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I lS I lillllllillll

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Bulletin N 1168
o.

James P. Mitchell, Secretary
BUREAU OF LABOR STATISTICS
Ayrness Joy Wickens, Acting Commissioner

L
a




Techniques of Preparing
Major BLS Statistical Series




B u lle tin N o . 1 1 6 8
D E C E M B E R 1954

U N IT E D

STATES

D EPARTM EN T

O F

J a m e s P . M itc h e ll,

LABOR

S ecretary

BUREAU OF LABOR STATISTICS
A r y n e s s Jo y W

i c k e n s , Acting

Commissioner

For s l by the Superintendent of Documents, U. S. Government Printing Off c
ae
ie
Washington 2 , D. C. - Price 65 cents
5

This bulletin was edited by Benjamin Lipstein of the Office of Statistical
Standards under the direction of Samuel Weiss, Chief Statistician of the
Bureau at the time when the bulletin was in preparation. The individual
chapters were prepared by the Bureau’s operating divisions.

n




Preface
Over the years, as the American economy has grown in size and complexity,
there has been a parallel growth in the importance of economic statistics.
Today, more than ever, the key decisions which affect public and private
policies can be made only after careful study of basic economic facts and
trends— and these, in many cases, can best be measured and summarized in
statistical series. Some of these current series which have come to be ac­
cepted as “ economic indicators” provide a broad gage of the level and trend
of our economy.
This reliance on economic data, in business and labor circles as well as in
Government, has placed a greater responsibility on the producers of statistics
to describe the scope and nature of their product, to indicate the reliability
(or limitations) of their data, and to explain the methods used in their
preparation. The Bureau of Labor Statistics— as a major producer of current
economic statistics— has long recognized this duty. The first version of this
volume in 1950 was intended to fulfill part of this obligation.
But the conditions under which statistics are prepared, and the methods
of compiling them, are constantly changing. In establishing its Office of
Statistical Standards in 1950 the Bureau reaffirmed its policy of working
continuously to improve the quality of its data and to increase their useful­
ness. The present volume is designed to meet the need for an up-to-date
comprehensive description of the methods used in preparing the BLS
statistical series.
The uses of BLS statistics are wide and varied. Their differing needs and
uses mean that data ideally suited to one purpose may have limitations for
another. Only the user, confronted with a specific problem, is able to judge
whether the accuracy and reliability of statistics being used are adequate to
meet the needs of his problem. The chapters on techniques used in the
preparation of major BLS series give the users the information necessary for
evaluating the fitness of the statistics for their own use.
In addition to outlining methodology and scope of major BLS statistical
series, this volume also presents the background and uses; concepts and
definitions used; sources; sampling and estimating methods; and the limita­
tion of the series and available measures of their reliability. A selected
bibliography is provided at the end of each chapter.
This bulletin supersedes an earlier edition, published in 1950 as Bulletin
9 9 3 .
The technical descriptions of major Bureau series in the earlier volume
have been revised and expanded to reflect the most recent developments in
our work. An introductory chapter has been added which describes the
similarities and differences in methodology of these series.




in




C o n ten ts
Chapter 1.— Introduction___________________________________________________________
Elementary unit o f inquiry_____________________________________________________
Sampling fram e_________________________________________________________________
Lim itation of the fram e_________________________________________________________
Sampling m ethods______________________________________________________________
M ethods of collection___________________________________________________________
Standardization of classifications and definitions_______________________________
Index numbers__________________________________________________________________
Voluntary reporting and confidentiality________________________________________

Page
1
2
2
3
3
5
6
6
7

Construction Statistics
Chapter 2.— Estimating national housing volum e___________________________________
Background and uses___________________________________________________________
Concepts and definitions________________________________________________________
Sources__________________________________________________________________________
Sampling plan___________________________________________________________________
Estimating procedures__________________________________________________________
Lim itations_____________________________________________________________________
Reliability_______________________________________________________________________
B ibliography____________________________________________________________________
Chapter 3.— Estimating expenditures for new construction________________________
Background and uses___________________________________________________________
Concepts and scope_____________________________________________________________
Sources and general estimating m ethods------------------------------------------------------------Specific estimating procedures— type of construction___________________________
Lim itations_____________________________________________________________________
Bibliography____________________________________________________________________
Chapter 4.— Labor required for new construction___________________________________
Background and uses___________________________________________________________
Concepts and scope_____________________________________________________________
Estimating procedures__________________________________________________________
Lim itations_____________________________________________________________________
Bibliography____________________________________________________________________

8
8
9
10
12
13
14
14
15
16
16
17
18
19
27
28
30
30
30
31
31
32

Industrial Hazards
Chapter 5.— W ork-injury and accident-cause statistics_____________________________
Background_____________________________________________________________________
Concepts and scope_____________________________________________________________
Survey methods and estimating procedures____________________________________
Limitations of the surveys----------------------------------------------------------------------------------Bibliography____________________________________________________________________

33
33
34
36
40
40

Manpower and Employment Statistics
Chapter 6.— Measurement of industrial em ploym ent_______________________________
Background_____________________________________________________________________
Uses_____________________________________________________________________________
Concepts and scope_____________________________________________________________
Survey m ethods_________________________________________________________________
Publication and revisions_______________________________________________________
Differences between BLS and other em ploym ent statistics_____________________
Lim itations_____________________________________________________________________
Bibliography____________________________________________________________________




