w hich shall be used in the education,
training, co u n selin g , and p lacem ent a ctiv ities per­
form ed under this A c t.” In addition, the im plem enta­
tion procedures for the V ocational E ducation A ct o f
1963, as am ended, called for the developm ent o f State
vocational education plans that take into consideration
projections o f occupational requirem ents. Finally, the
C om prehensive E m ploym ent and Training A ct o f 1973
called for the developm ent o f a com prehensive system
o f labor market information.
A s a result o f th ese legislative acts and as an effort to
m eet the needs o f governm ent planners and researchers
in the field o f em ploym ent and industrial m anagem ent,
the Bureau o f Labor Statistics and the E m ploym ent and
Training A dm inistration initiated the O ccupational
E m ploym ent Statistics Program, in cooperation with
the State em ploym ent security agencies.

Program Description
The O ES program has three elem ents, which are
described in detail further in this chapter. Briefly, they
are as follow s:
1. The Occupational Employment Statistics Survey — a
mail survey designed to collect current data on wage and
salary employment by occupation and industry from
nonfarm establishments.
2. The National/State Industry-Occupation Matrix Sys­
tem— a set o f tables (one for each State and the District
of Columbia) that, for a specific period o f time, show
total employment in specific occupational categories,
cross-classified by industrial sectors and class o f worker
categories, which are used as a principle tool in prepar­
ing estimates o f current employment and projections of
occupational requirements for States and sub-State
areas.

O C C U P A T IO N A L E M P L O Y M E N T S T A T IS T IC S
3.

T h e

S ta te

a n d

a re a

P ro g ra m — a p ro g ra m
e m p lo y m e n t

s e c u r it y

O c c u p a t io n a l

P r o je c t io n s

o f g u id a n c e a n d a s s is t a n c e to S t a t e
a g e n c ie s

in

d e v e lo p in g

e s t im a t e s

a n d p r o j e c t io n s o f o c c u p a t io n a l r e q u ir e m e n t s f o r S t a t e s
and

a re a s.

Uses of the Data
The O ES program is designed to produce occupa­
tional inform ation for use by State em ploym ent security
agencies and the Em ploym ent and Training Adminis­
tration. It is, how ever, a program that provides many of
the inform ation needs of other data users, including
individuals and organizations interested in planning vo­
cational education program s, and the requirem ents in
occupations w here higher education or technical train­
ing is needed. E stim ates of current and projected occu­
pational em ploym ent developed in the program also are
used in preparing inform ation for use in career counsel­
ing, estim ating the im plications on occupational re­
quirem ents o f changing expenditures for G overnm ent
program s, and to aid in jo b placem ent activities p er­
form ed at em ploym ent security offices. F urtherm ore,

!,

the inform ation produced provides a basis for the
analysis of State and sub-State occupational em ploy­
m ent. including changing em ploym ent use patterns by
industry, the im pact of technological and other changes
on occupational requirem ents, and the location and
n u m b er o f o c c u p a tio n a l skills w ithin and am ong
States, including changes over time. A main benefit of
the program is that it provides continuity and a basis for
all States to have occupational projections to meet their
program needs.
The OES program is a F ederal/State cooperative
program in which the Bureau has prim ary responsibility
for the technical developm ent and adequacy of the
program ; the Em ploym ent and Training Adm inistration
is responsible for funding, adm inistration, and the use
and application of the data generated by the program in
planning and o th er activities concerning program s
within its scope of responsibility; and State em ploy­
m ent security agencies are responsible for the collec­
tion of current occupational em ploym ent data from em ­
ployers, the incorporation of these d ata into the matrix
system , the developm ent of industry em ploym ent pro­
jections, and the final projections of occupational re­
quirem ents developed for Slates and areas.

O c c u p a tio n a l E m p lo y m e n t S t a t is t ic s S u r v e y

B ackground

In the Fall o f 1971, questionnaires were sent out to
50,000 m anufacturing establishm ents throughout the
U nited States, m arking the beginning of a survey de­
signed specifically to collect statistics on em ploym ent
by detailed occupation and industry. This survey was
conducted in cooperation with the Em ploym ent and
Training Administration and 10 State Employment Secu­
rity A gencies. It was designed to obtain occupational
estim ates for the N ation and for the cooperating State
agencies. In 1973, a sim ilar survey was inaugurated in
m ost nonm anufacturing industries (excluding trade). In
this survey the collection was done entirely by 22 State
agencies. B etw een 1973 and 1975, surveys were con­
ducted in trade and State and local governm ent indus­
tries; subsequent surveys of m anufacturing and non­
m anufacturing industries also have taken place. C ur­
rently, 35 State agencies (including the D istrict of Col­
um bia) are cooperating in this effort.

Program D escription
The O ES S urvey is a periodic mail survey conducted
by State em ploym ent security agencies of a sample of
nonfarm estab lish m ents to obtain wage and salary
em ploym
 ent by occupation. The survey is conducted
http://fraser.stlouisfed.org/ cycle (m anufacturing industries one year;
over a 3-year
Federal Reserve Bank of St. Louis

57

nonm anufacturing, except trade the second year; and
trade industries the third year). These data are used to
estim ate total em ploym ent by occupation and by indus­
try for each State and for areas within each State.
Em ploym ent inform ation is currently being collected
for betw een 2,000 and 2,500 occupations.
A specially prepared list of occupations has been
designed for each industry or for each group of indus­
tries surveyed that, in general, em ploy the sam e kinds
of occupations.
Two types of survey questionnaires — one long and
one short — have been developed. The short form
concept was developed in the attem pt to increase
respondent cooperation by reducing the reporting b u r­
den in sm aller establishm ents, Both form ats include
instruction and file copies and have occupational titles
and acco m panying definitions. The form s include
establishm ent identification inform ation and several
questions concerning nature o f business, status of activ­
ity, and auxiliary/non-auxiliary unit status. In addition,
provision is m ade to provide on the questionnaire
three-digit SIC descriptions to reduce industry misclassifications. The form s also include supplem ental sheets
for the long form respondents to report significant oc­
cupations that they could not place under specific titles,
and thus reported in the “ all o th e r” residua! data lines.
E xperience with previous surveys has shown that the
supplem ental sheets can be a valuable tool in improving
uiv occupational lists aiiu •detmitioiis, as wen us ciui ify-

58

BLS H A N D B O O K O F M ETH O D S

ing and correcting reported data.
The long format specifies an extensive list of occupa­
tions specifically selected for each industry. O ccupa­
tions are grouped under broad headings such as Clerical
O ccupations, Professional and Technical O ccupations,
and Service O ccupations. At the end of each grouping,
residual categories are included to allow for jobs that
cannot be slotted into a specific occupational title on the
questionnaire. As m entioned above, the respondents
are requested to use the supplem ental sheets to identify
significant jo b s in the residual categories.
The short form ats include abbreviated occupational
lists with accom panying definitions. No broad groups
are specified. Those establishm ents' jobs that cannot
be m atched to the occupations listed on the forms are
identified and briefly described by the respondents in
the blank spaces following the jo b lists. W hen the ques­
tionnaires are returned, these additional occupations
are coded according to the corresponding long form
preparatory to making estim ates o f em ploym ent by o c­
cupation.

Concepts
An establishment is an econom ic unit which proces­
ses goods or services, such as a factory, mine, or store.
It is generally at a single physical location and it is
engaged predom inately in one type of econom ic activ­
ity. W here a single physical location encom passes two
or more distinct and separate activities, these are
treated as separate establishm ents, provided that sepa­
rate payroll records are available and certain other
criteria are met.
Unit total employment includes full or part-tim e
w orkers; w orkers on paid vacations or other types of
leave; w orkers on unpaid short-term absences (i.e.,
illness, bad w eather, tem porary layoff, ju ry duty);
salaried officers, executives and staff of incorporated
firms; em ployees tem porarily assigned to other units;
and em ployees for whom this unit is their perm anent
(home) duty station, regardless of w hether this unit
prepares their paycheck. Unit total em ploym ent ex­
cludes proprietors, ow ners and partners of unincorpo­
rated firm s; unpaid family w orkers; and w orkers on
extended leave (i.e., pensioners and m em bers of the
Arm ed Forces).
Employees are reported in the occupation in which
they are working, not in an occupation for which they
may have been trained, if that is different. F or exam ple,
an em ployee trained as an engineer but working as a
drafter is reported as a drafter.
Working supervisors (those spending 20 percent or
more of their time at work similar to that perform ed by
w orkers under their supervision) are reported in the
occupations which are m ost closely related to their
work duties.
Part-time workers, learners, and apprentices are re in the occupation in which they ordinarily per­
norted
http://fraser.stlouisfed.org/
form their work.
Federal Reserve Bank of St. Louis

Industrial Classification
The classification system currently used for com pil­
ing and publishing data is that described in the 1967
Standard Industrial C lassification M anual. (See appen­
dix B of this bulletin for a detailed description of this
system .) Industries surveyed beginning in 1976 will be
classified according to the 1972 Standard Industrial
C lassification M anual.1
R eporting establishm ents are classified on the basis
of major product or activity data for the previous calen­
dar year.

Occupational Classification
The O ES occupational classification system is a
com bination o f two widely used system s. Titles and
descriptions of occupations used for data collection are
derived prim arily from the D ictionary of Occupational
Titles, third edition, published in 1965 by the D epart­
m ent of L ab o r’s U nited States Em ploym ent Service.
The C ensus of Population, published by the D epart­
ment of C om m erce, Bureau of the C ensus, is the other
m ajor source used for occupational classification. The
census is made up of about 400 categories reflecting
broad occupational coverage w ithout definitions. The
Dictionary of Occupational Titles, on the other hand, is a
more detailed classification system with definitions of
each occupation and organized to m eet the operating
needs of the public em ploym ent service. These two
sy stem s, plus inform ation com piled from industry
o ffic ia ls an d o th e r s o u rc e s , c o n trib u te d to th e
OES occupational classification system . This system is
organized to allow for the constant state of change that
occupational term inology and classification undergo.
This flexibility perm its integration of the feedback
gained from each successive round o f OES surveys.

Time Period
O ccupational em ploym ent data are requested for the
pay period including the 12th of the m onth, which is
standard for all Federal agencies collecting em ploy­
ment data.

Data Source
Sources of occupational d ata reported by respon­
dents are personnel records and, especially for the
small reporting units, personal knowledge of persons
com pleting the reports.
Em ploym ent benchm arks for this survey are derived
from em ploym ent data tabulated from the reports of the
u n em p lo y m en t in su ra n c e p ro g ram . In som e non1

S ta n d a r d I n d u s tr ia l C la s s if ic a tio n M a n u a l

m e n t a n d B u d g e t , E x e c u t iv e O f f ic e

( O f f ic e

o f th e P r e s id e n t ,

o f M anage­

1 9 7 2 .)

O C C U P A T IO N A L E M PL O Y M E N T STATISTICS

59

m anufacturing industries, supplem ental sources are
used to obtain lists o f estab lish m en ts that are not
covered by unem ploym ent insurance law s.

estim ates within that industry group. Similarly, the e s ­
tim ates o f com bined industry groups are derived by
summing the individual industry com ponents.

Collection Method

Presentation

Data are collected from respondents primarily by
mail, but personal visits are made to m any large em ­
ployers and to other respondents w ho indicate particu­
lar difficulty in com pleting the questionnaires. N or­
mally tw o mailings follow the initial mailing and a sub­
sample o f residual non-respondents are contacted fur­
ther by telephone.

A report on the results o f each O ES Survey is pub­
lished by the cooperating State em ploym ent security
agencies. Each report consists o f an analytical interpre­
tation o f the findings, and is supported by a statistical
table show ing estim ates o f occupational em ploym ent
and m easurem ents o f the sampling error associated
with the estim ates.

Sampling

U s e s a n d L im ita tio n s o f t h e D a ta

The O ES sam ple is designed to yield reliable industry
occupational estim ates for the participating States and
areas within th ose States. The sam ple members are
selected primarily from the lists o f establishm ents re­
porting to the State unem ploym ent insurance program.
The sam ple design initially stratifies the universe o f
establishm ents by industry. All establishm ents em ­
ploying 100 em p loyees or more are included in the
sam ple. In som e industries and States the level o f
em ploym ent for establishm ents included with certainty
is less than the 100 em p lo y ees or more lev el. For
establishm ents not included in the sam ple with cer­
tainty, an optimum allocation design is obtained by
stratifying the industry by size cla sses and sampling the
siz e c la s s e s w ith p rob ability p rop ortion ate to the
amount o f em ploym ent contained in th ose size classes.
Within each industry size stratum , the sample m em bers
are random ly selected .

Estimating Procedure
T he o c c u p a tio n a l d istrib u tio n o f the rep ortin g
respondents in each industry by size class is determ ined
by deriving the ratio o f the sum o f the em ploym ent in
each occupation to the sum o f the total em ploym ent o f
the corresponding reporting establishm ents. T hese dis­
tributions then are m ultiplied by the corresponding
benchm ark estim ates o f total em ploym ent in that size
class. E stim ates for occup ation s in each industry group
are derived by sum m ing all the occupational size class

II.

T h e N a tio n a l/S ta te In d u s try -O c c u p a tio n M a trix S y s te m
Background

Early in 1972, B L S inaugurated a n ew program called
the N ational/State Industry-O ccupation Matrix S y s­
tem . The purpose o f the program , w hich is being d e­

velop ed in coop eration w ith the E m p loym en t and


The collection and analysis o f occupational com posi­
tion patterns o f industries show how different industries
and different plants in the same industry em ploy work­
ers in the various skills, the factor affecting occupa­
tional com position, and trends over tim e, which reflect
technological and other changes. Such information is
essential in projecting em ploym ent requirem ents by
occupation (the needs for which are specified in educa­
tion and training legislation) and for vocational and
educational guidance purposes. The occupational com ­
position o f various industries is also needed to estim ate
the em ploym ent im plications o f proposed new G ov­
ernm ent program s, such as those in the fields o f energy,
pollution control, health, or urban m ass transit. Local
em ploym ent service offices use information on the o c­
cupational patterns o f industries to locate em ploym ent
op portunities for applicants. F in ally, occupational
em ploym ent and patterns data have m any u ses in
analysis within and outside the firm, and in industrial
m anagem ent.
All surveys are subject to possib le response and pro­
cessin g errors although th ese are reduced as much as
possib le through review ing, editing, and screening pro­
cedures and through contact with reporters w h ose data
are internally inconsistent or appear to involve m isin­
terpretation o f definitions or other instructions. In addi­
tion, estim ates derived from sam ple surveys are subject
to sampling error. In this program, sampling errors for
occupational em ploym ent estim ates are calculated and
normally published with the estim ates.

Training Adm inistration and State em ploym ent s e ­
curity agen cies, is to assist in the developm ent o f esti­
m ates o f current occupational em ploym ent and projec­
tions o f occupational requirem ents at the State and
local levels. Currently, m atrices, which are basically
tabulations that distribute total em ploym ent by occupa­

BLS H ANDBO O K OF M ETHODS

60

tion and by industry for a sp ecific period o f tim e, are
available for each State for 1970, 1974, and 1985.
The N ational/State Matrix S ystem w as developed in
respon se to the em ploym ent and educational legislation
o f the past d ecad e, w hich has continuously under­
scored the need for m ore and better inform ation con ­
cerning current and future local labor market condi­
tions. R ecen t m o v es to decentralize the responsibility
for em ploym ent planning and training activities to State
and local jurisdictions should add ev en further to the
dem ands for the inform ation produced through this sy s­
tem .

P r o g r a m D e s c r ip tio n
T he N ational/State Industry-O ccupation M atrix S y s­
tem is basically an ex ten sio n o f the national matrix
program (see chapter 6). T he sy stem is designed to
provide a set o f 51 (all States and the D istrict o f C olum ­
bia) individual m atrices, or tab les, that present total
occupational em ploym ent, cross-classified by indus­
trial secto rs, for a sp ecific period o f tim e. T hese mat­
rices are co n sisten t in form at, co n cep t, and data base
with the B L S national matrix. T he sy stem further pro­
vides for the d evelop m en t o f m atrices for sub-State
areas, usually Standard Statistical M etropolitan Areas.
It also includes occup ation -sp ecific death and retire­
m ent rates for each S tate, w h ich are u sed to estim ate
total o ccu p a tio n a l o p en in g s. T h e se rates w ere d e­
velop ed using special cen su s tabulations o f occup a­
tional em ploym ent distributed by age and the B L S
standard working life tables. A flexib le, m ulti-purpose
c o m p u te r s y s t e m w ill p erm it c o o p e r a tin g S ta te
em ploym ent security agen cies to update their m atrices
as required, prepare sub-State m atrices, incorporate
data from th e O ccu p ation al E m p loym en t S tatistics
(O E S) S urvey into the matrix sy stem , and d evelop pro­
jectio n s o f occupational requirem ents by industry se c ­
tor.
T he M atrix S ystem provides a uniform and integrated
set o f State occupational m atrices that sh ow em ploy­
m ent b y industry and cla ss o f w orker and are com para­
ble in sco p e, cod ing, and structure with the N ational
Industry-O ccu p ation M atrix. C urrently, each State
matrix p rovid es em ploym ent estim ates for about 420
occup ation s and for 201 industry sectors. B y integrating
the occupational em ploym ent estim ates derived from
the O E S S urvey into the m atrix sy stem , the S tates have
the m ost d etailed occupational em ploym ent data base
ever available to all States.




U s e s a n d L im ita tio n s
T he basic output o f the N ational/State Industry O c­
cupational Matrix S ystem is the availability o f current
estim ates and projections o f occupational em ploym ent
for States and sub-State areas, develop ed through stan­
dardized procedures, con cep ts, and definitions. This
output allow s for the analysis o f occupational em p loy­
m ent by industry on a com parable basis for areas within
States, regions, S M S A ’s that cross State boundaries,
and State and national data analyses. It allow s for pro­
gram evaluation, the study o f geographical movement o f
occupational em ploym ent am ong and within States. It
p rovid es the S tate a g en cies w ith a b asic tool for
em ploym ent an alyses, including the im pact o f tech ­
nological and dem ographic changes on occupational
em ploym ent requirem ents; the location and number o f
workers by occupation, and the im pact o f new indus­
tries or plant closings on em ploym ent in a State or an
area w ithin a State. B ecau se the system u ses a standard
approach to em ploym ent con cep ts and occupational
definitions, it provides an im proved basis for relating
o ccu p ation al supply arid dem and data at the sub­
national lev el. In addition, the availability o f State and
sub-State m atrices, and the projections o f occupational
requirem ents derived through the matrix system , pro­
vide basic occupational em ploym ent information for
use in vocational guidance and counseling at the State
and sub-State level. A t the sam e tim e, the system pro­
duces occupation! data needed for planning education
and training programs at th ese lev els.
T he current State m atrices available to State agencies
are based on data derived from several sou rces includ­
ing the C ensus o f Population, industry em ploym ent data
co llected directly from em p loyers, occupational data
obtained from regulatory and licensing agencies, and
other sources o f occupational inform ation. T he data
obtained from surveys are subject to the typical re­
sp on se and sampling problem s o f surveys. Data from
the various sou rces frequently differ in em ploym ent
con cept and definition; hen ce, the em ploym ent esti­
m ates are subject to the problem s associated w ith
analysis and adjustm ent. The data then indicate the
relative im portance o f an occupation to other occup a­
tions w ithin each industry group. C onsequently, the o c ­
cupational estim ates in the m atrices should be used
with caution, and should not be view ed as precise
m easurem ents. In addition, w hile the current m atrices
are restricted to about 420 occup ation s, the additional
detail to be provided by the O ES survey data will in­
crease the utility o f the system and reliability o f many
estim ates, particularly th ose for relatively small o ccu ­
pations.

OCCUPATIONAL EMPLOYMENT STATISTICS
III.

S t a t e a n d A r e a O c c u p a tio n a l P r o j e c t io n s

Background
The OES program is aim ed toward the developm ent
o f reliable estim ates o f current and projected occup a­
tional requirem ents data at the State and area levels
and, ultim ately for the N ation. To aid in the d ev elop ­
m ent o f this im portant inform ation, the Bureau o f
Labor Statistics and the E m ploym ent and Training
Adm inistration, in cooperation with the State em ploy­
m ent security agen cies, are developing and making
available system atic, standardized procedures for the
State agencies to u se in the d evelop m en t o f occupa­
tional em ploym ent inform ation for the States and areas
within the States.

P r o g r a m D e s c r ip tio n
This Federal/State coop erative program places the
responsibility for preparation o f State and area occup a­
tional projections in the State em ploym ent security
agencies. T h ese agen cies are the source o f essential
State em ploym ent statistics and have know ledge o f cur­
rent and p rosp ective State and area econom ic condi­
tions that are needed to m ake reliable industry and
occupation al p rojection s. T he program is broad in
scop e in that it covers basic research leading to the
develop m en t and im provem ent o f standardized p roce­
dures for making current estim ates and projections o f
occupational dem and and supply at the State and subState levels; guidance to State agen cy staff concerning
the use o f the occupational dem and and supply data in
the planning and im plem entation o f training and other
m anpow er and em ploym ent service activities; prepara­
tion and dissem ination o f technical procedures and ma­
terials for u se by the State agen cies, as w ell as training
o f State agen cies personnel by B L S regional office staff
in im plem enting the procedures; com puter system s that
permit the State agen cies to carry out the work related
to the develop m en t o f occupational em ploym ent data;
and a com m unications netw ork that perm its State to
express their data n eed s, review and com m ent on tech ­
nical and other m atters, and a cc ess a centralized data
processing service.
In this program, each o f the principal organizations
have certain respon sibilities. The E m ploym ent and
Training Adm inistration is responsible for the utiliza­
tion o f State and area occupational projections in train­
ing and em p lo y m en t se r v ic e program s. T he State
em ploym ent security agen cies have responsibility for
the preparation, review , and publication o f their respec­
tive State and area occupational estim ates and projec­
tions. The B ureau’s responsibilities include the conduct
o f b asic research lead ing to the d ev elo p m en t and
im provem ent o f standardized procedures for making



61

current estim ates and projections o f occupational sup­
ply and demand; the developm ent and updating o f tech­
nical manuals; the publication o f national projections
and other information needed as tools in the d evelop ­
m ent o f State and area projections; and the d evelop ­
m ent o f com puter programs, including a centralized
data processing service.
To further the objectives o f the program, research is
done by the State agencies that is incorporated into the
system , as is their insight concerning the needs o f data
users.
The State and area projections produced through this
program provide a m easurem ent o f the magnitude o f
change in occupational em ploym ent requirem ents over
the projection period. T hey are not intended to be pre­
cise m easurem ents o f future occupational em p loy­
ment lev els. N o attempt is made to adjust the projec­
tions for cyclical m ovem ents in the econom y.
The projections are updated frequently to reflect the
latest available data and the know ledge o f econom ic
co n d itio n s, including plant clo sin g s and openings;
technological innovations; and other factors necessary
to produce the m ost reliable projections p ossib le. To
further this end, the State agencies responsible for the
projections are encouraged to consult representatives
o f industry, labor, and other governm ent agencies dur­
ing the d evelopm ental p rocess to incorporate the w idest
possible know ledge concerning the econom ic area for
w hich the projections are being developed.

U s e s o f t h e D a ta
A lthough the program is designed to m eet the occu ­
pational data needs o f the E m ploym ent and Training
A dm inistration and the State em ploym ent security
agencies, the resulting State and area occupational in­
form ation is useful to other data users as w ell. Major
users, for exam ple, are the State and local vocational
education personnel involved in planning training pro­
grams. B ecau se the output covers the full spectrum o f
occupational skills, State and regional personnel in1
terested in the outlook for occupations requiring college
education have begun to use the data to a ssess the
supply o f and demand for college graduates. A s the data
from the O ccupational Em ploym ent Statistics surveys
(conducted by the State em ploym ent security agencies)
are fully used in the projections p rocess, the program
will have additional benefits. The survey covers, for
exam ple, many entry occupations and these data can be
used in job developm ent studies, as w ell as in preparing
career guidance information. The survey detail will also
facilitate the study o f training needs and analysis o f the
changing use o f workers by specific industries.

Chapter 8.

M easurem ent Of Unem ploym ent in State And Local A re a s
B ack grou nd

U nem p loym ent estim ates for States and local areas
are d evelop ed by State em ploym ent security agencies
to m easure local labor market im balance and hence are
a key indicator o f local econ om ic conditions. T hese
estim ates are u sed by State and local governm ents for
planning and budgetary purposes and as an indication o f
the need for local em ploym ent and training services and
program s.
U nder the Federal-State coop erative program, the
D epartm ent o f Labor d evelop s the con cep ts, defini­
tions and technical procedures w hich are used by State
a g e n c ie s fo r th e p rep a ra tio n o f la b o r fo r c e and
unem ploym ent estim ates. Federal agen cies u se local
area unem ploym ent estim ates to determ ine the eligibil­
ity o f an area for benefits in various Federal assistance
program s, such as the C om prehensive E m ploym ent
and Training A c t (C E T A ), th e P u blic W orks and
E con om ic D evelop m en t A ct (P W E D A ), the C oncen­
trated E m ploym ent Program (C EP), and others.
U nem p loym ent estim ates have been d evelop ed for
labor market areas for over 30 years. The program
began during W W II under the auspices o f the War
M anpow er C om m ission. The em phasis w as to identify
areas w here labor market im balance w as created as a
result o f an inadequate labor supply, material short­
ages, and transportation difficulties. After W W II, em ­
phasis w as placed on identifying areas o f labor surplus,
and the program o f classifying areas in accordance w ith
the severity o f unem ploym ent w as established.
In 1950, the D epartm ent o f L abor’s Bureau o f Em ­
ployment Security (now Employment and Training Ad­
m inistration) published a handbook on ‘ ‘T echniques for
Estim ating U n em p loym en t” in order that com parable
estim ates o f the unem ploym ent rate could be produced
am ong the States. During the late 1950’s, the H andbook
w as im proved by incorporating the exp erien ces gained
since the beginning o f the decad e. This research led to
the form ulation o f the “ 70-step m ethod” described in
the “ H andbook on Estim ating U n em p loym en t” , pub­
lished in 1960 by the Bureau o f E m ploym ent Security.
(S ee T echnical R eference 1.) This m ethod, also referred
to as the “ H andbook m eth o d ,” is a series o f com puta­
tional steps d esigned to produce total em ploym ent and
unem ploym ent estim ates.
In N ovem b er 1972, the Bureau o f Labor Statistics
w as assigned the responsibility for d evelop ing the con ­
cep ts and m ethods used by States to estim ate labor
force, em ploym ent, and unem ploym ent. In late 1973,
after ex ten siv e research, a new system for developing
labor force estim ates w as introduced. It com bined the

http://fraser.stlouisfed.org/
62
Federal Reserve Bank of St. Louis

main features o f the H andbook m ethod, including its
con cepts and definitions, as w ell as the estim ation co n ­
trols from the national survey for measuring the labor
force status o f individuals.
M e t h o d . During the developm ent o f the
H andbook m ethod, a effort w as made to establish a set
o f p r o c e d u r e s th at w o u ld d e riv e an e stim a te o f
unem ploym ent for an area com parable to the estim ate
that w ould be produced by a random sam ple o f h o u se­
holds in the area, as in the Current Population Survey.
On th e a s s u m p tio n th a t c o m p a r a b ility c o u ld be
ach ieved , the H andbook presents a series o f estim ating
“ building b lo c k s” w here categories o f unem ployed
workers are classified by their previous status. Three
broad categories o f unem ployed persons are identified:
(1) th ose w ho w ere last em ployed in industries covered
by State U n em ploym ent Insurance (U I) law s; (2) those
w ho w ere last em ployed in noncovered industries; and
(3) th ose w ho w ere either entering the labor force for the
first tim e, or w ere reentering the labor force after a
period o f separation.
In the current m onth, the estim ate o f unem ploym ent
is an aggregate o f the estim ates for each o f the three
building block categories. A n estim ate for the covered
category w as derived from a count o f current (U I)
claim ants and estim ates o f claim ants w h ose b enefits
have b een exhausted, persons w ho w ere disqualified
from receiving benefits, and persons w ho filed claim s
late, or not at all. The estim ates o f persons w ho have
exhausted their benefits and those in a disqualified
status are based on the num ber actually counted in the
current period, plus an estim ate o f th ose exp ected still
to be unem ployed from previous periods.
F o r th e n o n c o v e r e d c a te g o r y , an e s tim a te o f
unem ploym ent is d evelop ed for each industry or class
o f worker subgroup. T hese estim ates are based primar­
ily on the “ State covered unem ploym ent rate” (the
ratio o f covered unem ploym ent to covered em ploy­
m ent), and the estim ate o f em ploym ent for the sub­
group. For som e subgroups, special scaling factors,
based on relationships derived from national industry
data, are used to control the size o f the final estim ate.
The third category, new entrants and reentrants into
the labor force, could not be estim ated directly from the
U I system statistics becau se unem ploym ent for th ese
persons w as not im m ediately preceded by a period o f
em ploym ent. Instead, an equation w as d evelop ed to
estim ate total entrants into the labor force on the basis
o f the historical relationship o f entrants to the experi­
enced unem ployed and the experienced labor force. A t

H a n d b o o k

MEASURING OF UNEMPLOYMENT IN STATE AND LOCAL AREAS
a given m om ent in tim e, the H andbook estim ate o f
entrants into the labor force is a function of: (1) the
particular m onth o f the year; (2) the level o f the experi­
enced unem ployed; (3) the level o f the exp erienced
labor force, and (4) the proportion o f the working age
population that is considered “ y o u th ” . The estim ate o f
total entrants for a given month is a com posite estim ate
defined as:
U

= A (X + E ) + B X , w h ere

U

= to ta l e n tr a n t u n e m p lo y m e n t

E

= to ta l e m p l o y m e n t

X

= to ta l e x p e r i e n c e d u n e m p lo y m e n t

A , B = s y n t h e t ic f a c t o r s in c o r p o r a t in g s e a s o n a l v a r ia t io n ,
a n d a n a s s u m e d r e la t io n s h ip b e t w e e n th e p r o p o r ­
t i o n o f y o u t h s in t h e w o r k i n g a g e p o p u l a t i o n
a n d t h e h is t o r ic a l r e la t io n s h ip o f e n tr a n ts to e it h e r
t h e e x p e r i e n c e d u n e m p lo y e d (B f a c t o r ) o r th e
e x p e r i e n c e d la b o r f o r c e ( A f a c to r ) .

63

fits and the treatment o f persons who fail to qualify for
benefits for nonm onetary reasons (quits, discharges,
etc.), also vary from State to State.

M e th o d o lo g ic a l I m p r o v e m e n ts
In 1973 and 1974, several m odifications to the proce♦ dures used by the States for estim ating em ploym ent and
unem ploym ent were introduced. T hese w ere designed
to establish uniform labor force concepts and defini­
tions in all States and areas, consistent with those used
in the national labor force survey. The major thrust o f
the im provem ents has been in tw o areas: (1) M odifying
the m ethods previously used by States and areas to
estimate em ployment and unemployment, and (2) bench­
marking (or controlling) State prepared estim ates to
annual average totals from the Current Population
Survey.
M o d ific a tio n .
One o f the major m odifica­
tions introduced was a procedure for adjusting the
p la c e-o f-w o rk em p lo y m e n t e stim a te s u sed in the
H andbook to place-of-residence estim ates, as in the
Current Population Survey. Adjustm ent factors for the
major categories o f em ploym ent in the H andbook were
d evelop ed on the basis o f em ploym ent relationships
w hich existed at the tim e o f the 1970 decennial C ensus.
T hese factors are applied to the preliminary em ploy­
ment estim ates for the current period to obtain the
adjusted estim ates which are then used in the 70-step
m ethod. Each adjustment factor is defined as follow s:

P r o c e d u r a l

The total em ploym ent estim ate is based on data from
several sou rces. The primary source is a survey o f
establishm ents w hich is designed to produce an esti­
m ate o f the total num ber o f em p loyees on payrolls in
nonagricultural industries. E stim ates o f agricultural
w orkers, the self-em p loyed , unpaid fam ily w orkers,
and dom estics are d evelop ed synthetically.

C o n c e p t s A n d D e fin itio n s
There are several major conceptual and definitional
differences b etw een the H andbook m ethod and the
Current Population Survey (C PS). For exam ple, in the
H andbook, em ploym ent estim ates are based primarily
on establishm ent payroll data and h en ce are place-ofwork estim ates. B y contrast, the CPS estim ates are
based on a survey o f h ousehold s in the area and hence
are p la ce-o f-resid en ce estim a tes. In the H andbook
m ethod, a person on an unpaid ab sen ce is excluded
from the payroll estim ate, but is considered em ployed
in the C PS. A lso , a person holding tw o job s in covered
industries within the reference w eek is counted tw ice in
the payroll estim ate, but only o n ce in the CPS estim ate.
The conceptual differences b etw een the H andbook
and CPS estim ates o f u nem ploym ent are more difficult
to recon cile. B ased on U I co n cep ts, a person m ay be
eligible for b en efits, and h en ce be counted as un­
em ployed , ev en if the person had earnings during the
reference w eek b ecau se the State U I law s allow for
som e earnings b elow a fixed lev el, the so-called “ for­
given ess le v e l.” In the C PS, persons having any earn­
ings are counted as em ployed . T he H andbook d oes not
count (or estim ate) the number o f persons in covered
industries w ho do not have sufficient tim e on the job or
earnings to qualify for benefits. And since U I law s vary
from State
 to State, the “ forgiven ess le v e l” earnings,
http://fraser.stlouisfed.org/ the determ ination o f eligibility for ben e­
the criteria for
Federal Reserve Bank of St. Louis

=

(C /E ^ E * , w h e r e

C1 =

C e n s u s e s t i m a t e fo r t h e ith e m p l o y m e n t c a t e g o r y

E1 =

H a n d b o o k e s t i m a t e at t im e o f C e n s u s f o r t h e ith
e m p lo y m e n t c a te g o r y

E\ = P r e lim in a r y e s t im a t e f o r th e ith e m p lo y m e n t c a t e ­
g o r y d u r in g t im e p e r io d (t)

E\

=

A d j u s t e d e m p l o y m e n t e s t i m a t e w h ic h r e p la c e s E* in
t h e d e r iv a t io n o f th e fin a l e s t i m a t e o f to ta l e m p l o y ­
m e n t fr o m th e H a n d b o o k

B e n c h m a r k
A d ju s tm e n t.
The benchm ark m ethod ad­
ju sts su cce ssiv e pairs o f years in three general phases.
First, the m onthly H andbook estim ates in each year are
corrected for scale, creating a preliminary series. S ec­
ond, the perturbation betw een the CPS and Handbook
series is w edged into the relevant pair o f years to pro­
duce a sm ooth preliminary series. Third, the adjust­
m ent error in a given year caused by developing the
preliminary tim e series is forced into that year, yielding
the final time series.
In the first phase, each pair o f years is divided into
mutually exclu sive 4-m onth and 8-m onth periods. In
the 4-m onth period o f each year, M ay through A ugust,
preliminary estim ates are produced by multiplying each
H andbook estim ate by the ratio o f the CPS and Hand-

BLS HANDBOOK OF METHODS

64

justm ent is made in order to m inimize the potential
book annual averages for that year. This is an adjust­
m ent to the trend-cycle com ponent o f the H andbook
error in “ predicting” the trend in the current year,
series. In the final year, preliminary estim ates for May
im plicit in the forcing p rocess. A ny prediction error
through D ecem b er are also produced in this manner.
w ould ultim ately surface as an error in the extrapolated
The second phase co n sists o f a com bined trend-cycle
estim ates, since the D ecem ber estim ate is the bench­
and w edging or sm oothing adjustm ent. The wedging
mark that is extrapolated forward.
process is n ecessary to produce a preliminary time
E x tr a p o la tio n
P r o c e d u r e s . In the current year, the
series adjusted for differences b etw een su ccessiv e pairs
o f ratios o f annual averages, caused by random varia- * benchm arked estim ates are extrapolated forward by
tion. This phase replaces each H andbook estim ate in
applying the latest relevant correction factor to the
the 8-m onth period, Septem ber-A pril, by a w eighted
currents H a n d b o o k e stim a te s o f em p lo y m e n t and
unem ploym ent. The em ploym ent factor used in year (t)
com posite estim ate w hich is determ ined by multiplying
th e H a n d b o o k e s t im a te fo r th a t m o n th b y th e
is the quotient o f the D ecem ber em ploym ent benchmarked and H andbook estim ates in year (t-1). The
C PS/H andbook annual average ratios in each o f the pair
unem ploym ent factor for year (t) is the algebraic differ­
o f years and then adding together a predeterm ined
proportion o f each product. The proportions used are,
en ce b etw een the D ecem b er unem ploym ent benchin effect, the w eights. The generalized com posite for­
marked and H andbook estim ates in year (t-1). The pre­
liminary benchm arked estim ate for any month in the
mulation is:
current year is then the result o f applying the appro­
E{ =
E jR j Wj + E i R 2 W j, i = 1 ,8 ; w h e r e
priate correction factor by multiplication (for em ploy­
m ent), or by addition (for unem ploym ent) to the cur­
=
a c tu a l H a n d b o o k e s t im a t e fo r th e ith m o n th
rent m onthly H andbook estim ate.
Ri =
W£

r a tio o f a n n u a l a v e r a g e s in t h e e a r lie r y e a r o f p a ir

=

th e w e ig h t s o r p r o p o r t io n s , w h e r e K = 1 a n d 2

U s e s A n d L im ita tio n s
In Septem ber, for exam ple, the com posite estim ate
equals the sum o f one-eighth o f the product o f the
C PS/H andbook ratio o f annual averages in year (t) and
the Septem ber H andbook estim ate in year (t-1), plus
seven-eighths o f the product o f the CPS/H andbook
ratio o f annual averages in year (t-1) and the Septem ber
H and b ook estim a te in (t-1). S in ce the sum o f the
w eights equals 1, the w eights are easily com puted.
M o n th

W e ig h t s
Wi

S e p te m b e r
O cto b er
N ovem ber
D ecem ber
Janu ary
F eb ru ary
M arch
A p r il

W2

Vs

Vs

3
A

V4

Vs

3
/s

V l

V i

1/2

Vi

3
A

Vs

V4

3
A

Vs

Vs

Identical w eights are used for D ecem b er and January to
preserve the relationship b etw een th ese m onths during
the adjustm ent p rocess.
In the third phase, the preliminary m onthly estim ates
are forced to the CPS annual average to produce the
final tim e series. This is accom plished by multiplying
the m onthly estim ates for each year by the ratio o f the
CPS annual average to the annual average o f the pre­
liminary estim ates for the sam e year. In the last year o f
adjustm ent, h ow ever, a special procedure is used. The
difference b etw een the prelim inary annual average and
the CPS annual average is spread over the 11-month
J a n u a r y -N o v em b e r p erio d u sin g sp e c ia l w e ig h ts,
th ereb y c a u sin g th e D e c e m b e r b en ch m a rk ed and
H andbook estim ates to be in the sam e m ultiplicative

relationship
http://fraser.stlouisfed.org/ as are the annual averages. This lag ad­
Federal Reserve Bank of St. Louis

E stim ates o f unem ploym ent and the unem ploym ent
rate are used by Federal agencies to determ ine the
eligibility o f an area for benefits in various Federal area
assistance programs. Each m onth, the Departm ent o f
Labor classifies 150 major labor market areas according
to the degree o f im balance in the local labor market, as
measured by the unem ploym ent rates. T hese classifica­
tions are used by other Federal agencies for program­
matic purposes, for exam ple, to determ ine eligibility for
grants under the Public W orks and E con om ic D e­
velopm ent A ct, or for preference for local area firms in
Federal contracts awards under D efen se M anpower
Policy N o . 4.
The E m ploym ent Training Adm inistration o f the D e­
partment o f Labor u ses unem ploym ent data to deter-**
mine whether an area is eligible to receive funds under
the C om prehensive E m ploym ent and Training A ct
(CETA) o f 1973 and for allocation o f th ese funds. For
ex a m p le, u n its o f g en eral lo c a l g o v ern m en t o f a
specified minimum population size are eligible to re­
ceive funds under Titles II and VI o f the A ct, if the
unem ploym ent rate in the area is at least 6.5 percent for
3 con secu tive m onths, as determ ined by the Secretary
o f Labor. The am ount o f funds received by the area is
prorated on the basis o f the lev els o f unem ploym ent in
the eligible areas. For larger units o f local governm ent,
called prime sponsors, 37.5 percent o f the funds allo­
cated to an area under Title I o f the A ct, is based on the
unem ploym ent level.
The CPS annual average estim ates used to control
labor force estim ates at the State lev el and for large
m etropolitan areas are based on a random sam ple o f
households and hence are subject to sampling error.
B L S does not accept sam ple estim ates as controls un­

MEASURING OF UNEMPLOYMENT IN STATE AND LOCAL AREAS
less the coefficien t o f variation (standard error divided
by the m ean) o f the estim ate is 10 percent or less at 1
standard error. T he m onthly estim ates prepared using
the m odified H andbook m ethod are syn th etic esti­

65

m ates, not subject to sampling variability. Y et other
types o f nonsam pling errors and biases do occur. The
B L S has not determ ined the mean square errors o f
th ese monthly estim ates.

T e c h n ic a l R e f e r e n c e s
Number
1.

2.

U .S . D epartm en t o f L abor, B ureau o f E m p loym en t Secu rity,
“ H an d b ook o n E stim atin g U n em p lo y m e n t” , Employment
Security Research Methods, Handbook Series (B E S N o .
R -185), 1960, (reprints availab le from the B ureau o f L abor
S ta tistics, O ffice o f E m p loym en t Structure and T rends).
________ _ B ureau o f L abor S ta tistics, New Procedures for Es­
timating Unemployment in States and Local Areas, (Report
432), 1974.
T h is report p resen ts an o v e rv iew o f the n ew p roced ures
u sed to estim a te u n em p loym en t in S tates and local areas. T he
n ew m eth od is d esig n ed to prod u ce e stim a tes that are m ore
com parable from State to State and are con sisten t w ith the




Number
national u n em p loym en t estim ates.
3. _________ , “ L abor fo r ce , em p loym en t and u n em p loym en t” ,
C h. 1, BLS Handbook of Methods for Surveys and Re­
ports, (1976 ed ition ).
T h is chapter p rovid es d efin ition s o f the labor fo rce c o n ­
cep ts u sed in the Current P opulation S u rvey (C P S), as w ell as
a b rief d escrip tion o f the sam ple design .
4. _________ , “ E m p loym en t, hours and e a r n in g s” , C h . 3 , BLS
Handbook of Methods for Surveys and Reports, (1976 ed i­
tion).
T h is chapter d escrib es the p roced u res u sed to estim ate
nonagricultural w age and salary em p loym en t.

Chapter 9. Em ploym ent and W ages Covered
by Unem ploym ent Insurance Law s
B ack grou nd
E m ploym ent and w age data for workers covered by
State unem ploym ent insurance law s and for Federal
c iv ilia n w o r k e r s c o v e r e d b y th e p rogram o f
U n em p loym ent C om pensation for Federal E m p loyees
(U C F E ) are com piled from quarterly tax reports sub­
mitted to State em ploym ent security agencies by em ­
ployers subject to the State unem ploym ent insurance
law s and Federal installations subject to the U C F E
program s. This program o f com piling em ploym ent and
w age data is com m on ly referred to as the E S-202, the
Federal report w hich sum m arizes data from the quar­
terly tax reports.
The Federal U n em p loym ent Insurance Tax A ct pro­
vision s first b ecam e effective in January 1938. The A ct
applied only to firms em ploying at least eight p ersons in
20 w e ek s in a calendar year and exclu d ed certain
categories o f w orkers. A m endm ents to Title X V o f the
Social Security A ct — The Program o f U nem ploym ent
C om p en sation for F ederal E m p lo y e es — exten ded
coverage to Federal civilian em p loyees on January 1,
1955, and to w orkers in firms em ploying from four to
seven w orkers on January 1, 1958.
In 1958, the U n em p loym ent C om pensation for Exservicem en (U C X ) program becam e effectiv e, bringing
under coverage a significant portion o f m en and w om en
w ho had served in the armed forces. (The programs for
ex-m ilitary personnel w hich ex isted prior to 1958 were
o f a tem porary nature.)
O ver the years many States h ave, through changes in
State legislation, provided u nem ploym ent insurance
protection to additional categories o f w orkers above the
base established through Federal legislation.
Federal legislation em bodied in the E m ploym ent
Security A m endm ents o f 1970 effec tiv e January 1,
1972, exten d ed coverage o f State unem ploym ent insur­
ance system s to firms em ploying on e or more workers
in 28 S tates (the rem aining S tates had already e x ­
panded coverage for th ese small em ployers prior to
the p a ssa g e o f the F ed eral m inim um requirem ent)
and exp an ded som e o f the statutory coverage pro­
v is io n s . T h e se am en d m en ts as w e ll as ad ditional
changes in State legislation have broadened the base o f
workers protected by u nem ploym ent insurance to more
than three-fourths o f all w orkers. Special provisions for
railroad w o r k e rs are m ad e th ro u g h th e R ailroad
U n em p loym en t Insurance A ct.

66


Data on em ploym ent and w ages o f workers covered
by unem ploym ent insurance have been published quar­
terly in E m p l o y m e n t a n d W a g e s since the first quarter
o f 1950. B efore that tim e reports were issued sem iannu­
ally and annually beginning w ith 1938. In 1972, publica­
tion and technical responsibilities for the ES-202 pro­
gram were transferred to the Bureau of Labor Statistics
from the E m ploym ent and Training A dm inistration
(formerly M anpow er Adm inistration) o f the Depart­
ment o f Labor. Prior to that tim e, the Bureau performed
the data processing functions o f the ES-202 under con ­
tract from E m ploym ent and Training.

D e sc r ip tio n o f th e P ro g ra m
A s o f 1974, more than 3.8 million reporting units o f
em ployers in private industry w ere subject to State
unem ploym ent insurance law s. T hese units submit to
State ag en cies quarterly contribution (tax) reports
w hich contain data on m onthly em ploym ent, and quar­
terly total and taxable w ages, and contributions. Sim i­
larly, reports o f m onthly em ploym ent and quarterly
w ages are subm itted by approxim ately 33,000 reporting
units o f the Federal G overnm ent. T hese reports, sum ­
marized each quarter by State agen cies, provide a vir­
tual censu s o f workers (and their w ages) o f private
nonagricultural em ployers and the Federal G overn­
m ent. In addition alm ost 80 percent o f State govern­
m ent em p loyees are covered . Only 15 percent o f local
governm ent em p loyees and 4 percent o f workers en ­
gaged in agricultural production activities are in covered
employment.
Sum m arized em ploym ent and wage data obtained
from the contribution reports are transmitted quarterly
to the Bureau o f Labor Statistics by the em ploym ent
security agencies o f the 50 States, the D istrict o f C ol­
um bia, and Puerto R ico. The Virgin Islands report only
em ploym ent and w age data for Federal w orkers. T hese
data are in turn sum m arized by B LS and published in
the quarterly E m p l o y m e n t a n d W a g e s .

C o n c e p ts
T he e m p lo y m e n t and w a g e d ata r e p r esen t th e
number o f w orkers earning w ages during the pay period
including the 12th o f the m onth. T hese data are reported

EM PLO YM ENT AN D WAGES COVERED BY UN EM PLO YM EN T INSURANCE LAW S
on the quarterly reports o f em p loyers and su p ­
plemented by statistical reports from multiestablish­
ment employers engaged in more than one industrial
activity or geographic location. The pay period will
vary, in both date and length from employer to em­
ployer. For most employers, the payroll period is a
7-day period, not necessarily a calendar week. An em­
ployer who pays on more than one basis (such as pro­
duction em p loyees w eek ly and office em ployees
semimonthly) reports a figure that is the sum of the
number of workers on each type of payroll for the
appropriate period.
The employment count o f workers includes all corpo­
ration officials, execu tives, supervisory personnel,
clerical workers, wage earners, persons on paid vaca­
tions, piece workers, and part-time workers. Since the
employment count is based on individual establish­
ments, the workers are reported as working in the State
of the physical location o f their job.
Persons on paid sick leave, paid holiday, paid vaca­
tion, and so forth, are included, but those on leave
without pay for the entire payroll period are excluded.
Persons'on the payroll o f more than one establishment
during the period are counted each time reported.
Workers are counted even though, in the latter months
o f the year, their w ages may be nontaxable for
unemployment insurance purposes. The employment
count excludes the following: (1) Workers who earned
no wages during the entire applicable pay period be­
cause o f strikes or work stoppages, temporary layoffs,
illness, or unpaid vacations; (2) workers who earned
wages during the month without earning any during the
applicable pay period; and (3) proprietors, the selfem ployed, unpaid family workers, most farmworkers,
and most dom estics in private households.
Federal legislation, according to provisions o f PL
91-373, now requires the States to cover em ployees in
State owned and operated hospitals and State institu­
tions o f higher education. In addition, the UI laws of 42
States provide coverage for som e portion of the State
and/or local government em ployees, although in some
States these laws are not implemented. In 24 States,
coverage is mandatory for all State em ployees and in 6
States, coverage o f both State and local government
workers is mandatory. In the remaining States, cov­
erage is elective, so that only 80 percent of State gov­
ernment and 15 percent of local government em ployees
are actually covered. (Details on coverage laws are
provided in Comparisons of State Unemployment In­
surance Laws, available on request from the Employ­
m ent and Training A d m in istration , U I S erv ice,
Washington, D.C. 20212).
Employment data reported for Federal civilian em­
ployees are a by-product o f the operations of State
em ployment security agencies in administering the
provisions o f title XV of the Social Security Act—the
program o f Unemployment Compensation for Federal
Employees.

The data are based on reports of monthly em ploy­


67

ment and quarterly wages submitted each quarter to
State agencies for all installations of Federal agencies
having em ployees covered by the act, except the Cen­
tral Intelligence Agency and the National Security
Agency, which are omitted for security reasons. A Fed­
eral installation is a single physical location at which an
organizational unit of a Federal department or agency
has civilian employment.
The Department of Defense (except units paid from
nonappropriated funds) submits these data under a spe­
cial arrangement. In lieu of quarterly reports, installa­
tions of the Departments of Army, N avy, Air Force,
and other Defense units submit monthly reports to the
State agencies covering each installation having 101
em ployees or more. Quarterly data for all installations
including those having fewer than 101 em ployees are
reported directly to the Bureau of Labor Statistics,
which then transmits the figures to the States for inclu­
sion in the Department of Defense totals.
The Federal agencies currently report data sepa­
rately by installation, except where they exercise the
option to com bine small installations in a single
“ statew id e” report. Installation reporting permits
grouping the data by political subdivision below the
State level, i.e ., county metropolitan areas, etc.
The employment count for any given month for all
agencies (except the Department of Defense) is based
on the number o f persons on the payroll for the period
including the 12th of the month. The employment count
in installations of the Department of Defense includes
persons employed on the last workday of the month
plus all intermittent em ployees during the month. As
used here, intermittent workers are occasional workers
who were employed at any time during the month.
Total wages are in most States the total amount of
compensation paid by the employer to em ployees dur­
ing the calendar quarter for services performed, regard­
less whether the services were performed during the
calendar quarter. A few State laws specify that the
wages reported shall be on a payable basis, i.e ., for
services performed during the quarter. Under most
State laws or regulations, wages include bonuses, the
cash value of meals and lodging when supplied, and tips
and other gratuities.
Employer contributions for old-age and survivors in­
surance, for unemployment insurance, for workmen’s
compensation, and for private pension and welfare
funds, although generally considered supplementary to
wages and salaries, are not included in wages o f work­
ers in private industry for the purposes of reporting to
State agencies. On the other hand, em ployee contribu­
tions for the same purposes, money withheld for in­
com e taxes, union dues, etc., are included as wages
even though they are deducted from the worker’s gross
pay.
For Federal workers, wages represent the gross
amount of all payrolls for all pay periods ending within
the quarter. This gross amount includes cash allow­
ances and the cash equivalent o f any type of remunera­

BLS HANDBO O K OF METHODS

68

tion. It includes all payments for sick leave, lump-sum
payments for terminal leave, withholding taxes, and
civil service retirement deductions. Federal employee
remuneration generally covers the same type of ser­
vices as those for workers in private industry. Depend­
ing on the method used by the Federal agency in prepar­
ing its quarterly summary balance (cash or accrual
basis), the gross amount of payrolls is either paid or
payable.

T a x a b le W a g e s a n d C o n tr ib u tio n s
Taxable wages, which are that part of wages subject
to the State unemployment insurance tax, and the con­
tributions paid on such wages also are reported on
quarterly contribution reports from covered em ­
ployers.
Under provisions of Federal law, certain units of
State and local government after 1942 and certain non­
profit establishments o f the private sector after the 1972
expansion o f coverage could elect to reimburse the
State under which they were liable for any claims that
may have been filed against them. These reimbursable
accounts are not subject to the quarterly assessment for
the insurance funds. For these accounts and, of course,
those accounts under UCXand UCFE programs, the
taxable wage and contribution items would not be re­
ported on their quarterly report.
An employer pays contributions on only the first
$4,200 o f an em ployee’s annual wage in all but five
States. The portion of wage subject to taxation is de­
termined by State law and has varied substantially over
time. In 25 States, employers may obtain lower tax
rates by m aking volu n tary con trib u tion to the
unemployment fund.

Three States— Alabama, Alaska, and New Jersey
—also accept contributions from em ployees. Such con­
tributions are included without separate identification.

In d u str ia l C la s s if ic a t io n o f D a ta — 1 9 3 8 to
D a te
Employment and wage data have been classified by
industry beginning with 1938. (See table.)
From 1938 through 1941, quarterly and annual data
were classified in the 80 two-digit industry groups
shown in the 1939 edition of the S o c i a l S e c u r i t y B o a r d
I n d u s tr ia l C la s s ific a tio n C o d e .
From 1942 through 1946, the annual data were clas­
sified into 402 three-digit industry groups and the quar­
terly data into 77 two-digit groups provided in the 1942
edition o f the S o c i a l S e c u r i t y B o a r d I n d u s t r i a l C l a s s i f i ­
c a tio n C o d e .
For 1947 and 1948, the annual data were classified
into 406 three-digit groups and the quarterly data into 77
two-digit groups provided by the 1942 edition o f the
S o c ia l S e c u r ity B o a r d I n d u s tr ia l C la s s ific a tio n C o d e

for nonmanufacturing industries and in the 1945 edition
of the S t a n d a r d I n d u s t r i a l C l a s s i f i c a t i o n M a n u a l for
manufacturing industries.
From 1949 through 1957, the quarterly data con­
tinued to be classified into two-digit groups and, in
addition, by three-digit groups on the same basis as in
the 1947-48 period. The reporting o f annual data by the
States was discontinued.
Data for the years 1958 through 1963 were classified
into 384 three-digit and 79 two-digit industry groups
based on the classifications established in the S t a n d a r d
I n d u s t r i a l C l a s s i f i c a t i o n M a n u a l , 1957 edition. From
1964 through 1967, the series w ere cla ssified as

Industrial Classification of employment and wage data 1938-75
Basis of industrial classification

N ber of industry groups by
um
2-digit
code

3-digit
code

1938-41 .........................................
1942-46 .........................................
1947-55 .........................................
1956-57 .........................................
1958-67 .........................................
1968-74 .........................................
1975- .............................................
Nonmanufacturing

20
21
21
21
21
21
20

146
150
150
148
148
144

1938-41 .........................................
1942-57 .........................................
1958-67 .........................................
1968-74 .........................................
1975- .............................................

60
56
58
62
64

256
236
235
279

Period

4-digit
code

Social Security
B
oard (SSB)
1942
1939
edition
edition

Standard Industrial Classification (SIC
)
1945
edition

1957
edition

1967
edition

1972
edition

M
anufacturing

1

January-M arch qu arter only.

 on a m andatory basis.
2Not coded


X
X
X
X

1
469
1
433
1
417
1
451

X
X

X

X
X
X
2494
2553

X
X

EM PLOYM ENT AND WAGES COVERED BY UN EM PLO YM ENT INSURANCE LAWS
amended by the 1963 Supplement to the Manual.
Beginning with data for the January-March 1968
period, 384 three-digit and 78 two-digit industry groups
were used for classifying the data. These groupings are
based on the 1967 edition of the S t a n d a r d I n d u s t r i a l
C l a s s i f i c a t i o n M a n u a l . Conversion of the employment
and wage series to the 1972 edition will take effect
beginning with data for the first quarter 1975.
Employment and wage reports submitted by State
agencies do not carry industry detail beyond the threedigit level except for manufacturing industries. For
manufacturing, four-digit classifications are required in
the reports for the first quarter of each year, beginning
with those for the January-March 1956 period. Most
States, however, classify all reporting units for all in­
dustry sectors in their records with four-digit industry
codes, and some have tabulated data available for these
industries.
The objective in industry classification is to have
each place o f business coded on the basis of its principal
activity. If a firm in private industry or a government
agency conducts different activities at its various
establishments or installations, separate industry codes
are assigned to the extent possible to each establish­
ment. Industry codes are assigned by State agencies to
each reportable establishment or installation based on
‘*nature-of-business” information submitted for them.

Classification of Data by Employment
Size-of-Reporting Unit
For the first quarter of each year from 1959 to the
present, with the exception o f the 3-year period from
1964 through 1966, tabulations showing employment
and wage data by size-of-reporting unit are included.
Reporting units are, for the m ost part, individual
establishments o f employers. An establishment is gen­
erally defined as a single physical location at which one,
or predominantly one, type of econom ic activity is car­
ried on. Most employers covered under the State UI
laws operate only one place of business. In such in­
stances, the establishment, the reporting unit, and the
employer are identical. Employers who operate at two
or more locations and have employment o f more than 50
workers in all o f their secondary locations combined are
requested by the State agencies to identify separately
the employment and payrolls of each location. To the
extent that State agencies have been successful in ob­
taining employer cooperation in this regard, the report­
ing units and establishments of such employers are
identical. When multiestablishment employers do not
furnish this breakdown, the employment and payrolls
for the secondary locations are combined and reported
with the primary location as one reporting unit. Also,
particularly in industries characterized by small branch
establishment (e.g., food stores, drug stores, banks),
employers are allowed to group all branch establish­
ments in
 a single county and report the combination as a


69

single reporting unit.
In the government industry division, the equivalent
of a reporting unit is termed an “ installation” and the
governmental organization of which it is a part — i.e.,
the department, agency, or instrumentality responsible
for an activity of government is the employer (firm
equivalent). Federal agencies are requested to follow
slightly different criteria from private employers in
breaking down their reports by installation. They are
permitted to combine as a single statewide reporting
unit (a) all installations with 10 workers or fewer or (b)
all installations which have a combined total in the State
of fewer than 50 workers. Also, when there are fewer
than 25 workers in all secondary installations in a State,
they may be combined and reported with the major
installation.
As the result of the above-mentioned procedures, the
number of reporting units is always larger than the
number of subject employers (or government agencies)
but smaller than the number of establishments (or in­
stallations).
Nine employment-size intervals are used in the sizeof-reporting unit distributions. Subject only to the limi­
tations o f industry coverage, all but one o f these class
intervals represent the actual business population in the
given size classes.
In some States, nonprofit organizations having under
four em ployees are not required to be covered. In al­
most all of these States, however, employers can volun­
tarily participate in the State unemployment insurance
program and the data from these establishments are
included in the tabulations.

L im ita tio n s
The employment and wage data for quarters may be
affected by strikes, by bonus payments (usually in the
October-December quarter), by retroactive payments,
and by the influx of young summertime workers in the
July-September quarter. Employed covered workers,
covered workers, and covered jobs are considered
synonymous because o f th eclose approximation of jobs
and employed workers in the employment counts. The
em ploym ent figures overstate to som e extent the
number of individuals who were at work and receiving
pay during the week including the 12th o f the month.
Contributing to the overstatement are the dual or multi­
ple jobholders—those workers appearing on more than
one payroll for the same period. The overstatement due
to multiple job holding is to a large degree offset by the
underreporting o f workers due to turnover and unpaid
absences occurring in weeks other than the one being
measured.
Coverage may vary from State to State for those
industry sectors for which there are no Federal re­
quirements such as local government, part of State
government, agriculture, self-employed, and domestic
workers.

70

BLS HANDBO O K OF METHODS

When U l-covered private industry employment data
are compared directly with other employment series,
the industry exclusions should be taken into account.
During January-March 1974, there were excluded from
coverage approximately 1.2 million agricultural work­
ers; 1.8 million self-employed farmers; 5.5 million selfemployed nonagricultural workers; 1.4 million dom es­
tic workers; 1.2 million em ployees of nonprofit religi­
ous, charitable, medical, scientific and educational in­
stitutions; and 0.8 million unpaid family workers. In
addition to the above private industry em ployees, 8.1
million State and local government workers were not
protected by unemployment compensation laws. Also
excluded from the data are 2.3 million members o f the
Armed Forces and 0.6 million workers covered by the
railroad unemployment insurance system.
Since the data are secured as an incident to the collec­
tion of UI taxes and comprise a universe count o f em­
ployees covered by those taxes, the report is not subject
to sampling variability. Error sources do of course
exist. One o f the most important is caused by the need
to include an estimate for delinquent accounts. The
number o f estimations made varies from 2 to 10 percent
of total reporting units in each State resulting in
employment estim ates for about 1 percent of total
employment. N o uniform estimating procedures exist
among the States; however, estimates are usually pre­
pared for the individual reporting unit based on data
reported for the preceding quarter taking into account
seasonal variations and the trends in employment re­
ported by employers and installations in the same in­
dustry cell. Other sources of error include industry and
location coding errors for single unit establishments and
aggregation errors from multi-industry and multi­
location employers from which separate reports for
each unit are not provided.
The unemployment insurance reporting system is
capable of producing data at all levels of aggregation
down to the county and four-digit industry basis. The
quality of data at the lowest levels of aggregation and
distributions by size of firms are subject to the control
each State maintains in its location and industrial cod­
ing and, to a great extent, its success at soliciting
establishment data from multi-unit firms. With this
caveat, data for detailed industries and locations (usu­
ally county or labor market areas) may be obtained from
the relevant State agencies. To preserve the anonymity
o f establishments in private industry and of government
in sta lla tio n s, the B L S w ith h o ld s p u b lication o f
employment and wage data from any State or the N a­
tional industry level in which there are fewer than three
reporting units. At the request of a State, data also are
withheld for any industry level in that State where (1)
there is any reason to believe that the “ fewer than
three” rule would not assure against disclosure o f in­
formation relating to an individual reporting unit or
otherwise violate the State’s disclosure provisions and
(2) where the employment o f a single installation or



establishment accounts for over 80 percent of the indus­
try.
With the expansion o f coverage in 1972 to include the
great percentage o f those persons that are considered
“ em ployed,” and recent improvements in data proces­
sing procedures at State and national levels, these data
series have becom e a timely and accurate indication o f
the present state o f the labor market in both industry
and geographic cross-sectional detail.

C o m p a r is o n o f U l-C o v e r e d E m p lo y m e n t D a ta
W ith O th er S e r i e s
C o u n ty B u s in e s s P a tte r n s (C B P ) D a ta .

The differences
between U l-covered employment data and em ploy­
ment covered by the Federal Insurance Contributions
Act (Social Security) as published in C o u n t y B u s i n e s s
P a t t e r n s , are due primarily to (1) provisions in anumber
o f State unem ploym ent insurance law s excluding
selected groups from UI coverage; (2) differences in
industrial classifications that arise because of differ­
ences in what constitutes the reporting unit that is to
be classified and in the treatment o f central admini­
strative offices and auxiliary units; (3) differences in
the coverage o f nonprofit organizations; (4) other fac­
tors, such as differences in reports submitted by em­
ployers to Federal and State agencies and differ­
ences in m ethods of processing and adjusting the
data.
E m p lo y m e n t a n d P a y r o ll D a ta

in

th e E c o n o m ic

For complete censuses, such as the Census
of Manufacturers, the Census of Mineral Industries,
and the Census o f Business, the information is obtained
from establishments and the concepts o f employment
for industries in these censuses are similar to those in
the u nem p loym en t insurance reports. H ow ev er,
employment totals will differ due to (1) exclusions from
coverage in the UI program, (2) differences in industrial
classification particularly of central administrative of­
fices and auxiliary units, and (3) differences in pay
periods to which the data relate; for example, em ploy­
ment data for the most recent censuses for retail trade,
w h o le sa le trade, s e le c te d s e r v ic e s , and p ublic
warehouses, represent counts for the pay period includ­
ing March 12 for the year 1972. For manufacturing and
mineral industries, employment represents an average
of all production workers on the payroll during the pay
periods including the 12th of March, May, August, and
Novem ber plus all other em ployees on the payroll dur­
ing the pay period including March 12. The employment
for the construction industry represents estimates o f
the average number o f em ployees on the payroll for the
pay periods including the 12th of March, May, August
and November.

C en su ses.

EM PLO YM ENT AN D WAGES COVERED BY U N EM PLO YM EN T INSURANCE LAW S
S u r v e y ( C P S ) . The U l-covered
count o f both private and government employment con­
tains some duplication resulting from workers who ap­
pear on two payrolls because they have changed jobs or
worked at two or more jobs simultaneously during the
reporting payroll period. Such workers are counted
only once for the Current Population Survey (informa­
tion obtained from a sample of households), which clas­
sifies the workers according to the job at which they
worked the greatest number of hours in the survey
week. CPS figures on total civilian employment also
differ from payroll count figures in that they include
farmworkers, self-employed persons, dom estics, and
unpaid family workers who worked 15 hours or more in
the survey week, etc. The U l-covered count does not
include as employed certain persons “ with a job but not
at work” — those persons who earneed no wages dur­
ing the pay period because they were temporarily ab­
sent from their jobs due to unpaid vacations, taking time
off, illness, industrial dispute, or bad weather. Such
persons are counted as employed by the household
survey if they were not looking for work during the
survey week. The U l-covered employment series in­
cludes all individuals in covered employment regard­
less o f age. In 1966 and earlier years persons under 14
years of age were excluded from the CPS labor force
statistics. Subsequent to 1966 persons under 16 are
excluded.

C u rre n t P o p u la tio n

The
Bureau of Labor Statistics, the Employment and Train­
ing Administration, and, in 47 States and the District o f
Columbia, State employment security agencies coop­
erate in the operation o f the Current Employment
Statistics program. In the remaining States, the pro­
gram is operated by other State agencies in cooperation
with the BLS. The program was extended to Puerto
Rico and Guam in 1975. In the CES program, the State
agencies have responsibility for the preparation of cur­
rent estimates of employment for the State and for the
major labor market areas in the States, while the BLS
has responsibility for national estimates. The current
monthly nonagricultural employment estimates by in­
dustry for the nation and States are benchmarked to the
U l-c o v e r e d em p loym en t data su p p lem en ted by
employment data not covered by UI obtained from
various sources including County Business Patterns.
The current estimates of employment, average weekly
and hourly earnings, and average weekly hours are
derived from payroll reports submitted by a sample of
160,000 establishments.

C u rre n t E m p lo y m e n t S ta tis tic s (C E S ) P r o g r a m .

The Civil Ser­
vice Commission publishes a statistical series on Fed­
eral employment and payrolls which provide informa­
tion on employing agencies, types of positions and ap­
pointments, and characteristics o f em ployees. The

C iv il S e r v ic e C o m m is s io n (C S C ) D a ta .




71

Federal employment data covered by UCFE provide
industry and local area detail not available in the CSC
series, as well as an actual count o f monthly employ­
ment by State which is available in the CSC series only
for December of each year. Both the UCFE and CSC
count of the employed exclude: (1) Members o f the
Armed Forces, (2) temporary emergency workers in
cases o f fire, flood, earthquake, etc., and (3) officers or
crew members of an American vessel (a) owned by or
b a r e b o a t - c h a r t e r e d to the United States, and (b) whose
business is conducted by a general agent of the Secretary
of Commerce, if there is liability for the payment of payroll
taxes to an unemployment compensation fund under a
State UI law.
Certain Federal workers are in the UCFE count who
are not in the CSC count and vice versa. For example,
included in the UCFE count but excluded from the CSC
count are D efense Department workers paid from
nonappropriated funds, em ployees of County Agricul­
tural Stabilization and Conservation Committees, State
and Area Marketing Committees, and the Agricultural
Extension Service. Excluded from the UCFE count but
included in the CSC count are workers employed out­
side o f the United States and its territories, workers
paid on a contract or fee basis, paid patients or inmates
of Federal homes, hospitals or institutions, and certain
interns, nurses, and student em ployees of Federal hos­
pitals. The UCFE employment count relates to the
payroll period including the 12th o f the month; whereas
the CSC count represents the number of persons em­
ployed on the last workday o f the month plus all inter­
mittent em ployees during the month.

P r e s e n t a t io n a n d U s e s o f t h e D a ta
a quarterly publication by
BLS-Washington contains national totals of all covered
employment and wage data by the broad industry divi­
sions, major industry groups, and three-digit industry
groups. The data also are distributed by State for all
industry divisions, most major industry groups, and
selected three-digit industry groups. Publications for
the first quarter o f eaqh year also include national totals
for four-digit manufacturing industries.
Employment and wage data for Federal workers also
are tabulated by agency for the country as a whole. In
addition, data are shown by State for the largest agen­
cies.
For the first quarter o f each year from 1959 to the
present except for three years (1964-66), the publication
in clu d es tab u lation s sh ow ing the distribution o f
employment and wages by size-of-reporting unit for
each major industry division within each State and for
two-, three-, and four-digit (manufacturing) reporting
units for the United States as a whole.
State agencies publish their ES-202 data in a similar

E m p lo y m e n t a n d W a g e s ,

72

BLS HANDBO O K OF METHODS

manner, providing some county breakdowns and labor
area totals. Many States issue their publications only
once a year or in combination with the relevent data.
The private employer contribution reports and the
government reports provide data necessary for ad­
ministering the employment security program in the
States. The private industry employment data reflect
the extent o f unemployment insurance coverage of the
individual State laws, and the corresponding wage data
provide a basis for estimating the future flow of income
into State unemployment insurance funds. The revenue
for these funds is derived from a tax on payrolls o f
cov ered private em ployers. A n alyses o f covered
employment and payroll data are fundamental to the
development o f estim ates o f tax yield. Actuarial studies
and evaluation o f the financial solven cy o f State
unemployment insurance funds must take into account
employment and payroll fluctuations, the State’s indus­
trial com position, and the degree to which there is con­
cen tration in ind u stries particularly sen sitiv e to
econom ic changes.
Listings o f private employers and government agen­
cies are used to select the major establishments and
installations located in the area actively served by local
em ploym ent o ffices. Such inform ation frequently
serves as panels for sample selection and provides con­
trol totals for research on occupational patterns in labor
areas, the place o f work and place o f residence o f work­
ers, and special studies o f other facets of labor.
The data produced by this program represent the
largest universe o f monthly employment and quarterly
wage information by industry and by State regularly
available in the country. As such, they have broad
econom ic significance in evaluating labor trends and
major industry developments both for the Nation as a
whole and for individual States. In addition to the basic
uses in the Federal-State employment security system ,
these wage data are used by other organizations, either
independently or in cooperation with the BLS and the
State agencies, in the preparation o f other statistical
series. Two o f these uses are detailed below:
1. N a t i o n a l I n c o m e : T he B ureau o f E co n o m ic
Analysis, Department of Commerce, uses the State unem­
ployment insurance wage data as the major wage and
salary component o f the national income estimates and
the State distributions of wage and salary payments
which it prepares each year. In addition, State un­
employment insurance data are used to estimate that
part o f the wage and salary supplementation which is
accounted for by em ployer contributions to State
unemployment insurance funds, as well as the Federal
employer taxes paid for old-age and survivors insur­
ance purposes.
2. C u r r e n t E m p l o y m e n t E s t i m a t e s : Since 1939, the
basic source o f benchmark information for “ all em­
p loyees” in the Current Employment Statistics pro­
gram by industry has been covered employment data for




private industry and, beginning with 1959, by size of
establishment. Beginning in 1972, unemployment in­
surance data account for about 86 percent of the total
benchmark. The notable exceptions are private elem en­
tary and secondary schools, religious organizations,
and State and local governments.
The U l-covered employment figures are useful in
time series analysis and industry comparisons. The dis­
tribution of data by size-of-reporting unit are useful in
measuring the impact of the extension o f coverage to
small firms, analyzing wages by size of firms, and
benchmarking hours, earnings and labor turnover
statistics.

Average Earnings
Data on wages and average employment of both pri­
vate and Federal workers are used for calculating, with
reasonable accuracy, average weekly earnings of cov­
ered workers. The average weekly wage is computed by
dividing total wages for the year by 52 to derive a figure
on wages paid during the average week of the year,
which is then divided by the corresponding figure on
average monthly em ploym ent. Similarly, quarterly
wages are divided by 13. This procedure assumes that
“ average monthly em ployment” is approximately the
same in an average w eek, an assumption justified by the
fact that the pay periods for which employment is re­
ported are in most cases single weeks. Caution should
be exercised in using these average weekly earnings
particularly th ose d evelop ed from quarterly total
wages. The wage data for quarters may be affected by
strikes, by bonus payments (usually in the OctoberDecember quarter), retroactive payments, and by the
influx o f young summertime workers in the JulySeptember quarter.
The average weekly wage per covered worker com ­
puted by the above procedure cannot be used to calcu­
late average annual or quarterly wages o f workers,
since such averages would be overstated due to the
effects of labor turnover, short-time jobs, etc. The
number of different workers employed at one time or
another during an entire quarter or year, and hence
sharing in the wages paid for the quarter or year, is
substantially larger than the average number counted as
employed in the pay periods including the 12th of each
month o f the quarter or year. Also, the incidence o f
multiple job holding and part-timers among locations,
industries, and time periods in the year would affect
comparisons o f different earnings series. More exten­
sive data on annual per capita earnings o f workers can
be,obtained from individual continuous work history
tabulations prepared by the Bureau o f Old-Age and
Survivors Insurance and from special studies prepared
by some State employment security agencies from their
em ployee wage record files.

EM PLOYM ENT AN D WAGES COVERED BY UN EM PLO YM EN T INSURANCE LAWS

73

Technical References
N um ber

1.

2.

3.

B u n k e, Alfred L ., “ Q uarterly R eport o f E m ploym ent W ages
and C on tribu tion s (E S -2 0 2 ),” S elected P apers from N orth
A m erican C o n feren ce on L ab or S ta tistics, 1973, B ureau o f
L abor S ta tistics, U .S . D ep artm en t o f Labor.
E hrenhalt, Sam uel M ., “ S om e T hou ghts on Planning a C om ­
preh en sive E m p loym en t S tatistics P rogram ,” S elected Pap­
ers from N orth A m erican C on feren ce on L abor S tatistics,
1973, Bureau o f L abor S tatistics, U .S . D epartm ent o f Labor.
Interstate C o n feren ce o f E m p loym en t Secu rity A g e n c ies, T he




N um ber
E S -2 0 2 N e e d s a N e w P r io r ity in F e d e r a l- S ta te C o o p e r a tio n ,

4.

June 1971.
“ T ech n ical N o te s on Insured U n em p lo y m en t, C overed Em ­
p loym en t, and W age Statistics: T heir S ou rce, N atu re and
L im ita tio n s,” S u m m a r y o f E m p lo y m e n t S e c u r ity S ta tis tic s
R e p o r ts , M anpow er A dm in istration, U .S . D epartm ent o f

5.

L abor, M ay 1975.
“ E m p lo y m e n t , W a g e s ,

an d

C o n t r ib u t io n s ,

E S - 2 0 2 ,”

E m p lo y m e n t S e c u r ity M a n u a l, Part III, S ectio n s 0400-0599,

as R e v ise d , 1972, U .S . D epartm en t o f Labor.

Chapter 10.

Characteristics of the Insured Unem ployed

Background
The survey to m easure the characteristics o f the in­
su red u n e m p lo y e d w a s in itia te d in 1959 by th e
U nem p loym ent Insurance Service o f the U .S . Depart­
m ent o f L abor as an aid in evaluating its programs.
Since the num ber o f persons being served by the UI
system had been expanded considerably during the
1950’s, there w as a need to provide insight and under­
standing o f their characteristics. In recent years, as
unem ploym ent insurance w as expanded to cover about
three-fourths o f all w orkers, increasing interest in the
data w as exp ressed by econ om ists and other social
analysts, particularly during periods o f econom ic d e­
cline. In 1972, w hen it w as recognized that th ese data
w ere useful as general purpose statistics, responsibility
for the survey w as transferred from the U I Service to
the Bureau o f Labor Statistics.

Description of the Program
C haracteristics o f the insured unem ployed are ob­
tained as a by-product o f the operations o f the State
unem ploym ent insurance program s w hich are adm inis­
tered by State em ploym ent security agencies. Statistics
on insured unem ploym ent are based on the claim s filed
by individuals eligible for u nem ploym ent insurance
benefits.
U nder cooperative arrangem ents b etw een the State
em ploym ent security agencies and the Bureau o f Labor
Statistics, the State agen cies selec t each month a sam ­
ple o f records o f continued claim s filed by individuals
seeking benefits through regular State unem ploym ent
insurance program s. The selected records are transmit­
ted to B L S-W ashington w here they are sum m arized.
E stim ates are then com piled on characteristics such as
claim ant’s age, sex , color, occup ation , industry at­
tachm ent, and duration o f unem ploym ent. The data are
available m onthly by State and for the N ation as a
w hole.

Concepts
Insured unem ploym ent represents a count o f persons
w ho certify a w eek o f unem ploym ent in order to obtain
u n e m p lo y m e n t in s u r a n c e b e n e fits u n d er S ta te
unem p loym en t program s. T he cou n t includes som e
74



persons w ho work part-time for econom ic reasons and
are entitled to partial unem ploym ent insurance b en e­
fits. E xcluded are unem ployed persons claiming b en e­
fits under the Program o f U nem ploym ent C om pensa­
tion for Federal E m p loyees (U C F E ), the Program o f
U n em p lo y m e n t C o m p en sa tio n for E x -se r v ic e m e n
(U C X ), the Railroad U nem ploym ent Insurance Pro­
gram, the Supplem ental U nem ploym ent A ssistan ce
Program, and persons w ho have exhausted their ben e­
fits under regular State programs and are claiming bene­
fits under various Federal and State extended benefits
provisions.
A lso excluded are unem ployed persons w ho have no
recent work experience (new entrants and reentrants)
or w ho have insufficient work experience to qualify for
unem ploym ent benefits. In addition, m ost State law s do
not cover certain categories o f w orkers, such as som e
State and local governm ent workers, em ployees o f pri­
vate elem entary and secondary sch ools and religious
organizations, and the self-em ployed. L aw s may differ
markedly from State to State regarding the eligibility o f
workers, the length o f tim e eligible workers may re­
ceive benefits, the amount o f w eek ly benefits, and the
procedures under w hich the programs are operated.
Details on coverage law s are provided in C o m p a r i ­
s o n s
o f S ta te
U n e m p lo y m e n t In s u r a n c e
L a w s , B ES
N o . U -141, available on request from the Em ploym ent
and Training A dm inistration - U I S ervice, W ashington,
D. C. 20212.

Sampling
U n lik e the cou n ts o f total insured u n em p loyed ,
which are based on adm inistrative records, the charac­
teristics data are based on a sam ple o f claim ants. Each
month the State agencies draw a sam ple o f records from
the claim ant files. The sampling m ethod involves ran­
dom selection based on the last digits o f claim ants’
S o c ia l S e c u r ity n u m b e rs. T a b le 1 in d ic a te s th e
minimum sampling ratio required to obtain a given
sample size. In general, a sample o f at least 1000 units
from each State is required. Som e States select sam ples
which exceed the minimum sam ple requirem ents in
order to m eet State estim ation and publication criteria,
w hich results in a 10 percent sam ple, nationw ide, on the
average.
Insured unem ploym ent figures are based on the
w eek s o f unem ploym ent claim ed by individuals w ho

CHARACTERISTICS OF THE INSURED UNEM PLO YED
Table 1.

Expected sample size of claimant records.

Lowest volume of expected
continued claimants, week
including 19th of the month

Size of sample of continued claimants

Table 2. Relative error of estimate for selected uni­
verse sizes and proportion of characteristics being esti­
mated

minimum sample minimum resultant
sample size
(percent)
1
2
3
4
5
10
20
30
100

100,000 or more........................
50,000 to less than 100,000......
40,000 to less than 50,000 .......
30,000 to less than 40,000 .......
20,000 to less than 30,000 .......
10,000 to less than 20,000 .......
5,000 to less than 10,000 ..........
2,500 to less than 5,000............
Less than 2,500 ........................

1,000 or m
ore
1,000 to 2,000
1,200 to 1,500
1,200 to 1,600
1,000 to 1,500
1,000 to 2,000
1,000 to 2,000
750 to 1,500
Less than 2,500

75

Universe size
(Total number of claimants)

Proportion being estimated
.011

.05

.20

.50

.80

41.4
53.9
56.8
51.0
44.3

18.2
23.6
24.9
22.3
19.4

8.3
10.8
11.4
10.3
8.9

4.1
5.4
5.7
5.1
4.4

2.1
2.7
2.9
2.6
2.2

6.0
4.9
4.3
3.9

2.6
2.2
1.9
1.7

1.2
1.0
.9
.8

0.6
.5
.4
.4

0.3
.2
.2
.2

State level
2,500 ........................................
10,000 .......................................
50,000 .......................................
100,000 .....................................
200,000 .....................................
U.S. level

have certified a continued w eek o f unem ploym ent. A
total count o f claim s is reported w eek ly by the State
em ploym ent security agen cies. G enerally, a continued
claim filed in a given w eek certifies to unem ploym ent in
the preceding w eek . The sam ple o f claim ants is selected
from o fficia l S tate record s o f p erso n s eligib le for
unem ploym ent benefits during the w eek including the
19th o f the m onth in order to reflect unem ploym ent
during the earlier w eek including the 12th.