42
42
42
42
44
48
48
49
49
v

VI

C O N TEN TS

Manpower and Employment Statistics— Continued

Page

Chapter 7.— Hours and earnings in nonagricultural industries_________________________
Background and uses______________________________________________________________
C on cepts__________________________________________________________________________
S cope______________________________________________________________________________
Survey m ethods___________________________________________________________________
Publication and revisions_________________________________________________________
Lim itations________________________________________________________________________
B ibliography_______________________________________________________________________
Chapter 8.— Measurement of labor turnover__________________________________________
Background_______________________________________________________________________
Concepts and scope________________________________________________________________
Publication_____________________________________________________________________
Sources and estimating procedures_____________________________________________
Lim itations________________________________________________________________________
B ibliography____________________________________________________________________

51
51
51
51
52
54
55
56
57
57
57
59
59
61
62

Prices and Cost of Living
Chapter 9.— The Consumer Price Index____________________________________________
Background and uses___________________________________________________________
Index measurement_____________________________________________________________
The “ index market basket” _____________________________________________________
Prices used in the index calculation____________________________________________
Sampling m ethods______________________________________________________________
The index form ula_________________________________________________________________
Estimating and calculating procedure__________________________________________
Lim itations_____________________________________________________________________
B ibliography____________________________________________________________________
Chapter 10.— Wholesale prices indexes______________________________________________
M onthly and weekly indexes___________________________________________________
Background and uses______________________________________________________
Concepts and scope________________________________________________________
Survey methods and estimating procedures________________________________
Selection of sources____________________________________________________
W eights_______________________________________________________________
Calculation____________________________________________________________
Publication and revisions______________________________________________
The weekly index_____________________________________ ^_______________
Index form ula_________________________________________________________
Lim itations_________________________________________________________________
R eliability__________________________________________________________________
D aily index_____________________________________________________________________
Bibliography____________________________________________________________________

63
63
64
64
65
66
67
68
69
79
82
82
82
83
85
85
86
86
90
90
90
92
92
93
95

Studies of Wages and Industrial Relations
Chapter 11.— Studies of occupational wages and supplementary benefits___________
Background and uses___________________________________________________________
C oncepts________________________________________________________________________
Scope of survey_________________________________________________________________
Survey methods and estimating procedure_____________________________________
Publication______________________________________________________________________
Lim itations_____________________________________________________________________
B ibliography____________________________________________________________________
Chapter 12.— Collection and com pilation of work stoppage statistics_________________
Background_______________________________________________________________________
Concepts and scope_____________________________________________________________
Survey methods and sources___________________________________________________
Calculation procedures____________________________________________________________
Lim itations________________________________________________________________________
Bibliography______________________________________________________________________




96
96
96
97
97
100
100
105
106
106
106
107
107
109
112

YII

C O N TEN TS

Studies of Wages and Industrial Relations— Continued
Chapter 13.— The collection and analysis of collective bargaining agreements_____
Background and uses___________________________________________________________
Concepts and scope_____________________________________________________________
M ethods of collection and analysis_____________________________________________
Lim itations_____________________________________________________________________
Bibliography____________________________________________________________________

Page
113
113
113
115
118
118

Productivity and Technological Development
Chapter 14.— The measurement of trends in output per m an-hour_________________
Background and uses___________________________________________________________
Some general concepts__________________________________________________________
D escription o f industry indexes based on secondary source d a ta ______________
Concepts___________________________________________________________________
Sources and methods of calculation________________________________________
Physical production measurement_________________________________________
M an-hour measurement____________________________________________________
Lim itations________________________________________________________________
Bibliography____________________________________________________________________




119
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119
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120
121
121
123
124
125




T e c h n iq u e s o f P re p a r in g M a jo r B L S S t a t is t ic a l S e r ie s

C h ap ter 1.

The act creating the Bureau of Labor in 1884
specified its duties as follows:*
1
“ To collect information upon the subject of labor,
its relation to capital, the hours of labor, and the
earnings of laboring men and women, and the
means of promoting their material, social, intel­
lectual, and moral prosperity” : Subsequent legis­
lation and Executive orders further elaborated
the Bureau's areas of responsibility for the collec­
tion, compilation, and dissemination of economic
data.2
The Bureau of Labor Statistics is one of the
major fact finding agencies of the United States
Government. From its inception, as the Bureau
of Labor, it has been concerned with developing
current economic statistics to fill the needs of a
growing and more complex economy. One of the
first regularly published series of the Bureau was
the Wholesale Price Index. Other early areas
of investigation related to wage rates and the
differences in output between hand and machine
labor. Shortly after the Bureau of Labor became
the Bureau of Labor Statistics in the new Depart­
ment of Labor, economic pressures of the First
World W ar resulted in the development of the
Consumer Price Index.3 Over the ensuing years,
series such as those for employment, earnings,
housing starts, and changes in unit man-hour re­
quirements have been added. Some of these
series have come to be considered important eco­
nomic indicators.
The Bureau is responsible for both current eco­
nomic series and general economic studies.4 In
•Prepared b y B en jam in L ip stein o f the O ffice o f Statistical Standards.
i U . S. Stat. at Large N o . 23 (p . 60).
a U . S. Stat. at Large, N o . 25 (p . 182); N o . 37 (p . 736); N o . 46, ch ap . 873
(p . 1019).
a O riginally called the C o s t o f L iv in g In dex.

3 0 4 5 2 3 — 55------ 2




In tro d u ctio n *

the preparation of its basic series, a great mass of
related economic data are collected either in the
process of researches in these areas or as byproducts
of these activities. Periodically, special surveys
and analyses are conducted to enhance the uses
and maintain the currency of the techniques in­
volved in the development of such fundamental
statistics. A notable instance is the Consumer
Expenditure Survey conducted in connection with
the revision of the Consumer Price Index which
resulted in the accumulation of a wealth of data
regarding purchasing habits of American families.
The Survey of Residential Builders which revealed
the extent of owner and operative-built dwelling
units was an outgrowth of the data used in esti­
mating new housing starts.
M any of the underlying statistical processes
involved in the preparation of BLS series are
essentially the same although the scope of each
series may differ. This introductory chapter de­
scribes some of the important steps in the develop­
ment of these economic statistics; the areas of
similarity and difference; and the common rules,
definitions, and classification systems under which
many of them are prepared.
* T h e m a n y areas o f e co n o m ic in vestiga tion w ith in th e B u reau are d iv id e d
in to subject m atter fields. T h e D iv is io n o f C o n stru ctio n Statistics is c o n ­
cerned w ith n e w h ou sin g starts a c tiv ity , con stru ction expenditures an d labor
requirem ents an d n e w housing characteristics. T h e B ran ch o f Industrial
H azards ascertains w o rk -in ju ry freq u en cy rates and estim ates o f the v o lu m e
o f disabling w o rk injuries, an d also d evelop s m aterial o n accid ent causes.
T h e D iv is io n o f M a n p o w e r an d E m p lo y m e n t Statistics is con cern ed w ith a
w id e variety o f p roblem s such as m a n p o w e r requirem en ts, occu p a tion a l o u t­
lo o k , levels o f e m p lo y m e n t, hours, earnings, an d labor tu rn over. T h e W h o le ­
sale and C on su m er P rice Indexes are prepared b y th e D iv is io n o f P rices and
C ost o f L iv in g . M a tte rs relating t o m easurem ent o f u n it labor requirem ents
are the respon sibility o f th e D iv is io n o f P r o d u c t iv ity an d T ech n o lo gica l D e ­
velop m en t. T h e D iv is io n o f W ages a n d Industrial R elation s is concern ed
w ith occu p ation al, industrial, co m m u n ity an d geographic w age structures,
current w age d evelop m en ts, w o rk stoppages, a n d colle ctive bargaining eontracts.

1

2

T E C H N I Q U E S

OF

PREPARING

M A J O R

Elementary Unit of Inquiry
The business establishment has been found to be
the most satisfactory source of data for most
industrial statistics because it is the first level of
business organization for which complete records—
i. e., production, employment, purchases, sales,
wages, inventories, etc.— are generally main­
tained. The establishment is the primary unit of
organization in the business economy and is the
first integrated level of combination of employees
devoted to the production of a related group of
products or services.
In investigations of employment, wage, hazard,
and output per man-hour statistics conducted by
the Bureau, the following standardized definition
of the establishment is utilized:
“ An establishment is generally defined as a
single physical location where business is con­
ducted or where services or industrial operations
are performed; for example, a factory, mill, store,
mine, or farm. Where a single physical location
comprises two or more units which maintain
separate payroll and inventory records and which
are engaged in distinct or separate activities for
which different industry classifications are provided
in the Standard Industrial Classification, each
such unit shall be treated as a separate establish­
ment. An establishment is not necessarily iden­
tical with the business concern or firm which may
consist of one or more establishments. It is also
to be distinguished from organizational subunits,
departments, or divisions within an establish­
ment.” 5
In studying prices and the cost of living, the
elementary unit of inquiry is also frequently the
establishment. A t the retail level, price quota­
tions are obtained from retail outlets or service
establishments; for wholesale prices, the elemen­
tary sampling unit is the producer, manufacturer
or factory, or as close to that level as is feasible.6
Consumer expenditure studies and rent data
collection, of necessity, require focusing on the
family and dwelling unit, respectively, as the
elementary unit of inquiry.
The minor civil division is the elementary unit
of inquiry for new housing starts since building
permits are frequently issued at that level. For
1 Standard In du strial C lassification M an u a l, B u reau o f the B u d ge t, V o l. I,
M an u factu rin g Industries, N o v . 1945 (p. 1).
8 F o r som e staple com m od ities su ch as w h eat, prices are ob ta in e d from
c o m m o d ity exchanges.




BLS

STATISTICAL

SERIES

other surveys of new housing, such as housing
characteristics, sales, or rental prices, the survey
unit is a building permit or group of permits since
that is the basis for the major part of the sampling
frame. Subsequent followup of these permits may
in turn lead to building contractors or homeowners.
Sampling Frame
One of the first steps in a statistical investigation
is the definition of the universe of inquiry. This
is followed by the development of a frame needed
for sample selection.
In much of the Bureau’s work, the universes of
inquiry relate to the characteristics of establish­
ments within a specific industrial segment of the
economy. The various segments of the economy
have been classified in terms of the Standard
Industrial Classification (SIC) Manual and the
Social Security Board (SSB) Industrial Classi­
fication code.7 The Bureau uses the SIC system
for manufacturing industries and for government
and the SSB system for other nonmanufacturing
industries. Specific studies are defined as includ­
ing establishments falling within either a specified
4 -, 3-, or 2-digit industry group, or within a stand­
ard grouping of these industrial classes. For new
surveys, the sampling frames are lists of estab­
lishments obtained from employer reports to the
Bureau of Employment Security under the Unem­
ployment Insurance program. In going surveys,
sample supplementation or modification is also fre­
quently accomplished through reference to Unem­
ployment Insurance lists. The completeness of
these frames bears on the reliability of many of
the estimates derived for these programs.
The sampling frame should not be confused with
a benchmark which is a reasonably complete count
of the characteristic being estimated at a specific
date. Ideally, the characteristics being measured,
e. g., total employment, should be the same in the
benchmark and in the sampling frame for the same
date. In practice, this is not always possible and
is not always critical if the excluded establishments
represent only a small proportion of the universe.
The bias in sampling that results from excluding the
smaller establishments is frequently less than the
variance accompanying alternative probability
designs.8 Thus, for employment, the benchmark
7 O p. cit., Federal Secu rity A g e n cy , Social Secu rity B oa rd , 1942.
8 See C h a p . 6, M easurem ent o f In du strial E m p lo y m e n t.