Estimating Procedures
The characteristics (e .g ., age, sex , color, occupation,
industry attachm ent, and duration o f unem ploym ent) as
reported on the claim ants’ records are tabulated and
proportions calculated. For exam ple, if the total sample
drawn for a State num bers 1,500 records and 900 o f the
records relate to male claim ants, then 900 -f- 1500 equals
.60, the proportion o f m en. This proportion is multiplied
by the total num ber o f claim s filed in the State (assum e
14,000) during the w eek o f the 12th as reported on the
w eek ly report o f the insured unem ployed (ES-210 R e­
port):
14,000 x

1j UU

(or .60) = 8,400 men

T he results thus derived for each State are sum m ed to
obtain the national estim ate o f num ber o f male claim ­
ants. The sam e procedure is used in estim ating the other
characteristics.

Reliability of the Estimates
Since a sam ple is u sed the figures derived from the
survey are subject to sam pling variability. The range o f
sampling error to be ex p ected depends particularly
upon the size o f the characteristic being analyzed and
tends to be relatively larger for small groups in the
population. The range o f variation w hich may be e x ­
pected can be judged roughly from table 2. The chances
are about tw o out o f three that a sam ple estim ate o f the
given proportion o f the population would differ from the



1,000,000
2,000,000
3,000,000
5,000,000

..................................
..................................
..................................
..................................

1 Characteristics which are estimated to be less than 5 percent of State
insured unemployment are not published at State level but are shown at national
level only.

corresponding figure derived by an equally careful
com plete enum eration, by less than the relative error in
the table.
The accuracy o f the final results depends upon many
things b esides the degree o f variability inherent in a
random sam ple. Errors in processing, interviewer or
respondent bias, and failure to achieve a fairly random
sam ple, are all exam ples o f factors affecting the accu­
racy o f the final results that are not measured in the
errors o f estim ate show n in table 2.

Seasonal Movements
Insured unem ploym ent, like total unem ploym ent, is
characterized by fairly regularly recurring fluctuations
at certain tim es o f the year. The seasonal pattern in
insured unem ploym ent corresponds closely to that in
total unem ploym ent excep t for a notable divergence in
the sum m er m onths.
On a s e a s o n a l b a s is , b o th to ta l and in su red
unem ploym ent usually reach their highest level during
the year in the winter m onths, reflecting the slack
periods in econom ic activity in general and in outdoor
work in particular. After declining gradually through
April, total unem ploym ent spurts upward in May and
June, as job seekin g students and recent graduates enter
the labor market. Insured unem ploym ent, h ow ever,
d oes not reflect this midyear expansion in the labor
force, since it exclu d es students looking for summer
jo b s, new ly graduated students, and other new entrants
into the labor force. During the first half o f July, insured
jo b lessn ess normally show s a moderate rise due to
claim s filed by persons ineligible for pay during plant
sh u td o w n s for v a ca tio n p erio d s. F o llo w in g their
m idyear increases, both total and insured unem ploy­
ment d ecline, reaching their annual low points in O c­
tober. Thereafter, both series usually begin to rise.

76

BLS HANDBO O K OF METHODS

Limitations

Presentation and Uses

The characteristics data produced from the survey
are not com parable with the B ureau’s estim ates o f the
characteristics o f all u nem ployed p erson s obtained
from the m onthly “ h ou seh old ” survey. The insured
u n em p loyed su rvey relates to p erso n s eligib le for
unem ploym ent insurance under State programs only
and exclu d es m any categories o f workers w hich are
included in the count o f the total unem ployed. E x ­
cluded from the insured unem ploym ent count but in­
cluded in the h ousehold survey count are unem ployed
person s w h o have no recent w ork experience (new
entrants) or w h o have insufficient w ork exp erience to
qualify for unem ploym ent benefits; agricultural work­
ers, d om estic w orkers, unpaid fam ily w orkers, som e
State and local governm ent w orkers, em p loyees o f pri­
vate elem entary and secondary sch ools and religious
organizations, and the self-em p loyed . In addition, per­
son s eligible for unem ploym ent benefits under other
than State program s are exclu d ed from the characteris­
tics su rvey. A m ong such other program s are the Pro­
gram o f U n em p loym ent C om pensation for Federal Em ­
p loyees (U C F E ), the Program o f U n em p loym ent C om ­
p en satio n for E x -ser v ic em e n (U C X ), the R ailroad
U nem p loym ent Insurance Program, and various F ed ­
eral and S tate tem porary exten ded benefit programs.
On the other hand, the insured u nem ployed survey
in c lu d e s so m e p e r s o n s w h o w o r k p a r t-tim e fo r
e c o n o m ic r e a s o n s and are e n title d to p artial
unem ploym ent insurance b en efits. T h ese workers are
counted as em ployed in the h ousehold survey. A lso,
unem ployed insured workers in Puerto R ico are in­
cluded in the characteristics survey but exclu d ed in the
household survey.

The program provides inform ation, by State and for
the N ation as a w h ole, about the insured unem ployed,
(e.g ., age, sex , color, occupation, industrial attachm ent
and length o f current spell o f insured unem ploym ent.)
The data are published m onthly for the N ation and by
State in the Em ploym ent and Training Adm inistration
p u b lic a tio n U n e m p l o y m e n t I n s u r a n c e S t a t i s t i c s .
Annual averages are published in the H a n d b o o k o f
L a b o r S ta tistic s and the M a n p o w e r R e p o r t o f the
P resident.
Information on the characteristics o f the insured un­
em ployed is o f vital interest to analysts and policy mak­
ers alike. The data are needed to evaluate the effective­
ness o f unem ploym ent benefits in alleviating the finan­
cial hardship o f unem ploym ent. Since the insured un­
em ployed are “ experienced w orkers,” it is important
to know their characteristics such as occupation and
in d u stry a tta c h m e n t in o rd er to g u id e e f fe c tiv e
em ploym ent p olicies through im proved utilization o f
labor resources. T hose concerned with programs for
w om en are interested in the figures on w om en among
claim ants. The data by State are useful for guidance in
plant lo ca tio n s and effec tiv e regional em ploym ent
policies. A nalysts u se the characteristics o f the insured
unemployed to detect changes in industrial structure and
to observe changes in the experienced work force, in
order to study the cau ses o f unem ploym ent. The data
are o f particular interest during periods o f econom ic
downturn w hen they are n eeded for guiding em ergency
em ploym ent and unem ploym ent benefit provisions. In
addition, the U nem ploym ent Insurance Service and
others concerned with insurance programs need the
inform ation for actuarial studies.




Prices and Living Conditions
C h apter 11.

C on su m er Expenditures and Income

Background
Consum er expenditure su rveys are specialized fam ­
ily living studies in w hich the primary em phasis is on
collecting data relating to fam ily expenditures for goods
and serv ices u sed in day-to-day living. E xpenditure
surveys o f the Bureau o f L abor S tatistics also collect
inform ation on the am ount and sources o f fam ily in­
com e, on changes in savings or d eb ts, and on major
dem ographic and econ om ic characteristics o f fam ily
m em bers.
The B ureau’s studies o f fam ily living conditions rank
.among its oldest data-collecting functions. The purpose
o f the first nationw ide expenditure survey in 1888-91, in
line w ith the legislation creating the Bureau, w as to
study the w orker’s spending patterns as elem ents o f
production c o sts, with special reference to com petition
in foreign trade. It em ph asized the w orker’s role as a
producer, rather than as a consum er. Purposes and
coverage changed in su cce ssiv e su rveys, and problem s
caused by higher prices led to the second su rvey, in
1901. T he index o f prices o f food purchased by working
m en, w ith w eights based on 1901 data, w as u sed gener­
ally as a deflator for w orkers’ in com es and expenditures
for all kinds o f g ood s until W orld War I. The third major
survey, spanning 1917-19, provided w eights for com ­
puting a “ co st-o f-liv in g ” ind ex, n ow know n as the C on­
sum er Price Index (CPI). (S ee chapter 13.) The next
major study w as m ade for 1934-36 primarily to revise
th ese index w eights and covered on ly urban w age and
clerical w orkers.
In th e econ om ic dep ression o f the 1930’s, interest in
consum er su rveys expanded from study o f the w elfare
o f selected groups to general econ om ic analysis. A l­
m ost sim ultaneously w ith its 1934-36 investigation, the
Bureau cooperated w ith four other Federal agen cies in
a fifth su rvey, the Study o f C onsum er P urchases, in
1935-36, w hich presented consum ption estim ates for all
segm ents o f the population, both urban and rural. The
sixth su rvey, for 1950, covered only urban consum ers.
The seventh survey, Survey o f Consumer Expenditures,
1960-61, included both urban and rural families. It, like
the 1950 survey, provided the basis for revising the CPI
and also supplied abundant material for broader types
o f econ o m ic, social and market analysis. The rem ainder



o f this chapter deals with the 1972-73 survey— the latest
in the series describing the consum ption behavior o f the
A m erican people.

Design of the 1972-73 Survey
The 1972-73 C onsum er Expenditure Survey is the
eighth major survey o f this type, and the first since
1960-61. U nlike previous su rveys, the collection o f data
w as carried out by the U .S . Bureau o f the C ensus under
contract w ith the Bureau o f Labor S tatistics. The
1972-73 survey w as undertaken in part to revise the
w eights and associated pricing sam ples for the CPI, and
in part to help m eet the need for tim ely, accurate, and
detailed inform ation on A m erican consum er spending
patterns. Satisfying th ese tw o ob jectives is particularly
important in periods o f inflation and rapid econom ic
change. T he 1972-73 survey con sisted o f tw o separate
su rveys, each with a different data collection technique
and sample: (1) a quarterly panel survey in w hich each
consum er unit1 in the sam ple w as visited by an inter­
view er every 3 m onths over a 15 m onth period, and (2) a
diary or recordkeeping survey com pleted at hom e by
the respondent fam ily for tw o 1-week periods.
This design differed m arkedly from that o f previous
su rveys, including the 1960-61 survey. In that survey,
data w ere collected at a single point in time with the
B L S interview er asking detailed questions as m embers
o f the respondent fam ily reconstructed the previous
year’s receipts and disbursem ents. A detailed supple*A con su m er unit is d efined as “ (1) a fam ily o f tw o p erson s or m ore
u su ally livin g togeth er w h o p o o l their in com e and draw from a co m ­
m on fund for their m ajor item s o f e x p e n se , or (2) a single consu m er
w h o is fin an cially in d ep en d en t o f any fam ily group. T he single co n ­
sum er (or on e-p erso n fam ily) m ay be living eith er b y h im self in a
separate hou sin g unit; as a room er in a private h om e, lodging h o u se,
or h otel; or sharing a u n it.” T h e 1972-73 C on su m er Expenditure
S u rvey rep resen ted all non-in stitutional con su m er units living in the
U n ited S ta tes. A ll p erson s resid in g at a se lec ted sam ple add ress w ere
eligible for the su rv ey e x c e p t for p eriod s in the su rvey year that they
resid ed in m ilitary p o sts, cam p s, or reservation s (ex cep t for periods
o f 45 d a y s or le s s for training w ith N ation al Guard or reserve units); in
h o m es for the aged , asy lu m s, ja ils, and sim ilar “ lo n g -sta y ” institu­
tions; or in foreign cou n tries (e x ce p t on vacation s or b u sin ess trips).
(S e e T ech n ical R eferen ce N o . 7, pp. 15-16.)

77

78

BLS HANDBO O K OF METHODS

m ental questionnaire, covering one w e e k ’s purchases
o f food and other frequently purchased item s, was also
com pleted . (S ee Technical R eference 7 for a descrip­
tion o f collection m ethods and list o f published results.)
A cting as agent for the B L S , the C ensus Bureau
conducted the first year o f the 1972-73 quarterly survey
b etw een January 1972 and March 1973. Interviewing
for the second year ran from January 1973 to March
1974. The first year o f the diary survey covered the
period from the last w eek in June 1972 through the third
w eek o f June 1973. The second year diary covered the
period from the middle o f 1973 through the middle o f
1974.
It is estim ated that the quarterly survey obtained
detailed data for 60 to 70 percent o f total fam ily expendi­
tures. A ggregate estim ates, for exam ple, o f food and
beverages, w ere obtained for an additional 20 to 25
percent o f total expenditures. The detail by item for
these aggregate estim ates w as co llected in the diary
survey as w as the balance o f total expenditures for
inexpen sive and frequently purchased item s not in­
cluded in the quarterly survey.
All data collected w ere subject to the confidentiality
requirem ents o f the Bureau o f the C ensus and the
Bureau o f L abor S tatistics w hich protect against the
disclosu re o f resp on d en ts’ identities.

Collection Methods
Field Organization
Data collection w as under the direction o f the C ensus
B ureau’s perm anent professional field staff, which op ­
erated through 12 data collection centers throughout
the U nited S tates. In addition to th ese offices, 26 local
program offices w ere established for a period o f about
2 V i years. E ach local office w as directed by an area
supervisor with a staff consisting o f about six inter­
view ers and an editor-clerk. Interview ers, w henever
p ossib le, w ere selected from the m ost exp erienced and
best qualified o f th ose w ho w orked on the D ecennial
C ensus or on p ost-censal and evaluation projects. The
total num ber o f interview s for each phase w as approxi­
m ately 200.
S taff m em bers w ere throughly trained prior to begin­
ning their work on the survey. Interview ers received
about 7 days o f classroom training plus self-study train­
ing m aterials. Additional hom e study materials and
classroom training w as conducted prior to beginning
each quarter o f the survey. Formal training was sup­
plem ented by on-the-job training sufficient to insure job
perform ance at the level o f estaolish ed standards. Qual­
ity control m easures, such as editing returns, observing
interview s, and reinterview ing selected sam ple fam ily
units, w ere em ployed throughout the survey.



Data Collection
Som e testing o f collection m ethods was performed by
the Bureau o f Labor Statistics and by the Survey R e­
search Laboratory o f the U niversity o f Illinois. T hese
tests and the exp erience o f other countries indicated
that high quality data could be obtained in a consum er
expenditure survey if the survey design w as tailored so
that inform ation on larger and more easily recalled e x ­
penditures was collected by periodic recall interview s
and sm all, less exp en sive item s by day-to-day record­
keeping (diaries). This led to the creation o f quarterly
and diary collection veh icles. Furtherm ore, the quar­
terly design took account o f the notion that som e item s
are easily recalled over long periods w hile others are
accu rately rem em bered on ly o v er rela tiv ely short
periods.

Quarterly Survey
The initial quarterly survey interview for each year
provided socio-econ om ic characteristics o f the con ­
sumer unit, an inventory o f major durable item s, with
indication o f w hen obtained, and data covering a great
variety o f regularly purchased item s bought since the
first o f the year.
Subsequent quarterly interview s continued the c o l­
lection o f detailed exp en ses. In addition, in quarters
tw o through five, global estim ates for food and bever­
ages were obtained, as an aid in possib le integration
with detailed food item reports collected by diary. A lso,
at the second quarter, a global estim ate o f consum er
unit incom e for the previous year w as collected .
The fifth and final interview yielded inform ation on
housing ex p en ses, work exp erience, changes in assets
and liabilities, ex p en ses for m ost goods and services
previously requested, and estim ates o f consum er unit
incom e. Data on the latter involved highly detailed in­
com e queries, ranging from w age and salary earnings by
each m em ber o f the unit to consum er unit totals o f
rents, interest, dividends, etc.
A mere listing o f the broad areas o f expenditures
surveyed w ould provide only cursory insight into the
vast am ount o f detail collected . In the clothing section
o f the questionnaire, for exam ple, not only w ere the
item s o f apparel narrowly defined (dress shirts, sport
shirts, work shirts, b lou ses or top s, other shirts), but
age and sex cod es w ere assigned for both purchases o f
clothing for fam ily m em bers and gifts o f clothing pur­
chased for others. D ata collected on housefum ishings
and hom e appliances included indications o f w hether
item s purchased w ere new or used , and w hether or not
purchases w ere financed in part by trade-ins. In addi­
tion, the quarterly survey collected detailed informa­
tion pertaining to out-of-tow n trips and vacations.

CONSUMER EXPENDITURES AND INCOME
Diary Survey
The diary, com pleted by the respondent fam ily, was
designed primarily to obtain expenditure information
which w as either not collected in the quarterly survey
or was collected only as a global estim ate in that survey.
Expenditures for individual item s o f food , b everages,
personal care and housekeeping operation products and
se r v ic e s are co n sid e r e d to be p o o rly reca lled by
respondents for long periods o f tim e. The diary survey,
how ever, w as not lim ited to th ose typ es o f expendi­
tures, but, rather, included all ex p en ses which the fam ­
ily incurred during the survey w eek , ex cep t for e x ­
pen ses for fam ily m em bers w hile aw ay from hom e
overnight and for credit and installm ent plan paym ents.
Prior to leaving a diary w ith a consum er unit, the
interview er first co lle c te d inform ation on selec ted
so cio -e c o n o m ic ch a ra cteristics o f m em bers o f the
household in order to establish the com position o f the
consum er unit and to classify the unit for analysis. This
inform ation also w ould perm it the diary to be linked to
similarly classified data covered in the quarterly or
other su rveys. E ach reporting unit in the diary survey
w as then requested to maintain a daily record o f all
expenditures for tw o 1-w eek periods.
The diary reporting form w as divided by day o f
p u rch a se and b road c la s s ific a tio n s o f g o o d s and
services— m eat, fish , and poultry; laundry and diaper
ser v ic e , b eau ty and barber shop; h ou seh old help,
babysitters, and so on. This breakdown was used to aid
the respondent in recalling item s when recording daily
purchases. It also facilitated the coding o f individual
p urch ases, so that m eaningful aggregates and sub­
aggregates o f individual purchases could be presented
in statistical tables. The respondent w as instructed to
record a detailed description o f the goods or services
purchased, for exam ple, milk: W hole, skim , half and
half, ch o co la te, con d en sed , and so forth. This detail
w as required in order for item s to be represented in the
C onsum er Price Index according to their relative im ­
portance.
W ithin the category food and beverages for hom e
c o n su m p tio n , in fo rm a tio n w a s r e q u e ste d o n th e
number o f units purchased, net w eight or volum e per
unit, type o f packaging (fresh, frozen, canned, pack­
aged), and total co st. For m eals and snacks purchased
at a restaurant, carryout, and so on, inform ation w as
requested on kind o f purchase, type o f outlet, and total
co st including tips.
For drugs or m edical supplies, the respondent was
requested to indicate w hether the item purchased was
prescribed by a physician. Inform ation w as requested
regarding the age and sex o f individual m em bers o f the
con su m er unit for w h om cloth in g purch ases w ere
m ade. R ent, utility, fuel, teleph on e, and insurance e x ­
pen ses w ere collected in relation to the period covered
by the exp en se. All gift purchases w ere specially noted.



79

The data collected by the diary survey were subject to
detailed classification by the com puter. More than
1,700 separate cod es were developed to differentiate
purchases by class and description.

S a m p lin g

Design
The sam ple for each survey w as a self-weighting,
m u lti-sta g e, national prob ability sam ple m odified
slightly to provide for a designated minimum sample
size in 26 selected areas. The sam ples included 216
primary sampling units (P S U ’s), o f w hich 54 were
selected with certainty and the remaining 162 selected
on a basis o f a probability proportionate to size from
about 1,000 P S U ’s in about 145 strata o f approximately
equal size. P S U ’s included both urban and rural terri­
tory and were either an entire Standard Metropolitan
Statistical Area (SM SA ), a single county, or a group of
counties.
The sam ples were selected from the 1970 Census
20-percent tape file and stratified on the basis of the
following characteristics: Housing tenure, size of pri­
mary family and family m oney income. Separate samples
w ere drawn within 55 strata (5 size o f fam ily classes x 5
incom e cla sses x 2 tenure cla sses for housing units plus
4 cla sses o f vacant housing units plus group quarters).
N o other variables w ere included in the sample selec­
tion procedure.

Quarterly Sample
A pproxim ately 23,000 addresses were selected for
the quarterly survey sam ple. O f th ese, 10 percent were
exp ected to be vacant or dem olished at the time o f the
survey, and another 15 percent were exp ected to de­
cline to participate or otherw ise be unavailable for the
survey. On the basis o f th ese assum ptions, the survey
w ould yield 17,000 com plete interview s. Should the
anticipated 17,000 interview s not be realized from the
original 23,000 unit sam ple, a m atched sam ple was to be
drawn upon to achieve the level required nationally and
also for each o f the 26 designated P S U ’s.
The survey w as conducted over a 2-year period. The
sam ple o f 23,000 units w as divided into tw o repre­
sentative subsam ples o f approxim ately 11,500 units for
each survey year. D ivision o f the sample w as made on
the follow ing basis with each subsam ple being desig­
nated for inclusion in one o f the tw o survey periods:
1. T h e 3 0 la r g e s t c e r t a in t y P S U ’s w e r e in c lu d e d in b o th
s u r v e y p e r io d s w ith o n e - h a l f o f t h e u n its b e in g in c lu d e d
in e a c h s u r v e y p e r io d .
2 . T h e r e m a in in g 186 P S U ’s w e r e p a ir e d in t o t w o g r o u p s o f
93 P S U ’s e a c h . O n e g r o u p w a s d e s ig n a t e d fo r th e 1972
s u r v e y a n d th e o t h e r g r o u p fo r t h e 1973 s u r v e y .

80

BLS HANDBOOK OF METHODS

Diary Sample
A separate panel o f h ousehold s w as selected for the
diary survey. The sam ple design w as identical with that
used for the quarterly su rvey, including the sam e vari­
ables for stratification. The num ber o f units selected
w as exp ected to yield com pleted diaries from 17,000
household s, assum ing a 30 percent noninterview rate
for occu p ied units. A s in the quarterly survey, the
diary sam ple w as divided into tw o equal parts with one
part being included in each survey year. The sam ple
w as divided further into 52 subsam ples in order that
each w eek o f the year be represented in the survey.

Response Rates
The cooperation o f respondents w as excellen t. Pre­
liminary resp on se rates for the quarterly survey indi­
cate that 88 percent o f eligible sam ple units responded
in 1972 and about 90 percent in 1973. The percentages
represented 9,869 consum er units interview ed in 1972
and 10,106 in 1973. For the diary su rvey, respon se rates
w ere 80 percent in 1972-73 and 90 percent in 1973-74
with the percentages representing 21,367 com pleted
1-week diaries in the first year and 23,355 in the second
year.

trips and vacations, insurance, medical services, edu­
cation, reading, global food estim ates as w ell as data on
incom e, assets and liabilities. The classifying charac­
teristics and tables will be similar to th ose produced for
the diary.
The second general form o f release will be through
C onsum er E xpenditure Survey Series reports. T hese
will include individual year estim ates for diary and
quarterly data.
For the diary, the detailed ex p en se classification e s ­
tablished for the com bined year estim ates will be co l­
lapsed into more general groupings for both tabular
forms o f the single year estim ates. An initial issue o f this
report series w as published in N ovem ber o f 1975, BLS
Report 448-1, presenting selected w eek ly expenditures
cross-classified by fam ily characteristics. The report
series will also serve as the dissem ination vehicle for
background articles on the survey, presenting such in­
form ation as definitions, cooperation rates, m ean e x ­
penditure variances as w ell as periodic analytic studies.
The third form o f dissem ination will be public-use
com puter tapes. T h ese tapes will contain micro-data
from each survey, subject to the confidentiality policies
o f B L S.
Publications and tapes are scheduled for release
periodically throughout 1976 and early 1977.

U s e s a n d L im it a tio n s
D a t a D is s e m in a t io n

Uses
Inform ation from the 1972-73 C onsum er E xpenditure
Survey will be m ade available in bulletins, statistical
r e p o r t s , a n d o n c o m p u t e r t a p e s . S o m e p r e lim in a r y r e ­

sults from the first-year diary su rvey w ere made avail­
able in April and M ay 1975 in n ew s releases: U S D L
75-212 and 75-276. T h ese m ay be obtained from the
inform ation office o f the B L S O ffice o f Publications
(202/523-1221).
The bulletins w ill present com bined year data from
the diary and quarterly separately. D ata w ill include
m ean expenditures for all fam ilies and single consum ers
in the U n ited States as w ell as for each o f four regions o f
the N ation . In each o f th ese areas, expenditure data will
be tabulated by a set o f fam ily characteristics in on e­
w ay and cross-classified arrays. T he diary survey will
be the primary source for detailed data on food , h ou se­
keeping supplies, personal care item s and serv ices,
selected energy ex p en ses and non-prescription drugs
and m edical supplies. In e x c e ss o f 100 expenditure
categories w ill be displayed in the on e-w ay tables.
Som e collapsing o f the detail appearing in the one-w ay
tables m ay be n ecessa ry to support the cross-classified
tables.
The quarterly su rvey w ill be the source o f exp endi­
ture inform ation on housing, utilities, clothing, major
Digitized and minor equipm ent, h ousefum ishings, transportation,
for FRASER


A s in past consum er expenditure surveys conducted
by the Bureau, the revision o f the Consum er Price
Index market basket and w eights remains as a primary
reason for undertaking such an ex ten siv e survey. The
results o f the survey have been used to select a new
basket o f goods and services for the index and to deter­
mine the relative im portance o f the item s selected .
The data from the survey w ill be o f value to govern­
ment and private agen cies interested in studying the
w elfare o f particular segm ents o f the population, such
as the aged, low -incom e fam ilies, urban fam ilies, and
th ose receiving food stam ps. A s in the past, the Internal
R evenue S ervice exp ects to use data from the survey as
the basis for revising the average State sales tax tables
w hich taxpayers m ay use in filing Federal incom e tax
returns. The Bureau o f Labor Statistics u ses the survey
results to revise its Fam ily B udgets estim ates. (See
chapter 12.) T he survey data will be o f u se to econom ic
p olicy makers interested in the affects o f policy changes
on le v e ls o f livin g am ong d iv e rse so c io -e c o n o m ic
groups. E conom etricians w ill find the data useful in
constructing econom ic m odels. M arket researchers will
find it valuable in analyzing the dem and for a group o f
goods and services. The D epartm ent o f C om m erce will
use the survey data as a source o f inform ation for revis­

CONSUMER EXPENDITURES AND INCOME
ing its benchm ark estim ates o f som e o f the Personal
C onsum ption Expenditure com ponents o f the G ross
N ational Product.

Limitations of the Data
The results o f the quarterly and diary surveys are
subject to several typ es o f error. T hese include sam ­

81

pling, reporting and processing errors, and errors due to
the inability or refusal o f som e consum er units to give
the information requested. All data were review ed and
edited to minim ize reported and processing errors. In­
accurate reporting is a source o f error in any survey.
Thorough training o f interview ers and careful attention
to collection vehicle design helps to m inimize such er­
rors insofar as p ossible.

T e c h n ic a l R e fe r e n c e s
N um ber

1.

2.

3.

4.

Brown, Alan and Deaton, Angus. “ Surveys in Applied
Economics: Models of Consumer Behaviour” , E c o n o m ic J .,
Dec. 1972, pp. 1145-1236.
Survey of applications of models of consumer behavior,
with some coverage of related consumer demand theory and
methods of family expenditure analysis methods. Extensive
nine-page bibliography.
Carlson, Michael D. “ The 1972-73 Consumer Expenditure
Survey” , M o n th ly L a b o r R e v ie w , Dec. 1974, pp. 16-23.
Summary of purpose, scope, uses, and methods of surveys.
Ferber, Robert, “ Consumer Economics, A Survey” , J . E c o n .
L it ,, Dec. 1973, pp. 1303-1342.
Survey of currents of thought on determinants of total
consumption, including history, development, general con­
sumption function theory and discussions of various group­
ings of factors affecting consumption. Extensive nine-page
bibliography.
Flueck, John A . , Waksburg, Joseph, and Kaitz, Hyman B . ‘ ‘An
Overview of Consumer Expenditure Survey Methodology” ,

N um ber

7.

Murphy, Kathryn R. C o n s u m e r E x p e n d itu r e s a n d I n c o m e : S u r ­
v e y G u id e lin e s , U.S. Bureau of Labor Statistics, Bulletin
1684, 1971.
Documents methodology of the Survey of Consumer Ex­
penditures, comparisons with related data, evaluations and
analyses of sample returns. Contains glossary and facsimiles
of data collection forms.

8.

Pearl, Robert B. M e th o d o lo g y o f C o n s u m e r E x p e n d itu r e S u r ­
v e y s , Bureau of Census Working Paper 27, 1968.
Summary of various methods used, proposal for continuing
surveys, and 25 pages of appendices describing expenditure
survey methods used in various countries.

9.

Prais, S. J. and Houthakker, H. S. T h e A n a ly s is o f F a m ily
B u d g e ts , New York: Cambridge University Press, i/71.
Survey of analysis of family expenditure survey data, with
some coverage of consumer demand theory, data collection
and limitations of data.

10.

U.S. Bureau of the Census. I n d e x e s to S u r v e y M e th o d o lo g y
L it e r a t u r e , T e c h n ic a l P a p e r N o . 3 4 , 1974.
Listing of references to published and unpublished papers,
articles, reports, etc., on methodological aspects of design
and conduct of surveys, other than sample design and
methods, statistical theory and data processing.

11.

U.S. Department of Labor. H o w A m e r ic a n B u y in g H a b its
C h a n g e , 1959.
Popular-style book, dovetailing various studies to yield a
picture of changes in consumption habits of the American
people between 1875 and 1950. Includes chapter of technical
comments on comsumption statistics and an 11-page bibliog­
raphy.

12.

Zimmerman, Carle C., C o n s u m p tio n a n d S ta n d a r d s o f L iv in g ,
N ew York: D. Van Nostrand Co., 1936.
Definitive analysis of family expenditure studies, with per­
tinent tabular materials, and discussions of psychological,
social, and economic concepts and theories of consumption.

1971 P r o c e e d in g s , B u s , & E c o n . S t a t . S e c ., A m e r . S ta t.
A s s ’n ., pp. 238-246, 1972.

5.

Identifies basic methodological problems encountered and
considers their magnitude and possible solutions.
Lamale, Helen H. S tu d y o f C o n s u m e r E x p e n d itu r e s , I n c o m e s
a n d S a v i n g s - M e t h o d o l o g y o f th e S u r v e y o f C o n s u m e r E x ­
p e n d itu r e s in 1 9 5 0 , Philadelphia, Pa.: University of Pennsyl­

6.

vania, 1959.
Comprehensive statement of purposes, procedures, and
reliability of data of 1950 survey, with summaries of BLS
surveys from 1888—89 to 1950. Includes facsimiles of data
collection forms.
Lansing, John B. and Morgan, James N. E c o n o m ic S u r v e y
M e th o d s , Ann Arbor: Institute for Social Research, Univer­
sity of Michigan, 1971.
Review and evaluation of survey methodology, with em­
phasis on households, covering use, design, sampling, collec­
tion, analysis, and administration.




Chapter 12.

Family Budgets

B ack gro u n d

“ Standards o f livin g” refer to the goals o f consum ers
and w orkers in their con su m p tion o f g ood s and ser­
v ic e s, u se o f leisure tim e, and con d ition s o f w ork. Stan­
dard b ud gets, also d escrib ed as fam ily budgets, m ea­
sure th e total co sts or am ounts o f incom e required to
ach ieve the lev els and m anner o f living im plicit in one
set o f hypothetical g o a ls. 1 C ost estim ates are d evelop ed
by translating the generalized con cep t o f a living stan­
dard into a list o f com m od ities and serv ices w hich can
be priced. T hus, standard budgets are norm ative, or
benchm ark, estim a tes o f living c o sts. T h ey d o not
represent the w ays in w hich fam ily in com es should be
sp en t, or the w ays average fam ilies actually spend their
incom es.
T he first standard b udgets prepared b y the Bureau o f
Labor S tatistics w ere d evelop ed for the specific pur­
p o se o f evalu atin g liv in g c o n d itio n s o f cotton -m ill
w ork ers in F all R iv er, M a ss, and in the S outh in
1908-09. T h ese budgets d escrib ed tw o standards o f
living— a. m inim um , including on ly bare n ecessities;
and a fair standard, including som e allow ance for com ­
fort. A n oth er budget defining a standard o f health and
d ecen c y w as d evelop ed in 1919. In the late 1930’s, B L S
cooperated w ith the W orks P rogress A dm inistration in
pricing tw o budgets: A m aintenance budget, described
as ab ove the m inimum su b sisten ce lev el but approach­
ing a satisfactory A m erican standard o f living; and an
em ergen cy budget, derived b y cutting the m aintenance
budget for em ergency con d itions “ w ith the least harm
to the individuals and the social g ro u p .” T he informa­
tion available at the tim e concerning the requirem ents
for nutritionally adequate diets and healthful housing
w as incorporated into the definitions o f the living stan­
dard in each o f th ese b udgets. F or oth er com pon ents o f
fam ily livin g, the “ requ irem en ts” w ere form ulated
primarily on the basis o f the personal judgm ent o f the
budget m ak ers.2
'In 1954, at th e r eq u est o f th e U n ited N a tio n s E co n o m ic and S ocial
C o u n cil, a c o m m ittee o f e x p erts from six d ifferen t cou n tries (inclu d­
ing th e U n ited S ta tes) recom m en d ed that the fo llo w in g d istin ction b e
m aintained b e tw e e n th e term s “ le v e l” an d “ stan dard” o f living: T h e
“ le v e l o f liv in g ” rela tes to th e actual livin g co n d itio n s o f a p eo p le.
T h e ‘‘standard o f liv in g ’ ’ r elates to the asp irations or ex p e cta tio n s o f a
p e o p le , that is, the livin g co n d itio n s w h ich th e y se e k to attain or
regain, or w h ich th e y regard a s fittin g and proper fo r th e m se lv es to
en jo y . H o w e v er la y m en and the general p u blic freq u en tly refer to th e
“ high le v e ls o f liv in g ” actu ally a ch iev ed b y the average A m erican
w o rk er as the “ high stan dard” o f A m erican livin g.
2P u b lish ed so u rces fo r th e se b u d gets are d escrib ed in T ech n ical
R e feren ce N o . 3 , listed o n p. 83.


82


In 1946, the Bureau com piled the C ity W orker’s Fam ­
ily B udget for a “ m od est but adequate” standard o f
living. The procedures used standards o f adequacy that
reflected the judgm ents o f scien tists and experts where
these w ere available; for other com pon en ts, they d e­
pended on statistical an alyses o f consum er c h o ic e s.3
The sam e m ethod, with som e refinem ents, w as used in
1959, in the interim revisions o f the City W orker’s Fam ­
ily B udget and the Budget for a Retired C ou p le.4 T hese
procedures w ere used again, with additional refine­
m ents, in the m id-1960’s to d evelop the “ interm ediate”
budgets (initially described as “ m oderate” budgets) for
a fo u r -p e r so n fa m ily and a retired c o u p le . S u b ­
seq u en tly, the co sts o f the interm ediate lev el budgets
w ere scaled dow nw ard and upward by a variety o f
tech n iq u es to p rod uce a “ lo w e r ” and a “ h igh er”
budget for each fam ily ty p e .5 Procedures for the inter­
m ediate budgets o f the 1960’s and the scaling tech ­
niques are described in the remainder o f this chapter.

D e s c r ip tio n o f th e B u d g e t s

All norm ative estim ates o f living co sts m ust be based
on sp ecific fam ily situations. The construction o f a fam ­
ily budget, therefore, requires a set o f assum ptions
w hich m ust be form ulated exp licitly by the budget
maker at the ou tset. T hese relate to the age, size, and
type o f fam ily; the manner o f living appropriate for the
specified fam ily com position and the locality in w hich
the fam ily resid es.
Fam ily com position has a significant effect on spend­
ing patterns, manner o f living, and fam ily needs. The
budgets for a younger, four-person fam ily, sp ecifies
that the fam ily co n sists o f an em ployed husband, age
38, w ho has a w ife n ot em ployed ou tside the h om e, and
tw o children, a girl o f 8 and a b oy o f 13. This fam ily type
represents a middle stage in the life c y c le , and it has
b een w id ely u sed as the unit for other budgets com piled
for earlier periods. The fam ily in the budgets for a
retired couple co n sists o f a husband and w ife, age 65 or
over, w ho are assum ed to be self-supporting, in reason­
ably good health, and able to take care o f th em selves.
This unit, w hich has a m arkedly different pattern o f
living and needs than the younger fam ily , has been the
subject o f special con cern in national p olicy form ation
3S e e
bu d get
4S e e
5S e e

T ech n ical R e feren ce N o . 18. F or d escrip tio n o f a co m p an ion
for an eld erly c o u p le , s e e T ech n ical R eferen ce N o . 19.
T ech n ical R e feren ce N o s . 7 and 10.
T ech n ical R e feren ce N o s . 11, 14, 15, and 16.

FAMILY BUDGETS
over the last three d ecad es. B udget quantities and
budget com ponent co st estim ates for other fam ily types
cannot be derived as fractions or m ultiples o f the quan­
tities or co st estim ates for food , shelter, clothing, trans­
portation, etc. for the four-person fam ily or the retired
co u p le .6
B oth typ es o f fam ilies w ere assum ed to live in an
urban area. A ssu m p tions also w ere made concerning
the living arrangem ents and tenure o f the fam ilies; in­
ventories o f housefurnishings, household equipm ent,
and clothing; m eans o f transportation; ow nership o f life
insurance; p rovisions for m edical care; savings posi­
tions, etc. In making th ese assum ptions, the budget
makers w ere guided by data on the p revalence o f ow n ­
ership o f particular typ es o f assets in the urban m et­
ropolitan population, and the availability o f good s and
services provided by governm ents for collective co n ­
su m ption or p rovid ed under c o lle c tiv e bargaining
agreem ents b etw een em ployers and unions.
All three budgets provide for the m aintenance o f
physical health and social w ell-being, and participation
in com m unity activities. W ithin this broad fram ework,
different lev els w ere obtained by varying the assum p­
tions concerning the manner o f living and by providing
different quantities and qualities o f the necessary goods
and services.
The con tent o f the budgets is based on the manner o f
living and consum er ch o ices in the 1960’s. The low er
budget differs from the interm ediate and higher budgets
in several specifications: The fam ily lives in rental h ous­
ing w ithout air conditioning, (excep t for a proportion o f
retired cou p les w h o m ay ow n their ow n h om es), relies
h eavily on public transportation, supplem ented, where
n ecessa ry , by the u se o f an older car, performs more
services for itself, and utilizes free recreation facilities
in the com m unity. Com pared with the interm ediate
budget, the life style in the higher budget is marked by
m ore h om eow n ership , high lev els o f new-car ow ner­
ship, m ore h ousehold appliances and equipm ent, and
more paid-for services. For m ost item s com m on to all
budgets the quantities are greater and the qualities
higher in the interm ediate than in the low er budget, and
in the higher than in the interm ediate b u d get.7

D ata S o u rc e s

Budget quantities and pricing specifications w ere d e­
rived from tw o sou rces: (1) S cien tific or technical
judgm ents concerning the requirem ents for physical
health and social w ell-being; and (2) analytical studies
o f the ch o ices o f good s and services made by consum ­
ers in su cce ssiv e incom e groups, as reported in the
B ureau’s surveys o f consum er exp en d itu res,8 to de­
termine the incom e class w h o se spending pattern w ould
be assum ed as the “ norm ” for a sp ecified budget level.
Scien tific standards for nutritionally adequate diets
for individuals in different sex-age groups have been
d FRASER
Digitized for evelop ed by the F ood and Nutrition Board o f the


83

N ational Research C ouncil, and translated by the U .S .
Departm ent o f Agriculture into food plans at different
cost lev els. T hese food plans were used as the basis for
the food-at-hom e com ponent o f the budgets.
H ousing standards established by the Am erican Pub­
lic H ealth A ssociation and the U .S . Public H ousing
A dm inistration were adopted for the budgets. T hese
standards relate to sleeping space requirem ents, essen ­
tia l h o u s e h o ld e q u ip m e n t (in c lu d in g p lu m b in g
facilities), adequate utilities and heat, structural condi­
tion, and neighborhood location o f the dw elling units.
Fuel requirem ents were derived by analyzing actual
fuel purchases o f fam ilies in the specified types o f d w el­
lings in relation to degree-days to provide an adjustment
for differences in clim ate. E stim ates o f electricity and
utility services required for the appliances specified for
the budgets w ere furnished by utility com panies and
association s.
The w idespread use o f insurance to cover the cost o f
major illness w as accepted as a basis for a standard for
m edical care, and a fam ily m em bership in a group
health insurance plan (M edicare for the retired couple)
w as specified. Q uantities o f m edical care services not
covered by insurance w ere derived from data on utiliza­
tion rates provided by the 1963-64 U .S . N ational Health
Survey and the 1960-61 Consum er E xpenditures Sur­
vey. Major m edical provisions were specified for the
higher budget.
N o generally accepted scientific standards are avail­
able for other com ponents o f the budgets (clothing,
h o u se fu r n ish in g s, tr a n sp o r ta tio n , p erso n a l ca r e,
household operation, reading, recreation, tob acco,
education, gifts and contributions, and m iscellaneous
exp en ses). T herefore, for m ost o f th ese com ponents a
technique w as d evelop ed w hich relied on the ch oices o f
consum ers as the basis for a standard. Purchases were
exam ined at su ccessiv e incom e levels to determ ine the
incom e lev el in w hich the point o f maxim um incom e
elasticity occurred. The average num bers and kinds o f
item s purchased at this incom e level b ecam e the quan­
tities and qualities specified for the interm ediate level
budget. In general, incom e cla sses below and above the
cla sses used for the interm ediate level w ere specified as
6
Extensive analyses of consumption data dating back over more
than a century have provided a variety of measures of general wel­
fare; e.g., the relative adequacy of diets, the proportion of income
spent for various categories of goods, or the proportion of income
saved. These measures, either singly or in combination, have been
used as the basis for determining scales of equivalent income for
families of different size. One such scale is described in Technical
Reference No. 12. The scale is based on the assumption that families
spending the same proportion of income on food have attained equal
levels of living. Although the scale is useful in estimating equivalent
costs of goods and services, or net income requirements after income
taxes and occupational expenses, it cannot be applied to individual
items or major components of budget costs.
7
For a discussion of the relativity of living standards, see Technical
Reference Nos. 5 and 6.
8
For a description of the Bureau’s surveys of consumer expendi­
tures, see chapter 11.

84

BLS HANDBOOK OF METHODS

the so u rce o f q u an tities for the lo w er and higher
budgets, respectively.
For the transportation com pon en t, quantities for the
interm ediate and higher budgets w ere based on the
average consum ption pattern o f fam ilies o f each budget
type. For the low er budget, average patterns o f renter
fam ilies w ere used. E xcep t for the higher budget where
costs include a car for all fam ilies, autom obile ow ner­
ship w as sp ecified in inverse relationship to the avail­
ability o f m ass public transportation. M ileage allow ­
ances w ere adjusted by the u se o f autom obiles for work.
In determ ining budget c o sts, lev els o f prices paid for
item s are as important as the num bers o f item s bought.
Item s in the interm ediate budget w ere priced in the
types o f stores and professional and service establish­
m en ts cu sto m a r ily p a tro n ized by urban fa m ilies.
Prices, pricing p rocedures, reporting stores and service
establishm en ts, and price calculation m ethods were
th ose used by the B L S for the C onsum er Price In d ex ,9
excep t that additional quotations w ere obtained in som e
ca ses to calculate averages and different qualities were
priced in other ca ses to represent the interm ediate
budget level. For som e item s in the low er and higher
budgets, special prices w ere co llected directly from
stores and establishm ents. In the main, h ow ever, prices
for th ose tw o lev els w ere estim ated in a variety o f
w a y s .10
Since spring 1969, the co sts o f the consum ption com ­
ponents o f the budgets have b een derived by applying
price changes reported in the C onsum er Price Index for
individual areas to the appropriate previous p eriod’s
co sts for each main class o f good s and services.

U se s and

L im it a tio n s

In the m ethods described, a fam ily budget is the end
result o f a multitude o f d ecision s by the budget maker,
based on standards form ulated by scien tists or experts
or on analyses o f data on consum ption patterns from a
variety o f sou rces. The budgets are not sim ply the
products o f a survey o f w ays fam ilies at particular in­
com e lev els actually spend their m oney. The judgm ent
o f the budget maker is involved in selecting among the
fam ily typ es and manners and lev els o f living to be
rep resen te d ; in d eterm in in g th e m o st ap propriate
sources o f data to be used in deriving budget quantities;
and in interpreting actual fam ily consum ption in terms
o f norms or benchm arks. The appropriateness o f the
operating assum ptions can be evaluated only by the
budget users in relation to the purposes to be ser v ed .11
Budget estim ates m ay be analyzed in four w ays: (1)
9
For a description of the Consumer Price Index, see chapter 13.
1 technical Reference Nos. 13, 15, and 16 provide additional de­
tails on the methods, as well as lists of goods and services priced.
Dollar cost estimates are provided in these reports and also in Tech­
nical Reference No. 9.
n For a discussion of the uses of family budgets, see Technical
Nos. 2, 4, 8, and 17.
Reference



C osts are com pared with incom e. H ow ever, costs for a
specific fam ily type should be com pared only with av­
erage incom es, or incom e distributions, for fam ilies o f
the sam e type. This kind o f analysis has been restricted,
therefore, by the availability o f cost estim ates for only
tw o fam ily types. H ow ever, fam ily equivalence scales
may be used to d evelop estim ates for com parable
benchmark levels for fam ilies o f other typ es. (2) Budget
co sts in one place are com pared with costs in another,
i .e ., the budgets provide a basis for calculating an index
o f locality differences jn “ living c o s ts .’’12 The Bureau
has provided this type o f analysis in conjunction with its
published reports. (3) C osts are com pared over time to
m easure changes in living standards. The sporadic
character o f the Bureau’s fam ily budget research pro­
gram im p o se s ser io u s lim ita tio n s on th is ty p e o f
a n a ly sis. A lso th e ju d gm en t fa cto r in d ev elo p in g
b u d g ets in tr o d u c e s a se r io u s b ias for ev a lu a tin g
changes in the levels and living standards o f fam ilies
from decade to decade. (4) Finally, budget estim ates o f
different lev els are com pared to provide a m easure o f
the aggregate addition to incom e required to raise con ­
sum ption to particular le v e ls. T he d evelop m en t o f
budgets for three different levels facilitates this type o f
analysis.
Fam ily budgets are used in econom ic research to
appraise the econom ic condition o f the population and
to evaluate the need for, and the effect of, specific laws
and programs. For exam ple, norm ative living co sts are
used to m easure the exten t to w hich social security or
unem ploym ent insurance benefits provide incom e suf­
ficient to purchase the manner and content o f living
used to define a specified budget level; to estim ate
aggregate co sts o f consum er goods as a basis for de­
veloping public policies; or to prepare estim ates o f the
number o f fam ilies living below the specified budget
level. Budgets also provide benchm arks for administra­
tive determ inations, as required by a number o f existing
law s or p olicies o f social, w elfare, and educational
agencies; e .g ., to establish criteria o f eligibility for pub­
lic assistan ce, public housing, support services for indi­
viduals in job developm ent program s, subsidized m edi­
cal or mental health, guidance serv ices, or college
scholarship aid.
In addition to their primary use as tools in evaluating
incom e adequacy, fam ily budgets are used to m easure
place-to-place differences in living co sts, as a basis for
fam ily counseling, in w age negotiations, and as an aid in
consum er education.
L ocality ind exes based on the B L S budgets reflect
differences in co sts o f established residents in a com ­
m unity. Rental co sts, for exam ple, are based on the
averages for occupied dw ellings and are not a valid
m easure o f the co sts o f vacant units available to new
residents. Sim ilarly, the co sts o f maintaining a hom e
purchased 7 years ago, w hile an appropriate m easure
1 For a discussion of the interarea indexes calculated with the
2
family budget cost estimates, see Technical Reference No. 9.

F A M ILY BUDGETS
for an established, budget-type fam ily, d oes not provide
information on the relative co sts o f purchasing hom es in
current m arkets. The cost o f food reflects not only
differences in price levels but also, and more important,
differences in regional preference patterns in the choice
o f food to m eet nutritional stan d ard s.13 The indexes,
therefore, are more appropriate as research tools in

85

analyses o f the relationship betw een incom e and costs
o f established residents in different locations than as
m easures o f differences in costs for fam ilies moving
from one location to another.
13For a m easure o f the effect on food c o sts o f p rice-level differences
versu s regional d ifferen ces in the ch o ice o f fo o d s, see T echnical
R eferen ce N o . 1.

T e c h n ic a l R e f e r e n c e s
N um ber

1.

2.

3.

4.

5.

6.

7.

B ra ck ett, Jean C ., “ In tercity D iffer e n c es in F am ily F o o d
B ud get C o s ts ,” M o n th ly L a b o r R e v i e w , O ctob er 1963, pp.
1189-1194.
A n an a ly sis o f the effects on food budget c o st estim ates o f
usin g for all cities a single set o f w eigh ts representing urban
U .S . food pattern s, or different w eigh ts for each city reflect­
ing the food p referen ces o f the region in w hich the city is
lo ca ted .
B rack ett, Jean C ., “ N e w B L S B u d gets P rovide Y ardsticks for
M easuring Fam ily L ivin g C o s ts ” M o n th ly L a b o r R e v ie w ,
April 1969, pp. 3-16.
P rovid es a non tech n ical descrip tion o f the co n cep ts and
p roced u res u sed to d ev e lo p the bu dgets for a four-person
fam ily at three lev e ls o f livin g, a sum m ary o f the spring 1967
c o st e stim a tes and locality in d ex e s, and a d iscu ssio n o f the
appropriate u ses o f the bu dgets.
C lo rety , J o sep h A ., “ C on su m p tion Statistics: A T ech n ical
C o m m e n t,” H o w A m e r ic a n B u y in g H a b its C h a n g e , Ch.
X , 1959, pp. 217-242.
P resen ts a rep resen tative cro ss-se ctio n o f budgets co m ­
piled in this country during the 20th cen tury. S h ow s average
dollar c o st figures for the total and for the major com p on en ts
o f ea ch bu dget.
H a w e s, M ary H ., “ M easurin g R etired C o u p les’ L ivin g C o sts in
U rban A r e a s ,” M o n th ly L a b o r R e v ie w , N ovem b er 1969, pp.
3-16.
In clu d es estim a tes o f the c o sts o f budgets for three lev e ls o f
living fo r a retired cou p le in spring 1967 and budget-based
lo ca lity in d ex es. D escrib es u ses o f th ese bu dgets as to o ls in
determ ining eligib ility for variou s program s and in helping
older co u p les to evalu ate their ow n spen ding habits.
L a m a le, H elen H ., “ C h anges in C o n cep ts o f In com e A d eq u acy
O ver the L ast C en tu ry ,” A m e r ic a n E c o n o m ic R e v ie w , M ay
1958, pp. 291-299.
A n a n alysis o f the relation sh ip o v er tim e b etw een actual
le v e ls o f living in the U n ited S tates and the goals or standards
o f living w h ich have b een a ccep ted in different historical
period s and for different p u rp oses.
L am ale, H elen H ., “ P overty: T he W ord and the R e a lity ,”
M o n th ly L a b o r R e v ie w , July 1965, pp. 822-827.
D isc u s se s the standard budget approach to the evalu ation
o f in com e a d eq u acy for different fam ily typ es and in different
geographical lo ca tio n s and estim ation o f the exten t o f p overty
in the U n ited S ta tes.
L a m a le, H elen H . and S to tz , M argaret S ., “ T he Interim C ity
W orker’s F am ily B u d g et,” M o n th ly L a b o r R e v ie w , A u gust

1960, pp. 785-808.
E stim ates the c o st o f a “ m od est but ad eq u ate” standard o f
living fo r a hu sb and, w ife, and tw o children (living in rented
h ou sing), at autum n 1959 p rices, in 20 large cities and their
suburbs. In clu d es the detailed list o f the g o o d s and serv ices
u sed to d efine the living standard for the 1950’s , and d escrib es

the w a y this list w as d ev elo p ed and priced.



N um ber

8.

9.

10.

11.

12.

13.

14.

15.

O rsh an sk y, M ollie, “ B ud get for an E lderly Couple: Interim
R ev isio n by the Bureau o f L abor S ta tistic s,” S o c ia l S e c u r ity
B u lle tin , D ecem b er 1960, pp. 26-36.
A sum m ary report on “ T he B L S Interim B udget for a
Retired C o u p le .” (S ee R eferen ce N o . 10.) In clud es a d iscu s­
sion o f variou s con cep tu al problem s en cou n tered in d e v e lo p ­
ing norm ative living c o sts estim ates for a retired co u p le, and
som e lim itations o f this particular budget.
S h erw ood , Mark K ., “ Fam ily B u d gets and G eographic D iffer­
e n c e s in Price L e v e ls ,” M o n th ly L a b o r R e v ie w , April 1975,
pp. 8-15.
D isc u s se s the geographic variations in the fam ily budget
m arket b ask ets and the assu m p tion s that m ust be m ade to u se
the interarea in d exes as “ living c o s t s ” in d exes.
S to tz , M argaret S ., “ T he B L S Interim B ud get for a Retired
C o u p le ,” M o n th ly L a b o r R e v i e w , N o v e m b e r 1960, pp.
1141-1157.
E stim ates o f the c o st o f a “ m o d est but ad eq u ate” standard
o f living for a m an age 65 or o v er and his w ife (living in rented
h ou sin g), at autum n 1959 p rices, in 20 large cities and their
suburbs. In clud es the d etailed list o f the g o o d s and serv ices
u sed to d efine the living standards for 1950’s; and d escrib es
h ow this rep resen tative list w as d ev elo p ed and priced.
U .S . D epartm en t o f L abor, Bureau o f L abor S tatistics, “ City
W orker’s Fam ily B ud get for a M oderate L iving Standard,
autum n 1966” (B ulletin 1570-1, 1967).
D escrib es ch an ges in this budget over the last tw o d eca d es,
and g iv es autum n 1966 c o sts for urban U n ited States and c o sts
and comparative indexes for 39 metropolitan areas, and 4
non m etropolitan regions.
U .S . D epartm en t o f L abor, Bureau o f L abor S tatistics, “ R e ­
vised E q u ivalen ce S cale for E stim ating E qu ivalent In com es
or B ud get C osts by Fam ily T y p e ” (B ulletin 1570-2, 1968).
Includes scale values for selected family types which can be
used to app roxim ate total c o sts o f con su m p tion for the three
budget lev e ls. A lso in clu d es a sum m ary and d iscu ssion o f the
status o f research on fam ily eq u ivalen ce scales.
U .S . D epartm en t o f L abor, Bureau o f L abor S tatistics, “ City
W orker’s Fam ily B ud get P ricing, P roced u res, S p ecifica tio n s,
and A verage P rices, A utum n 1966” (B ulletin 1570-3, 1968).
R eports on pricing m eth od ology used in the interm ediate
budget and in clu d es U .S . urban average prices and averages
for five m etropolitan areas for selected item s priced for the
budget.
U .S . D epartm ent o f L abor, Bureau o f L abor S tatistics, “ R e­
tired C o u p le’s B u d get for a M oderate L ivin g Standard, A u ­
tum n 1966” (B ulletin 1570-4, 1968).
D escrib es ch an ges in this budget over the last tw o d e ca d es,
and g iv es autum n 1966 c o sts for urban U n ited States and c o sts
and com parative in d exes for 39 m etropolitan areas and four
nonm etropolitan regions.
U .S . D epartm en t o f L abor, Bureau o f L abor S tatistics, “ Three
Standards o f L ivin g for an U rban Fam ily o f F our P erso n s,

BLS HANDBOOK OF METHODS

86

T e c h n i c a l R e f e r e n c e s — C o n t in u e d
Number

16.

17.

Spring 1967” (B ulletin 1570-5, 1969).
D escrib es bu dgets for a fou r-p erson fam ily at three le v e ls o f
living. E x p la in s in d etail th e c o n c e p ts, p ro ced u res, data
so u rces, and estim atin g m eth o d s, and p rovid es lists o f g o o d s
and se r v ic es priced . In clu d es spring 1967 c o sts and locality
in d ex es.
U .S . D epartm en t o f L ab or, B ureau o f L ab or S ta tistics, “ T hree
B u d gets fo r a R etired C ou p le in U rban A reas o f the U n ited
S ta tes, 1967-68” (B ulletin 1570-6, 1970).
D escrib es bu d gets for a retired co u p le at three lev e ls o f
livin g. E x p la in s in d etail the c o n c e p ts, p ro ced u res, d ata
so u rces, and estim atin g m eth od s, and p rovid es lists o f g o o d s
and serv ices in clu d ed . In clu d es spring 1967 c o s ts and locality
in d ex es. (A su p p lem en t to this B u lletin p rovid es c o sts and
in d ex es for 1969-70.)
U .S . D epartm en t o f L abor, B ureau o f L abor S ta tistic s, ‘ ‘R eport
o f the A d v iso ry C om m ittee on Standard B ud get R e se a rc h ,”
June 1963.
R eco m m en d a tio n s form ulated b y a com m ittee o f exp erts
w ith e x ten siv e ex p erien ce in u sin g standard bu dgets on the
n eed s fo r variou s ty p es o f b u d gets, general c o n cep ts o f the




Number

18.

19.

stan dards o f livin g to b e d escrib ed b y the b u d g ets, and
m eth od ological and other prob lem s a sso cia ted w ith estim a t­
ing and pu blishin g bu dget c o sts. In clu d es a se lec ted b ib liog­
raphy on the m ajor u ses o f standard b u d gets.
U .S . D ep artm en t o f L ab or, B ureau o f L ab or S ta tistics, “ W ork­
e r s’ B u d gets in the U n ited States: C ity F am ilies and Sin gle
P erso n s, 1946 and 1947,” (B u lletin 927, 1948).
C o n cep ts, d efin ition s, and tech n iq u es u sed in d ev elo p in g
the original C ity W orker’s F am ily B u d get for a fou r-p erson
fam ily, d etailed list o f g o o d s and se r v ic es p riced , and 1946-47
c o st estim a tes for 34 c ities. A lso an historical su rvey o f fam ily
b u d g e ts, and su m m ary d ata on S ta te b u d g ets for sin g le
w o m en w ork ers.
“ A B u d get for an E ld erly C o u p le ,” Social Security Bulletin,
F ebruary 1948, pp. 4-12.
E stim ates o f th e c o s t o f a “ m o d e st but ad eq u ate” standard
o f livin g for a co u p le age 65 or old er, at M arch 1946 and June
1947 p rices, in eigh t large c ities. (C on cep ts and tech n iq u es
u sed to co m p ile this b u dget w ere parallel to th o se em p lo y ed in
d ev elo p in g the original B L S C ity W ork er’ B u d get. S e e R efer­
e n c e N o . 18.)

Chapter 13.

Consum er P rices

M uch o f the follow ing description o f m ethodology,
sam pling, com pilation, and presentation o f the C on­
sum er Price Index w ill be superseded by the R evised
CPI scheduled to be introduced with the release o f the
index for April 1977.1

B ack grou nd
T he C on sum er Price In d ex w as initiated during
W orld W ar I w h en rapid ch a n g es in livin g c o s ts,
particularly in shipbuilding cen ters, made such an index
essential in w age negotiations. T o provide appropriate
w eighting patterns for th e in d ex, studies o f fam ily
expenditures w ere con d ucted in 92 industrial centers in
1 9 1 7 - 1 9 . T h e B u reau o f L a b o r S ta tis tic s b egan
publication o f in d exes for 32 individual cities in 1919.
Regular publication o f U .S . city average ind exes was
not begun until 1921, but in d exes w ere estim ated back
to 1913.2 S in ce that tim e the w eighting factors, the list
o f item s included in the market basket, and the cities in
w hich price data w ere co llected for calculating the in­
d ex have b een updated several tim es.
B eca u se p e o p le ’s buying habits had changed sub­
stantially by the m id-1930’s, a new study w as made
covering exp en d itures in the years 1 9 3 4 -3 6 which
provided the basis for a com preh en sively revised index
introduced in 1940 w ith retroactive calculations back to
1935.
During W orld War II, w hen m any com m odities were
scarce and good s w ere rationed, the index w eights
w ere adjusted tem porarily to reflect th ese shortages.
Again in 1950, the Bureau m ade interim adjustm ents,
b ased on su rveys o f consum er expenditures in seven
c itie s b e tw e e n 1947 and 1949, to reflect the m ost
im portant effects o f im m ediate p ostw ar changes in
buying p attern s.3 This adjustm ent w as follow ed by the
first com p reh en sive p ostw ar revision o f the index,
*See article b y Julius S h isk in , “ U p d atin g the C on su m er Price
In d ex— A n O v e r v ie w ,” M o n th ly L a b o r R e v ie w , July 1974, pp. 3 - 2 0 .
C o lle c t io n o f food p rices b ack to 1890 had b een initiated in 1903.
D uring the c o u rse o f th e 1 9 1 7 - 1 9 exp en d itu re su rvey, retail p rices for
other a rticles w ere c o lle cte d in 19 cities for D ecem b er o f ea ch year
b a ck to 1914 and in 13 o th er c ities back to D ecem b er 1917 on ly. Retail
p rices o f fo o d and w h o le sa le prices o f oth er item s w ere u sed to
estim a te p rice change from 1914 b ack to 1913.
3S e e I n te r im A d j u s t m e n t o f C o n s u m e r s ’ P r ic e I n d e x (B L S B ulletin
1039, 1951).




w hich w as com pleted in January 1953.4 At that time,
not only w ere the w eighting factors, list o f item s, and
sources o f price data updated, but many im provem ents
in pricing and calculation m ethods were introduced.
A lso, coverage o f the index w as extended to small
cities so as to represent all urban wage-earner and
clerical-w orker fam ilies. The m ost recent revision was
com pleted in 1964, with the introduction o f new expen­
diture w eights based on spending patterns in 1 9 6 0 -6 1 ,
and updated sam ples o f cities, goods and services, and
retail stores and service establishm ents.
The manner in w hich the index has been used and its
acceptance by the public have changed from time to
tim e. It has seen m any appraisals, criticism s, and
investigations. Perhaps the m ost far-reaching study
was conducted during World War II by the President’s
C o m m itte e on th e C o st o f L iv in g .5 T he H o u s e
C om m ittee on E d u ca tio n and L abor co n d u cted a
detailed exam ination o f the index in 1951.6 The m ost
recent study w as made by the Price Statistics R eview
C om m ittee, ap poin ted by the N ation al B ureau o f
E conom ic R esearch, at the request o f the O ffice of
Statistical Standards o f the Bureau o f the Budget, to
review all governm ent price sta tistic s.7
A s a result o f th ese investigations and the B ureau’s
continuing efforts to im prove the index, changes in
coverage, collection , and calculation procedures have
been introduced at various tim es. E xam ples o f these
changes include the addition o f m edium and small
cities to the city sam ple in 1953, the exten sion o f
coverage to include single workers in 1964, and in­
stitution o f direct pricing o f restaurant m eals in 1953.
a n d S c o p e . 9, The C onsum er Price Index (CPI)
is a statistical m easure o f changes in prices o f goods
and services bought by urban wage earners and cleri-

C o n c e p t

4S e e C o n s u m e r P r ic e s in th e U n ite d S t a t e s 1953 - 5 8 (B L S B u lle­
tin 1256).
3R e p o r t o f th e P r e s i d e n t ’s C o m m itte e o n th e C o s t o f L iv in g , O ffice
o f E co n o m ic S tab ilization , W ash in gton, 1945.
^ C o n s u m e r s ’ P r ic e I n d e j c-R ep ort o f a S p ecial Su b com m ittee o f the
C om m ittee on E d u cation and L abor. H o u se o f R ep resen tatives, 82/1,
S u b com m ittee R eport N o . 2, W ash in gton, 1951.
'G o v e r n m e n t P r ic e S ta f/s//c.s-H earin gs before the Su bcom m ittee
on E co n o m ic S tatistics, Joint E co n o m ic C om m ittee, C on gress o f the
U n ited S ta tes, 87/1, Part 1, W ash in gton, January 24, 1961.
8S e e article b y S id n ey A . Jaffe, “ T he Statistical Structure o f the
R ev ised C P I” , M o n th ly L a b o r R e v ie w , A u gu st 1964, pp. 9 1 6 -9 2 4 .

87

88

BLS HANDBO O K OF METHODS

cal w o rk ers,9 including fam ilies and single persons.
The index often is called the “ cost-of-living in d ex ,”
but its official nam e is C on sum er Price Index for
Urban W age Earners and Clerical W orkers. It m ea­
sures changes in p rices, w hich are the m ost impor­
tant ca u se o f ch an ges in the c o st o f livin g, but it
d oes not indicate how much fam ilies actually spend to
defray their living ex p en ses. Prior to January 1964,
the com plete name for the index was: Index o f Change
in Prices o f G oods and S ervices Purchased by City
W age-Earner and Clerical-W orker Fam ilies to M ain­
tain Their L evel o f L iving.
The C onsum er Price Index is a w eighted aggrega­
tive index number with “ fix e d ” or “ con stan t” annual
w e ig h ts , or it o ften is referred to as a “ m arket
b asket” index. T hus, in the C onsum er Price Index the
procedure is to m easure price change by repricing at
regular tim e intervals and com paring aggregate costs
o f the good s and services bought by consum ers in
a selected base period. The quantities o f th ese goods
and se r v ic e s are kept con sta n t e x c e p t at tim es o f
w eight revision s. S in ce new w eights are introduced
w ithout affecting the index lev el, any change in aggre­
gate co sts is due to price change. The quantities repre­
sent not only annual consum ption o f the goods and
services actually priced for the index but also con sum p­
tion o f related item s for w hich prices are not obtained,
so that the total co st o f the market basket represents
total consum er spending for good s and services.
The index represents price change for everything
people buy for living— fo o d , clothing, au tom obiles,
h om es, h ou sefu rn ish in gs, h ou seh old su p p lies, fu el,
drugs, and recreational goods; fe es to d octors, law yers,
beauty shops; rent, repair c o sts, transportation fares,
public utility rates, e tc ., including all taxes directly
a s s o c ia te d w ith th e p u r ch a se o f an item and its
contin ued ow n ersh ip . It deals with prices actually
charged to con su m ers, including sales and ex c ise taxes,
since th ese are an inherent part o f the market price
the consum er m ust pay for good s and services subject
to such taxes. It also includes real estate taxes on
ow ned h om es w hich are part o f the price o f hom e9T he d efin ition o f w a g e earners and clerical w ork ers is b ased o n the
occu p a tio n a l cla ssifica tio n u sed by the B ureau o f the C en su s for the
1960 C en su s o f P opulation and listed in the A lph abetical In d ex o f
O ccu p a tio n s and In du stries. T he group in clu d es craftsm en, forem en ,
and kindred w o rk ers, su ch as carp en ters, b ook b in d ers, etc.; op era­
tiv es and kindred w ork ers, su ch as app rentices in the building trades,
d eliv ery m en , fu m a c em e n , sm elters, and p ou rers, e tc.; clerical and
kindred w ork ers; serv ice w ork ers, e x c e p t private h ou seh old , su ch as
w a itr esses, practical n u rses, e t c .; sales w orkers; and laborers, e x ce p t
farm and m ine. It e x clu d es p ro fessio n a l, tech n ical, and kindred
w o rk ers, su ch as en gin eers and teach ers; farm ers and farm m anagers;
m anagers, o fficia ls and proprietors; private h ou seh old w orkers; and
farm laborers and su p ervisors. A con su m er unit inclu ded in the
1960—61 S u rv ey o f C on su m er E xp en d itu res w as cla ssified in the
in d ex group if m ore than h alf the com b in ed in com e o f all fam ily
m em b ers w a s ob tain ed in a w age-earner and clerical-w ork er o ccu p a ­
 lea st o n e fam ily m em b er w a s a full-tim e earner (i.e .,
tion and at
http://fraser.stlouisfed.org/ s or m ore during the su rvey year).
w ork ed 37 w e e k

Federal Reserve Bank of St. Louis

ow nership. H ow ever, it d oes not include incom e or
other personal taxes, since they are not associated
with prices o f specific goods and services although
they may have an indirect im p a ct.10 Since 1953, it
has treated the purchase o f a hom e in the sam e way
as the purchase o f such durable goods as autom obiles,
refrigerators, etc.
In the 1964 revision, the index coverage w as e x ­
tended to include single con su m er u n its11 in addi­
tion to fam ilies o f tw o or m o re.12 The average size
o f fa m ilies rep resen ted in the in d ex is about 3.7
persons, and their average fam ily incom e in 1960-61
w as about $6,230 after taxes. The average incom e
after taxes o f single persons represented in the index
w as about $3,560.
e i g h t i n g S t r u c t u r e . The annual consum ption patterns
represen ted in the index sin ce January 1964 w ere
determ ined in the Survey o f Consum er Expenditures
(C E S )13 in 66 Standard M etropolitan Statistical Areas
(S M S A ’s) and smaller cities covering the period 1960—
61, excep t for A nchorage, A laska, which w as surveyed
for 1959. E xpenditure records were obtained from the
4,343 urban fa m ilies o f tw o or m ore p erson s and
from the 517 single workers included in the survey
w ho were classified as w age earners or clerical w ork­
ers.
S ixteen cities in the sm allest size class which w ere
included in the 1960—61 survey are not included in
the CPI sam ple for pricing. H ow ever, in the w eight
derivation, expenditures by consum er units in th ese
small cities w ere included with th ose for the 16 small
cities priced for the index, so that the resulting weights
are based on the total sam ple o f 32 small cities.
In establishing index w eights from the detailed ex ­
penditure data, about 400 item s were selected objec­
tively to com p ose the “ market b asket” for current
pricing, beginning with the January 1964 “ new series”
indexes. N o t all item s are priced in every SM S A or city.
In order to make possib le estim ates o f sampling error,
tw o subsam ples o f item s have been established. T hese
are priced in different areas and in different outlet
sam ples, as indicated in table 1. The population w eights
W

10F or a m ore detailed d isc u ssio n , se e “ T a x es and the C on su m ers’
P rice In d e x ,’’ Monthly Labor Review, January 1958, pp. 5 3 —57.
11A p erson livin g a lon e or in a h ou seh old w ith others from w h o m he
w as fin an cially ind ep en dent; i.e ., his in com e and exp en d itu res w ere
not p o oled . T erm s su ch as “ single p erso n s, single w ork ers, sin g les,
e t c .’’ u sed su b seq u en tly, refer to single con su m er units and n ot to
unm arried p erson s.
12F rom January through N o v em b er 1964, the B ureau com p u ted a
separate in d ex applying o n ly to fam ilies o f tw o or m ore, for com para­
bility w ith the p reviou s series. S in ce the sam e item s w ere priced for
fam ilies and sin g les, the overall m o v em en t o f the separate ind ex w as
identical w ith the in d ex inclu ding sin gle w ork ers and it w as d isc o n ­
tinued.
13T h e S u rvey o f C on su m er E xp en d itu res is d isc u sse d in ch. 11
o f this bu lletin . T h e se lec tio n o f the exp en d itu re su rvey and CPI city
sam p les is d escrib ed in detail in an article by M arvin W ilk erson , “ T he
R ev ised C ity S am p le for the C on su m er P rice In d e x ,’’ Monthly Labor
Review, O ctob er 1960, pp. 1 0 7 8 -1 0 8 3 .

CONSUMER PRICES
T a b le 1.

89

C ities, p op u latio n w e ig h ts , a n d p ricing s c h e d u le fo r th e re v is e d c o n s u m e r p ric e in d ex
P r ic in g s c h e d u le 2
C it y a n d s i z e s t r a t u m

O th e r ite m s

P o p u l a t io n
w e ig h t1

Food3

S c h e d u le 3
S a m p le s
*

S t a n d a r d m e t r o p o l i t a n s t a t i s t i c a l a r e a s o f 1 , 4 0 0 , 0 0 0 o r m o r e in I 9 6 0 :
B a l t i m o r e , M. .d. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1. . 4 0 2
B o s t o n , M a s. .s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 .. 9 3 0
.
C h i c a g o - N o r t h w e s t e r n I n d ia n .a .4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . 5 5 2
. .
C l e v e l a n d , O h io . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ...3 .2. 5
. .

\
I

1
I

D e t r o i t , M i c h . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. .. 8 .9 5
. . .
L o s A n g e l e s - L o n g B e a c h , C. .a .l.i.f. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . 0 1 7
.
N e w Y o r k - N o r t h e a s t e r n N e w J e r s. e .y. 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2 . 5 7 7
. .
P h ila d e lp h ia , P a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

D en ver, C o lo ................................................................................
H a r t f o r d , C o n n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 .. .3. .4. 8
.
H o n o l u l u , H a w a i i . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3. 5.4
.
.9 9 9
H o u s t o n , T e x . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .................. . . . . . . . . . . . . . . . . .
I n d i a n a p o l i s , I . . d. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1. . 0 9 5
n.
K a n s a s C ity , M o .- K a n s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
M i l w a u k e e , W i s . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 5 0
M i n n e a p o l i s - S t . P a u l, M i n n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ...0. .4. 2
.
N a s h v ille , T e n n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S a n D i e g o , C a .l.i.f. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 6 7 2
S e a t t l e , W a s h . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 .. .8. . . 7
. 3
W i c h i t a , K a n s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ...0. .9. 6
.
S ta n d a r d m e tr o p o lita n s t a t is t ic a l a r e a s o f 5 0 ,0 0 0 to 2 4 9 ,9 9 9
in I 9 6 0 :
A u s tin , T e x . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B a k e r s f i e l d , C a. l. i. f. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1. . 3 2 3
B a t o n R o u g e , L a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1. . 2 .5 0
. .
C e d a r R a p id s , I o w a ....................................................................
C h a m p a i g n - U r b a n a , I I I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ...2 .8. 4
. .
D u r h a m , N . C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1...2 .5. 0
. .
G r e e n B a y , W i s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1. . 2 .8 4
. .
L a n c a s te r, P a . ............................................................................
1
O r la n d o , F l. a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 5 0
.
P o r t l a n d , M a i n e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1...8 .0. 3
. .
U r b a n p l a c e s o f 2 , 5 0 0 t o 4 9 , 9 9 9 in I 9 6 0 :
A n c h o r a g e , A l a s k a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 0 .6. .5
.
C r o o k s t o n , M i n .n. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1. . 3 5 2
.
D e v i l s L a k e , N . D a k . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ...3. . . 2
. 5
F i n d l a y , O h i o . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 .. .3. 5.2
. .
F l o r e n c e , A l. a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1. . 2 2 7
.
K i n g s t o n , N . Y. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1. . 1 7 1
.
K la m a t h F a lls , O r e g . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
L o g a n s p o r t , I n .d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 .. 3 5 2
. .
.
M a n g u m , O k l a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1. . 2 .2 6
. .
M a r t in s v ille , V a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
M c A l l e n , T e x . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1. . 2 .2 7
. .
M i l l v i l l e , N . J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ...1. . . 1
. 7
N i l e s , M i c.h . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 . 3 5 1
.
.
O rem , U ta h
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 .. .3. .3. 9
.
S o u t h b r id g e , M a s s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

 at end of table.
S e footnotes
e


2B
2B
2A, 2B
2B

1A, 2B

V
f

1
1
1

P i t t s b u r g h , P a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 .6. 5
1 .
S t. L o u i s , M o . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 .. .4. . . 8
. 2
S a n F r a n c i s c o - O a k l a n d , C. . . l. i. f. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . 3 7 2
a
W a s h in g t o n , D .C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S ta n d a rd m e tr o p o lita n s t a t is t ic a l a r e a s o f 2 5 0 ,0 0 0 to 1 ,3 9 9 ,9 9 9
in I 9 6 0 : 5
A tla n ta , G a ..................................................................................
B u f f a l o , N . Y. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2...3 4 7
.
.
C in c in n a t i, O h io -K y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2 . .
D a l l a s , T e x . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 .3 4
D a yton , O h i o ..............................................................................

1A,
1A,
1A, IB ,
1A,

V

1A, IB ,
2A, 2B
2 .7 0 3

I
1 .2 5 5

\/
I

1
1
I

1

1A,
1A,
1A, IB ,
1A, I B ,

1 .0 9 6
1 .8 3 8

3

X
X

X
1A, 2 B
X

X
X
X

X

1A, 2B

.7 4 0

2

X

2B
2B
2A, 2B
2A, 2B

1A,
1A,
1A,
1A,
1A,

2 .9 3 4
\

1
1
1
1
1
1

1A, 2 B
1A, 2 B

1

M

2B
2B
2B
2B
2B

X
X
X
X
X

1
i1nA,CD 9 R
.7 1 0

2 .9 3 3

X
X

1A, 2 B
1A, 2B

X

2

X
X

1A, 2 B
1A, 2B
1A, 2 B

X

2

X

X

X
X

1A, 2B
1A, 2 B
1A, 2 B

/

7

X
#

1 . 21 0
5

1
2
2

X

2
2
1 A2 8 2 B
., 4
1A, 2 B

1A, 2 B
1A, 2 B

X
X

1A, 2 B

1A, 2B

X
X

X

1

X

1

1 . 810 3
1A, 2B

1

X
X

1A, 2B

2

2

1,2
1

1, 2
1

2

2

1

X
X
X

1

2

X

1

1

X

2

1 .31 8
3

X
X
X

1

2

2

1

1

1 . 22 7
2

2
2
1 .1 1 0
7

X

2

X

2
2

X

1

2

X

X
1

2
1

X
X
X

90

BLS HANDBOOK OF METHODS

T a b le 1.

C ities, p op u latio n w e ig h ts , a n d p ricin g s c h e d u le fo r th e r e v is e d c o n s u m e r p ric e in d e x — C o n tin u ed
P r ic in g s c h e d u le 2
C it y a n d s i z e s t r a t u m

P o p u la t io n
w e ig h t1

O th e r ite m s
Food3

S c h e d u le 3
S a m p le s

D.

M

1

2

3

U r b a n p l a c e s o f 2 , 5 0 0 t o 4 9 , 9 9 9 in 1 9 6 0 — C o n t i n u e d
U n i o n , S . C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. . 2 .2 7
. . .
1 . .
V i c k s b u r g , M i s s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 .2 6

1
2

1
2

X
X

Foods, fu e ls , a n d s e v e r a l o th e r ite m s a r e p r ic e d every m on th in a ll c it ie s . P r ic e s
1 T h e 18 la r g e s t S ta n d a rd M e tr o p o lita n S t a t is t ic a l A re a s a s d e f in e d f o r 3 th e
o a
1 9 6 0 C e n s u s o f P o p u la tio n w e r e s e le c t e d on a c e r ta in ty b a s is a n d r e p r e s e n t thfe m ­ f e w ite m s a r e c o lle c t e d s e m ia n n u a lly o r a n n u a lly in a ll c it ie s . P r ic e s o f o th e r
s e lv e s o n ly in th e p o p u la tio n w e ig h t p a tte r n s . T h e o th e r s a m p le s e le c t io n s g o o d s a n d s e r v ic e s a re o b ta in e d on th e s c h e d u le in d ic a te d :
c a rry
Mn
n o t o n ly th e ir ow n p o p u la tio n w e ig h t s b u t a ls o p r o ra ta s h a re s o f th e p o p u la tio = E v e r y m on th .
l = J a n u a r y , A p r il, July, a n d O cto b er.
w e ig h ts o f a ll c i t i e s in th e ir re g io n in th e s a m e p o p u la tio n c la s s .
2 Item s a m p le s a r e id e n t ifie d a s s a m p le s “ 1 ” a n d “ 2 . ” O u tle t s a m p le s 2 a re ebru ary, M a y, A u g u s t a n d N o vem b er.
= F
id e n t ifie d a s s a m p le s “ A ” a n d “ B .” T h e d e te r m in a tio n a s to th e e x te n t o f s a m p lin g= M a rch , June, S e p te m b e r, a n d D e cem b er.
3
w ith in an a re a d e p e n d e d on p la n s fo r p u b lis h in g s e p a r a t e a re a in d ex es an d on p la n4s S ta n d a rd C o n s o lid a te d A re a s .
fo r d e v e lo p in g e s t im a t e s f o r s a m p lin g e r ro r a n d its co m p o n e n ts .
5 P o p u la tio n w e ig h t s r e v is e d f o r th is g rou p b e g in n in g Ja n u ary 19 66.

show n in the table are u sed to com bine price data
for the 56 individual areas in the CPI sam ple into
a U .S . city average. T hey w ere derived from the 1960
C ensus o f Population but adjusted to represent the
w age-earner clerical-w orker coverage o f the CPI. For
the 18 largest S M S A ’s, w hich are included in the sam ­
ple w ith certain ty, th e w eigh ts are b ased on their
respective populations only. F or the remaining cities,
w hich w ere selected by probability sam pling m ethods
to represent all other urban p laces, the w eights repre­
sent not only the specific city population, but also the
population o f all cities in the sam e region and size
class. T hus, every city in the sam e region and size
class (other than the 18 largest) has identical popula­
tion w e ig h ts.14
The list o f item s priced includes all the m ost im­
portant good s and services and a sam ple o f the less
important o n es. In com bination, th ese represent all
item s purchased. Table 4 con tain s a com plete list o f
the item s priced for the index. T he content o f this
market basket in term s o f item s, quantities, and quali­
tie s is k ep t e s s e n tia lly u n c h a n g e d 15 in th e in d ex
calculation b etw een major revision s so that any m ove­
m ent o f the in d ex from on e m onth to the n ext is
due so lely to changes in prices. A com parison o f the
total co st o f the market basket from period to period
yields the m easure o f average price change.
In th e s e le c tio n o f th e item sam p le for the re­
v ised C PI, ex c ep t for the ch o ice o f the particular
quality or variety o f the item to be priced (sp eci­
fication), probability sam pling techniques w ere u sed,
as described later. T he more important item s are in­
cluded in the sam ple with certainty. The remaining
14S ix additional B siz e Standard M etrop olitan Statistical A reas
w ere added to the national in d ex in January 1966. S in ce th ey w ere
se lec ted ou tsid e the probab ility fram ew ork , th ey w ere assign ed on ly
their ow n pop ulation w eigh t w h ich w as su b stracted from that o f other
stratum B
cities in the sam e region.
1
"Minor w eight
http://fraser.stlouisfed.org/ revisions are introduced by linking.