I N T R O D U C T I O N

includes employment in all establishments (Un­
employment Insurance reporters augmented by
firms not covered by such programs) while the
sampling frame, when derived from Unemploy­
ment Insurance listings only, frequently excludes
establishments with less than eight employees.
In developing the sampling frame for pricing
retail foods, the important distinctions are between
chain and independent food stores, classified by
type of operation such as combination grocery and
meat store, grocery only or specialty store; in
apparel, between department and specialty stores.
A t the wholesale level, it is important to identify
establishments which are large volume sellers and
price leaders, as well as the smaller producers
which may be characterized by different price
movements.
In the case of household or dwelling unit surveys
it is uneconomic and unnecessary to list all house­
holds or dwelling units. Area or block sampling is
used to achieve comparable results. This process
involves a complete listing of blocks and segments
within the sample area. A sample of blocks and
segments is then selected; within these, all house­
holds or dwelling units are listed from which a
sample of such units is then selected for actual
enumeration. The delineation of the sampling
frame is less difficult where the sampling units are
blocks, segments, minor civil divisions, counties,
groups of counties or urbanized areas, as in the
case of the rent component of the Consumer Price
Index and the housing starts survey.
Limitation of the Frame
Of necessity, any list of establishments compiled
from historical reports on some industrial classifica­
tion basis is out of date almost at its inception
because of births and deaths of establishments or
of changes in industrial classification resulting from
shifts in the establishment’s production. There­
fore, in most Bureau programs, part of the indus­
trial classification process entails a determination
of the establishments within the scope of the
industry being studied. In the employment
statistics program, the industrial classification of
manufacturing establishments is checked each
year by a supplementary product questionnaire
which requests information on the types of prod­
ucts produced and their relative importance in the
establishment. Answers to this questionnaire



3

permit appropriate revisions in the industrial
classification of establishments. Nonmanufac­
turing establishments are classified once a year
based on a description of activity given on the
regular report form. In the case of wage, work
injury, and output per man-hour surveys, the
determination of in- and out-of-scope establish­
ments is made during each survey.
In sampling from lists, as is the case with estab­
lishment sampling, delineation of the universe
involves considerable difficulty. There is no
definitive way of knowing when the entire popula­
tion of establishments has been included in the list.
Only after careful examination of supplementary
lists can it be determined that the compiled list
is reasonably complete. A limitation in the use
of Unemployment Insurance listings is that the
laws in some States exclude employers with fewer
than eight employees. For wage studies, this
limitation is not serious and the universe is defined
to exclude firms with less than eight employees or,
on occasion, some other size depending on the
nature of the particular survey. Another problem
in the use of lists arises out of the time lag in their
preparation with the result that the universe of
inquiry tends to under-represent new firms. New
firms established subsequent to the reporting
period in which the list is compiled are not included
The effect of new firm formations on the establish­
ment listing varies with the industry. Special
attention is given therefore to industries charac­
terized by rapid turnover and resultant high rates
of business births and deaths— existing listings are
supplemented by reference to trade publications,
directories, associations, and unions.
Errors of the frame can also result from respond­
ent error. Since an establishment’s industrial
classification is based upon its own report, the
final statistics published for a particular industry
contain not only sampling errors, but also errors
in classification resulting from the respondent’s
incorrect reporting or incorrect industrial coding.9
Sampling Methods
Sample surveys rather than complete enumera­
tions are the basic means which enable the Bureau
to produce timely data. A number of different
9 A test o f the V a lid ity o f C o lle ctin g W age Statistics b y M a il Q uestion­
naire, b y Sam uel E . C o h e n and B en jam in L ip ste in , Journal o f the A m e rica n
Statistical A ssociation , June 1954.

4

T E C H N I Q U E S

OF

PREPARING

types of sampling and collection methods are used
by the Bureau, stemming from the needs of pro­
grams and available resources. Probability sam­
pling is used in the development of many impor­
tant series, e. g., housing starts, wage rates, and
selection of Consumer Price Index cities and
retail food stores. In other instances, nonproba­
bility, cutoff type samples have been developed
primarily because of the efficiency of such sam­
pling types in may segments of the business
economy. This technique is discussed in the
chapter on industrial employment.
The Bureau has found that complete enumera­
tion is desirable in special instances. Most note­
worthy is the permit segment of the national
housing starts series which is based on a complete
canvass of building permit officials. In this
instance complete coverage is justified because:
(1) the mail collection is very inexpensive; and
(2) the variation in housing activity between cities
is high. In the case of statistics of work stoppages
which are called rare events1 instatistical terminol­
0
ogy, the Bureau attempts to obtain complete
coverage of all work stoppages involving six or
more employees because of the difficulties of
estimating this statistic by sampling methods.
Where the sampling unit is the establishment
and where the estimate relates to the number of
employees, e. g., distribution of employees by
wage rates, occupations, and output per man-hour,
the design of the sample is usually of a uniform
nature. The listing of establishments is grouped
in two or more size strata, in terms of number of
employees per establishment. If there are two
strata, large and small, the large establishment
stratum is usually given complete coverage and a
sample is selected from the small establishment
stratum. The definition of large establishments is
frequently a function of the size of the requisite
sample. For small samples, only a few establish­
ments may be classified as large; for large samples
many more establishments would be so classified.
Such a design is usually optimum with respect to
allocation. A sample design is optimum with
respect to sampling efficiency when the sampling
error is a minimum for a fixed cost or cost is
minimized for a specified degree of accuracy.
w Statistically, a characteristic is a rare e ve n t w h e n its relative occurence in
th e p opu lation is sm all.




M A J O R

BLS

STATISTICAL

SERIES

In the employment, hours, and earnings, and
turnover programs a variation of this design called
cutoff sampling is used. The establishments are
arrayed by size and all establishments above a
specified size are included in the sample. The
cutoff size varies among industries within States.
The establishment is a highly efficient unit of
sampling for many of the Bureau’s investigations
and often the only possible one. The employ­
ment, productivity, wage, and hazard statistics
programs are concerned with certain characteris­
tics of groups of employees. The establishment
represents a large clustering of employees and
thus provides an inexpensive source of information
for the basic elements of analysis. Character­
istics such as employment, earnings, wages, and
occupational distributions, and work injuries are
easily obtained at the establishment level. Accu­
racy of response is an important additional advan­
tage to the obvious cost advantage of sampling
establishments rather than households or individ­
uals. Information collected from establishments
is generally obtained directly from accounting
records. Further, the industrial classification of
establishments is based on actual production
records or close approximations. Employees gen­
erally have such limited knowledge of their own
establishment that it could not be properly classi­
fied by industry type. Response errors, in the
reporting of wage statistics and occupations, tend
to be of much greater magnitude in household
surveys than in establishment surveys.
Establishment sampling for retail pricing follows
a pattern of allocation similar to that for the
employment and wage programs. In price investi­
gations, however, the measure of size of the estab­
lishment is the volume of sales rather than of
employment. Thus, in food pricing for the
Consumer Price Index, stores are stratified into
chains (large) and independents (small). Differen­
tial rates of sampling for price quotations are
used in these two strata.
Probability area sampling is used in selecting
Consumer Price Index cities and in the housing
starts series. These designs are of greater com­
plexity, as a result of the special estimating
techniques used. References to the technical
aspects of these designs will be found in the
chapters on the CPI and housing starts series.

INTRODUCTION

Methods of Collection
The Bureau uses a variety of means for collect­
ing data: namely, mail schedule, personal inter­
view, telephone, and telegram. The mail schedule
predominates as a means of collecting basic data
because of the low cost per respondent, the
general high rate of response obtained by the
Bureau, and the accuracy of the returns.
A unique feature of the Bureau's mail collection
program is the shuttle schedule, which has been
used for many years in a number of monthly
surveys. This type of collection form is used
widely in the collection of data on employment
and payrolls, turnover, and wholesale prices.
Space is provided on the schedule for the entry
of monthly data throughout the year. In the
first month, e. g., January, a schedule is sent to
the respondent, requesting submission of January
data and return of the schedule to the Bureau.
When the schedule is returned, the data are
edited and recorded. The same schedule is
returned to the firm for the February entries.
In reporting February data, the respondent can
refer to the January entries. This method of
collection assures a higher level of consistency in
reporting than might result from independent
schedules. It becomes a simple matter for both
the respondent and the Bureau to review the
schedule for reasonableness. This advantage is
of considerable importance for time series, since
respondent variability from month-to-month is
minimized. There is the further advantage that
addressing of forms and entry of area, industry,
and other codes need be done only once a year.
Thus, costs of operation and possibility of coding
errors are reduced.
The type of collection medium used in the
Bureau depends for the most part on the com­
plexity of the data. Surveys which are more
complex are generally conducted by the direct
interview technique. Examples of these are the
Consumer Expenditure Survey, some types of
direct unit man-hour studies, and certain wage
investigations which require considerable detail
from the respondent. In such surveys, rarely will
a respondent be willing to devote the time required
to complete the mail questionnaire, and frequently
he may not have the specialized knowledge
necessary to complete the survey schedule.
Definitions and concepts employed in these