Federal Reserve Bank of St. Louis

item s within a given expenditure class were selected
with probability. The relative im portance o f a certainty
item represents consum er spending for that item only.
“ Probability” item s represent all other item s within
the expenditure class. T he total w eight o f these item s
is divided equally am ong the probability item s within
an expenditure class. Table 2 show s relative impor­
tan ces in the national index as o f D ecem b er 1963.
Individual relative im portances are not show n in the
table for p robability item s; rather their com bin ed
im portance is show n as “ other priced item s” in each
expenditure class.

Data Sources and Collection Methods
Prices are obtained in the 56 area CPI sam ple by
personal visit to a representative sam ple o f nearly
18,000 stores and service establishm ents where w age
and clerical w orkers buy goods and services, including
chain stores, independent grocery stores, department
and specialty stores, restaurants, professional people,
and repair and service sh o p s.16 Rental rates are ob ­
tained from about 40,000 tenants. Reporters are lo ­
cated both in the city proper and in suburbs o f each
urban area. C ooperation is com pletely voluntary.
Prices are co llected in each urban location at in­
tervals ranging from on ce every month to on ce every
3 m onths, as indicted in table 1, with a few item s
su rveyed sem ian n ually or annually. B eca u se food
prices change frequently, and b ecau se food s are a
significant part o f total spending, food pricing is con ­
ducted every month in each urban location. Prices
o f m ost other goods and services are collected every
month in the five largest urban areas and every 3
16F or a m ore co m p lete d isc u ssio n , se e The Consumer Price Index:
Pricing and Calculation Procedures, unnum bered paper by D oris P.
R o th w ell, B ureau o f L abor S ta tistics, U .S . D epartm en t o f L abor,
1964.

C O N SU M E R PRICES

91

Table 2. Consum er price index (new se r ie s)1 relative importance of major groups, sp ecial groups and
individual item s se le c te d with certainty2 D ecem ber 1963
C o m p o n e n ts
A ll i t e m s

P ercen t o f
a l l it e m s
D ecem ber 1963

.................................................................
100.00
M AJO R G R O U P S

F o o d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 2 .4 3
H o u s in g . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3 .2 3
A p p a rel an d u p k e e p .................................................
1 3 .8 8
T r a n s p o r t a t i o n. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
H e a l t h a n d r e c r e a t i o .n. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1 9 .4 5
M e d i c a l c a r e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5 .7 0
2 .7 5
P e r s o n a l c a r e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
R e a d in g a n d r e c r e a tio n .................................... 5 .9 4
O t h e r g o o d s a n d s e r v i c .e.s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.
5 .0 6
S P E C IA L G R O U P S
A ll it e m s l e s s s h e l t e r . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A l l i t e m s l e s s f o o .d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.
7 7 .5 7
C o m m o d i t i e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6 5 . 9 7
N o n d u r a b le s ..................................................... 4 7 .1 9
D u r a b le s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 8 .7 8
S e r v ic e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 4 .0 3
4 3 .5 4
C o m m o d i t i e s l e s s f o o .d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.
N o n d u r a b l e s l e s s f o .o. . d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.
2 4 .7 6
A p p a r e l c o m m o d it ie s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 .1 6
A p p a r e l c o m m o d it ie s le s s fo o t w e a r . .. .
N o n d u r a b l e s l e s s f o o d a n d a p p a .r. e .l . . . . . .
. .
1 5 .6 0
H o u s e h o ld d u r a b le s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 .6 9
4 .7 2
H o u s e f u r n i s h i n .g .s. . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.
2 8 .5 3
S e r v i c e s l e s s r e n. t. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1 3 .4 7
H o u s e h o l d s e r v i c e s l e s s r e. .n. t . . . . . . . . . . . . . . . . . . . . . . . .
.
T r a n s p o r ta tio n s e r v ic e s ....................................
M e d i c a l c a r e s e r v i c. .e. s . '. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.
4 .5 6
O t h e r s e r v i c e .s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. .
5 .6 4
IN D IV ID U A L IT E M S
Food ....................................................................... 2 2 .4 3
F o o d a t h o m e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1 7 .8 9
C e r e a ls a n d b a k e r y p r o d u c ts ..................... 2 .4 5
C e r e a l .s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.8 0
1 .6 5
B a k ery p ro d u c ts ................................
W h it e b r e a d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.6 0
O t h e r p r i c e d i t e m .s. . . . . . . . . . . . . . . . . . . .
1 .0 5
M e a t s , p o u l t r y , a n d f i s .h . . . . . . . . . . . . . . . . . . . . . . . .
. .
5 .6 3
M e a ts ............................................... 4 .4 5
B e e f a n d v e a l. . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.21
H a m b u r g e r ..........................
S te a k .................................
.8 0
O th e r , p r i c e d i t e m . . . . . . . . . . . . .
s
.8 4
P o r k. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1 .3 0
Pork c h o p s ..........................
B a con ................................
.3 0
O t h e r p r i c e d i t e m .s. . . . . . . . . . . .
.6 4
O th e r m e a t s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
P o u ltr y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.7 3
F r y in g c h i c k e n s . . . . . . . . . . . . . . . . . . . . . . . . . .
O t h e r p r i c e d i t e m .s. . . . . . . . . . . . . . . . . . . .
.22
F i s h. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.4 5
D a ir y p r o d u c t s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
M i lk , f r e s h ( g r o c e r y ) . . . . . . . . . . . . . . . . . . . . . . . . . .
M i lk , f r e s h ( d e l i v e r .e. .d. .). . . . . . . . . . . . . . . . . .
.68
B u tte r ...............................................
O t h e r p r i c e d i t e m .s. . . . . . . . . . . . . . . . . . . . . . . . . . .
1.02
F r u it s a n d v e g e t a b l e .s. . . . . . . . . . . . . . . .... . . . . . . . . . .
3 .0 2
F r e s h f r u i t. s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.
.7 6
A p p l e .s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.1 7
B a n a n a s ....................................
.1 5

te a e do ta le
Sefo tn s t n f b .
e oo


C o m p o n e n ts

Percen t of
a ll i t e m s
D ecem b er 1963

F o o d — C o n tin u e d
F o o d a t h o m e — C o n tin u e d
F r u it s a n d v e g e t a b l e s — C o n t i n u e d
F re s h f r u it s — C o n tin u e d
O ra n g e s .....................................
.20
O t h e r p r i c e d i t e m .s. . . . . . . . . . . . . . . . . . . .
.2 4
1 0 .6 3
F r e s h v e g e t a b l e s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.9 4
L e t t u c .e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.1 6
P o ta to e s ....................................
.1 4
T o m a to e s ..................................
O th e r p r ic e d ite m s . . . . . . . . . . . . . . . . . . . . .
1 .3 2
P r o c e s s e d f r u i t s a n d v e g e t a .b . l. . . s.
. e.
O t h e r f o o d a t h o m .e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3 .9 9
.6 4
E gg s .................................................
F a ts a n d o i l s .....................................
.1 5
M a r g a r in e .................................
7 9 .8 5
O t h e r p r i c e d i t e m .s. . . . . . . . . . . . . . . . . . . .
.4 0
S u g a r a n d s w e e t .s. . . . . . . . . . . . . . . . . . . . . . . . . . . .
.6 4
N o n a lc o h o lic b e v e r a g e s . . . . . . . . . . . . . . . . . . . . .
1.01
C o f f e e , c a n a n d b .a. . g. . . . . . . . . . . . . .
.
.4 0
O th e r p r ic e d it e m s . . . . . . . . . . . . . . . . . . . . .
P r e p a r e d a n d p a r t i a l l y p r e p a r e d f o o d ..
1 .1 5
F o o d a w a y f r o m h o m .e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4 .5 4
R e s ta u r a n t m e a ls ..................................... 3 .7 5
B etw een m ea l s n a c k s ................................
7 .6 5
H o u s in g . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3 . 2 3
S h e l t e r . . . . . . . . . . . . . . . . . . . ...... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2 0 .1 5
R en t ........................................................
5 .5 0
H o te ls a n d m o t e l s .....................................
H o m e o w n e r s h i p. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1 4 .2 7
P u r c h a s e a n d f i n a n c .i .n. . g . . . . . . . . . . . . . . . .
.
9 .1 1
4 .8 6
H om e p u rc h a s e ..........................
M o r t g a g e i n t e r e s. t. . . . . . . . . . . . . . . . . . . . .
2 .8 3
2 .1 3
T a x e s a n d i n s u r a n. .c. .e. . . . . . . . . . . . . . . . . . .
R e a l e s t a t e t a x .e. .s. . . . . . . . . . . . . . . . . . . .
1 .7 2
P r o p e r t y i n s u r a n c .e. . . . . . . . . . . . . . . . . . . .
.4 1
M a i n t e n a n c e a n d r e p a i .r .s. . . . . . . . . . . . . . . .
3 .0 3
C o m m o d i t ie s. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.9 8
2 .0 5
S e r v ic e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5 .2 6
F u e l a n d u t i l i t i .e. .s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.7 3
F u e l o i l a n d c o a .l . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.6 7
F u e l o il . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.0 6
C o a l .................................................
G a s a n d e l e c t r i c .i .t. y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.
2 .7 1
G as ..................................................
1 .3 0
E le c t r ic it y ..........................................
1 .4 1
.5 7
O th e r u t i l i t i e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 .8 2
T e le p h o n e ..........................................
1 .3 8
.4 4
W a te r a n d s e w e r a g e ..........................
H o u s e h o l d f u r n i s h i n g s a n d o p e r a .t. i. . . n. . . . . . . . .
. o.
7 .8 2
.3 6
T e x t i l e h o u s e f u r n i s h i n g .s. . . . . . . . . . . . . . . . . . . . . . . . .
.
.6 1
F u r n i t u r.e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1 .4 4
B e d r o o m s u i t e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.2 8
.9 4
L iv in g roo m s u i t e ...............................
.2 8
O t h e r p r i c e d i t e m .s. . . . . . . . . . . . . . . . . . . . . . . . . . .
.88
.5 1
F lo o r c o v e r i n g s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.4 8
.3 4
R u g s , s o f t s u r f a c.e. . . . . . . . . . . . . . . . . . . . . . . . . . .
O t h e r p r i c e d i t e m .s. . . . . . . . . . . . . . . . . . . . . . . . . . .
.1 4
2 .8 0
A p p lia n c e s ................................................
.8 5
R e fr ig e r a t o r s .....................................
O t h e r p r i c e d i t e m .s. . . . . . . . . . . . . . . . . . . . . . . . . . .
1 .0 8
.2 5
O t h e r h o u s e f u r n i s h i n g. s . . . . . . . . . . . . . . . . . . . . . . . . . .
.
.8 3
H o u s e k e e p i n g s u p p l i e. . . . . . . . . . . . . . . . . . . . . . .
s
1 .5 5
H o u s e k e e p in g s e r v i c e s ............................... 1 .5 5
D o m e s t ic s e r v i c e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.2 6
B a b y s itte r.......................................
.2 9
P o s ta g e ............................................
O t h e r p r i c e d i t e m .s. . . . . . . . . . . . . . . . . . . . . . . . . . .
.7 7

.2 4
.4 0

.5 5

.6 1

.7 9

.3 8

6 .2 8

1 .3 6
.2 8

.2 3

92

B LS H A N D B O O K OF M ETH O D S

Table 2. Consum er price index (new ser ie s)1 relative importance of major groups, sp ecial groups and
individual item s se le c te d with certainty2 D ecem ber 1963—Continued
C o m p o n e n ts

A p p a r e l a n d u p k e. e .p . . . . . . . . . . . . . . . . .
. .
M e n 's a n d b o y s ’ a p p a r.e .l . .
.
M e n ’ s a p p a r.e .l. . . . . . . . . . .
.
S u i t s , y e a r r o u n d ..
O th e r p r ic e d ite m s
B o y s ’ a p p a r e l. . . . . . . . . . . . . .
W o m e n ’s an d g ir ls ' a p p a re l
W o m e n ’ s a p p a r e .l. . . . . . . .
W in t e r c o a t s.......
S t r e e t d r e s s e s. . . . . .
H o s e , n y l o .n . . . . . . . .
.
O th e r p r ic e d ite m s
G ir ls ’ a p p a r e l ..............
F o o tw e a r ............................
S t r e e t s h o e s , m e n .’ .s. . . .
S t r e e t s h o e s , w o m e n ’ s ..
O t h e r p r i c e d i t e m .s. . . . .
O t h e r a p p a r e l. . . . . . . . . . . . . . . . . . . . .
C o m m o d i t i e s. . . . . . . ..
S e r v i c e .s. . . . . . . . . . . . . . . . . . . . .
D r y c l e a n i n. .g. . . . . . .
M e n 's s u i t . . . .
W o m e n ’s d re s s
O th e r p r ic e d ite m s

P ercen t o f
a l l it e m s
D ecem b er 1963
1 0 .6 3

2.86
2.21
.3 6
1 .8 5
.6 5
4 .0 8
3 .2 3
.2 8
.5 0
.3 9
2 .0 6
.8 5
1 .5 1
.2 6
.2 6
.9 9
2 .1 8
.7 1
1 .4 9
.7 9
.4 4
.3 5

.68

T r a n s p o r t a t io n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 3 .8 8
P r i v a t e t r a n s p o r t a t i o .n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.
1 2 .6 4
A u t o s a n d r e l a t e d g o o d .s . . . . . . . . . . . . . . . . . . . . . . . .
. .
9 .0 2
A u t o p u r c h a s e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5 .0 2
2 .5 5
N ew c a r s ....................................
U s e d c a r .s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2 .4 7
G a s o l i n e a n d m o t o r o. i. l. . . . . . . . . . . . . . . . . . . .
3 .2 8
G a s o lin e ....................................
3 .0 5
M o to r o il . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.2 3
A u to p a r ts .........................................
.7 2
A u t o m o b i l e s e r v i c. . . s . . . . . . . . . . . . . . . . . . . . . . .
e.
3 .6 2
A u to r e p a ir s a n d m a in t e n a n c e . . . .
.9 8
O th e r a u t o m o b ile e x p e n s e s .........
2 .6 4
A u to in s u r a n c e ....................
1 .4 2
R e g i s t r a t i o n f e e . .s. . . . . . . . . . . . .
.
.3 7
D r iv e r s ' l i c e n s e. . . . . . . . . . . . . . . . . .
.0 4
P a r k i n g f e e . .s. . . . . . . . . . . . . . . . . . . . .
.1 8
A u t o f i n a n c i n g c h a r g e .s. 3. .
.
.6 3
P u b l i c t r a n s p o r t a t .i .o. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
n
1 .2 4
L o c a l t r a n s i t. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.7 8
T a x ic a b s ..................................................
.1 4
T r a in f a r e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.0 7
A i r p l a n e f a r e. .s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.20
In t e r c ity b u s fa r e s ....................................
.0 5
1 For a description o f th e new series, see

Description, 1971.

The Consumer Price Index, A Short

2 The lis t of item s priced includes a ll the more im portant goods and services
and a s am p le of th e less im p o rta n t ones. In c o m b in a tio n , these represent a ll
item s included in th e CPI. W eights fo r in d ividual c e rta in ty item s are shown sep arately.
Some of th e m , however, a re represented by more th a n one sp e cific atio n , bu t the
w eights fo r the in d ividual sp ecificatio n s are not shown. The rem aining w eight of
each exp end iture cla s s having both c e rta in ty and pro b ab ility item s w as shared

m onths in all other p laces. Pricing o f food is done
e a c h m o n th o n 3 c o n s e c u t iv e d a y s e a r ly in th e
m onth; rents and item s for w h ich prices are obtained
by m ail are reported as o f the 15th o f the month;
pricing o f other item s exten d s o v er the entire calendar
m onth. T he Bureau u ses mail questionnaires to obtain
 streetcar and bus fares, public utility rates,
data on


C o m p o n e n ts

Percen t o f
a ll ite m s
D ecem b er 1963

1 9 .4 5
H e a lt h a n d r e c r e a t i o .n. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
M e d ic a l c a r e .................................................... 5 .7 0
1 .1 4
‘ D r u g s a n d p h a r m a c e u t i c . . l.s . . . . . . . . . . . . . . . . . .
a .
.5 0
O v e r - t h e - c o u n t e r i t e m. .s. . . . . . . . . . . . . . . . . . . .
.6 4
P r e s c r ip t io n s .....................................
P r o fe s s io n a l s e r v ic e s ................................ 2 .5 9
.1 2
F a m il y d o c t o r , h o u s e v i s. .i . . . . . . . . . . . . . . .
t
.7 7
F a m il y d o c t o r , o f f i c e v i s. .i .t . . . . . . . . . . . . . .
O p t o m e t r ic e x a m in a t io n a n d
.2 9
e y e g l a s s e. .s. . . . . . . . . . .: . . . . . . . . . . . . . . . . . . . . .
.8 6
D e n tis ts ’ f e e s ....................................
.5 5
O t h e r p r i c e d i t e m .s. . . . . . . . . . . . . . . . . . . . . . . . . . .
.3 6
H o s p ita l s e r v ic e ......................................
s
H e a lt h i n s u r a n c e 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 . 6 1
H o s p ita l s e r v ic e s ...............................
.6 6
N o n h o s p ita l s e r v i c e s ..........................
.7 1
O v e r h e a d. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.2 4
2 .7 5
P e r s o n a l c a r e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1 .5 2
T o i l e t g o o d s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S e r v i c e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 .2 3
M e n ’ s h a ir c u t . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.5 1
O t h e r p r i c e d i t e m .s. . . . . . . . . . . . . . . . . . . . . . . . . . .
.7 2
R e a d in g a n d r e c r e a tio n .................................... 5 ,9 4
R e c r e a tio n ................................................ 4 .3 6
2 .7 8
R e c r e a t i o n a l g o o d..s. . . . . . . . . . . . . . . . . . . . . . . . . . .
.6 3
TV s e t s ......................................
O th e r p r ic e d ite m s .....................
2 .1 5
R e c r e a t i o n a l s e r v i c. .e. .s. . . . . . . . . . . . . . . . . . . .
1 .5 8
M o v ie s (in d o o r ) . . . . . . . . . . . . . . . . . . . . . . . . . .
.3 8
.3 6
B o w l i n g f e e s. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
O t h e r p r i c e d i t e m .s. . . . . . . . . . . . . . . . . . . .
.8 4
R e a d i n g a n d e d u c a t .i .o. .n. . . . . . . . . . . . . . . . . . . . . . . . .
1 .5 8
N e w s p a p e rs......................................
.5 0
C o l l e g e t u i t i o. .n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.
.2 3
O t h e r p r i c e d i t e m .s. . . . . . . . . . . . . . . . . . . . . . . . . . .
.8 5
O t h e r g o o d s a n d s e r v i c .e. s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.
5 .0 6
1 .8 9
T o b a c c o p r o d u c. .t .s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C ig a r e tte s ........................................
1 .7 4
O t h e r p r i c e d i t e m .s. . . . . . . . . . . . . . . . . . . . . . . . . . .
.1 5
A l c o h o l i c b e v e r a g. .e. .s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2 .6 4
B eer ............... ................................
1 .0 6
.7 8
W h is k e y a n d w i n .e. . . . . . . . . . . . . . . . . . . . . . . . . . . .
A w a y fr o m h o m e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.8 0
P e rs o n a l e x p e n s e s .....................................
.5 3
.2 8
F u n era l s e r v ic e s...............................
.
.1 2
B a n k s e r v ic e c h a r g e s .........................
L e g a l s e r v i c e s . . . . . . . . . . . . . . . . . . . . . . . . . . . .3. . . . . . .
1.
M is c e lla n e o u s 3 5 .....................................................

.3 8

equa lly by th e p ro b a b ility item s as of D ecem ber 1 9 6 3 , except in a few cases
where w eights fo r d u p lic a te d item s have double w eights.
3 Not a c tu a lly priced; im puted from priced item s.
4 Cost of he a lth insurance is im puted to price changes fo r representative services
plus the cost of overhead. For a more com plete discussion, see a rtic le by James C.
D augherty, " H ea lth Insurance in the Revised C P I,” Monthly Labor Review, Novem­
ber 1 96 4 , pp. 1 2 9 9 - 1 3 0 0 .
5 Personal fin a n c in g charges other th a n m ortgage in te re s t and auto fin a n c in g .

new spaper prices, and prices o f certain other item s
w hich do not require personal visit by Bureau agents.
For a num ber o f item s, e .g ., hom e purchase, college
tuition, used cars, m agazines, e tc ., data collected by
other G overnm ent agen cies or private organizations
are used.
To insure that the index reflects only changes in

CONSUMER PRICES
prices and not ch an ges due to quantity or quality
differences, the Bureau has prepared detailed specifi­
cations w hich describe the physical characteristics o f
the item s in the m arket b ask et. S p ecia lly trained
Bureau representatives exam ine m erchandise in the
stores to determ ine w hether the good s and services
for which they record prices conform to the specifi­
cation s. W here the p recisely sp ecified item is not
sold at a particular retail establishm ent, the B ureau’s
representative q uotes prices and obtains a detailed
te c h n ic a l d e s c r ip tio n o f th e item n e a r e st to the
physical characteristics o f the specification, in order
to insu re that p rices w ill be q u oted on the sam e
quality and quantity from tim e to tim e. At the first
pricing in an o u tlet th e agen t s e le c ts the v olu m e
selling item m eeting sp ecification, making sure that it
is regular m erchandise in good condition and avail­
able in a custom ary assortm ent o f colors, patterns,
etc.
A t the su b seq u en t pricings the agent p rices the
identical item if it is still available in a reasonable
assortm ent and selling in substantial volum e. If it is
not, she m ust substitute another volum e selling item ,
m eeting sp ecification, if p ossib le. If she cannot, she
prices an item deviating from specification. Prices o f
substitute item s m eeting specification are com pared
directly. Prices o f deviating item s are introduced by
linking or splicing in such a w ay that the difference
in price b etw een the specification and the deviating
item is n o t r e fle c te d as a p rice c h a n g e . I f it is
p o ssib le to obtain an estim ate o f the value o f the
quality d ifferen ce, p rices o f the p reviou s item are
adjusted by the quality estim ate and com pared with
prices for the current month.
W hen the sam ple o f reporters is changed for any
reason, prices from the new reporter also are intro­
duced by linking.

Sampling
A co m p lic a te d in d ex su ch as th e CPI m ust be
based on a w h ole com p lex o f sa m p les.17 A sam ple o f
cities or areas is required in w hich expenditure sur­
v ey s and price co llectio n w ill be conducted. Within
each area there m ust be a sam ple o f fam ilies or con ­
sum er units, from w hich consum er expenditures will
be obtained. It is con ven ien t, but not essential, that
the city sam pling points be the sam e for price co llec­
tion as for the C onsum er Expenditure S urveys.
Further, since it is im p ossib le to price all the thou­
sands o f item s w hich consum ers buy, it is n ecessary
to select a sam ple o f item s for pricing, to represent
17F o r a m ore detailed d isc u ssio n , se e Sampling Aspects of the
Revised CPI, unnum bered paper by M arvin W ilk erson , Bureau o f
L FRASER
Digitized for abor S ta tistics, U .S . D epartm en t o f L abor, 1964.


93

price m ovem ent o f all item s. Sam ples o f outlets are
needed at each sampling point in which price quota­
tions are obtained for the selected item s. Finally,
pricing usually is done at a specific time o f the month
or quarter so there is, in effect, a sampling o f time.
In the 1964 revision, the Bureau o f Labor Statistics
used probability sam pling to a greater exten t than
had been done previously, despite the well-know n diffi­
c u ltie s in v o lv e d . A t th e sam e tim e , the B ureau
attem pted to include in the CPI sampling design som e
m ethod for obtaining an estim ate, even if only a crude
on e, o f sampling error. Probability sampling is a n eces­
s ity , o f c o u r s e , if th is is to b e d o n e in a c o n ­
ventional manner. H ow ever, even if probability sam ­
pling could be follow ed rigorously through all the com ­
plicated CPI structure, the m ere com putational load
would be so exten sive that it would be impractical to
com pute m easures o f error excep t by som e “ sim ple”
approach. T he o b jec tiv e, th erefo re, has been ap­
proached by the “ replication” m ethod.
The sam ple design includes an ex post facto pair­
ing o f probability cities (or Standard M etropolitan
Statistical A reas), tw o replicated item sam ples, and
replicated outlet sam ples. In addition to the minimum
program, designed to produce an estim ate o f the total
sampling error in the index from all sources, the struc­
ture includes more extended replication in selected
cities aim ed at perm itting so m e evalu ation o f the
com ponents o f the error, that is, variation in sampling
results due to sampling o f cities, item s, and outlets.
S a m p le .
A co re sam p le o f 50 S M S A ’s (se e
footnote 13) or smaller cities for the index, supple­
m ented by 16 additional D size cities for the fam ily
expenditure surveys was the m aximum size consistent
with available budget. T hese additional D size cities
w ere surveyed because expenditure patterns are more
variable am ong small cities than among large cities.
T he prim ary sam pling units (P S U ’s) are Standard
M etropolitan Statistical Areas as they w ere defined
by th e B u rea u o f th e B u d g e t p rio r to th e 1960
C ensus, excep t that the Standard Consolidated Areas
for N ew York and Chicago w ere used, plus indivi­
dual urban places outside the S M S A ’s. B ecause 1960
C ensus data w ere not then available, the m easure o f
size used in sam ple selection w as the estim ated urban
popu lation as o f January 1, 1959. T he population
w eights actually assigned are based on 1960 data.
The P S U ’s w ere stratified by broad region and by
s iz e in to 12 r e g io n a l-s iz e strata. T h e 12 la rg est
S M S A ’s w ere selected with certainty, that is, they
represen t th e m se lv e s in the sam ple d esign . S in ce
A laska and H awaii have been added in the revised
CPI, on e sam ple selection has been allocated to each
o f th ese tw o States. The remaining 36 selections are
allocated to the 12 regional-size strata on the basis
o f relative population and relative co sts o f pricing
C ity

94

B LS H A N D B O O K OF M ETH O DS

cities o f different size. Four size strata are defined * cal im portance. T hese are: (1) the item level, and f>)
as follow s:
the level which defines the finest stratification for
A. The 12 largest S M S A ’s on the basis o f urban
the item sampling; that is, the strata to which allo­
p o p u la tio n , in e ffe c t th o s e w ith p o p u la tio n o v er
cations o f item s are made and within which probability
1,400,000;
sam ples o f item s are selected. The term “ expendi­
B. Other large S M S A ’s with urban population great­
ture c la ss” (EC) is given to this level. The expendi­
er than 250,000;
ture cla sses are primarily groupings of items which
C. S M S A ’s w ith urban p o p u la tio n o f 5 0 ,0 0 0 serve similar human needs. Items are grouped within
250,000; and
an EC so that they are as hom ogeneous as possible
D. N onm etropolitan urban p laces with population
with respect to their physical characteristics. It is not
less than 50,000.
possible to confine groupings to items which are similar
The m ethod o f selection used is know n generally
with respect to price m ovem ents.
as “ con trolled se le c tio n ” w hich w as described by
W ithin an exp en d iture class base period expen­
R oe G oodm an and L eslie K ish in the Septem ber 1950
diture w eights will be held constant; that is, the EC
is s u e o f th e J o u r n a l o f t h e A m e r i c a n S t a t i s t i c a l
expenditures serve as a way o f defining the level of
A s s o c ia tio n
(pp. 3 5 0 -3 7 2 ). This m ethod accom plishes
living w hich is to be held constant until the next
major revision o f the CPI. The Bureau plans to re­
a good geographic dispersion o f sampling points across
the country.
sample item s within an EC betw een major revisions
A fter the initial 50-area sam ple w as selected , the
w henever there is evid en ce o f a major redistribution o f
B L S received funds to prepare city indexes for six
relative expenditures or indications that the previous
additional large S M S A ’s— Cincinnati, H ouston, Kan­
sam ple o f priced item s d oes not adequately represent
sas C ity, M ilw aukee, M inneapolis-St. Paul, and San
the class. The connotation o f “ item ” in the sampling
D iego— as part o f a plan to publish indexes for each
frame is n ecessarily fairly broad and the items are
SM SA with 1,000,000 total population in 1960. T hese
not o f equal hom ogeneity in the different classes. Gen­
areas w ere added to the national index in January
erally the listing is above that o f the final “ specified1966.
in-detail” item s for which prices are collected. For the
m ost part no attempt has been made to carry proba­
bility sampling to this ultimate stage.
S a m p le s
o f C o n s u m e r U n i t s . The C ES sam ples were
ch osen as subsam ples o f housing units enum erated in
There w ere about 1,800 line items in the expendi­
advance Comprehensive Housing Unit Surveys (CHUS)
ture survey schedule. A fter exten sive experimentation,
con d ucted in each area late in the year preceding
using expenditure data from a 1959 pilot survey in
Cincinnati, a final sampling frame containing 52 EC’s
the actual survey d a te .18 The C H U S also serve as the
source o f the sam ples o f rental dw ellings for measuring
and 812 item s w as d eveloped. The list of EC’s and
the number o f item s in each are shown in table 3.
price change in rents, and o f ow ner occupied units
The first step in the selection o f the item sample
for m easurem ent o f changes in property taxes. They
for the revised index w as to m ake a roughly optimum
also provide data for w eights for hom e purchase. The
allocation o f the total number o f items to be priced
a c tu a l s iz e o f th e C H U S sa m p le in an a rea is
to each EC. F actors con sid ered were the relative
determ ined primarily by the rental sam ple desired and
im p ortan ces o f the E C ’s and a rough measure of
by the proportion o f renters in the given area, as
variability o f price m ovem ent.
estim ated from C ensus data. The number o f addresses
en u m era ted in th e C H U S is u su a lly m any tim es
A s in past revision s o f the CPI, the samples were
la rg er th a n it is in th e sa m p le s fo r s u r v e y s o f
selected on a national basis. Selection o f independent
consum er expenditures.
sam ples, city-by-city, is not practical since it would
result in a huge list o f item s to be priced in at least one
city and an im possible burden o f writing and keeping up
S a m p lin g
o f Ite m s .
A classification system has been
with changes in specifications.
d evelop ed to provide a logical publication fram ework
T he tw o replicated sam ples o f item s o f the revised
containing the traditional major expenditure groups,
CPI have been selected with “ probability proportional
subgroups, e tc ., but, in a broader sen se, to divide
to s iz e ,” size being defined as the relative im portance of
the thousands o f g ood s and serv ices purchased by
the expenditures for the item to total expenditures for
consum ers into m eaningful and m anageable com pon­
all item s. The general procedure w as to array item s
ents o f the universe. It provides the fram ework for
w ithin a stratum and by u sin g a random start to
the selection o f the item sam ple and for the deriva­
make regular selection s along the array. Each o f the
tion o f index w eights.
two replicated sam ples thus contains “ certainty item s;”
T w o lev els o f the classification system are o f criti­
that is, item s which are certain o f inclusion because
their relative im portance is greater than the selecting
18The se lec tio n o f the C E S sam ple is d isc u sse d in ch. 11 o f this
interval. The replicated sam ples also contain som e dubulletin.



95

C O N SU M E R PRICES
Table 3.

Number of item s in sam pling frame and number of item s priced by expenditure c la s s

E x p e n d itu r e
c la s s n u m b er

C la s s e s
A ll it e m s

EC
EC
EC

EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 .1. 2. . .
. .

F o o d .........................................................................................................................
Food a t h om e:
C e r e a ls a n d b a k e r y p r o d u c ts :
1 ...........
C e r e a l s a n d g r a i n p r o d u c t s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1. 9 .
.
2 ...........
B a k e r y p r o d u c t s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 .6.
.
M e a t s , p o u lt r y , a n d f i s h :
3 ...........
M e a ts :
B e e f a n d v e a l . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
..
P o r k . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
.
O t h e r m e a t s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14
4 ...........
P o u l t r y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.
F is h . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
.
5 ...........
D a ir y p r o d u c ts .6 ...........
D a ir y p r o d u c t s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1. 9
.
F r u it s a n d v e g e t a b l e s :
7 ...........
F resh fr u its ........................................................................................
8 ...........
F r e s h v e g e t a b l e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
..
9 ...........
48
P r o c e s s e d f r u i t s a n d v e g e t a b .l.e. .s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
O th e r fo o d a t h o m e :
10 ........
E g g s .................................................................................................1
..
11 . . . . . . . . .
F a t s a n d o i l s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
.
12 . . . . . . . . .
12
S u g a r an d s w e e t s ...............................................................................
13 . . . . . . . . .
N o n a l c o h o l i c b e v e r a g e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.
.
14 .........
P r e p a r e d a n d p a r t ia lly p re p a r e d f o o d s .................................................
1 5 ........
F o o d a w a y f r o m h o m e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3. . .

EC 1 6
EC 1 7
EC 1 8
EC 1 9
EC 2 0
EC 2 1

EC 2 2
EC
EC
EC
EC

N u m ber of
ite m s

23
24
25
26

EC 2 7
EC 2 8

H o u s i n g . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212. . . .
....
S h e lte r :
R e n t ..........................................................................................................
.........
H o m e o w n e r s h ip :
3
........
P u r c h a s e a n d f i n a n c i n. .g. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
........
T a x e s a n d i n s u r a n c e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
.
M a i n t e n a n c e a n d r e p a ir s .14
........
C o m m o d i t i e .s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ..
.
.........
S e r v i c e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 .0
.
........
F u e l a n d u t i l i t i e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6 . .
..
H o u s e h o ld fu r n is h in g s a n d o p e r a t io n :
H o u s e fu r n is h in g s :
........
T e x t i l e h o u s e f u r n i s h i .n. .g. s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
.
F u r n it u r e a n d f l o o r c o v e r i n g s :
........
F u r n it u r e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1
.
........
F lo o r c o v e r i n g s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
........
A p p l i a n c e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
...
........
O t h e r h o u s e f u r n i s h i n g s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 .2.
.
H o u s e h o ld o p e r a t io n :
........
H o u s e k e e p i n g s u p p l i e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 .8.
.
........
H o u s e k e e p i n g s e r v i c e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4.
.

EC 2 9 . . . . . . . .
EC 3 0 . . . . . . . .
EC 3 1 . . . . . . . .
EC 3 2 . . . . . . . .
EC 33 . . . . . . . . .
EC 3 4 . . . . . . . .
EC 3 5 . . . . . . . .

EC 3 6
EC 3 7
EC 3 8
EC 3 9
EC 4 0
EC 4 1

A p p a r e l a n d u p k e e p . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 .8. 4. . .
. .
M e n ’s a n d b o y s ’ a p p a r e l:
M e n ’ s a p p a r e l . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.0 .
. .
B o y s ’ a p p a r e l . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2. 3. .
.
W o m e n ’s a n d g i r l s ’ a p p a r e l:
W o m e n ’ s a p p a r e l . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3. 9 . .
.
G i r l s ’ a p p a r .e. .l. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 1
F o o t w e a r . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21. .
...
O th e r a p p a r e l:
C o m m o d i t i e .s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 6
.
S e r v i c e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 .4. .
.

T r a n s p o r t a t i o n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 .4. . . .
.
P r iv a te :
A u to s a n d r e la t e d g o o d s :
2
........
A u to p u r c h a s e ....................................................................................
........
G a s o lin e a n d m o to r o i l ......................................................................2
..
........
A u t o p a r t s , e t c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
.
A u to m o b ile s e r v ic e s :
.........
A u t o r e p a i r s a n d m a i n t e n a n c e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 3.
..
........
O t h e r a u t o m o b i l e e x p e n s e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.
........
P u b l i c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6. . .
.




N u m ber o f
it e m s
s a m p le d

N u m ber o f
s p e c ific a t io n s
p r ic e d
396

309
92 6 7
3

105

4

4

5

5

7

9

6
6

6
6
3

3

4

5

6

7

18
5
11
10

8
11
10

1

1

3
4
5
58
0

3
4

6
8

2

9

73

81

24

2

2
2

3

6

6

2

5

5

6

10

6

6

10

11

3

4

8
8

8
8

8

8
8

7
64

12
4

77
15
4

19

26

8

9

9

11

6
6

6
6

21

34

2
2
2

12

6

6
6

4
5

3

2

5

B L S H A N D B O O K O F M E TH O D S

96
Table 3.

Number of item s in sam pling frame and number of item s priced by expenditure c la ss—Continued

E x p e n d itu re
c la s s n u m b er

EC 4 2
EC 4 3
EC 4 4
EC 4 5
EC 4 6

EC 4 7
EC 4 8
EC 4 9
EC 5 0
EC 5 1
EC 5 2

C la s s e s

N u m ber o f
ite m s

H e a lt h a n d r e c r e a t i o n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
M e d i c a l c a re -.
D r u g s a n d p r e s c r i p t i o n s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 .
.
P r o f e s s i o n a l s e r v i c e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11. .
..
H o s p i t a l s e r v i c e s a n d h e a lt h i n s u r a n c e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 .
.
P erson al ca re:
T o i l e t g o o d. .s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 8
S e r v i c e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 .
.
R e a d i n g a n d r e c r e a t io n - .
R e c r e a tio n :
R e c r e a t i o n a l g o o d s - . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9
. .
R e c r e a t i o n a l s e r v i c e.s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 3
R e a d i n g a n d e d u c a t i o n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
...
O th e r g o o d s a n d s e r v ic e s :
T o b a c c o p r o d u c t s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3. .
A l c o h o l i c b e v e r a g e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3. .
F i n a n c i a l a n d m i s c e l l a n e o u s p e r s o n a l e x p e n s e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4. .
.

plicates o f item s selected but not w ith certainty. Table
4 contains a listing o f the item s priced in each sam ­
ple.
For the final selectio n , relative im portances (in the
fam ily expenditure pattern) for the con d en sed sampling
frame (52 E C ’s and 812 item s) w ere obtained from e x ­
penditure data for nine o f the cities su rveyed for 1960.
Ideally, o f cou rse, the data should have covered all 66
cities, but such data w ere not available in tim e for u se in
selection o f item s. Expenditure data for th ese nine
p laces w ere w eighted together to give preliminary esti­
m ates o f U .S . average ex p en d itu res. (Final ind ex
w eights o f cou rse are based on com plete data for all
cities.)
T h e s e le c tio n o f o n e or m ore s p e c ific a tio n s or
“ sp ecifie d -in -d e ta il” item s to rep resen t the item s
selected from the sam pling fram e has b een made in
m ost ca se s by com m odity sp ecialists from expert know ­
ledge o f the item . Factors taken into con sideration are
the im portance and represen tativeness o f particular
qualities and the feasibility o f describing a selected item
clearly enough to perm it repetitive price collection. In a
few ca se s w here sufficient data ex isted , it is p ossib le to
m ake a seco n d stage probability selectio n o f sp ecifica­
tions.
p l i n g . T he first big problem encountered in
attem pting probability sam pling o f ou tlets w as to obtain
inform ation about the u niverse o f retail and service
establishm ents in a given area. Ideally, nam es and ad­
d resses o f su ch p la ces, inform ation as to type o f store or
outlet, som e indication o f volum e o f sa les, and prefera­
bly fairly sp ecific inform ation as to ty p es o f m erchan­
d ise carried w ould h ave b een desirable.
C om prehensive establishm ent data w ere obtained
from a list o f firm s w h ich report to the Bureau o f OldA ge and S u rvivors In surance (S o cia l S ecu rity A d ­

m inistration,
http://fraser.stlouisfed.org/ U .S . D epartm ent o f H ealth , E ducation,
O u t le t S a m

Federal Reserve Bank of St. Louis

Nu m ber o f
ite m s
s a m p le d

N u m ber o f
s p e c ific a t io n s
p r ic e d

58 15
1

99

2

20
12
6

9

2
8

8

4

4

13

6
6

20
7

2
3
3

3

and W elfare). U sin g sampling ratios furnished by B L S ,
m aster sam p les o f retail and serv ice o u tlets w ere
selected by B O A SI. T hese w ere supplem ented with
listings from other sou rces.
In the larger S M S A ’s, a tw o-stage sampling p roce­
dure has been follow ed . Sam ples o f neighborhood and
suburban localities and shopping centers have been
selected in w hich pricing outside the dow ntow n area is
conducted. T h ese w ere selected with probability pro­
portional to sales volum e, using the best available sales
data. The listings o f sam ple ou tlets w ere lim ited to those
falling within the sam pled areas.
The number o f food stores priced varies from less
than 10 in the sm allest cities to about 80 in N ew York.
The num ber o f quotations for non-food item s per city is
quite small; the basic number in each outlet sam ple is
four. This m eans that for the cities in w hich both item
sam ples are priced eight is the maximum sam ple size
even for item s appearing in both item sam ples. In a few
“ A ” cities, the sam ple sizes are set at 5 per sam ple or a
m axim um o f 10. A t the U .S . le v e l, h o w ev e r, the
number o f quotations is sizeable.
In selecting the sam ple, allocations o f quotations
w ere made for each item by type o f outlet, based on
available sales data, “ w here bought” su rveys, etc. A s a
specific exam ple, if eight quotations are required for a
particular w om an ’s sh oe specification, the allocation
might be three quotations to departm ent stores, tw o to
w om en ’s specialty sh ops, tw o to w om en ’s shoe stores,
and on e to fam ily sh oe stores. Specific allocations also
are made by location within the SM SA (central business
district, neighborhood centers, and suburbs) and, in
som e ca se s, to multiunit and independent establish­
m ents.
In addition to the pricing o f regular retail and service
ou tlets, there are a number o f special item s w h o se na­
ture requires separate sam ples o f sp ecific typ es o f “ out­
lets;” for exam ple, sam ples o f physicians and other

CONSUMER PRICES
Table 4.

97

List of commodities and services priced for the consumer price index as of January 19751
Priced items

Groups, subgroups, expenditure classes
Sample A

EC-1

Food:
Food at home:
Cereals and bakery products:
Cereals and grain products ....

EC-2

Bakery products

.................

EC-3
3A

Meats, poultry, and fish:
Meats:
Beef and veal ................

3B

Pork..............................

3C

Other meats..................

EC-4

Poultry ................................

EC-5

Fish.....................................

EC-6

Dairy products .............................

EC-7

Fruits and vegetables:
Fresh fruits...........................

EC-8

Fresh vegetables ..................

EC-9

Processed fruits and vege­
tables ..............................

EC-10
EC-11

Other foods at hom
e.E ggs....................................
Fats and o ils ........................

EC-12

Sugar and sweets .................

EC-13

Nonalcoholic beverages .........

EC-14

Prepared and partially prepared
foods.................................

EC-15

Food away from home .........................


S efo tn te at e do tab .
e o o s n f le


Sample B

Corn flakes ................................................
Rice, long and short grain...........................
White bread................................................
Whole wheat bread ......................................
Layer cake, plain ........................................

Flour, white, all-purpose.
Cracker meal.
White bread.
Cookies, cream filled.
Cinnamon rolls.

Hamburger .................................................
Steaks, round, U.S. choice...........................
Steaks, porterhouse, U.S. choice ..................
Rump roasts, boneless, U.S. choice...............
Chuck roasts, U.S. choice..............................
Veal cutlets................................................
Pork chops .................................................
Bacon ........................................................
Loin roast ..................................................
Picnics, smoked..........................................
Lamb chops, loin, U.S. choice ......................
Salami sausage..........................................
Frankfurters ...............................................
Frying chicken, whole or cut-up.....................
Chicken breasts..........................................
Fillets, fresh or frozen2 ................................
Tuna fis h ...................................................
Milk, fresh, grocery, Vitamin D .....................
Milk, fresh, skim ........................................
Ice cream, prepackaged ...............................
Butter........................................................

Hamburger.
Steaks, round, U.S. choice.
Steaks, sirloin, U.S. choice.
Rump roasts, boneless, U.S. choice.
Rib roasts, U.S. choice.
Beef liver.
Pork chops.
Bacon.
Pork sausage, fresh, bag, or roll.
Ham, whole, smoked.
Bologna sausage.
Liver sausage.
Ham, canned.
Frying chicken, whole or cut-up.
Turkey, medium size.
Shrimp, frozen breaded.
Sardines.
Milk, fresh grocery, Vitamin D
.
Milk, evaporated, canned.
Cheese, American process.
Butter.

Apples, all purpose......................................
Bananas, yellow variety ...............................
Oranges, except Temple or King.....................
Grapes, Thompson seedless..........................
Grapefruit, fresh, pink or white....................
Orange juice, fresh ......................................
Head lettuce...............................................
Potatoes, white ..........................................
Tomatoes...................................................
Asparagus, green........................................
Carrots, topped, prepackaged .......................
Cucumbers.................................................
Spinach, prepackaged .................................

Apples, all purpose.
Bananas, yellow variety.
Oranges, except Temple or King.
Grapes, Thompson seedless.
Strawberries, fresh.
Watermelons, whole or sliced.
Head lettuce.
Potatoes, white.
Tomatoes.
Cabbage, all varieties except red.
Celery, Pascal stalk.
Onions, Yellow.
Peppers, sweet, green.

Pears, Bartlett, can or jar ...........................
Lemonade, concentrate, frozen......................
Beets, sliced, can or jar ..............................
Tomatoes, can or j a r ....................................
Dried beans, Navy or Great Northern ..............

Fruit cocktail, canned.
Pineapple-Grapefruit juice drink, canned.
Orange juice concentrate, frozen.
Peas, green, can or jar.
Broccoli spears, frozen.

Eggs, large, Grade A ....................................
Margarine, colored ......................................
Salad dressing, Italian ................................
Sugar, white, granulated..............................
Chocolate bars, plain milk...........................
Coffee, 1 lb. can ........................................
Carbonated fruit drink.................................
Tea bags ....................................................

Eggs, large, Grade A.
Margarine, colored.
Salad or cooking oil, vegetable.
Grape jelly.
Chocolate flavored syrup.
Coffee, 1 lb. can.
Coffee instant.
Cola drink.

Bean soup, canned, condensed .....................
Spaghetti, in tomato sauce, canned ..............
Mashed potatoes, instant.............................
Potatoes, French fried, frozen.......................
Restaurant meals:
Lunch .................................................
Breakfast.............................................

Chicken soup, canned, condensed.
Baby foods, strained.
Sweet pickle relish.
Pretzels, hard, salted.
Restaurant meals:
Lunch.
Dinner.

98

BLS HANDBOOK OF METHODS

Table 4.

List of commodities and services priced for the consumer price index as of January 1975— Continued
Priced items

Groups, subgroups, expenditure classes
Sample B

Sample A
Food— Continued
Food away from home— Continued

Housing:
Shelter:
EC-16
Rent ..........................................

EC-17

Homeownership:
Hom purchase and financing .
e

EC-18

Taxes and insurance..............

EC-19

Maintenance and repairs:
Commodities .................

EC-20

Services ........................

EC-21

Fuel and utilities................................

EC-22

EC-23

Household furnishings and
operations:
Textile housefurnishings ........

Furniture..............................

•

EC-24

Floor coverings......................

EC-25

Appliances..................................

EC-26

Other housefurnishings ................

EC-27

Housekeeping supplies .................

EC-28

Housekeeping services..................


S efo tn te at e do tab .
e o o s n f le


Between meal snacks:
Coffee, cup .........................................
Carbonated beverages, cup ...................
Frankfurter on roll ................................
Ice cream, dish ...................................

Between meal snacks.Coffee, cup.
Carbonated beverages, cup.
Pie, slice.
Candy bar.

Rent of house or apartment..........................
Hotel, motel room rates ...............................

Rent of house or apartment.
Hotel, motel room rates.

Hom purchase...........................................
e
Mortgage interest rates ...............................
Property taxes, residential ...........................
Property insurance premiums:
Fire and extended coverage ...................
Homeownership policy...........................

Home purchase.
Mortgage interest rates.
Property taxes, residential.
Property insurance premiums-.
Fire and extended coverage.
Homeownership policy.

Exterior house paint .....................................
Air Filters ..................................................
Packaged dry cement m ............................
ix
Residing houses .........................................
Reshingling roofs ........................................
Replacing sinks ..........................................
Fuel oil and coal:
Fuel oil, #2 ........................................
Coal, anthracite or bituminous...............
Gas and electricity:
G as.....................................................
Electricity ...........................................
Other utilities:
Residential telephone services ...............
Residential water and sewerage services ..

Interior house paint.
Shelving, Ponderosa pine.
Shrubbery, evergreen.
Residing houses.
Repainting both living and dining rooms.
Repairing furnaces.

Pillows, bed ...............................................
Curtains, tailored, polyester.........................
Drapery fabric ......................;.....................
Sofas, standard, upholstered........................
Recliners, upholstered .................................
Sofas, convertible .......................................
Bedding sets, mattress and boxspring...........
Bedroom chests ..........................................
Aluminum folding chairs ..............................
Rugs, soft surface.Broadloom, acrylic................................
Broad loom nylon ........ .........................
,
Broadloom, polyester.............................
Floor covering, vinyl .....................................
Refrigerator-freezers, electric .......................
Washing machines, electric, automatic .........
Ranges, free standing, gas or electric ..........
Clothes dryers, electric, automatic ...............
Room heaters, electric, portable...................
Dinnerware, Fine china ................................
Carpet sweepers, or utility pails...................
Window shades ...........................................
Electric drills, hand held..............................
Detergent, liquid.........................................
Laundry soap for fine fabrics........................
Scouring pads, steel wool.............................
Toilet tissue ...............................................
Domestic service, general housework .............
Baby sitter or child care service ...................
Postal services ............................................
Laundry flatwork, finished service.................
Licensed day care service, preschool child......
Washing machine repairs .............................

Sheets, percale or muslin.
Bedspreads, double bed size.
Slipcovers or throws.
Sofas, standard, upholstered.
Cocktail tables.
Bedroom dressers.
Bedding sets, mattress and boxspring.
Dining room chairs.
Cribs.
Rugs, soft surface:
Broadloom, acrylic.
Broadloom, nylon.
Broadloom, polyester.
Floor tile, vinyl asbestos.
Refrigerator-freezers, electric.
Washing machines, electric, automatic.
Vacuum cleaners, canister or upright.
Air conditioners, demountable.
Garbage disposal units.
Flatware, stainless steel.
Table lamps, with shade.
Lawn mowers, power rotary type.
Nails, 8d (penny) common.
Detergent, granules or powder.
Air deodorizers, spray type.
Paper napkins, embossed.
Stationery envelopes.
Domestic service, general housework.
Baby sitter or child care service.
Postal services.
Laundry flatwork, finished service.
Reupholstering furniture.
Moving expenses.

Fuel oil, #2.
Coal, anthracite or bituminous.
Gas.
Electricity.
Residential telephone services.
Residential water and sewerage services.

CONSUMER PRICES

99

Table 4. List of commodities and services priced for the consumer price index as of January 1975— Continued

G ups, subgroups, expenditure classes
ro
Apparel and upkeep:
Men’s and boys' apparel:
EC-29
Men's apparel.......

Boys' apparel

EC-30

EC-31

EC-32

EC-33

Women's and girl's apparel:
Women's apparel ......

Girls’ apparel

Footwear

Priced item
s
Sam A
ple
Suits, year-round weight ......................
Topcoats or all-weather coats ...............
Sport jackets ......................................
Slacks, wool, wool blend, or polyester ....
Shirts, work........................................
Shirts, sport, short sleeves ..................
Shirts, sport, long sleeves ...................
T-shirts, cotton or polyester/cotton........
Coats, all purpose, cotton or cotton blend
Dungarees, cotton or polyester/cotton....
Coats, heavyweight, wool or wool blend,
i 2 qualities ....................................
Carcoats, heavyweight........................
Skirts, winter weight..........................
Skirts, summer weight........................
Dresses, daytime, chiefly manmade fiber
Dresses, street, manmade fiber,
2 qualities ....................................
Slacks, summer weight.......................
Slacks, winter weight.........................
Slips, nylon .......................................
Brassieres.........................................
<
Hose or pantyhose, nylon....................
Anklets, or knee length socks ..............
Handbags, rayon faille or plastic.........
Raincoats, vinyl or fabric ......
Skirts, acrylic ......................
Slips, polyester blends or nylon
Handbags, plastic................

Men’s:
Shoes, street, oxford or buckle strap,
2 qualities ................................
Women’s
.Shoes, street, pump, 2 qualities ....
Shoes, evening, pump ...................
Shoes, casual ..............................
Houseslippers, scuff .....................
Childrens’:
Sneakers, boys’, oxford type ...........

EC-34

EC-35

Other apparel:
Commodities ......

Services ..../.

Diapers, cotton gauze or disposable ...
Yard goods.....................................
Earrings, Pearl, simulated or imitation
Dry cleaning, men’s suits and women’s
dresses .......................................
Shoe repairs, women’s heel lift .........
Laundry, men’s shirts.......................

Transportation:
Private:
EC-36
Auto purchase

S efo tn s t n f b .
e oo
te a e do ta le


New cars:
Chevrolet, Impala, 4-door sedan............
Chevrolet, Chevelle, sport coupe.............
Ford, LTD, 4-door hardtop......................
Ford, Mustang II, 2-door hardtop...........
Plymouth, Gran Fury Custom, 4-door sedan
Dodge, Royal Monaco, 4-door sedan .......
American Motors, Hornet, sport wagon ....
Toyota, Corona, 4-door sedan ................

Sam B
ple
Suits, year-round weight.
Jackets, lightweight.
Trousers, work.
Slacks, cotton, manmade or blends.
Shirts, business or dress.
Socks.
Handkerchiefs, cotton or polyester/cotton,
Sport jackets, wool or wool blend.
Undershorts, cotton.
Coats, heavyweight, wool or wool blend,
2 qualities.
Coats, lightweight, wool or wool blend.
Sweaters, wool or acrylic.
Dresses, daytime, chiefly manmade fiber.
Dresses, street, manmade fiber, 2 qualities.
Blouses, polyester/cotton or manmade.
Bathing suits.
Girdles.
Panties, nylon or acetate.
Hose or pantyhose, nylon,
jGloves, fabric.

Coats, lightweight.
Slacks, cotton or polyester.
Shorts or scooter skirt.
Dresses cotton, polyester/cotton or manmade
fabric.
Robes, quilted.
Shoes, street, oxford or buckle strap,
2 qualities.
Shoes, work, high.
Shoes, street, pump, 2 qualities.
Shoes, evening, pump.

Shoes, oxford.
Dress shoes, girls’, strap or pump.
Wrist watches, men’s imported movement.
Wrist watches, women’s imported movement.
Zippers, skirt or neck placket.
Dry cleaning, men’s suits and women’s
dresses.
Automatic laundry service.
Tailoring charges, hem adjustment.

Chevrolet, Impala, 4-door sedan.
Ford, Pinto, 3-door sedan.
Ford, LTD 4-door hardtop.
,
Chevrolet, Vega, 2-door hatchback.
Plymouth, Valiant Duster, 2-door coupe.
Plymouth, Fury Custom, 4-door sedan.
Volkswagen, Deluxe, 2-door sedan.

BLS HAND BO O K OF METHODS

100

Table 4. List of commodities and services priced for the consumer price index as of January 1975— Continued

G
roups, subgroups, expenditure classes
Transportation— Continued
Private— Continued
Auto purchase— Continued

EC-37

Gasoline and motor oil

EC-38

Auto parts ...........................
Automobile services:
Auto repairs (mechanical)
and maintenance.......

EC-39

EC-40

EC-41

Other automobile expenses

Public transportation

Priced item
s
Sam A
ple
Used cars:
2 years old, Chevrolet and Ford
3 years old............... do
4 years old............... do
5 years old............... do
Gasoline, regular and premium
Motor oil, premium...............
Storage batteries .................

Chassis lubrication, complete...........
Motor tune-up .................................
Automatic transmission repair ..........
Auto insurance premiums, liability and
physical damage..........................
Auto financing charges3 ...............
Auto registration fe e s..................
Auto operator’s permits................
Parking fees, private and municipal
Local transit fares.......................
Taxicab fares..............................
Railroad fares, coach ..................
Airplane fares, chiefly coach ........
Bus fares, intercity......................

Sam B
ple

2 years old, Chevrolet and Ford.
3 years old,
Do.
4 years old,
Do.
5 years old,
Do.
Gasoline, regular and premium.
Motor oil, premium.
Tires, tubeless, new.

Water pump replacement.
Exhaust system repair.
Front end alignment.
Auto insurance premiums, liability and
physical damage.
Auto financing charges.3
Auto registration fees.
Auto operator’s permits.
Parking fees, private and municipal.
Local transit fares.
Taxicab fares.
Railroad fares, coach.
Airplane fares, chiefly coach.
Bus fares, intercity.

Health and recreation:
Medical care:
EC-42

Drugs and prescriptions

Over-the-counter items:
Multiple vitamin concentrates................
Liquid tonics .......................................
Cold tablets or capsules .......................
Prescriptions:
Anti-infectives:
Ampicillin, trihydrate capsules........
Sedatives and hypnotics:
Phenobarbital tablets.....................
Ana Igesics*
Propoxyphene HCL (with APC) tablets-.
Ataractics:
Chlordiazepoxide HCL capsules........
Antispasmodics:
Propantheline bromide tablets ........

Cardiovasculars and antihypertensives:
Reserpine tablets..........................

Aspirin compounds.
Cough syrups.
Adhesive bandages, packages.

Tetracycline HCL capsules.
Secobarbital sodium capsules.
Hormones:
Prednisone tablets.
Progestogen-Estrogen contraceptives.
Phenobarbital/hyoscyamine sulfate,
atropine sulfate, and hyoscine hydro­
bromide tablets.
Pentaerythritol tetranitrate tablets.
Chlorothiazide tablets.

EC-44

Professional services

Hospital services and health
insurance.Hospital services .......

o s at e do tab .
S efo tn te n f le
e o


General physician, office visits.
General physician, house visits.
Obstetrical cases.
Chiropractors and podiatrists, office visits.
Herniorrhaphy, adult.
Examination, prescription, and dispensing
of eyeglasses.

Fillings, adult, amalgam, one surface
Dentures, full upper.......................

EC-43

Cough preparations:
Promethazine expectorant with codeine
General physician, office visits .....................
General physician, house visits .....................
Pediatric care, office visits..........................
Psychiatrists, office visits .......... .................
Routine laboratory tests...............................
Examination, prescription, and dispensing
of eyeglasses........................... ..............

Fillings, adult, amalgam, one surface.
Extraction, adult.

Semiprivate rooms ...
Operating rooms ....
Laboratory tests......
Electrocardiograms ..
Anti-infectives........
Intravenous solutions

Semi private rooms.
Operating rooms.
X-ray diagnostic service series.
Oxygen.
Tranquilizers.
Physical therapy.

CONSUMER PRICES
Table 4.

101

List of commodities and services priced for the consumer price index as of January 1975—Continued

Priced item
s

G ups, subgroups, exp
ro
enditure classes
Health and recreation— Continued
Hospital services and health
insurance— Continued
Health insurance .........

Sam A
ple

Claims Portion:
Hospital services:
Semi private rooms................
Operating rooms ..................
Laboratory tests........ ...........
Electrocardiograms ...............
Anti-infectives......................
Intravenous solutions ...........
Nonhospital services:
General physician, office visits
Surgeons’ fees (Tonsillectomy/
Adenoidectomy).................

Sam B
ple

Hospital services:
Semiprivate rooms.
Operating rooms.
X-ray; diagnostic service series.
Oxygen.
Tranquilizers.
Physical therapy.
Nonhospital services:
General physician, office visits.

Retained earnings (overhead)...............
EC-45

EC-46

Personal care.Toilet goods

Personal care services

Reading and recreation:
Recreation:
EC-47
Recreational goods

EC-48

EC-49

EC-50

EC-51

Recreational services

Reading and education

Other goods and services:
Tobacco products ....

Alcoholic beverages

Surgeons’ fees (Herniorrhaphy, adult).
Obstetrical cases.
Retained earnings (overhead).

Toothpaste, standard dentrifrice
Hand lotions, liquid ........... .
Face powder, pressed ......... .
Cleansing tissues...................
Men’s haircuts .......................
Shampoo with wave sets, plain .
Women’s haircuts...................

Toilet soap, hard milled.
Shaving cream, aerosol.
Deodorants, aerosol.
Home permanent refills.
Men’s haircuts.
Shampoo with wave sets, plain.
Permanent waves, cold.

TV sets, color and black and white........
Radios, portable ............................ .
TV replacement tubes..........................
Sports equipment:
Golf balls ...................................
Basketballs, rubber or vinyl cover ...
Outboard motors .................................
Tricycles............................................
Board games .....................................
Dog food, canned and boxed.................
Indoor movie admissions:
Adult..........................................
Children^ ...................................
TV repairs, picture tube replacement ....
Bowling fees, evening..........................
Golf green fees ....................................
Newspapers, street sale and delivery ....
College tuition and fees.Undergraduate, resident................
Undergraduate, nonresident ..........
Magazines, single copy and subscription
College textbooks, undergraduate .........

TV sets, color and black and white.
Radios, portable.
Tape recorders, portable.
Sports equipment:
Fishing rods, fresh water spincast.
Bowling balls.
Phonograph records, stereophonic.
Bicycles.
Movie cameras, Super-8mm, zoom lens.
Film, 35mm, color, slide.
Indoor movie admissions:
Adult.
Children's.
Drive-in movie admissions, adult or car.
Bowling fees, evening.
Film developing color.
Newspapers, street sale and delivery.
College tuition and fees:
Undergraduate, resident.
Undergraduate, nonresident.
Paperback books, not school or technical.
Piano lessons, beginner.

Cigarettes, nonfilter tip, regular size,
pack...............................................
Cigarettes, filter tip, king size,
carton................................... ........
Cigars, domestic, regular size ..............
Beer, at home, local and national brands
Whiskey, spirit blended and straight
bourbon..........................................

Cigarettes, nonfilter tip, regular size,
carton.
Cigarettes, filter tip, king size, pack.
Cigars, domestic, regular size.
Beer, at home, local and national brands.

Wine, dessert and table.......................
Beer, away from home .........................
EC-52

Financial and miscellaneous
personal expenses.

Whiskey, spirit blended and straight
bourbon.
Wine, dessert and table.
Beer, away from home.

Funeral services, adult ................................
Bank service charges, checking account ........

Funeral services, adult.
Legal services, short form will.

1Th list of com odities and services priced for the H
e
m
onolulu, H aii SM
aw
SA
differs from this list as follows: frozen fruit pies, m
ahi-m
ahi, papaya, pineapple,
green beans, watercress, water heater, water heater replacem
ent, m
en’s sweaters and
wom
en’s lightweight jackets, not priced elsewhere, are priced in Honolulu in
lieu of cracker m
eal, haddock, orange juice, strawberries, asparagus, spinach,
air filters, furnace repair, m
en’s coats, and wom
en’s coats, respectively. In addi­
tion, m
en’s tropical weight suits, boys’ cotton or polyester/cotton sport coats

and girls’ cotton or polyester cotton skirts are priced in lieu of m
en’s year-



round weight suits, boys’ wool or wool blend sport coats and girls’ acrylic
skirts, respectively; while m
en’s long sleeve sport shirts and wom
en’s socks are
n priced in H
ot
onolulu.
2 Tw of the largest volum sellers am
o
e
ong the following types of fish are
priced within each city, since within any given city all varieties of fish are
n available: F
ot
rozen ocean perch and haddock; fresh cod, catfish, king salm
on,
halibut, sole, and haddock.
3 Not actually priced: im
puted from priced item
s.

BLS HANDBO O K OF METHODS

102

medical specialists, restaurants, dairies, hotels, prop­
erty owners, etc. Each of these offers its own particular
problems.
When the original samples, which were selected in
Washington, were sent to the regional offices a great
many practical problems were encountered, and many
expedients and compromises with strict probability
procedures were required to complete the initiation of
pricing for the revised index. H owever, even though
some deviations from probability sampling were inevit­
able and had been anticipated, the final samples adhere
to the original basic structure to the maximum extent
possible. As a result, the main benefits of probability
sampling have been achieved: lack o f bias, representa­
tion o f different types o f outlets, sections o f each
SMSA, etc.

C a lc u la t i o n

P r o c e d u r e s

The index is a time series. As previously explained, it
is a weighted average of price changes for a sample of
priced items, expressed as a relative o f average prices in
a reference base as 100. Weights, which are based on
annual consumer expenditures, are kept constant from
month to month. The index measures changes as they
occur. It is not adjusted for seasonal variation.19
The Bureau began publication o f seasonally adjusted
indexes in 1966, for selected components which show a
significant seasonal pattern o f price change.20
F o rm u la . In the absence o f major weight revisions, and

where q

is a derived composite o f the annual quantities
purchased in a weight base period for a bundle o f
goods and services to be represented by the specific
item priced
p and p ' are the average prices o f the specific com ­
m odities or services selected fo r pricing (the
superscript indicates that the average prices are not
necessarily derived from identical samples o f out­
lets and specifications over long periods)
i —s is the month preceding a weight revision (most
recently, D ecem ber 1963)
/ is the current month
a is the period o f the most recent Consum er Expendi­
ture Survey (1 9 6 0 -6 1 ) from which the revised
weights are derived
o is the reference base period o f the index (1967).

The (p0q 0) o r ( p - _ ^ ) b a s e “ weights” for a given
priced item are the average annual expenditures in a
weight base period represented by that item and other
similar non-priced items. Although constant physical
weights are implicit in the index, in reality the constant
q 's are not calculated separately.
In actual practice, the base expenditure for each item
is projected forward for each pricing period by the price
relative for the priced item:

\P i -1

In practice, then, the index formula is as follows:
(Dec. 1963
Index)
£ (P /

(3)

sQo)

x

Z ( p ' _ xq a)
’

h o

s (P o Q o )

ignoring the problems of sampling, the index formula is
most simply expressed as:
r

-

(Change from Dec.
1963 to month i- 1 )

S(P/ -

( —^L )

i:° " Z (P o « o

C
-

or by its algebraic equivalent, the dollar weighted aver­
age o f price relatives:
2

,
.P t
(P o Q o )—
Po\

h o

xioo

a p , - A , ) x „ o f r .)
( P i - SQ a )

1 For a discussion of the problems involved in using varying sea­
9
sonal weights, see “ Use of Varying Seasonal Weights in Price Index
Construction,” by Doris P. Rothwell, in th e J o u r n a l o f th e A m e r ic a n
S t a t i s t i c a l A s s o c i a t i o n , March 1958, pp. 66-77.
2 Factors used to compute seasonally adjusted indexes are availa­
0
ble on request.




x io o

W i - !<?„)

the previous pricing period to the current month are
expressed as relatives (or ratios) for each item, and the
price changes for the various goods and services are
combined, using weighting factors based on the impor­
tance o f the item in consumer spending and that o f other
items which it represents. This com posite importance is
called the cost weight o f the market basket item. There
is a set o f separate cost weights for each o f the 56 urban
locations included in the index. The following hypothe­
tical example for pork illustrates the index procedure:

X100

h o
X ( p o < lo )

\ p i - V

Illu stra tiv e C a lcu la tio n . Average price changes from

This is the customary, oversimplified way o f writing a
price index formula to show that the ^ ’s are held con­
stant between major revisions. In actual practice, the
basic data for weights are values which include allow­
ances for unpriced items, and the current index is com ­
puted by a chain computation procedure, as shown
below:
(2 )

)

_ 2 (P flo )

(1 )

(la )

a

(Change from month
i- 1 to month i)

Sample
item

September
Ratio
October
•September October October-^cost weight
cost
price
September weight
price
(Sept, x
ratio)

Pork chops....
Ham.............
Bacon ..........
Total.........

$0.75
.80
1.00

$0.7725
.82
1.02

1.03
1.025
1.02

$15.00
8.00
10.00

$15.45
8.20
10.20

33.00

33.85

CONSUMER PRICES
Identical results could be obtained for pork by m ultiply­
ing prices each period by the implied physical quantities
included in the market basket, as the follow ing illus­
trates.

Sample item

Implied
quantity
(pounds)

September
price

September
cost
weight

October
price

October
cost
weight

Pork chops......
Ham...............
Bacon .............

20
10
10

$0.75
.80
1.00

$15.00
8.00
10.00

$0.7725
.82
1.02

$15.45
8.20
10.20
33.85

33.00

Total...........

The average change in pork prices is com puted by com ­
paring the sum o f the co st w eights in O ctober with the
com parable sum for Septem ber, as follow s:
October cost w eigh t........................... .$33.85 x 100=102.6
September cost weight ...................... $33.00

This m eans that pork prices in O ctober w ere 102.6
percent o f (or 2.6 percent higher than) pork prices in
Septem ber.
Although the secon d m ethod may appear simpler, in
reality it is not. Deriving the im plied quantity w eights is
an extra operation, and th ese im plicit quantities change
as revised sam ples are linked in. Furthermore, the sec­
ond form ulation greatly com plicates the handling o f the
num erous substitutions o f reporters and item s which
occur co n sta n tly in rep etitive ind ex w ork. C o n se­
quently, the first m ethod is the on e actually used for the
CPI. The second illustration, h ow ever, m ay assist the
u se r to u n d e r sta n d th e m e a n in g o f th e in d e x
m echanism .
After the co st w eights for each o f the item s have been
calculated, they are added to area totals for com m odity
groups and all item s. The U .S . totals are obtained by
com bining area totals, with each area total w eighted
according to the proportion o f the total wage-earner and
clerical-w orker population w hich it represents in the
index based on 1960 C ensus figures. Finally, published
index values are com puted by dividing the co st weight
for a particular series by its average cost w eight in the
standard reference base period, and multiplying the
result by 100.
. Since 1971, the standard refer­
en ce b ase o f the index has been 1967= 100.21 This
m eans that current prices are exp ressed as a percentage

R e fe r e n c e

B a s e

P e r io d

21F orm er C on su m er Price Index O fficial R eferen ce B a ses and
P eriods in U s e
R eferen ce B a ses ( = 100)

Periods in U s e
From

1913
1923-25
1935-39
1947-49
1957-59




Through

1913
O ctob er 1935
July 1940
1953
1962

S eptem ber 1935
June 1940
1952
1961
1970

103

o f prices for the average o f the year 1967. An index o f
110 m eans that prices have increased 10 percent since
the base period; similarly, an index o f 90 means a
10-percent d ecrease. The index can be converted to any
desired base period for which the index is available.
This is done by dividing each index number to be co n ­
verted by the index for the desired base period. Tables
o f conversion factors are provided on request for m ost
series, enabling users to convert indexes for preceding
periods on other bases to the current standard reference
base 1967. Since the 1967 base w as adopted in 1971, All
Item s indexes for the U .S . city average and the 23 areas
for which separate indexes are available have been
continued on their former b ases (1 9 5 7 -5 9 in m ost
cases). T hese indexes are com puted directly from cost
w eights, in the sam e manner as the 1967 base indexes.
Before the m ost recent rebasing, indexes on former
bases w ere calculated by applying the appropriate con ­
version factor to the index on the standard reference
base then in use. U se o f published conversion factors to
rebase All Item s indexes from the 1967 base to their
former bases will at tim es yield results w hich differ
slightly from the official indexes published by B L S.
T hese differences arise because o f rounding.
P r o c e d u r e s .
Although prices are not ob­
tained in all 56 cities every month (table 1 for pricing
cy cle), all 56 cities are represented in each monthly
index com putation. B etw een quarterly survey dates,
for every item excep t new autom obiles, the w eights are
held at the level o f their last pricing. For new au­
tom obiles, a price change is imputed to the unpriced
cities on the basis o f changes in cities surveyed every
month.
For food and apparel item s w hich are sold only at
certain season s o f the year, the index calculation is
m ade in the off-sea so n as if prices o f th ese item s
changed proportionally with prices o f item s o f a similar
nature w hich are available. For exam ple, prices for
strawberries, w hen these are not in season , are carried
forward on the basis o f changes in prices o f all other
fresh fruits. W hen the item returns to the market the
current price is com pared, in effect, with the estim ated
price im plicit in the procedure described.

Im p u ta t io n

P r ic e s .
In the calculation o f average food
prices for publication, the prices used in the index are
given special editing, since they are not necessarily
restricted to a single specified quality and size. Proce­
dures have been devised to calculate city and U .S .
prices for publication w hich u se index values and price
relatives exten sively. T hese procedures em ploy bench­
mark prices for defined specifications for each o f the
56 cities, in w hich quotations not m eeting the specified
quality are excluded. Benchm ark prices are com puted
in an independent operation, pooling prices for all out­
lets rather than as an average o f average prices for the
tw o subsam ples. The benchm ark prices then are ad­

A v e r a g e

104

BLS HANDBO O K OF METHODS

justed m onth by month by the price changes reflected in
the index. The first benchmark calculation w as for April
1964, from w hich date prices w ere estim ated back to
D ecem b er 1963 and forward to D ecem ber 1964. N ew
benchm ark calculations are made periodically, usually
on ce a year. City prices are com bined to U .S . averages
by the use o f the 1960 index population w eig h ts.22
A verage bills for specified quantities o f gas and ele c ­
tricity and average prices o f fuel oil, w hich are pub­
lished for the largest cities, are the sam e as th ose used in
the index calculation. Since th ese are for identical quan­
tities and qualities from m onth to m onth, no special
editing is required.
A verage p rices, as w ell as price in d exes, are available
on a m onthly basis for regular and prem ium gasoline for
23 large m etropolitan areas and the U .S . as a w hole.
I te m I n d e x e s .

In d exes for selected item s and groups
(com m only referred to as item ind exes) w ere published
sem i-annually during 1964 and 1965. Quarterly publica­
tion w as resum ed in 1966 and m onthly publication w as
initiated in January 1969.

Septem ber, and D ecem ber. A report containing a more
com prehensive analytical text and additional tables is
published several w eek s after the date o f the press
release. Other m onthly reports contain average prices
o f selected food s and fuels in the largest m etropolitan
areas.
The CPI for the U nited States and for selected areas
is published also in the M o n t h l y L a b o r R e v i e w in the
issue dated 2 m onths later than the index.
The annual H a n d b o o k o f L a b o r S t a t i s t i c s contains
annual average indexes for each CPI series and esti­
m ated U .S . average retail prices for selected foods b e­
ginning with the earliest reliable and consistent data
available; m onthly data are published for the tw o m ost
recent years. In “ The A natom y o f Price Change” , an
article p u b lish ed quarterly in the M o n t h l y L a b o r
R e v i e w , trends in the CPI and its com ponents and their
effect on the overall econom y are analyzed.
A verage prices for food s and fuels are published in
E s tim a te d R e ta il F o o d P r ic e s b y C itie s a n d R e ta il
P r ic e s a n d I n d e x e s o f F u e ls a n d U tilitie s .

U s e s o f th e In d ex
A n a ly s is a n d P r e s e n ta tio n
The CPI is made available first in a press release,
usually near the end o f the month follow ing that to
w hich the data relate. The press release is made availa­
ble to the press and is mailed to a list o f subscribers.
This release contains a description o f price changes
during the month and several tables o f major group and
subgroup ind exes and percent changes from selected
dates, for the U .S . city average, and for selected large
m etropolitan areas. Percent ch an ges, in som e ca ses, are
exp ressed as both sim ple rates and as com pound rates.
B L S m o n th ly r e le a s e s a fte r 1965 h a v e sh o w n
sea so n a lly -a d ju ste d n ation al in d e x e s and p ercen t
changes com puted for selected groups and subgroups
w here there is a significant seasonal pattern o f price
change. In addition, each o f the B ureau’s regional of­
fices prepares a p ress release for each o f the areas in its
region for w hich CPI figures are published.
In 1972, publication o f a set o f consum er price in­
d exes which groups urban areas by 1960 population size
w as b eg u n .23 In 1973, publication o f a set o f consum er
price in d exes w hich groups urban areas by four major
geographic regions w as initiated.24 B oth sets o f indexes
are calculated from data collected for u se in the national
CPI, and are available for the m onths o f M arch, June,
22F or a m ore d etailed d iscu ssio n , se e article by D oris P. R oth w ell,
“ C alcu lation o f A vera g e R etail F ood P r ic e s,” M o n th ly L a b o r R e ­
v i e w , January 1965, pp . 6 1 - 6 6 .
23S e e article by R echard C . Bahr, M ark R . M ein ers, and T osh ik o
N a k a y a m a , “ N e w C o n su m er P rice I n d e x e s b y S iz e o f C it y ,”
M o n th ly L a b o r R e v i e w , A u gu st 1972, pp. 3 —8, Reprint 2822.
24S e e article by T o sh ik o N ak ayam a and D ian e W arsky, “ M easur­
ing R egional Price C h ange in U rban A r e a s ,” M o n th ly L a b o r R e v ie w ,
O c t o b e r 1 9 7 3 , p p . 3 4 - 38, R eprint 2920.




One o f the m ost important u ses o f the index is as a
guide to broad econom ic p olicy. It is on e o f the m ost
w idely used m easures o f inflationary pressures. During
wartime periods, the index and its com ponents have
served an important administrative function in con n ec­
tion with determ ination o f p olicies concerning price
control and subsidies. In peacetim e, the index and its
underlying statistics have played an important part in
the governm ent’s effort to maintain stable wage-price
relationships and to judge the advisability o f making
monetary or tax adjustm ents. It is one o f the ch ief
statistical tools for conversion o f the national accounts
to constant dollars.
The m ost widespread u se o f the CPI is in w age ad­
justm ents and collective bargaining negotiations. A l­
though this w as the primary reason for its beginning,
u se o f the CPI for this purpose declined during the
post-W orld I and depression periods. Its u se in this w ay
w as revived during W orld War II, but escalation by the
index did not receive w idespread acceptance until the
principle w as written into a contract b etw een the U n it­
ed A utom objle, Aircraft, and Agricultural Im plem ent
W orkers o f A m erica and the General M otors Corpora­
tion in 1948. The number o f workers covered by such
contracts in 1972 w as more than 4 m illion.25 H ow ever,
m ovem ents o f the index have an indirect effect on
wages and salaries o f m any m ore w orkers.26
The CPI is used ex ten siv ely to m easure changes in
purchasing pow er o f the consum er dollar. It is the basis
25S e e W a g e C a le n d a r , 1972 (B L S B ulletin 1724).
26S e e article b y F ran cis S . C unningham , “ T he U s e o f P rice In d ex es
in E scalator C o n tra cts,” M o n th ly L a b o r R e v ie w , A u gu st 1963, pp.
9 4 8 -9 5 2 .

CONSUMER PRICES
Table 5.

105

Sum m ary of characteristics of the CPI

DEFINITION O TH IND
F E
EX
Title

Consumer Price Index-U.S. City Average for Urban Wage Earners and Clerical Workers.
£<Pi_.<7a>

Formula (Simplified expression)

^ i:o

— 1 :o

i-.^ a

Base period .........................................

1967=100. All items series also published on 1957-59 base.

Definition of index expenditure weights ...

Average expenditures for urban wage-earner and clerical-worker consumers (including single workers)
derived from the 1960-61 Consumer Expenditure Survey in 66 urban places, adjusted for price changes
between the survey dates and 1963 except for 6 cities added in 1966.

POPULATION COVERAGE O
F
EXPENDITURE SURVEY
Place of residence......................
Family size................................
Occupation................................
Length of employment ................
Income......................................

I

Urban places 2500 or more in I960; including Alaska and Hawaii.
No restriction; single consumer units included.
Wage-earner and clerical-worker families and single individuals living alone. (More than half of total
family income from wage-earner and clerical-worker occupations.)
At least 1 family member or single consumer unit must have been employed for 37 weeks or more during the
survey year in wage-earner or clerical-worker occupations.
No criterion as to income except the qualification above.

CITY COVERAGE
Population weights .............
Sample of priced cities ........
Published indexes ..............

Based on 1960 Population Census; Alaska and Hawaii included. Proportion of population in wage-earner
and clerical-worker group covered by index was based upon BLS expenditure surveys.
50 metropolitan areas and cities selected originally to represent all urban places in the U.S. including
Alaska and Hawaii with populations of 2500 or more in 1960. Six additional areas added in 1966.
U.S. and 17 large metropolitan areas for families and single consumer units combined. Indexes for six
more large metropolitan areas available in the latter part of 1965.

ITEM SAMPLE
Basis of sample selection............
Basis for allocation to priced items
Commodity coverage....................
Number of items priced................
Pricing cycle...............................

Probability proportionate to importance in family spending.
Expenditures classified into 52 expenditure classes. Certainty items assigned their own importance; re­
mainder of expenditures assigned equally to probability selections within expenditure classes.
Goods and services purchased for family living, including necessities and luxuries; excluding personal in­
surance, income and personal property taxes but including real estate taxes and sales and excise taxes.
About 400 represented in U.S. index and published city indexes. Certainty items priced in all un­
published cities; other items in 1 of 2 subsamples of unpublished cities.
Prices of foods, fuels and a few other items priced monthly in all cities.
Prices of most other commodities and services priced monthly in the 5 largest cities, and quarterly in
remaining cities.

REPORTER COVERAGE
Location ................
Number of reporters .
Number of quotations
Pricing technique ....

In central cities and selected suburbs of 56 metropolitan areas (50 areas in 1964 and 1965).
About 1,775 food stores (1,525 for 50 areas), 40,000 tenants (34,000 for 50 areas), 16,000 other
reporters of all kinds (15,000 for 50 areas).
Over 1 million food prices per year; about 80,000 rent charges per year (68,000 for 50 areas);
over 475,000 quotations per year for items other than food and rent (over 450,000 for 50 areas).
Personal visit of BLS agent except for a few items collected by mail or from secondary sources.
Specification pricing but agent is permitted to price deviations from specification under prescribed con­
ditions.

for m ost estim ates o f changes in real earnings o f labor,
and fo r c o m p a r iso n w ith p r o d u c tiv ity m e a su r es.
Changes in purchasing p ow er are used for such diverse
purposes as adjusting royalties, pen sion s o f govern­
m ent and nongovernm ent w orkers, w elfare paym ents,
rental contracts, and occasion ally alim ony paym ents.

L im it a t io n s o f t h e I n d e x
The CPI is not an ex a ct m easure o f price change. It is
subject to sam pling errors w hich m ay cau se it to deviate




som ew hat from the results w hich would be obtained if
actual records o f all retail purchases by w age earners
and clerical workers could be u sed to com pile the index.
T hese estim ating or sampling errors are lim itations on
the precise accuracy o f the index rather than m istakes
in the index calculation. The accuracy could be in­
creased by using much larger sam ples, but the co st is
prohibitive. Furthermore* the index is believed to be
sufficiently accurate for m ost o f the practical u ses made
o f it. With the changes in sampling techniques intro­
duced in 1964, the Bureau is attem pting to m easure the
sam pling error in the in d ex .27

BLS HANDBO O K OF METHODS

106

A nother kind o f error occurs b ecau se people w ho
give inform ation do not alw ays report accurately. The
Bureau m akes every effort to keep th ese errors to a
minim um , obtaining prices w herever p ossib le by per­
sonal ob servation, and corrects errors w h en ever they
are d iscovered subsequently. Precautions are taken to
guard against errors in pricing, w hich would affect the
index m ost seriously. The field representatives who
co llect the price data and the com m odity sp ecialists and
clerks w ho p rocess them are w ell trained to w atch for
unusual deviations in prices w hich might be due to
errors in reporting.
The CPI represents the average m ovem en t o f prices
for urban w age earners and clerical workers as a broad
group, but not the change in prices paid by any one
fam ily or small group o f fam ilies. The index is not
directly applicable to any other occupational group or
to non-urban workers. Som e fam ilies may find their
outlays changing b ecau se o f changes in factors other
than p rices, such as fam ily com position . The index
m easures only the change in prices and none o f the
other factors w hich affect fam ily living exp en ses.
In m any in stan ces, changes in quoted prices are ac­
com panied by changes in the quality o f consum er goods
and serv ices. A lso new products are introduced fre­
quently w hich bear little resem blance to products pre­
viously on the market; hen ce, direct price com parisons
cannot be m ade. Q uoted prices are adjusted for changes
in quality, w h en ever n ecessa ry data are available.
Technical specifications and highly trained personnel
are relied on to insure com parability o f quality o f item s

com pared from period to p eriod .28 N everth eless, som e
residual effects o f quality changes on quoted prices
undoubtedly do affect the m ovem ent o f the CPI either
downward or upward from tim e to tim e.29
A nother important lim itation o f the index is that it
m easures only tim e-to-tim e price change in a given
area. City ind exes do not show intercity differences in
either prices or living co sts. T hey show only differences
in rates o f price change from on e time to another. Other
types o f m easures are required to show place-to-place
differences in living co sts. The m ost recent such m ea­
sure is “ The Interim C ity W orker’s Fam ily B udget”
w hich show s the estim ated dollar co sts o f a “ m odest
but adequate” level o f living in 20 large cities and their
suburbs in the fall o f 1959, w hich is described in chapter
12 .

27Prelim inary estim ates o f sam pling error w ere com p u ted and pub­
lished ip M e a s u r e m e n t o f S a m p lin g E r r o r in th e C o n s u m e r P r ic e
I n d e x : F ir s t R e s u l t s , b y M arvin W ilk erson , p ap er p resen ted at
A m erican Statistical A sso c ia tio n m eetin gs, D ecem b er 29, 1964. A d ­
ditional estim ates w ill be m ade availab le as w ork co n tin u es o n this
project.
28H o o v er , E th el D ., “ T he CPI and Problem s o f Q uality C h a n g e,”
M o n th ly L a b o r R e v ie w , N o v e m b e r 1961, pp. 1 1 7 5 -1 1 8 5 . R eprint
2378, and Larsgaard, O lga A ., and L o u ise J. M ack , “ C om p act Cars in
the C on su m er P rice In d e x ,” M o n th ly L a b o r R e v ie w , M ay 1961, pp.
5 1 9 -5 2 3 .
29S e e testim o n y o f E w an C lague in H e a r in g s b e f o r e th e S u b c o m ­
m itte e o n E c o n o m ic S t a t i s t i c s , Joint E co n o m ic C om m ittee, C on g ress
o f the U n ited S ta tes, 87/1, Part II, p. 588, W ash in gton, M ay 1 , 2 , 3 , 4 ,
and 5, 1961.

T e c h n ic a l R e f e r e n c e s
N u m ber

1.

B a h r , R ic h a r d
C .,
M e in e r s ,
M a rk a n d T o s h ik o
N a k a y a m a . “ N e w C o n su m er P rice In d e x e s b y S iz e o f
C it y ,” M o n th ly L ab o r R e v ie w , A u g u st 1972, pp . 3 - 8 .
R eprint N o . 2822.
D escrib es the se t o f in d ex es initiated in 1972, w h ich m ea­
sure price change in urban areas grouped b y size o f p op ula­
tion. P resen ts and a n alyzes historical data for th ese in d exes
from 1967 through 1972.

2.

C unningham , F ran cis S . “ T he U s e o f Price In d exes in E scalator
C o n tra cts,” M o n th ly L a b o r R e v ie w , A u gu st 1963, pp. 9 4 8 952. R eprint N o . 2424.
D isc u s se s the tech n iq u es o f esca la tio n u sin g the tw o m ajor
price in d ex es p u blished by the Bureau o f L abor S tatistics
— the C on su m er P rice In dex (CPI) and the W h olesale Price
In dex (W PI). E xam in es the basic elem en ts o f an escalator
cla u se and p roced u res for carrying ou t the agreem ent.
D au gh erty, Jam es C. “ H ealth In su ran ce in the R evised C P I,”
M o n th ly L a b o r R e v ie w , N o v em b er 1964, pp. 1 2 9 9 -1 3 0 0 .
E xp la in s and ju stifie s the m ajor ch an ge in the treatm ent o f
the health insu ran ce com p on en t o f m edical care as initiated in
the recen t rev isio n o f th e C on su m er P rice In d ex. C om p ares
the form er m ethod o f pricing actual prem ium rates w ith the
n ew m eth o d o f pricing th e b en efits r eceiv ed for hospital and
p rofessio n a l se r v ic es com b in ed w ith a m easu rem en t for re­
tained earn in gs.

3.




N um ber

4.

5.

6.

H o o v er , E th el D . “ T he CPI and P rob lem s o f Q uality C h a n g e,”
M o n th ly L a b o r R e v ie w , N o v e m b e r 1961, pp. 1175—1185.
E xp lain s and illustrates prob lem s o f quality m easurem ent
m et in th e in d ex calcu lation p roced u res. D efin es quality as
u sed b y the B L S , sp ecifica tio n pricing, direct price com pari­
so n s, and linking p roced u res. C on clu d es that there is n o
e v id en ce to su pp ort the argum ent that the in d ex is n ot a true
m easu re o f price ch an ge b eca u se o f n ot fu lly elim inating the
effe c t o f quality ch a n ges.
H u m e s, H elen and S c h ir o , B runo. “ T he R ent C om p on en t o f the
C o n su m ers’ P rice In d ex. Part I— C o n cep t and M ea su re­
m e n t ,” M o n t h l y L a b o r R e v i e w , D e c e m b e r 19 4 8 , p p .
6 3 1 - 6 3 7 . “ T he R en t C om p on en t o f the C on su m ers’ P rice
In d ex. Part II— M eth od ology o f M easu rem en t,” M o n th ly
L a b o r R e v ie w , January 1949, pp. 6 0 - 6 8 . C om bined in R e­
print N o . 1947.
Part I d isc u s se s the b a sic co n cep ts underlying the rent
in d ex. Part II ex p lain s the m eth od s o f obtaining and calcu la t­
ing rental d ata, the ’’n ew unit b ia s” w h ich e x isted during
W orld W ar II and the problem o f com p en satin g for d ep recia­
tion o f quality ca u sed b y aging.
Jaffe, S id n ey A . “ T h e S tatistical Structure o f th e R e v ise d C P I,”
M o n th ly L a b o r R e v ie w , A u gu st 1964, pp. 9 1 6 - 9 2 4 .
D e sc rib es the c o n c ep t and form u lation , p op ulation and e x ­
penditure co v er a g e, statistical tech n iq u es and p rob lem s o f

CONSUMER PRICES

107

T e c h n i c a l R e f e r e n c e s — C o n t in u e d
N um ber

7.

8.

9.

10.

the rev ised in d ex. E xam in es so m e operational a sp ec ts, e s p e ­
cially sam ple rep lication . P resen ts the in d ex form ula in g e n ­
eral, sim plified, and in operation al form .
L am ale, H elen H u m es. “ H ou sin g C o sts in the C on su m er Price
In d ex , Part I , ” M o n th ly L a b o r R e v i e w , February 1956, pp.
1 8 9 -1 9 6 . “ H o u sin g C o sts in the C on su m er Price Index. Part
II, M o n th ly L a b o r R e v ie w , April 1956, pp. 4 4 2 - 4 4 6 . C om ­
bined in R eprint N o . 2188.
Part I d efin es the hou sin g com p on en t o f the index and
d escrib es the d erivation o f exp en d itu re w eigh ts u sed in the
calcu lation o f the sh elter in d ex. Part II d escrib es the p roce­
du res u sed to m easu re ch an ges in the p rices o f the variou s
item s o f sh elter c o st.
L arsgaard, O lga A . and M ack , L o u ise J. “ C om p act Cars in the
C on su m er P rice In d e x ,” M o n th ly L a b o r R e v ie w , M ay 1961,
pp. 5 1 9 - 5 2 3 . R eprint N o . 2368.
S u m m arizes and exp lain s the m eth od ology u sed to link
co m p a ct cars in to the C on su m er Price In dex in 1961. D isc u s­
s e s the h istorical treatm ent o f q u ality ch an ges in standard size
cars.
N a k a y a m a , T o sh ik o and W arsk y, D ian e. “ M easuring R egional
P rice C h an ge h r U rban A r e a s ,” M o n th ly L a b o r R e v ie w ,
O cto b er 1973, pp. 3 4 - 3 8 . R eprint N o . 2920.

N u m ber

13.

14.

15.

D e sc rib es C on su m er Price In d ex es w h ich m easure price
ch an ge in urban areas grouped b y region s. P rovid es historical
d ata fo r th ese in d ex es togeth er w ith a brief a n alysis o f their
b eh a v io r during the 1 9 6 7 -1 9 7 3 period.
N atio n a l B ureau o f E co n o m ic R esearch . T h e P r ic e S t a t i s t i c s o f
th e F e d e r a l G o v e r n m e n t: R e v i e w , A p p r a is a l, a n d R e c o m ­
m e n d a tio n s , (W ash in gton, N a tion al B ureau o f E co n o m ic R e­

search , G eneral S eries, N u m b er 73, 1961), 496 pp. A lso ap­
p e a r s in G o v e r n m e n t P r i c e S t a t i s t i c s : H e a r i n g s ,
S u b co m m ittee o n E con om ic S ta tistics o f the Joint E con om ic
C o m m ittee, 87th C o n g ., 1st s e s s ., Part 1, January 24, 1961,
([W a sh in g to n ,] U .S . G overn m en t Printing O ffice, 1961), 526
pp.
R ep ort o f the d etailed in v estigation b y the P rice S tatistics
R e v iew C om m ittee o f the N B E R in 1959 o f the m ain price
in d ex es co m p iled b y the F ed eral G overnm ent: T he C on su m er
P rice In dex; the W h olesale P rice In dex; and the In d ex es o f
P rices R e ce iv ed and Paid b y Farm ers. R e v iew s and a n alyzes
the v ariou s a sp ec ts o f th e in d ex es and p resen ts general and
sp ecific recom m en d ation s for im p rovem en ts. T w elv e sta ff
reports app en ded.
11. R o th w e ll, D o r is P . “ C a lc u la tio n o f A v e ra g e R etail F o o d
P r ic e s ,” M o n th ly L a b o r R e v ie w , January 1965; pp. 6 1 —66.
E xp lain s the B L S m eth od s o f co llectin g p rices, and com ­
puting in d ex es and average p rices for fo o d item s in the ind ex.
E m p h a sizes the u n su itab le nature o f in d ex data for com pari­
so n o f p rices b e tw e en c ities. P resen ts estim ated retail p rices
o f fo o d from D ecem b er 1963 through N o v em b er 1964, the
c ities c o v er ed , and the pricing diagram for fo o d in th e ind ex.
1 2 . __________“ U s e o f V arying S ea so n a l W eigh ts in Price Index
C o n stru ctio n ,” J o u r n a l o f th e A m e r ic a n S t a t i s t i c a l A s s o c i a ­
tio n , M arch 1958, pp. 6 6 - 7 7 .
D escrib es a form ula b ased on varying sea so n a l w eig h ts for
m onth -to-m onth m easu rem en ts o f price change w h ich d o es
n o t ex h ib it the “ b ia s e s ” o f ch ain in d ex es and w h ich satisfies
cla ssica l in d ex th eory w ith resp ect to year-to-year com pari­
so n s. R esu lts o f exp erim en tation w ith alternative form ulas
are p resen ted .




16.

S h isk in , J u liu s. “ U p d a tin g th e C o n su m er P rice In d ex —
A n O v e r v ie w ;” M o n th ly L a b o r R e v i e w , July 1974, pp.
3 - 2 0 . Reprint N o . 2979.
D escrib es u ses and m easu res o f the CPI and its lim itations
as a p roxy for a co st-of-livin g in d ex. R e v iew s previou s revi­
sio n s and d isc u sse s problem s and p u rp oses o f the current
revision sch ed u led for co m p letio n in 1977. In clud es a ca len ­
dar sh ow in g sch ed u led step s on the revision , 1 9 7 2 -7 8 .
U .S . C o n g ress, H o u se o f R ep resen ta tiv es, C om m ittee on Edu­
cation and L abor. C o n s u m e r s ’ P r ic e I n d e x , S p ecial su b com ­
m ittee o f the C om m ittee on E d u cation and L abor, 82nd
C o n g ., 1st s e s s ., R eport N o . 2 (1951), 39 pp.
N o n tech n ica l sum m ary o f resu lts o f hearings on the reliabil­
ity o f the C on su m er Price In d ex. P resen ts details o f history,
u s e s , and m eth od o f con stru ction o f the in d ex. R ecom m en d s
con tin u ed support o f the in d ex by the C on gress.
U .S . C o n g ress, Joint E co n o m ic C om m ittee. G o v e r n m e n t P r ic e
S t a t i s t i c s : H e a r in g s , S u b com m ittee on E con om ic S ta tistics,
87th C o n g ., 1st s e s s ., Part I, January 24, 1961 (W ashington,
U .S . G overn m en t Printing O ffice, 1961), 526 pp. Part 2, M ay
1, 2, 3, 4, and 5, 1961. (1961), 265 pp.
Part 1 p resen ts findings o f an in vestigation by the Price
S ta tistic s R e v ie w C o m m ittee o f the N a tio n a l B ureau o f
E c o n o m ic R e se a rc h in 1 9 5 9 - 6 0 o f all govern m en t price
sta tistics. A lso in clu d es 12 sta ff papers on sp ecific su bjects.
T he d etailed tech n ical report in clu d es recom m en dations for
im p rovem en t o f all in d ex es and, sp ecifically for the C on­
su m er P rice In d ex, su ggests exten d ed co v erage to include
sin gle co n su m ers, probability sam pling tech n iq u es, esta b ­
lish m en t o f a research d iv isio n , and regularly sch ed u led
w eigh t rev isio n s. Part 2 p resen ts testim on y b efore the sub­
co m m ittee o f m em b ers o f the Price S tatistics R e v iew C om ­
m ittee, govern m en t o fficia ls, and oth er interested parties
con cern in g the com m ittee report and recom m en d ation s.
U .S . C o n g ress, Joint C om m ittee on the E co n o m ic R eport. T he
C o n s u m e r s ’ P r ic e I n d e x - R e p o r t o f th e J o in t C o f n m itte e o n
th e E c o n o m ic R e p o r t o n th e C o n s u m e r s ’ P r ic e I n d e x o f th e

U n ite d S t a t e s B u r e a u o f L a b o r S t a t i s t i c s , 80th C o n g ., 2nd
s e s s . (1949), 20 pp.
B rief statem en t o f the results o f exam in ation s o f m eth o d o l­
o g y , com p ilation , c o m p o sitio n , and p resen tation o f the C on ­
su m er P rice In d ex as o f 1949. E x te n siv e bibliography.
17. U .S . D ep artm en t o f L abor, B ureau o f L abor S tatistics. T he
C o n s u m e r P r ic e I n d e x : H is to r y a n d T e c h n iq u e s . B ulletin
1517 (1966), 112 p ages.
P resen ts the m o st co m p reh en sive treatm ent o f the U .S .
C on su m er Price In d ex availab le in a single docu m en t. Pro­
v id es an h istorical sum m ary cov erin g the sc o p e and m ethod
o f com p ilin g th e C on su m er Price In d ex sin ce its in cep tion , a
d etailed exp lan ation o f p resen t tech n iq u es, and a d escrip tion
o f th e 1964 co m p reh en sive revision o f th e in d ex. A b ib liog­
raphy o f p u b lication s on m eth od ology and an alysis o f price
trends is inclu ded.
1 8 . _________ T h e C on su m er P rice Index: A Short D escrip tion ,
1971.
A n on -tech n ical d escrip tion o f the in d ex, its sco p e and
com p u tation . E xp lain s the m arket b ask et, form ula, u ses and
lim itations o f th e in d ex. T ab les sh o w c ities inclu ded, popula­
tion w eig h ts, pricing sc h e d u le s, groups o f g o o d s and serv ices
p riced , their relative im portance and the num ber o f item s
priced a s o f D ecem b er 1963.

BLS HANDBO O K OF METHODS

108

T e c h n i c a l R e f e r e n c e s — C o n t in u e d
N um ber

N um ber

19.

ju stm en t p resen ted . T abu lation o f adjusted in d exes from
1 9 4 0 -5 0 , relative im portances and w eigh ts generated by the
interim adjustm ent also are p resen ted .
2 2 . _________ C o n s u m e r P r ic e s in th e U n ite d S t a t e s , 1 9 5 3 —5 8 :
P r ic e T r e n d s a n d I n d e x e s , B ulletin 1256, (1959), 126 pp.
A n a ly zes and exp lain s retail price trends and their e ffect on
the e co n o m y from 1953 to 1958. B rief history o f the in d ex and
com p arison o f featu res o f the old in d ex based on the 1 9 3 4 -3 6
exp en d itu res su rv ey , w ith the adjusted in d ex based on the
1 9 4 7 -4 9 exp en d itu res su rvey in 7 cities and the revised ind ex
based on the 1950 exp en d itu res su rvey. E xp lain s the 1952
revision in detail. P resents historical in d ex es for variou s seg ­
m ents o f the in d ex.
2 3 . U . S . O f f ic e o f E c o n o m ic S t a b iliz a t io n . R e p o r t o f t h e
P r e s i d e n t ’s C o m m itte e o n th e C o s t o f L iv in g , (1945), 423 pp.
S u m m arizes the findings o f the in vestigation in 1943 - 4 4 o f
the su itab ility o f the C on su m er Price In dex for m easurem ent
o f the change in the c o st o f living during w artim e. In clud es
d etailed d isc u ssio n s o f the d efin ition , sc o p e , and statistical
m eth od ology o f the ind ex.
24. W ilk erson , M arvin. “ Sam pling Error in the C on su m er Price
In d e x ,’’ J o u r n a l o f th e A m e r ic a n S t a t i s t i c a l A s s o c ia tio n ,
S ep tem b er 1967, V olu m e 62, N o . 319, pp. 8 9 9 - 9 1 4 .
D escrib es the sy stem o f rep licated sam p les introduced into
the con su m er price in d ex as o f D ecem b er 1963. E stim ates o f
sam pling error in the CPI are g iven and their adequ acy and
lim itations evalu ated .

20.

_________ S e a s o n a l F a c to r s , C o n s u m e r P r ic e I n d e x : S e l e c t e d
S e r ie s , J u n e 1 9 5 3 - M a y 1 961, B ulletin 1366 (1963), 47 pp.
P rovides basic data w ith w h ich C on su m er Price Index old
series in d ex es can be adjusted for season al variation. U sers
are cau tion ed that the 1964 revision m ay have a very d ifferent
effect o n the series. In clu d es a d escrip tion o f the B L S m eth od
o f com puting season al fa cto rs, a d isc u ssio n o f its application
to co n su m er price series, co m m en ts on sp ecific series and
tables providing in d ex es and season al factors for 66 selected
series through M ay 1961.
__________ “ T a x es and the C on su m ers’ Price In d e x ,’’ M o n th ly
L a b o r R e v ie w , January 1953, pp. 5 3 - 5 7 . Reprint N o . 2090.
D isc u s se s the present treatm ent o f taxes in the ind ex and
the sp ecific ta x es inclu ded. Ju stifies the B L S p olicy o f c o n ­
tinuing to ex clu d e in com e ta x es from the ind ex and including
sa les and e x c ise ta x e s.

21. —
_____

I n te r im A d ju s tm e n t o f C o n s u m e r s ’ P r ic e I n d e x : C o r ­
r e c tio n o f N e w U n it B ia s in R e n t C o m p o n e n t o f C o n s u m e r s ’
P r ic e I n d e x a n d R e la tiv e I m p o r ta n c e o f I te m s , B ulletin 1039

(1952), 4 9 pp.
M ilitary d ev elo p m en ts in K orea in 1950 em p h asized and
m ade urgent the need for rew eighting o f certain segm en ts o f
the in d ex b efore the already initiated revision could be com ­
p leted in 1952. T h e failure to reflect the d ifferen ce b etw een
rents for n ew d w ellin gs w h en th ey first enter the m arket and
com parable d w ellin gs already on the m arket during and after
the S ec o n d W orld W ar is d isc u sse d and the m ethod o f ad-




Chapter 14.

Wholesale Prices

B ackground
The W holesale Price Index (WPI) is the oldest con ­
tinuous statistical series published by the Bureau o f
Labor Statistics (B L S) and on e o f the oldest in the
Federal G overnm ent. It w as first published in 1902, and
covered the years 1890—1901. The origins o f the index
are associated with a resolution o f the U .S . Senate in
1891, w hich authorized the Senate C om m ittee on F i­
nance to investigate the effects o f the tariff law s “ upon
the imports and exports, the grow th, developm ent,
production, and prices o f agricultural and m anufac­
tured articles at hom e and abroad.’’1
The index published in 1902 on the b ase 1 8 9 0 -9 9 was
an unw eighted average o f price relatives and included
from 250 to 261 com m odities. Since that tim e, many
changes have been made in the sam ple o f com m odities,
the base period, and in the m ethod o f calculating the
index. The first major change w as com pleted at the end
o f 1914, w hen a system o f w eighting w as introduced and
the index w as recalculated back through 1890.2 B y
1940, the number o f com m odities had increased to ap­
proxim ately 900, based on about 2,000 individual price
quotations. Then, in 1952, the m ost exten sive revision
in the history o f the index w as co m p leted .3 The number
o f com m odities and quotations w as doubled, w eights
w ere based on 1947 C ensu ses and changes were made in
the calculation m ethod. Som e changes in classification
w ere made also, including expansion to the present 15
major groups. A major reclassification was implemented
in January 1967, w hen the 8-digit classification struc­
ture w as initiated. A lso at that tim e, new w eights from
the 1963 industrial cen su ses w ere introduced.
By January 1975, the num ber o f com m odities had
increased to nearly 2,800, the num ber o f price quota­
tions had increased to over 10,000, and the index had
'Wholesale Prices, Wages, and Transportation, S en ate R eport N o .
1394, “ T he A ldrich R ep o rt,” S en ate C om m ittee o n F in an ce, C on ­
g ress o f the U n ited S ta tes, M arch 3, 1893, Part I, (52d C o n g ., 2d
s e s s io n ) , G o v e r n m e n t P rin tin g O ffic e (18 9 3 ); an d Course of
Wholesale Prices, 1 8 9 0 -1 9 0 1 , B ulletin o f the D epartm en t o f Labor,
N o . 39, M arch 1902, pp. 205 - 2 0 9 .
2S e e a lso , A llan D . S earle, “ W eigh t R ev isio n s in the W h olesale
P rice In d ex , 1 8 9 0 -1 9 6 0 ,” Monthly Labor Review, February 1962,
pp. 1 7 5 -1 8 2 .
3A large num ber o f the n ew ly introduced com m od ity p rices w ere
carried b a ck to 1947. T h e p resen tly published in d ex con tain s the n ew
co m m o d ities for the period 1 9 4 7 -5 1 and d isp la ces the old er, less
co m p reh en siv e ind ex o n the 1926 b ase pu blished for the sam e period.




becom e increasingly representative o f general primary
market price changes.

D e s c r ip t io n o f S u r v e y

Concepts
Throughout its history, the WPI has been a measure
o f price changes for goods sold in primary markets in
the U nited States. “ W holesale’’ as used in the title o f
the index refers to sales in large quantities, not prices
received by w holesalers, jobbers, or distributors.
From its inception, the index has been considered a
general purpose index designed to measure changes in
the general price level in other than retail markets.
From the beginning o f the index, h ow ever, attention
w as directed to som e specific needs o f users, and in­
d exes for individual com m odities and for major com ­
modity groups were published. A s early as 1903, two spe­
cial group indexes by stage o f processing — Raw Com­
m odities and M anufactured C om m odities — were pub­
lished “ to m eet the w ish es o f students o f price statis­
tic s .’’ In recent years, em phasis has been placed on the
developm ent o f more subdivisions within major groups
and special com binations o f indexes such as by stage o f
processing and by durability o f product.
M ost o f the quotations reported to the Bureau are the
selling prices o f representative manufacturers or pro­
ducers, but som e prices are th ose quoted on organized
exchanges (spot prices) or at central markets. Prices for
imported com m odities are th ose received by importers
— the first com m ercial transaction involving the com ­
m odity in the U nited States. Since the index is intended
to m easure “ pure’’ price change, that is, not influenced
by changes in quality, quantity, shipping term s, product
m ix, e tc ., com m odities included in the index are de­
fined by precise specifications which incorporate their
principal price-determ ining characteristics.4 So far as
p ossib le, prices are f.o .b . production point, and refer to
sales for im m ediate delivery. Prices applicable to longrun contracts generally have been excluded excep t
w here contract prices dom inate the market. “ Futures’’
prices are not included.
4A n exam p le o f a com m od ity sp ecification for steel strip is: “ Strip,
cold -rolled , carbon ste el, c o ils, N o . 4 tem p er, N o . 2 finish , N o . 3
ed g e, b ase cham istry, 6 ” x .050” , in quantities o f 10,000 to 19,9991b.,
m ill to u ser, f.o .b . m ill, p er 100 lb .”

109

110

BLS HANDBO O K OF METHODS

Universe
The WPI universe con sists o f all com m odities sold in
com m ercial transactions in primary markets o f the l i ­
nked States, including Alaska and Hawaii. Commodities
produced in the U nited States are included, as well as
those im ported for sale. The universe covers m anufac­
tured and p rocessed good s and the output o f industries
classified as manufacturing, agriculture, forestry, fish ­
ing, m ining, gas and electricity, public utilities, and
goods com petitive w ith th ose made in the producing
sector, such as w aste and scrap m aterials. All system a­
tic production is represented, but individually priced
item s, such as works o f art, are excluded. A lso ex­
cluded are goods transferred betw een establishments
o w n ed by the sam e com pan y (interplant or intra­
com pany transfers). G oods sold at retail by producerow ned retail establishm ents also are excluded b ecause
they conceptually belong to a retail (custom ers’) uni­
v erse, rather than to primary market transactions.
Civilian goods norm ally purchased by the G overn­
m ent are in the u niverse, but military good s are not.
G overnm ent sales o f som e com m odities (e .g ., electric
pow er) are included if they can be considered com peti­
tive w ith free market sales.

Prices
To the exten t p ossib le, the prices used in construct­
ing the index are th o se that apply to the first significant
com m ercial transaction in the U nited States. T ransac­
tions for the sam e item at later stages o f distribution are
not included. H o w ever, as raw materials are trans­
form ed into sem ifinished and finished good s, the result­
ing products are represented.
With som e ex cep tio n s, the prices refer to on e particu­
lar day o f each m onth. In m ost ca se s, the pricing date is
T uesday o f the w eek containing the 13th day; but for
som e com m odities (farm products, particularly) a day
other than T uesday is used b eca u se it is considered
more represen tative.5 For som e other products, an av­
erage o f prices throughout the month is used and results
in 1- or 2-m onth lags b etw een the price reference month
and the index m on th .6
T he Bureau attem pts to base the WPI on actual trans­
action prices. C om panies are requested to report prices
less all d iscou n ts, allow an ces, rebates, free deals, etc.,
so that the resulting net price is the actual selling price
o f the com m odity for the specified basis o f quotation.
The Bureau periodically em ph asizes to reporters the
need to take into account all discoun ts and allow ances.
5T h e p rices u sed in the in d ex through 1951 w ere the sim ple arithm e­
tic averages o f p rices for all T u esd ays in the m onth. F rom January
1952 through D ecem b er 1966, T u esd ay o f the w e ek containing the
15th w a s the pricing date.
6L agged prod u cts inclu de gas fu e ls, electric p ow er, refined p e ­
troleum , and industrial ch em ica ls.




H ow ever, list or book prices are used if transaction
prices are unobtainable.
Prices are generally f.o .b . production or central mar­
keting point to avoid reflection o f changes in transporta­
tion co sts. D elivered prices are included only when the
custom ary practice o f the industry is to quote on this
basis and the Bureau cannot obtain a price at the pro­
duction point. Subsidies to the producer and ex cise
taxes are excluded since they are not considered part o f
the price, but import duties are included as part o f the
selling price o f imported goods.
Although the sam e com m odity is priced generally
month after m onth, it is necessary to provide a m eans
for bridging over changes in detailed specifications (or
descriptions o f item s priced) so that only real price
change will be m easured. An adjustment is particularly
important w hen new com m odities are introduced, but
even w hen specifications o f existing com m odities are
changed, care is exercised to help insure that only price
changes influence the index. A new price series result­
ing from a physical change in an article or a change in its
selling terms is substituted for the earlier series by
direct com parison or by linking. The objective o f the
linking procedure is to insure that the index will reflect
only th ose changes due to actual price d ifferen ces.7
Each time a change in the item priced occurs, the
Bureau appraises the significance o f the specification
change to ascertain w hether an actual price change
occurred. If the specification change is minor and does
not involve price-making factors, the substitution is
effected by direct com parison, and any reported price
change b etw een the old and the new specification is
reflected in the index. If changes in specification are
major, and if either no real price change occurred or no
information can be obtained concerning the value o f the
differen ce in sp ecification (perhaps indicative o f a
change in quality), the substitution is made by linking
and no change is reflected in the index. In this ca se, any
reported difference in price level is not permitted to
affect the index level.
W hen differences are major, an attempt is made to
obtain data from the reporters on the value o f the addi­
tional (or deleted) features and to adjust the price index
accordingly. This is particularly important in the case o f
7T he fo llo w in g ex am p le illustrates the linking p rocedure: T h e S ep ­
tem ber price for a certain m achine u sed in the calcu lation o f the ind ex
w as $2,347.50. In O ctob er, a n ew m odel o f the m achine w a s intro­
d u ced , priced at $2,562.60. T h e n ew m odel w a s con sid ered e s s e n ­
tially com parable w ith the old , e x c e p t that it had a m ore pow erful
m otor and larger tires. T h e se w ere valued at $186.20 m ore than the
value o f th ose u sed o n the form er m od el. F or linking, the S eptem ber
price o f the n ew m od el w as estim ated at $2,533.70 ($2,347.50 S e p ­
tem ber price o f form er m od el p lu s $186.20 in crease in value o f m otor
and tires). T he price com p arison b e tw e en S ep tem b er and O ctob er
w as b ased on the estim ated S ep tem b er price o f $2,533.70 and the
reported O ctob er p rice o f $2,562.60. T hu s a 1 .1-percent in crease w as
reflected in the O ctob er in d ex, but the price ch an ge du e to quality
im p rovem en t (m ore pow erfu l m otor and larger tires) w a s not re­
flected .

W HOLESALE PRICES

111

Wholesale Price Index
Relative importance, number of items and price quotations for major groups and subgroups
Code

Grouping

Relative importance in total
1963 weights

Number of items and price
quotations, July 1975

December 1974

December 1966

Items

Price quotations

01
01-1
01-2
01-3
01-4
01-5
01-6
01-7
01-8
01-9

All Commodities ................................................................................
Farm products, processed foods and feeds ............................
Farm products ...................................................................
Fresh and dried fruits and vegetables ....................
G rain s........................................................................
Livestock ...................................................................
Live poultry ...............................................................
Plant and animal fibers ...........................................
Fluid milk ..................................................................
E g g s ...........................................................................
Hay, hayseeds, and oilseeds....................................
Other farm products.................................................

100.000
29.078
11.141
1.119
1.980
2.959
.344
.467
1.978
.469
1.034
.790

100.000
27.170
10.637
1.171
1.357
3.086
.332
.553
2.001
.576
.780
.781

2,793
279
87
30
8
12
3
15
2
1
7
9

10,108
768
126
47
8
12
3
24
2
1
12
17

02
02-1
02-2
02-3
02-4
02-5
02-6
02-7
02-8
02-9

Processed foods and feeds ...............................................
Cereal and bakery products .....................................
Meats, poultry, and f is h ...........................................
Dairy products...........................................................
Processed fruits and vegetables .............................
Sugar and confectionery...........................................
Beverages and beverage m aterials...........................
Fats and oils1 ...........................................................
Miscellaneous processed fo o d s................................
Manufactured animal fe e d s .....................................

17.936
2.141
4.141
1.937
.859
2.795
1.897
.910
1.221
2.034

16.533
2.038
4.404
2.275
.856
1.192
2.047
.603
1.183
1.935

192
22
39
15
35
11
18
17
20
15

642
85
93
55
153
25
104
24
61
42

03
03-1
03-2
03-3
03-4
03-5
03-6
03-7

Industrial Commodities ............................................................
Textile products and apparel ...........................................
Cotton products ........................................................
Wool products ...........................................................
Synthetic products....................................................
Silk products2 ...........................................................
Apparel .....................................................................
Textile housefurnishings...........................................
Miscellaneous textile products ................................

70.922
5.772
1.090
.248
1.159
—

2,514
169
36
7
47
—
64
10
5

9,340
405
75
8
97
—

2.809
.334
.132

72.830
7.149
1.152
.403
1.488
.021
3.562
.384
.139

04
04-1
04-2
04-3
04-4

Hides, skins, leather, and related products ...................
Hides and skins ........................................................
Leather ......................................................................
Footwear....................................................................
Other leather and related products .........................

1.040
.067
.157
.571
.245

1.264
.097
.196
.667
.304

49
12
11
17
9

101
12
12
52
25

05
05-1
05-2
05-3
05-4
05-6
05-7

Fuels and related products and power ............................
Coal ...........................................................................
Coke ...........................................................................
Gas fuels ...................................................................
Electric power ...........................................................
Crude petroleum1 .....................................................
Petroleum products, refined ....................................

9.616
1.104
.127
.722
1.896
.801
4.966

7.130
.439
.070
.691
1.808
.614
3.508

163
7
7
2
18
13
116

1,517
57
6
2
176
60
1,216

06
06-1
06-2
06-3
06-4
06-5
06-6
06-7

Chemicals and allied products ........................................
Industrial chemicals ................................................
Paint and paint materials1 .......................................
Drugs and pharmaceuticals.....................................
Fats and oils, inedible.............................................
Agricultural chemicals and chemical products .......
Plastic resins and m aterials....................................
Other chemicals and allied products .......................

6.475
2.264
.681
.625
.215
.719
.479
1.492

6.738
1.968
.706
.888
.163
.675
.456
1.522

324
84
29
105
7
44
10
45

830
321
62
161
7
117
29
133

07
07-1
07-2

Rubber and plastic products............................................
Rubber and rubber products ....................................
Plastic products........................................................

2.074
1.251
.824

2.339
2.339
------

99
57
42

306
168
138

08
08-1
08-2
08-3
08-4

Lumber and wood products...............................................
Lumber.......................................................................
Millwork ....................................................................
Plywood ......................................................................
Other wood products ................................................

2.393
1.300
.597
.368
.129

2.418
1.215
.658
.416
.129

88
52
16
15
5

349
186
61
71
31

See footnotes at end of table.



,

190
24
11

BLS HANDBO O K OF METHODS

112

Wholesale Price Index—Continued
Relative importance, number of items and price quotations for major groups and subgroups
Code

Relative importance in total
1963 weights

Grouping

December 1974
09
09-1

December 1966

Number of items and price
quotations, July 1975
Items

Price quotations

4.782

4.877

83

307

09-2

Pulp, paper, and allied products ....................................
Pulp, paper, and products, excluding building paper
and board ..............................................................
Building paper and board ........................................

4.672
.110

4.719
.158

75
8

274
33

10
10-1
10-2
10-3
10-4
10-5
fl0-6
10-7
10-8

Metals and metal products .............................................
Iron and steel ...........................................................
Nonferrous metals ....................................................
Metal containers .......................................................
Hardware ...................................................................
Plumbing fixtures and brass fittin g s.......................
Heating equipment ...................................................
Fabricated structural metal products .....................
Miscellaneous metal products ........................ .........

13.828
5.240
3.403
.505
.504
.167
.218
1.834
1.957

12.799
4.547
3.205
.462
.548
.177
.254
1.716
1.890

373
106
89
9
45
14
21
40
49

1,225
387
228
31
135
65
62
126
191

11
11-1
11-2
11-3
11-4
11-6
11-7
11-9

Machinery and equipment ................................................
Agricultural machinery and equipment....................
Construction machinery and equipment...................
Metalworking machinery and equipment.................
General purpose machinery and equipment ............
Special industry machinery and equipment ............
Electrical machinery and equipment........................
Miscellaneous machinery .........................................

10.954
.629
.814
1.416
1.697
1.484
3.554
1.361

12.110
.665
.807
1.469
1.665
1.506
4.462
1.536

799
129
60
145
104
75
199
87

2,893
305
270
632
407
212
779
288

12
12-1
12-2
12-3
12-4
12-5
12-6

Furniture and household durables ...................................
Household furniture ..................................................
Commercial furniture................................................
Floor coverings ..........................................................
Household appliances ...............................................
Home electronic equipment .....................................
Other household durable goods................................

2.893
.769
.417
.271
.674
.249
.512

3.584
.904
.416
.385
.891
.459
.529

94
21
7
9
29
8
20

431
126
28
41
142
18
76

13
13-1
13-2
13-3
13-4
13-5
13-6
13-7
13-8
13-9

Nonmetallic mineral products .........................................
Glass1 .........................................................................
Concrete ingredients ................................................
Concrete products ....................................................
Structural clay products excluding refractories .....
Refractories...............................................................
Asphalt roofing..........................................................
Gypsum products.......................................................
Glass containers .......................................................
Other nonmetallic minerals ................................

2.936
.291
.567
.843
.142
.131
.157
.088
.264
.454

3.040
.364
.612
.882
.168
.139
.127
.106
.273
.369

50
4
4
4
6
10
5
3

7
7

429
15
162
58
43
60
18
9
26
38

14
14-1
14-2
14-4
14-8

Transportation equipment ................................................
Motor vehicles and equipment.................................
Aircraft1 ....................................................................
Railroad equipment...................................................
Mobile hom es............................................................

6.054
5.221
.390
.323
.121

7.244
6.932
—

104
67
8
27
2

242
139
8
31
64

15
15-1
15-2
15-3
15-4
15-9

Miscellaneous products....................................................
Toys, sporting goods, small arms, ammunition .....
Tobacco products ......................................................
Notions ......................................................................
Photographic equipment and supplies ....................
Other miscellaneous products .................................

2.105
.421
.701
.089
.287
.608

2.498
.513
.802
.102
.386
.695

119
30
9

338
107
46
10
62
113

1 Subgroup index not published.
2 Subgroup index discontinued January 1971.
N T : Relative im
OE
portance represents the basic value weight of an item m
ultiplied b the relative of price change betw the weight date and a later date,
y
een




.312

—

5
40
35

and the result is expressed as a percentage of the total for all com odities.
m
T e differences betw the relative im
h
een
portances as of D ber 1966, the date of
ecem
last m weight change, and that of D ber 1974 are the result of price
ajor
ecem
changes only.

W HOLESALE PRICES
som e durable good s, such as autom obiles, which have
periodic model changes. A lso, price increases which
result from the addition o f features that formerly sold at
extra cost are not reflected in the index. C onversely,
price changes attributable to deletion o f equipm ent
which was form erly standard are not treated as d e­
creases.
In the event production o f a specified com m odity is
discontinued by a reporter, or its im portance is re­
duced, the Bureau co llects price data for a similar or a
replacem ent item . Prices are obtained for the new and
the discontinued series for a 1-month overlap period.
The index is extended by linking, and the difference, if
any, b etw een the new item price and the original price is
taken as a measure o f the quality difference betw een the
tw o item s.
Linking is also used for the addition to or deletion o f
com m odities or groups o f com m odities from the index;
the addition to or deletion o f a com pany report from the
sam ple o f com panies priced, or, on occa sio n , a change
in the source o f price. W henever a new com m odity is
added to an existing com m odity group, linking o f the
new item to any one o f the existing item s is not perti­
nent. Instead, the w eights o f the entire group are redis­
tributed to include the new item and the link is m ade at
the group level instead o f at the com m odity level. A
similar procedure is used to handle item s that drop out
o f the index.
Prices for individual com m odities reported by the
individual com panies are averaged (usually by m eans o f
an unw eighted average). M onth-to-m onth price change
should be com puted from m atched-com pany data. In
order that a change in the com pany-reporter sample
itself not affect the m easure o f percent change, the
change is calculated for any 2 m onths from identicalcom pany data. T hus, a new report affects the index no
earlier than the secon d month.

Classification
T he classification system o f the WPI follow s com ­
m odity lines. Products are grouped by similarity o f
end-use or material com p osition , rather than by indus­
try o f origin. The WPI classification d oes not m atch the
Standard Industrial C lassification (SIC), the Standard
C om m odity C lassification, the U nited N ation s Stan­
dard International Trade C lassification (SITC), or any
other standard classification . H istorical continuity and
the needs o f index users have been important in de­
veloping the classification. N o single classification plan
can m eet all o f the requirem ents for w h olesale price
sta tistic s, but the plan adopted should be flexib le
enough to facilitate regrouping o f price series to make
special grouping ind exes. In July 1975, the index was
made up o f 15 major groups, 88 subgroups, 294 product
cla sses, 603 subproduct c la sses, and 2,793 item s.8
 for the m ajor groups and subgroups included in the W PI.
8S e e table


113

To m eet the needs o f index users, a number o f special
group in d ex e s are calcu lated and published each
m o n th . A m o n g th e s e are in d e x e s by sta g e o f
p ro cessin g ,9 indexes by durability o f product, and in­
d exes o f construction materials, in addition to about 22
other special group indexes.
E xcept for the stage o f processing indexes, these
special groupings con sist o f rearrangements o f the WPI
data into different com binations o f pric.e series, so that
the appropriate prices and w eights are those o f the W PI.
The stage o f processing ind exes, h ow ever, regroup
each item priced in the WPI according to the amount o f
processing, manufacturing, or assem bling it undergoes
before entering the market. A com m odity may appear
in several different categories in this schem e. Thus, 29
percent o f the fresh vegetables (by value-w eight) was
assigned to crude foodstuffs and feedstuffs for further
p ro cessin g and 71 p ercen t to con su m er fo o d s (as
“ fin ish ed ” goods). The value w eights are the same as
those o f the WPI and the allocations among the stages o f
processing are from an inter-industry transaction study
made for the year 1958 by the Bureau o f Economic
A n alysis, U .S . Departm ent o f Com m erce. Early in
1976, th ese allocations will be updated to 1967 relation­
ships.

D a ta S o u r c e s a n d C o ll e c t i o n M e t h o d s

Prices
Price data are collected by mail questionnaire, and
reporting is voluntary and confidential. M ost prices are
collected each m onth. For a few com m odities, for
w h ich p rice ch a n g e s are in fr e q u e n t, th e sh u ttle
schedule is mailed quarterly, but m onthly prices are
requested. G enerally, the price data used in the index
are obtained directly from the producing com pany, but
som e trade publications are used when the publication
generally is accepted as reliable by the Bureau and the
industry. For fish and m ost agricultural products, the
prices used are those collected and published by other
G overnm ent agencies.
Price reporting is initiated, w herever possible, by a
personal visit by a Bureau representative to the pro­
spective respondent. Pricing o f additional products from
established reporters often is started by mail. In any
even t, a detailed repon lescribing all o f the price­
making characteristics o f the com m odity is prepared for
each new price series. This com m odity price informa­
tion sheet (B L S 1810) is show n on pages 118, 119 and
120. The form b ecom es a part o f the permanent record
for the series. After the initial collection o f prices,
m onthly information is co llected by mail on a shuttle
schedule. (B L S 473, show n on pages 121 and 122.)
9T he broad stages o f p ro cessin g are: C rude m aterials for further
p rocessin g; In term ed iate m aterials, su p p lies, and com p on en ts; and
F in ished g o o d s. E ach o f th ese is su bd ivided further.
.

114

BLS HANDBO O K OF METHODS

Weights
The price data are com bined using w eights based on
value o f shipm ents. The major sources o f the Value data
are:
B u r e a u o f C e n s u s ............ C e n s u s o f M a n u f a c t u r e s
C e n s u s o f M in e r a l I n d u s t r ie s
B u r e a u o f M in e s

.............. V a r io u s p u b lic a t io n s , e .g . ,
M in e r a ls Y e a r b o o k

D e p a r tm en t o f
A g r ic u ltu r e ....................... V a r io u s p u b lic a t io n s , e .g . ,
A g r ic u ltu r a l S t a t i s t i c s
B ureau o f
F is h e r i e s ............................V a r io u s p u b lic a t io n s , e .g . ,
F is h e r i e s o f th e U n it e d S t a t e s

In addition, m any other sources o f data, such as trade
a ssocia tio n s, are u sed Import data are obtained from a
report o f the U .S . D epartm ent o f C om m erce, U n i t e d
S ta te s

Im

p o r ts

f o r

C o n s u m p tio n .

Sampling
The m onthly index is based on a judgm ent sam ple o f
com m od ities, a sam ple o f sp ecifications (descriptions),
and a sam ple o f reporters. The sam ple o f com m odities
is ch osen after a review o f the data o f the industrial
cen su ses and other statistics o f value o f transactions.
G enerally, the com m odities ch o sen are th ose o f the
largest shipm ent values. Starting w ith January 1967,
ex p a n sio n o f In du stry S ecto r P rice In dex sam ple
coverage has been a major influence in selecting new
products for the W PI. N e w item s are not added until
they have b ecom e established in the m arket.10 They are
added, norm ally, in D ecem b er or June o f any year, and
have their first effect on the index in January or July.
S a m p le s o f s p e c ific a tio n s and o f rep o rters are
selected after consultation w ith trade associations or
other industry representatives and w ith staff o f other
governm ent agen cies. Individual com m odity sp ecifica­
tions are selected also on the basis o f net dollar sales.
That is, the “ volum e seller” o f the industry (not o f the
com pany) is preferred. T he specification describes not
only the popular physical characteristics but also the
m ost com m on quality, grade, lev el o f distribution, and
market. H o w ev er, term s o f sales (discounts, e tc.) are
based on the com p an y’s ow n m ost com m on practice.
For som e com m od ities, prices are quoted by producers
and sellers in term s o f a single specification taken as
standard; all other prices are quoted as differentials
from the standard. The latter is true for som e farm
products such as w heat and cotton . W hen no standard
10If n ew item s are add ed before th ey b eco m e fu lly estab lish ed , the
sharp p rice d eclin e ex p erien ced by m o st p rod u cts, as th ey m o v e from
d ev elo p m en t to m ass prod u ction , im parts a d ow nw ard bias to the
in
Digitized for d ex . A lso , m?.ny n e w p rod u cts turn ou t to be o f on ly transitory
FRASER
sig n ifica n ce.
http://fraser.stlouisfed.org/

Federal Reserve Bank of St. Louis

com m odity basis ex ists, the specification to be priced is
selected with the help o f industry experts.
The number o f reporters is determ ined, to som e e x ­
tent, by the variation o f price m ovem ents among them
and the degree o f price leadership. W henever p ossible,
a minimum o f three com panies is obtained, so that data
for specified com m odities can be published without
disclosure o f information supplied by individual com ­
panies. For com m odities with more than one major
production area and a definite regional pattern, a larger
sam ple is selected . A m ong these com m odities are e lec­
tric pow er, refined petroleum products, w aste materials
and building m aterials such as brick, cem ent, and stone.
A com paratively small list o f properly selected com ­
m odities would produce a reliable index, if only an All
C om m odities index w ere desired. H ow ever, histori­
cally, interest has been great in ind exes for groups o f
com m odities and for individual com m odities. To m eet
these needs, the Bureau has increased the sample in
order to provide m ore detailed indexes as well as many
special-purpose in d exes. Probability sam pling tech ­
niques generally have not been used for the WPI, but
their feasibility currently is being tested.

E s t im a t in g P r o c e d u r e s
F orm ula a n d C a lcu la tio n
In con cept, the W holesale Price Index is calculated
according to a m odified L aspeyres formula:
l.Ii

= [ 2 QaPi/2 QaPo] x 100, w h e r e Po is th e p r ic e o f a
c o m m o d i t y in th e c o m p a r is o n p e r io d a n d Pi is its p r ic e
c u r r e n t ly . Qa r e p r e s e n t s th e q u a n t it y s h ip p e d d u r in g th e
w e ig h t - b a s e p e r io d .

An alternative form ulation more clo sely approxi­
m ates the actual com putation procedure:
2. Ii = [2 (QaPo) (Pi/Po) / 2 QaPo]

X 100.

In this form , the index is a w eighted average o f price
relatives for each item (Pi/Po). The expression (QaPo)
represents the w eights in value form and the “ P ” and
“ Q ” elem ents (both o f w hich originally relate to period
“ a ” but are adjusted for price change to period “ o ” ) are
not derived separately. E ach value w eight includes not
only the value o f item s priced but also the values o f
unpriced item s w h ose price m ovem ents are assum ed to
behave similarly. W hen new w eights are introduced,
the index w ith new w eights is linked to the index co n ­
structed with the earlier w eights. The w eight adjust­
m ent itself, therefore, affects only the later calculations
o f average price change. W hen specifications or sam ­
ples change, the item relatives must be com puted by
linking (m ultiplying) the rela tiv es for the separate
periods for w hich the data are precisely com parable.
(For a som ew hat more detailed treatm ent, see chapter
13, C onsum er P rices.)

W HO LESALE PRICES
Base Period
The W holesale Price Index has been com puted on the
governm ent-w ide standard reference base 1967=100
since January 1971.11 It had been based 1 9 5 7 -5 9 = 1 0 0
from January 1962 through D ecem b er 1970. Earlier
bases w ere 1 9 4 7 -4 9 , 1926, and 1913. N e w item s (or
new index groupings con sisting primarily o f new item s)
introduced into the index after 1967 cannot be calcu ­
lated on the 1967 b ase. Such in d exes are published with
separate b ases related to the date o f introduction.

Weights
The WPI w eights represent the total net selling value
o f com m odities produced ^ p ro cessed , or im ported in
this country, including A laska and H aw aii, and flow ing
into primary m arkets. T he values are f.o .b . production
point and are ex clu siv e o f ex c ise taxes. The value o f
interplant transfers, military products, and good s sold
at retail directly from producing establishm ents also are
exclud ed . Thus the definition o f the w eights conform s
to the universe definition.
E ach com m odity price series is considered represen­
tative o f a class o f prices and is assigned its ow n w eight
(the shipm ent value o f the com m odity) plus the w eights
o f other related com m od ities not directly priced but
w h o s e p r ic e s are k n o w n or a ssu m e d to m o v e
sim ilarly.12 The assignm ent o f price m ovem ents for
priced com m odities to th ose for w hich quotations are
not obtained is referred to as im putation. For som e
co m m o d itie s — su ch as sh ip s and som e k inds o f
custom -m ade m achinery — it is not possible to obtain
direct m easures o f price m ovem ent. The w eigh ts for
such item s are assigned to other com m odities or groups
o f com m od ities for w hich prices are available. U su ally,
this assignm ent is m ade to priced com m odities that
have a similar m anufacturing p ro cess, on the assum p­
tion o f similar price m ovem en ts. Price m ovem ents for
attachm ents and parts for certain m achinery often are
im puted to the m achine itself.
The B ureau’s p olicy is to revise the WPI w eights
periodically w h en data from the industrial cen su ses
b ecom e a v a ila b le.13 T he w eigh ts beginning in 1976 are
based on the 1972 industrial ce n su ses. In dexes for 1947
through 1954 are based primarily on the 1947 cen su ses.
In the January 1955 in d ex, adjustm ents w ere made to
align the major group w eight totals w ith 1 9 5 2 -5 3 averu C o n v ersio n o f in d ex es from the 1967= 100 b a se to the 1 9 5 7 -5 9
b a se m ay be a cco m p lish ed b y m ultiplyin g the 1967= 100 b ased ind ex
b y that item ’s 1967 annual (12-m onth) average (1957-59= 100) and
d ividing the result by 100. A vera g es for 1967, calcu lated from 12
m o n th s ’ d a ta , an d a p p ea r in g in th e D e c e m b e r 1968 is s u e o f
“ W h o lesa le P rices and P rice In d e x e s’’ m ay be used for base con ver­
sion .
12B efo re the 1952 rev isio n (calcu lated b ack to 1947), priced item s in
the in d ex w ere w eig h ted o n ly b y their o w n m arket valu es.
Digitized for 13In gen eral, the c e n su s e s are co lle cte d at 5-year intervals.
FRASER



115

age shipm ent values as reported in the Annual Surveys
o f M anufactures. W eights based on the 1954 census
shipm ent values w ere introduced in January 1958.
From 1961 through 1966, w eights w ere based on 1958
censu s values, and from 1967 through 1975 they were
based on 1963 censu s values. In January 1976 new
w eights from the 1972 industrial cen su ses w ere incor­
porated.
The Bureau publishes the relative im portance o f each
item in the WPI rather than the actual values used as
w eights. The relative im portance o f an item represents
its basic value w eight used in the index, including impu­
tations, m ultiplied by the relative o f price change from
the w eight date to a later date; the result is expressed as
a percent o f the total for all com m odities or for som e
index grouping.14

Imputing Missing Prices
W henever price data are not available for a particular
m onth, it is n ecessary to estim ate the m issing price for
u se in the calculation o f the index. For com m odities in
the farm products and p rocessed food s groups, out o f
the market season ally, the price in off-season is im­
puted from the com bined m ovem en t o f the related
com m odities for w hich prices are available for the two
periods being com pared. For other com m odities, delin­
quent prices are held unchanged from the preceding
month.
Prices for som e custom -m ade item s are reported to
B L S as estim ates. For exam ple, prices for fabricated
structural steel for buildings and bridges are obtained
from producers w ho reprice, each m onth, steel o f the
sam e specifications as used in structures on w hich they
had been engaged at the tim e pricing for the WPI was
initiated. E levators, normally sold including installa­
tion, are reported f.o .b . plant — i.e ., excluding trans­
portation and installation co st — for use in the WPI.
A n a ly s is a n d P r e s e n ta tio n
The m onthly WPI is published first in a press release,
usually issued in the first w eek o f the month follow ing
the reference month. Indexes are show n for all groups
and subgroups as w ell as for All C om m odities, Farm
Products and Processed F ood s and F eeds com bined,
and Industrial C om m odities. A nalytic tables also are
included w hich sh ow m onthly percent changes for the
preceding 12 m onths for major groupings, and selected
season ally adjusted and unadjusted changes for som e
stage o f processing classification s. A brief description
and analysis o f the cau ses o f price m ovem ents are in­
cluded. The m onthly detailed report, issued som e tim e
after the p ress re le a se , carries all data for w h ich
14T h e u se o f relative im portance data to con stru ct in d ex es for
groups o f prod u cts is d isc u sse d in the 1973 su pp lem en t o f ‘ ‘W h olesale
P rices and P rice In d e x e s .’’ R elative im p ortan ces as o f D ecem b er for
all W PI item s are published in each annual su pp lem en t.

116

BLS HANDBO O K OF METHODS

w h olesale price indexes are published, including item
ind exes and all special group in d exes. Prices for many
individual com m odities also are included. This report
includes a more com prehensive an alysis than that given
in the press release. Annual sum m aries appear in the
annual supplem ents. In addition, num erous historical
tabulations at various lev els o f detail are available on
request.
The m onthly in d exes are published as final. B egin­
ning with data for January 1967, on ly major corrections
are made and published im m ediately at the tim e the
error is d iscovered. Sub seq u en tly, all corrections re­
ported during the year are m ade, and the ind exes for all
12 m onths and the annual average are republished as
revised.
S ele c te d se a so n a lly adjusted in d ex e s or p ercen t
changes are published in the p ress release and m onthly
detailed report. A bout 50 in d exes w hich historically
show significant and con sisten t seasonal m ovem ent are
presented each m onth season ally adjusted and unad­
ju sted . T he applicable season al adjustm ent factors are
available on request from the Bureau. T h ese factors are
recalculated annually to include m ore recent data, and
the m ost recent set o f factors m ay differ som ew hat from
th ose p reviously in use.
U s e s a n d L im it a t io n s
The W PI is used by governm ent and private research
agencies for many purposes, including market analysis,
escalation o f long-term purchase and sales contracts,
and form ulation o f m onetary p olicies. It is u sed , as w ell,
as an indicator o f econ om ic trends.
A 1961 survey o f users o f the WPI revealed that m ore
than on e-h alf u se the All C om m odities index as a gen ­
eral econ om ic indicator. A bout 40 percent u se that
index or its com ponents to com pare w ith their selling or
buying prices. The survey revealed that o ver 10 billion
dollars (in term s o f unexpired value) in long-term con ­
tracts for purchase o f material or lea se o f industrial
property are escalated according to changes in the total
index or its com pon en ts. G overnm ent agencies and
private research groups also u se the com ponent series
in deflating value data in preparation o f the gross na­
tional product estim ates and in studies o f econom ic
grow th.
T he ind ex also is u sed by buyers and sellers o f com ­
m odities — purchasing agents and sales managers. In
m ost o f th ese ca se s, it is not the All C om m odities index,
but rather the group indexes and the individual price
series that are em ployed . B uyers o f com m odities are
able to ch eck both the am ounts w hich they pay for
goods and the general m ovem ent o f their purchase
prices against the index. The u se o f the index for ch eck ­
ing ab solu te price lev els is lim ited substantially, h ow ­
ever. T he B ureau’s main goal has b een to m easure the
direction
 and am ount o f change, and only incidentally


The index, as a m easure o f general and specific price
trends, also is used w idely in budget making and re­
v iew , both in governm ent and in industry; in planning
the co st o f plant expansion programs; in appraising
inventories; in establishing replacem ent costs; etc.
C om ponents o f the index also are used in LIFO (LastIn, First-Out) inventory accounting by som e organiza­
tions.
A lthough the WPI often is used to m easure change in
purchasing pow er o f the dollar, it should not be used to
m easure changes in general purchasing pow er, prices at
retail, securities p rices, etc. Com parisons b etw een the
level o f the W PI, the C onsum er Price Index, and the
indexes o f prices o f farm products show relative change
from a base period, but com parisons o f the index levels
should not be used as a m easure o f the actual margins
b etw een farm prices and manufacturing or betw een
manufacturing and retail. Its com m odity classification
structure should be borne in mind w hen using it to
m easure price changes for industries, many o f which
m ake diverse products not classified as their “ pri­
m ary” p rod u cts.15
A gain, as in other m easures, the WPI has som e lim i­
tations even in the field for w hich it is conceptually
designed. Segm ents o f the index are used as deflators o f
gross national product data, but gaps in WPI coverage
leave considerable areas for which deflators have not
been provided.
The WPI is based on a purposive judgm ent sam ple.
The A ll C om m odities Index can be assum ed to be more
reliable than a com ponent group index, in general.
A lso , it can be assum ed that the reliability o f the index
has increased over tim e as the sample has exp an d ed .16
A s the econ om y has produced an increasing proportion
o f fabricated finished goods (w hose price changes are
relatively infrequent), over the years, m ovem ent o f the
WPI has becom e som ew hat sm oother. Currently, new
products are added each year. In earlier d ecad es, there
were also major additions o f large numbers o f new item s
at one tim e, in com m odity areas previously underrepre­
sented. T hese sudden expansions could have made it
appear that prices had stabilized suddenly.
To the exten t that quality im proves (or deteriorates)
over the years, the index errs w hen no adjustment is
m ade. H ow ever, the Bureau m akes suitable adjust­
ments whenever possible. Assuming quality improve­
m ent, the in d e x ‘w ould have an upward bias if direct
com parison w ere m ade b etw een unim proved and im ­
proved articles. If, on the other hand, such changes
w ere con sisten tly m ade by linking, a downward bias
w ould result. Since the Bureau has not adopted either
m ethod ex clu siv ely , and in m any instances tries to
evaluate the changes brought to its attention, the bias
that may exist is considered to be small. H ow ever, no
m easure o f its magnitude is available.
15S e e ch . 15 o n Industry P rice In d e x es.
16T h e sam p le o f p riced item s dou bled in 1952 to abou t 1,850 item s
C reased to about 2,500 since then.

W HOLESALE PRICES

117

T e c h n ic a l R e f e r e n c e s
Number
1.

2.

3.

4.

C unningham , F ran cis S ., “ T h e U s e o f Price In d exes in E s­
calator C o n tra cts,” Monthly Labor Review, A u gust 1963, pp.
9 4 8 - 9 5 2 Reprint N o . 2424.
A statem en t o f the u se o f the W h olesale and C on su m er
Price In d ex es in escalatin g pu rchase and sales con tracts and
w a g e s, w ith som e sp ecific su ggestion s and pitfalls noted.
E v a n s, W . D u an e and H offen b erg, M arvin, “ Input-O utput R e­
lation s and A p p raisal,” in Studies in Income and Wealth,
N e w Y ork , N ation al B ureau o f E co n o m ic R esearch , (1955)
V o l. 18.
A statem en t o f the con cep tu al fram ew ork, data, pricing
problem s and sign ifican ce in eco n o m ic an alysis o f the U .S .
G ov ern m en t’s interindustry statistical study o f 1947.
E v a n s, W . D u an e and H offen b erg, M arvin, ‘ ‘The Inter-Industry
R elation s Stu dy for 1947,” The Review of Economics and
Statistics, M ay 1952, pp. 9 7 - 1 4 2 .
A d escrip tion o f sc o p e , u s e s , and m ethod o f the U .S .
G o v ern m en t’s interind ustry statistical study o f 1947. In­
c lu d es d isc u ssio n s o f com putational problem s, areas o f u se,
data req uirem en ts, e tc.
N atio n a l Bureau o f E co n o m ic R esearch . The Price Statistics of

the Federal Government: Review Appraisal, and Recom­
mendations, W a sh in g to n , D .C ., N B E R G en eral S e r ie s,

5.

6.

N u m ber 73 (1961).
A n appraisal o f p rice sta tistics o f the F ederal G overnm ent
b y the P rice S tatistics R e v iew C om m ittee o f N B E R , coverin g
u s e s , c o n c e p ts, co lle ctio n , and p u blication, sam pling, and
other a sp ec ts o f the C on su m er P rice In d ex, W holesale Price
In d ex , In d ex o f P rices Paid by F arm ers, and other price
m easu res.
S ea rle, A llan D ., “ W eigh t R e v isio n s in the W h olesale Price
In d ex , 1 8 9 0 -1 9 6 0 ,” Monthly Labor Review, February 1962,
pp. 1 7 5 -1 8 2 .
H isto ry o f w eigh t ch an ges and w eighting co n c ep ts, from
in cep tio n o f the W h olesale P rice In d ex.
U .S . C o n g ress, Joint E co n o m ic C om m ittee. Government Price

Statistics: Hearings: Subcommittee on Economic Statistics,

7.

8.

87th C o n g ress, 1st s e s s ., Part 1, Jan. 2 4 ,1 9 6 1 ,526 pp .; Part 2,
M ay 1 - 5 , 1 9 6 1 ,2 6 5 pp.
Part I p resen ts the rep ort, Price Statistics of the Federal
Government, prepared b y the N B E R (q .v .); Part II con tain s
sta tem en ts o f private and govern m en t eco n o m ists, including
th e r e sp o n se o f E w a n C la g u e, form er C o m m issio n er o f
L ab or S ta tistics.
U .S . D epartm en t o f L abor, Wholesale Prices, 1890 to 1899
(B ulletin 27, 1900).
D e scrib es an inquiry into the c o u rse o f w h o lesa le p rices for
the p u rp ose o f continuin g the stu d y con tain ed in the R eport
o n W h o lesa le P rices, W ages, and Transportation m ade b y the
S en a te C om m ittee on F in an ce, M arch 3 ,1 8 9 3 (pp. 2 3 7 -3 1 3 ).
U .S . D epartm en t o f L ab or, Course of Wholesale Prices, 1890 to
1901 (B ulletin 39, M arch 1902).
D e scrib es U n ited S tates S en a te F in an ce C om m ittee in d ex
(p p . 2 0 5 - 2 1 1 ) , an d D e p a r tm e n t o f L a b o r in d e x (p p .
2 1 2 -2 4 3 ).




Number
9.

10.

U .S . D ep a rtm en t o f L ab or, B ureau o f L abor S ta tistic s
Wholesale Prices and Price Indexes, 1954 -56 (Bulletin \2 \ 4 ,
M ethod o f Calculating Special Group In d exes, (pp 1 2 -1 3 )
C alculating R elative Im portance D ata (p. 14), D escription o f
In d ex es b y Stage o f P rocessing (E conom ic Sector Indexes)
(pp. 1 5 -2 2 ); A P ossible E ffect on W eight R evisions (p. 7)
U .S . D epartm en t o f L abor, Seasonal Adjustment FactorsWholesale Price Index: S elected Series 1 9 4 8 - 1%1 (B L S Bul­
letin 1379, 1963).
S ea so n a l adju stm ent factors for 183 com m od ities and
com m od ity groups, and description o f B L S seasonal adjustm ent m eth od.

11.

U .S . D epartm en t o f L abor, Wholesale Prices and Price In­
dexes, 1957, B L S B ulletin 1235 (1958).
In d ex es by D urability o f Product (E conom ic Sectors by
D urability o f P roduct), pp. 1 1 -1 4 .

12.

U .S . D e p a r tm en t o f L a b o r , B u reau o f L ab or S ta tistic s,
Wholesale Prices and Price Indexes, 1958, B L S Bulletin 1257
(1959).
D e scrib es Su pp lem en tary Inquiry on W holesale Price Re­
ports (d iscou n t stu d y), pp. 1 0 - 1 2 , and January 1958 R evision
o f the W eighting Structure, pp. 1 4 -1 6 .
U .S . D epartm en t o f L abor, Wholesale Prices and Price In­
dexes, 1961, (B L S B u lletin 1382, 1964).
January 1961 R ev isio n o f the W eighting Structure, pp.
1 4 -1 6 .
U .S . D e p a r tm en t o f L a b o r , B u rea u o f L ab o r S ta tistic s,

13.

14.

Wholesale Prices and Price Indexes, January 1967 (final) and
February 1967 (final).

15.

D e scrib es introduction o f n ew 1963 w eigh t values and
m ajor reclassification effected in January 1967.
U .S . D epartm en t o f L abor, Wholesale Prices and Price In­

dexes, January 1970.

16.

D e sc r ib e s d e r iv a tio n and u s e o f r ela tiv e im portances
(w eigh ts) and lists all W PI w eigh ts for D ecem b er 1969.
U .S . D epartm en t o f L abor, Wholesale Prices and Price In­

dexes, January 1971.

17.

18.

19.

20.

In trod uces the n ew standard referen ce b a se, 1967=100,
and d escrib es con v ersio n from the form er b ase.
U .S . S en a te, Wholesale Prices, Wages, and Transportation,
S en ate R eport N o . 1394, P a r ti, “ T h e A ldrich R ep ort” (1893).
C on tain s a sum m ary o f th e co m p lete S en ate report on
w h o lesa le p rices, on w a g es, and on transportation m ade in
resp on se to a S en ate resolu tion o f M arch 3, 1891.
S earle, A llan D ., “ T ow ard C om p reh en sive M easurem ent o f
P r ic e s,” Monthly Labor Review, M arch 1971, pp. 9 —22.
D e scrib es h o w a general price in d ex cou ld be co n stru cted ,
w h at it sh ould accom p lish , and virtu es and lim itations o f
variou s app roaches.
C lorety, Josep h A ., Jr., “ M easurin g C h anges in Industrial
P rice s,” Monthly Labor Review, N o v em b er 1970, pp. 3 0 - 3 6 .
R elates Stigler-K indahl stu dy (N B E R , 1970) to B L S pro­
gram.
T ib b etts, T h om as R ., “ Im p rovem en ts in the Industrial Price
P rogram ,” Monthly Labor Review, M ay 1975, pp. 5 1 - 5 2 .

BLS HANDBOOK OF METHODS

118
BLS 1810
Rev. Feb. 1974

Form Approved
O.M.B. No. 44-R0602
U.S. DEPARTMENT OF LABOR
Bureau of Labor Statistics
Washington, D.C. 20212

Commodity
Code No.

PRICE INFORMATION SHEET
FOR
COMMODITIES SOLD IN PRIMARY MARKETS IN THE U.S.
The Bureau o f L abor S ta tistics w ill h o ld all inform a­
tion furn ish ed b y the respon den t in str ic t confidence.

Name of Firm
Division or Affiliate
Address: Street

City & State

Information Authorized by (Nam e)

Title

Information Furnished by (Name)

Title

Telephone No.

Mail Schedule to (R eporter)

Title

Telephone No.

Address: Street

City & State

Zip Code

I.

CO M M O DITY D E S C R IPT IO N




(include style number, model number, lot number, grade, brand, etc.)

Zip Code

W HOLESALE PRICES
II.

119

BASIS O F R EPO R TED PRICE

Unit Quoted
Size of Order
Class of Seller (m fr., im porter, etc.)

Class of Customer (wholesaler, user, etc.)

Shipping Terms (f.o .b ., fa c to ry or shipping p o in t, frt. allow ed, delivered, etc.)

Type of Carrier Most Frequently Used (rail, truck, oth er)

Common Carrier □
Company Owned □

Other

Prices preferred b y BLS are th e actual n et transaction prices f.o .b . fa cto ry . If it is im p ossib le to furnish su ch data,
furnish d isco u n ts w h ich c o u ld b e used to arrive at the preferred data.
I f y o u provide oth er than th e actual transaction p rice, in d icate th e ty p e o f price fu r n ish e d :__________________________ .

III. D ISC O U N T S A N D A LLO W AN CES APPLICA BLE TO R E P O R T E D PRICES

(Check the box provided for any which have been deducted to obtain the reported prices.)
Quantity Discount (based on size o f order)

□
Trade Discount

□
Cash Discount (indicate term s)

□
Seasonal Discount (indicate term s)

□
Other Discounts (R ebates, Cum ulative V olum e D iscounts, A llow ances, Free Deals, etc.,) Explain fully:




BLS HANDBOOK OF METHODS

120
IV .

PRIC E H IST O R Y F O R CO M M O DITY D E S C R IB E D

(Provide the price history hack through_______ for the commodity described previously in sections I and II.)
Price

Date

Remarks

V.

G E N E R A L CO M M O DITY IN FO R M A T IO N

Type of package, if applicable
Is a refund allowed for returnable containers?
Based on quantity, approximately what percent of your shipments of this commodity during the past year were inter-plant transfers (captivep.

List any duties or excise taxes which are applicable to the reported prices. If tax is included in the reported price, explain how to calculate the price
excluding the tax.

Other remarks:

V I.
Other mfr. (O.E.M.
or assembler)

A PPR O X IM A T E P E R C E N T A G E O F SA L E S TO EAC H C L A SS O F C U STO M ER
Distributor

Jobber

Wholesaler

Retailer

User

Exporter

Sales

IF A N Y Q U E ST IO N S A R IS E C O N C E R N IN G TH E F O R M , P L E A SE CO NTA CT:

D ate o f In terview




Total

100%

(a pp ro x .%)

Interview er

Other
(specify)

W HO LESALE PRICES

121
Form Approved
O.M.B. No. 44R0194

BLS473
(Rev. Jin. 1974)

U.S. DEPARTMENT OF LABOR
Bureau of Labor Statistics
Washington, D.C. 20212
INFORMATION FOR THE WHOLESALE PRICE INDEX

ALL REPORTS WILL BE HELD IN CONFIDENCE

Dear Sir:
The price data which you provide is used in computing the Wholesale Price Index which is the
officially accepted indicator o f primary market price movements. The index is widely used by
industry and government.
These voluntary reports, submitted by you and other businessmen, are the major source o f infor­
mation used in preparing this index. The information you provide is strictly confidential and open
to inspection only to sworn employees o f the Bureau o f Labor Statistics.
Please use the enclosed envelope, which requires no postage, for returning this schedule.
continued cooperation is greatly appreciated.
COMMISSIONER OF LABOR STATISTICS

IMPORTANT INSTRUCTIONS
In the boxes provided on the other side, please be sure to indicate all changes in
COMMODITY DESCRIPTION, BASIS OF QUOTATION, DISCOUNTS, ALLOWANCES, AND TAXES
that may have occurred since your last report.
Your cooperation in keeping all information current
is a great aid in computing a reliable, accurate Wholesale Price Index.
Remarks




Your

BLS HANDBOOK OF METHODS

122

INFORMATION FOR THE WHOLESALE PRiCE INDEX
Code No.
1. COMMODITY DESCRIPTION (P a indicateall ch n e
le se
a g s.)

CHANGES
Give date, nature, and
estimated value of change

2. BASIS OF QUOTATION (P a indicateall ch n e
le se
a g s.)

Date and nature of change

Unit________________
Class of seller and customer
Size of order__________
Shipping terms________
Other (Specify)________
3. DISCOUNTS, ALLOWANCES, AND TAXES Indicate all discounts, allowances, and taxes applicable to above-basis otquotation. This information is needed to arrive at the ACTUAL SELLING PRICE. (P a indicateall ch n e
le se
a g s.)
,, ,
^
YES
Quantity discount
Trade discount
Cash discount
Seasonal discount
Other discount
Other charges

Date and nature of change

NO

Have any indicated
> discounts been deducted
from the reported price?
Have any of these
been included?

Excise taxes

4. PRICE INFORMATION For the commodity described in item 1, please enter below the current price for the date indicated, on the basis quoted in
item 2.
Price as of Sept. 9,1975
PRICING
DATE

PRICE

DATE OF PRICE
CHANGE (If any)

PRICING
DATE

PRICE

Oct. 14,1975

Apr. 13,1976

Nov. 11,1975

May 11,1976

Dec. 9,1975

June 15,1976

Jan. 13,1976

July 13,1976

Feb.10,1976

Aug. 10,1976

Mar. 9,1976

DATE OF PRICE
CHANGE (If any)

Sept. 14,1976

r

n

PERMANENT OFFICE RECORD
KINDLY RETURN
THIS FORM PROMPTLY

L




J

Chapter 15.

Industry Price Indexes

Background
A part o f the B L S project on interindustry econom ics
in the early 1950’s w as the preparation o f a series o f
industry price in d ex es, based upon data collected for
the W h olesale Price Index (W PI), covering the period
1947 through 1953. The new ind exes w ere n ecessary to
revalue bills o f good s and industry output, and w ere
calculated by regrouping the WPI into an interindustry
(input-output) classification structure. An additional
set o f product cla ss in d exes w as com puted in 1959 for
the Bureau o f the C ensus for u se in their 1958 pro­
duction index benchm ark. This latter set w as used to
deflate the shipm ent values in C ensus product cla sses
w here actual production data w as either lacking or un­
satisfactory. A gain, th ese w ere essentially ind exes o f
com m odity prices, classified as primary to a given
ind u stry.1
The need for a B L S program o f published Industry
Price Index tim e series becam e increasingly apparent in
1960 and 1961 w hen the Price Statistics R eview C om ­
m ittee o f the N ational Bureau o f E con om ic R esearch
recom m ended to the Bureau o f the B udget that the
basic ob jectives o f an industrial price program should
be com p reh en siven ess, m axim um detail in reporting,
and groupings m ost useful in econ om ic analysis. The
com m ittee stated “ . . . It seem s desirable that the
subclassification should aim at fitting into the Standard
Industrial C lassification .” 2
In 1962, the Bureau o f Labor Statistics initiated the
d evelop m en t o f industry price ind exes. B eca u se o f the

lrThe cla ssifica tio n o f estab lish m en ts in to in d u stries, in this pro­
gram , fo llo w s the g u id elin es esta b lish ed b y the O ffice o f M anagem ent
and B u d get in its Standard Industrial C lassification (SIC) sy stem , as
d efin ed in the 1972 ed ition . U n d er this cla ssification sy stem , related
produ cts or serv ices are grouped togeth er and g iv en an industry cod e
num ber (co n sistin g o f 4 digits). E v ery estab lish m en t is assign ed to the
industry in w h ich its m o st im portant prod u cts or ser v ic es, in term s o f
v a lu es, are cla ssified . M any ind ustries con tain estab lish m en ts w h ich
produ ce significan t q u an tities o f g o o d s and se r v ic es that are classified
in other ind ustries. T h ese g o o d s usu ally are referred to as “ secon d ary
p ro d u cts.”

2
Government Price Statistics, Hearings before the Subcommittee
on Economic Statistics, o f the Joint E co n o m ic C om m ittee, C on gress
o f the U n ited S ta tes, Part I, January 2 4 ,1 9 6 1 , page 64. A lso se e report
o f U n ited N a tio n s E co n o m ic and S ocial C ou ncil; Problems and

Methods in the Gathering of Representative and Comparable
Wholesale Price Series, E /C N . 3/264, 15 M arch 1960, ch . II.



project’s sco p e, the program w as seen as a long-run
activity to be accom plished in several stages o f d e­
velopm ent. The initial phase w as d evoted to a study o f
potential and conceptual data collection and conversion
problem s.
The first indexes used gross shipm ent w eights and
com m odity prices from the WPI to construct output
price indexes for the mining and manufacturing sectors.
The developm ent o f output price indexes for the trans­
p ortation , co m m u n ica tio n s, and so m e oth er n on ­
m anufacturing ind u stries is now in p rogress. The
Bureau now publishes price indexes for total railroad
freight and selected com m odity groupings, based upon
th e S tan d ard T ra n sp o r ta tio n C o m m o d ity C o d es
(STCC), with data available from January 1969. Input
price in d exes, i.e ., th ose representing the price o f ma­
terial purchases, are planned for future developm ent.

Concepts
An industry price index is a com posite index con sist­
ing o f price series that follow the general econom ic
pattern o f a particular industry. It includes products,
som etim es o f dissim ilar typ es, grouped by industry o f
origin. T hus, it differs from the W holesale Price Index,
w hich is based primarily upon groupings o f similar
com m odities. T hese industry indexes may be output
price in d exes or input price ind exes, based upon either
the products and services sold or the products and
services purchased by an industry. An output price
index for a given industry represents price indexes for a
sam ple o f the products produced by that industry, aver­
aged together according to the relative im portance o f
production o f each sam ple product to the industry. An
input index for an industry co n sists o f an aggregation o f
price ind exes for a sam ple o f the com m odities and ser­
vices purchased by the industry, averaged together ac­
cording to the relative magnitude o f the purchases.
The direction o f the Bureau’s work has been toward
tw o sets o f output price indexes. The first set, the
industry price ind exes, u ses w eights o f gross shipments
o f products “ m ade-in-the-industry” for the deflation o f
industry shipm ents. The second set, the product class
in d ex e s, (to be used for deflating C ensu s product
cla sses) is output price indexes o f industry shipm ents
cla ssified by industry, but w eigh ted by shipm ents
o f the product produced anyw here in the econom y.