5

surveys are complex, thus requiring execution of
the schedules by trained investigators. In the
case of the Consumer Expenditure Survey, an
interview may exceed a full day. A single inter­
view at a plant in a wage or unit man-hour study
at times lasts a full day and may require a number
of call backs. In these situations the investigator
may question several company officials on a series
of specific problems, but almost always directly
consults the establishment's detailed accounting
records.
Field interviewers are required in area sampling
where lists of the basic units of enumeration are
not available. For example, there is no single
source to which the Bureau may direct an inquiry
concerning new housing activity in nonpermit
issuing areas. To obtain such data, a field enumer­
ator must canvass the sample area and enumerate
all new housing starts.
Factors relating to commodity quality in many
important segments of the Consumer Price Index
require the collection of price data by field enu­
merators. A fundamental operational principle of
the index is “pricing by specification." Compara­
bility of price quotations from month-to-month is
maintained by rigid specifications for the com­
modities included in the index. The pricing of
certain wearing apparel calls for highly trained
commodity specialists whose function is the pricing
of comparable items from month-to-month. Vari­
ations in thread count, stitching, and trim are very
often the indirect factors in price changes—i. e.,
price change through quality variation. Food
pricing involves essentially the same problem.
Bureau agents must not only watch for quality
variations but must also keep the Bureau informed
of the disappearance and reappearance of com­
modities.
A program of quality control of field inter­
viewers was recently inaugurated by the Bureau
to insure an adequate level of quality of data col­
lection. Under this program, acceptability of the
interviewer is determined by the use of a sequential
sampling plan. In this plan, a sample of each
interviewer's work is revisited by supervisory per­
sonnel who determine the accuracy of the original
interview, compliance with instructions and other
predetermined criteria related to the specific pro­
gram. An important feature of the program in­
cludes the setting of criteria for acceptable
interviews in widely differing situations.

6

T E C H N I Q U E S

OF

PREPARING

Standardization of Classifications and Definitions
The U. S. Bureau of the Budget’s Standard
Industrial Classification System is basic to this
Bureau’s industrial statistics program for manu­
facturing industries. As stated in the Foreword
to the Standard Industrial Classification Manual,
the code “is intended primarily as an aid in secur­
ing uniformity and comparability in the presenta­
tion of statistical data collected by various agencies
of the United States Government, State agencies,
trade associations, and private research agen­
cies.” 1 It serves this same purpose within the
1
Bureau, fostering comparability of data collected
in employment, wages, earnings, injuries, and
other series.
The following general principles were used as
guides in developing this classification system: 1
2
(1) The classification should conform to the
existing structure of American industry.
(2) The reporting units to be classified are
establishments, rather than legal entities or
companies.
(3) Each establishment is to be classified accord­
ing to its major activity.
(4) To be recognized as an industry, each group
of establishments must have significance from the
standpoint of the number of establishments, num­
ber of wage earners, volume of business, employ­
ment and payroll fluctuations and other important
economic features.
The Social Security Board’s Industrial Classifi­
cation Code serves the same function for nongov­
ernment, nonmanufacturing statistics compiled by
the Bureau. Under these standard systems,
establishments can be classified on either a 2-, 3-,
or 4-digit industry basis depending on the detail
desired.1
3
Where related statistics cut across program lines
or across Government bureaus, the Bureau of
Labor Statistics cooperates to the maximum
extent possible in the Bureau of the Budget’s
efforts to obtain adherence to standard definitions
of terms to assure maximum comparability.
The use of the definition of establishment described
earlier (p. ,2) is a case in point. Of outstanding
ii s ta n d a rd In du strial Classification M a n u a l, B ureau of the B u d g e t, Vol*
I, M an u factu rin g In dustries, N o v e m b e r 1945.
is I b id . (p. I V ) .
is A n exam ple o f a 2-digit group is M a jo r G rou p 20— F o o d an d K in d re d
P rod u cts w h ich is com p osed o f a n u m b e r o f 3-digit groups one o f w h ich is
G ro u p N o . 201— M ea t P rod u cts w h ich is in turn co m p o se d o f a n u m b e r o f
4-digit industries one o f w h ich is In d u s try N o . 2011— M e a tp a ck in g, w holesale.




M A J O R

BLS

STATISTICAL

SERIES

importance is the use of the Bureau of the Budget’s
definition of “Production and Related Workers,”
so basic to the employment, wage, and productiv­
ity program,11
4and the “standard payroll period.” 1
5
6
Index Numbers
Index numbers are used widely by the Bureau in
presenting various statistical series. Most promi­
nent are the Consumer and Wholesale Price
Indexes. Index numbers are also used in varying
degrees in wage, employment, and productivity
statistics. For operational reasons, the Laspeyres
base year weighted index number is most generally
used since, in many instances, data for weighting
purposes are available for past years but not for
the period in which the index is to be issued.
The problem of comparability over time is
always present in the construction of index
numbers. In price indexes, the quality of items
may change or commodities may go off the market;
in production indexes used in obtaining measures
of output per man-hour, changes in the method of
reporting production data create discontinuities;
discontinuities are also created by quality as well
as model changes. These technical difficulties are
overcome within limits through the use of “link
relatives.” For example, in the time period “n,”
a commodity included in the index is no longer
available on the market. A similar or related
product is substituted and price information for
this new product is obtained for time period “n”
and also for the previous time period (n-1). The
link relative consists of the price in period “n”
divided by the price in period “n-1.” This new
relative is applied against the last available index
(period “n-1”) to project it into time period “n.”
In the case of price indexes, such discontinuities
are rarely serious since many near substitutes are
available for most commodities on the market.
m Standard D efin ition s o f T y p e s o f W ork ers, B u rea u o f the B u d g e t, N o ­
v e m b e r 7, 1944. P r o d u ctio n and R ela ted W ork ers are defin ed to in clu d e
w ork in g forem en and all n on su p erv isory w ork ers (in clu d in g leadm en an d
trainees) engaged in fabricating, processing, assem bling, in spection , receiving,
storage, han dling, p ackin g, w arehousing, sh ippin g, m aintenance, repair,
janitorial, w a tch m a n services, p ro d u ct d evelop m en t, auxiliary p r o d u ctio n
fo r p la n t’s o w n use (e. g., pow erpla n t) an d record keeping an d other services
closely associated w ith the a b o v e p r o d u ctio n operations. E x clu d e d are
su pervisory e m ployees (a b o v e th e w ork in g forem en level) and their clerical

staffs.
1 Standard Specifications fo r E m p lo y m e n t R ep orts, B ureau o f the B u d g e t,
5
N o v e m b e r 15, 1944. F orm s designed to collect in form ation from business
establishm ents o n the n u m ber o f em ployees, p ayrolls, hours w o rk e d , o r
related item s sh ou ld p ro v id e for su ch co lle ctio n as o f p a yroll periods ending
nearest the fifteenth o f the m o n th .