123

124

BLS HANDBOOK OF METHODS

T h e se c o n d s e t ’s prim ary u se is in in p u t-o u tp u t
an a ly sis.3

Universe
The Standard Industrial C lassification (SIC) system ,
as revised in 1972, is currently used to define the scope
o f the industry price index universe. This system en­
com p asses all products covered in the SIC as revised in
1972. R elated products or serv ices are grouped together
and assigned a d ivision , tw o , three, or four digit indus­
try cod e according to the lev el o f industrial detail con si­
dered. A t the present tim e, the sco p e o f pricing is al­
m ost entirely restricted to the WPI com m odity co v ­
erage due to the u se o f WPI price data.
In theory, if price indexes are to parallel industry
output data, the in d exes should cover the total output o f
each industry including the value o f primary and seco n ­
dary shipm ents, interplant transfers, the value o f sales
to all c la sses o f cu stom ers, and the value o f industrial
services. T hey should also include the value o f sales for
export p urposes, but exclu d e the value o f e x c ise taxes
and co sts o f transporting finished good s to purchasers.
This approach is con sisten t w ith the “ total activity”
coverage o f statistical series on em ploym ent and pro­
duction.
In p ractice, industry price in d ex es are currently
lim ited in scop e to the value o f primary and secondary
shipm ents. Total product shipm ents are used (including
interplant transfers) w hich inherently include ship­
m ents to all custom ers and the value o f exported prod­
ucts. The value o f industrial services is not currently
covered in the universe.
T heoretically, input price in d exes o f materials con ­
sum ed in production should co v er the total material
inputs o f the industry. This figure w ould include im­
ports for consum ption, transportation, d elivery costs
and ex c ise taxes. In practice, the material input indexes
will probably cover only the total material inputs o f an
industry. Since values for im ports, transportation, d e­
livery c o sts and e x c ise taxes are difficult to obtain on an
industry by industry b asis, the Bureau is only at the
prelim inary stages in producing such material input
in d ex e s.4

Prices and Base Period
Prices used in the present industry price ind exes are
generally th o se used in the W P I.5 Industry price in3F or a d isc u ssio n o f the variou s u ses o f input-output a n alysis, se e
“ Input-O utput Structure o f the U .S . E co n o m y 1967,’’ Survey of

dexes ideally w ould extend pricing to all classes o f cu s­
tom ers, including retail, for inclusion in the output in­
d exes. B uyer’s p rices, including the value o f shipping
co sts, would be used for input indexes and w ould be
representative o f the particular mix o f products pur­
chased by the buying industry. Currently, price data is
limited in scop e to that obtained from the WPI w hich is
conceptually lim ited to the actual transaction prices o f
individual sellers.
The current reference base period for the Industry
Price Indexes is 1967 = 100.

Classification
The Standard Industrial Classification provides the
basis for the classification schem e used in constructing
industry price ind exes. W ithin this fram ework, indi­
vidual products are given a 7-digit code by the Bureau o f
C en su s.6 The product ind exes are then aggregated to
5-digit product cla sses. U sin g these product class in­
dexes, 4-digit industry indexes are obtained using “ madein-the-industry” w eights. In concept, industry indexes
can be aggregated to fit the sectoring plan o f the latest
Input-Output m o d el.7 H ow ever, existing price co v ­
erage is restricted to the manufacturing and mining
sectors, and it is inadequate, ev en in th ose tw o sectors,
for reliable estim ates at the 2- and 3-digit SIC levels.

Sampling and Estimating Procedures
Sampling
A t the present tim e, the Industry Price Index pro­
gram depends alm ost entirely upon price data primarily
collected for the W holesale Price Index. T hus, expan­
sion o f data for the industry price index has depended
on the expansion o f the WPI. This expansion is gener­
ally directed at th ose industries w hich are considered to
be m ost significant, based on such standards as value o f
shipm ents, total em ploym ent, market im portance, etc.
U nder th ese general criteria, particular com m odities,
specifications, and respondents are selected judgm entally for the WPI and industry price indexes on the basis
o f volum e, market share, and price leadership.
Price data used in com puting an industry output price
index should be representative o f the output o f the
industry, nam ely, o f the value o f products made in
plants classified in the industry but excluding prices o f
products primary to the industry but made in plants
classified in other industries. A s a rough guide to the

Current Business. F ebruary 1974, p age 24.
4F or a th eoretical d iscu ssio n o f input price in d ex e s, se e On the
Theory of Industrial Price Measurement: Input Price Indexes by
R ob ert B . A rch ibald, (B L S w orking paper 48, 1975).
5S e e chapter 14, W h o lesale P rices, for a detail d iscu ssio n o f the
 in the W h o lesale P rice In d ex.
prices u sed



®The SIC p rovid es n o produ ct c o d e s.
^The Input-O utput m odel referred to is that com p iled b y the B ureau
o f E c o n o m ic A n a ly s is , U .S . D e p a r tm e n t o f C o m m e r c e . S e e
“ Input-O utput Structure o f the U .S . E con om y: 1967, “ Survey of
Current Business, F ebruary 1074, pp. 25-32 and 36.

INDUSTRY PRICE IN DEXES
adequacy o f sampling techniques, the im m ediate objec­
tive is to represent at least 50 percent o f the total
wherever-m ade value o f the com m odities included in
each 5-digit C ensus product class. At the 4-digit indus­
try lev el, the publication criteria are as follow s. For
those product cla sses w hich m eet the 50 percent stan­
dard, the primary production for that industry is added
to the production for all published secondary products.
This aggregation is com pared w ith the total value o f
primary and secondary shipm ents for the industry. A p­
proxim ately 85 percent o f the total should be repre­
sented in order to publish a particular industry index.

Weights
Since January 1976, w eigh ts for the output indexes
are the 1972 value o f shipm ents obtained from the Cen­
sus o f M anufactures, the C ensus o f Mineral Industries
and data o f the U .S . Departm ent o f Agriculture. V alues
include th ose for interplant transfers, goods p rocessed
and consum ed in the sam e establishm ent, and goods
sold for export. V alues o f im ported com m odities are
not included. The difference in the scop e o f the w eights,
as com pared with the W PI, stem s from the ob jective in
this sy stem to m atch price data with the sco p e o f
dom estic industry production.
Each priced product actually represents a class o f
com m od ities and is assigned its ow n w eight plus the
w eights o f other products not directly priced in the
index but w h o se prices are know n or assum ed to m ove
similarly. V alues for unpriced products w hich cannot
be assigned to a sp ecific priced com m odity are imputed
to the average m ovem en t o f the product cla sses in
which they fa ll.8
For u se in deflating industry shipm ents, the 4-digit
(SIC) Industry In dexes are derived from 5-digit product
class in d exes w eighted together by their shipm ents
value for the particular industry, i.e ., the “ made-inthe-industry” value.

Formula and Calculation
A m odification o f the L aspeyres fixed-w eight for­
mula is used. The form ula is:
Ii = [2 (Q aPo) (Pi/Po)

I X

QaPo] x 100

w here Ii is the current index value for a given grouping,
Po is the price o f an individual product in the base year
1967, Pi is its price currently, and Qa is the quantity
shipped during the w eight-base year 1972. Form erly,
the w eight-base period w as 1963. In succeeding years,
new w eights will be introduced w h en ever w eights are
8T his proced ure is the sam e as that em p loyed in the W P I. H o w ev er,
as the p rodu ct c la s se s are d efin ed d ifferen tly, an unpriced com m od ity
m ay h ave a different price m o vem en t im puted to it in the Industry

In dex program than it has in the W PI.



125

revised for the com prehensive WPI.
In actual practice, the calculation may be som ewhat
more involved than indicated by the simple formula
a b o v e. For exam p le, indexes used for deflating industry
shipm ents values should em ploy product w eights based
upon values o f com m odities made within the same in­
dustry. Since the C ensus data for such values are avail­
able only at the 5-digit (product class) level and not in
greater detail, it is n ecessary first to construct product
c la s s in d e x e s b a se d u p on to ta l o u tp u t w e ig h ts
(wherever-m ade) which are available for detailed prod­
ucts. Then, using 5-digit m ade-in-the-industry w eights,
the product class indexes are com bined to the 4-digit
industry level.

Analysis and Presentation
The published indexes for selected 5-digit product
classes and 4-digit industries con sist o f annual averages
for the period 1957 through 1964, and cover 44 manufac­
turing and eight mineral industries.
M onthly indexes are available beginning in January
1965 for the sam e limited number o f industries and
products. Indexes for additional industries are intro­
duced as im proved sampling qualifies them for publica­
tion. B y January 1975, indexes were being published for
160 four-digit industries and 453 five-digit product
classes.

Uses and Limitations
Price statistics organized along industrial lines have
particular relevance to studies o f econom ic growth,
p r o d u c tiv ity , and o th e r ty p e s o f in d u stria l and
econom ic analysis w here the em phasis is on industrial
structure rather than market or com m odity-use classifi­
cation.
W hether a price index m eets a given specific need
depends largely upon its com m odity coverage and its
weighting structure. An important use o f an output
index w eighted by gross shipm ent values is to deflate
values in order to arrive at m easures o f output in con ­
stant dollars. M ost m easures o f output and productivity
rely primarily upon physical quantity data for the vari­
ous products o f an industry, but in cases w here quantity
data are not available, deflated values can be used if
suitable price indexes are available for use as deflators.
D eflated value data may serve as a check on production
indexes prepared from quantity data and unit-value
w eights. There are many sectors o f the econom y for
which the analysis o f industrial output is severely limited
becau se appropriate price indexes are not available.
The process o f deflation provides a m eans q f obtain­
ing an estim ate o f quantity change from data available
on total dollar value and a price index. If the dollar
values th em selves are divided by the price index, the

BLS HANDBOOK OF METHODS

126

resulting dollar values express the sales value in terms
o f constant dollar in the base period o f the index. Or an
index o f dollar volum e can be divided by the price index
to obtain a production in d ex .9
The output indexes also may be used for com paring
price m ovem ents with other industry-based statistical
m easures such as em ploym ent, earnings, productivity,
etc. In lieu o f input in d exes, price indexes consistent
with total shipm ents w eights can be useful for deflating
industry inputs. For exam ple, the appropriate index for
deflating the value o f aluminum purchased by an indus­
try w ould be the index w h ose com ponents represent
shipm ents o f aluminum to buyers in this industry rather
than the aggregate output o f the primary aluminum
industry.
Input price ind exes will be useful to research depart9It can be sh ow n that d ivision o f the valu e in d ex by the L asp eyres
(b ase-y ea r-w eig h ted ) price in d ex yield s a produ ction index o f the
P a a sch e (current-year-w eight) form . D iv isio n by the P aasche price
in d ex , c o n v e rsely , y ield s a quantity ind ex o f the L asp ey res typ e. S ee
chapter 31, O utput per E m p lo y ee H our M easu res: Industries and the
Fed eral G overn m en t.

m ents in private industry as well as to public agencies.
They should be consistent in coverage with B LS series
on average hourly earnings, another important elem ent
o f cost. For contract escalation, they will give index
users a wider ch oice o f indexes. A s previously indi­
cated, input price indexes are not available yet.
The prices used in constructing the currently pub­
lished output indexes are th ose w hich are regularly
collected on a monthly basis and used in the calculation
o f the com prehensive W holesale Price Index. T hese
prices generally are at the primary market level, but a
few are at other levels. It must be assum ed that these
price m ovem ents are similar to m ovem ents at the mar­
ket level o f sales represented by the Census data. To
include interplant transfer values and values o f goods
produced and consum ed in the same industry, it is
necessary to assum e that price m ovem ents o f goods in
com m ercial markets represent the price changes o f
goods not sold in com m ercial markets.
Until additional pricing can be done, industry indexes
will be limited by the coverage— com m odity and class
o f custom er— o f the W holesale Price Index.

Technical References
Number
1.

Number

On the Theory of Industrial Price Mea­
surement: Input Price Indexes, B ureau o f L abor S tatistics,

A rch ibald, R ob ert B .,

W orking Paper 48, M ay 1975.
A paper w h ich con sid ers input price in d ex es, their proper­
ties and briefly the properties o f a sy stem o f input and output
price in d ex es.
2. M o s s , B e n n e tt R ., “ In d u stry and S e c to r P rice I n d e x e s ,”
Monthly Labor Review, A u gu st 1965, pp. 974-982.
C on tain s price in d ex es for abou t 50 four-digit (Standard
Industrial C lassification ) ind ustries, togeth er w ith a tech nical
n ote on co n c ep ts, m eth od ology, and u ses.
3. N ation al B ureau o f E co n o m ic R esea rch , “ Input-O utput R ela­
tions and A p p ra isal,” Studies in Income and Wealth, vol. 18,
N e w Y ork, 1955.
A d escrip tio n o f sc o p e , u s e s , and sign ifican ce in eco n o m ic
a n alysis o f the U .S . G overn m en t’s interindustry statistical
stu dy o f 1947.
4 ________T he P rice S ta tistics o f the F ed eral G overn m en t, N e w Y ork,
1960.
A n appraisal o f price statistics o f th e Federal G overnm ent




by the P rice S tatistics R ev iew C om m ittee o f N B E R , coverin g
u s e s , co n c ep ts, c o lle ctio n , p u blication, sam pling, and other
a sp ects o f the C on su m er Price In d ex, W h olesale Price In d ex,
In dex o f P rices Paid by F arm ers, and other price m easures.
U .S . C on gress, Joint E co n o m ic C om m ittee. Government Price

5.

Statistics, Hearings before the Subcommittee on Economic
Statistics, Part I and Part II. W ash in gton, D .C ., J 9 6 1 .
Part I rep resen ts the report, The Price Statistics of the
Federal Government prepared by the N B E R (q .v .); Part II
*

6.

con tain s statem en ts o f private and govern m en t eco n o m ists
including the resp on se by E w an C lague, form er C om m is­
sioner o f L abor S tatistics.
U .S . D epartm ent o f C om m erce, Bureau o f E con om ic A n a ly sis,
Interindustry E c o n o m ics D iv isio n , “ Input-O utput Structure
o f the U .S . E con om y: 1967,” Survey of Current Business,
February 1974, pp. 24-56.
A p resen tation o f sum m ary data for 1967 in w h ich the 467
d etailed ind ustries are aggregated to 85 ind ustries, togeth er
w ith a tech n ical n ote on co n c ep ts, m eth od ology, and u ses o f
input-output an alysis.

Chapter 16.

Spot Market P rices

B ackground
A s early as January 1934, at the request o f the U .S .
D epartm ent o f the T reasury, the Bureau o f Labor
S ta tis t ic s b eg a n th e c o m p u ta tio n o f a d a ily
com m odity price index, using quotations for sen si­
tiv e c o m m o d it ie s . It w a s r e le a s e d fir s t to th e
general public in January 1940. In 1952, in con n ection
with the revision o f all its major price index series,
th e B u r ea u is s u e d a n e w D a ily In d e x o f S p o t
M arket Prices. The new index w as not a continua­
tion o f th e old s e r ie s , but w a s b a sed on a n ew
sam ple o f 22 com m odities and w as calculated on a
1 9 4 7 - 4 9 b a se ; in c o n tr a s t, th e o ld in d e x w a s
based on 28 com m od ities and w as calculated with
A ugust 1939 as base.
In January 1962, th e 2 2 -c o m m o d ity in d ex w as
recalcu la ted on a 1957—59 = 100 b ase to co rres­
pond to the b ase period adopted for other Federal
G overn m en t gen eral p u rp ose in d ex e s. In January
1971, the in d ex w as reb ased again in a cco rd an ce
with governm ent-w ide practice, this time to a 1967
= 100 b a s e . In 1969, c o m p u ta tio n o f th e in d e x
on a daily basis w as discontinued. Since then the index
h as b e e n p rep a re d fo r T u e s d a y o f e a c h w e e k .

D e s c r ip tio n o f S u r v e y
The Spot M arket Price Index is a m easure o f price
m ovem en ts o f 22 sen sitive basic com m odities w h ose
markets are presum ed to be am ong the first to be influ­
enced by changes in econ om ic conditions. A s such, it
serves as on e early indicator o f im pending changes in
busin ess activity.
The com m odities used are in m ost cases either raw
materials or products clo se to the initial production
stage w hich, as a result o f daily trading in fairly large
volum e o f standardized qualities, are particularly sen si­
tive to factors affecting current and future econom ic
forces and conditions. H ighly fabricated com m odities
are not included for tw o reasons: (1) they em body rela­
tively large fixed co sts w hich fact cau ses them to react
less quickly to changes in market conditions; and (2)
they are le ss important as price determ inants than the
more basic com m odities w hich are used throughout the
producing econom y.



A s p o t price is a price at which a com m odity is selling
for im m ediate delivery. In the absence o f a spot price, a
b i d or an a s k e d price may be used. Som e o f the prices
used are n o m i n a l prices in that they are not actual
transaction prices. Often they are e x c h a n g e prices— a
price for a co m p letely standard com m od ity w hich
elim inates the effect o f minor quality changes on actual
transaction p rices.1 Trade publications may use this
type o f price for com m odities such as co co a beans,
coffee, and w ool tops. The price for print cloth is an
average o f spot price and price for m ost distant forward
contract because it was determ ined that a large part o f
the sales o f print cloth are made on a contract basis.
The 22 com m od ities are com bined into an “ All
C om m odities” grouping, with tw o major subdivisions:
Raw Industrials, and Foodstuffs. Raw Industrials in­
clude burlap, copper scrap, cotton, hides, lead scrap,
print cloth, rosin, rubber, steel scrap, tallow , tin, w ool
top s, and zinc. Foodstuffs include butter, co co a beans,
corn, cotton seed oil, h ogs, lard, steers, sugar, and
wheat.
The item s upon w hich the index is based are clas­
sified further into four smaller groups: M etals, Textiles
and Fibers, L ivestock and Products, and Fats and Oils.
H ow ever, som e o f the 22 com m odities do not fall into
one o f th ese four groupings. For exam ple, sugar is not
included in any special group. Furthermore, the group­
ings are riot mutually exclu sive. Lard, for instance, is in
both the L ivestock and Products Index and in the Fats
and Oils Index.

D a ta S o u r c e s a n d C o lle c t io n M e t h o d s
The prices used in the index are obtained from trade
p u b lication s or from other G overn m ent a g en cies.
Prices for c o c o a beans, corn, steers, sugar, wheat, bur­
lap, copper scrap, cotton, lead scrap, print cloth (spot),
rubber, steel scrap, w ool tops, and zin c, are o f the
sam e specification and market source as those used in
the com prehensive m onthly W holesale Price In d ex .2
Prices for butter, hides, hogs, lard, rosin, tallow , and tin
are either differently specified spot prices or from dif­
ferent markets.
Exchanges which issue spot prices have committees to make a
determination of the spot for the standard commodity.
2
See chapter 14, Wholesale Prices.

127

BLS HANDBO O K OF METHODS

128

44 = L ogarithm ic con stan t w hich w hen divided
by 22 equals log o f 100.

S e le c tio n of P r o d u c ts
The criteria for the selection o f com m odities w ere (1)
w ide u se for further p rocessin g (basic), (2) freely traded
in an open market, (3) sen sitive to changing conditions
sig n ific a n t in th o s e m a rk ets, and (4) su ffic ien tly
h o m og en eo u s or standardized so that uniform and
representative price quotations can be obtained o ver a
period o f tim e.
Subject to th ese restrictions, efforts w ere made to
include representative sen sitive com m odities from as
large a segm ent o f the econ om y as possib le. A lso, the
influence o f international m arkets upon the econom y
w as taken into accoun t by the inclusion o f som e key
com m od ities (such as crude rubber and tin) w hich are
important in international trade. B oth in the sam ple and
in the index structure, an attem pt w as m ade to prevent
p r ic e m o v e m e n ts o f a g r ic u ltu r a l p r o d u c ts from
dom inating the m ovem en t o f the index.

E s t im a t in g P r o c e d u r e s
The Spot Market Index is an unw eighted geom etric
m ean3 o f the individual com m odity price relatives, i .e .,
o f the ratios o f the current prices to the base period
prices. T he u se o f the geom etric m ean has the advan­
tage that the index is not dom inated by extrem e price
m o v e m e n ts o f in d iv id u a l c o m m o d itie s. S in ce e x ­
trem ely large m o v em en ts m ay be a typ ical, it w as
deem ed better to m inim ize their effects, even at the
exp en se o f losing the effect o f large representative
changes. H o w ev er, the fact that each o f the com ­
m odities is unw eighted in the index m eans that a price
change for rosin, a com paratively unimportant com ­
m odity, has as much effect as an equal percentage
m ovem en t in the price o f a very important com m odity
such as w heat, cotton , or steel scrap.
The com putation procedure involves obtaining for
each com m odity the ratio o f its price in any given period
to its price in the base period and taking the 22nd root o f
the product o f th ese ratios. This product is then multi­
plied by 100 to obtain the index num ber for each period.
T he calculation is made by m eans o f logarithm s. The
form ula reduces to

2 L og

P

k -

2 log

P 0

4-

44

w here
I k

= Index for a given day

P k

= Price for a given day

P

= A verage (geom etric) price in base period

Q

3
The geometric mean of n figures is the nth root of their product.
Thus, the geometric mean of the numbers 1.5, 2.0, and 9.0 is 3.0

(1.5x2x9=27. 3/27=3). The arithmetic mean, is 4.2.



M onthly average indexes are obtained according to
the previous procedure, excep t t h a t/* = the geom etric
average o f the T uesday prices (daily prices prior to
1969) over the month. In maintaining the index over
tim e, it may be necessary to change com m odity specifi­
cation s or substitute entirely new products. T h ese
changes are handled by a statistical linking procedure
so that only actual price m ovem ents are reflected in the
index.

A n a ly s is a n d P r e s e n ta tio n
Tuesday spot market indexes and prices are published
each w eek , on the Friday follow ing the day o f refer­
en ce. A summary o f w eek ly indexes and the average for
each month are published w ith the first w eek ly release
o f the follow ing m onth. Beginning with 1950, historical
indexes are show n for T uesday o f each w eek together
with m onthly averages; from July 1946 through 1949
indexes are listed for T uesday o f each w eek only. In
addition, in d exes are published for selected earlier
dates: August 15, 1939, D ecem ber 6, 1941, A ugust 17,
1945, and June 28, 1946.

U s e s a n d L im ita tio n s
A survey o f users in 1964 show ed that the Index is
frequently used as a general econom ic indicator, for
gaging the direction o f basic prices, for forecasting gen­
eral price m ovem en ts, and for current prices o f specific
commodities. Other uses, frequently mentioned, are for
market research and for com paring price trends with
the u ser’s selling or buying prices.
The Tuesday Index o f Spot Market Prices differs from
the W holesale Price Index in m ethod o f construction
and w eighting, as w ell as in the sam ple o f item s for
which prices are included. W hile it is independent o f the
monthly com prehensive index, changes in the T uesday
Index or its co m p on en ts m ay foresh adow turns in
W holesale Price In dexes. H ow ever, the T uesday Index
is not a good indicator o f current price trends for the
w hole econom y. For this purpose, the com prehensive
W holesale Price Index should be used. The T uesday
Spot M arket Index is, by design, very sensitive to price
changes in basic com m odities but, b ecau se o f its un­
w eighted structure, the magnitude o f changes in any o f
the index groups cannot be used as a reliable m easure o f
the general price change o f all com m odities within the
groups.
For many o f the 22 item s, the com m odity exchange
prices are based upon transactions w hich cover as little
as 25 percent o f the total sold in all m arkets. In som e

SPOT M AR KET PRICES
ca ses, the price is set by a com m ittee o f experts from
the com m odity exchange for a standardized com m od­
ity. A lso, w hen there are not enough transactions from
which to obtain an actual market price, a “ norm al” spot
price is set. From this, it is apparent that the exchange
prices may not alw ays be representative o f the large
volum e o f private transactions occurring outside the
organized market. H o w ev er, it is believed that the re­
ported exchange prices generally are used as the basis
for private negotiations.

C o m p o s i t i o n o f G r o u p in g I n d e x e s
M

Copper scrap, lead scrap, steel scrap, tin,

e ta ls :

and zinc.
T e x tile s

a n d

F ib e r s :

Burlap, cotton , print cloth, and

w ool tops.
L iv e s t o c k

a n d

P r o d u c t s :

H id es, h ogs, lard, steers,

and tallow .
F a ts

a n d

O ils :

B utter, co tto n seed oil, lard, and tal­

low .
Specifications for Commodities Included in the Index as of October 1975
C o m m o d ity

S p e c ific a tio n s

M a rk e t

Burlap ............10 oz., 40", ex-dock or ex-warehouse, New Y
ork.
duty paid, per yd.
Butter............. Grade A 92 score, per lb...................... Chicago.
,
Cocoa beans ....Accra, per lb....................................... New Y
ork.




C o m m o d ity

129
S p e c ific a tio n s

Copper scrap . ..No. 2 heavy copper and wire, refiners’
buying price, carload lots, delivered
buyers' works, per lb.
Corn.............. ..No. 2 yellow, per bu.............................
Cotton .............Middling, 11/16”, per lb......................
Cottonseed oil ..Crude, valley,per lb.............................
Hides............. .Cow, light native, packer 30/53 lbs.,
fleshed, packer to tanner, dealer, or
exporter per lb., f.o.b. shipping point.
Hogs ............. .U.S. No. 2’s and 3’s, 200=220 lbs.,
per 100 lb.
Lard.............. .Prime Steam, in tanks, per lb..............
Lead scrap..... .Battery plates, smelters’ buying price,
East, carload lots; delivered buyers’
works, per lb.
Print cloth ..... .48”, 78x78 count, 4 yds./lb. spot
and nearby, per yd.
Print cloth .......48”, 78x78 count, 4 yds./lb., most
distant contract, per yd.
Rosin............. ..Gum, windowglass grade, carlots, per
100 lb.
Rubber .............Crude, natural, N 1 Ribbed Smoked
o.
Sheets, per lb.
Steel scrap.......No. 1 heavy melting, (dealer), consumers’ buying price, including broker­
age, delivered, per gross ton.
Steers ..............Choice, 900-1100 lbs., per 100 lb.
Sugar ..............Raw, 96°, duty paid, per 100 lb.
Tallow..............Packer's prime, inedible, per lb.
Tin...................Grade A spot delivery, per lb.
,
Wheat..............No. 1 D Northern Spring, per bu.
ark
Wheat..............No. 1 H W
ard inter Ord., per bu.
W tops ..... ..Certificated spot price, nominal, per
ool
lb.
Zinc .............. ..Slab, Prime Western, for prompt
delivery, delivered, (f.o.b. New
Y equivalent), per lb.
ork

M a rk e t

N Y
ew ork.
Chicago.
10 markets.
M
emphis.
Chicago.
Omaha.
Chicago.
New Y
ork.
New Y
ork.
New Y
ork.
New Y
ork.
New Y
ork.
Chicago.
Omaha.
New Y
ork.
Chicago.
New Y
ork.
Minneapolis.
Kansas City
Boston.
New Y
ork.

Chapter 17.

International Price Indexes

B ackground
The International Prices Program grew out o f a long­
standing need for accurate m easures o f price changes
for U .S . im ports and exports. Som e countries, such as
W est Germ any and Japan, have been producing such
in d exes for m ore than 20 years. In the period im ­
m ediately follow ing World War II, the Bureau o f Labor
Statistics began a program to d evelop export and import
price in d ex es. T he program advanced to the point
w here hundreds o f prices had been collected from e x ­
porters and im porters and test in d ex es calcu lated.
H ow ev er, the program w as term inated in 1948 (along
with others) b ecau se o f budget reductions. In 1961, a
report on Federal Price S tatistics given to the Subcom ­
m ittee on E con om ic Statistics o f the Joint E conom ic
C om m ittee, by the N ational Bureau o f E con om ic R e­
search (N B E R ) su ggested responsbility for com pilation
o f export and im port price in d exes be assigned to a
Federal statistical agen cy, “ to obtain the attention and
r e so u r c e s fo r th e s e in d e x e s th at w e b e lie v e are
esse n tia l.” 1 A further study con d ucted by the N B E R
outlined the feasibility and n ece ssity for such a p roject.2
In 1967, the B L S also began research on the feasibility
o f develop ing export and im port price in d exes, and the
first funding w as provided for producing such m easures
in the budget for F Y 1970.
E xport price in d exes w ere first published in 1971 and
import price in d exes in 1973. D ata w ere collected annu­
ally for June o f each year until 1974 w hen collection and
publication w as begun on a quarterly basis. The pro­
gram is still in its expansion phase w ith published c o v ­
erage as o f S eptem ber 1975 accounting for 27 percent o f
the 1974 value o f exp orts and 6 percent o f the 1974 value
o f im ports. C overage is exp ected to ex c eed 60 percent
by value o f both im ports and exports by 1978. Published
categories are based on the nom enclature o f the Stan­
dard International Trade C lassification o f the U nited
N a tio n s (S IT C ), w h ich is a p rod uct c la ssifica tio n
sy ste m .3
1 U.S. Congress, Joint Economic Committee, Subcommittee on
Economic Statistics, G o v e r n m e n t P r ic e S t a t i s t i c s , 87th Congress,
First session, Part 1, January 24, 1961, p. 29.
2 Irving Kravis and Robert Lipsey, P r ic e C o m p e t i t i v e n e s s in
W o r ld T r a d e , (New York: Columbia University Press for the N a­
tional Bureau of Economic Research, 1971).
3 United Nations Statistical Office, C o m m o d ity I n d e x e s f o r th e
S t a n d a r d I n te r n a tio n a l T r a d e C la s s if ic a tio n , R e v i s e d , Statistical Pa­
pers, Series M , no. 38, Vol. I, II. (New York: United Nations, 1963).




130

Description of Survey
The tw o ind exes being developed in this
program will cover virtually all transactions in non­
military goods b etw een the U .S . and the rest o f the
world. The export price index will provide a m easure o f
price change for U .S . products sold to other countries.
The import price index will provide a m easure o f price
change for good s purchased from other countries by
U .S . residents.
C o n c e p ts .

In addition to the goal o f providing a general index o f
prices for U .S . exports and an index for U .S . im ports,
there is another important goal: to develop indexes for
detailed product categories. This goal is being met
through the present publication program w herein quar­
terly price ind exes are published for num erous cate­
gories o f finished m anufactured goods both for exports
and for im ports. T h ese categories are defined by the
4-and 5-digit level o f detail o f the SITC. The SITC is a
product classification system used by num erous cou n ­
tries, including the U .S ., to classify and publish the
value o f their exports and imports. The calculation o f
U .S . export and import price indexes by SITC category
thus facilitates the com parison o f U .S . price trends and
sectoral production with the exports and imports and
price trends o f other countries. W hen sufficient co v ­
erage is achieved at this level o f detail, higher level
aggregate ind exes will be prepared, though indexes will
not be prepared for SITC categories with small values
o f trade.
U n i v e r s e . The product universe o f the export
price ind exes covers virtually all products sold by U .S .
residents to foreign buyers. (R esidents in this instance
has its national incom e account definition, and it in­
cludes corporations, b u sin esses, and individuals but
d oes not require either U .S . ow nership or U .S . citizen ­
ship.) The product u niverse o f the import price index
covers all products purchased from abroad by U .S .
residents. The universe in the case o f each o f these
ind exes includes raw materials and agricultural prod­
u cts, sem i-finished m anufactures and finished man­
ufactures including both capital good s, such as electri­
cal m achinery, agricultural equipm ent, textile equip­
m ent, e tc ., and consum er good s such as refrigerators,
appliances, electronic equipm ent, clothing, etc. Trans­
actions b etw een related parties and b etw een unrelated
parties are priced in th ese ind exes.

P r o d u c t

IN T E R N A TIO N A L PRICE INDEXES
Military goods are not priced in the indexes except to
the exten t that som e products may be purchased on the
open market for military use, e .g ., autom obiles, clo ­
thing, non-specialized hardware, fuel, etc. A few items
such as works o f art, ships, and so forth are not included
because o f the difficulty o f obtaining time series for
com parable products in their categories.
The prices used in the construction o f these
indexes are collected according to the specification
m ethod. To the exten t p ossib le, they refer to prices at
the U .S . border for exports and at both the foreign
border and at the U .S. border for im ports. For nearly all
products, the prices refer to transactions com pleted
during the first 2 w eek s o f the third month o f each
calendar quarter. If a firm had no transactions in a
product during that 2-w eek period, prices for a transac­
tion up to 2 w eek s earlier or later may be used.
E very effort is made to obtain actual transaction
prices. R espondents are requested on the price re­
porting form s to indicate all d iscoun ts, allow ances, re­
bates, etc. applicable to the reported prices, so that the
price used in the calculation o f the indexes is the actual
p rice for w h ich the p rod u ct w as b ought or sold .
R espondents are rem inded o f this requirem ent through
a com bination o f personal v isits, telephone calls, cor­
respon d en ce and special enclosu res with the reporting
form s.
For the export price in d exes, the prefefred pricing
basis is fas (free alongside ship) U .S . port o f exportation
for specified term s and size o f shipm ent. In cases where
firms report export prices fob (free on board) pro­
duction point, inform ation is collected which enables
the Bureau to calculate a shipm ent co st to the specified
port o f U .S . exportation. This inform ation includes lo­
cation o f product point and port o f exportation, size and
w eight o f shipm ent, nam e o f carrier, and routing. For
m ost finished m anufactures, respondents frequently
report export prices on an fob factory basis. M any o f
the export price in d exes are being published on this
basis pending con version to fas basis. For imports tw o
different prices are collected . The first is the import
price fob at the foreign port o f exportation. This is
con sisten t with the basis for valuation o f imports in the
national accoun ts. The second is the import price cif
(cost, insurance, and freight) at the U .S . port o f impor­
tation. The price on a c if basis con sists o f the foreign
selling price plus the other co sts (insurance and freight)
associated with bringing the product to the U .S . border.
The import duty on the product, if any, is collected as a
separate piece o f inform ation.
Since a price index requires that the sam e item be
priced from period to period, it is n ecessary to recog­
nize that products may be m odified or changed from
time to tim e. Since changes in specifications or terms o f
transaction constitute a change in the product being
priced, an adjustm ent is made to com pensate for these
 The detailed sp ecifications collected for each
changes.
P r ic e s .



131

product include detailed descriptions o f the physical
and functional characteristics o f the product, the terms
o f transaction including number o f units bought or sold,
discounts, credit term s, and packaging. Since the objec­
tive o f the price index is to provide a measure o f pure
price change, changes in the product are linked into the
index. The method used follow s the linking procedure
o f the W holesale Price Index. (S ee chapter 14.)
Average prices are not published or calculated be­
cause even within the narrowest category o f products,
i.e ., 7-digit level o f detail, scop e is allowed for the
products priced to vary among respondents in order to
reflect the product m ost typical o f each respondent in
that category.
The classification system s used in the
export and import price indexes are product classifica­
tion system s. For exports, products are classified ac­
cording to the 7-digit Schedule B classification system
o f the U .S . Departm ent o f C om m erce as o f 1973.4 The
Schedule B system (Statistical Classification o f D om es­
tic C om m odities Exported from the U .S .) provides ap­
proxim ately 4,000, 7-digit product cod es. For imports,
products are classified according to the Tariff Schedule
o f the U .S . Annotated (T SU SA ) as o f 1973.5 This is a
7-digit product classification system . At the 5-digit level
the Tariff Schedule is determ ined by law and is the
m eans whereby imported products are classified for
duty purposes. T wo-digit statistical suffixes or annota­
tions may be added to each 5-digit Tariff Schedule
num ber for statistical p urposes. T hese annotations
provide a m ore detailed classification system for re­
cording the flow o f products imported into the U .S .
A pproxim ately 8,000 o f the more than 10,000 T SU SA
categories are used each year.
Since the U .S . trade flow s are recorded in value
terms for each 7-digit Schedule B and each 7-digit
T S U S A category, value weights are thus provided for
calculation o f the ind exes.
The indexes w hich are published em ploy the nom en­
clature and classification o f the SITC. The SITC is made
up o f 10 section s at the 1-digit level, 56 divisions at the
2-digit lev el, 177 groups at the 3-digit level, and 625
subgroups at the 4-digit level. Additional subsidiary
cla sses are available raising to 1,312 the number o f
“ basic item s” in the system . C oncordance schem es are
used for classifying Schedule B categories or T SU SA
c a te g o r ie s in to th e S I T C .6 T h e S c h e d u le B , the
T S U S A , and the SITC are exhaustive so that no prodC la s s ific a tio n .

4 U.S. Bureau of the Census, Schedule B, S t a tis tic a l C la s s if ic a ­
tio n o f D o m e S tic a n d F o r e ig n C o m m o d itie s E x p o r te d f r o m th e U n ite d
S t a t e s , January 1, 1971 edition, and revisions, (U.S. Government

Printing Office, Washington, D .C.)
5 U.S. Tariff Commission, T a r if f S c h e d u le s o f th e U n ite d S t a t e s
A n n o ta te d , 1973 (U.S. Government Printing Office, Washington,
D.C.)
6 U.S. Bureau of the Census, U .S . F o r e ig n T ra d e S ta t i s t i c s C la s ­
s if ic a tio n s a n d C r o s s C la s s if ic a tio n s , 1970 and revisions, (U.S. Gov­
ernment Printing Office, Washington, D.C.)

132

BLS HANDBO O K OF METHODS

uct will appear in more than on e place in export price
indexes or import price in d exes calculated for SITC
categories.

Data Sources and Calculation Methods
Price data used in the ind exes are collected by
mail questionnaire and reporting is voluntary and con ­
fidential. M ost prices are collected each quarter. In
nearly all ca ses price data are collected directly from
the exporter or the im porter, though in a few cases
prices are obtained from brokers.
Price reporting by firms is initiated in all cases by
personal visit by a Bureau representative. A t the tim e o f
the person al v isit, if the p ro sp ectiv e resp o n d en t’s
cooperation is obtained, the reporting requirem ents are
explained verbally and in writing, and the selection o f
products is m ade for w hich the firm will report price
inform ation. In m ost ca ses inform ation initially pro­
vided by a firm contains data for earlier periods. In these
ca ses, the Bureau representative often m ust leave the
reporting form s with the respondent so that past prices,
sp ecification s, and d iscounts can be obtained by the
firm from its records. Sub seq u en tly, current prices are
co llected by mail. H o w ev er, teleph on e contact is main­
tained with the respondent, sp ecifically with the person
at the firm w ho is responsible for providing the price
inform ation each quarter. In addition, respondents are
revisited periodically in order to review reporting prac­
tices and requirem ents and to review the sam ple o f
products for w hich prices are being reported. Fre­
quently during th ese revisits som e products w hich had
been reported are dropped from further reporting and
new item s are added. Provision is also made on the
form s used for the quarterly price reporting by mail for
the respondent to discontinue reporting for products
w hich have declined in im portance or to add products
w hich have b ecom e significant.

P r ic e s .

T he price relatives are com bined using value
w eights. In the ca se o f the export price index, average
price relatives in each 7-digit Schedule B category are
w eighted by the value o f exports in that category during
the base period used in the calculation formula. F or the
import price ind ex, price relatives are w eighted by the
value o f im ports in each 7-digit T S U S A category during
the base period. T he value data are com piled by the
Bureau o f the C ensus for 7-digit categories from ship­
p ers’ exp ort declarations and im port entry docum ents
and are available on m agnetic tape and in regularly
printed publications. The publications are:
W

e ig h ts .

Exports: U .S. Bureau of the Census,
S c h e d u le

B

C o m m o d it y

b y

U .S .

C o u n tr y

, Report

E x p o r ts

FT-410, December of each year
Imports: U .S. Bureau of the Census,
C o n s u m p tio n

a n d

FT-246, Annual




G e n e r a l

U .S .

Im p o rts

Im p o r ts ,

f o r

Report

The export and import price indexes w hich
have been calculated are based on judgm ent sam ples o f
products, sp ecifications, and respondents. T he sam ple
o f products is based on value criteria at the 7-digit level
o f detail for exports and for im ports, as reported in
s ta tis tic s o f U . S . tra d e. F or th e m o st part, th e
categories selected for pricing are ch osen on the basis o f
high value. Thus som e Schedule B numbers or T S U S A
categories m ost likely will not be priced for a 4- or
5-digit index. The sam ple o f respondents is ch osen from
industry directories and from information obtained in
conversations with trade or industry associations and
various governm ent agencies. The individual products
w hich are priced by a given respondent are selected
during the personal visit by a Bureau representative.
The selection o f an item for pricing is based on the goal
o f selecting a product (or products) within a narrow
product category, the price m ovem ent o f which is typi­
cal for item s exported by that respondent in that prod­
uct category. The specifications provide a com plete
description o f the item , its physical characteristics, its
functions, and the term s o f the typical transaction in
that product category. For exports, the specifications
also include the class o f buyer and for imports they also
include the country o f origin. This m ethod o f obtaining
specifications m eans that within an index (at the 4- or
5-digit lev el or w ithin a 7-digit cla ssifica tio n ), the
specifications priced for on e firm m ost likely will be
different fcom the sp ecifications priced for another
firm. The advantage o f this approach lies in the fact that
prices collected on a specification basis are used in the
ind exes and, at the sam e tim e, the products included in
the index are m ost representative o f each firm ’s export
or import transactions. This avoids the potential prob­
lem that a single national or regional specification may
not accom odate product differences among firms and
m ay be unrepresentative o f the bulk o f transactions in
the product category for all firms.

S a m p lin g .

N o index is published in such a w ay as to reveal the
nam e or price or price behavior o f any respondent. This
requires that there be a minimum o f three respondents
for each index. In m ost ca ses the number o f respon­
d en ts in ea ch p u b lish ed in d ex is larger than th is
minimum.
Probability sampling has been initiated for products
and respondents. This procedure is used for nearly all o f
the indexes new ly produced after June 1976. In addi­
tion, it will be used to replace the judgm ent sam ples in
the p reviou sly published ind ex groups. E ventually
probability sam pling will be used for all the ind exes in
each SITC section.
The sam ples are constructed from shippers’ export
declarations and import entry docum ents filed with the
Bureau o f C ensus. T hese form s contain the 7-digit
product cod e, value and quantity o f the shipm ent, and
the com pany name along with other inform ation. The
first section covered is exports o f SITC -6, manufac-

INTERNATIONAL PRICE INDEXES
tured articles classified chiefly by material. The prod­
ucts in this section account for slightly over 15 percent
o f the value o f U .S . exports and include such products
as iron and steel, non-ferrous m etals, w ood , glass, tex ­
tiles, paper, etc. The procedures used for d eveloping
the sam ple o f export products and respondents for
SITC-6 will be applied to d eveloping probability sam ­
ples o f products and respondents for all other SITC
section s.
Products and respondents w ere selected using a sam ­
ple design consisting o f four stages. The first stage
involved the selection by B L S o f 253 o f the 827, 7-digit
num bers in section s 6 3 - 6 9 o f Schedule B. The 827,
7-digit Schedule B num bers w ere first stratified in order
to assure publishability at various 2-, 3-, 4-, and 7-digit
levels. W ithin each stratum , a system atic sam ple w as
selected , with probability o f selection proportionate to
the 1973 dollar value o f each Schedule B number.
The secon d stage o f sampling w as im plem ented by
the Bureau o f the C ensus using their file o f shippers’
export declarations (S E D ’s). L ine item s pertaining to
the 253 selected Schedule B num bers from all S E D ’s
w ere sorted by S ch ed u le B num ber, and stratified
within by the dollar value o f the shipm ent. Within each
value stratum , a system atic, equal probability sam ple o f
line item s w as selected .
The B L S sum m arized this inform ation from around
12,000 S E D ’s by exporter and S chedule B number. At
this stage there w ere approxim ately 4,000 separate ex ­
porters, from w hich a sam ple o f 1,000 was drawn using
sy stem a tic, p rob ab ility-p rop ortion ate-to-size, se le c ­
tion. The m easure o f size for each exporter w as its
maxim um probability, a num ber arrived at by con sider­
ing the im portance o f the portion o f the universe the
exporter represents in each Schedule B number. In
som e c a se s subsam pling w as undertaken to reduce re­
porter burden.

Estimating Procedures
u l a a n d C a l c u l a t i o n . The export and import price
indexes are w eighted price relatives o f the L aspeyres
type. The w eights are derived from U .S . export and
import values resp ectively in the base year using the
m ost detailed available product classification system s.
W ithin e a c h w e ig h t c a t e g o r y , p r ic e r e la tiv e s are
w eighted equally and then aggregated to the SITC in­
d ex level.

F o r m

w h ere:
x = S I T C g r o u p fo r w h ic h in d e x is c a lc u la t e d




133

j = t h e w e i g h t c a t e g o r ie s w it h in x ( t h e y a r e t h e S c h e d u le
B c a t e g o r ie s f o r e x p o r t s , a n d t h e T S U S A c a t e g o r ie s
fo r im p o r t s )
i = p r o d u c t w it h in j
n = n u m b e r o f p r ic e r e l a t iv e s w ith in j
t = t im e
Wj = s h a r e o f v a lu e o f j**1 c a t e g o r y in g r o u p x in t h e b a s e
year
P^/Pj0 = p r ic e r e la t iv e o f p r o d u c t i in y e a r t t o b a s e y e a r o .

The value w eights are the dollar value o f exports or
imports in each 7-digit category. E ach value weight
includes the item s w hich are priced within the 7-digit
category and also other item s which are not priced but
w h ose price m ovem ents are assum ed to behave simi­
larly. N o t all w eight categories are included in each
SITC group for which an index is published. Instead, a
sam ple o f 7-digit categories represent all o f the 7-digit
categories within the index group. W hen new 7-digit
categories, i.e . w eights, are introduced into an index,
the index including the new categories is linked to the
earlier index.
P e r i o d . The export and import price indexes are
published with the reference period 1967 = 100, where
possible. In num erous ca ses, h ow ever, price data do
not extend back to 1967 so that more recent reference
bases m ust be used. A s noted ab ove, h ow ever, for
calculation purposes the w eight base is 1973. The in­
d exes are set equal to 100 in 1967 after calculation.

B a s e

Analyses and Presentation
The export and import price ind exes are published in
B L S press releases on a quarterly basis. The indexes
are released 5 w eek s after the end o f the reference
month. The in d exes, which are not seasonally adjusted,
are published for 4- and 5-digit SITC categories and are
show n both on an index level and in terms o f percent
change. R evision s are published w hen they are made
and are denoted in the press release with an “ r .”

Uses and Limitations
The ind exes published in this program are the only
indexes o f prices related to the U .S . foreign trade sec­
tor. W hen the categories covered have been extended
to encom pass all categories o f U .S . exports and imports,
they will provide quarterly m easures o f the price trend
o f U .S . products sold abroad and o f products imported
to the U .S . from other countries. The series will enable
analysts and policym akers to a ssess the effect o f export
and import price changes on the U .S . econom y and its
industrial sectors, as w ell as to analyze the effects o f
price changes on the balance o f paym ents. The price
m easures will provide a basis for calculating changes in

134

BLS HANDBOOK OF METHODS

the volum e o f real exports and im ports in the aggregate
and for product groups. T hey provide a basis for m ea­
suring changes in the prices o f U .S . products in relation

to price trends o f com parable products o f other major
industrial countries with w hich the U .S . com petes for
m arkets.

T e c h n ic a l R e f e r e n c e s
Number
1.

2.

Number

C ream er, D . , “ S o m e R ecom m en d ation s for D ata Im provem ent
in th e G N P A c c o u n ts ” a p r o g r ess rep ort in Statistical
Reporter, O ffice o f M anagem en t and B u d get, W ash in gton,
D . C. (January 1975)

5.

In teragen cy C om m ittee on M easu rem en t o f Real O utput, Su b­
co m m ittee o n P rices, Report on Criteria for Choice of Unit
Values or Wholesale Prices in Deflators, se e ap p en d ices
(W ash in gton, D .C ., B ureau o f the B u d get, June 17, 1970,
m im eographed)

6.

3.

Irving K ravis and Robdrt E . L ip s e y , Price Competitiveness in
World Trade (N e w Y ork: C olum b ia U n iv ersity P ress, for the
N ation al B ureau o f E co n o m ic R esea rch , 1971)

4.

7.
8.

(N e w Y ork: N ation al B ureau o f E co n o m ic R esearch , 1974)




tical P apers, S eries M , N o . 38, V ol. 1 (N e w York: U n ited
N a tio n s, 1963)
U .S . B ureau o f the C en su s, U.S. Exports-Schedule B Commod­
ity by Country, R eport F T 410, D e c. 1973
U .S . B ureau o f the C en su s, U.S. Imports for Consumption and
General Imports, R eport F T 246, D e c . 1973
U .S . C o n g ress, Joint E con om ic C om m ittee Government Price

Statistics: Hearings: Subcommittee on Economic Statistics,

Irving K ravis and R ob ert E . L ip se y , “ International P rices and
Price P r o x ie s” in R u ggles, N . E . , et.al. The Role of the Com­

puter in Economic and Social Research in Latin America

Commodity Indexes for the
Standard International Trade Classification, Revised, S tatis­

U n ited N a tio n s Statistical O ffice,

9.

10.

8 7 th C o n g ress, ls t s e s s .,P a r t 1, J a n .2 4 ,1 9 6 1 ,5 2 6 ,p p .;P a r t2,
M ay 1 - 5 , 1961
U .S . D epartm en t o f C om m erce, Statistical Classification of

Domestic and Foreign Commodities Exported by the United
States, Schedule B, 1971
U .S . T ariff C o m m issio n , Tariff Schedule of the United States
Annotated, 1975

Wages and Industrial Relations
Chapter 18.

O ccupational Pay and Supplem entary Benefits

Background
The Bureau o f L abor S tatistics, for many d ecad es,
has conducted studies o f w ages by occupation and in­
dustry, based upon em ployer records. The B ureau’s
first such study, grow ing out o f a study by the U .S .
Senate in 1891, resulted in a w age rate record extending
back continuously to 1860. S ystem atic collection o f
wage data by occupation and industry has continued
since the turn o f the century; changes in coverage have
been dictated mainly by governm ent requirem ents. A
large survey program undertaken for the War Industries
Board in 1919 produced occupational pay rates by in­
dustry and State, and (for som e industries) by city.
B etw een 1934 and 1940, the selection o f industries
studied w as determ ined largely by adm inistrative needs
under the N ational R ecovery A ct, Public Contracts
A ct, and the Fair Labor Standards A ct, with em phasis
on nationw ide data for relatively low -w age industries.
Survey activity shifted in the 1 9 4 0 -4 1 defense period
to heavy industries essential to war production. Im­
plem entation o f wage stabilization policy during the
war required a large-scale program o f occupational
w age studies by industry and locality. The em phasis on
data by locality has continued since 1945 within the
fram ew ork o f industry studies generally designed to
yield national and regional estim ates. In addition, the
Bureau d evelop ed three new typ es o f surveys.
Area w age su rveys, initiated in the late 1940’s, were
designed to m eet the grow ing demand for pay data
related to office clerical and manual jo b s that are com ­
m on to a w id e variety o f m anufacturing and non­
manufacturing industries within m etropolitan areas.
This survey program w as firmly established and tem ­
porarily expanded for u se in the wage stabilization ef­
fort during the K orean em erg en cy . T he n eed for
nationw ide estim ates o f w hite-collar pay in private in­
dustry for u se in appraising the Federal w hite-collar
salary structure resulted in a survey design that would
produce national averages, based on an area sam ple.
Data for individual areas studied also serve the w age
administration n eed s for other governm ent agencies.
Prior to 1960, studies in a very few professions pro­
vided salary data. B eginning in that year, salary surveys
have b een made on a nationw ide basis covering profes­
sional, adm inistrative, technical, and clerical job s in a



broad spectrum o f industries. A verages for these jobs
are used by the adm inistrative agencies directly con ­
cerned with Federal pay matters.
R ecognizing the increased interest in governm ental
pay, and the fact that governm ent em ployees repre­
sented a large and grow ing segm ent o f the total work
force, the Bureau began a series o f wage, and benefit
studies in eight city governm ents during 1970. The
series w as later expanded to include all cities having
500,000 inhabitants or more; this group included 26
cities in 1975.

Description of Surveys
Although differing in industrial, geographic, and o c ­
cupational coverage, the four typ es o f surveys d e­
scribed form an integrated program o f occupational
wage surveys based upon a com m on set o f administra­
tive form s, manual o f procedures, and com m on con­
cepts and definitions. Em ployer cooperation in surveys
is on a voluntary basis. Confidential individual estab­
lish m e n t d ata c o m p ile d b y th e B u r e a u ’s fie ld
econom ists are grouped in published reports in a man­
ner th a t w ill a v o id p o s s ib le d is c lo s u r e o f an
establishm ent’s rates. E stablishm ents included in all
surveys are classified by industry as defined in the 1967
ed itio n o f th e S t a n d a r d I n d u s t r i a l C l a s s i f i c a t i o n
M a n u a l prepared by the U .S . O ffice o f Management
and B u d g et.1 Survey reports identify the minimum size
o f esta b lish m en t (m easured by total em ploym ent)
studied. D efinitions for S t a n d a r d M e t r o p o l i t a n S t a t i s ­
tic a l A r e a s
are em ployed in all program s.2
I n d u s t r y w a g e s u r v e y s provide data for occupations
selected to represent the full range o f activities per­
form ed by w orkers. Consideration also is given, in their
selection , to the prevalence in the industry, definiteness
and clarity o f d u ties, and im portance as reference
points in collective bargaining.
In addition to collecting straight-time first-shift rates
(or hours and earnings for incentive workers) for indi­
vidual w orkers in the selected occupations, surveys in
m ost industries also establish the w age frequency
distribution for broad em ploym ent groups, i.e ., pro1 S e e app. B .
2 S e e app. C.

135

136

BLS HANDBOOK OF METHODS

duction and related workers or nonsupervisory work­
ers. W eekly work schedules; shift operations and differ­
en tia ls; paid h olid ay and v a ca tio n p ra ctices; and
health, insurance, and retirem ent benefits are included
in the inform ation collected , along with the provisions
made for other item s, applicable to certain industries.
T h e s tu d ie s a ls o p r o v id e e s t im a te s o f lab orm anagem ent agreem ent co v era g e, proportions em ­
ployed under incentive pay plans, and the extent to
w hich establishm ents provide a single rate or range o f
rates for individual job categories.
Fifty manufacturing and 20 nonm anufacturing indus­
tries, accounting for about 22.5 million em p loyees, are
surveyed on a regularly recurring basis. A majority are
studied on a 5-year c y c le , but a number o f com para­
tively low -w age industries are on a 3-year cy cle. In
addition, special w age surveys also are undertaken at
the request o f others.
N early all o f the manufacturing, utilities, and mining
industries are studied on a nationw ide basis and esti­
m ates are provided also for regions and major areas o f
concentration. Surveys in trade, finance, and service
industries usually are limited to a number o f m etropoli­
tan areas. N ation w id e surveys generally d evelop sepa­
rate estim ates by size o f establishm ent, size o f com ­
m unity, labor-m anagem ent agreem ent coverage, and
type o f product or plant group.
A r e a
w a g e
s u rv e y s
provide data for occup ations
com m on to a w ide variety o f industries in the areas
surveyed. The 76 occupational categories studied in­
clude 29 office clerical; 17 electron ic data p rocessing,
drafting, and industrial nurses; and 30 m aintenance,
to o lro o m , p ow erp lan t, and cu sto d ia l and m aterial
m ovem ent jo b s. T hus, they provide representation o f
the range o f duties and responsibilities associated with
w hite-collar, skilled m aintenance trades, and other
“ indirect” manual jo b s. W eekly salaries reported for
in d iv id u a ls in w h ite -c o lla r jo b s re la te to regular
straight-time salaries that are paid for standard work­
w eek s. A verage hourly earnings for m aintenance and
other manual job s relate to first-shift hourly rates.
Industry d ivision s included are (1) manufacturing; (2)
tra n sp o rta tio n , co m m u n ic a tio n , and oth er p ub lic
utilities; (3) w h olesale trade; (4) retail trade; (5) finance,
insurance, and real estate; and (6) selected service in­
d u stries. E sta b lish m en ts em p loyin g few er than 50
w orkers are exclu d ed — with a minimum o f 100 applying
to manufacturing; transportation, com m unication,and
other public utilities; and to retail trade in the 13 largest
com m unities.
In addition to the all-industry averages and distribu­
tions o f workers by earnings cla sses, separate data are
provided for m anufacturing and nonm anufacturing in
each area and, w herever p ossib le, for individual indus­
try d ivision s in the nonm anufacturing sector. Am ong
the 70 Standard M etropolitan Statistical A reas in this
annual su rvey program as o f 1976, separate data are
provided for transportation, com m unication, and other




public utilities in 68 areas; for retail trade in 32 areas; for
w h olesale trade and finance, insurance, and real estate
in 18 areas; and for the selected service industries in 20
large areas. In 31 o f the larger areas, wage data are
presented separately for establishm ents that have 500
workers or more.
Data on w eek ly work schedules; paid holiday and
vacation practices; and health, insurance, and retire­
ment benefits are recorded separately for nonsupervis­
ory office workers and plant workers (nonoffice). Shift
operations and differentials are collected for plant work­
ers in manufacturing. Data on minimum entrance rates
for inexperienced office workers are collected in all in­
dustries. T hese item s are studied every 3 years in all
areas. This survey program also has developed infor­
mation on profit-sharing plans, characteristics o f sick
leave plans, wage paym ent system s, and other item s
related to em ployee com pensation.
Special area w age surveys have been conducted an­
nually since 1967 at the request o f the E m ploym ent
Standards Adm inistration for use in administering the
Service Contract A ct o f 1965. Cross-industry surveys
provide inform ation on hourly earnings for 14 office
occup ation s, 10 professional and technical jo b s, and 20
m aintenance, toolroom , powerplant, and custodial and
material m ovem ent jo b s. The industrial scop e includes
m anufacturing; transportation, com m unication, and
other public utilities; w h olesale trade, retail trade; fi­
nance, insurance, and real estate, and selected service
industries. E stab lish m en ts w ith few er than 50 em ­
ployees are excluded from the scope o f these special area
w age surveys.
In addition to the cross-industry surveys, special in­
dustry studies are conducted for the E m ploym ent Stan­
dards Adm inistration. T hese studies provide informa­
tion on hourly earnings for 10 moving and storage jobs; 6
refuse hauling job s; 24 contract construction jobs; 7
laundry job s; and 6 food service job s. For both the
cross-industry surveys and special industry studies,
data on incidence o f paid holidays and vacation prac­
tices, and health, insurance, and retirem ent benefits are
provided every 3 years.
T h e
N a t io n a l S u r v e y
o f P r o f e s s io n a l, A d m in is tr a ­
tiv e , T e c h n ic a l, a n d
C le r ic a l P a y
provides a fund o f
broadly based inform ation on salary levels and distribu­
tions in private em ploym ent. The 72 occupation-w ork
levels studied in 1975 were selected from the follow ing
fields: A ccounting, legal services, personnel m anage­
m en t, en gin eerin g and ch em istry , buyin g, clerical
supervisory, drafting, and clerical. D efinitions for th ese
occupations provide for classification o f em p loyees ac­
cording to appropriate work levels (or classes). A l­
though reflecting duties and responsibilities in industry,
the definitions w ere designed to be translatable to
specific pay grades in the General Schedule applying to
Federal C lassification A ct em ployees. This survey,
thus, provides information in a form suitable for use in
com paring the com pensation o f salaried em p loyees in

OCCUPATIONAL PAY AND SUPPLEMENTARY BENEFITS
the Federal civil service with pay in private industry.
M onthly and annual average salaries are reported for
all occupations. D ata relate to the standard salaries that
w ere paid for standard work schedules i.e ., to the
straight-time salary corresponding to the em p lo y ee’s
normal w ork sc h ed u le , exclu d in g overtim e hours.
N ationw ide salary distributions and averages are pre­
sented for men and w om en com bined. A verages also
are presented for establishm ents in m etropolitan areas
com bin ed and for esta b lish m en ts em p loyin g 2,500
workers or more.
Industry division s included are: (1) manufacturing,
(2) transportation, com m unication, electric, gas and
sanitary serv ices, (3) w h olesale trade, (4) retail trade,
(5) finance, insurance, and real estate, and (6) engineer­
ing and architectural serv ices, and com m ercially oper­
ated research, d evelop m en t, and testing laboratories.
Lim ited to the N a tio n ’s m etropolitan areas for the
years 1960 through 1964, the annual survey w as e x ­
panded in 1965 to include nonm etropolitan counties.
The minimum establishm ent size included in the survey
is 250 workers in manufacturing and retail trade and 100
in th e o th e r in d u s tr ie s s tu d ie d . T h e m in im u m
establishm ent size has been adjusted at various tim es
since 1961. S in ce the survey sco p e is subject to change,
users are directed to the S cop e and M ethod o f Survey
appendix in the bulletins for a description o f current
p ractice.3
M u n i c i p a l g o v e r n m e n t w a g e s u r v e y s provide data for
occupation s com m on to m any m unicipal governm ents.
The 50 occup ation s studied include 10 office clerical; 5
data processing; 13 m aintenance, custodial, and trades
and labor; 6 public safety and correction; 2 sanitation;
and 14 p rofession al, adm inistrative, and technical job s.
To facilitate com parisons, the survey £ are designed to
be as com parable as p ossib le to the Bureau’s area wage
surveys o f private industry and to other related studies.
A verage salaries relate to base salaries for a standard
w orkw eek , plus longevity pay, reported on a m onthly
basis. In addition to w age data, com prehensive infor­
m ation is provided on city pay plans and their admini­
stration, work practices, unionization, and health, insur­
ance, and retirem ent benefits o f municipal em p loyees.
T o assist in making inter-city com parisons and com ­
parisons with private industry and unions, the principal
features o f the benefit plans are described in standard
form ats. T h ese form ats are alm ost identical to those
used in the B ureau’s D i g e s t o f H e a l t h a n d I n s u r a n c e
P l a n s , 1974 E dition, and th e D i g e s t o f S e l e c t e d P e n s i o n
P la n s , 1 9 7 3 E d it io n .
. T he B ureau’s occupational w age surveys
sum m arize a highly sp ecific w age m easure— the rate o f
p ay, excluding prem ium pay for overtim e and for work
on w eek en d s, h olid ays, and late shifts, for individual
C o n c e p ts

3
T he term s “ in s c o p e ” or “ w ithin s c o p e ” are used throughout this
chapter to refer to the co v erage o f the particular su rvey b ein g d e ­
scribed.



137

workers. In the case o f workers paid under piecew ork
or other types o f production incentive pay plans, an
earned rate is com puted by dividing straight-time earn­
ings for a time period by corresponding hours worked.
Production bonuses, com m ission s, and cost-of-living
bonuses are counted as earnings. In general, bonuses
that depend on factors other than the output o f the
individual worker or group o f workers are excluded;
exam ples o f such nonproduction paym ents are safety,
attendance, year-end or Christmas b onu ses, and cash
distributions under profit-sharing plans.
U n less stated otherw ise, rates do not include tips or
allow ances for the value o f m eals, room , uniform, etc.
The earnings figures, thus, represent cash w ages (prior
to deductions for social security, taxes, savings bonds,
premium paym ents for group insurance, m eals, room or
uniform s) after the exclu sion o f premium pay for over­
tim e, w eek en d, holiday, or late shift work.
H ours show n for salaried occupations relate to stan­
dard w eek ly hours for which the em ployee receives his
regular straight-time salary.
Occupational classifications are defined in advance
o f the survey. B ecau se o f the em phasis on interestab­
lishm ent and interarea com parabilty o f occupational
content, the Bureau’s job descriptions may differ sig­
nificantly from th ose in use in individual establishm ents
or th ose prepared for other purposes. The job descrip­
tions used for wage survey purposes are typically brief
and usually more generalized than th ose used for other
purposes. The primary objective o f the descriptions is
to identify the essential elem ents o f skill, difficulty, and
responsibility that establish the basic con cept o f the
jo b .4
A lth o u g h w o rk a r r a n g e m e n ts in a n y o n e e s ­
tablishm ent may not correspond p recisely to th ose de­
scribed, th ose workers m eeting the basic requirem ents
established for the jo b are includ ed .5
In applying th ese job descriptions, the Bureau’s field
representatives exclude working supervisors, appren­
tices, learners, beginners, trainees, handicapped work­
ers, part-tim e or tem porary w orkers, probationary
workers u nless provision for their inclusion is specifi­
cally stated in the jo b description.
4 A n exam p le o f a jo b description:
M A C H IN IS T , M A IN T E N A N C E
P rod u ces rep lacem en t parts and n ew parts in m aking repairs o f
m etal parts o f m ech anical equip m ent operated in an establishm ent.
W ork in v o lv es most of thefollowing: interpreting written instructions
and sp ecification s; planning and layin g ou t o f w ork; using a variety o f
m a ch in ist’s han dtools and p recision m easuring instrum ents; setting
up and operating standard m achine tools; shaping o f m etal parts to
c lo s e toleran ces; m aking standard sh op com p u tation s relating to di­
m e n sio n s o f w ork , toolin g, fe e d s, and sp eed s o f m achining; k n o w l­
ed ge o f th e w orking properties o f the com m on m etals; selectin g
standard m aterials, parts, and equip m ent required for this w ork; and
fitting and assem b lin g parts in to m ech anical equip m ent. In general,
the m ach in ist’s w ork norm ally requires a rounded training in m a­
ch in e-sh o p p ractice u sually acquired through a form al app renticeship
or eq u ivalen t training and ex p erien ce.

BLS HANDBOOK OF METHODS

138

Paid h olid ays, paid vacation s, and health, insurance,
and retirem ent plans are treated statistically on the
basis that th ese are applicable to all nonsupervisory
plant or office workers if a majority o f such w orkers are
eligible or can ex p ect eventually to qualify for the prac­
tices listed. D ata for health, insurance, and retirem ent
plans are lim ited to th ose plans for w hich at least a part
o f the co st is borne by the em ployer. This lim itation
d oes not apply, h ow ever, to data for health, insurance,
and retirem ent plans reported in the m unicipal govern­
m ent su rveys. Informal p rovisions are excluded.

Survey Methods
. C o n su lta tio n s are held w ith appropriate
m anagem ent, labor, and G overnm ent representatives
to obtain v iew s and recom m endations related to scop e,
tim ing, selectio n , and definitions o f survey item s, and
typ es o f tabulations. Particularly in planning surveys in
specific industries, th ese d iscu ssio n s importantly sup­
plem ent com m en ts and su ggestion s received from the
regional offices at the con clu sion o f the previous study.
R eflecting its u se in evaluation o f Federal w hite-collar
pay, the design o f the N ational Survey o f P rofessional,
A dm inistrative, T echnical, and Clerical Pay w as d e­
velop ed in conjunction w ith the O ffice o f M anagem ent
and B udget and the C ivil S ervice C om m ission. Changes
in the survey sco p e, item coverage, and job definitions
are initiated by th ese agencies.
The industrial scop e o f each su rvey is identified in
term s o f the c la ssifica tio n sy stem provided in the
S t a n d a r d I n d u s t r i a l C l a s s i f i c a t i o n M a n u a l . The scop e
may range from part o f a 4-digit cod e for an industry
study to a uniform com bination o f broad industry divi­
sions and sp ecific industries for the area w age surveys
or the salary survey o f p rofession al, adm inistrative,
technical, and clerical jo b s. T he n eed s o f major users
are a prim e co n sid e ra tio n in d esig n in g the m ulti­
purpose occupational studies.
The minimum size o f establishm ent included in a
survey is set at a point w here the p ossib le contribution
o f the exclu d ed establishm ents is regarded as negligible
for m ost o f the occup ation s surveyed. A nother practi­
cal reason for the adoption o f size lim itations is the
difficulty encountered in classifying workers in small
e s t a b lis h m e n t s w h e r e th e y d o n o t p erfo rm th e
sp ecialized duties indicated in the jo b definitions.

P la n n in g

5
In gen eral, w ork ers are included in a cla ssifica tio n if the du ties as
d escrib ed are perform ed a m ajor part o f the tim e and the rem ainder is
sp en t o n related d u ties requiring sim ilar or lesse r skill and resp on ­
sibility. H o w e v er , in so m e jo b s , particularly o ffice and sk illed pro­
du ctio n -w o rk er ca teg o ries, w ork ers m ay regularly perform a com b i­
nation o f d u ties in v o lv in g m ore than on e occu p ation . U n le ss indi­
ca ted o th erw ise in the d escrip tion , in th ese situ ation s con sid eration
for cla ssifica tio n p u rp o ses is g iven to th o se elem en ts o f the jo b w h ich
are m o st im portant in determ ining its lev e l for p ay p u rp oses. T h u s, a
w orker m eets the b a sic c o n c ep t o f the stenograph er classification if
taking o f d ictation is a regular requirem ent o f the jo b e v e n though a
m ajority o f tim e is sp en t on routine typing.




C onsiderations in timing o f industry surveys include
date o f expiration o f major labor-m anagem ent agree­
m ents, deferred w age adjustm ents, seasonality o f pro­
duction (e .g ., garm ents), and interests o f users. W her­
ever p ossib le, area w age surveys are timed to follow
major wage settlem ents as w ell as to m eet the needs o f
governm ent agencies engaged in w age administration
as required by law.
The typ es o f occupations studied and criteria used in
their selection were identified in the description o f the
various typ es o f surveys. The job list for each survey is
selected to represent a reasonably com plete range o f
ra tes in th e w a g e stru ctu re for th e em p lo y m e n t
categories involved, i.e ., production and related work­
ers in a sp ecific manufacturing industry or nonsuper­
visory o ffice, m aintenance, material handling, and cu s­
todial workers in a m etropolitan area. The established
hierarchy o f job rates to be found within establishm ents
and industries perm its the u se o f pay data for such key
or benchm ark job s for interpolating rates for other job s.
T echnological d evelopm ents or user interests may dic­
tate changes in the job lists and definitions. N ew defini­
tions for job s usually are pretested in a variety o f estab ­
lishm ents prior to their u se in a full-scale survey.
Q u e s tio n n a ir e s .
T w o basic schedules are used in ob­
taining data in all surveys. The first (B L S 2751 A) in­
cludes item s relating to products or services, em ploy­
m ent, shift operations and differentials, work schedule,
overtim e prem ium s, paid holidays and vacations, in­
surance and retirem ent plans, union contract coverage,
and other item s applicable to the establishm ent. The
second (B L S 2753G) is used in recording occupation,
sex , m ethod o f w age paym ent, hours (where needed),
and pay rate or earnings for each worker studied. Sup­
plem entary form s are used to m eet particular needs.

C o lle c tio n .
Bureau field econom ists collect data by
personal visit to each o f the sam ple establishm ents. Job
functions and factors in the establishm ent are carefully
com pared w ith th ose included in the Bureau job defini­
tions. The job matching may involve review o f records
such as pay structure plans and organizational charts,
com pany position descrip tion s, interview s with ap­
propriate officials, and, on o ccasion , observation o f
job s within plants. A satisfactory com pletion o f job
matching perm its acceptance o f com pany-prepared re­
ports where this procedure is preferred by the respon­
dent. G enerally, h ow ever, the field econom ist secures
w age or salary rates (or hours and earnings, w hen
needed) from payroll or other records and data on the
selected em ployer practices and supplem entary b en e­
fits from com pany officials, com pany booklets, and
labor-m anagem ent agreem ents.
A rea w age surveys in all areas involve personal visits
every third year w ith partial collection by mail or tele­
phone in the intervening years. E stablishm ents par-

O CCUPATIO NAL PAY AN D SUPPLEMENTARY BENEFITS

139

BLS HANDBOOK OF METHODS
BLS 2751A

U.S. D E P A R T M E N T O F LA B O R
Bureau of Labor S tatistic s

(R e v . J u n e 1 9 7 3 )

Budget Bureau No. 44-R0338
Approval expires November 30, 1972

WAGE-SURVEY
G EN ER A L ESTABLISHMENT INFORMATION
1. E S T A B L I S H M E N T

Your report w ill be
held in confidence

ID E N T IF IC A T IO N

A . S u rvey

P a y ro ll P e rio d

P a y ro ll P eriod
1 9_ _ _

e s t a b l i s h m e n t

S T R E E T

A D D R E S S

C O U N T Y ,

N A M E

S T A T E

A N D

1 9__

n a m e

C IT Y

A N D

T I T L E

Z IP

O F

C O D E

A R E A

A U T H O R IZ IN G

N A M E

O F F I C I A L

C O D E

A N D

-

T E L E P H O N E

T I T L E

O F

O F F I C I A L

S U P P L Y IN G

D A T A

19 —

1 9 ___
A D D R E S S

O F

O F F IC E

FRO M

WHICH

B . C e n t r a l O f f i c (eCom
plete
N AM E

O F

S T R E E T

D A T A

WAS

if clearance

O B T A IN E D ,

IF

D IF F E R E N T

and/or d ta
|
a

|

FRO M

A B O V E

N AM E

C O M P A N Y

A D D R E SS

C IT Y ,

S T A T E

T E L E P H O N E

j obtained from this source)

|

A N D

Z IP

O F

A U T H O R IZ IN G

O F F I C I A L

C O D E

T IT L E

2. C U R R E N T

PR O D U C TS

OR S E R V IC E S A N D

PRO CESSES

A P P R O X IM A T E
A PPR O X IM A T E
P R O D U C T O R S E R V I C E %A N N U A L
A. P R O D U C T O R S E R V I C E % A N N U A L
VALUE
VALUE
1 9_ _ _
1 9___

3. O F F I C E

USE

O N L Y

S C H E D U L E N O .I D E N T .
1-5
1 9____
1 9____

B. S C O P E O F O P E R A T I O N S




6-8

AREA
9-11

R E G IO N S T A T E
12

13-14

C ITY
SI Z E

SIC C O D E

15

16-19

EST.
SI Z E

U N IO N
2 0 21

S
I
W E I G H T P E C EARLI S C IHCASR ­
ACT
T
(1)
22 -24 25 -27

(2 )
28-30

BLS HANDBO Q K OF METHODS

140

OCCUPATIONAL PAY AND SUPPLEMENTARY BENEFITS
BLS 2751 A —Continued

U.S. DEPARTMENT OF LABOR

(Rev. June 1973)

Bureau o f Labo r S ta tis tic s

w
.
P A Y R O L L

S U R V E Y

P E R I O D

S C H E D U L E

NO.

E S T A B L I S H M E N T

5* UNION CONTRACT COVERAGE
No

A.

A re a m a jo r ity o f you r p ro d u c tio n w o rk e rs c o v e r e d b y u n ion a g re e m e n ts ?

B.

A r e a m a j o r i t y o f y o u r o f f i c e w o r k e r s c o v e r e d b y u n i o n a g r_ e _ _ e n t s ?
_e m

32

Y es

3 <□
1

C.

W ith w h a t u n io n s d o e s t h is e s t a b l i s h m e n t h a v e c o n t r a c t s ? .
D

o l

|

C
c

W hat o c c u p a tio n a l g ro u p s a re c o v e r e d b y th e c o n tra c t?
( L i s t grou ps b e lo w o p p o s ite th e a p p ro p ria te u n io n ,)

( G i v e nam e an d a f f ilia t io n b e lo w ,)

P ro d u ction W orkers:

O ffic e W orkers:

6.

ESTABLISHMENT EMPLOYMENT (APPROXIMATE)
A.

W hat is the a p p ro x im a te to ta l e m p lo y m e n t*

B.

How

in t h is e s t a b lis h m e n t ?

m a n y a r e n o n s u p e r v i s o r y p r o d u c t i o n ( p l a n t ) w- o -r- k -e- - -s- ?
- - r

M e n ---------------------------------------------------------------------------------W om en ______________________________________________________________
C.

N o n s u p e rv is o ry o ffic e

w o r k _ _r _ _?_ _ _ _ _ _ _ _ _:_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
_e s
_

M e n_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
W om en______________________________________________________________
D.

O t h e r e m p l o y e e s ( e x e c u t i v e , p r o f e s s i o n a l , s u p e r v i s o r_ y _ e t c . ) ?
_,

E. _________________________________________________
F . __________________________ I______________________
Includes salaried officers of corporations but does not include proprietors, members of unincorporated firms, pensioners,
members of the armed forces carried on the payroll, or unpaid family workers.
G.

R em arks




OCCUPATIO NAL PAY AND SUPPLEMENTARY BENEFITS

141

BLS HANDBOOK OF METHODS
M S

2 5 30
7

OCCUPATIONAL RATES

Rov. 65

Payroll parted.

Schodulo No.________________________________fat. Homo_____________________________________________________________________________Pago

O C C UPATI ON A N D GRADE




Occupational
coda
(D

Sox
(2)

Mothod o f Numbor of
pay
workors
(3)
(4)

Hours
(5)

Salary, rato, or
oarnings
(6)

Lino
No.
(7 )
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

(*>

142

BLS HANDBOOK OF METHODS

ticipating in the mail collection receive a transcript o f
the job matching and w age data obtained previously,
together with the job definitions. The up-dated returns
are scrutinized and questionable entries are checked
with the respondent. Personal visits are made to estab­
lishm ents not responding to the mail or telephone re­
quest and to th ose reporting unusual changes from
year-earlier data.
The work o f all field econ om ists is checked for qual­
ity o f reporting, with particular attention directed to
accuracy in job m atching. The revisits are made by
supervisory and senior econ om ists. System atic tech ­
nical audits o f the validity o f survey definitions, made
by staff with sp ecialized training, also are maintained
for the technically com plex nationw ide w hite-collar
salary survey.

S a m p li n g
B efore the sam ple is selected , a suitable sampling
“ fram e” m ust be located or d evelop ed . A sampling
frame is a list o f establishm ents w hich fall within the
designated scop e o f the survey. The frame is as clo se to
a universe as p ossible but is often incom plete. B L S uses
fram es primarily com piled from lists provided by reg­
u la to r y g o v e r n m e n ta l a g e n c ie s (p rim a rily S ta te
unem ploym ent insurance agen cies). B ecau se th ese are
som etim es incom plete, they are supplem ented by data
from trade directories, trade association s, labor unions,
and other sources.
The survey design em ploys a high degree o f stratifica­
tion. E ach geographic-industry unit for w hich a sepa­
rate analysis is to be presented is sam pled indepen­
dently. W ithin th ese broad groupings, a finer stratifica­
tion by product (or other pertinent attributes) and size
o f establishm ent is m ade. Stratification may be carried
still further in certain industries: T extile m ills, for in­
stance, are classified on the basis o f integration, i.e .,
w hether they spin on ly, w eave on ly, or do both. Such
stratification is highly important if the occupational
structure o f the variou s industry segm en ts differs
w idely.
The sam ple for each industry-area group is a proba­
bility sam ple, each establishm ent having a predeter­
mined chance o f selection. H o w ever, in order to secure
m axim um accuracy at a fixed lev el o f co st (or a fixed
level o f accuracy at minimum co st), the sampling frac­
tion used in the various strata ranges downward from all
large establishm ents through progressively declining
proportions o f the establishm ents in each smaller size
group. This procedure follow s the principles o f op ­
timum allocation w here the standard deviation o f the
characteristic being estim ated is proportional to the
average em ploym ent in the stratum. Thus, each sam ­
pled stratum will be represented in the sam ple by a
number o f establishm ents roughly proportionate to its




share o f the total em ploym ent. Though this procedure
may appear at first to yield a sam ple biased by the
over-representation o f large firm s, the m ethod o f esti­
mation em ployed yields unbiased estim ates by the as­
signm ent o f proper w eights to the sampled establish­
m ents.
In the event a sample establishm ent within scop e is
uncooperative in supplying usable data, a substitute is
assigned in the sam e in d u stry -lo ca tio n -size c la ss.
(Since no clo se relation exists b etw een failure to par­
ticipate in th ese surveys and the item s being studied,
little bias is introduced by this procedure.)
The size o f the sample in a particular survey depends
on the size o f the u niverse, the diversity o f occupations,
and their distribution, the relative dispersion o f earn­
ings am ong estab lish m en ts, the distribution o f the
establishm ents by size, and the degree o f accuracy re­
quired. E stim ates o f variance based on data from previ­
ous surveys are used in determining the size o f the
sam ple needed.
A s indicated earlier, area w age surveys are limited to
selected m etropolitan areas. T hese areas, h ow ever,
form a sam ple o f all such areas, and, w hen properly
com bined (w eighted), yield estim ates o f the national
and regional lev els. The sam ple o f areas is based on the
selection o f one area from a stratum o f similar areas.
The criteria o f stratification are region, type o f indus­
trial activity as m easured by percent o f manufacturing
em p lo y m e n t, and m ajor in d u stries. E a ch area is
selected with its probability o f selection proportionate
to its nonagricultural em ploym ent. The largest m et­
ropolitan areas are self-representing, i.e ., each one
form s a stratum by itself and is certain o f inclusion in the
area sam ple. The present area sam ple contained about
70 percent o f all nonagricultural em ploym ent o f the
m etropolitan area com plex o f the entire country in
1973.
E s t im a t in g P r o c e d u r e s
E stim a te d a v e r a g e e a r n in g s (h o u r ly , w e e k ly ,
m onthly, or annual) for an industry or an occupation are
com puted as the arithmetic m ean o f the individual em ­
p lo y e e’s earnings. T hey are not estim ated by dividing
total payrolls by the total tim e w orked, since such in­
formation alm ost never is available on an occupational
basis.
All estim ates are derived from the sam ple data. The
averages for occupations, as w ell as for industries, are
w eighted averages o f individual earnings and not com ­
puted on an establishm ent basis. The proportion o f
em ployees affected by any fringe provision likew ise is
estim ated from the sample; all plant and office workers
in each establishm ent are considered to be covered by
the predom inant benefit policy in effect, and the entire
plant and office em ploym ent o f the establishm ent is
separately classified accordingly.

O CCUPATIONAL PAY AN D SUPPLEMENTARY BENEFITS
A s m entioned previously, the use o f a variable sam ­
pling ratio in different strata o f the population would
result in biased estim ates if straight addition o f the data
for the various establishm ents w ere m ade. Therefore,
each establishm ent is assigned a w eight that is the in­
verse o f the sampling rate for the stratum from w hich it
was selected — e .g ., if a third o f the establishm ents in
o n e stra tu m are s e le c t e d , e a c h o f th e sa m p led
establishm ents is given a w eight o f 3.
To illustrate the u se o f w eigh ts, su pp ose the universe
were 7 establishm ents, from w hich a sam ple o f 3 was
selected . A ssum e that establishm ent A w as drawn from
a cell, or stratum, in w hich on e o f the tw o establish­
m ents w as used in the sam ple. It therefore is given a
w eight o f 2. E stablishm ent B , on the other hand, w as
taken w ith certainty (or a probability o f 1) and is thus
given a w eight o f 1. E stablishm ent C w as taken from the
remaining group w here on e o f the four establishm ents
w as used in the sam ple, and h en ce is given a w eight o f 4.
The follow ing calculations are made in estim ating aver­
age earnings for a given occupation.
W ork e rs
in

in

s a m p le

m e n ts

e s t a b lis h ­

a t s p e c ifie d

ra te

A n a ly s is a n d P r e s e n ta tio n
E s tim a te s

h o u r ly
W e ig h t

n u m b e r

2
1

C ...................
‘4
Estimated universe

40
30
20
10

in

o f to ta l

s tra tu m

e a rn in g s

A ...................
B ...................