INTRODUCTION

It is of interest to note that the projection of
indexes by this method of relatives generally does
not permit quality to affect the level of price
indexes. However, over long periods of time the
combined effect of new products, model changes,
and, to some extent, quality variation affects the
index. Therefore, in the strict sense, index
numbers are comparable only over relatively short
periods of time. The longer the time span, the
less comparability in the series.
In order to assist the users of Government index
numbers in making comparisons, the Bureau of the
Budget recommended that all official Govern­
ment index numbers be converted to a 1947-49
base, unless some other period is clearly more
suitable. In compliance with this request most
indexes prepared by the Bureau of Labor Statistics
were placed on this base.
Voluntary Reporting and Confidentiality
The Bureau’s functions as a statistical agency




7

are prescribed by law. The collection of infor­
mation from firms and individuals is the means
by which the Bureau executes these functions.
The Bureau has always relied upon the voluntary
cooperation of respondents in the reporting of
data. This is based on the belief that data pro­
vided on a voluntary basis are more reliable in
the long run than those obtained under a man­
datory authority. The system of voluntary re­
porting is intimately related to the Bureau’s
pledge of confidentiality of response. When
firms and individuals provide the Bureau volun­
tarily with information concerning their opera­
tions, it is with the clear understanding that these
data will be used only for statistical purposes and
that no releases will be made which will disclose
the identity of the individual firm or establish­
ment. Collection schedules are available only to
sworn employees of the Bureau of Labor Statis­
tics. Over the years, respondents’ confidence in
the Bureau’s policy of confidentiality has contrib­
uted to increased rates of response in surveys.

Chapter 2. Estim ating National Housing V olum e*
Background and Uses
The housing statistics series prepared by the
United States Department of Labor’s Bureau of
Labor Statistics measures the number of new
permanent nonfarm dwelling units started in the
United States. The detailed series—by publicprivate ownership and type of structure—is avail­
able on a monthly basis beginning in 1939 and on
an annual basis from 1920. Total estimates,
without detail, are available from 1910-19.
The series is widely used by government and
industry as an important economic indicator. It
is a key tool in shaping national economic and
housing policy and a guide in determining the
scope and emphasis of Federal housing programs.
Business and labor follow the trend and level of
housing activity closely because of the important
influence of residential building on the general
economy and, specifically, on the numerous major
markets affected by new housing production.
Methods of deriving new nonfarm housing esti­
mates have varied considerably in different parts
of the period for which the series are available.
In 1921 the Bureau of Labor Statistics began to
collect information from large cities on the num­
ber and valuation of buildings and dwelling units
recorded on building permits. Although the
number of reporting cities grew steadily, the Bu­
reau itself did not make any comprehensive esti­
mates from these reports for many years, but
published simple summaries.
The earliest housing starts series covered the
period from 1920 to 1936 and was prepared on an
annual basis by David L. Wickens and Ray R.
Foster in a study for the National Bureau of
Economic Research.1 These authors made ex­
tensive use of Census data for 1920 and 1930, and
of data reported to the Bureau of Labor Statis­
tics by numerous building-permit-issuing localities.

Beginning in 1937, the Bureau of Labor Statistics
carried forward the Wickens-Foster annual series,
basing it upon building-permit information.2
After data from the 1940 Census of Housing be­
came available the 1930-39 estimates were re­
vised by the Bureau of Labor Statistics.3 From
1940 to date the Bureau has prepared regular
monthly estimates.
For trend analysis purposes it was found
desirable to have estimates prior to 1920. To
answer this need the Bureau derived estimates
for 1910-19 by the following method. Utilizing
historical building-permit data compiled during
special building-permit surveys conducted in the
late 1930’s, the estimates for 1920 were extra­
polated backward according to the year-to-year
trends in permit volume in available cities. The
number of cities varied from 205 for 1920-21 to
132 in 1910. National totals only were derived
for the decade.
In summary, then, the currently used housing
starts series is composed of data derived by various
methods during the following time segments:
(1) 1910-19, estimates derived by the Bureau;
(2) 1920-29, part of the period covered by the
original Wickens-Foster estimates; (3) 1930-36,
a BLS revision of the Wickens-Foster estimates;
(4) 1937-39, a BLS revision of its earlier estimates;
and (5) 1940 to date, regular monthly estimates
derived by the Bureau.
Although the details of the methodology
changed according to the available sources of data,
the estimates between 1940 and 1953 were derived
by essentially similar methods. For a description
of the methodology used from 1947-53, see
Estimating National Housing Volume, by Dorothy
K. Newman, Bureau of Labor Statistics Bull. No.
993, chap. Ill (pp. 13-19). The present article
outlines the revised estimating techniques installed
early in 1954.