$2.60
2.70
2.95
2.65

W o rk e rs

2x40
1x30
1x20
4x10
170

e a r n in g s

2x40x$2.60
lx30x 2.70
lx20x 2.95
4xl0x 2.65
$454.00

The estim ated average hourly earning is thus ——- ^ or
$2.67.
170
A similar m ethod applies to any characteristic esti­
m ated from the sam ple. To estim ate the proportion o f
em ployees in establishm ents granting paid vacations o f
2 w eek s after 2 years o f serv ice, for instance, the
establishm ents are classified according to the length o f
vacation granted after 2 years’ service, establishm ent
w eights are applied to em ploym ent, as in the previous
exam ple, and the proportion o f the estim ated em ploy­
m ent in the 2-w eek category o f the estim ated total
em ploym ent then is com puted. U sin g the sam e three
establishm ents as in the previous exam ple, this can be
illustrated as follow s:
A c tu a l to ta l
W e ig h t

W e ig h te d

V a c a tio n

e s t a b lis h m e n t

e m p lo y -

p r o v is io n s

e m p lo y m e n t

E s ta b lis h m e n t

m e n t

a fte r 2 y e a rs

A ...................
2
100
B ...................
1
500
C ...................
4
75
Estimated universe...................................

200
500
300
1,000

1week.
2 weeks.
1week.

T h u s , th e e s tim a te d p e r c e n ta g e o f w o r k e r s in
establishm ents granting 2 w e e k s’ vacation after 2 years
o f service is

SO
O
- - o r 50 percent.
1,000




W hen a large establishm ent within survey scop e, for
w hich no substitute ex ists, is unable to supply data, the
d eficiency is alleviated by increasing the weight o f the
m ost nearly similar units. Should any segm ent be af­
fected by a substantial am ount o f such noncooperation,
the publication o f materials will be dim inished by om it­
ting separate presentation o f sectors seriously affected.
W here a sam ple o f selected m etropolitan areas is
used to represent the totality o f such areas, a second
stage o f w eighting is used to expand the individual area
totals to region and/or national estim ates. Since, as
indicated in the description o f the sampling m ethod,
each area represents a stratum o f similar areas, the total
from each area is w eighted to the estim ated stratum
totals by multiplying by the inverse o f the chance o f
selection. This procedure provides the ratio o f nonagricultural em ploym ent in the stratum to that in the sam­
ple area (one in the case o f the large self-representing
areas). Sum m ing all such estim ated stratum totals
yields the earnings and em ploym ent totals for the region
and the country as a w hole.

o c c u p a tio n

A v e ra g e
E s ta b lis h m e n t

143

W here an industry survey is designed to yield esti­
m ates for selected States or areas, these are published
separately as information becom es available from all
sample firms in the State or area unit. Industry surveys
limited to selected areas do not provide a basis for the
exam inations o f pay lev els by size o f com m unity, size
o f esta b lish m e n t, p ro d u ct, or la b or-m an agem en t
agreem ent coverage that generally are included in bulle­
tin reports on nationw ide surveys. R egardless o f g eo ­
graphic sco p e, industry survey reports record the inci­
dence o f incentive pay plans and, to the extent possible,
average pay lev els separately for tim e and incentive
workers.
Individual bulletin reports on individual area w age
surveys are supplem ented by tw o summary bulletins.
The first com piles the results o f individual area surveys
m ade during a year. The secon d contains inform a­
tion on occupational earnings, em ployer practices, and
supplem entary w age benefits for all m etropolitan areas
com bined and by industry division within the four
broad cen su s regions.
Percent increases, adjusted for changes in em ploy­
m ent, are com puted for broad occupational groups,
e .g ., office clerical, electronic data processing, skilled
m aintenance, and unskilled plant. T hese increases are
com puted annually, separately for all industries, man­
ufacturing, and nonm anufacturing, for each metropoli­
tan area studied, for all m etropolitan areas com bined,
and for four broad censu s regions. Area pay relatives
for the four occupational categories are published an­
nually, permitting ready com parisons o f average pay
levels am ong areas. E stim ates o f labor-managem ent

BLS HANDBO O K OF METHODS

144

agreem ent coverage are also presented annually. O c­
c u p a tio n a l p ay r e la tio n s h ip s w ith in in d iv id u a l
establishm ents are sum m arized periodically.
Bulletins on the N ational Survey o f Professional,
A dm inistrative, T echnical, and Clerical Pay present
o ccu p a tio n a l averages and distribu tion s on an all­
industry basis, nationw ide and separately for all m et­
ropolitan areas com bined, and for establishm ents em ­
ploying 2,500 w orkers or m ore. A verage pay lev els for
industry divisions are show n as percentages o f the all­
industry averages. Y ear-to-year percent changes for
occupation-w ork lev els and trend estim ates for occup a­
tions are reported.
Industry w age, area w age, and municipal govern­
m ent w age survey reports are issued throughout the
year as the surveys are com pleted. The bulletin on the
N a tio n a l S u r v e y o f P r o fe ssio n a l, A d m in istra tiv e,
T echnical, and Clerical Pay is available in D ecem ber.
Sum m aries o f the data in the bulletins and special
analyses appear also in the M o n t h l y L a b o r R e v i e w .

U s e s a n d L im it a t io n s
O ccupational w age data d evelop ed in th ese surveys
have a variety o f u ses. T hey are used by Federal, State,
and local agen cies in w age and salary administration
and in the form ulation o f public policy on w ages, as in
minimum w age legislation. T hey are o f value to Federal
and State m ediation and conciliation services and to
State unem ploym ent com pensation agencies in judging
the suitability o f job offers. K now ledge o f lev els and
trends o f pay rates by occup ation , industry, locality,
and region is required in th e a n a ly sis o f cu rrent
econom ic d evelop m en ts and in studies relating to w age
dispersion and differentials.
Bureau data are used in con n ection w ith private w age
or salary determ inations by em ployers or through the
collectiv e bargaining p rocess. T o the exten t that w ages
are a factor, survey data also are considered by em ­
ployers in the selection o f location for new facilities and
in co st estim ating related to contract work.
O ccupational w age survey programs are not designed
to supply m echanical answ ers to q uestions o f pay pol­
icy. A s suggested earlier, lim itations are im posed in the
selection and definition o f industries, o f geographic
units for w hich estim ates are d evelop ed , o f occupations
and associated item s studied, and in determ ination o f
periodicity and timing o f particular su rveys. D epending
upon his n eed s, the user may find it n ecessary to inter­
polate for occup ation s or areas m issing from the survey
on the basis o f know ledge o f pay relationships.
B ecau se o f interestablishm ent variation in the pro­
portion o f w orkers in the jo b s studied and in the general
level o f pay, the survey averages do not n ecessarily
reflect eith er the ab solu te or relative relationships
found in th e majority o f establishm ents. To illustrate,




em p loym en t in the sp ecia lized m aintenance crafts
tends to be concentrated in the larger establishm ents,
w h e r e a s e m p lo y m e n t is c u s to d ia l and m a teria l
m ovem ent job s is distributed more w idely within an
industry or area. Thus, to the extent that pay rates in the
larger establishm ents vary from the average lev el, the
skill differential m easure based on the survey averages
will differ to som e degree from that obtainable within
each o f the larger establishm ents.
The incidence o f incentive m ethods o f paym ent may
vary greatly among the occupations and establishm ents
studied. Since hourly averages for incentive workers
generally ex ceed th ose for hourly-rated workers in the
sam e jo b , averages for som e incentive-paid job s may
equal or ex ceed averages for jo b s positioned higher on a
job evaluation basis but normally paid on a tim e basis.
W herever p ossib le, data are show n separately for time
workers and incentive workers in the industry surveys.
Incentive plans (generally plant-wide in application)
apply to only a very small proportion o f the workers in
the indirect plant job s studied in the area w age program.
Although year-to-year changes in averages for a job
or job group primarily reflect general w age and salary
changes or merit increases received by individuals,
these averages also may be affected by changes in the
labor force resulting from labor turnover, labor force
expansions and reductions for other reasons, as w ell as
changes in the proportion o f workers em ployed in e s ­
tablishm ents with different pay levels. A labor force
expansion might increase the proportion o f low er paid
workers and thereby low er the average, or the closing
o f a relatively high-paying establishm ent could cause
average earnings in the area to drop.
This problem has been overcom e for area wage sur­
vey s by holding establishm ent em ploym ents constant
w hile com puting percent increases in earnings. That is,
th e p r e v io u s and cu rren t y ea r ea rn in g s o f ea ch
establishm ent are w eighted by that establishm en t’s
previous year’s em ploym ent. An establishm ent w hich
does not have workers or has not been sam pled in the
previous year is not included in the calculation.
R e l i a b i l i t y o f s u r v e y s . R esults o f the surveys gener­
ally will be subject to sampling error. This error will not
be uniform, since, for m ost occupations, the dispersion
o f earnings am ong establishm ents and frequency o f o c ­
currence o f the occupation differ. In general, the sam ­
ple is designed so that the chances are 9 out o f 10 that
the published average d oes not differ by more than 5
percent from the average that would be obtained by
enum eration o f all establishm ents in the universe.
The sampling error o f the percentage o f workers re­
ceiving any given supplem entary benefit differs with
the size o f the percentage. H ow ever, the error is such
that rankings o f predom inant practices alm ost alw ays
will appear in their true position. Small percentages
may be subject to considerable error, but will alw ays
remain in the sam e scale o f magnitude. For instance,

OCCUPATIO NAL PAY AN D SUPPLEMENTARY BENEFITS
the proportion o f em p loyees in establishm ents provid­
ing m ore than 5 w e e k s’ paid vacation to long-service
em ployees m ay be given as 2 percent, when the true
percentage for a l l establishm ents might be only 1 per­
cent. Such a sam pling error, w hile considerable, d oes
not affect the essential inference that the practice is a
rare one.
E stim ates o f the num ber o f workers in a given o cc u ­
pation are subject to considerable sampling error, due
to the w ide variation am ong establishm ents in the pro­
portion of workers found in individual occupations. (It is
not unusual to find th ese estim ates subject to sampling
error o f as m uch as 20 percen t.) H en ce, the estim ated
number o f workers can be interpreted only as a rough
m easure o f the relative im portance o f various occup a­
tio n s . T h e g r e a te s t d e g r e e o f a c c u r a c y in th e s e
em ploym ent cou n ts is for th o se occup ation s found
principally in large establishm ents. This sampling error,
h ow ever, d oes not m aterially affect the accuracy o f the
average earnings show n for the occupations. The esti­
m ate o f average earnings is technically know n as a
“ ratio e stim a te,’’ i.e ., it is the ratio o f total earnings { n o t
payrolls) to total em ploym ent in the occupation. Since
th ese tw o variables are highly correlated (i.e ., the er­
rors tend to be in the sam e direction), the sampling error

T e c h n ic a l

N um ber

1.

2.

3.
4.

C o h en , S am u el E ., “ S tu d ies o f O ccup ation al W ages and Su p­
plem en tary B e n e fits .’’ M o n th ly L a b o r R e v ie w , M arch 1954
(pp. 2 9 2 - 297).
A n earlier d escrip tion o f the m eth od s o f w age su rv ey s,
sim ilar to the p resen t article.
D o u ty , H . M ., “ S u rv ey M eth od s and W age C om p a riso n s.”
L a b o r L a w J o u r n a l , April 1964 (pp. 2 2 2 -2 3 0 ).
A d i s c u s s i o n o f the u s e s o f w a g e s u r v e y r e s u l t s , a n d the
pitfalls to b e a v o id ed . A short d isc u ssio n o f the factors affect­
ing su rv ey m eth o d s is also inclu ded.
H o u ff, Jam es N . , “ Im p roving A rea W age S u rvey In d e x e s .”
M o n th ly L a b o r R e v ie w , January 1973 (pp. 5 2 - 5 7 ) .
K an n in en , T o iv o P ., “ N e w D im en sio n s in B L S W age S u rvey
W o r k .” M o n t h l y L a b o r R e v i e w , O c to b e r 1959 (p p .
1 0 8 1 -1 0 8 4 ).




145

o f the estim ate (average hourly earnings) is considera­
bly smaller than the sampling error o f either total earn­
ings or total em ploym ent.
Since com pletely current and accurate information
regarding establishm ent products and the creation of
new establishm ents is not available, the universe from
which the sam ple is drawn m ay be incom plete. Sample
firms incorrectly classified are accounted for in the
actual field w ork, and the universe estim ates are re­
vised accordingly. T hose firms w hich should have been
included but were classified erroneously in other indus­
tries cannot be accounted for.
Since som e m easure o f subjective judgm ent enters
into the classification o f occupations and other charac­
teristics, there is som e reporting variability in the re­
sults. A repetition o f the survey in any establishm ent
with different interview ers and respondents would un­
doubtedly produce slightly different results. H ow ever,
w hen spread over a large number o f establishm ents the
d ifferences, being random, w ould tend to balance out.
H en ce, analyses based on a small number o f respon­
dents m ust be used with care, even when all eligible
establishm ents are included. N o evid en ce o f any con ­
sistent error has been uncovered.

R e fe re n c e s

N um ber

5.

6.

A n outline o f the occu p ation al w age su rvey program s, as
exp an d ed in fiscal 1960. L ists the typ e o f su rvey and c y c le for
each o f 70 ind ustries stu died sep arately, and identifies the
area sam p le as originally determ ined for the labor m arket
su rvey program .
T alb ot, D eborah B ., “ Im proved A rea W age S u rvey In d e x e s .”
M o n th ly L a b o r R e v ie w , M ay 1975 (pp. 3 0 - 3 4 ) .
A d iscu ssio n o f d ifferen ces in com puting A rea W age Sur­
v e y pay in creases by the m atch ed and unm atched sam ple
tech n iq u es.
W ard, V irginia L ., “ A rea Sam p le C h anges in the A rea W age
Su rvey P rogram .” M o n th ly L a b o r R e v ie w , M ay 1975 (pp.
4 9 -5 0 ).
A d e sc r ip tio n o f th e A rea W age S u rv e y program and
ch an ges in the program ’s area sam p le.

Chapter 19.
B a c k g r o u n d

a n d

D e s c rip tio n

Union W age Rates

o f S u rv e y

Annual studies o f union w age rates and hours are
conducted in four industries: building construction,
local transit, local trucking, and printing.1 A biennial
study o f union w age rates for grocery store em ployees
also is included in the program. U n ion wage rates and
hours are th ose agreed on through co llectiv e bargaining
b etw een em ployers and trade unions; they are defined
as (1) the basic (minimum) w age rates (excluding holi­
day, vacation, or other benefit paym ents regularly made
or credited to the worker each pay period) and (2) the
m axim um num ber o f hours per w eek at straight-time
rates. R ates in e x c e s s o f the n egotiated m inimum,
w hich m ay be paid for special qualifications or other
reason s, are exclu d ed .
The u se o f union agreem ents or other union records
in studies o f occupational w ages is practicable in indus­
tries that are characterized by a high degree o f organiza­
tion and in w hich (1) defined craft groupings persist, as
in building construction or printing, or (2) key occupa­
tions can be clearly d elineated, as in local transit.
The B ureau’s annual union w age studies began in
1907. Since that tim e, the num ber o f cities studied has
varied greatly. B eginning with the 1976 survey the sam ­
ple w as selected on a probability basis, consisting o f 66
citie s2 w ith 100,000 inhabitants or m ore, according to
the 1970 C ensus. T he scop e o f the inform ation for indi­
vidual industries has also been changed. For exam ple,
24 journeym en crafts and 9 helper and laborer classifi­
cation s in the building trades are covered currently, in
place o f the 13 journeym en and 7 helper and laborer
classification s in the initial studies.
The study o f union w age rates and hours in the build­
ing trades includes virtually all jou rn eym en and helper
and laborer classification s. In dexes and other data are
show n for each important trade as w ell as for all trades
com b in ed .3 B eginning in July o f 1972, the study w as
!T he co v era g e at variou s tim es a lso inclu ded barbers, lin em en,
lo n g sh o rem en , and w ork ers em p loyed in b rew eries, laundries, m etal
trad es, m illw ork, resta u ran ts, soft-drink produ ction, th eaters, and
b ak eries.
2In th ese stu d ies, data relate to individual c ities and con tigu ou s
suburban area s, rather than to the m uch broader Standard M etrop oli­
tan Statistical A reas w h ich are u sed in m ost other Bureau su rveys.
3In add ition to the annual stu d ies in the building trades, a quarterly
su rv ey o f 7 m ajor co n stru ction trades is con d u cted in 121 cities.
E stim ated average hou rly w age rates for all trades com bined and for
ea ch su rv ey ed trade are p resen ted , togeth er w ith the estim ated
change during the quarter and the year.


146


expanded to workers in five o f the trades com m only
found on highw ay, street, and other heavy construction
p ro jects-ca rp en ters, cem ent finishers, operating en ­
gineers, structural-iron w orkers, and laborers. W age
data and other contract provisions are published by city
for each o f the five trades, although this information is
not currently included in the calculation o f any indexes
or averages d eveloped.
The trucking study em braces drivers and helpers en ­
gaged in local trucking. Over-the-road drivers and local
city drivers paid on a m ileage or com m ission basis are
excluded. All data, including ind exes, are presented for
the tw o major classifications o f drivers and riding help­
ers.
U nion w ages and hours in the local-transit industry
are lim ited to operating em p loyees. Data are show n
separately for operators o f surface cars and b uses, and
elevated and subw ay lines, excep t that indexes are
show n only for the industry as a w hole.
In the printing industry, 15 book and job trades, 8
new spaper trades and 6 lithography trades are studied,
and for the new spaper trades, separate data are show n
for day and nightwork. Indexes and other data are pre­
sented separately, by type o f printing, for each trade
and for all trades com bined.
In 1971, a biennial study o f w age rates and hours in
grocery stores w as inaugurated. Data are show n sepa­
rately for 15 occupational classification s, including
cashiers, grocery clerks, meat departm ent w orkers,
dairy clerks, produce clerks, and stockers.

D a ta

S o u rc e s

a n d

C o lle c tio n

M e th o d s

The union w age studies are designed to include all
local unions in the covered industries in the selected
cities. Periodic ch ecks are made with central labor
unions, district cou n cils, and other authoritative bodies
to identify new local unions that should be included
in the studies.
Information is collected by mail from local unions
and when n ecessary from international unions and re­
gional union organizations. Personal visits are made to
unions that do not respond to the mail questionnaire.
B efore 1947, all data relative to union w age studies w ere
co llected directly from local union officials (generally
the secretaries or busin ess agents) by Bureau represen­
tatives and entered on form s designed specifically for
this purpose.

U N IO N WAGE RATES
Inform ation requested relates to the first workday in
July for all industries. This date w as adopted, after
num erous changes, becau se m ost n ew agreem ents in
these industries have been negotiated by that time each
year. In order to maintain year-to-year com parability,
wage rate, hours, and m em bership data for the previous
year are transcribed onto the form s before they are sent
out. U nion officials are requested to ch eck the previous
year’s data and revise any figures w hich may have been
incorrectly reported, and to insert current data. C opies
o f union agreem ents also are requested from union offi­
cials for the purpose o f (1) checking the data entered on
the sch ed u les with the terms o f the agreem ents, and (2)
building up the files o f union agreem ents maintained by
the Bureau o f Labor S ta tistics.4 T he reporting form
used for the building trades survey is reproduced on
pages 1 4 9 -5 2 .

S a m p lin g

a n d

E s tim a tin g

P ro c e d u re s

The current series is designed to reflect union wage
rates and hours in all cities o f 100,000 inhabitants or
more. All cities o f 500,000 inhabitants or more are in­
cluded, as are m ost cities in the 250,000 to 500,000
group. T he citie s in the 100,000 to 250,000 group
selected for study are distributed w id ely throughout the
U nited S tates. Data for som e o f the cities included in
the study are w eighted to com pensate for cities not
surveyed. To provide appropriate representation in the
com bination o f data, each region is considered sepa­
rately w hen city w eights are assigned.

Rates
An overall average hourly rate is com puted for each
o f the industries included in the union w age studies. In
addition, averages are presented by occupation for
grocery store em ployees; by industry branch, trade,
city, and region in building construction and printing;
and by occupation, city , and region, in local transit and
local trucking.
A verage union rates are calculated by w eighting each
q u o ta tio n fo r th e c u rr en t y e a r b y th e r e p o r ted
m em bership.5 T hese averages are lev els designed to
provide com parisons am ong trades and cities at a given
time. T hey do not m easure the trend o f union rates, the
function served by the index series.

Indexes
Chain ind exes are calculated for all o f the industries
except grocery stores, to portray the trend o f union wage
4S e e chapter 28, “ C o llectiv e Bargaining A g r ee m e n ts.”
5R eported m em bership, as u sed in this stu d y, is defined as m em ­

bers w orking or im m ed iately available for w ork.



147

rates and w eekly hours. In calculating these indexes,
the percent change in aggregates is com puted from
quotations for all identical classifications in the industry
for 2 su ccessiv e years. To obtain the aggregates, the
rates and hours for both the previous and current years
are w eighted by the m em bership in the particular clas­
sification for the current year. The index for the current
year is com puted by multiplying the index for the pre­
ceding year by the ratio o f the aggregate change. For
exam ple, in the 1974 study o f building trades, the rate
aggregate for all quotations increased 7.8 percent over
the previous year. The July 1, 1974, index o f union
hourly w age rates for all building trades (173.4) is the
result o f m ultiplying the July 1, 1973, index (160.8) by
the ratio o f the aggregates (1.078). This m ethod o f index
calculation m inim izes the influence o f year-to-year
changes in m em bership.
Indexes o f union hourly w age rates and w eekly hours
are com puted for each classification as w ell as for all
classifications com bined in the building construction,
local trucking, and printing industries. In the local
transit industry an index is provided only for all classifi­
cations com bined. Irregular hours o f work for operating
em p loyees in many o f the covered cities prevent the
com putation o f an index for union w eek ly hours in the
local transit industry. An index series for all grocery
store workers will be d evelop ed upon the accum ulation
o f sufficient trend data.
The base period for the indexes o f union wage rates
and w eek ly hours is the 1967 average. The series for the
building trades and printing industry date back to 1907,
for local transit to 1929, and for local trucking to 1936.
Although data for the latter tw o industries were co l­
lected for years before the dates o f the index series,
indexes w ere not constructed becau se o f inadequacies
in the available data.

A n a ly s is

a n d

P re s e n ta tio n

The averages and ind exes m entioned together with
other summary data are contained in the bulletins pub­
lished annually for the building trades, printing, local
transit, and local trucking studies. Included among the
information show n for individual trade classifications is
the proportion o f union m em bers having hourly rates at
different lev els, as w ell as the proportion o f union
m em bers having, since the previous study, w age rate
increases o f specified am ounts in terms o f cents per
hour and percent. The increase registered by the trade
is show n also. The biennial grocery store bulletin pre­
sen ts average w age rates and increases since the previ­
ous survey for all cities o f 100,000 inhabitants or more; a
distribution o f union m em bers by hourly occupational
w age rate; and intercity com parisons o f wage rates by
occupation.
In addition, the union rates o f w ages and hours in
effect on the date o f the survey, as reported by union

BLS HANDBO O K OF METHODS

148

officials, for both the previous and current years are
published for each classification by city. T hese furnish
a direct com parison o f union rates b etw een the 2 years
for each o f the industries studied. The rates o f w ages are
indicated as hourly rates and the hours as the w eek ly
hours o f work before overtim e rates are applicable. The
current studies also present data on em ployer paym ents
for insurance (health and w elfare) and pension pay­
m ents; in addition em ployer p aym ents for vacation and
other funds (excep t th ose for apprenticeship) are show n
for the building trades. T h ese paym ents are exp ressed
in term s o f cents per hour or as percent o f rate.

U s e s

a n d

L im ita tio n s

The B ureau’s union w age series provide a m eans o f
determ ining intercity w age d ifferen ces for com parable
w ork, and the relationships b etw een rates applicable to
w orkers in occu p ation s requiring varying degrees o f
skill. T he data are u sed in w age n egotiations by both
m anagem ent and labor. The w age rates o f buildingtrades w orkers are esp ecially important in estim ating
construction c o sts, b ecau se labor expenditures con sti­
tute an important elem ent in the total co st o f building
con stru ction . T he in d ex series derived from th ese
studies provide barom eters o f year-to-year changes in
rates o f w ages and hours in the industries covered.




A verage union rates provide com parisons o f w age
rates among industries, trades, and cities at a given
time. U nlike the in d exes, they are not an accurate
m easurem ent o f year-to-year changes becau se o f flu c­
tuations in m em bership and other factors. M em bership
figures for the various trades or classifications do not
remain constant and changes may have a marked effect
on average rates. For exam ple, if organizational drives
in cities having relatively low er rates o f w ages result in
sharp increases in m em bership, the m ovem ent o f the
rate lev els for the affected trades as a w hole is naturally
retarded. C on versely, increases in m em bership in cities
having high w age rates accelerate the upward m ove­
m ent o f averages.6
The union rates are not n ecessarily the actual rates
paid to all w orkers, and the union hgurs are not n ece s­
sarily the hours actually worked. W orkers with above
average exp erience and skill may be em ployed at rates
above the union w age rates, esp ecially during prosper­
ous tim es w hen a tight job market creates com petitive
bidding for the better w orkers. During periods o f d e­
pressed busin ess activity, actual hours worked often
are less than hours specified in the union agreem ent.
M e m b e r sh ip (u sed for w eigh tin g pu rp oses) relates on ly to a ctiv e
m em b ers in the c ity and co n tigu ou s suburban areas. It d o e s n ot reflect
the total ju risd iction o f local u n io n s, w h ich m ay exten d b eyon d th ese
lim its, and it d o e s n ot n ecessa rily reflect m etropolitan area rates.

149

UN IO N WAGE RATES

Bureau of Labor Statistics
Union Wage Rates and Hours in the
Building Trades

U.S. Department of Labor
O.M.B. No. 44-R0738
Approval expires: 3/31/78

r

n

L

J

Dear Union Official:
The Bureau of Labor Statistics is now conducting its annual survey of union wage rates and hours in the building trades. The continued
success of these surveys, begun in 1907, depends largely upon your cooperation. Please complete the attached questionnaire and return it
along with a copy of your current agreement in the enclosed, postage-paid envelope. Please return the questionnaire within two weeks, if
possible.
Thank you very much for your cooperation.
Very truly yours,

Regional Commissioner for the Bureau of Labor Statistics

PART A. CONTRACT IN FORMATION

Start card

[

aT ]

I. Agreement Dates

(Enter date as follows: July 2,1976, should read

07 | 02 | 7 6 j
Mo.

A. On what date did your agreement go into effect?

Day

Yr.

..............................................

B. On what date was the agreement ratified or approved by the union membership?

C. On what date does the current contract expire?
D. Does the agreement have a reopening clause?

.................................................
Yes C D

...................................................

No l _I

2

1

End card
BLS 1150.1 (Rev. Mar. 1976)




^

| A8

|

150

BLS HANDBO O K OF METHODS

2
FOR THE FOLLOWING QUESTIONS, REPORT INFORMATION WHICH IS IN EFFECT ON THE FIRST WORKDAY IN JULY OF
THIS YEAR. (Do not include retroactive increases, occurring when contracts approved after July 1 provide increases effective back
through the first workday in July or before.)__________________________________________________________________________
II. Benefits
REPORTING INSTRUCTIONS
The Benefits information you reported last year is shown on the upper portion of the enclosed Part B form. Please correct last year's information, where
necessary, by lining out any incorrect data and writing the correction directly above it in the same box. (NOTE: If the rates shown do not agree with what
you reported last year, we may have adjusted the data you reported to eliminate retroactive increases. In that case, do not correct the rates.)
For each benefit listed below complete columns B through E as follows:
Column B — Check yes or no, to indicate whether your contract provides for an employer contribution for this benefit.
If no, skip to the next benefit.
If yes, complete the line as follows:
Column C — Enter the percent and/or dollar amount contributed. Include cost-of-living adjustments if they are made as payments to a specified fringe
benefit. (For Insurance, report contributions for unmarried employees.)
(a) Percent — Enter contribution to the nearest hundredth of a percent (fo r 10%%, en ter 10.25; fo r 9%, enter 9 .0 0 ).
(b) Dollars/Cents — Enter amount contributed to the nearest tenth of a cent (fo r one dollar, enter $ 1 ,0 0 0 ; fo r 72% cents, enter $ .7 2 5 ).
(c) If the agreement does not specify the amount of contribution, leave columns (a) and (b) blank, and enter a check in column (c).
Column D — If you report an hourly contribution, leave this space blank. If you report other than hourly, enter one of the following codes to indicate
the unit of time covered by this contribution:
D = Per shift (daily); W = Weekly;

M = Monthly; A = Annually; B = Biweekly; S = Semi-monthly

Column E — Check one box.
C o l. A

Start card
C o l. E

C o l. B
N am e o f b e n e fit

C o l. D

Is this

H o w m uch does th e e m p lo y e r c o n trib u te foi r each

M e th o d

H o w is th is c<> n trib u tio n m ade?

benefii t

C ode

C o l. C

em p loyee?

o f pay

C heck o n e.

pro vid ed?
C o n tra c t

1

.v.v.
01

• 1 - -I

i

Jo u rn e y m an

98

H

E d u c a tio n and

08

. L.

M

O th e r

%

%

$
$

%

$

%

$

%

*

$

%

T ra in in g

$

%

P ro m o tio n

$

%

p lo y m e n t B enefits

$

%

$

Includes such items as life insurance, hospitalization, medical, surgical, dental, and other similar types of health and welfare programs.




End card

rep orted
on P art B

Savings Funds

07

on P art B

S u p p le m e n ta ry U n e m ­

06

rep orted
on P art B

H o lid a ys

05

...................

I ’’ ” ..1 1 7 + 2 0 }

w age rate

V a c a tio n

04

H

a d d itio n to

rep o rted

Pension

03

r

rate

In su ra n c e *

02

■

a d d itio n to
w age rate

(c)

(b)

2

w o rk e rs in

am ount of

D ollars /c e n ts

Paid to

in w age

c o n trib u tio n

Percent
(a)

No

In cluded

fu n d in

specify
Yes

Paid to a

does n o t

a n d /o r

A3




UNION WAGE RATES

151
3

BLS HANDBOOK OF METHODS

152
4

Instructions for Completion of Part B

R ep ort wage rate in fo rm a tio n which is in e ffe c t on the firs t w orkday in Ju ly o f this year. (D o n o t include retroactive increases, occurring when contracts
approved a fte r J u ly 1 provide increases effective back through the firs t w orkday in J u ly o r b e fo reJ

Corrections to Last Year's Data. The information you reported last year is shown on the enclosed part B form. If you find any errors in last year's wage rate
information, please use the following procedure to correct the data:
1. Line out the error and write the correction directly above it in the same box.
2. Enter the letter C in the last space on the line, in the column labelled "Action Code."
NOTE:

If the rates shown do not iagree with what you reported last year, we may have adjusted the data you reported to eliminate
retroactive increases. In that case, do not correct the rates.

Reporting Current Year's Data. Please enter the current year's data on the line marked "current year" on part B, in the spaces directly below last year's. 'For
each occupation listed, report the information described below, under the identifying columns. (Do not report for any occupation other than those listed.)
If the current year's data is the same as last year's for any item (wage rate, hours, membership), enter a check mark ( J ) in that space instead of repeating
the data.
Wage Rate in Effect July 1 — Report the minimum or basic straight-time wage rata in effect the first workday in July of this year. Include cost-ofliving adjustments. Enter the amount to the nearest tenth of a cent. (For $10.50, enter $10,500; for $9.75%, enter $9,758.)
Number of Weekly Hours — Report the maximum number of hours which can be worked each week at straight-time rates. Enter the number of hours
to two decimal places. (For 37% hours, enter 37.50.)
Number of Union Members — Enter the number of workers available to work at each rate. If a worker is eligible to work at more than one occupation,
report that worker only once, in the primary occupation. Exclude apprentices.
Method of Pay — If you report an hourly rate, leave this space blank. If you report other than hourly, enter one of the following codes:
D * Per shift (daily)

W - Weekly

M = Monthly

A * Annually

B = Biweekly

S = Semi-monthly

Have you included cost-of-living adjustments in the wage rates reported?
1 □

Yes

2

□

No

3

□

No contract provision for cost-of-living adjustments

End card

Please return the completed form with a copy of the union contract, if available, in the accompanying postage paid envelope. If you have only one copy of
the contract available, we will be glad to make a duplicate and return the original promptly.

Official Supplying Information
Title

Name

State

City

Address: Street

Home

Telephone No.: Office
Area code (




)

Area code (

)

ZIP code

UNION WAGE RATES
U.S. DEPARTMENT OF LABOR
Bureau o f Labor Statistics
Ind.

City

153

PART B

Sch. No.

Page

UN IO N W AGE RA TES A N D H O U RS

Union
(1 -9 )

Year
(10-11) (12-13)

(14-17)

(18-23)

•o ^
o «
£ 4.
V <4
s °
(24)

■§&
•c04
(25-28)

(29-34)

S °
(35)

(36-39)

(40-45)

•a ^
o £
v <-.
<
S o
(46)

£ Method
® of Pay

Employer Contributions for Selected Benefits:
1 *
j a,
5
(47-50)

(51-56)

s °
( 57)

(58-61)

(62-67)

8v

f80>

A3

Trade or Occupation

Year

Wage Rate in Effect July 1

(17-18)

(19-23)

(orfirst w
orkday inJuly)

Number o f Union Members
at Each Reported Rate

Number o f Weekly Hours
Before Overtime Pay
(24-27)

iH
(33)

(28-32)

4i
1

BLS 1150 (December 1975)




|

- O f fic e
© Use

A3

J.T. Code
(10-11) (12-16)

>

o Do

Chapter 20.

Current W age D evelopm ents

B ack grou nd
Since January 1948, the Bureau o f Labor Statistics
h as is s u e d a m o n th ly r e p o r t, C u r r e n t W a g e
D e v e l o p m e n t s , w hich lists general w age changes and
changes in supplem entary b enefits agreed to in selected
collectiv e bargaining situations, identifying the situa­
tions by com pany and union nam e. T he scop e o f the
listing has varied som ew hat from tim e to tim e, but since
1953, it has b een lim ited to agreem ents affecting ap­
proxim ately 1,000 production or nonsupervisory work­
ers or m ore in manufacturing and selected nonm anufac­
turing industries. B eg in n in ^ in 1968, lim ited govern­
m ent coverage has been included in the m onthly list­
ings. This coverage has generally b een restricted to
Federal and State G overnm ents, and the public sector
in the 10 largest m etropolitan areas.
C u r r e n t W a g e D e v e lo p m e n ts
w as initiated b ecau se
o f the rapid increase in w age rates and prices in the early
post W orld War II period, the interest in determ ining
the exten t to w hich settlem ent patterns spread from
industry to industry, and the discontinuance o f an index
o f w age rates that had been initiated during W orld War
II. Interest in the listing w as stim ulated by the K orean
em ergency w hen the W age Stabilization Board needed
data on the exten t to w hich w ages and b enefits w ere
being changed.
In 1949, and again in 1951 and 1952, statistical sum ­
maries o f w age changes w ere prepared to supplem ent
the listing, but regular preparation o f a statistical sum ­
mary began in 1954. T h ese quarterly statistical sum ­
maries sh ow the distribution o f settlem ents and (since
1955) o f w orkers by the size o f the general w age changes
agreed to.
Beginning in 1959, another statistical summary w as
instituted. It is lim ited to m anufacturing, but includes
inform ation on general w age changes for nonunion and
small union situations, as w ell as for large collective
bargaining situ a tio n s.1 From 1959 through 1970, this
summary also included inform ation on changes in sup­
plem entary benefits.

D e s c r ip tio n o f S e r i e s
The sum m ary o f major co llectiv e bargaining situa­
tions hereafter is referred to as the “ m ajor” series, and
the sum m ary that is based on changes in w ages in man­
ufacturing firms o f all kinds is described as the “ man­
ufacturing” series.

154


The major series d escribes general w age changes and
changes in b en efits2 in all collective bargaining settle­
m ents involving 1,000 production and related workers
or m ore in manufacturing and 1,000 nonsupervisory
workers or m ore in the nonm anufacturing sector, e x ­
cluding G overnm ent and agriculture.3 Supervisory and
professional em p loyees are excluded.
C ontracts covering multiplant firms are included if
the agreem ent as a w hole covers 1,000 workers or more
even though each individual plant em ploys few er work­
ers. A lso included are contracts with trade associations
or w ith groups o f firms that bargain join tly with a union
or unions, ev en though the firms are not associated
form ally and each has few er than the minimum number
o f workers covered by the series. Situations in which
tw o or more unions, together representing more than
1,000 w orkers but individually representing few er,
negotiate essentially identical contracts with one firm
or a group o f firm s, are tabulated as one bargaining unit.
T he summary for manufacturing as a w hole currently
rep resen ts all estab lish m en ts having four or more
em p lo y ees4 that adjust w ages by m eans o f general wage
ch an ges,5 regardless o f w hether the workers are repre­
sented by a union.
W age change data are presented in cents per hour
and, since 1959, as a percent o f average straight-time
hourly earnings, adjusted to exclude premium pay for
overtim e work.
T w o general typ es o f inform ation are presented on
w age changes: (1) W age changes related to collective
bargaining settlem ents occurring during a time period
are tabulated. B oth first-year changes (those scheduled
during the first 12 m onths o f the contract) and total
w age changes over the life o f the contract, exp ressed as
an annual rate, are presented for these settlem ents; and
(2) w age changes effective in a period, whether re1 T h e listin g, a s con trasted w ith th e se sum m aries, p rovid es a m uch
m ore detailed a cco u n t o f negotiated w age and b en efit ch an g es than
can b e p resen ted in a tabular sum m ary. W hen availab le, inform ation
on ch an ges for large groups o f n on un ion w ork ers, including p ro fes­
sion al, w h ite-collar, and prod u ction e m p lo y ee s, also is p resen ted .
2 O nly ch a n g es in b en efits that rep resent ch an ges in c o sts are
inclu ded.
3 Prior to 1966, the con stru ctio n , se r v ic e trad es, and fin an ce in d u s­
tries a lso w ere ex clu d ed .
4 S e e Sam pling and E stim atin g P roced u res for revision s in c o v ­
erage for sam p les draw n after 1975.
5 G eneral w a g e ch an ges are d efin ed as ch an ges affectin g at least
o n e-ten th o f the w ork ers at an y on e tim e or all w ork ers in an o c cu p a ­
tion . C h an ges resultin g from p rom otion s, m erit in crea ses, e t c ., are
e x clu d ed .

CU RREN T WAGE DEVELOPM ENTS
suiting from current settlem ents, prior year negotia­
tions, or the operation o f escalator clau ses, also are
m easured.
In 1974, the Bureau introduced three new series re­
lated to th ese tw o typ es o f wage m easu res.6 W age
changes in collective bargaining settlem ents now also
are cross-classified by contract duration. This series
m easures first-year w age changes, increases deferred
to subsequent years, and annual rates o f changes by
duration o f contract.
A nother recently introduced series com pares firstyear negotiated w age increases before and after costof-living escalator adjustm ents b ecom e effective. As
they b ecom e know n, by quarter, cost-of-living pay­
m ents during the first year o f the contract are added to
first-year negotiated in crea ses. A verages are presented
for all settlem ents and for only th ose having escalator
p rovisions.
A third series presents total effective w age changes,
including the influence o f current settlem ents, prior
settlem ents, and escalator p rovisions, by quarter. Pre­
viously; th ese m easures w ere available only on an an­
nual basis. The quarterly effective wage-rate change
series also is available for selected industry divisions.
In distributions o f w orkers by size o f w age change, all
workers in an establishm ent or collective bargaining
situation are distributed according to the average wage
increase in the establishm ent or situation. The number
o f workers affected by changes in supplem entary b en e­
fits includes all production and related workers in the
situations w here the benefit is changed, w hether or not
all are affected im m ediately. For exam ple, if a fourth
w eek o f vacation is added for workers having 20 years’
service in an establishm ent em ploying 1,000 w orkers, a
vacation change w ould be recorded for 1,000 w orkers,
even though only a relatively small proportion would
benefit from the change im m ediately.

D a ta S o u r c e s a n d C o lle c tio n M e th o d s
The statistical summary o f the major series is com ­
piled from the sum m aries o f co llectiv e bargaining set­
tle m e n ts lis te d in th e m o n th ly C u r r e n t W a g e
D e v e l o p m e n t s w hich, in turn, is derived primarily from
se c o n d a r y s o u r c e s , in c lu d in g g en era l c irc u la tio n
new spapers and p eriodicals, as well as union, m anage­
m ent, and trade publications. Other important sources
o f inform ation are the file o f union contracts maintained
by the B L S and the U . S. D epartm ent o f L abor’s files o f
pension and health and w elfare agreem ents, maintained
by the D ivision o f R eports P ro cessin g .7 B y the end o f
the year, the B L S con tacts either m anagem ent or labor
representatives in any situation for w hich these other
6 F o r the d ev elo p m en t and further analysis o f th ese series, see
V icto r J. S h eifer, “ N e w m easu res o f w age-rate ch an ge, “Monthly
Labor Review, D ecem b er 1974, pp. 1 0 - 1 5 .
7 Inform ation from con tracts supplied on a confidential b asis is
 t h e s t a t i s t i c a l s u m m a r i e s , n o t f o r t h e m o n t h l y listing.
used on ly in



155

sources have not yielded inform ation on wage and
benefit changes during the year.
Information for nonunion and small unionized firms
is gathered quarterly (sem iannually in 1965 and 1966) by
a questionnaire mailed to participating establishm ents.
T he inform ation on general w age ch an ges is sup­
plem ented by data on the major bargaining units ob­
tained from the contract file (unionized establishm ents)
and from new spaper clippings purchased from a com ­
mercial clipping service. At the end o f the year, B LS
em ployees contact, primarily by telephone, a sample o f
firms that have failed to respond to the mail question­
naire or that have provided incom plete or unclear in­
form ation.

S a m p li n g a n d E s t im a t in g P r o c e d u r e s
As indicated earlier, all bargaining situations having
1,000 w orkers or m ore in m anufacturing and non­
m anufacturing industrie? are included in the major
series. It is believed that the current list o f about 2,300
su ch s itu a tio n s , b u ilt up s in c e C u r r e n t W a g e
D e v e l o p m e n t s w as started in 1948, is very nearly com ­
plete. After a bargaining situation is added to the uni­
verse, it is withdrawn only if it cea ses to be within the
scop e o f the survey (e .g ., a change to nonunion from
union, or because o f an apparently perm anent drop in
em ploym ent to substantially below 1,000).
The sam ple for manufacturing is derived from State
unem ploym ent insurance (UI) listings w hich show re­
porting units by location, number o f em ployees, and
industry classification .8 The sam ple is a highly stratified
probability design w ith sampling ratios varying from 1
out o f 200 establishm ents having up to 19 em ployees to
all o f th ose having 1,000 em ployees or m ore.9
The ratios are uniform for all industries. Since data
er e available from secondary sources for all unionized
situations having at least 1,000 production and related
workers, data for all establishm ents m eeting this criter­
ion also are included in the summary for manufacturing.
The sam ple selected from the UI listings is com pared
with this list o f establishm ents for w hich information
already is available; since data for these sample m em ­
b ers are ob tain ed from seco n d a ry so u rce s, th e se
establishm ents are not sent questionnaires. Approxi­
mately 6,000 establishm ents are left for the question­
naire survey.
A lthough the sam pling design yields a sam ple in
w hich large firms are relatively overrepresented, this
8 S ee ap p en dix B , “ Industrial C la ssifica tio n .” F or a m ore detailed
d escrip tion o f u n em p loym en t insu ran ce data, se e chapter 3. Sam p les
draw n prior to 1975 e x clu d ed estab lish m en ts havin g few er than 4
e m p lo y ee s b e c a u se in m any S tates th ey w ere not co v ered by un em ­
p loym en t com p en sa tio n program s. D u e to ch an ges in U I data c o lle c ­
tion , sam p les tak en after 1975 are e x p e cte d to inclu de estab lish m en ts
having few er than 4 em p lo y ee s.
9 In the c a s e o f a fe w c o m p a n ie s h a v in g large n u m b ers o f
estab lish m en ts each including 1,000 w orkers or m ore, a sam ple o f
plants is ch o sen .

156

BLS HANDBOOK OF METHODS

bias is overcom e by the estim ating procedure. Each
establishm ent in the sam ple is assigned a w eight which
is the reciprocal o f the sampling ratio in the stratum
from w hich it w as selected . An establishm ent selected
from a stratum from w hich 1 out o f 4 establishm ents is
ch osen is assigned a w eight o f 4, so that it represents
itself and three other establishm ents. Information for
e a c h e s t a b lis h m e n t is m u ltip lie d b y th e w e ig h t
assigned to the establishm ent. T hus, all establishm ents,
regardless o f size, are represented appropriately in
the final estim ates.
A n e s t a b lis h m e n t in th e su b s a m p le o f n o n ­
respondents is subsequently contacted and is weighted
to represent all n onrespondents in the stratum. It is
assigned a new w eight— the product o f the original
w eight and the inverse o f the subsam pling fraction.
Thus, 1 out o f 3 nonrespondent establishm ents sub­
sam pled from a group originally sam pled at the rate o f 1
out o f 2 w ould be assigned a w eight o f 6. If an establish­
m ent included in the sam ple ^vith certainty fails to re­
spond, another similar establishm ent w ould be w eigh­
ted to represent it.
To the estim ates derived from the w eighting o f the
sam ple questionnaire are added the data from seco n ­
dary so u rces— the num ber o f w orkers under major
bargaining situations.
The totals thus obtained are further adjusted to re­
duce the hazards o f sampling and to take account o f
opening or closin g o f establishm ents b etw een com pila­
tion o f the State unem ploym ent insurance listing from
w hich the sam ple is ch osen and the date o f the survey.
A djustm ents are made o f em ploym ent lev els for pro­
duction w orkers in the 2-digit Standard Industrial C las­
sification m anufacturing industry groups, as reported in
the m onthly em ploym ent series o f the Bureau o f Labor
Statistics for the period covered by the summary o f
w age c h a n g es.10 For exam ple, if the estim ate o f pro­
duction worker em ploym ent in an industry group de-*
rived from the sam ple is 100,000 but the B ureau’s esti­
mate o f em ploym ent in that industry group less the
em ploym ent o f the major situations w as 110,000 work­
ers, the w eighted em ploym ent for each sam ple situation
in that industry w ould be multiplied by *
or 1.1.
7
100,000
The resulting industry group estim ates w ould be com ­
bined to provide the estim ates for all manufacturing.
The major series for manufacturing and nonm anufac­
turing com bined is not adjusted in this fashion, since it
is presum ed to be all inclusive.
A new sam ple o f nonunion and small unionized plants
in manufacturing is generally selected every 3 years.
A fter the initial contact, establishm ents that indicate
that th ey have a p olicy o f adjusting w ages on an indi­
vidual b asis, rather than by m eans o f general wage
changes, are included in further surveys only to main­
tain the proper em ploym ent estim ates.
10 S e e ch . 3.




P r e s e n t a t i o n a n d A n a l y s is
Preliminary information on the “ package c o st” and
general wage changes resulting from collective bargain­
ing settlem ents involving the major situations is issued
in press releases about 4 w eek s after every quarter and
the information is also sum m arized in C u r r e n t W a g e
D e v e lo p m e n ts
(See “ M easuring C ollective Bargaining
S ettlem en ts,” beginning on page 158 for a description
o f the package co st program). M easures reflecting the
various influences on the overall size o f w age settle­
ments are presented. W age changes are measured sepa­
rately for settlem ents containing cost-of-living provi­
sions and for th ose w ithout such clau ses. W age-rate
information is also presented separately for the man­
ufacturing and nonm anufacturing sectors. A verages are
also tabulated for all settlem ents excluding those in the
construction industry, and for nonmanufacturing set­
tlem ents excluding construction, as well as for con ­
struction settlem ents alone. The press releases also
provide preliminary data on the total effective wage
change, by com ponent and for various industrial se c ­
tors, on a quarterly basis.
Final data on w age and benefit changes are not avail­
able until early in the follow ing year, and are presented
in C u r r e n t W a g e D e v e l o p m e n t s , and to a limited exten t,
in the M o n t h l y L a b o r R e v i e w . Yearend summaries also
include information on the number o f workers receiving
changes in various supplem ental practices, classified
by benefit and by size o f wage change.
Quarterly data and the full-year article for m anufac­
turing are published in C u r r e n t W a g e D e v e l o p m e n t s .
T he quarterly e stim a te s w h ich are b ased on p re­
liminary data, stress w age changes resulting from set­
tlem ents or m anagem ent d ecision s made during the
period, w hile the yearend article, which is based on
final data, also analyzes trends in the size, frequency,
and type o f w age changes, and the prevalence and re­
sults o f w age escalation p olicies. B ecau se it is based on
data for both large and sm all union ized and nonunionized establishm ents, the manufacturing analysis
can m ake m any o th er u se fu l co m p a r iso n s o f its
com ponents.

Uses and Limitations
The data are used ex ten sively by labor, m anagem ent,
and the Federal M ediation and C onciliation Service in
collective bargaining; by private institutions and uni­
versities in studies o f industries or groups o f industries;
and by local and Federal G overnm ent agen cies in­
terested in the current econom ic picture to determ ine
trends in w age and benefit changes as w ell as for w age,
incom e, and gross national product forecasts. The data
relate to changes in w age rates and should not be inter­
preted as changes in em p loyee earnings.

C U R R E N T W AGE D E V E L O PM E N T S
BLS 2675d
Jan. 1975

157

U.S. D EPA RTM EN T O F LA BO R
Bureau o f L abor Statistics

Form Approved
O.M.B. No. 44-R1135

W ashington, D.C. 2 0212

WAGE DEVELOPMENTS IN MANUFACTURING, 1975

The Bureau o f Labor Statistics
will hold all information furn­
ished by the respondent in
strict confidence.

n

r
Keep this copy for
your company file.

L

Identification or location of establishment for
which information is requested, if different from
mailing address.

J

(Change if incorrect, include ZIP code.)

I.

II.

What was the major product (in terms of sales value) of this plant during 1974?

A. All employees

B. All production and related workers

1. Number

III.

See page 4 for explanation.

Please provide employment and payroll information for the payroll period including January 12,1975.

1. Number

2. Payroll

3. Man-hours

Do collective bargaining agreements cover a majority of your production and related w o rk e rs? ........................

Yes

No

□

No

□

□

If “No,** please skip to section YU.
■
--------------- -------- —■„ .—»-------------------------------------------------------- —
If “Yes,** please answer all questions except VII.

F O R UN ION FIR M S ONLY
IV.

Union and Agreement Identification:
A. With what union or unions do you have a collective bargaining agreement?_______

B . Are you a party to an agreement signed by an employer association with this union(s)?

.............................

Yes

EU

If so, what is the association’s name? ___________________ _____________________________________________ —
V.

Agreement Expiration Date:
When does your collective bargaining agreement(s) expire or become subject to reopening on wages?
(Space has been provided for two entries since the date may change during the year.)

VI.

New or Revised Agreement:

Please mark appropriate boxes below to bring your report up to date fo r-

During the quarter-

Jan- -Mar.
1975

A. Did you negotiate a new or revised
collective bargaining contract(s) for your
production and related w o rk e rs? ..................... .
B. If yes, did you agree on an immediate or
deferred change in wages?............... ..................




Apr.--June
1975

July--Sept.
1975

Yes

No

Yes

No

Yes

. . . .

□

□

□

□

□

. . . .

□

□

□

□

□

Oct.--Dec.
1975
Yes

No

□

□

□

□

□

□

No

PLEASE TURN TO NEXT PAGE.

158

B L S H A N D B O O K O F M ETH O D S

2

F O R N O N U N IO N F IR M S O N LY
VII.

Policy Regarding Wage Changes:
Whether or not you changed wages during the first quarter of 1975, what is your policy regarding general wage changes?

□
□

1. Wages are normally changed only on an individual b a s is .......................................................................................................
2. General wage changes are sometimes m ade...............................................................................................................................

F O R U N IO N AN D N O N U N IO N FIR M S
VIII.

Cost-of-Living Escalation:
Do you have a cost-of-living escalator policy whereby wages are changed automatically with specified changes in a i— >
price in d e x ? ............................................ ........................................................................................................................Yes I
___ I
If so, please list the months in which wage changes will go into effect if the price index warrants. (If you wish, you
may include the formula used for determining the amount of the change, and we will compute the change to eliminate
the necessity of mailing the questionnaire back to you.)

IX.

No □

Wage-Rate Changes for Production and Related Workers, 1975:
Please report any general wage-rate changes you have put into effect for your production and related workers in the previous quarter.
Include:

Exclude:

1. All changes affecting either (a) 10 percent or more of your production and
related workers at any one time, or (b) all workers covered by a single col­
lective bargaining agreement, even if the agreement applies to fewer than
10 percent of the workers.

1. Increases to individuals resulting from promo­
tions, automatic increases with length of service,
or progression within an established rate range.

2. Any change in your pay scales even though no workers received immediate
pay increases as a result of this change.

2. The cost of any changes in supplementary
benefits.

3. Any cost-of-living escalator adjustments whether or not they are part of
y o u r p e rm a n e n t rate s tru ctu re .

4. Increases decided on in earlier years but going into effect in 1975.
5. Increases decided on in 1975 but scheduled to go into effect in later years
(list in Part C.)
6. Changes in hourly rates resulting from changes in hours without correspond­
ing changes in weekly or daily pay.
7. Increases resulting from changes in the minimum wage law.
A. Have you put into effect any such general wage changes during the quarter?
Jan.-M ar.
1975
Y e s ......................................................................... . .

□

No .......................................................................... . .

□

Apr.-June
1975

□
□

If your answer is “Yes” , indicate below the form of the wage change(s) and lis t each
1. Uniform cents per h o u r................................... . .

□

2. Uniform percentage c h a n g e ........................... . .

□

3. Higher cents per hour for skilled workers. . . . .

□

4. Other (specify in section XI. “ Remarks” ) . . . .

□




□
□
□
□

July-Sept.
1975

□
□

Oct.-Dec.
1975

□
□

chanze in subsection C:

□
□
□
□

□
□
□
□

C U R R E N T W AGE D E V E L O P M E N T S

159
3

IX

Wage-Rate Changes for Production and Related Workers, 1975-Continued
C. List any general wage-rate changes which have already been placed into effect during 1975 or which have already been decided upon and
are scheduled to go into effect in the future. List effective date of increase, number of workers affected, class of workers affected, amount
of change and type of change.
If all workers did not receive the same amount (either the same number of cents or the same percentage) list changes for each group on a
separate line with the approximate number affected. For example, if there was a uniform across-the-board change plus added changes for
some workers, list the uniform change first and show additional changes below. If a cost-of-living escalator adjustment went into effect at
the same time as another increase, list it separately . Increases resulting from changes in minimum wage law should also be listed separate­
ly and identified.
In reporting information for incentive workers include, if possible, estimated effects of wage-rate changes on incentive workers* earnings.
(For example, if base rates for incentive workers were raised 5 cents and this increased their hourly earnings about 7 cents, report 7 cents.)
If any changes in scales were made that did not affect any workers immediately, indicate the approximate number to be affected by the
end of the year.
Indicate whether change was given in percentage or cents terms.

Effec­
tive
date

Approxi­
mate
number
receiving
wage
adjust­
ments

Check if this increase was
Gasses of production and related workers or jobs affected

Decided
on in
1975

Amount of hourly change

i

%

t

%

t

%

4

%

4

%

4

%

4

%

4

%

4

%

4

%

4

%

4

%

4

%

4

%

4

%

4

%

4

Auto­ Deferred
matic (decided
cost-of on in an
living
earlier
escalator year)

%

D. Do you anticipate any wage changes during 1975 in addition to those listed above (cost-of-living changes or changes for which
amount is unknown at the present time)?
A pr.-June
1975
Y e s .....................................................................................................................................................
n o

. . . . . . .................................................................................................................................




July-Sept.
1975

Oct.-Dec.
1975

E
D
E
D

E
D
E
D

E
D
E
D
PLEASE TURN TO NEXT PAGE.

160

B L S H A N D B O O K O F M ETH O D S

4
E xplanations fo r R e p o rt o n Wage D evelopm ents
in M anufacturing, 1975
Section 11-A All employees-total number on the payroll o f the plant covered by this report who worked full-time or part-time or received pay for
any part of the period reported. Include persons on paid vacations and sick leave. Exclude persons on leave without company pay the entire period
as well as pensioners and members of the Armed Forces not working during the period reported.
Section II-B Production and related v/oaken-Include working foremen and all nonsupervisory workers engaged in fabricating, processing, assembling,
inspecting, receiving, storing, handling, packaging, warehousing, shipping, trucking, hauling, maintenance, repair, janitorial, watchmen services, pro­
duct development, auxiliary production for plant’s own use (e.g., power-plant), recordkeeping, driver-salesmen in food processing industries, and
other services closely associated with these production operations.
Exclude employees engaged in executive, purchasing, finance, accounting, personnel, cafeteria, professional, and technical activities;
sales; advertising; collection; installation, and servicing of products; route office functions; factory supervision above the working
foremen level; and employees on your payroll engaged in construction of major additions or alterations to the plant.
1. Number. Include both full-time and part-time production and related workers on your payroll-whether wage or salaried-who worked
during or received pay for any part of the payroll period reported. Include persons on paid sick leave, paid holidays, and paid vaca­
tions.
2. Payroll. Include pay earned during the payroll period by production and related workers reported in the preceding box. Payroll
should be reported before deduction for old-age and unemployment insurance, group insurance, withholding tax, bonds, and union
dues. Include cost-of-living allowances, pay for overtime, holidays, vacations, and sick leave.
3. Man-hours. Include all hours worked, not scheduled hours, during the payroll period by the production and related workers reported
in ihe first box plus hours paid for stand-by or reporting time and holidays, and man-hours equaivalent to pay received by employees
directly from your firm for sick leave and for holidays and vacations for this payroll period.
NOTE:
X
XI.

Data in Section II are to be reported for the payroll period including Jan. 12,1975 and should not be revised during subsequent quarters.

Do you want a copy of the Bureau's annual summary on this survey?

Yes □

Remarks:

Name and title of person furnishing data (p se typeorprint)
lea




Area code, Phone no.

N oC U

Chapter 21.

Measuring Collective Bargaining Settlements

B ackground

D e s c r i p t i o n of S e r i e s

The Bureau’s program of measuring the effects of
collective bargaining settlements on hourly labor com ­
pensation is a reflection of two developments: One, the
growing importance of fringe benefits as a proportion of
em ployee compensation, and tw o, increased concern
about the effects o f collectively bargained wage and
benefit changes on the price level.
Whereas in earlier years the econom ic terms of
negotiated settlements could be equated largely with
agreed-upon changes in wage rates, today, possible
ch a n g es in a h o st o f pay su p p lem en ts m ust be
considered— such as various forms of premium pay,
paid leave, cash bonuses, and employer contributions
to funds providing pension or health and welfare bene­
fits. Although straight-time pay for working hours is
still the major element o f compensation, supplements
are now a significant portion, accounting for about a
fifth o f total em p lo y er o u tla y s for w orker
com pensation.1
Moreover, growing concern during the 1960’s over
the extent to which increased labor costs may contri­
bute to inflation has heightened interest in the size of
collective bargaining settlements.
Responding to these influences, the BLS began es­
timating the cost o f wage and benefit (i.e., “ package” )
changes in a limited number o f key settlements in 1964.
The work was expanded the following year and, since
1966, the Bureau has attempted to determine the price
o f all settlements affecting 5,000 workers or more in the
private nonfarm sector. In addition, a separate series
has been developed for the construction industry, cov­
ering settlements for 1,000 workers or more.

At present, the Bureau publishes two sets of data on
wage-benefit decisions. One shows the annual rates of
increases in settlements reached in a given time period
and scheduled to go into effect at any time during the
term of the agreements. The other is limited to the
changes set for the first 12 months of the agreements.2
Published data summarize settlements reached during
individual quarters of a year, during full years, and
during the first 6 and 9 months of each year.
Frequency distributions are shown for workers
grouped by the size o f their settlements. In these dis­
tributions, all workers affected by a given action are
entered at the average for the bargaining unit. The sums
of the individual settlements are averaged—both means
and medians are presented— each settlem ent being
weighted by the number of workers affected. However,
the pricing of individual settlements is not disclosed.
Averages for full years are available separately for
m anufacturing and nonm anufacturing industries.
Otherwise, no industry detail is published, except for
the separate construction industry series.
As indicated in the preceding paragraphs, these
series relate to the pricing of decisions, i.e ., they mea­
sure the effect of changes agreed on in a given period
although, considering the general practices o f negotiat­
ing multiyear collective bargaining agreements contain­
ing provisions for annual (and sometimes more fre­
quent) improvements, the changes may be introduced
only at a subsequent date. Measures of wage and bene­
fit changes actually placed in effect in specified periods,
whether as a result of current bargains, changes agreed
upon earlier but with deferred effective dates, or the
operation of cost-of-living wage escalator clauses, also
are available.

1 S e e Paul L. S h eib le, “ C h anges in E m p lo y ee C om p en sation , 1966
to 1972,” M o n th ly L a b o r R e v i e w , M arch 1975, pp. 1 0 - 1 6 . It is
difficu lt to m easure the grow th o f su p p lem en ts o ver the years and to
quantify their current im portance. T he national in com e accou n ts
provide o n e pertinent sou rce o f data. T h ey sh ow that su pp lem en ts to
w a g es and salaries ro se as a p ercen t o f total e m p lo y ee com p en sation
from 1 percen t in 1929 to 12 p ercen t in 1974. T h e N a tio n a l I n c o m e a n d
P r o d u c t A c c o u n t s o f th e

U n ite d S t a t e s , 1 9 2 9 - 1 9 6 5 : S t a t i s t i c a l

U . S . D e p a r tm e n t o f C o m m e r c e , O ffic e t ) f B u s in e s s
E c o n o m ics (1966), p. 14; S u r v e y o f C u r r e n t B u s in e s s , January 1975,
p. 32. T h ese figures, h o w ev e r, d o n ot reveal the relative im portance
o f all su pp lem en ts in eith er year, sin ce m any— su ch as prem ium
p a y m en ts, lea v e p a y m en ts, and ca sh b o n u ses— appear as parts o f
w a g es and salaries. T he figures therefore are n ot com parable to th ose
found in su rv ey s o f em p loyer exp en d itu res for supplem entary co m ­
p en sation .
T a b le s ,




2
B efo re 1970, the B ureau published tw o m easures o f change o v er
the life o f the con tract, the so-called equal tim ing and the tim ew eigh ted m easu res. T h e form er assu m ed equal spacing o f changes
during the term o f the contract; the latter to o k a ccou n t o f the actual
effe c tiv e d ates o f w age and b en efit ch an ges. T he tim e-w eighted m ea­
sure has b een d iscon tin u ed , b e ca u se it appeared to be o f significan ce
prim arily for the an alysis o f individual settlem en ts rather than for
overall series o f the typ e produ ced by the Bureau. M oreover, drop­
ping o f the tim e-w eigh ted m easure and introduction o f a series on
first-year ch an ges p ro v id es parallel sta tistics b oth on w age-rate
ch an ges alon e and on w a g es and b en efits com bined.

161

B L S H A N D B O O K O F M ETH O D S

162

D a ta S o u r c e s a n d C o lle c tio n M e th o d s
The terms of the settlements to be priced are obtained
primarily from secondary sources, such as general cir­
culation newspapers and periodicals and union, man­
agement, and trade publications. Collective bargaining
agreements and documents on pension and health and
welfare plans also are consulted. When these sources
are inadequate, direct requests for information are
made to the companies and unions involved.
Large quantities of statistical data, as well as the
settlement terms, are required. These are needed both
to determine existing employer outlays and to assay the
effect on these expenditures of agreed wage and benefit
changes. Efforts are made to use existing data. H ow ­
ever, when these prove inadequate, the parties are re­
quested to furnish data. Such requests, it must be em­
phasized, are made to receive specific information from
which the Bureau can price settlements; the requests
are not made to receive the parties’ own evaluations of
the terms o f their settlements.
One o f the major sources of information on current
hourly earnings is the establishment information which
BLS obtains through its monthly employment, payroll,
and hours survey. Information on current outlays for
pay supplements may be available from BLS surveys of
expenditures for such benefits. Pertinent information
for estimating expenditures for some items may be
found in industry wage surveys, e.g., extent of late-shift
work and occupational employment distributions. An­
nual financial reports filed with the Department of
Labor under the Welfare and Pension Plan Disclosure
Act provide useful material. N ot all the sources tapped
are g o v ern m en tal; for in sta n c e , inform ation on
workmen’s compensation insurance rates is reported
by the National Council on Compensation Insurance.

S a m p lin g a n d E stim a tin g P r o c e d u r e s
As was noted earlier, the Bureau attempts to cover all
settlements for 5,000 workers or more (1,000 or more in
construction) in the private nonfarm sector. Substan­
tially all such settlements come to the attention of the
Bureau and are included in its series, it is believed.
D iscu ssion o f procedures for pricing individual
settlem ents3 may be centered around three questions:
(1) What items in a collective bargaining settlement are
to be priced? (2) How are the costs of these items to be
determined? (3) How are these costs to be expressed?

Coverage. Little evidence is needed to demonstrate
that many terms of a union-management agreement, not
3
Prod uction o f statistical series m erely entails grouping and a v ­
eraging the pricing o f individual settlem en ts. P ublished distributions
sh o w the num ber o f w orkers under k n ow n settlem en ts for w h ich data
Digitized for ere in su fficien t to perm it pricing.
w FRASER



merely the wage and benefit provisions, may affect
directly or indirectly an em ployer’s costs. For example,
one o f the so-called “ n oneconom ic” terms o f an
agreement— seniority—may have a limited influence on
costs through its effect on employee efficiency.4 H ow­
ever, such an item is essentially not measurable.
Consequently, the BLS program is confined to the
w age-benefit com ponent o f co llectiv e bargaining
agreements, i.e., to the effect o f settlements on em­
ployer outlays for employee compensation. This com­
ponent, clearly, is of major significance in its own right.
Included are items such as changes in wage rates; mod­
ifications in premium pay, bonuses, paid leave, and
severance pay; and adjustments in employer payments
for pension, for health and welfare, and for supplemen­
tal unemployment benefits, excluding the costs of ad­
ministering these benefits. Also included are changes in
formal contract provisions specifying paid time for
clothes change, washup, and lunch periods.
Excluded are informal modifications of unwritten
rest-period practices; items related to, but not normally
considered part of, compensation— such as per diem
payments, moving expense reimbursements, and pay­
ments for safety clothing; and provision of facilities or
services such as parking lots and health units, the costs
of which often are charged to capital rather than labor
accounts.

Determination o f Costs. Since a value is placed on set­
tlements at the time they are reached, the costs attri­
buted to them obviously are estimates of outlays to be
made in the future; they cannot be taken from em­
ployers’ accounting records. The estimates are made on
the assumption that conditions existing at the time the
contract is negotiated will not change. For example,
estimators assume that methods of financing pensions
will not change, and that expenditures for insurance will
not change except as a result of altered benefit provi­
sions or modified participation because o f changes in
company contributions. They also assume that the
composition of the labor force will not change.
In this regard, except for any guaranteed increases,
which are treated as deferred adjustments, possible
wage-rate changes as a result o f cost-of-living escalator
clauses are excluded because of difficulties in predict­
ing movements o f the Consumer Price Index. Thus, the
Bureau prices the wage and benefit changes that would
go into effect if the price level were to remain stable.5
Nevertheless, package estimates do attempt to mea­
sure the costs associated with actual characteristics of
4 A lm o st in evitab ly a ten d en cy has d ev elo p ed to regard all contract
ch an ges as servin g to in crease em p loyer p aym en ts. A lthou gh this
u n dou btedly is the com m on result, so m e ch an ges, e v en w h en pro­
p osed b y u n ion s, m ay lo w er c o sts. U n ion -m an agem en t coop eration
sch em es h ave at tim es provid ed ex am p les.
5 T he series on w age and b en efit ch an ges actually placed into effect
inclu des escalator adju stm ents, sin ce the issu e o f p rediction o f CPI
m ovem en ts d o e s not arise.

MEASURING COLLECTIVE BARGAINING SETTLEMENTS
the work force affected by the settlem ents, not the costs
for som e hypothetical em ployee group. A ttem pts to
base estim ates on the actual age, length o f service, sex,
and skill characteristics o f the w orkers involved recog­
nize that the ch oice in incorporating alternative benefit
changes into contracts is affected by their co sts, which,
in turn, are affected by the character o f the work force.
For exam ple, an extra w eek o f vacation after 15 years of
service will co st very little w hen only 10 percent o f the
workers have that m uch service, but will co st about 1
percent o f straight-time hourly earnings when half o f
the workers have been em ployed for 15 years or more.
A s a rule, indirect effects o f settlem ents are ignored:
factors such as p ossib le exten sion o f settlem ent terms
to nonunion w orkers in the sam e firm or to m em bers o f
other bargaining units. Sim ilarly, the co st o f providing
lengthened vacations is m easured by the w ages and
salaries paid for the additional tim e off; co sts o f hiring
vacation replacem ents, if n ecessary, are not con si­
dered. M oreover, effects on unit labor co sts, which
involve consideration o f em p loyee efficien cy as w ell as
em ployer paym ents, are disregarded.
H ow ever, “ creep ” 6 is accounted for. Creep reflects
the fact that an increase in w age rates will have a seco n ­
dary effect on em ployer co sts through its effect on
outlays for b en efits. A 20-cent-an-hour w age increase
will affect not only straight-tim e w age rates but also
su p p lem en ta ry p a y m en ts g o v ern ed by w age rates
— such as overtim e prem ium s, leave paym ents, pension
benefits related to salary lev el, and social security
payroll taxes (if earnings are not at or above the statu­
tory maximum tax base). Creep is taken into account by
raising each w age increase provided by the new con ­
tract by a creep , or loading, factor. This factor is essen ­
tially the ratio o f current hourly expenditures on ben e­
fits that vary with w age lev els to current straight-time
hourly earn in gs.7
M any item s in a co llectiv e bargaining agreem ent are
priced w ithout difficulty. This is particularly true w hen
settlem ent term s are exp ressed as cents-per-hour ad­
ju s tm e n t s , e . g ., a 2 0 -c e n t-a n -h o u r g en er a l w a g e
increase8 or a 5-cent increase in em ployer contributions
to a health and w elfare fund. T h ese stipulated centsper-hour figures are utilized as the co sts o f the settle­
m ent p ro v isio n s.9 Percentage w age adjustm ents are
converted to cents-per-hour figures on the basis o f cur­
rent average straight-tim e hourly earnings. Although
less direct, the co st o f an additional holiday is estim ated
adequately by prorating 8 h ours’ average pay (if the

6 T he term s ‘ ‘roll-u p ” and ‘ ‘b u lg e ,” am ong oth ers, a lso are u sed to
e x p r ess the sam e idea.
7 It varies from this ratio to the e x ten t that there are lim its on
earnings that are su b ject to social secu rity taxes.
8 W here appropriate, the e ffect o f a general w age increase on
in cen tiv e earnings is inclu ded in the m easu rem en t o f the w age in­
crea se.
9 S in ce estim a tes are on a cen ts-p er-h ou r-w ork ed , rather than
per-hour-paid-for, b a sis, agreed-u pon in creases are adjusted if they
are on an hours-paid-for b asis.




163

normal workday is 8 hours) over the number o f annual
working hours per em ployee. The co st o f an additional
w eek o f vacation for 25-year em p loyees is estim ated
sim ilarly, but one must know the number o f em ployees
with the required seniority.
Other settlem ent terms are more difficult to price.
For exam ple, the co st o f an unfunded severance pay
plan depends on the frequency o f layoffs as w ell as on
plan provisions. E stim ates o f such frequencies are at
best hazardous. Pension im provem ent costs are par­
ticularly difficult to estim ate b ecau se o f the considera­
ble discretion em ployers often have in funding their
ob ligation s.10 The general approach follow ed by the
Bureau is to assum e that a given pension benefit in­
crease will raise existing expenditures for current ser­
vice proportionately. Since em ployer contributions for
pensions frequently vary w idely from year to year,
outlays in several past years are exam ined to develop a
m easure o f current paym ents.
U nder the B L S fram ework, estim ates concerning
m ost p rovisions are o f actual cash outlays to be made by
em ployers. H ow ever, in the case o f im proved paid
leave p rovisions, a change may entail tim e o ff for work­
ers, but not additional cash paym ents by the em ployer.
H ow ever, paym ent per hour w orked will rise and this
change is taken as the co st effect o f the settlem ent
provision.
In case o f a reduction in the basic w orkw eek, the
increase in hourly rates needed to maintain w eek ly pay
is the major item B L S prices. To som e exten t, a reduced
basic w orkw eek may be accom panied by additional
overtim e work. H ow ever, u nless this overtim e is pro­
vided specifically in the agreem ent, it is ignored in the
co st estim ate.
Increases in hourly pay rates are not the only cost
effects considered in this instance. E ven if there is no
change in total em ployer outlays for particular pay sup­
plem ents but the contract provides for reduced hours,
the outlays for them per hour w orked will rise and affect
the co st o f settlem ent.
t h e C o s t s . The total cost o f a given settle­
m ent is obtained by adding up the cents-per-hourw orked co sts o f each o f the individual wage or ?nefit
changes. This sum is then exp ressed as ap ercen t o f pay,
as this ratio facilitates inter-com pany com parisons by
elim inating influences o f payroll size and w age level.
Furtherm ore, since econ om ic studies generally em ­
phasize relative rates o f change in statistical series,
p ercen t-o f-p a y c o s ts can be integrated into broad
econom ic an alyses.
E xpression o f package co sts as a percent o f pay re­
quires estim ation o f an appropriate b ase (the d e ­
nom inator o f the ratio) as w ell as the co st o f the settle­
m ent term s (the numerator). The base used by the

E x p r e s s in g

10
E m p lo y ers’ contractual ob ligation s com m on ly are to provide
giv en le v e ls o f p en sion b en efits, rather than to exp en d sp ecified
am oun ts o f m on ey.

BLS HANDBOOK OF METHODS

164

Bureau con sists o f current outlays per hour w orked for
all item s o f em p loyee com pensation , as defined, plus
em ployer expenditures for legally-required social in­
surance. The latter is part o f em p loyee com pensation,
although not subject to change through collective bar­
gaining.
Sin ce collective bargaining agreem ents generally are
for 2-year periods or longer, B L S ex p resses the total
percent increase over the contract term at an annual
rate to perm it com parison am ong agreem ents for differ­
ing tim e spans as w ell as to facilitate the u se o f the data
in conjunction w ith other statistical series. T hese an­
nual rates o f increase take into account the com pound­
ing o f su ccessiv e changes. In addition, the Bureau
com pu tes first-year ch a n g es, i.e ., the total change
scheduled for the first 12 m onths o f the agreem ent,
exp ressed as a percent o f current hourly com pensation.
A s a general rule, the first-year increase is larger than
the average annual increase over the full term o f the
agreem ent; contracts com m only are “ front-loaded.”
Contracts are considered to run from their effective
dates to their term ination dates. H o w ev er, where w age
reopening clau ses are found, the reopening date is taken
as the term ination date and any agreem ent under the
reopening clau se is treated as a new settlem ent.
Pricing o f a co llectiv e bargaining settlem ent is illus­
trated on the sam ple w orksheet. This exam ple assum es
that at the tim e o f the settlem ent straight-time hourly
earnings averaged $3 and that total supplem entary
benefits w ere $1 an hour w orked, providing total com ­
pensation o f $4 an hour w orked (the base). A lso as­
sum ed is a creep factor o f 20 percent, 2,000 annual
working hours per em p loyee, and a 3-year agreem ent
effective January 1, 1975, providing the im m ediate and
deferred w age and benefit im provem ents show n on the
w ork sh eet. T he settlem en t p ro v id es a 7.1 p ercent
first-year package and a 6.5 percent annual rate o f in­
crease over the 3-year term. T he w orksh eet also sh ow s
the w age and benefit gains scheduled for each o f the 3
calendar years (1975, 76, and 77), from w hich material
the series on changes actually placed into effect is
d ev elo p e d ,11 and the wage-rate changes apart from
benefit im provem ents. The latter data are com puted
without reference to creep and relate w age gains to
average hourly earnings rather than average hourly
com pensation.

P r e s e n t a t i o n

a n d

A n a l y s i s

Press releases covering w age changes and w age and
benefit changes in major co llectiv e bargaining settle­
m ents are issued toward the end o f the month follow ing
the clo se o f each quarter. T hese releases contain pre­
liminary data for the first 3, 6, and 9 m onths o f a year
11
T h u s, th e series on e ffe c tiv e p ack age ch an ges essen tia lly is
b a sed o n the pricing o f item s at the tim e settlem en ts are reach ed . T he
on ly ex ce p tio n is the su b seq u en t add ition o f co st-of-livin g esca la to r
w a g e ch a n ges.




and for the full year. This material also appears in
W a g e D e v e lo p m e n ts
(C W D ).
Final quarterly
material (both for individual quarters and the cum ula­
tive quarterly material appearing in the press releases)
is included in the C W D article for the full year. Informa­
tion on the total effective changes also appears in the
final summary.
Sum mary data for recent individual quarters and
4-quarter periods are show n m onthly in C W D together
w ith other statistical series depicting asp ects o f change
in em ployee com pensation. The presentation facilitates
analysis o f the interrelations b etw een the series and the
divergences in their m ovem ents.

C u r r e n t

U

s e s

a n d

L i m

i t a t i o n s

Package co st data are used exten sively by union and
m anagem ent officials, for w hom data on developm ents
in other firms and industries often provide an important
criterion for their ow n deliberations. In a different vein,
the data are exam ined by governm ent officials and pri­
vate analysts, concerned with the econom ic repercus­
sions o f co llectiv e bargaining on the costs o f individual
em ployers and on w age-price-em ploym ent relations
within the econ om ic system as a w hole.
The user o f the data should rem em ber that the series
d oes not purport to m easure all changes in average
hourly expenditures for em ployee com pensation. E s­
tim ates are derived under the assum ption that all fac­
tors affecting em ployer outlays other than contract
m odifications are constant.
N ev erth eless, changes in the volum e o f overtim e and
shift w ork, in the com position o f the work force, in the
level and stability o f em ploym ent, in factors affecting
incentive earnings, e tc ., are not unusual, and will influ­
en ce outlays for em ployee com pensation. In som e in­
stan ces, th ese changes are introduced by m anagem ent
specifically to offset co sts o f new labor agreem ents. In
other ca se s, changes are the result o f m odified pro­
duction schedules or o f technological developm ents in­
dependent o f collective bargaining, and may either add
to or subtract from the co st o f the union-m anagem ent
settlem ent. In any even t, an important influence on the
lev el o f em p lo y ee co m p en sa tio n , so cia l insu ran ce
taxes, is essentially outside the scop e o f the package
cost estim ates.
T w o other factors m ust be considered. First, package
costs are only estim ates o f future changes in em ployer
outlays. A s already em phasized, com pletely accurate
estim ates should not be exp ected . S econ d ly, the data
apply primarily to settlem ents for 5,000 workers or
more.
A lthough package co st estim ates are extrem ely valu­
able as com prehensive m easures o f change resulting
from union-m anagem ent negotiations, to u se the esti­
m ates as precise, unam biguous, and unfailing m easures
o f the econom ic effects o f collective bargaining is ad­
ding an assignm ent w hich the data are incapable o f
fulfilling.

> 0

PACKAGE COST ANALYSIS WORKSHEET

SO
N am e -

L o c a tio n

-

U n io n
SCHED.

10 11

19

15 1 17
6

111 M m 1 W b m

M E A S U R IN G C O L L E C T IV E B A R G A IN IN G S E T T L E M E N T S

3 /1 5 /7 5

E s c a l.

C la u s e

In fo r.

(if

Y ear

T o ta l
C ent 8

2 8 .2 5

---------------

8 3 .6 1

— ----- --— —

D iv id e d
By * *

$ 4 .0 0

T o ta l
A nnual
P e rc e n t
R a te o f
In c re a se In c re a se

X

7 .1 %

2 0 .9 0

$ 4 .0 0

6 .5 %

X

2 3 .5 4

$ 3 .0 0

5 6 .9 1

$ 3 .0 0

2 8 .2 5

$ 4 .0 0

7 .1 %

1976

2 2 .6 9

$ 4 .2 8 2 5

5 .3 %

3 2 .6 7

$ 4 .5 0 9

7 .2 %

N /A

N /A

N /A

N /A

N /A

B e n e fits

N /A

N /A

N /A

----------

C o n tra c t

W ages a n d B e n e f i t s

E ffe c tiv e

E ffe c tiv e

in

in

*

---

--

7 .8 %
6 .0 %

1 8 .9 7

20%
s h ift
.6 C
s h ift
.6 0

&

H o lid a y s :
$ 3 .4 9 9

y
W ages a n d

W a g e s : 5% @ 3 . 0 0
S k ill a d ju st fo r
Im p r, s h i f t d i f f .
a d d . 2<? h r . o n 2 n d
30% =
a d d . 30 h r . o n 3 r d
20% =
2% @ 3 . 1 7 2
5% @ 3 . 2 3 5
3% @ 3 . 3 9 7
2%
3 .4 9 9

5
C

1977

of

Fiw

in

1
c
L

BASE

W&B
OTL*

«&B
T im e
^ g h td ^

W&B
F .Y
★

I M°m m

MM

c e n ts
E x c l u d e 1W i t h
cre e p
cree p
1 5 .0 0
1 8 .0 0

P ro v is io n

N /A

1975

W ages O v e r L i f e

DUR

M
°1°13 7
| |H5lolo 1p H M M w
l°l

W ages a n d B e n e f i t s
(tim e w e ig h te d ) - F i r s t - Y e a r W ages A lo n e

T o ta l
W ages

In c re a se s
1 /1 5 /7 5
1 /1 /7 5
1 2 /3 1 /7 7

MEASURE:

W ages a n d B e n e f i t s
(o v er l i f e o f c o n tra c t)

F .Y .
W a^es

EMPLY .

a p p lic a b le )

S T A T IS T IC A L INFORMATION

F i r s t - Y e a r W ages & B e n e f i t s

S IC

2323 24|25|2

P A
D a t e P r i c e d O u t ----------------------------P r e v i o u s E x p i r a t i o n D a t e ---------D a t e N e g o t i a t e d : --------------------------E f e c t i v e D a te o f A g re e m e n t - New E x p i r a t i o n D a t e --------------------

A . H .E .

1 add.
h rs.

&8

= 2 7 .9 9 - r
1972
V a c a tio n s :
Im p r. a v e ra g in g
h r s . o f v a c ./ y r , fo r a l l

1 /1 /7 5
1 /1 /7 5
1 /1 /7 5
fo r

in

1975

2 3 .5 4

$ 3 .0 0

1 . 2 0

in

1976

1 6 .1 8

$ 3 .2 3 5

in

1977

1 7 .1 9

$ 3 .3 9 7

.m

in

.N /A

N /A

N /A

in

N /A

n/a

N /A . . . . .

N /A

N /A

N /A

.

h rs. =
20 a d d .
e m p ls .

1

^

2.

IO L

$ 3 .2 3 5 @ 20 h r s . = 6 4 .7 0 t 198 0 h r s =
a d d e d im p a c t i n 1977
$ 3 .4 9 9 @ 20 h r s . = 6 9 .9 8 * 1 9 7 2 h r s .
= 3 .5 5 0
( 3 .5 5 0 - 3 ,2 2 0 ) =
P e n s io n s a d d . 50 / h r . to fu n d 1 /1 /7 7
50
2 0 8 0 h r s . = $ 1 0 4 .0 0 - 1 9 7 2 =

5 ,2 7

H im .
IteDfc a l l - E l a n esfcab.
E s t im a t s ayg>- c o a t of-,$.lQ0/p.mp,1.
J S1 0P

Ju .Q Z

3 .2 7

_x28

&

N /A _

W ages A lo n e E f f e c t i v e

m

5 .1 %

W ages A lo n e E f f e c t i v e

7 .6 1

.1 6 . 1 8 ■ 1 9 x 4 2
- 1/U Z 7 .
XQ .1 9. 1 1 * 2 1
8 .4 0
- 7 / . 1 / Z 1 - L Q0

5 .0 %

W ages A lo n e E f f e c t i v e

JU 44

6 .3 4

1 0 /1 /7 5
7 /1 /7 6

7 .8 %

W ages A lo n e E f f e c t i v e

1 . 2 0

fo r

M

W ages A lo n e E f f e c t i v e

1 . 0 0

O th e r:

..................... - .........................

.
N /A

NZA—
N /A
TO T A L S :

R em ark s:
N o te :

** F or
d iv id e
F o r th e e
a s o f th e
P ric e d




w ages and b e n e f i t s , d iv id e by th e b a s e ; f o r w ages a lo n g ,
b y t h e A .H .E .
f f e c t i v e m e a s u r e s , d i v i d e b y t h e a d j u s t e d b a s e o n A .H .E .
s t a r t o f th e a p p r o p r ia te y e a r .

O ut B y:

J o h n D oe

8 3 .6 1

W ages an d f r i n g e s —
W a g e s ------------------------------O ver
o r con

* No d a t a
m ade, th e

s h o u ld b e s u p p lie d in th e s e
d a ta w il l be s u p p lie d .

c o lu m n s .

W h en v e r i f i c a t i o n

is

BLS HANDBOOK OF METHODS

166

T e c h n i c a l

Number
1.

D a v id , L ily M ary and Sh eifer, V ictor J. “ E stim ating the C ost o f
C o llectiv e Bargaining S e ttle m e n ts,” Monthly Labor Review,
M ay 1969, pp. 1 6 - 2 6 . R eprint N o . 2617.
A m ore detailed d escrip tion o f the Bureau o f Labor S tatis­
tics p roced u res fo r pricing c o lle ctiv e bargaining settlem en ts. 2

2.

S h eifer, V ictor J. “ T he R elation sh ip B e tw ee n C hanges in W age




R e f e r e n c e s

Number
R ates and in H ourly E arn in gs,” Monthly Labor Review, A u ­
gu st 1970, pp. 1 0 - 1 7 . R eprint N o . 2688.
C om p ares general w age rate and hourly earnings ch an ges in
87 m anufacturing estab lish m en ts over a 7-m onth period. T he
issu es raised are pertinent in any con sid eration o f the relation
b etw een pack age c o st e stim a tes and actual ch an ges in hourly
co m p en sation exp en d itu res.

Chapter 22.

W age Chronologies and Salary Trend Reports

B a c k g r o u n d

M ost Bureau o f Labor Statistics series show ing the
m ovem ent o f m oney w ages— such as data on average
hourly earnings— apply to large aggregates o f workers,
e .g ., all production workers in a given manufacturing
industry either nationw ide or in a particular State or
local area. W age chronologies and salary trend reports,
on the other hand, apply to more narrowly defined
em ployee groups.
Chronologies report on wage-rate changes made by
specific em ployers. E xcep t for the study on Federal
General Schedule em p loyees, they deal with d ev elop ­
m ents under collective bargaining agreem ents. In all
cases they report on supplem entary benefits as w ell as
wage changes.
Salary trend reports present and analyze changes in
s a la r ie s o f s e le c t e d c a t e g o r ie s o f g o v e r n m e n t
e m p lo y e e s.1 In m ost instances, how ever, they do not
2
contain separate data for individual em ployers.
Both programs date back to the early post-W orld War
II period. The wage chronology program was instituted
in 1948 and the first salary trend report was issued in
1950. To the exten t p ossib le, material for earlier years
was included in the initial reports.

D e s c r i p t i o n

o f

P r o g r a m

T he fo llo w in g 32 ch ro n o lo g ies cur­
rently are being m aintained:2
1. Aluminum Co. of Am erica, and the United
Steelworkers and the Aluminum Workers
2. American Telephone and Telegraph Co., Long Lines
Dept., and the Communications Workers
3. The Anaconda Company and the United Steelworkers
4. Armour and Co. and the Meat Cutters and Butcher
Workmen
5. Atlantic Richfield Co. and the Oil, Chemical and
Atomic Workers
6. Berkshire Hathaway, Inc., and the Textile Workers
Union of America
7. Bethlehem Steel Corp., Shipbuilding Dept, and the
Marine and Shipbuilding Workers

C h r o n o lo g ie s .

1 Although other B LS studies report on salary trends, they do not
have this specific title. The time series in these studies are often
by-products of repetitive Bureau survey activity.
2 Several chronologies have been discontinued, generally either
because of fragmentation of bargaining units, declining importance,
or because standardization of collective bargaining eliminated the
value of more than one chronology in a given industry.




8. Bituminous Coal Mine Operators and the United Mine
Workers
9. The Boeing Co. (Washington plants) and the Ma­
chinists
10. Commonwealth Edison Co. o f Chicago and the
Electrical Workers (IB EW )
11. Dan River, Inc. and the United Textile Workers of
America
12. Federal Employees Under the General Schedule Pay
System
13. Firestone Tire and Rubber Co. and B. F. Good­
rich Co. and the United Rubber Workers
14. FMC Corp., Chemical Group-Fiber Div. and the Tex­
tile Workers Union o f America
15. Ford Motor Co. and the Automobile Workers
16. Greyhound Lines, and the Amalgamated Transit
Union and the Machinists
17. International Harvester Co. and the Automobile
Workers
18. International Paper C o., Southern K raft D iv i­
sion, and the United Papermakers and the Electrical
Workers (IB E W )
19. International Shoe C o., and the U nited Shoe
Workers and the Boot and Shoe Workers
20. L o ck h eed -C aliforn ia Co. and the Machinists
21. Martin Marietta Aerospace and the Automobile Work­
ers
22. Massachusetts Shoe Manufacturers and the United
Shoe Workers
23. N ew York City Laundries and the Amalgamated
Laundry Workers Joint Board (affiliated with Amal­
gamated Clothing Workers)
24. North Atlantic Longshore Industry and the Interna­
tional Longshoremen’ s Association
25. Pacific Coast Shipbuilding and various unions
26. Pacific Gas and Electric Co. and the Electrical
Workers (IB E W )
27. Pacific Longshore Industry and the International
Longshoremen’ s and Warehousemen’ s Union
28. Railroads and Various Unions
29. Rockwell International (Electronics, North American
Aircraft/Space Operations) and the Automobile Work­
ers
30. Swift & Co. and the Meat Cutters and Butcher
Workmen
31. United States Steel Corp. and the United Steel­
workers
32. Western Union Telegraph C o., and the United
Telegraph Workers and the Communications Workers

E a ch c h ro n o lo g y c o v e r s eith er a sin g le w a g edeterm ination unit or a group o f closely related units. It
may cover an individual com pany and union (e.g ., Ford
M otor C o. and the U n ited A u tom ob ile W orkers),
a single com pany and tw o unions or more (e.g ., the
A lum inum C o. o f A m erica and th e U n ited S te e l­
workers and the Aluminum W orkers), a group o f em ­

167

168

BLS HANDBOOK OF METHODS

ployers and single union (e .g ., N e w York City Laun­
dries and the Am algam ated Clothing W orkers), a gl*oup
o f com panies and a group o f unions (e .g ., Pacific C oast
shipbuilding com panies and a num ber o f craft unions),
or a governm ental b ody (e .g ., the chronology covering
Federal General Schedule em p loyees).
The program is designed to sum m arize long-term
w age-benefit d evelop m en ts in a variety o f industrial
environm ents. A ccordingly, chronologies cover groups
that (1) have existed over a period o f years; (2) are
important in their ow n industry; (3) em ploy a significant
number o f w orkers; (4) are o f general public interest;
and (5) are willing to cooperate with the Bureau and for
w hich appropriate inform ation is available.
E ach ch ronology con sists o f an introductory descrip­
tion o f the parties involved and their co llectiv e bargain­
ing relationship, follow ed b y (1) a narrative syn opsis o f
the co llectiv e bargaining, legislative, or adm inistrative
d evelop m en ts resulting in sp ecific w age and benefit
changes, and (2) a tabular sum m ary o f the changes
th em selv es. E ach ch ronology con tain s separate tables
show ing general w age changes and changes in benefits.
A s u sed in the w age chronology program, general
w age changes are defined as upward or downward
changes that affect an entire unit or a substantial group
o f w orkers at one tim e. E xcluded are adjustm ents in
individual rates (such as prom otions, or merit or senior­
ity increases) and minor adjustm ents in w age structure
(such as changes in individual jo b rates or incentive
rates) that do not have an im m ediate and noticeable
effect on the general w age lev el. B ecau se o f the om is­
sion o f non-general w age ch an ges, fluctuation in incen­
tive earnings, and other factors, the sum o f the w age
changes listed in each chronology will not coincide
necessarily w ith the m ovem ent o f average hourly earn­
ings over the sam e period.
The tables generally include benefits such as guaran­
teed m inim um earnings, shift prem ium s, daily and
w eek ly overtim e, w eek en d prem ium s, pay for holiday
w ork, paid vacations and h olid ays, other paid leave
p rovisions, reporting tim e, w aiting tim e, paid lunch
periods, pay for travel tim e, and health, w elfare, and
p en sion benefits.
W hen minimum plant rates, com m on labor rates,
occupational w age rates, or rates for labor grades are
important in the w age structure, th ey are show n in
chronological seq u en ce, parallel to the general w age
changes.
S a la r y
T r e n d R e p o r t s . T hese reports currently are is­
sued for Federal G eneral Sch ed ule em p lo y ees, police
and firefighters, and urban public sch ool teachers. T hey
all contain in d exes o f long-term salary m ovem ents.
D ata on recen t and current salary lev els also are pro­
vided.
A report on m unicipal governm ent refuse collectors
w as initiated in 1972, and although in d exes o f long-term




salary m ovem ents are not yet available, salary level
data and changes since 1972 are show n.
Reports for p olice, firefighters, refuse collectors, and
teachers basically apply to cities having 100,000 in­
habitants or m ore, and provide separate figures for
regions and city-size groups, as w ell as overall national
data. Material on individual cities, how ever, is not
show n. B ecau se it deals with a single em ployee group,
the report on Federal General Schedule em ployees con ­
tains con siderab le detail on d evelop m en ts in w age
structure.

D a t a

S o u r c e s

Both w age chronologies and salary trend reports are
d evelop ed primarily from published data. C ollective
bargaining agreem en ts, p en sion and w elfare d o cu ­
m ents, and new spaper and periodical articles provide
the main sources o f chronology information. T hese are
supplem ented by direct requests to the parties for in­
form ation w hen available written records are inade­
quate. T hus, m ost o f the information used to com pile
chronologies is, in one form or another, already a mat­
ter o f public know ledge. In all instances, to avoid dis­
sem in ation o f erro n eo u s m aterial, p re-p u b lication
drafts o f ch ronologies are subm itted to the parties for
their review and com m ents.
Salary trend reports are prepared largely from salary
data collected by other groups. That for Federal G en­
eral Schedule em ployees is based on data published by
the U .S . Civil S ervice C om m ission in its annual report
on P a y S t r u c t u r e o f t h e F e d e r a l C i v i l S e r v i c e .
R eports on teachers, p olice and firefighters, and ref­
use collectors are based mainly upon com pilations o f
data for individual cities made by the N ational E duca­
tion A ssociation for teachers and the International City
M anagem ent A ssociation for the other occupations.
T hese are supplem ented by annual surveys o f salaries
and working conditions conducted by the International
A ssociation o f Fire Fighters and the Fraternal Order o f
P olice, and by direct inquiries by the Bureau o f Labor
Statistics.
S t a t i s t i c a l

P r o c e d u r e s

Statistical analysis in the salary trend program is
confined largely to the preparation o f indexes (excep t
for refuse collectors) o f salary m ovem ents o f groups
o f governm ent em p lo y ees. Sampling problem s do not
arise since in each ca se an effort is made to exam ine
the total universe, i.e ., all Federal General Schedule
em p lo y ees, and all teach ers, firefighters, and police
in cities having 100,000 inhabitants or m ore.
Indexes generally are com puted by a m ethod that
m inim izes the effect o f year-to-year changes in relative
em ploym ents in the cities or occupational categories

W AGE CHRONOLOGIES AN D SALAR Y TREND REPORTS
covered . A s a rule, chain ind exes are em ployed, i.e .,
the index for the current year is obtained by adjusting
the index for the prior year by the percent change in
average salaries over the intervening period. N orm ally,
to preserve a pure m easure o f salary change, average
salaries for each o f the 2 years are com puted using
current-year em ploym ents as w eights.

P r e s e n ta tio n a n d A n a ly s is
a g e
C h r o n o l o g i e s . W age c h r o n o lo g ie s
are pub­
lished individually as B L S B ulletins and revised period­
ically to incorporate material resulting from new c o llec­
tive bargaining settlem ents and legislative or adm inis­
trative d evelop m en ts. B ulletins are updated after every
other contract settlem ent or legislative enactm ent. In­
tervening develop m en ts are reported in supplem ents to
existing bulletins. Thus, w hen 3-year collective bar­
gaining agreem ents are negotiated, a revised bulletin
should be issued on ce in 6 years.

W

T r e n d R e p o r t s . A rticles covering developm ents
for Federal General Schedule em p loyees, firefighters
and p olice, and refuse collectors appear annually in
C u r r e n t
W a g e
D e v e lo p m e n ts
(C W D ).
Press releases
containing summary data for firefighters and police
precede publication o f the articles. Salary changes for
teachers are reported in biennial C W D articles, since
the basic data are issued at 2-year intervals. Reprints
are available o f all C W D articles. In addition, all articles
issued up to the m id-1960’s have been collected and
reprinted in the B L S bulletins listed in the technical
references at the end o f this chapter.
C hronologies are primarily listings o f w age and bene­
fit changes, with background material limited to de­
scriptions o f the co llectiv e bargaining, administrative
or legislative processes leading up to the changes. Great­
er effort is m ade in salary trend reports to analyze the
data. Background factors are presented and the wage

S a la r y

169

m ovem ents are com pared with w age changes for other
em ployee groups.
U s e s a n d L im ita tio n s
B oth wage chronologies and salary trend reports are
useful as sources o f com parative w age data for union,
m anagem ent, and governm ent officials engaged in wage
setting, and as research tools for econom ic analysts.
C hronologies are particularly useful for negotiators be­
cause the studies present detailed information on de­
velopm ents in units that frequently provide wage lead­
ership for their industries. M oreover, com parisons o f
w age and benefit changes in such units provide valuable
insights into w age setting in the A m erican econom y. In
addition, the data help to explain the m ovem ents in
aggregative statistics such as the Bureaus series on aver­
age hourly earnings.34Salary trend reports are notew or­
thy as one o f the relatively few sources o f data on wage
m ovem ents and levels in the governm ent sector.
A lthough w age chronologies describe changes in
supplem entary benefits, they do not m easure the effect
o f th ese changes on em ployers’ hourly labor co sts. In
this con n ection , d ecision s on w hether or not to adopt a
given benefit change may hinge on its co st, w hich may
vary am ong bargaining units having work forces o f dif­
fering com position.
The tem ptation m ay be to use salary trend reports as
indicators o f salary m ovem ents for governm ent em ­
p loyees in general. H ow ever, the particular groups
covered by th ese reports are by no m eans a represen­
tative sam ple for this purpose.
3
F or ex a m p les o f the u se o f ch ron ologies b y eco n o m ists, see
H arold M . L e v in so n , Postwar Movement of Prices and Wages in
Manufacturing Industries, Stu dy Paper N o . 21, Stu dy o f E m p lo y ­
m ent, G row th, and P r ice ,L ev e ls, Joint E co n o m ic C om m ittee, 86th
C o n g ., 2d S e ss . (W ashington: 1960); and John E . M aher, “ A n Index
o f W age R ates for S e lec ted In d u stries, 1 9 4 6 - 1 9 5 7 ,” Review of
Economics and Statistics, A u gu st 1961, pp. 27 7 —282.

T e c h n ic a l F
Number
1.

2.

Number

A m o w , Philip, B lo ch , Joseph W ., and Q uant, W illis C. “ T he
N e w W age C h ron ology S e r ie s,” Monthly Labor Review, D e ­
cem b er 1948, pp. 5 8 1 -5 8 3 .
D escrib es the aim s o f the chron ology series at the tim e it
w a s introduced.
U .S . D epartm en t o f L abor, Bureau o f L abor Statistics.

5.

Direc­

tory of Wage Chronologies, 1948 - June 1975 (1975).
L ists ch ro n o lo gies that w ere m aintained in 1975, the tim e
span c o v ered , and the p la ce o f publication.

6.

W ., “ Starting S alaries o f R efu se C ollectors in 123 C ities
up 7 .9 p ercen t in 1974,” Current Wage Developments,
D ecem b er 1975, pp. 4 2 - 6 0 .
Y e a st, R ichard K ., “ T ea ch ers’ Pay R ises 13.6 p ercen t in 2
Y e a r s ,” Current Wage Developments, M arch 1975, pp.
3 9 -4 4 .
T he m o st recen t annual or biennial articles on govern m en t
e m p lo y e e s’ salaries.
U .S . D e p a r tm en t o f L a b o r , B u rea u o f L a b o r S ta tis tic s .

Salary Trends: City Public School Teachers, 1925—
65
3.

4.

Y e a s t , R ic h a r d K ., “ U . S . G e n e r a l S c h e d u le E m ­
p lo y e es R e ce iv ed O ctob er 1975 Salary In crease o f 5 Per­
c e n t , ” Current Wage Developments, F e b r u a r y 1976,
pp. 3 7 - 4 4 .
B o r u m , J o a n D . , “ S ta r tin g P a y o f M e tr o p o lita n P o lic e ,
F irefigh ters R o se 6.5 P ercen t in 1974,” and E llis, M ilfred




7.
8.

(B ulletin 1504, 1966).
___. Salary Trends: Federal Classified Employees, 1939—
64
(B ulletin 1444, 1965).
___ . Salary Trends: Firemen and Policemen, 1924— (B u lle­
64
tin 1445, 1965).
C om p ilations o f p reviou sly pu blished salary trend articles.

Chapter 23. Annual Earnings and Em ploym ent Patterns
of Private Nonagricultural W orkers
B ack grou nd
A w orker’s annual earnings from em ploym ent are an
ex cellen t gauge o f econ om ic w ell-being. Annual earn­
ings depend on rates o f pay and hours o f em ploym ent
w hich in turn are dependent on the w orker’s occupa­
tion, industry o f em ploym ent, and area o f em ploym ent.
O ccupational w ages, or hourly or w eek ly earnings data
cannot be extrapolated to annual earnings b ecau se
som e w orkers are not em ployed for a full year and
others m ay w ork in more than on e occupation or in
more than on e industry. S in ce the late 1960’s, the
Bureau o f Labor Statistics has had a program o f studies
designed to provide inform ation on annual earnings
from w a g es and salaries in private nonagricultural
em ploym ent. T he first study, in 1964, w as lim ited to
w age and salary earnings covered b y social security;
subsequent studies have included data on w age and
salary earnings covered under either the Social Security
A ct or the Railroad R etirem ent A ct. Publications cover
all years w ith the excep tion o f 1968 and 1969, w hich
w ere om itted w h en program m odifications enabled
more tim ely p rocessin g o f data for 1970. Rather than
delay the publication o f 1970 data, the data for 1968 and
1969 w ere not p rocessed . B ulletins are issued annually
with special analytical studies being published intermittantly in the M o n t h l y L a b o r R e v i e w .

earnings for the private nonagricultural sector as a
w h ole, for each industry division, for each major indus­
try group at the tw o-digit SIC level, and for selected'
industry groups at the three-digit SIC level o f industry
cla ssifica tio n . The data, though available only for
w hite-collar and blue-collar workers com bined, are
unique, because unlike annual earnings data from other
sou rces, they perm it an analysis o f the distribution o f
w age and salary earnings and em ploym ent patterns by
industry and quarters o f em ploym ent.
The studies focus separately on earnings in the indus­
try in w hich workers had greater earnings than in any
other, and on earnings in all industries. Som e o f th ese
data and so m e o f th e em p lo y m en t p attern s data,
separately and w ith earnings data, also are presented
for w ork ers c la ssifie d by age, race, and se x . In­
form ation also is provided on the inequality o f in­
com e distributions as m easured by Gini ind exes o f
concentration.
Earnings and em ploym ent patterns o f workers w ho
had covered w ages and salaries in each quarter o f the
year are em phasized particularly. Information about
earnings and em p loym en t patterns o f four-quarter
workers is the clo sest to data for workers fully attached
to the private sector work force that can be obtained
from the source materials. D ata on workers em ployed
in any quarter o f the year m ore closely represent the
experience o f all workers in the private nonagricultural
sector.

D e s c r ip tio n o f t h e S e r i e s
S o u r c e o f D a ta
The series co v ers earnings and em ploym ent patterns
in the private, nonagricultural sector w hich, broadly
defined, includes individuals w h o w ork for w ages and
salaries in em ploym ent covered by the Social Security
A ct and the Railroad R etirem ent A c t .1 E xcluded are
earnings in agriculture, self-em ploym ent, and in go v ­
ernm ent units other than th ose that participate in social
security and function like private firm s, such as hospi­
tals and sch ools.
The studies provide distributions o f m edian and mean
1 F o r a d isc u ssio n o f the interrelationsh ip o f, and jo in t coverage
under, the railroad retirem en t and so cia l secu rity sy stem s, se e U .S .
D epartm en t o f H ea lth , E d u cation , and W elfare, S ocial Secu rity
A d m in istration, Social Security Handbook, (F ebruary 1974), and
U .S . R a ilro a d R e tir e m e n t B o a r d , Handbook on Railroad Re­
tirement and Unemployment Insurance Systems (1975).

170




The data are develop ed by the Bureau o f Labor
Statistics from statistical inform ation obtained from the
Social Security Adm inistration and the Railroad R e­
tirem ent Board. To preserve the confidentiality o f the
records, the data are provided to the Bureau o f Labor
Statistics w ithout identification o f individuals or em ­
p lo y ers. H o w e v e r , to com b in e data from variou s
em ploym ents and to facilitate statistical processing,
each individual and em ployer is assigned a perm anent
control number, different from his social security or
em ployer identification number.
Each individual in the sam ple provides dem ographic
information (race, sex , and year o f birth) w hen he ap­
plies for a social security number. Each em ployer under
social security from w hom the individual receives any

A N N U A L EARNINGS AN D EM PLO YM ENT PATTERNS OF PRIVATE
N O N AG R IC U LTU R AL WORKERS
wages or salaries during the calendar quarter reports
the am ount o f the w age paym ent in the quarter; em ­
p lo y ers c o v e r e d under railroad retirem en t report
m onthly. H ow ever, em ployers cea se to report w age
and salary earnings after the worker has reached his
taxable earnings limit in that em ploym ent situation.
E m ployers report w ages paid to the maximum annual
limit under social security and to the maxium m onthly
limit under the railroad retirem ent system . E m ployer
reports also indicate the industry and, e x c ep t for
em ploym ent covered by the Railroad Retirem ent A ct
(RRA), the area in w hich the w ages or salaries w ere
earned. E m ployers subject to the R RA also provide
in form a tio n a b ou t th e o c c u p a tio n a l ca te g o r y the
worker w as em ployed in.

S a m p l e D e s i g n , a n d S a m p li n g a n d
N o n s a m p l i n g V a r ia b ilit y
The sam ple, w hich includes 1 percent o f all social
security num bers, w as selected on the basis o f a multi­
stage system atic cluster sampling procedure. Social
security numbers are u sed as the individual’s identifica­
tion num ber in both the social security and railroad
retirem ent system s. An individual selected for the sam ­
ple remains in it p erm anently.2
Since estim ates in this study are based on a sam ple,
they m ay differ from cen su s figures. M oreover, the
sam ple data are not adjusted to benchm ark lev els estab­
lished by com plete cou n ts. In addition, the data are
subject to nonsam pling variability due to errors in re­
porting and cla ssifica tio n and other p o ssib le error
sou rces, that w ould be present in a com plete enum era­
tion as w ell as in a sam ple. A s a result, ratios established
from the sam ple data are considered to be reasonable
estim ates o f th ose existing within the population as a
w hole. N ev erth eless, particular care should be exer­
cised in interpreting m edians and percents based on
relatively small num bers o f ca se s as w ell as small differ­
en ces b etw een figu res.3

E s t im a t in g P r o c e d u r e s
To estim ate total earnings o f individuals, the Social
S ecu rity A dm inistration d eterm in es the quarter in
w hich the taxable limit is reached (“ limit quarter” ).
2 F or a detailed d iscu ssio n o f the sam pling proced ure, reporting
criteria, and co v era g e under the social secu rity and railroad retire­
m ent sy stem s, se e U .S . D epartm en t o f H ealth , E du cation , and W el­
fare, S ocia l Secu rity A dm in istration, Workers Under Social Security,
1960 (1968) and Social Security Handbook, op. c it .; also se e Hand­
book on Railroad Retirement Systems, op. cit.
3 F or an indication o f the order o f m agnitude o f the sam pling errors
and a fuller d iscu ssio n o f the sam pling and non sam pling variability to
w h ich the series is su b ject, se e Workers Under Social Security, 1960,
o p . cit.




171

Earnings in the prior quarter equal to or greater than the
“ limit quarter” earnings are substituted for th ose in the
“ limit quarter” and in all subsequent quarters. Limit
quarter earnings, h ow ever, are used to estim ate earn­
ings in the limit and subsequent quarters if limit quarter
earnings were higher than earnings in previous quar­
ters. The summation o f the quarterly earnings after these
substitutions then b ecom es the estim ated annual total.
W hen the taxable limit is reached in the first quarter, the
Social Security Administration im putes an estim ated
total.
Em ployers covered by the Railroad Retirem ent A ct
are required to provide information about the m onthly
earnings o f each em ployee up to the maximum credita­
ble limit subject to Railroad R etirem ent A ct taxes.
H en ce, even earnings reported at the maximum level
for each month aggregated to annual totals may be
substantially below the w orker’s total earnings. The
Railroad Retirem ent Board, how ever, collects informa­
tion from em ployer records about the total annual earn­
ings o f a sam ple o f workers covered by the act. Factors
for raising creditable com pensation under the Railroad
Retirem ent A ct to total railroad earnings are derived by
com paring the total earnings data for individuals col­
lected in the special study with the aggregated monthly
earnings data for the sam e individuals. The incremental
factors for workers in the sam e broad occupational
categories are then averaged. The resulting factors,
developed by the Railroad R etirem ent Board, are ap­
plied by the Bureau o f Labor Statistics to the credited
m onthly earnings o f each individual by taking into ac­
count his occupational category.4

A n a ly s is a n d P r e s e n ta tio n
The inform ation presented can be classified into four
major groups. The first deals with m eans, m edians, and
frequency distribution o f earnings o f workers grouped
by race and sex and classified by the industry in which
they received the largest part o f their annual earnings
(industry o f major earnings). The second group pre­
sents mean and median earnings and numbers o f workers
grouped by age and classified by race, sex , and industry
o f major earnings. The third includes number o f work­
ers with various em ploym ent and dem ographic charac­
teristics such as region o f em ploym ent, quarters o f
w ork, and number o f em ployers. The final group pro­
v id e s G ini in d e x e s o f c o n ce n tra tio n for w o rk ers
grouped by race, sex , and industry o f major earnings.
4
A lthou gh the Railroad R etirem en t Board c o lle cts annual earnings
data for a 1-percent sam p le o f w ork ers, the sam pling criteria differ
from th o se used b y the S ocial Secu rity A dm inistration. T o perm it the
com b in ation and integration o f data from the tw o sy stem s, the R ail­
road R etirem en t Board provid es the B ureau o f L abor S tatistics with
data for a sam ple o f w orkers selected according to the sam ple design
estab lish ed b y th e S ocial Secu rity A dm inistration.

172

BLS HAND BO O K OF METHODS

Term s used in the series and the m ethods used to
classify workers by industry and region o f major earn­
ings and the industrial classification schem e used in
classifyin g nonpolicy governm ental units in scope o f
the study program are described below . Information
also is provided on Gini ind exes o f concentration.
A n n u a l e a r n i n g s are defined as gross w ages, salaries,
and other paym ents (such as b on u ses) received by em ­
p loyees, before d ed uctions, in em ploym ent covered
under the Social Security A ct or the Railroad Retire­
m ent A ct. Such paym ents m ay be cash , cash equiva­
lents, or other perquisites such as good s, clothing,
board, or lodging.
S elf-em p lo y m en t earnings, p aym ent for w ork in
em ploym ent exclu ded from the coverage o f the acts,
and paym ent for w ork in agriculture, in covered go v ­
ernm ental units engaged in public administration and
for military service have been exclu d ed from this study.
M ost paym ents by em ployers to or on behalf o f em ­
p lo y e es, or for em p lo y ees and their dependents for
retirem ent, death, sick n ess or accidental disability, or
m edical and hospitalization ex p en se under provisions
o f a plan or system m eeting certain general criteria, and
em ployer paym ents to a trust fund, such as a pension
trust, exem pt from tax under the Internal R evenue
C ode, are not counted as w ages in this se r ie s.56
W o r k e r s H a v i n g S o m e E a r n i n g s i n t h e I n d u s t r y . Each
individual w ho earned $1 or m ore in an industry during
the year is counted in each industry in w hich he had any
earnings. A worker w ho had som e earnings in each o f
five three-digit industries, as defined in the S t a n d a r d
I n d u s t r ia l
C la s s if ic a t io n
M a n u a l 6 fo r ex a m p le,
is
counted for each o f th ese industries as w ell as in each
tw o-digit industry and in each division o f w hich the
three-digit industries are a part. B ecau se a worker is
counted in each three-digit industry, each tw o-digit in­
dustry and in each division in w hich he had $1 in co v ­
ered w age and salary earnings or m ore, the aggregate
count at each level is greater than the total number o f
workers at each broader industry level (two-digit, divi­
sion, private nonagricultural econom y).

M a j o r E a r n e r s a n d I n d u s t r y o f M a j o r E a r n i n g s . To ob­
tain the m ost realistic picture o f the characteristics o f
workers em ployed in an industry during a year it is
beneficial to exclu d e data for individuals w ho w ere only

5 U n d er certain circu m stan ces tips are co u n ted as w ages for social
secu rity p u rp o ses and thu s are inclu ded in the data file u sed in this
stu dy series. P aym en ts to w orkers from tax exem p t trust funds are
n ot co n sid ered w a g es (ex cep t for w ages paid b y the fund to its
e m p lo y ee s) and thu s are ex clu d ed . E m p loyer p aym en ts to trust fun ds
w h ich are not tax ex em p t a lso are ex clu d ed . D ep en d in g on their
nature and p u rp ose, p ay m en ts to w ork ers from th ese funds m ay be
co u n ted for so cia l secu rity p u rp oses and thus are inclu ded in the data
file .— S u ch w ou ld b e th e c a se if the p aym en t w as a b on u s or vacation
paym ent. F o r a m ore detailed d isc u ssio n o f c o v er ed w a g e s, se e the
Social Security Hanbook, op . cit.
6 Issu ed b y the U .S . O ffice o f M anagem en t and B ud get.




casually em ployed in the industry. Each em ployee-em ­
ployer com bination within the A E E P sample has a
separate and distinct record. Thus, data for an indi­
vidual worker, depending on his work experience, can
be included for several different industries. To avoid
this duplication o f data (and as a result to provide more
industry specific information) workers are assigned to
an “ industry o f major earnings” at the 3-digit SIC level.
This industry is the one from which the worker received
the largest portion o f his total w age and salary earnings.
This assignm ent does not change at higher levels o f
aggregation, thus preventing a worker from being iden­
tified as a major earner in different industries at differ­
ent SIC levels.
An em ployer in this study is an individual,
partnership, or corporation recognized under the law as
a separate entity m eeting certain criteria.7 H ow ever, a
firm w hich separately incorporates at each o f its loca­
tions may be considered a separate em ployer at each
lo ca tio n . T hu s, a w orker transferred from on e to
another location that is incorporated separately may
have more than on e em ployer in the sam e year even
though he continued to work for the sam e firm.

E m p lo y e r .

C la s s if ic a tio n .
Em ploym ent and earnings
data based on the Social Security Adm inistration’s
(S S A ) d a ta file are c la s s ifie d a c c o r d in g to th e
A dm inistration’s industrial classification system . This
sy stem differs slightly from that p ublished in the
S ta n d a r d In d u s tr ia l C la s s ific a tio n
M a n u a l (SIC), and
used in m ost statistical series in the assignm ent o f in­
dustry cod es to governm ental units. M ost statistical
series classify governm ental units into SIC D ivision
I-G overnm ent. The S S A , h o w ev er, cla ssifies on ly
policym aking governm ental units in D ivision I. All
separable nonpolicym aking units are assigned to non­
governm ental S SA industry classification cod e appro­
priate to their activity. Thus, for exam ple, all em ploy­
m ent with policym aking boards o f education (classified
by the SSA and SIC as governm ent) has been excluded
from this study. S ch ools, colleges, and other operating
units covered under voluntary election provisions o f
the act, h ow ever, w ere treated as service industry
em ploym ent, b ecau se the units were classified by S SA
into SIC 82, educational ser v ic es.8
Em ploym ent and earnings data based on the Railroad
R etirem ent B oard’s file are classified into the follow ing

In d u s tr ia l

7 F or d etails, se e the Social Security Handbook, op. cit. In addi­
tion, b e ca u se so m e w ork ers w ork for m ore than o n e em p loyer during
the sam e w e ek , data sh ow in g num ber o f em p loyers should be u sed
w ith caution.
8 F or d etailed in form ation , se e U . S . D epartm en t o f H ea lth , E d u ca­
tion , and W elfare, S ocial S ecu rity A dm in istration, Comparison of

Social Security Administration and Standard Industrial Class­
ification Systems, 1967 (N o v . 1967) and the guid e prepared b y the
A dm in istration in 1971, en titled “ Industrial C o d es in the S ocial
Secu rity A dm in istration C on tin u ou s W ork H istory S am p le (C W H S ),
D ata for 1957 through 1971.

A N N U A L EARNING S AN D EM PLO YM ENT PATTERNS OF PRIVATE
N O N AG R IC U LTU R AL WORKERS
industries as defined in the S I C M a n u a l : Railroads, SIC
401; sleeping car com panies, SIC 402; express com ­
panies, SIC 404; rental o f rail cars com pan ies, SIC 474;
and oth er co m p a n ies perform ing se r v ic e s railroad
transportation and certain railway labor organizations,
SIC 861 and 863. In each case the assignm ent is based
on the industrial classification o f the w orker’s last em ­
ployer w ho w as covered under theRailroad Retirem ent
A ct. D ata for w orkers w h o had earnings in more than
one industry, all o f w hich w ere covered under the social
security system or on e o f w hich w as covered under the
railroad retirem ent system , are classified and presented
separately and in com bination.
a n d
M u lti-in d u s tr y
W o r k e r s . A t each lev el o f
industry classification the em ploym ent experience o f
each sam ple m em ber w as exam ined to see if all o f his
earnings w ere in on e or m ore than one industry. T hose
with earnings in m ore than on e industry w ere classified
as multi-industry w orkers. This conceptual approach
may be seen in the ca se o f a worker w h o w as em ployed,
as illustrated b elo w , by an em ployer in each o f two
three-digit industries within the sam e tw o-digit indus­
try.
S in g le

In d u s try

le v e l

Division A ...............................................
2- digit group, A-l ...............................
3- digit group, A-ll ............................
3-digit group, A-12 ...............................

N u m b e r o f e m p lo y e r s

2
2
1
1

o f M a j o r E a r n i n g s . The region in which workers
had their major earnings is determ ined by a plurality
earnings test similar to that described above in detail in
“ Major earners and industry o f major earnings.’’ The
region in w hich he had greater earnings than any other is
his region o f major earnings.
In a few ca se s, earnings in the industry and region o f
major earnings m ay not coin cid e. All data for major
earnings are classified first by industry and then by
region. A w orker w h o earned 40 percent o f his annual
w ages in industry A in the N ortheast, 30 percent in
industry B in the South, and the remaining 30 percent in
industry C also in the South w ould be classified as a
major earner in industry A and as having had his major
earnings in the South.
In this series, w orkers em ployed under the Social
Security A ct or the Railroad Retirem ent A ct are divided
into five regions: Four cover the 50 States and the
D istrict o f Columbia; the fifth includes all em ploym ent
in U .S . territories, on foreign soil, or aboard ocean ­
going v e s s e ls .9
Data in this series do not indicate w here w ages and
salaries covered by the Railroad R etirem ent A ct were
earned .10 T herefore, a con ven tion w as adopted ascrib­
ing all such em ploym ent to the N orth Central region

w here many railroads and railroad-related organiza­
tions have their headquarters.
All workers in this series have been divided into
tw o groups, “ w h ite” and “ b la ck .” The white category
includes all workers excep t blacks, This convention,
which is different from that used in m ost statistical
series, w as adopted to minim ize the effect on those
groups for w hom the sample w as not sufficiently large
to present data separately and to m axim ize the analyti­
cal u sefu lness o f the data.

R a c e .

Gini I n d e x e s o f C o n ce n tr a tio n
Gini ind exes are a w idely used m ethod o f determining
the equality o f the distribution o f incom e. This is done
by com paring the cum ulative percent o f total w ages
earned by a given percent o f the population with the
percent o f w ages that would be earned by the popula­
tion if the incom e distribution w ere exactly uniform (in
a uniform distribution 10 percent o f the population
earns 10 percent o f the incom e; 20 percent earns 20
percent, etc.). This con cept can more easily be under­
stood by considering the follow ing illustrative incom e
distribution:
Distribution A




Distribution B

Population
unit

Income
units
received

Cumulative
percent of
total in­
come units

Income
units
received

Cumulative
percent of
total in­
come units

1
2
3
4
5

3
3
3
3
3

20
40
60
80
100

1
2
3
4
5

6.6
19.9
39.9
66.6
100.0

Aggregate
income

15

R e g io n

9 F o r all in d u stries, e x c e p t w ater transportation, em p loym en t ou t­
side the 50 sta tes or the D istrict o f C olum bia is on ly a sm all fraction, if
a n y , o f the total num ber o f the in d u stry’s m ajor earners.

173

15

The plot o f a perfectly equal distribution (in this e x ­
ample distribution A in the chart) yields a straight line
usually referred to as the line o f equality. A distribution
other than one in w hich all units receive the same in­
com e (distribution B) w ould result in a curve beneath
this line but having the sam e end points. The Gini index
provides a m easure o f the am ount o f deviation o f this
curve from the line o f equality. It is calculated by e x ­
pressing the area bounded by the curve and the line o f
equality as a ratio o f the total area o f the triangle formed
by the line o f equality and the X- and Y -axis. This ratio
10
E m p loym en t under the R ailroad R etirem en t A c t m akes up
nearly all th e m ajor earners in the railroad industry (SIC 40) and a
substantial proportion o f th o se at the all transportation lev e l, but only
a v ery sm all fraction o f the total em p loym en t in other industries or at
the total private nonagricultural lev e l. T h u s, the con v en tio n adop ted
has a seriou s effect on the regional em p loym en t distributions and
regional earnings picture at the all transportation lev el but little effect
on other ind ustries or at the total private nonagricultural lev el.

B L S H A N D B O O K O F M ETH O D S

174

ranges from 0 to 1, with the degree o f equality o f the
distribution decreasing as the index number increases.
•

* ■ > , _

4

I' ‘

’I

^ ||§ |fg |g g § g

1

P ercent o f in co m e un its

Uses and Limitations
The data provide an insight into the answ er to the
question: “ H ow w ell do private nonagricultural w ork­
ers do in their industry o f major earnings and to what
extent do they supplem ent th ese earnings by em ploy­
ment in other private sector in d u stries.’’ Data are used
in collectiv e bargaining; in formulating public policy
and in making inter-industry and international com pari­
sons; in analyzing the distribution and diversity o f earn­
ings, and variations in em ploym ent patterns among in­
dustries, regions, and betw een workers o f different
races and sex es.
The data, how ever, have several substantial limita­
tions. Som e workers w h ose annual earnings are in­
cluded in the series also have earnings in self-em ploy­
m ent, agriculture, or em p loym en t in governm ental
units excluded from the series. A s a result, these work­
ers appear to have low annual earnings. Probably m ost
o f these workers w ere attached to the em ployed work
force to a very lim ited extent. The unavailability o f
data on hours or w eek s w orked or paid for, or occupa­
tional group (other than in railroading) seriously limits
the analytic potential o f the series. The 3 - 5 years lag
betw een the reference period and the date o f publica­
tion introduces another limiting factor. T hese delays
result primarily from reporting requirem ents estab­

lished by the law , the adm inistrative requirements o f
the collecting agencies, and the processing required to
reduce the m ass o f micro data into statistical sum ­
maries. N everth eless, since em ploym ent patterns usu­
ally change very slow ly and relative earnings distribu­
tions generally are quite com parable from year to year
even though the level o f earnings m oves upward, the
relationships show n are indicators o f the current situa­
tion.
N othw ithstanding the lim itations, data from this
series, unlike those from other so u rces,11 permit an
analysis o f the distribution o f w age and salary earnings
and em ploym ent patterns o f workers by demographic
characteristics, industry, and quarters o f em ploym ent.
Thus, they are uniquely useful to all concerned with the
annual w age arid salary incom e o f individuals and the
em ploym ent patterns o f those in the private nonagricul­
tural work force.
11
D issim ilarities in co n cep t or m ethod b etw een the B L S annual
earnings and em p loym en t pattern series and other series m ay result in
im portant d ifferen ces in sam pling and nonsam pling variability b e­
tw een series. T herefore, caution m ust be exercised in using data from
the B L S annual earnings series in conjun ction with data from other
statistical series. T he m ajor sou rces o f other annual earnings data
togeth er w ith a brief explanation o f the m ost im portant difference
b etw een them and the data in this series are noted b elow .
The S ocial S ecu rity A dm inistration (S S A ) pu blishes som e annual
earnings data by industry. T heir m ost recent report Workers Under
Social Security, 1960 (1968), p rovid es statistical inform ation about
em p loym en t, earn in gs, and insurance status o f w orkers under oldage, su rvivors, disab ility, and health insurance. The S S A a lso pub­
lish es selected sum m ary data in the Social Security Bulletin. The
industry attach m en t co n cep t u sed by the S S A , h o w ever, is different
from that used in this stu dy. Further, the Social S ecurity data do not
include earnings in em p loym en t covered by the Railroad R etirem ent
A ct.
T he Railroad R etirem en t Board (R R B) annually pu blishes a “ re­
search and sta tistics n o te ” w h ich provides inform ation about the total
railroad earnings o f railroad e m p lo y ee s. T he RRB data, h o w ev er,
exclu d e earnings in em p loym en t not co v ered by the Railroad R etire­
m ent A ct.
S om e annual earnings data at the all-industry level by occu pational
group are published b y the Bureau o f the C en su s, U .S . D epartm ent o f
C om m erce, in “ C on su m er In co m e ,” S eries P-60 o f the Current Popu­
lation Reports. T his pu b lication also p rovid es a distribution o f w age
and salary earnings, at the all-industry lev e l, by sex and race. In
addition average earnings by sex are presen ted for selected industry
d ivision s and for a fe w m ajor industry (tw o-digit SIC ) groups. The
stu d y, based on a hou seh old su rvey, d o e s not p rovide distributions o f
w age and salary earnings by industry group and has different c o n ­
cep ts o f industry attachm ent from th ose used in this study.
The O ffice o f B u sin ess E co n o m ics o f the U .S . D epartm ent o f
C om m erce a lso p u b lish es estim ates o f the average annual earnings o f
“ fu ll- t im e e m p l o y e e s ” in its Survey of Current Business;
th ese estim ates do not reflect the effect on average earnings o f w ork­
ers w h o w ork le s s than a full year.

T e c h n ic a l R e f e r e n c e s
Number
1.

U . S . D e p a r tm e n t o f L a b o r, B u rea u o f L a b o r S ta tis tic s :

Annual Earnings and Employment Patterns, Private Non­
agricultural Employment, 1964 (R eport 330, 1969).
 Annual Earnings and Employment Patterns of Private
2 . ------

Number
Nonagricultural Employees - 1965 (B ulletin 1675, 1970).
3 . -------- Annual

Earnings and Employment Patterns of Private
Nonagricultural Employees, 1971 and 1972 (forthcom ing).

Chapter 24.

Employer Expenditures for Employee Compensation

B ackground
The m easurem ent o f em ployer expenditures for em ­
ployee com pensation and the com position o f payroll
hours w as undertaken by the Bureau o f Labor Statistics
(B L S) to fill a large gap in the statistics o f em ployee
com pensation and hours paid for.
Prior to World War II, com pensation for Am erican
labor con sisted mainly o f w ages and salaries for time
worked or units produced. U nder the N ew D eal, h ow ­
ever, additional paym ents w ere required under various
social insurance program s, and, later, during the years
o f World War II, em ployers w ere encouraged by the
policies o f the War Labor Board to grant w age supple­
m ents instead o f w age increases, e .g ., vacations and
hospitalization. Shortly after the war, the N L R B ruled
that pen sion plans w ere within the purview o f co llec­
tively bargained agreem en ts.1 E xpenditures for these
and other com pensation elem en ts, in addition to pay for
working tim e, began to com prise a substantial portion
o f the total com pensation o f labor.
A s early as 1875 the A m erican E xpress Com pany
instituted a private p en sion p lan .2 In 1929, a private
study3 indicated that there w ere alm ost 400 such plans,
and by 1974 there w ere over 52,000 retirem ent plans and
139,000 w elfare plans in the U .S .4
Paid vacation s and holidays also have a relatively
short history for m ost w orkers. Paid vacations w ere
fairly w ell established for salaried workers by the mid­
dle o f the nineteenth century. Industrial w orkers, h o w ­
ever, first started to receive paid vacations around the
turn o f the century, and not until after World War I did
the principle o f paid vacations begin to assum e impor­
tance in the d evelop m en t o f labor policy; paid holidays
generally w ere not found in industry until World War II,
although it had been custom ary for salaried workers to
receive pay for tim e not w orked on designated holidays.
B y 1972, approxim ately 7 percent o f the production
worker hours paid for in manufacturing industries were
in la n d S teel v s. N ation al L abor R elation s B oard, 170

leave hours, alm ost all o f which were vacation and
holiday hours.
The im portance o f recent changes in the structure of
com pensation may be illustrated by exam ining those
that occurred for manufacturing production workers
b etw een 1959 and 1972. During that period, pay for
working time increased from $2.23 to $3.84 an hour or
about 72 percent. A t the sam e tim e, em ployer expendi­
tures for all other elem ents o f com pensation increased
from 38 cents to $1.02 an hour or about 168 percent.
Thus, the relative im portance o f pay for working time
decreased from 85.4 percent o f total com pensation in
1959 to 78.9 percent in 1972.
The Bureau has for many years recognized the n eces­
sity o f studying outlays for em ployee com pensation.
Early attem pts w ere limited to exploratory work on
m ethodology and the availability o f d ata.5 By 1959,
m ost o f the technical and conceptual problem s had been
sufficiently resolved to permit the initiation o f a regular
program.
The first survey in the program, 1959 expenditures in
manufacturing, w as follow ed by a 1960 mining study; a
1961 finance, insurance, and real estate survey; and
another manufacturing industry study in 1962. The 1963
study o f expenditures for salaried (white-collar) work­
ers, w hich covered m ost nonagriculture industries in
the private sector, represented the first shift in program
em phasis from an industry to an econom y-w ide orienta­
tion. Since then the program has been redesigned to
cover all em p loyees in the private nonfarm sector and
to cover all significant item s o f em ployee com pensa­
tion.
For 1972, a special study o f com pensation o f State
governm ent em ployees was conducted and separate
reports w ere issued for each S ta te.6 Similar studies for
local governm ents are being considered. E ventually it
is planned to expand the program to cover the entire
econom y.

Federal

D e s c r ip t io n o f S u r v e y

Reports, S eco n d S eries 247 (1948), 251 (1949).
2T his w a s the first record ed private p en sion plan in A m erica.
3L atim er, M urray W ebb. Industrial Pension Systems in the United
States and Canada, (Industrial R elation s C ou n selors, In c., N e w
Y o rk , 1932).
4T otal a ctiv e plans co verin g 26 em p lo y ees or m ore for w h ich d e­
scrip tion s had b een filed w ith the U .S . D epartm ent o f L abor by
D ecem b er 3 1 ,1 9 7 4 , under th e p ro vision s o f the W elfare and P en sion
Plans D isclo su re A ct, as am ended (P .L . 85-836 as am ended by P .L .
. 87-420). Welfare and Pension Plan Disclosure Act, 1974 Report to
Congress, U .S . D epartm en t o f L abor, L abor-M anagem ent S ervices
A dm inistration.




The survey relates to em ployee com pensation prac­
tices, em ployer expenditures arising from these pracb
Problems in Measurement of Expenditures on Selected Items of
Supplementary Employee Remuneration, Manufacturing Establish­
ments, 1953 (B L S Bull. 1186, 1956); Wage Structure: Basic Iron and
Steel, January 1951 (B L S S eries 2, N o . 81, 1951); Wage Structure:
Electric and Gas Utilities, September 1957 (B L S R eport 135, 1958).
6
Employee Compensation in State Governments, 1972 (B L S Bull.
1899, 1976).

175

176

BLS HANDBOOK OF METHODS

tices, and to all hours for w hich paym ent is made —
hours w orked, paid hours o f vacation, holiday, sick
leave, and civic and personal leave.
The program is designed to provide data biennially
for the entire private nonfarm sector; separate informa­
tion is given for manufacturing and nonmanufacturing
industries, for all em ployees and for office and nonof­
fice em p loyees separately. Data are also show n sepa­
rately for nonoffice workers in union and nonunion
establishm en ts. Survey coverage exten d s to the 50
States and the D istrict o f Colum bia.
The data relate to cash disbursem ents o f em ployers
for em ployee com pensation, hours w orked, and hours
paid during a calendar year. D ata for a lesser period o f
tim e do not com pletely reflect either the outlays made
by em ployers or the number o f hours paid for. Paid
leave tim e, for exam ple, usually is spread unequally
throughout the calendar year; sim ilarly, expenditures
for m ost o f the legally required insurance programs stop
after a specified maxim um amount is earned by each
worker during the year. T h ese practices result in wide
variations b etw een expenditures in the early part o f the
year and in the latter part o f the year.

and holiday funds, severance pay funds and supplem en­
tal unem ploym ent benefit funds, and savings and thrift
plans.

P a y r o ll H o u r s
The payroll hours studied are all hours for which the
workers receive pay. T hese hours consist o f plant or
working hours, and vacation, holiday, sick and other
hours o f paid leave. Although an hour normally is de­
fined as 60 m inutes o f elapsed tim e, a payroll hour does
not necessarily con sist o f 60 m inutes. For exam ple,
hours w orked on a day that would otherw ise have been
a paid holiday are paid for tw ice— on ce as a paid holi­
day, and on ce as working hours. T herefore, an 8-hour
holiday worked, for which 16 hours o f paym ent w as
m ade, is counted as 16 hours— half o f w hich are holiday
hours and half are work hours. C onversely, som e hours
o f leave are paid for at less than the regular rate and only
the equivalent hours are counted. Each overtim e hour
worked at premium rate is counted as 1 plant-hour.

E s t a b li s h m e n t P o l i c i e s
E x p e n d itu r e s
The expenditures studied are considered to con sti­
tute the major elem ents o f em p loyee com pensation in
Am erican industry. The expenditures, and therefore
their m easurem ent, fall into three broad categories:
1. p a y m e n t s m a d e d ir e c t ly to th e w o r k e r s a n d w h ic h c o n ­
s t it u t e th e to ta l o f th e ir g r o s s p a y r o ll;
2. l e g a lly r e q u ir e d s o c ia l i n s u r a n c e s , m a n d a te d b y t h e
S t a t e a n d F e d e r a l G o v e r n m e n t s , w h ic h a r e m o s t o f t e n
f i n a n c e d th r o u g h e m p lo y m e n t t a x e s ; a n d
3. e x p e n d it u r e s g e n e r a lly m a d e to th ir d p a r ty in s u r e r s o r
u n io n - m a n a g e m e n t a d m in is te r e d b e n e f it f u n d s .

Item s w h ich are included in the w o rk ers’ gross
payroll include pay for time w orked (at straight-time
and prem ium rates o f pay) and pay for time not worked
such as vacations, holidays, sick leave time and time
spent in court, on military leave, or for bereavem ent
purposes. A lso included in gross payroll are severance
paym ents and nonproduction b onu ses which do not
provide retirem ent benefits.
E xpenditures to finance legally required insurances
include th ose for Social Security and Railroad R etire­
m ent ta x es, Federal and State unem ploym ent taxes,
w orkers’ com pensation , and in States which require
them , paym ents to finance State Tem porary D isability
Insurance program s.
The remaining expenditures for com pensation pro­
vide econom ic security for the worker and his depen­
dents in the face o f old age, death, disability, unem ­
ploym ent, or ill health; or provide paid leisure time. They
include m onies spent for em p loyee life, accident and
health insurance plans, retirem ent program s, vacation




Data on establishm ent policies give an added dim en­
sion to the expenditures data and are important in their
ow n right. A m ong the p olicies for w hich information is
collected are the kinds o f insurance provided (life, h os­
pitalization, m edical, etc.), w hether em ployees m ust
pay part o f the co st o f their private retirem ent or insur­
ance coverage, and the number o f holidays and w eek s
o f vacation em ployees receive. The data on establish­
m ent p olicies are also u sed in the review o f the expendi­
tures and hours data collected in the survey.

D a ta S o u r c e s a n d C o lle c t io n M e t h o d s
The data are obtained from annual records kept by
the surveyed establishm ents. G enerally, no single re­
cord is sufficient and several record sources must be
summarized in each establishm ent to arrive at annual
totals. The data are entered by the em ployer on pre­
printed form s in accordance with detailed instructions.
N o t all com panies keep records in the detail re­
quested and approxim ations in these cases may be ac­
cepted. In general, tw o types o f approxim ations are
used. First, if the establishm ent records are kept for a
broader grouping o f em p loyees than are being studied,
the prorated share for the workers included in the sur­
vey is com puted on the basis o f em ploym ent, hours, or
payroll, w hichever is m ost appropriate. S econ d , by
using collateral data, estim ates are made w here records
are not kept but the practice is observed. For exam ple,
the expenditures for holiday pay may be approxim ated

EM PLOYER EXPENDITURES FOR EM PLOYEE COMPENSATION
by multiplying the number o f hours paid for holiday
leave by average straight-time hourly earnings. Errors
occurring from the use o f th ese approxim ations would
have to be in the sam e direction in substantially all the
cases (overstatem ent or understatem ent o f the actual
values) to have a material effect on the accuracy o f the
results.
Data are collected primarily by mail, although per­
sonal visits are made to many o f the large em ployers
and to a sam ple o f the establishm ents that have not
responded to a second mailing o f the questionnaire. A
questionnaire used in the expenditure study is repro­
duced at the end o f this chapter.

S a m p li n g P r o c e d u r e
The surveys are conducted on the basis o f a highly
stratified probability sam ple o f establishm ents selected
by industry, location, and em ploym ent size. The sam ­
ples generaly are designed to yield reliable data for an
industry division at the national lev els, in four broad
econom ic regions, and for major industry groups.
The lists o f establishm ents from w hich the sam ples
are selected are th ose maintained by the State agencies
administering the em ploym ent insurance law s. T hese
lists show the em ploym ent, industry classification, and
location o f all establishm ents covered by those laws in
each State. Som e establishm ents in particular indus­
tries are exem pted from the U I law s. The data used in
sampling th ese establishm ents are obtained from lists
com piled by regulatory G overnm ent agencies, trade
association s, and other sources.
Within each industry, the sam ple is selected to yield
the m ost accurate estim ates p ossib le with the resources
available— the principle o f optim um allocation. This is
done by including in the sam ple a greater proportion o f
large estab lish m en ts than o f sm all. In general, an
establishm en t’s chance o f selection is roughly propor­
tionate to its em ploym ent size.
A subsam ple o f establishm ents failing to reply to the
mail inquiries is selected to represent all nonrespon­
dents, follow ing the sam e general plan as is used in the
original sam ple. Establishm ents in this subsam ple are
visited personally, instead o f being solicited again by
mail.

E s t im a t in g P r o c e d u r e s
•

Data for each sam ple establishm ent are w eighted in
accordance with the probability o f selection o f that
establishm ent. In individual industry studies the selec­
tion is based on establishm en t size strata. F or e x ­
am ple, a reporting unit w hich is in a stratum at which
the selection probability w as set, at 1 out o f 5 establish­
m ents, will be given a w eight o f 5, representing itself
and four other establishm ents in this sam e stratum. In




177

the biennial studies o f the entire private nonfarm sector,
the probability o f selection is proportionate to estab­
lishm ent em ploym ent size. Thus, a reporting unit em ­
ploying 1,000 w orkers, in a sam ple where the em ploy­
ment size probability base w as set at 10,000, will be
given a weight o f 10, representing itself and other estab­
lishm ents having an aggregate em ploym ent o f 10,000
workers. U nder both procedures all establishm ents
over a certain size are included.
The sample o f nonrespondents for which data are
collected by Bureau field representatives is weighted
appropriately to represent all nonrespondents.
In the event that usable data cannot be obtained from
any unit visited in person, whether among the follow up
o f nonrespondents or among large units often selected
in the sample with certainty, its w eight is assigned to
units in the sample with the m ost similar industry-sizelocation characteristics.
All estim ated totals derived from such weighting pro­
cedures are adjusted further by the level o f total em ­
ploym ent or paid hours for the survey year, based on
data from the B ureau’s m onthly establishm ent em ­
ploym ent statistics program. For instance, if the level of
the aggregates, as derived from the weighting proce­
dures is 40 million in an industry class, and the corres­
ponding level as show n by the em ploym ent statistics
program is 44 million, the totals o f the survey items
would be multiplied by 1.1. The adjusted data represent
all establishm en ts.7
Som e im provisation is necessary in the construction
o f such annual benchmark totals. The m onthly em ploy­
m ent series provides data for only one pay period
each m onth, and the estim ate o f annual totals is made
by multiplying by the average number o f w eeks in a year
(52.14).
Inform ation from other sources, wherein a detailed
breakdown by State or region is show n, is used as a
basis for prorating the current em ploym ent (or hours)
estim ates into regional aggregates. Such sources in­
clude the C ensus o f M anufacturers and County B usi­
n ess Patterns (based on Social Security establishm ent
data).8

P r e s e n ta tio n
The expenditure data on the individual elem ents o f
com pensation are com bined to give a m easure o f total
em ployee com pensation. The expenditure data for each
individual elem ent and for groups o f elem ents are pre­
sented as a percent o f total com pensation, in cents per
paid hour, and in cents per working hour. T hese mea­
sures are shown for all establishments, as well as for only
those establishm ents that had an actual expenditure for
a particular practice during the reference year. Hours
7S e e ch . 3 , “ E m p loym en t, H ou rs, and E arn in gs.’
8U .S . D epartm ent o f C om m erce, Bureau o f the C en su s,
Business Patterns (variou s years).

County

178




BLS HANDBOOK OF METHODS
BLS2868
Rev. Dec. 1974

O.M No. 44-R1300
.B.
Approval expires: Dec. 31,1975

U .S . D E P A R T M E N T O F L A B O R
B ureau o f L a b o r Statistics
W ashington, D .C . 2 0 2 1 2

n

r

The Bureau o f Labor Statistics
will hold all information furn­
ished by the respondent in strict
confidence.

C O P Y F O R Y O U R F IL E S
R E T U R N T H E C O P Y W IT H
T H E M A IL IN G L A B E L

L

------------- Location of ufiit for which data are requested.

_l
EXPENDITURES FOR EMPLOYEE COMPENSATION, 1974

G entlem en :
T h e Bureau o f L a b o r Statistics is conducting an im p o rta n t survey o f h o w m u ch com panies spend fo r em ployee com pensation—
fo r wages and salaries and fo r program s th a t provide fo r em ployees’ h e a lth and w elfa re . Y o u r G overn m ent needs this in fo rm a ­
tio n to aid in fo rm u la tin g econom ic p o lic y. Please help us produce the best statistics possible b y com pleting this fo rm .
In fo rm a tio n fro m the survey w ill be o f value to y o u r com pany also, since it w ill enable y o u to com pare y o u r expenditures fo r
em ployee com pensation w ith those m ade b y ind ustry in general.
K e ep a copy o f y o u r re p o rt on the e xtra fo rm enclosed. W hen the B ureau’s report on th e survey is issued, w e w ill send y o u a
copy and show y o u h o w to com pare data fo r y o u r com pany w ith the n a tio n a l averages.
Y o u r re p o rt w ill be he ld in confidence b y the B ureau o f La b o r Statistics. N o th in g w ill be released relating to in d ividual
com panies.
Please com plete the fo rm w ith in 3 w eeks and re tu rn th e one w ith the address label in the enclosed envelope. I f y o u need
assistance in com pleting the fo rm , phone the Bureau collect at A rea code 2 0 2 ,9 6 1 -4 0 1 9 o r 9 6 1 -3 7 2 5 . T h a n k y o u fo r y o u r
cooperation.
S incerely yours,

/ U L I U S S H IS K IN
Com m issioner

I.

Company official to contact if there are questions about this report:
Name and title (Please print or type)

II.

Area code, phone no.

Units covered by this report:
Is this questionnaire being completed for the unit(s) designated above?

□

Yes

□

No, our records make it impossible to report separately for the unit designated above. Units in addition to the one for which
data are requested are included in this report.

W is the principal product, service, or activity of this unit?
hat

I f you checked no, please complete item VIII. at end o f questionnaire to describe the units covered.

III.

Average 1974 employment in units covered by this report:
Please enter the average number of employees in each category during 1974. Include full- and part-time employees. Types of employees
in each category are described below.
A. Office employees (1974 average)

-------------------------

B. Nonoffice employees (1974 average)------------------------C. Total 1974 average employment

________________

OFFICE EMPLOYEES-Include all employees in executive, administrative, and management positions, above the working supervisor level. Also
include supervisory and nonsupervisory professional employees and their technical assistants; employees engaged in office clerical operations; and
all salespersons whose sales activities are primarily performed outside of the establishment (e.g., real estate salesmen and door-to-door salesmen).
NONOFFICE EMPLOYEES-Include all employees, except office employees as defined above, in nonsupervisory, nonprofessional positions.
Include employees engaged in fabricating, processing, or assembling; building or excavating; mining, drilling, or pumping; maintaining or repairing;
shipping, receiving, handling, warehousing, padring, or trucking; retail sales; operating or working on moving vehicles (buses, boates, etc.); janitorial
work; guard or watchman work; and similar activities.
TOTAL EMPLOYMENT-Is the sum of office plus nonoffice employees. Proprietors, members of unincorporated firms, and unpaid family
workers are not considered to be employees and are excluded from the survey.

EM PLOYER EXPENDITURES FOR EM PLOYEE COMPENSATION
2

Instructions and Definitions for Specific Items on N ext Page
Part IV .
Lin e 1. T o ta l gross p a y r o ll- T o ta l o f wages, salaries, and
oth e r paym ents m ade during 1 9 7 4 before any deductions.
The am o u n t should equal wages reported on In te rn a l Reve­
nue Service Form s W -2 as subject to Federal w ith h o ld in g
taxes, or to ta l rem u neration reported on line 11 o f IR S
F o rm 9 4 0 , E m p lo y e r’s A n n u a l Federal U n e m p lo y m e n t T a x
R e tu rn 1 97 4 .

Lines 2 & 3 . P ay fo r ove rtim e , w eekend and h o lid a y w o rk —
F o r overtim e and w eekend w o rk , re p o rt the straight-tim e pay
fo r w o rk beyond the no rm a l w o rk d a y o r w o rk w e e k o n lin e 2
and the corresponding p re m iu m pay on line 3 . F o r exam ple:
I f overtim e is paid at tim e and one-half, re p o rt tw o -th ird s
o f to ta l overtim e cost on line 2 and one-th ird o n line 3.
F o r w o rk on holidays, re p o rt straight-tim e pay fo r tim e
A C T U A L L Y w o rk ed on lin e 2 and any corresponding pre­
m iu m on lin e 3 . Regular h o lid a y pay or “ pa y in lieu o f tim e
o f f ’ should be reported o n ly on line 6 . F o r exam ple: A n
em ployee w o rk ed o n a h o lid a y . H e received his regular pay
fo r w o rk in g ; plus o n e -h a lf his regular pay as a p re m iu m fo r
having to w o rk on a h o lid a y ; plus his n orm al h o lid a y pay.
R e p o rt his regular pay fo r w ork in g on line 2 , the p re m iu m on
line 3 , and the regular h o lid a y pay on line 6 . R e p o rt pa y fo r
w o rk during vacation periods the same w a y , on lines 2 , 3 ,
and 5.

Lin e 4 . S h ift diffe re n tia ls —T o ta l expenditures fo r pay above
regular day-shift rates fo r w o rk on late shifts. In clu d e pay
fo r hours n o t w o rk ed . F o r exam ple: I f late shift em ployees
w o rk
hours per day b u t receive pay fo r 8 hours, report
the to ta l o f the o n e -h a lf h o u r paym ents as a shift d iffe re n tia l.

IVi

lin e s S-8. Pay fo r leave—R e p o rt o n ly regular leave expenses.
E xclu de paym ents to unio n adm inistered vacation and h o li­
day funds, trustees, e tc ., and pay fo r tim e actually w o rk ed
on holidays o r during vacation periods. (See overtim e ex­
amples above under “ Lines 2 and 3 .” )

Lin e 9 . N o n p ro d u c tio n bonuses—T o ta l a m oun t p aid fo r n o n ­
pro d u ctio n bonuses including lum p-sum paym ents u nder p ro ­
fit-sharing plans, and o th e r irregular or seasonal bonuses
(such as attendance, Christm as, or yearend bonuses). P ro­
ceeds o f profit-sharing plans w h ic h are paid in to re tire m en t
plans should be reported On line 17; those paid in to savings
and t h r ift plans should be reported on line 2 0 .

L in e 10. Severance p a y - T o ta l o f all paym ents m ade b y the
establishm ent to em ployees because o f tem p o ra ry o r perm a­
ne n t severance o f e m p lo y m e n t. E xclu de paym ents to funds,
(re p o rt these on line 1 9 ) and to pensioners under the provi­
sions o f pay-as-you-go pension plans (re p o rt these on line
1 7 ).
Lin e 11. Social S ecurity ( F IC A ) - I n 1 9 7 4 the em p lo y er’s
pa y m e n t was S.8S percent o f the firs t $ 1 3 ,2 0 0 paid each em ­
p lo yee, o r a m a x im u m o f $ 7 7 2 .2 0 per em ployee. See IR S
F o rm 9 4 1 , E m p lo y e r’s Q u a rte rly Federal T a x R e tu rn w hich
y o u file d in A p ril, J u ly , and O cto b e r 1 9 7 4 ,.and January
1 9 7 5 . R e p o rt o n e -h a lf the sum o f y o u r q u a rte rly paym ents
(lin e 1 4 o f the ta x fo rm s).




L in e 1 2. Federal u n e m p lo y m e n t insurance ( F U T A ) —In 1 9 7 4
the e m p lo y er’s p a y m e n t was 0 .5 percent o f the firs t $ 4 ,2 0 0
paid each em ployee, o r a m a x im u m o f $21 per em ployee.
See IR S F o rm 9 4 0 fo r 1 9 7 4 , lin e 2 1 . R ailroads include to ta l
paym ents u nder R a ilro a d U n e m p lo y m e n t Insurance A c t.
L in e 13. State u n e m p lo y m e n t insurance—In m o st states the
p a ym ent was a t varying rates on the firs t $ 4 ,2 0 0 paid each
em ployee. See IR S F o rm 9 4 0 fo r 1 9 7 4 , colum n 9 .
L in e 14. W o rk m e n ’s com pensation and paym ents un d e r the
Federal E m p lo y e r’s L ia b ility A c t—I f y o u r firm was self-in­
sured en ter the a m o u n t paid on w o rk m e n ’s com pensation
claim s. I f an insurance p o lic y was purchased enter the pre­
m iu m paid fo r 1 9 7 4 . I f pa y m e n t was m ade to a S tate fu n d
enter the a m o u n t o f th e p a y m e n t. Railroads should re p o rt
p a y m e n ts m ade u nder the Federal E m p lo y e r’s L ia b ility A c t
fo r this ite m .
Lines 1 6 -2 1 . Private w elfare p la n s -N e t paym ents (a fte r de­
d u c tio n o f refunds, rebates, and dividends) m ade d u rin g 1 9 7 4
b y the establishm ent to funds (inc lu d in g union-m anagem ent
funds), trustees, insurance com panies, and paym ents m ade
under the provisions o f self-insured plans to em ployees o r
th e ir beneficiaries. In clu d e paym ents fo r current em ployees,
em ployees on la y o ff, re tire d em ployees, and th e ir depend­
ents. E xclu de em ployee contribu tions and all adm inistrative
costs incurred b y th e establishm ent. A lso exclude paym ents
m ade b y funds, trustees, and insurance carriers to y o u r em ­
ployees o r th e ir beneficiaries.
L in e 16. L ife , accident, and he a lth insurance
plans, and union-m anagem ent adm inistered
h e a lth funds—L ife , accidental dea th and dism em ­
b e rm en t, sickness and accident, wage and salary
continuance insurance, and death benefits; and
ho s p ita liza tio n , surgical, m edical, d e n tal, op tic a l,
and drug plans. E xclu de expenditures fo r in p la n t m edical care and visiting nurses or p h y ­
sicians.
L in e 17. Pension and re tire m en t plans, and
union-m anagem ent adm inistered pension funds—
D ire c t p a y m e n t to pensioners under a pay-asyou-go pension p la n , paym ents under p ro fitsharing plans deferred u n til re tire m en t, and pa y ­
m ents fo r past and current liab ilitie s u n d e r
funded plans.

Party.
L in e 2 2 . T o ta l num b e r o f hours paid fo r in 1 9 7 4 —T o ta l o f
all em ployee hours w o rk e d , plus all em ployee hours o f paid
leave.
Lin e 2 3 . N u m b e r o f overtim e hours—A ll hours actually
w o rk ed beyo n d th e no rm a l w o rk d a y or w o rk w e e k .
Lines 2 4 -2 7 . N u m b e r o f leave hours—A ll hours o f leave fo r
w h ic h em ployees are p a id , even i f the tim e o f f is n o t taken.
E xam ple: A n em ployee w orks 8 hours on a h o lid a y . H e re­
ceives regular pay fo r 8 hours w o rk , and also receives 8 hours
o f pay fo r th e h o lid a y . T h e 8 h o lid a y hours fo r w h ic h he was
paid should be included on line 2 5 . T h e 8 hours actually
w o rk e d on the h o lid a y should be included on line 2 3 , since
these hours w ere be y o n d the n o rm a l w o rk w e e k . T h e to ta l 16
hours fo r w h ic h he was paid should be included on line 2 2 .

179

180




BLS HANDBOOK OF METHODS
3

G eneral Instructions fo r Parts I V and V B elow
1.
2.
3.
4.

Please enter 1974 information for each numbered line.
If there were no expenditures or hours for an item, enter “ 0.”
If it is not possible to make an estimate for an item, please enter “ not available*' on the appropriate line.
If your records combine data for several items, prorate the combined figure among the items to which it relates OR report the combined figure
and clearly indicate to which items it relates.
5. If your records for an item combine data for office and nonoffice employees, please prorate the combined data between the two employee
groups in the most appropriate manner. If it is not possible to prorate combined data, enter the total figure under office and enter “ combined*'
under nonoffice.
IF YOU NEED HELP, CALL THE BUREAU COLLECT AT AREA CODE 202-961-4019 OR 961-3725

Office

Part TV. Total Compensation in 1974

Nonoffice

$

$

Pay for overtime, weekend, and holiday work:

Pay for leave:

10. Severance pay....................................................................................
11.

Employer expenditures for legally required insurance:
Social Security (FICA) or railroad retirement....................................

12.

Federal (FUTA) or railroad unemployment insurance........................

13.

State unemployment insurance.......................................................

14.

W
orkmen’s compensation and payments under Federal
Employer’s Liability A ct...............................................................

15.

Other, e.g., State temporary disability insurance (specify):

16.

Employer expenditures for private welfare plans:
Life, accident, and health insurance plans, including
union-management health funds.....................................................

17.

Pension and retirement plans, including union-management
pension funds ...........................................................................

18.

Vacation and holiday funds............................................................

19.

Severance pay and supplemental unemployment benefit funds............

20.

Savings and thrift plans....................................................................

21.

Other private welfare plans (specify):

Part V. Hours Paid for in 1974
22. Total number of hours paid for in 1974 ................................................
23. Number of overtime hours included in total...........................................
24.

Number of leave hours included in total:
Vacation.......................................................................................

25.

Holiday .......................................................................................

26.

Sick..............................................................................................

27.

Civic and personal leave.................................................................

Office

Nonoffice
Hours

Hours

EM PLO Y ER E X P E N D IT U R E S FOR EM PLO Y EE C O M PEN SA TIO N

V I.

181

Establishment practices and policies:
A . Plaid vacations. R eport the number o f employees w ho received vacation pay during 1974 directly from the establishment according to
the amount o f pay.
Number o f em ployees receiving—

1w e e k ’s

1and under
2weeks’

pay

No
vacation
pay

Em ployees

pay

Under

2and under
3 weeks’
pay

3 and under
4 w eeks’
pay

4 and under
5 w eeks’
pay

5 weeks’
pay or
more

O f f i c e .......................................
N o n o f fic e .................................

B. Paid holidays. Enter the number o f days per em ployee. I f more than one practice existed fo r an em ployee group, report that which
applied to the greatest number in the group. I f the greatest number o f employees received no paid holidays, enter “ 0.”
O ffice e m p lo y e e.s. . . . . . . . . .. . . . . . . . . . . . . .full d a y s_ _ _ _ _ _ _ _ _ h a lf days
.
_
N o n o ffice e m p lo y e e.s. . . . . . . . . . . .
_ full days _
_ h alf days
C. Side leave. Did the establishment pay side leave for any—
No
O ffice e m p lo y e e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . □. . .
.
N o n o ffice e m p lo y e e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . □
□
D. Civic and personal leave. Did the establishment pay d v ic leave (m ilitary, ju ry, witness, voting, etc.) or personal leave
(such as for death in fa m ily) fo r any—
O ffice e m p lo y e e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .□. . . . . . . . . □
.
N o n o ffice e m p lo y e e.s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .□. . . . .
□
E. L ife , accident, and health insurance plans, and union-management administered health funds. Did the
establishment finance any o f the follow in g insurance plans or funds f o r —
L ife

O ffice em ployees . . . . Y es
N o n o ffice em ployees . . Y es

Sickness and accident

□

Hospitalization or medical

□

No

□

Y es □

No

□

Y es □

No

□

□

No

□

Y es □

No

□

Y es □

No

□

Did em ployees pay fo r part o f any o f these insurance plans or funds (answer N O i f payment was on ly fo r additional
benefits or coverage fo r dependents)—
L ife

O ffice em ployees
Y es
N o n o ffice em ployees . . Y es

Sickness and accident

H ospitalization or medical

□

No

□

Y es □

No

□

Y es □

No

□

□

No

□

Y es □

No

□

Y es □

No

□

F. Pension and retirement plans or union-management administered pension funds. Did the establishment finance such a
plan or fund fo r —
yes
No
□
O ffice e m p lo y e e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ................ ._.. . . . .. . . □
N o n o ffice e m p lo y e e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .□ . . . .
.
Did em ployees pay for part o f any o f these plans or funds (answer N O i f payment was on ly for additional benefits)
O ffice e m p lo y e e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .□. . . . .
N o n o ffice e m p lo y e e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .□ . . . .
.
G. Collective bargaining. Did union-management agreements cover a m ajority o f the—
O ffice e m p lo y e e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .□. . . . .
N o n o ffice e m p lo y e e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . □ . . . .
.
H. Regular workw eek, 1974. H ow many hours (e.g., 4 4 ,4 0 , 37.5, etc.) and days (e.g., 4 .5 ,5 .0 ,5 .5 ) w ere normally
worked each week b y the m ajority o f the—
hours per w eek and _
hours per week and .

O ffice em ployees . . .
N o n o ffice em ployees .

_ _ _ _ _ days per week
_ _ _ _ _ days per week

I. I f yo u were required to com plete the U.S. Department o f Labor’ s O S H A Form 103, ‘ ‘Occupational Injuries and Illness
Survey,” please enter the figure you reported in Section II I o f that form (T o ta l Hours W orked in 1974): . . . . . . . . . . . .
...
Y es

V II .

No

Ia the unit(s) fo r which y ou are completing this report part o f a larger company or corporate enterprise?. . . . . . . . . . . . . . . . □
...
I f “ yes,” please check the appropriate b o x below to indicate the T O T A L E M P L O Y M E N T size o f the entire company
organization.

□

V II I.

□

Under 50
em ployees

50-99

□

□

100-249

250-499

□

□

500-999

a

1000-2499
em ployees

2500 or m ore

Units in du de in report ( i f d ifferent from that requested in address b o x ):
I f this report relates to units in addition to the one designated at the top o f page 1, please provide the follow in g inform ation fo r each
unit included in the report.




Average 1974 em ploym ent

Principal product,
service, or activity

□

□
□
□
□
□

B L S H A N D B O O K OF M ETH O D S

182

d a ta f o r w o r k in g h o u r s a n d f o r p a id l e a v e h o u r s a r e
p r e s e n t e d a s a p e r c e n t o f a ll p a i d h o u r s .
A . T h e e x p e n d it u r e r a tio s are c a lc u la t e d a s f o llo w s :
1. E x p e n d it u r e s a s a p e r c e n t o f to ta l c o m p e n s a t io n fo r
all e s t a b l i s h m e n t s ^
A g g r e g a t e e x p e n d it u r e s fo r th e p r a c tic e
A g g r e g a t e c o m p e n s a t io n in all
e s t a b lis h m e n t s

X

2. E x p e n d it u r e s a s a p e r c e n t o f to ta l c o m p e n s a t io n fo r
e s t a b lis h m e n t s r e p o r tin g e x p e n d it u r e s =
A g g r e g a t e e x p e n d it u r e s fo r th e p r a c t ic e
- - - - - - - - - - -- - - - - - - - - - --- - - - - - - - - - - - - - - --- - - - - -;- - - - - - - - x
100
A g g r e g a t e c o m p e n s a t i o n in
e s t a b lis h m e n t s r e p o r tin g
e x p e n d it u r e s fo r t h e p r a c t ic e .

B.

T h e e x p e n d it u r e r a te s a r e c a lc u la t e d a s f o llo w s :
1. E x p e n d i t u r e s in c e n t s p e r p a i d h o u r f o r a ll
e s t a b lis h m e n t s =
A g g r e g a t e e x p e n d it u r e s fo r t h e p r a c t ic e

2. P a y fo r le a v e tim e ; v a c a t io n s , h o lid a y s , m is c e l l a n e o u s
le a v e o f a b s e n c e , a n d p a y m e n t s to v a c a t io n a n d h o lid a y
fu n d s .
3. P a y m e n t s fo r r e tir e m e n t p r o g r a m s; s o c ia l s e c u r it y a n d
p r iv a te r e tir e m e n t p la n s .
4 . P a y m e n t s fo r h e a lth a n d r e la te d p r o g r a m s; lif e , a c c i ­
d e n t , a n d h e a lth in s u r a n c e , s ic k l e a v e , a n d w o r k e r s ’
c o m p e n s a t io n .
5. P a y m e n t s fo r u n e m p lo y m e n t b e n e f it p r o g r a m s; u n e m ­
p lo y m e n t in s u r a n c e , s e v e r a n c e p a y , a n d s e v e r a n c e p a y
fu n d s a n d s u p p le m e n t a l u n e m p lo y m e n t b e n e f it fu n d s .
6. N o n p r o d u c t io n b o n u s e s .
7 . S a v in g s a n d th r ift p la n s .

Data are presented on the im portance o f various
types o f paid hours relative to all paid hours. Informa­
tion is also published on the number o f paid holidays
and number o f w eek s o f paid vacation received by
workers.

A g g r e g a t e p a id h o u r s
2 . E x p e n d i t u r e s in c e n t s p e r h o u r o f w o r k f o r a ll
e s ta b lis h m e n ts =
A g g r e g a t e e x p e n d it u r e s fo r t h e p r a c t ic e
A g g r e g a t e p a id h o u r s m in u s
a g g r e g a te p a id l e a v e h ou rsy
3. E x p e n d it u r e s in c e n t s p e r p a id h o u r fo r e s t a b l i s h ­
m e n t s r e p o r tin g e x p e n d i t u r e s =
A g g r e g a t e e x p e n d it u r e s f o r th e p r a c t ic e
A g g r e g a t e p a id h o u r s in e s t a b lis h m e n t s
r e p o r tin g e x p e n d it u r e s fo r th e p r a c t ic e .
4 . E x p e n d it u r e s in c e n t s p e r p a id w o r k in g h o u r fo r
e s t a b lis h m e n t s r e p o r tin g e x p e n d it u r e s =
A g g r e g a t e e x p e n d it u r e s fo r th e p r a c t ic e
A g g r e g a t e p a id h o u r s m in u s p a id
a g g r e g a te l e a v e h o u r s in e s t a b l i s h ­
m e n t s r e p o r tin g e x p e n d it u r e s fo r t h e
p r a c t ic e .

The distribution o f workers by establishm ent exp en ­
diture ratios and rates is published, as well as the aver­
ages o f ratios and rates. E xpenditures also are show n by
selected establishm ent characteristics such as size,
com pensation lev el, unionization and, w henever p ossi­
ble, by region.
A n a ly s is
The expenditure data describing the payroll or non­
payroll elem en ts o f com pensation are presented in
summary by this characteristic. H ow ever, the analysis
o f the data is related to the benefit function o f each
elem ent. Thus, for analytical purposes, elem ents o f
com pensation that provide similar or interchangeable
benefits are grouped together. The follow ing groups o f
com pensation elem ents are studied:
1.

P a y f o r w o r k in g tim e ; str a ig h t tim e p a y , a n d p r e m iu m s
fo r o v e r t i m e , w e e k e n d h o l i d a y , a n d s h ift w o r k .




U s e s a n d L im ita tio n s
D ata from the surveys are used by em ployers in com ­
paring their expenditure and hours practices with the
averages for their industry and with th ose o f other e s­
tablishm ents having similar or dissim ilar characteristics
(industry, size, location , union status, and average
earnings levels o f w orkers). Labor and m anagem ent use
the data in co llective bargaining; and G overnm ent uses
the statistics in the formulation o f public p olicy, in
producing estim ates o f industry output per man-hour,
and in making international com parisons. They also are
used in deriving estim ates o f the amount and type o f
labor com pensation and the nature o f the hours for
which com pensation is received by workers.
A s indicated earlier, the expenditures studied com ­
prise the significant elem ents o f em ployee com pensa­
tion in Am erican industry. The aggregate o f the exp en ­
ditures studied represents total em ployee com pensa­
tion. It does not, how ever, represent total labor cost
w hich is a more encom passing concept and includes
factors such as the co st o f recruiting and training labor,
the administrative exp en ses incurred in administering
benefit programs, and many other expenditures result­
ing from the u se o f labor as a factor o f production. Som e
o f these expenditures m ay be important in particular
establishm ents.
The expenditures and hours data are subject to both
sampling and reporting errors, the precise magnitude
and direction o f w hich are not known. N everth eless,
the errors resulting from sampling generally are con si­
dered to fall within acceptable confidence ranges; and
reporting errors, to have a material effect on the accu­
racy o f the results, would have to be in the sam e direc­
tion in substantially all o f the cases.

183

E M PL O Y E R E X P E N D IT U R E S FOR E M PL O Y E E C O M PE N SA T IO N
T e c h n ic a l R e f e r e n c e s
Num ber

N u m ber

1.

U .S . D e p a r tm e n t o f L a b o r , B u rea u o f L a b o r S ta tis tic s .

3.

o f S u p p le m e n ta r y E m p lo y e e R e m u n e r a tio n , M a n u fa c tu r in g

-----------------

P r o d u c tio n

W o r k e r s in M in in g I n d u s t r i e s ,

4.

------------:—

E m p lo y e r E x p e n d itu r e s f o r S e l e c t e d S u p p le m e n ta r y

E s ta b lis h m e n ts , 1 9 5 3 (B ulletin 1186, 1956).

R e m u n e r a tio n P r a c tic e s in F in a n c e , I n s u r a n c e , a n d

A stu d y o f the availab ility o f record s, w illin gn ess and ability
o f industry to provide data, the quality o f expenditure data,
and other m atters o f m eth od ology and definition .
2 .

I960

(B ulletin 1332, 1963).

P r o b le m s in M e a s u r e m e n t o f E x p e n d itu r e s o n S e l e c t e d I te m s

Real

E s ta te I n d u s tr ie s , 1961 (B ulletin 1419, 1964).

_____E m

p lo y e r E x p e n d itu r e s f o r S e l e c t e d S u p p le m e n ta r y

R e m u n e r a tio n P r a c t i c e s f o r P r o d u c tio n W o r k e r s in M a n u f a c ­
tu r in g I n d u s tr ie s , 1 9 5 9 (B ulletin 1308, 1962).




5 .

_____________ E m

p lo y e e C o m p e n s a tio n in th e P r iv a te
E c o n o m y 1 972, (B ulletin 1873, 1975).

Nonfarm

6 . _________ Baum an, A lvin , “ M easuring E m p lo y ee C om p en sa­
tion in U .S . In d u stry,” M o n th ly L a b o r R e v ie w , O ctob er
1970, pp. 1 7 - 2 3 .

Chapter 25.

The Em ploym ent C o st Index

B ack grou nd
The Bureau o f Labor Statistics is developing a new
m easure o f the rate o f change in em p loyee com pensa­
tion called the E m ploym ent C ost Index (E C I).1 This
effort w as initiated in respon se to a need for such a
statistical series, ex p ressed with increasing frequency
over the past d ecad e by governm ent policym akers. E x ­
isting m easures, w hile adequate for specific purposes,
were found to be too fragm ented, to o lim ited in co v ­
erage, insufficiently tim ely or d etailed, or subject to the
influence o f factors unrelated to the basic trend. The
B ureau’s basic ob jective is to produce a tim ely and
com preh en sive m easure o f changes in the price o f labor
services akin to the C onsum er Price In d ex’s m easure­
m ent o f the m ovem en t o f prices o f consum er good s and
services. A corollary requirem ent is that the major
com ponents o f the m easure be capable o f separate
analysis.
T im eliness is important: T he change in the m easure
m ust be available as so o n as p o ssib le after it has
occurred, not m any m onths afterward. The m easure
should be com prehensive to co v er co sts incurred by
em ployers for em p loyee b enefits in addition to w ages
and salaries and to en com pass all industries, occup a­
tions, and areas. And the m easure should be stan­
dardized so that it has a constant industrial, occu p a­
tional, and geographic co m p o sitio n , m uch like the
fixed-w eight market basket o f com m odities in the C on­
sum er Price Index.
The full develop m en t o f the ECI w ill require a period
o f several years. Initially only quarterly percentage
changes are being published for w ages and salaries in
the private nonfarm econ om y (excluding households)
and fo r s e le c t e d c o m p o n e n ts o f th e e c o n o m y .
The ECI will be expanded gradually to broaden its
coverage, detail, and frequency to a m onthly index o f
all em p lo y ee com pensation in the econ om y as a w hole.
A more detailed set o f statistics for industrial, occupa­
tional, and geographic com pon en ts w ill also eventually
be available.
In the cou rse o f d evelop ing the E C I, the Bureau

1 In its initial d ev elo p m en t, the m easu re w a s referred to as the
G eneral W age In d ex. T h e term E m p loym en t C o st In dex w a s su b sti­
tuted a s a m ore appropriate d escrip tion . F or som e o f the sem inal
thinking o n th e E C I, s e e N orm an J. S am u els, “ D e v elo p in g a G eneral
W age In d e x ,” Monthly Labor Review, M arch 1971, pp. 3 - 8 .


http://fraser.stlouisfed.org/
184
Federal Reserve Bank of St. Louis

obtained the ad vice o f representatives o f business and
labor and con su lted the academ ic and professional
statistics com m unities. E xten sive testing o f procedures
preceded data collection. The suggestions received and
the experience gained in testing, together with the re­
sources available and considerations o f what w as oper­
ationally feasib le, helped shape the initial survey de­
sign.

D e s c r ip t io n o f t h e I n d e x
M ajor F e a tu r e s
The ECI is a m easure o f change in the price o f labor
defined as com pensation per em ployee-hour w orked.2
The self-em ployed, ow ner-m anagers, and unpaid fam ­
ily workers are excluded from coverage.
The ECI is designed as a L aspeyres, fixed-w eight
index at the occupational lev el, thus eliminating the
effects o f em ploym ent shifts am ong occupations. The
index w eights are derived from occupational em ploy­
m ent for ECI industries reported in the 1970 C ensus o f
Population; the w eights remain fixed from period to
period pending a major index revision, which is next
scheduled to occur w hen the results o f the 1980 C ensus
becom e available.
The index is com puted from data on com pensation by
occupation collected from a sam ple o f establishm ents
w eighted to represent the universe o f occupations and
establishm ents in the econom y. The wage and salary
com ponent o f the index is represented by straight-time
hourly earnings in the occupation. Straight-time earn­
ings are defined as total earnings before deductions,
excluding prem ium paym ents for overtim e, w eek en d,
and la te -sh ift w ork . E arn ings in clu d e p rod u ction
b onu ses, com m ission s, and cost-of-living allow ances.
They exclu d e paym ents in kind, room and board, tips,
etc. T he data co llected are average w age and salary
rates for the occupation, not aggregate payrolls divided
by aggregate hours. Inform ation on benefits, not yet
covered at the current stage o f developm ent o f the
index, will be collected from the establishm ents report­
ing w age and salary data.

2
F or an exp an d ed d isc u ssio n o f EC I c o n c ep ts, se e V icto r J.
S h eifer, “ E m p loym en t C o st In dex: a m easu re o f ch an ge in the ‘price
o f la b o r ,’ ” Monthly Labor Review, July 1975, pp. 3 —12.

T H E E M PL O Y M E N T COST IN D E X
All earn in gs are com p u ted on an hourly b asis,
w hether or not this is the actual basis o f paym ent.
Earnings o f salaried em p loyees and th ose paid under
incentive system s are converted to an hourly basis.
B enefits will also be converted to an hourly basis when
collected . Thus occupational hourly earnings plus the
em ployer’s co st per hour w orked for em ployee benefits
constitute the price o f labor in the ECI.
Since pay rates generally pertain to the job rather
than to the incum bent w orkers, the basic unit o f data
collection is an occupation in an establishm ent. The
occupation is com prised o f all th ose workers em ployed
in jo b s cla ssified under an ECI o ccu p a tio n in the
establishm ent. Thus the ECI m easures changes in rates
o f pay for sp ecific jo b s, not changes in the earnings o f
individual workers.
W hile shifts in the typ es o f workers within the o ccu ­
pation in a given establishm ent may affect wage m ove­
m ents, shifts in em ploym ent am ong occupations and
esta b lish m e n ts are co n tr o lle d b y m easuring w age
change for the sam e occup ation s in the sam e establish­
m ents and applying fixed em ploym ent w eights to the
results. T he unit o f observation is standardized to a
certain exten t b elow the occupational level by m ea­
suring only certain typ es o f labor within the occupation,
e .g ., full or part tim e, incen tive or tim e rated, depending
on the predom inant type.
Scope
The scop e o f the ECI will expand in four discrete
stages:
S t a g e 1.

S tr a ig h t-tim e h o u r ly e a r n in g s ; p r iv a te n o n fa r m
e c o n o m y e x c e p t h o u s e h o l d s ; q u a r te r ly p e r c e n t
c h a n g e s ; lim it e d p u b lis h e d d e ta il (p r e s e n t s ta g e
o f d e v e lo p m e n t ) .

S ta g e 2.

S tr a ig h t - t im e h o u r ly e a r n in g s a n d b e n e f it c o s t s ;
p r iv a t e n o n fa r m e c o n o m y e x c e p t h o u s e h o ld s ;
q u a r te r ly i n d e x e s ; lim it e d p u b lis h e d d e t a il.

S ta g e 3.

S t r a ig h t - t im e h o u r ly e a r n in g s a n d b e n e f it c o s t s ;
to ta l c iv ilia n e c o n o m y ; q u a r te r ly i n d e x e s ; lim ite d
p u b lis h e d d e t a il.

S ta g e 4 .

S t r a ig h t-tim e h o u r ly e a r n in g s a n d b e n e f it c o s t s ,
t o t a l c iv i l ia n e c o n o m y ; m o n t h ly i n d e x e s ; e x ­
p a n d e d p u b lis h e d d e t a il.

O c c u p a tio n a l C la s s ific a tio n

e t c .) w h ic h

are th e n

185
c o m b in e d

in to

12 o c c u p a t i o n a l

grou p s:
P r o f e s s io n a l, t e c h n i c a l , a n d k in d r e d w o r k e r s
M a n a g e r s a n d a d m in is tr a t o r s , e x c e p t fa rm
S a le s w o r k e r s
C le r ic a l a n d k in d r e d w o r k e r s
C ra ft a n d k in d r e d w o r k e r s
O p e r a t iv e s , e x c e p t tr a n s p o r t
T r a n s p o r t e q u ip m e n t o p e r a t iv e s
L a b o r e r s , e x c e p t fa r m
F a r m e r s a n d fa r m m a n a g e r s
F a rm la b o r e r s a n d fa r m s u p e r v is o r s
S erv ice w ork ers, e x c e p t private h ou seh old
P r iv a te h o u s e h o ld w o r k e r s

For the ECI, the list o f 441 occupations w as modified
to elim inate categories which are inappropriate for data
collection purposes and in som e instances to collapse
occupations into a single category. The net effect was to
reduce the 441 categories to 417.
Furthermore, only 9 o f the 12 occupational groups
listed above w ere used in the initial w age and salary
survey. Farm ers and farm managers, farm laborers and
farm supervisors, and private household workers were
excluded. For later stages o f developm ent o f the index,
all occupational categories listed will be included.
T he C e n su s o cc u p a tio n a l c la ssific a tio n sy stem
m erely lists occupations and occupational categories;
no definitions are provided. For data collection pur­
p o s e s , d e fin itio n s o f th e o c c u p a tio n s h ave b een
d ev elo p ed .4
The occupations surveyed differ from industry to
industry and from establishm ent to establishm ent, al­
though in sum they represent the board spectrum o f
occupations in the private nonfarm econom y.

Industrial C la s s ific a tio n
T he E C I cu rren tly c o v e r s all p riv a te nonfarm
establishm ents classified in major industry divisions B
through H defined in the 1967 edition o f the S t a n d a r d
I n d u s t r i a l C l a s s i f i c a t i o n M a n u a l (SIC), with the ex cep ­
tion o f private h ouseholds. Published data are limited to
the five major divisions o f contract construction; man­
ufacturing; w h olesale and retail trade; transportation,
com m unication, electric, gas, and sanitary services;
and services, excep t private household s, because the
sam ple size is insufficient to support separate publica­
tion for mining, and finance, insurance, and real estate
at this tim e. N o minimum establishm ent size cu toff is
used.

The ECI occupational classification system is based
on the classification system u sed to co llect data for the
1970 C ensus o f P opulation.3 T he C ensus system cla ss­
ifies all occup ation s reported into 441 3-digit occupa­
tional categories (such as A ccountant, Stockhandler,

The com pensation data from w hich the ECI is com ­
puted are obtained quarterly from a sam ple o f about

3 Classified Index of Industries and Occupations, 1970 Census of
Population, (Bureau o f the C en su s, 1971).

4
Employment Cost Index: Occupational Classification System
Manual (Bureau o f L abor S tatistics, January 1975).




D a ta S o u r c e s a n d C o l le c t io n M e t h o d s

186

B L S H A N D B O O K O F M E TH O D S

2,000 establishm ents and from a sam ple o f occupations
within th ese establishm ents. O ccupational em ploym ent
data for sam ple selection and w eighting w ere also co l­
le c te d for the su r v e y o c c u p a tio n s in th e sam p le
establishm ents and in about 8,000 additional establish­
m ents from a larger sam pling frame.
The index w eights w ere derived from occupational
em ploym ent figures reported in the 1970 C ensus o f
Population.
Data collection is initiated by a B L S field repre­
sentative with an initial visit to the survey reporting
unit.5 Quarterly reports thereafter are normally co l­
lected by mail or teleph on e to the B L S regional office.
The purpose o f the initial visit are: to introduce the
program and obtain cooperation; to determ ine the or­
ganizational unit or units for establishm ent coverage; to
perform jo b m atches; to d ev elo p establishm ent re­
porting procedures; and to com plete the first schedule.
A major task in the initial con tact is job m atching, that
is, determ ining the jo b s and w orkers in the establish­
ment that m atch the occupation as defined for the sur­
vey. The job match and resulting em ploym ent figures
are carefully docum ented on B L S form 3038 A, which
also contains basic inform ation about the establish­
ment.
The establishm en t’s reporting procedures are also
recorded on B L S Form 3038 A. The preferred reporting
arrangement is to have the establishm ent report the
straight-time average hourly rate for each m atched o c ­
cupation. W hen this is not p ossib le, the establishm ent
may (1) report hourly rates, or hours and earnings, for
each worker in a m atched occupation (or provide com ­
parable payroll records), placing the burden o f com put­
ing the occupation average hourly rate on the B L S
regional office; (2) report earnings detail for a sample o f
workers in all com pany jo b s w hich m atch an ECI o ccu ­
pation; or (3) report earnings detail for a l l workers in a
sample o f com pany job s w hich match a single ECI
occupation. O ptions 2 and 3 reduce the burden o f re­
porting where the number o f incum bents or job s is too
large for efficient reporting. In p ractice, options 2 and 3
are seldom used.
Other determ inations w hich are made at the tim e o f
in itia l c o lle c t io n are th e c h a r a c te r is t ic s o f th e
occupation s— w hether the majority o f incum bents are
full or part tim e, tim e or incentive w orkers, or covered
by co llectiv e bargaining agreem ents. This information
is also recorded on B L S Form 3038 A.
The wage data are co llected on B L S Form 3038 B.
(See p. 184). This form is used as a shuttle and is sent
back to the respondent for addition o f new data every
quarter. T he survey m onths are M arch, June, Septem ­
ber, and D ecem ber; the data pertain to the pay period
which includes the 12th o f the month.
5
T he co lle ctio n m eth od s d escrib ed h ere relate to the on goin g w age
and salary su rv ey in the private nonfarm e co n o m y . P roced ures for
c o llectin g data o n ben efit c o sts and th e agricultural, h o u seh old ,
and g o vern
 m en t secto rs are still bein g d e v elo p ed .



The information on forms 3038A am! 3038B is cod ed ,
keypunched, and transmitted to the " -^eau’s W ashing­
ton office for editing; questionable
is are verified,
and the data are made ready for com putation.

T h e S u r v e y D e sig n
Planning for the ECI survey involved tl considera­
tion o f alternative designs within the overall budgetary
constraint. Som e o f the major elem ents entering into
these considerations were the basic ECi products de­
sired, the availability o f data, and requirem ents to as­
sure statistically reliable estim ates. Other elem ents
considered w ere the efficien cy o f alternative collection
procedures and the probable degree o f cooperation
from respondents.
K ey factors in the ultimate ch oice o f a survey design
were the im portance attached to obtaining initial data
by personal visit, the availability o f C ensus data on
occupational em ploym ent am ong industries, and test
results show ing that respondents w ere more responsive
to furnishing occupational w age data than wage data for
individual em ployees.
The interaction o f all the above planning considera­
tions and test results led to the adoption o f a survey
design with the follow ing features:
a. S e l e c t io n o f a s e t o f s a m p le o c c u p a t i o n s b y in d u s tr y
b a s e d o n th e 1970 C e n s u s o c c u p a t io n a l e m p lo y m e n t
d is t r ib u tio n s .
b . S a m p lin g in t w o p h a s e s . T h e fir s t p h a s e c o n s i s t e d o f
a b o u t 1 0 ,0 0 0 e m p l o y i n g u n i t s , t h e s e c o n d p h a s e
o f a b o u t 2 ,2 0 0 . C o l l e c t io n o f e m p lo y m e n t d a ta fo r th e
s e l e c t e d o c c u p a t i o n s in (a ) w a s u n d e r ta k e n in th e fir s t
p h a s e . H o w e v e r , m a x im u m u s e w a s m a d e o f a v a il­
a b le d a ta fr o m B L S O c c u p a t io n a l E m p lo y m e n t S u r v e y s
w h e r e v e r fe a s ib le .
c . A t w o - w a y c o n t r o lle d s e l e c t i o n 6 o f s a m p le e s t a b l i s h ­
m e n t s a n d o c c u p a t i o n s in th e s e c o n d p h a s e o f s a m p ­
lin g a s d i s c u s s e d in t h e f o l l o w i n g s e c t i o n . T h e r e ­
s u ltin g s a m p le w a s u s e d f o r w a g e c o ll e c t i o n p u r p o s e s .
d . D a ta c o l l e c t i o n in th e fir s t p h a s e b y m ail s u r v e y , in th e
s e c o n d p h a s e b y in itia l p e r s o n a l v i s i t a n d b y m a il
o r t e le p h o n e t h e r e a f t e r .

S a m p lin g
S e le c t io n o f S a m p lin g U n its
Phase I occupations were selected from em ploym ent
data provided by the 1970 C ensus o f Population. An
average o f 23 occupations was selected for each o f 62
SIC industry groups, generally at the 2-digit SIC level.
Five o f the occupations— th ose with the largest indus­
try em ploym ent— w ere selected with certainty; tw o o c ­
cupations w ere selected by sampling within each o f nine
major occupational groups within the industry.
6
R. G ood m an and L. K ish , “ C on trolled S e lec tio n , A T ech niqu e in
P r o b a b ility S a m p lin g ,” Journal of the American Statistical
Association, V ol. 45, 1950, pp. 3 5 0 - 7 2 .

BLS 3 0 3 8 B
M arch 1975

U .S. D E P A R T M E N T O F L A B O R
Bureau o f Labo r Statistics

Establishm ent nam e _

ECI W AGE D A T A FO R M

□□
Line
no.

BLS
occ.

, 197 _

Id en tification o f survey occupations, com pany jobs, or individuals fo r w hom wage
in form ation is being reported on each line

code

H o urly
rate

(l)

(2 )

1
R

i
Hours and earnings
i
(3 )

N um ber o f
workers
per line
(4 )

1

3
4
5
6
7
8
9
10
11
12

TH E E M PL O Y M E N T COST IN D E X

2

13
14
15
16
17
18
19
20

Please use the back page o f this form to explain significant earnings changes (i.e., decreases or large increases in the average rate o f pay fo r an occupation) from one reporting period to the next.




00

188

BLS HANDBOOK OF METHODS

The 18 occup ation s selected by sam pling, together
w ith the 5 certainty occup ation s, w ere then used as the
23 sam ple occupations in the first phase o f data co llec­
tion. The n ecessary factors for sam ple weighting were
also obtained from this sam pling activity.
Phase I establishm ents w ere a subsam ple o f 10,000
from a p ro b a b ility sa m p le o f 2 0 0 ,0 0 0 p r e v io u sly
selected for the 1972 O ccupational Safety and Health
(O SH ) Survey. The latter sam ple w as derived from a
frame o f about 4,000,000 reporting units covered by the
unem p loym en t insu ran ce program s o f each o f the
States. G enerally, in m anufacturing industries the re­
porting unit and the establishm ent are identical; in
nonm anufacturing the reporting unit is a com bined one
for establishm ents w ith com m on activity in a county.
T he selectio n o f the 10,000 P hase I units w as a
probability-proportional-to-size (PPS) procedure ap­
plied to a 3-digit SIC industry classification o f reporting
units by em ploym ent size from the 1972 O SH file. The
initial file u sed for ECI w as not a com plete universe,
and a supplem entary probability procedure w as used to
assure that the final ECI sam ple represented the entire
frame o f all units in the U nited States within the survey
scop e.
A m atch o f the 10,000 Phase I units w as made w ith the
O ccupational E m ploym ent S urvey file. A bout 1,000
com m on units w ere found for w hich no n ew data on
occupational em ploym ent w ere sought. Each o f the
remaining units w as sent a schedule w ith the 23 occupa­
tions for the respective industry and w as asked to pro­
vide em ploym ent counts by occupation. T hese data
w ere edited and u sed in the Phase II sam ple selection.
W here a unit w as m atched from the O E S survey, OES
data w ere com piled and structured to fit the ECI o ccu ­
pational categories. W hen a sam ple unit did not re­
spond, data w ere imputed using average data from a
com parable group o f reporting units, usually at the
3-digit SIC lev el. The occupational data w ere then
w eigh ted, using w eights derived from the overall Phase
I PPS selectio n procedures.
Phase II o f the double sam pling procedure led to the
final sam ple o f about 2,200 establishm ents and the iden­
tification o f the final set o f specific occupations sampled
within each establishm ent. The m ethod o f sampling
em ployed in the second phase used a PPS procedure
and adopted a principle first suggested by L ahiri.7 The
principle w as used w ith a single selection o f establish­
m ents for each o f 23 occup ation s join tly using a tw ow ay controlled selection procedure. The general objec­
tive is to selec t establishm ents so that:
a. There is joint probability selection of establishments for
all 23 detailed occupations in a given subindustry;
b. The number of selected sample occupations in an
establishment is consistent with the expected number
from an optimum allocation of the sample and condition-

7
D .B . L ahiri, “ A M eth od o f S am p le S e lec tio n Providing U n ­
b ia se d R a tio E s tim a te s ” , Bulletin of International Statistical
Institute, v o l. 33, Pt. II, D e cem b er 1951, pp. 1 3 3 -4 0 .




al o n t h e r e la t iv e w e ig h t e d e m p lo y m e n t a m o n g P h a s e
I s a m p le u n its ; a n d
c . T h e n u m b e r o f e s t a b l i s h m e n t s to b e a s k e d to p r o v id e
in f o r m a t io n o n e a c h s a m p le o c c u p a t io n is c o n s i s t e n t
w it h t h e o v e r a ll s u r v e y d e s ig n p la n ; i . e . , a b o u t 2 ,2 0 0 .

The single selection o f establishm ents for each o f the
23 o cc u p a tio n s in ev e r y o n e o f th e 62 in d u stries
w as carried out in a series o f steps.
In the first step, the w eighted em ploym ent data from
the Phase I survey w ere converted to relative m easures
o f size within each occupation, with the sum o f all such
m easures in an occupation across establishm ents equal
to 1.00. For exam ple, if w eighted em ploym ent in an
establishm ent represented 1.3 percent o f total em ploy­
ment for the occupation, the relative measure o f size
would be 0.013.
The next step identified the maximum relative m ea­
sure o f size for each establishm ent, that is, the largest o f
all th e o c c u p a tio n a l r e la tiv e m e a su r e s fo r th at
estab lish m en t. T h ese m axim um relative m easures
ranged from a very small fraction to 1, the latter repre­
senting an establishm ent which em ployed all o f the
workers in a given occupation in the industry.
The third step used the maximum relative m easure o f
size to select Phase II establishm ents. To do this the
data on the maxim um relatives w ere cum ulated su cce s­
sively across establishm ents to provide a basis for sy s­
tem atic PPS selection. In order to carry out the PPS
selection it was n ecessary to determ ine the expected
num ber o f sam ple establishm en ts in the particular
industry by using the ratio o f Phase I establishm ents
in the c e ll to th e total num ber in all c e lls m ulti­
plied by the overall Phase II sam ple size. The PPS
system atic interval for a cell w as calculated as the sum
o f the maxim um relative m easures o f size divided by the
exp ected number o f Phase II sample establishm ents.
The PPS selection w as then carried out using a random
start and su ccessiv e multiples o f the sampling interval.
A s a result o f this step, the actual Phase II establish­
m ents w ere selected . A lso identified were the sample
occupations with the m axim um relative m easure o f size
for each o f the selected establishm ents.
The fourth step used the data on relative m easures o f
size fo r ih e occupations in the Phase II establishm ents
(selected in the third step) in a tw o-w ay controlled
selec tio n m eth od to d eterm in e w h ich occu p a tio n s
would be in the sam ple for each establishm ent. This
step involved converting the occupational relative m ea­
su re o f s iz e in to r a tio s r e la tiv e to th e sa m p le
establishm ent’s maxim um relative m easure o f size, and
su m m in g th e r a tio s fo r e a c h o c c u p a tio n a c r o s s
establishm ents in the cell and for all survey occupations
in each establishm ent. The form er sum indicates the
exp ected number o f establishm ents for a given occupa­
tion that w ould be provided by a single pattern o f twow ay controlled selection; the latter indicates the e x ­
pected number o f occupations for a given establishm ent
provided by a single pattern. In tw o-w ay controlled
selection, the occupational ratios are used with con ­
straints on achieving both sets o f exp ected numbers

189

THE EMPLOYMENT COST IN D EX
sim ultaneously. Various single-w ay patterns are used
to select sets o f establishm ents and occupations.
The fourth step o f the sam ple design w as execu ted by
use o f a com puter program d evelop ed for the tw o-w ay
controlled selection. The process o f selection required
multiple patterns in order to ach ieve the goal o f b etw een
7 and 12 occup ation s for w hich periodic reports would
be required from each sam ple establishm ent.

t io n a l g r o u p , in d u s t r y , g e o g r a p h ic lo c a t i o n , a n d m e t ­
r o p o lit a n a r e a a n d u n io n s t a t u s .
b . E m p lo y m e n t , in 1 9 7 0 , fo r th e 3 -d ig it c e n s u s c o d e o c c u ­
p a t io n s in an in d u s tr y c e l l , o b t a in e d fr o m t h e d e c e n n ia l
cen su s.
c . S a m p le w e ig h t s d e r iv e d fo r e a c h e s t a b lis h m e n t o c c u p a t i o n fr o m t h e p r io r P h a s e I o c c u p a t io n a l e m p l o y ­
m e n t s u r v e y o r t h e in itia l e m p l o y m e n t r e p o r t e d o n th e
s u r v e y s c h e d u le .

The ind ex com putation in v o lv es essen tia lly fiv e
steps:
S a m p l e R o t a t io n
Current plans are to build sam ple rotation into the
ECI program. Only very large establishm ents w ould
be ex clu d ed from the rotation sch em e. T he c y c le
o f sam p le ro ta tio n h as n o t y e t b een e sta b lish e d ,
but a 3- to 5 -y e a r r o ta tio n p la n is u n d er c o n ­
sideration.

I n d e x C o m p u t a t io n
The basic com putational fram ework is the standard
form ula for a p rice-typ e in d ex num ber w ith fixed
w eights as m odified by the special statistical conditions
w hich apply to the E C I.8 This form ula (sim plified for
illustrative purposes) sh o w s the fixed em ploym ent
w eights applied to com pensation over the index com pu­
tation periods as:

S j° i
w h e re

x i

R t =

ZjOj x * and I is the sym bol for the index, R represents a ratio o f
wage bills, Xj is the sym bol for average occupational
com pensation (initially straight-time pay) in time t, and
0 is the sym bol for occupational weight. Further amp­
lifying this formula, the wage bill relative Rt is obtained
by summing w eighted occupational earnings across o c ­
cupation within major occupational groups, major o c ­
cupational groups within industries and, then the 62 SIC
industry groups. This operation is exp ressed as:

1. E s t a b lis h m e n t - o c c u p a t io n s a m p le w e ig h t s a r e a p p lie d t o
t h e o c c u p a t io n a l e a r n in g s to o b ta in w e ig h t e d a v e r a g e
e a r n in g s f o r e a c h o c c u p a t io n in e a c h o f t h e 62 S I C in d u s ­
tr y c e l l s fo r th e c u r r e n t a n d p r e c e d in g s u r v e y p e r i o d s . 9
2. T h e s e w e ig h t e d a v e r a g e e a r n in g s a r e m u ltip lie d b y b a s e
w e ig h t p e r io d e m p lo y m e n t fr o m th e d e c e n n ia l c e n s u s to
o b t a in w a g e b ills f o r e a c h o c c u p a t io n - in d u s t r y c e ll fo r
t h e s u r v e y p e r io d s .
3 . T h e w a g e b ills a r e s u m m e d a c r o s s all c e l l s to o b ta in to ta l
w a g e b ills f o r t h e s u r v e y p e r io d s .
4 . T h e a g g r e g a te w a g e b ill fo r th e c u r r e n t s u r v e y p e r io d is
d iv id e d b y th e w a g e b ill f o r t h e p r io r p e r io d to o b ta in
r a t io s .
5. I n it ia lly , th e r a t io s a re c o n v e r t e d t o q u a r te r ly p e r c e n ­
ta g e c h a n g e s . E v e n t u a lly , t h e r a tio s w ill s e r v e a s lin k
r e la t iv e s to m o v e t h e in d e x fr o m q u a r te r to q u a r te r .

The exam ple show n to illustrate these steps uses
hypothetical data attributed to an econom y consisting
o f three establishm ents em ploying workers in tw o o c­
cupations, for the survey periods o f Septem ber 1975,
D ecem ber 1975, and March 1976.
The com putations for the occupational groups and
industry d iv isio n s, fo llo w the sam e p rocedu res as
those for the overall ind exes excep t for the summation.
The w age bills for the occupational group are summed
acro ss ind u stries and region s for each group; the
w age b ills for the industry d iv isio n s are sum m ed
a cr o ss o cc u p a tio n a l grou p s and reg io n s for each
industry division.
C om putation p rocedu res for the region s, unionnonunion and m etropolitan-nonm etropolitan area in­
d e x e s are identical to th e se for the overall index
excep t that the establishm ent occupational rates are
cla ssified accord in g to region , union -n onu n ion or
m etropolitan-nonm etropolitan area status for separate
com putations.

Zk Sh SjOjXj_
Rt “ 2 k S b S j O j X*

1

w here k represents the SIC, h is the major occupa­
tional group, and j the C ensus occupation.
All ind exes are com puted from the follow ing data:
a. A v e r a g e s tr a ig h t-tim e h o u r ly e a r n in g s fo r 3 -d ig it c e n s u s
c o d e o c c u p a t i o n s in th e s a m p le o f m a t c h e d e s t a b l i s h ­
m e n ts in th e c u r r e n t a n d p r e v io u s s u r v e y p e r io d s . T h e
o c c u p a t io n a l w a g e d a ta a re id e n t if ie d b y m a jo r o c c u p a -

P r e s e n ta tio n
T h e EC I is p u b lish e d q u arterly in th e sec o n d
month after the survey period. For exam ple, percentage
ch a n g es com p u ted from the su rv ey data for June
p ub lish ed in A u gu st. T he relea se sum m arizes the

9
In certain lim ited circu m stan ces, w h en occu pational w age data
for estab lish m en ts are not reported in the current su rvey period , the
8
In actual p ractice, the EC I com putational form ulas and p roce­ last reported data are projected forw ard by the average p ercen t
ch an ge in occu p ation al w age data for the sam e occu p ation reported
dures differ som ew h at from th ose p resen ted h ere, w h ich h ave been
b y other sam p le estab lish m en ts in the cell. T he projected w a g e data
sim plified and stream lined for illustrative p u rp oses. This idealized
are im puted to the nonreporting estab lish m en t for the current su rvey
explanation a lso anticip ates the com p u tation o f in d ex es, not sim ply
 ch an ges.
period.
percentage



BLS HANDBOOK OF METHODS

190

Illustrative Index Computation
S te p 1:

E s t a b l i s h m e n t - o c c u p a t i o n s a m p le w e i g h t s a r e a p p l i e d to t h e o c c u p a t i o n a l e a r n in g s
fo r e a c h o c c u p a tio n in e a c h o f t h e 6 2 S IC in d u s try c e lls fo r th e s u rv e y p e rio d s :

to o b t a in

w e ig h t e d a v e ra g e e a r n in g s

S a m p le w e ig h t

S a m p le o c c u p a tio n
S e p t.

Dec.

M a r.

(1 )

(2 )

$ 5 .3 1
5 .2 2
5 .1 8 *

$ 5 .4 0
5 .3 8
**

T o t a l ......................................
W e ig h te d a v e r a g e . . . .

4 .9 0

4 .9 0
4 .8 6
4 .8 9 *

1 .0
2 .0
3 .0

T o ta l ......................................

1 .5
2 .5

Dec.

(4 )

$ 5 .3 0
1 0 .4 0
1 5 .4 8
3 1 .1 8
5 .1 9 6

M a r.

(2 ) x (4 )
(a )
$ 5 .3 1
1 0 .4 4
1 5 .5 4

(3 ) x

(b )
$ 5 .3 1
1 0 .4 4
**

3 1 .2 9
5 .2 1 5

1 5 .7 5
5 .2 5 0

(4 )

$ 5 .4 0
1 0 .7 6
**
1 6 .1 6
5 .3 8 7

7 .3 5

7 .3 5

7 .3 5

7 .4 1

1 2 .1 5

3 .5

1 2 .0 0
1 7 .0 1

1 7 .1 2

1 2 .1 5
**

1 2 .3 5
**

7 .5

4 .8 0
4 .8 6

4 .9 4
4 .9 4
**

S e p t.
(1 ) x

6 .0

C a rp e n te rs :
E s t a b lis h m e n t 1 ............................
E s t a b lis h m e n t 2 ............................
E s t a b lis h m e n t 3 ............................

W e ig h t e d a v e r a g e

(4>

(3 )

$ 5 .3 0
5 .2 0
5 .1 6

E s t a b lis h m e n t 2 ............................
E s t a b lis h m e n t 3 ............................

a v e r a g e e a r n in g s

C o m p u ta tio n o f

S t r a i g h t - t i m e h o u rly e a r n in g s

E le c t r ic ia n s :
E s t a b lis h m e n t 1 ............................

w e ig h te d

3 6 .3 6

3 6 .6 2

1 8 .6 5

1 9 .7 6
4 .9 4 0

....

4 .8 4 8

4 .8 8 3

4 .8 7 5

NOTE: Asterisk (*) indicates imputed data. Tw asterisks indicate that Establishment 3, classified as a temporary nonrespondent in December,
o
is a dropout in March. In (a im
) puted data from Establishment 3 are used in calculation; in (b only data from Establishments 1 and 2 are used.
)
S te p 2 :

T h e s e w e ig h t e d a v e ra g e e a r n in g s a re m u lt ip lie d by b a s e w e ig h t p e rio d e m p lo y m e n t fro m th e d e c e n n ia l c e n s u s to o b t a in w a g e b ills fo r e a c h
o c c u p a tio n - in d u s t r y c e ll fo r t h e s u rv e y perio d s-.
O c c u p a tio n a l
w e ig h t —

W e ig h te d a v e ra g e e a r n in g s

W a g e b ills

1 9 7 0 c e n s u s e m p lo y -

S a m p le o c c u p a tio n
M a r.

m ent

( i)

(2 a )

D e c.
(2 b )

(3 )

(4 )

S e p t.
(1 ) X (4 )

E l e c t r i c i a n s ..............................................

$ 5 ,1 9 6

$ 5 ,2 1 5

$ 5 ,2 5 0

$ 5 ,3 8 7

3 ,0 0 0

$ 1 5 ,5 8 8

$ 1 5 ,6 4 5

$ 1 5 ,7 5 0

$ 1 6 ,1 6 1

C a r p e n t e r s ................................................

4 .8 4 8

4 .8 8 3

4 .8 7 5

4 .9 4 0

2 ,0 0 0

9 ,6 9 6

9 ,7 7 6

9 ,7 5 0

9 ,8 8 0

2 5 ,2 8 4

2 5 ,4 2 1

2 5 ,5 0 0

2 6 ,0 4 1

S e p t.

T o t a l w a g e b il l, c r a f t
a n d k in d r e d w o rk ­
e rs , In d u s t r y 1 ..............

(2 a ) x

D e c.
(4 ) ( 2 b ) x ( 4 )

NOTE: Col. (2a) includes im
puted figures from Establishment 3 (see step 1 Col. (2b) excludes Establishment 3.
);

S te p 3 :

T h e w a g e b ills a r e s u m m e d a c r o s s a ll c e lls to o b t a in t o t a l w a g e b ills fo r t h e s u rv e y p e rio d s :
W a g e b ills
In d u s tr y

D ec.

S e p t.

M a r.

a)

(2 b )

(3 )

$ 2 5 ,2 8 4

$ 2 5 ,4 2 1

$ 2 5 ,5 0 0

$ 2 6 ,0 4 1

2 8 5 ,1 2 5

1 ..........................................................................

(2 a )

2 8 7 ,3 4 5

2 8 7 ,6 5 0

2 9 1 ,6 0 0

6 2 .......................................................................
T o t a l .............................................

S te p 4 :

T h e a g g r e g a t e w a g e b ill f o r th e c u r r e n t s u rv e y p e rio d is d iv id e d b y t h e w a g e b ill fo r t h e p r io r p e rio d to o b t a in r a tio s :
D ecem ber =
M a rc h

S te p 5 :

2 8 5 ,1 2 5 =

1 .0 0 7 8

= 2 9 1 , 6 0 0 -*• 2 8 7 , 6 5 0 =

2 8 7 ,3 4 5 *

1 .0 1 3 7

T h e r a t io s a r e c o n v e r te d to q u a r t e r ly p e r c e n ta g e c h a n g e s :
D ecem ber =

0 . 7 8 p e rc e n t

M a rc h
= 1 . 3 7 p e rc e n t
E v e n tu a lly , t h e r a t io s w ill s e rv e a s lin k r e la t iv e s to m o ve th e in d e x fro m q u a r t e r to q u a r t e r :
S e p te m b e r in d e x =

1 0 0 .0 0

D e c e m b e r in d e x
M a r c h in d e x

1 0 0 .0 0 x 1 .0 0 7 8 = 1 0 0 .7 8
1 0 0 .7 8 x 1 .0 1 3 7 = 1 0 2 .1 6




=
=

M a r.
(3 ) x (4 )

THE EMPLOYMENT COST IN D EX
k ey trends, presents the tabulations, and contains a
technical descriptive note.

U s e s a n d L im it a t io n s
The E m ploym ent C ost Index will provide for the first
tim e, a com prehensive and tim ely m easure o f changes
in the rate o f em ploym ent com pensation , free o f much
o f the influence o f em ploym ent shifts. Such a m easure
may be esp ecially useful for understanding and explain­
ing trends in com pensation , forecasting such trends,
and relating them to other econ om ic variables. In addi­
tion, it m ay be o f u se in the form ation o f w age d ecisions
by parties to co llectiv e bargaining and in contract cost
escalation , as w ell as for th ose presently unforeseen
u ses w hich inevitably arise from the ingenuity o f the
users. The ECI is not, h ow ever, intended as a substitute
for existing m easures o f com pensation , all o f w hich are
useful for their p urposes. In many instances, it may
com plem ent or illum inate existin g statistical series.
The lim itations o f the index m ust be kept in mind.
B ecau se the ECI is an ind ex, it m easures changes rather

191

than levels o f com pensation. Further, the index is not a
m easure o f the total co st o f em ploying labor. N o t all
labor co sts (e.g ., training ex p en ses, retroactive pay,
etc.) fall under the E m ploym ent C ost Index definition
o f com pensation; m oreover, total em ploym ent costs
vary with the am ounts and typ es o f labor used—factors
which are held constant in the Em ploym ent C ost Index.
In its initial stages the ECI will not cover all em ployers
and em p loyees and all com pensation; ultim ately this
lim itation will be elim inated. Finally, the index is not a
pure rate m easure. A lthough straight-time hourly earn­
ings provide a clo se approxim ation o f the rate and the
E m p lo y m en t C o st In dex is d esig n ed to elim in ate
em ploym ent shifts am ong establishm ents, industries,
and occup ation s, em ploym ent shifts within the occupa­
tions and longevity pay increases will influence the
level o f earnings reported by the respondent.
Som e o f th ese lim itations are temporary; som e are
built into the conceptual fram ework o f the measure; and
others stem from d eficiencies in the state o f the art o f
m easurem ent w hich will be resolved in time with re­
search and im provem ents in technique.

T e c h n ic a l R e f e r e n c e s
Number
1.

2.

3.

G o lo n k a , T h eo d o re J ., and S tein b erg, Josep h , “ Sam pling A s ­
p e c ts o f the G en eral W age In d e x ” . U n p u b lish ed paper pre­
sen ted to the W ash in gton Statistical S o c iety M eth od ological
S e c tio n , M arch 29, 1974.
G o od m an , R. and K ish , L ., “ C on trolled S electio n , A T e ch ­
nique in P robability Sam p lin g” , Journal of the American
Statistical Association, V o l. 45, 1950, pp. 3 5 0 - 3 7 2 . 3
L ahiri, D . B ., “ A M eth od o f S am p le S electio n P roviding U n ­
b iased R atio E stim a te s, ’ ’ Bulletin of The International Statis­
tical Institute, V o l. 33, Pt. II, D e cem b er 1951, pp. 1 3 3 -4 0 .




Number
4.
5.

6.

S am u els, N orm an J ., “ D ev elo p in g a G eneral W age In d e x ,”
Monthly Labor Review M arch 1971, pp. 3 - 8 .
S h eifer, V ictor J ., “ E m p loym en t C ost Index: a m easure o f
ch an ge in the ‘price o f labor’, ” Monthly Labor Review, July
1975, pp. 3 - 1 2 .
U .S . D epartm en t o f C om m erce, B ureau o f the C en su s, Class­

ified Index of Industrial Occupations, 1970 Census of
Population, 1971.
7.

U .S . D e p a r tm e n t o f L a b o r , B u rea u o f L a b o r S t a t is t ic s ,

Employment Cost Index: Occupational Classification System
Manual, January 1975.

Chapter 26.

Employee Benefit Plans

B ackground
T he B ureau’s studies o f em p lo y ee benefit plans date
back to the early forties w h en em ploym ent-related
health benefit programs first appeared in collective bar­
gaining a greem en ts.1 B efore W orld War II job-related
p lan s p ro tectin g e m p lo y e e s and th eir d ep en d en ts
against the financial co n seq u en ces o f accident, sick ­
n ess, death, and old age w ere practically nonexistent,
esp ecia lly for production w orkers. T he developm ent o f
th ese typ es o f protection w as stim ulated by the Internal
R even u e A ct w hich as early as 1921 granted favorable
ta x tr ea tm e n t to e m p lo y e r c o n tr ib u tio n s to b oth
p en sion and w elfare plans and to p en sion plan in­
vestm en t incom e. H o w ev er, the phenom enal upsurge
in plan grow th resulted ch iefly from three factors (1)
w age co n tr o ls during W orld W ar II and th e early
p ostw ar period that perm itted b en efit plans w hile
denying w age increases, (2) the N ational L abor R ela­
tions B oard’s interpretation o f the L abor M anagem ent
R elations A ct o f 1947 making p en sion s a legitim ate
c o lle c t iv e b a rg a in in g is s u e (u p h e ld b y th e U . S .
Suprem e Court in 1949) and (3) the 1949 report o f the
Steel Industry F act Finding Board w hich maintained
that industry had both a social and econom ic obliga­
tion to provide w orkers w ith so cia l insurance and
pen sion s. The w age freeze during the K orean War
p ro v id e d ad d ed stim u li to th e g ro w th o f b e n e fit
p lan s.2
During the 1940’s and 1950’s, the establishm ent or
im provem ent o f such plans w as alm ost alw ays a co l­
lectiv e bargaining issu e. In th e 1960’s unions also
su cceed ed in negotiating m ore com preh en sive cover­
age, m ostly by enlarging the sco p e o f existing plans.
The B ureau’s first studies w ere m ade in the 1940’s
and 1950’s. T h ese w ere based on small sam ples o f
negotiated plans and w ere designed to provide informa­
tion about health benefit plans p rovisions rather than
to co llect statistics on the prevalence o f such p lan s.3
In the late 1940’s the Bureau issued several reports
on health and insurance and retirem ent plans as part
T o r background inform ation o f th e B u reau ’s role in the gathering
o f d a ta o n th e r e s u lt s o f c o l l e c t i v e b a r g a in in g s e e c h . 2 8 ,
“ C o llec tiv e B argaining A g r ee m e n ts.’’
2S e e table 1 in “ U n io n s R eport S lo w R ise in H ealth , In su ran ce,
a n d P e n s io n C o v e r a g e ,’’ Monthly Labor Review, J a n u a ry
1975, page 68.

^Health-Benefit Programs Established Through Collective Bar­
gaining, 1947, B L S B ull. 841.

192


o f its long-range program conducted join tly with the
Social Security Adm inistration and the U . S . Public
H ealth S ervice o f the Federal Security A gency (now
the Departm ent o f H ealth, Education and W elfare).
A fter the universe o f em ployee benefit plans becam e
know n (as a result o f the reporting requirem ents o f
the W elfare and Pension Plans D isclosure A ct o f 1959),
the studies w ere based on scientifically selected sam ­
ples representative o f all plans filed under the A c t.4
A s a result, for the first tim e p la n s.n o t under co l­
lective bargaining were included as w ere a represen­
tative sam ple o f small plans, whether negotiated or
not. T hese im provem ents in sampling, which are re­
flec ted in reports for 1960 and su b seq u en t y ea rs,
grea tly en h a n ced th e u se fu ln e ss o f th e B u rea u ’s
studies.

U sers
The Bureau is the major source o f data on the e x ­
tent to w hich w orkers are protected by job-related
health and insurance, and pension plans, the protec­
tion afforded their dependents, and the extent to w hich
they are protected after they are laid o ff or retire from
active em ploym ent. U n iverse estim ates based on the
sam ple data collected generally are available in Bureau
publications. T hey are frequently used by labor and
managem ent representatives involved in contract nego­
tiations, State and Federal conciliators and m ediators,
public and private arbitrators, C ongressm en and Con­
gressional sta ff considering legislation affecting the
welfare o f w orkers, and governm ent officials responsi­
ble for recom m ending legislation and review ing pro­
p osed legislation. B L S studies and reports are used by
teachers, students and others in the academ ic field,
private consultants, researchers, writers, and others
not directly involved in legislation or collective bar­
gaining but w ho are concerned with the developm ent,
4In a c co r d a n ce w ith th e A c t, a d m in istrators o f w elfa re and
p en sion plan s, exclu d in g th ose for govern m en t w ork ers and em ­
p lo y e es o f nonprofit organ ization s, having at lea st 26 participants
filed w ith th e D epartm en t o f L abor d etailed d escrip tion s o f their
p lan s, including all am endm ents. A dm inistrators o f plans havin g
at le a s t 100 p a rticip an ts a lso had to file annual sta tistic a l re­
ports o n th e fin an cial statu s o f their p lan s. In gen era l, sim ilar
filings are required b y the D ep artm en t, in accord an ce w ith E m ­
p lo y e e R etirem en t In com e S ecu rity A c t, sign ed in to law b y the
P resident on S ep tem b er 2, 1974, w h ich rep laces the W elfare and
P en sion Plans D isclo su re A ct.

EMPLOYEE BENEFIT PLANS
status, and trends in em ployee benefit p rovisions and
coverage.

D e s c r ip tio n a n d M e th o d o lo g y
D etailed an alyses o f the p rovisions o f em ploym entrelated pen sion plans and health and insurance plans
provide the core o f the B u reau ’s major stu d ies o f
em ployee benefit plans. The Bureau publishes several
D ig e s t s
th at su m m a rize th e m ajor p r o v is io n s o f
selected pension plans, health and insurance plans,
and other typ es o f em p loyee benefit plans. The pen­
sion studies are lim ited to retirem ent plans that pro­
vide m onthly cash incom e for life to eligible workers.
D eferred profit sharing p la n s, sto c k b onu s plan s,
savings and thrift plans and other tax-qualified plans
have not, as yet, b een studied in detail. The em ploy­
m en t-rela ted h ea lth p la n s stu d ie d b y the B ureau
p r o v id e o n e or m o r e o f th e f o llo w in g b e n e fits :
H ospital, surgical, m edical, and major m edical ben e­
fits. M any also include dental and vision care ben e­
fits as w ell as benefits for out-of-hospital diagnostic
and laboratory se r v ic e s. L ife insurance (including
death ben efits), accidental death and dism em berm ent
insurance, and b enefits for short and long-term dis­
abilities are the m ore com m on benefits provided under
insurance plans.
Statistical reports o f the Bureau are based on probablity sam ples representing the u niverse o f plans filed
with the Departm ent o f Labor. T hese sam ples include
w ith certainty all the large plans— usually th ose having
at lea st 5,000 participants— and, depending on the
purpose o f study, sam ples o f sm aller plans, stratified
by such factors as w orker coverage, and type o f em ­
ployer unit (single or m ulti-em ployer). Studies o f this
type are m ade in anticipation o f requests for statisti­
cal data for legislation and for co llectiv e bargaining.
In addition, several studies have been made at the
request o f or under contract w ith other governm ent
agencies such as the L abor-M anagem ent S ervices A d­
ministration, the E m ploym ent and Training Adm ini­
stration (form erly th e M an p ow er A d m in istration),
and the Social Security Adm inistration.
For the statistical studies that are now in progress
the Bureau defines a single p en sion plan as on e where
th e fo llo w in g p ro v isio n s are id en tica l for all plan
participants: A ge and service requirem ents for parti­
cipation, vesting, normal retirem ent, early retirem ent,
and s p e c ia l ea rly retirem en t; d e fin itio n o f a full
year o f service in term s o f hours w orked; and defi­
nition o f “ break in se r v ic e .’’ P reviously, the Bureau
accepted the adm inistrator’s definition o f a plan and if
variations ex isted , analyzed the provisions applicable
to the largest group o f workers. Sim ilarly, the Bureau
defines a health and insurance plan as on e that provides
identical health b enefits for a specified group o f work­
 all workers in the groups receive the same
ers i.e .,


193

typ es and le v e ls o f b en efits. P reviou sly, as in the
analysis o f pension plans, if type or level o f bene­
fits varied, the benefits analyzed were those avail­
able to the largest group o f workers.
The detailed analyses o f health and insurance plans,
and o f p en sion plans in v o lv e the interpretation o f
com plex legalistic language and insurance industry
term inology, and conversion o f the interpretations into
cod es w hich are aggregated to provide universe esti­
m ates o f the number o f plans and workers covered
by specified plan provisions, requirem ents, etc. The
interpretation o f th ese aggregates are then summarized
in n o n tech n ic a l language as w e ll as in sta tistica l
tables.
D igests o f major provisions o f selected health and
insurance plans and selected pension plans are pre­
pared p eriod ically and p ub lished in the D i g e s t o f
S e le c te d H e a lth
a n d In s u r a n c e P la n s
and the D i g e s t
o f S e le c t e d
P e n s io n
P la n s .
W hile the plans (about
150) included in each D igest are not representative
o f the universe o f plans, they are “ leading’’ plans
that set the trend o f plan developm ent. Each plan was
initially selected b ecau se it represented a large number
o f workers in a particular industry or because o f its
unique features. The benefits described in each sum­
mary are th ose available to the largest group o f work­
ers covered by the plan. The D igests are kept upto-date by the issuance o f supplem ents. N ew D i g e s t s
are reissued every 3 or 4 years.
The digests o f selected health and insurance plans
and selected pension plans are prepared by analyzing
major provisions o f selected plans and then summar­
izing the analysis into nontechnical text. To assure
c o m p le te n e ss and a ccu ra cy o f in terp retation , the
sum m aries are review ed by the parties to the plans.
A lso , w h en ev er a plan is changed the parties are
requested to update the published plan summary. The
revised sum m ary, w hich is review ed by the Bureau
for com pleten ess and con sisten cy in interpretations,
is issued as a supplem ent to the D i g e s t . (D igests o f
other typ es o f em ployee benefit plans such as profitsharing, stock bonus and savings plans, and supple­
mental unem ploym ent plans have also been prepared
using the m ethod described ab ove, but they are not
kept up-to-date.)
Since alm ost all o f the plans summarized in each
ed itio n o f th e D i g e s t s w ere in clu d ed in th e p re­
vious edition com parisons are readily made. A rticles
on recent changes in these significant plans are regu­
larly published in the M o n t h l y L a b o r R e v i e w .
Other em ployee-benefit publications o f the Bureau
include articles on the incidence o f pension plans,
based on results o f the B ureau’s biennial surveys o f
expenditures for em ployee com pensation (see chapter
24) and on the prevalence o f collectively bargained
health and insurance and pension plans based on data
collected for the Bureau’s D i r e c t o r y o f N a t i o n a l a n d
In te r n a tio n a l L a b o r O r g a n iz a tio n s
(see Chapter 29).

194

BLS HANDBOOK OF METHODS
T e c h n ic a l R e f e r e n c e s

N um ber

N um ber

P e n s io n s
1.

2 .
3 .
4 .
5 .
6 .
7 .
8.

U JS. D epartm en t o f L abor, B ureau o f L ab or S tatistics, “ P en ­
sio n F orm u la Su m m arization , ’ ’ M o n th ly L a b o r R e v ie w , April
1971, pp. 4 9 - 5 6 .
_______“ G row th o f B e n e fits in a C ohort o f P en sion P la n s,”
M o n th ly L a b o r R e v ie w , M ay 1971, pp. 4 6 —50.
---------- C o v e r a g e a n d V e s tin g o f F u ll-T im e E m p lo y e e s U n d e r
P r iv a te R e tir e m e n t P la n s , A pril 1972 (B L S R eport 423), 1973.
_______“ S u rv iv o r’s P en sion s: A n E m erging E m p lo y ee B e n e ­
fit ,” M o n th ly L a b o r R e v i e w , July 1973, pp. 3 1 - 3 3 .
_______“ M u ltiem p loyer P en sio n Plan P rovision s in 1973,”
M o n th ly L a b o r R e v ie w , O ctob er 1974, pp. 1 0 - 1 6 .
_______ D i g e s t o f S e l e c t e d P e n s i o n P l a n s , 1973 E d itio n ,
1974 and su p p lem en ts.
_______“ C h an ges in S e le c te d P en sio n P lan s, M o n th ly L a b o r
R e v ie w , July 1975, pp. 2 2 - 2 7 .
____ . “ P r e v a le n c e o f P rivate R etirem en t P la n s ,” M o n th ly
L a b o r R e v ie w , O ctob er 1975, pp. 1 7 - 2 0 .

p r o v e m e n ts in H e a lth C a r e ,” M o n t h l y L a b o r R e v i e w ,
A u gu st 1972, pp. 3 1 - 3 4 .
1 0 .
__ D i g e s t o f H e a lth a n d I n s u r a n c e P la n s , 1974 E d ition ,
1975 and su p p lem en ts.
1 1 . _______ “ H ealth B en efits for L a id -o ff W ork ers,” P ress R e­
lea se issu ed F ebruary 28, 1975.
12. ______ . “ C h an ges in H ea lth C are P la n s ,” M o n th ly L a b o r
R e v ie w , D ecem b er 1975, pp. 2 2 - 2 6 .

H e a lth a n d I n s u r a n c e a n d R e t ir e m e n t
13.

U .S . D e p a r tm e n t o f L a b o r , B u rea u o f L a b o r S t a t is t ic s ,
“ U n io n s R ep ort S lo w R ise in H ealth , In su ran ce, and P en ­
sio n C o v e r a g e ,” M o n th ly L a b o r R e v i e w , January 1975,
pp. 6 7 - 6 9 .

D ir e c to r y
H e a lth a n d I n s u r a n c e

14.

U .S . D e p a r tm e n t o f L a b o r , B u rea u o f L a b o r S t a t is t ic s ,
A D ir e c t o r y o f B L S S tu d ie s in E m p l o y e e C o m p e n s a tio n ,

9.

U .S . D epartm en t o f L ab or, B ureau o f L abor S tatistics, “ Im-




1 9 6 0 -7 5 (1975), pp. 1 0 - 1 5 .

C h a p te r 2 7 .

W o rk S to p p a g e s

B ackground
W ork stoppage statistics are com piled by the Bureau
o f Labor Statistics to provide a quantitative m easure o f
the exten t to w hich disputes b etw een labor and man­
agem ent result in strikes or lock outs and o f the im­
m ediate e c o n o m ic d isru p tion resu ltin g from su ch
s to p p a g e s .1 W h en c o n sid e r e d alo n g w ith gen eral
econom ic m easures, th ese statistics also serve at tim es
as a broad indicator o f the state o f industrial unrest.
The first attem pt by any Federal agency to com pile
sta tistics on strik es w as m ade in 1880,2 w hen the
Bureau o f the C ensus sent questionnaires to em ployers
and workers involved in all disputes w hich w ere noted
in the public press during the year. Information w as
received on 762 situations. Som e data w ere obtained on
the cau ses o f strikes and their results, but not on the
number o f workers in volved or resultant days o f idle­
n ess.
The n ext collection o f strike statistics w as under­
taken in 1887, w hen the Bureau o f Labor, then in the
D epartm ent o f the Interior, exam ined files o f new spap­
ers, trade journals, and com m ercial periodicals for ref­
erences to strikes for all years from 1881 to 1886. Staff
m em bers visited the areas w here strikes w ere reported
and obtained detailed inform ation about each strike
from every available person or source. Studies utilizing
basically the sam e procedures subsequently w ere made
in 1894, 1901, and 1906. A s a co n seq u en ce o f these
efforts, data w ere published for the 1 8 8 1 -1 9 0 5 period
on the num ber o f strikes and w orkers involved, with
breakdow ns by industry and State; the number o f estab­
lishm ents involved; and the percentage o f strikes in­
volving labor organizations.
N o Federal agency collected national inform ation on
stopp ages occurring during the 1 9 0 6 -1 3 period. In
1914, relyin g e x c lu s iv e ly on printed so u r c e s, the
Bureau o f Labor Statistics attem pted to com pile a re­
cord o f all strikes and lock ou ts during the year. In the
follow ing year, the Bureau inaugurated a m ethod for the
collection o f strike and lock out material w hich has been
t h r o u g h o u t th is c h a p te r , th e term s “ w o rk s to p p a g e ” and
“ strik e” are u sed interchan geab ly; b oth term s, u n less oth erw ise
n o ted , a lso in clu d e lo ck o u ts. T h e d efin ition s, term s, and classifica­
tion s u sed by the Bureau in com p ilin g w ork stop page data w ere
ad o p ted for statistical and research p u rp oses and h ave no legal sig­
n ifican ce.
2On the State level, the Bureau o f Labor Statistics o f M assachusetts,
issu ed a report in 1880 o n strikes in that S tate from 1825. In 1881, the
B ureau o f Industrial S tatistics o f P en n sylvan ia issu ed a report on
strikes in that State from 1835.




follow ed , with m odifications, since that time. Briefly
stated, the procedure was to send questionnaires to the
parties involved in work stoppages, follow ing receipt
from the press and other sources o f n otices relating to
these situations.
Im provem ents in the program in 1927, in particular
the procurem ent o f data on the number o f workers
involved in all stoppages and the com putation o f days o f
idleness, inaugurated the modern series o f monthly and
annual strike d ata.3

D e s c r ip t io n o f t h e S e r i e s
The present series on work stoppages covers all
strikes and lockouts know n to the Bureau o f Labor
Statistics and its cooperating agencies. It covers all that
continue for 1 full day or shift or longer and involve six
workers or m ore. T hese lim itations on size and dura­
tion, som ew hat arbitrary but o f long standing, are
n ecessary for reasons o f efficien cy, and, in part, b e­
cause o f the difficulty involved in defining, identifying,
and securing inform ation on strikes that last a few hours
or less.
The Bureau defines a strike as a temporary stoppage
o f work by a group o f em p loyees to exp ress a grievance
or enforce a dem and. A lockout is defined as a tem por­
ary withholding o f work by an em ployer (or a group o f
em ployers) to enforce terms o f em ploym ent on a group
o f em p loyees. Since 1922, the Bureau has made no
attem pt to distinguish b etw een strikes and lockouts in
its statistics; both typ es are included in the term “ work
stop p ages” and, for the sake o f con ven ien ce in writing,
in the term “ strik es.”
A lthough an em ployer-em ployee dispute is im plicit in
these definitions, som e inclusions in the Bureau’s series
relate only indirectly to this concept. For exam ple,
jurisdictional strikes and rival union disputes betw een
tw o unions or more often have the em ployer on the
sidelines. In a sym pathy strick, the issue o f the stop­
page d oes not usually involve the im m ediate em ployer.
M oreover, protest strikes against the actions o f go v ­
ernm ental agencies are not the result o f a dispute be­
tw een an em ployer and his em ployees.
All stop p ages, w hether or not authorized by the
union, legal or illegal, are counted. On the other hand,
the B ureau’s series exclu d es strikes o f Am erican sea3F or additional inform ation on the early history o f the w ork sto p ­
page sta tistics program , se e B L S B u lletin 651, Strikes in the United
States, 1880 to 1936 (1938).

195

BLS HANDBO O K OF METHODS

196

m en or other workers in foreign ports and strikes o f
foreign crew s in Am erican ports. A lso excluded are
so-called slow d ow n s, where em p loyees continue at
work but at deliberately reduced production speed, and
th ose instances in w hich workers report an hour or tw o
late each day as a protest gesture or quit work several
hours before closing tim e to attend rallies or m ass m eet­
ings.
The number o f work stoppages occurring during a
given period provides a m easure o f the frequency o f
disputes; the severity and effect o f such actions are
m easured by the number o f w orkers in volved , duration,
and the resultant days o f id len ess. The basic statistical
unit in the B ureau’s series is the individual strike or
lockout. If groups o f em p lo y ees (regardless o f their
number and type and location o f em ploym ent) join in a
work stoppage for a com m on ob jective, their action is
classed as a single strike.
The figure used for the number o f w orkers involved in
a strike or lock out is the m axim um number actually
made idle in the establishm ent or establishm ents di­
rectly involved. N o distinction is made in arriving at
this figure b etw een the active participants in the strike,
the num ber o f union m em bers or workers covered by an
agreem ent, and th ose sent hom e by the em ployer when
a stoppage by one group or departm ent prevents plant
operation.
D ays o f id len ess, like the num ber o f workers in­
volved , are based on the id len ess at the establishm ent
or establishm ents directly involved. W orkers involved
m ultiplied by w orkdays lost equal total days idle. In
instances where the num ber o f w orkers idle varies dur­
ing the period o f the stoppage, appropriate adjustm ents
are made in this calculation. A llow an ce is made in these
com p u ta tio n s for h o lid a y s and d a y s n ot norm ally
worked.

A side from the clippings from new spapers and other
publications, m ost o f th ese sources have been d e­
veloped over a period o f years. A s a general rule, e x ­
pansion in the Bureau’s “ lead ” sources brings an in­
crease in the number o f stoppages reported, but has
little effect on the total number o f workers and days o f
idleness, becau se the added stoppages tend to be small.
After the receipt o f n otices regarding the existen ce o f
work stoppages, the Bureau mails questionnaires to the
parties involved to secure direct information on each
stoppage. Should a reply not be received within 3
w eek s, a second questionnaire is m ailed, and, in the
case o f continued nonresponse, a mailogram or tele­
gram may be sent, or an effort made to secure the
necessary data by telephone. In som e instances o f non­
response, field representatives o f the Bureau secure the
n ecessary data; in others, cooperating State agencies
may be asked to contact the parties.
The ty p es o f inform ation sought by the B ureau
through its questionnaire have changed over the years,
partly in response to changing needs. The primary func­
tion o f th ese reports is to com pile statistics, not to keep
records on the strike activity o f individual firms and
unions. The separate questionnaires currently used for
private and public sector disputes are show n on pages
1 9 4 - 196.4
A lthough strikes, by their very nature, are usually
matters o f public know ledge and o f reporting by n ew s­
papers and other publications, the Bureau holds confi­
dential the individual reports subm itted by private se c ­
tor em ployers and unions, as w ell as supplem entary
data collected through State or Federal agencies. The
rules o f confidentiality observed here are similar to
those follow ed in other Bureau surveys. This restriction
does not apply to strikes in the public sector.

E s t im a t in g P r o c e d u r e s
D a ta S o u r c e s a n d C o lle c tio n M e th o d s
The task o f collecting strike data has tw o basic ele­
m ents: (1) to learn o f w ork sto p p a g es w h en and
w herever th ey o ccu r, and (2) to obtain the n e c e s­
sary fa c ts regarding ea c h situ a tio n as q u ick ly as
p ossib le.
Inform ation about the ex isten ce o f stoppages cur­
rently is obtained from various sou rces, including: (1)
clippings from daily and w eek ly new spapers through­
out the country provided by com m ercial clipping ser­
vices; (2) n otices received directly from the Federal
M ediation and C onciliation Service; (3) a periodic com ­
pilation by the local offices o f the State em ploym ent
security agen cies, provided through the Em ploym ent
and Training Adm inistration o f the U .S . Departm ent o f
Labor; (4) a number o f other State agen cies, such as
State m ediation boards and labor departm ents; (5) vari­
ous em ployers and em ployer association s; (6) interna­
tional unions and their publications; (7) and other F ed­
eral agen cies and com m ission s.



Since the Bureau is able to obtain information on
virtually all work stoppages within the scope o f its
definition, estim ating is necessary only in the prepara­
tion o f its m onthly reports on the level o f strike activity
in the U nited States as a w hole. The availability o f
reasonably accurate data on the larger stoppages at the
time th ese estim ates are prepared— approxim ately 4
w eeks after the end o f the month o f reference— assures
approxim ate conform ity to the final statistics which are
based alm ost exclu sively on the parties’ replies.
M onthly estim ates are prepared on the number o f
stoppages, the number o f workers involved, and days o f
idleness. A s there is a lag b etw een the occurrence and
reporting o f a number o f relatively small strikes, the
number o f stoppages beginning during a given month is
estim ated by increasing the number o f strikes on w hich
4A m odified form o f this qu estion naire is used in th e c a se o f m o st
jurisdiction al d isp u tes and th ose in coal m ining.
In the ca se o f prolonged strik es, a le s s detailed qu estion naire is sen t
to the parties p eriod ically to d eterm in e the statu s o f the stop p age.

197

WORK STOPPAGES
BLS 3006
(Rev. J . 1974)
an

WORK STOPPAGE REPORT
Government

FormApproved
O.M No. 44-R
.B.
1397

U.S. DEPARTMENT OF LABOR
Bureau of Labor Statistics
Washington, D.C. 20212

This request for inform
ation relates to:

1.

Government Department, Agency, or Installation
Address:

Nam
e:
Facility w
here stoppage occurred (nam if different fromabove):*
e

Address:

Level (check one):

□ School d
istrict
□ O
ther (specify)

□ Federal
□ S
tate

Function (check one):
□ Adm
inistrative serv
ices
□ W
elfare services
□ Law enforcem and correction
ent
□ Fire protection______________
2.

□ M
unicipality
□ Countv
□
□
□
□

Sanitation services
Education
S
treets and highw
ays
Parks, recreation, libraries, etc.
Local no.

Address:

Affiliation:

Did th organization
e
call or support th
e
work stoppage?
□ AFL-CIO
□ O
ther union
□ Yes
□ No
ation
□ Em
ployee association □ No inform

Settlem
ent
reached on:

□ Yes

□ No

Settlem t
en
ratified on:

Em
ployees returned
to work on:

Scheduled w
orkweek prior to
stoppageD
ays _____ Hours___

Employees Affected

Total em
ployees idled at least one full sh
ift
or day:

(IMPORTANT - Include all em
ployees directly involved in th stoppage and em
e
ployees m idle by
ade
lack of work in th sam facilities or by observance of picket lin If exact figures are not available,
e
e
es.
please provide estim
ate.)

Did th num idled chan significantly during th stoppage?
e
ber
ge
e
□ Yes
□ No
(If “yes” please en ch ges innum idle an dates of ch ges on reverse side of th form
ter an
ber
d
an
is
.)
O
ccupational classification (check one or m
ore):
□ T ers
each
□ Policem
en
□ N
urses
□ Firem
en
□ O
ther professional and tech ical em
n
ployees
□ Sanitation m
en
□ Gerical
□ C
raftsm (specify) _
en
5.

D th organization
oes is
h official recogni­
ave
tio ?
n

Dates of Stoppage and Workweek

Stoppage
began on:
4.

H
ospitals and health serv
ices
Transportation and allied facilities
O
ther utilities
O
ther (specify)

Union or Association

Nam
e:

3.

□
□
□
□

□ O
ther blue collar and m
anual
□ O
ther (specify)

Agreement Information

Stoppage occurred (check one):
□ In attem
pting to obtain
recognition
□ In negotiating first
agreem t
en

□ D
uring agreem t term
en
(change in term not involved)
s
□ In renegotiating agreem t
en
(expiration or reopening)

□ No form agreem t involved
al
en
□ O
ther (specify)

M issu in dispute in order of im
ajor
es
portance:

Please specify th m
e ethod used to resolve th dispute (check one):
is
□ Agreem of th parties
ent
e
□M
ediation (conciliation)
□ R
eturned to work w
ithout agreem t
en
□ Fact-finding
□ Voluntary arbitration
□ Injunction (court order)

□ Com
pulsory arbitration
□ O
ther (specify)

Did agreem t to return to work include a procedure for handling any u settled m
en
n
ajor issu involved in the stoppage (e.g., by subm
es
ittal to arbitration or
fact-finding)?
□ Yes
□ No
If yes, note issu and procedures agreed upon on reverse side of th form
es
is
.
D a governm agency, or private individual, or organization a
id
ent
ssist in arran g th return to w
gin e
ork?
(C
heck one or m
ore):
□ Federal
□ State
□ Local

□ P
rivate

□ None

P
lease identify governm agency:
ent
Sign
ature of person m
aking report:

Title:

D
epartm or organization:
ent

* If m th one facility w involved, please en inform
ore an
as
ter
ation on reverse side of th form Also u reverse side for clarifying rem
is
.
se
arks, particularly
on n
ature of stoppage (m sick leave, or resign
ass
ation etc.).
s,




198

BLS HANDBOOK OF METHODS

BLS 8 7
1
(R J . 1974)
ev. an

FormApproved
O .B. No. 44-R
.M
0212

U.S. DEPARTMENT OF LABOR
Bureau of Labor Statistics
Washington, D.C. 20212

WORK STOPPAGE REPORT
The Bureau o f Labor Statistics will
hold all information furnished by
respondent in strict CO NFIDENCE

Please answ all questions
er

T request for inform
his
ation relates to:

No.

1.

Employer

Nam --------------------------------------------------------------------------e:

Ad

Num of establish en directly involved in w
ber
m ts
hich w
orkers observed picket lin
es:
If m than one establish en u reverse side; if one enter below:
ore
m t, se
a. Location ___________________________________________________
b. Industry ___________________________________________________
(Indicate m activity and principal products or services, e.g., M
ajor
ining-bitum
inous coal; C
onstruction-highw and streets; M
ays
anufacturing-w
ood
upholstered furniture; W
holesale trade-plum
bing supplies; Transportation-m
otor freight.)
2.

Union
Nam
e:

□ AFL-CIO
□ O
ther

Address:

Did th union call or
e
support th w
e ork
stop age?
p
□ Yes
□ No
□ No inform
ation

3.

Dates of Stoppages and Workweek

Stoppage
began on:

Settlem t
en
reached on:

Settlem t
en
ratified on:

Em
ployees return
ed
to work on:

Scheduled w
orkw prior to stoppage:
eek
D
ays

4.

H
ours

Employees Affected

Total em
ployees idled at least one full

(IMPORTANT - Include all em
ployees directly involved in th stoppage and em
e
ployees m idle by
ade
lack of work in th sam establish en or by observance of picket lin If exact figures are not
e
e
m ts
es.
available, p
lease provide estim
ates.)
Did th ndm idle ch
e
ber
ange sign
ifican during the stoppage?
tly
□ Yes
□ No

day or shift: [

1

(If yes, please en ch ges in th num idle and dates of ch ges on reverse side.)
ter an
e
ber
an
O
ccupational classification (check one or m
ore):
□ Professional and tech ical
n
□ C
lerical

□ S
ales
□ Production an
d
m
ainten ce
an

5. Contract Status
Stoppage occurred (check one):
□ In n
egotiating 1 agreem t
st
en
or obtaining union recognition
□

6.

□ Protective
□ S
ervice

□ In renegotiating agreem t
en
(expiration or reopening)
□ No form agreem t involved
al
en

During agreement term (change
in terms not involved)

□ O
ther (specify)

□ O
ther (specify)

Major issues in dispute, in order of importance:

(Please list) ------------------------------------------------

7.

Did employees return to work—
□ voluntarily, or

□ under th term of a court order or in ction
e
s
jun
?

8.

Did agreement to return to work include a procedure for handling any unsettled major issues involved in the stoppage (e.g., by
submittal to arbitration)?
□ Yes
□ No
If yes, note issu and procedures agreed upon on reverse side of th form
es
is
.

9.

Did a government agency, or private individual, or organization assist in arranging the return to work?

(Check one or m
ore):

□ Federal

□ State

□ Local

□ Private

□ None

Please identify governm agency _______________________________________________________________________________
ent
Sign
ature of person m g report:
akin
Title:
Com
pany and organization:




USE REVERSE SIDE FOR ANY CLARIFYING REMARKS

199

WORK STOPPAGES

Supplem entary Inform ation for item s 1 and 4
If the stoppage involved m ore than one establishm ent or if idleness varied from period to period during the stoppage, please use
the following space to indicate the num ber idle in eacli establishm ent and the variation in idleness at different dates. Include
b oth w orkers directly concerned and those m ade idle because o f dispute in the same establishm ent.
IF EXACT FIGURES ARE NOT AVAILABLE, PLEASE FURNISH ESTIMATES.
Establishment involved and location
(City, County, State)

REMARKS:




Industry or
principal
product

Approximate number
of workers idle
a full shift or more

Dates this number
was idle
a full shift or more

200

BLS HANDBOOK OF METHODS

leads have been received by a percentage which is fixed
for each calendar month. An estim ate o f the total
number o f stoppages in effect during the month is ob­
tained by supplementing the latter estimate by a percen­
tage o f the stoppages in effect during the prior month.
In estimating the number o f workers involved and
total idleness, efforts are made to obtain as much pre­
liminary information as possible on the size and dura­
tion o f individual large stoppages—those of at least 500
workers or 5,000 days o f idleness. To the known figures
for these large stoppages is added the product o f the
estimated number o f smaller strikes and the average
number o f workers (or days) that previous experience
indicates for such stoppages.
In its preliminary reports, as well as in its final re­
ports, the Bureau relates the days o f idleness to the total
estim ated working time o f all workers. The “ total
econom y” measure o f strike idleness, which was insti­
tuted in 1967, includes government and agricultural
e mployees and private nonfarm workers, but excludes
forestry, fisheries, and private household employment
in its employment count and in the computation o f
idleness ratios. Before 1967, the BLS series excluded
government and agricultural workers from employment
totals, but accounted for time lost by these workers
while on strike. This reevaluation o f methods has im­
proved the calculations o f idleness and made the
Bureau’s measurement o f work stoppage intensity na­
tional in scope.

A n a l y s i s a n d I n t e r p r e t a t io n

The data p resented in the p arties’ reports are
analyzed and classified according to a number o f sig­
nificant factors, briefly described here:
(1) Each strike is assigned a n in d u s tria l c la ssifica tio n
in accordance with the S ta n d a r d In d u stria l C la ssifica ­
tion M a n u a l prepared by the Office o f Management and
Budget.® In those cases in which a stoppage affects
workers in more than one industry, one o f two proce­
dures may be followed. If the stoppage is small, the
strike is classified in the industry in which it was in­
itiated; in large interindustry stoppages, a stoppage is
recorded for each industry affected, and the approxi­
mate numbers o f workers and idleness are allocated to
each.
(2) The d u ra tio n o f each stoppage is taken as the
number o f calenda