♦Prepared b y M a r v in W ilk erson o f the D iv is io n o f C on stru ction Statis­
tics.
1 F or a detailed discussion o f th e m eth od s used, see N ation a l B u reau o f
E c o n o m ic R esearch B u lletin 65, dated Septem ber 15, 1937, and C h a p . V o f
R esidential R eal E state (1941) b y D a v id L . W ick en s.

8



2 See B u ild in g C o n stru ctio n , 1940, B u reau o f L a b o r Statistics B u ll. N o .
693 (p. 17).
2 H ou sin g and the Increase in P o p u la tio n , b y M . H . N aigles. M o n t h ly
L a b o r R e v ie w , A p ril 1942 (p p . 869-880).

ESTIMATING

N A T I O N A L

Concepts and Definitions
The unit of measurement of the volume of
housing construction is the “dwelling unit.” A
dwelling unit is defined by the Bureau of Labor
Statistics as a dwelling place containing permanent
cooking facilities, i. e., the minimum built-in
facilities essential to housekeeping. The dwelling
unit count, therefore, reflects the number of
families planned for in the construction of new
housekeeping dwellings, and includes not only
1-family homes but units in 2-family structures
and in 3-or-more-family apartment buildings.
Temporary units and units without house­
keeping facilities and such dwellings as trailers,
houseboats, sheds, and shacks are not included.
Excluded also are the temporary dwellings built
during the period of defense and World War II,
the Federal temporary reuse units erected during
the Veterans Emergency Housing Program of
1946-47, and temporary structures erected at
large Federal industrial facilities and on military
posts.
Accommodations in transient hotels, dormitories,
and clubhouses are also excluded from the dwelling
unit figures. These are usually nonhousekeeping
quarters and the buildings containing them are
defined as “nonhousekeeping residential.” Units
in apartment hotels are excluded, unless most
of the space in the structure is devoted to house­
keeping units. Since the Bureau's housing statis­
tics are designed to reflect the extent of new
house-building activity, and not necessarily all
additions to the housing inventory, living quarters
provided for superintendents in public buildings,
warehouses, and factories are excluded also.
Construction of such a residence is quite incidental
to the nonresidential character of the building.
On the other band, the Bureau's housing estimates
do include housekeeping units in buildings that
also contain stores; for example, large apartment
buildings with shops on the ground floor.
The series does not cover farm dwellings,
although, as will be explained later, it is possible
that a few farm homes are counted.
The volume of new permanent nonfarm dwelling
units started should not be interpreted as being
equivalent to the change in the inventory of
existing housing, as, for example, the change in the
dwelling unit count between decennial Censuses
of Housing. Changes in the Census totals result



H O U S I N G

V O L U M E

9

from a number of factors, of which new housing
construction is only one. Units provided by the
remodeling of existing residential structures or the
conversion of nonresidential buildings into resi­
dential housing are automatically excluded from
the new housing series although counted in the
Census.
The new permanent nonfarm dwelling units
included in the Bureau of Labor Statistics series
are now classified as metropolitan or nonmetro­
politan; private or public; and 1-family, 2-family,
3- to 4-family; and 5-or-more-family structures.
The former classification of urban or rural nonfarm
location has been abandoned because of the prob­
lem of resolving differences between the geographic
areas used for building permit systems and the
urban areas as defined in the 1950 Census.4 All
units located within the 168 Standard Metropoli­
tan Areas as defined by the Bureau of the Budget
and used by the Bureau of the Census in the 1950
Census of Population and Housing are classified
as metropolitan. Housing located outside these
areas is classified as nonmetropolitan.
Dwelling units owned by Federal, State, or local
governments are classified as public units; all
others are considered private. Thus, ownership
is the determining factor. Even though private
units are financed by mortgages insured by the
Federal Housing Administration or guaranteed
by the Veterans Administration they are not
publicly owned. Conversely, the fact that housing
built by local housing authorities may be financed
by bond issues sold to private groups does not
mean that it is privately owned housing.
A one-family structure may be detached, semi­
detached or one of a continuous row. A semi­
detached one-family structure has a common wall
with another structure which also contains a single
dwelling unit. Each unit in both semidetached
and row houses is counted as a separate structure,
because each has a separate entrance and separate
heating facilities and utility connections. Each can
be soldindependently of the other units inthe group.
< T h e 1950 u rban category includ es n o t o n ly in corp ora ted places o f 2,500o r m ore b u t a large n u m b e r o f u n in corporated specially delineated localities,
and the densely settled b u t u n in corp orated fringes adjacent to large cities.
T h ese un in corporated areas w ere defin ed o n the basis o f housing or pop u la tio n
d en sity and their boun daries in general are n o t political b u t fo llo w su ch
identifiable p h ysical characteristics as streets, roads, railroads, stream s, etc.
O n th e other h an d, b u ild in g-p erm it system s usually cover entire p o litica l
su bd ivision s: cities, villages, tow n sh ips, counties, etc.; it is n o t possible t o
ob ta in reports w h ich segregate the b u ildin g a c tiv ity b y u rban an d n on u rb a n
areas w ith in such su bdivision s.

10

T E C H N I Q U E S

O F

P R E P A R I N G

M A J O R

BLS

STATISTICAL

SERIES

population, 93 percent of the metropolitan nonfarm
population, and 95 percent of the total urban
population, based on 1950 Census figures. It is
estimated that about 85 percent of nonfarm hous­
ing is built in these permit places. Reports are
received in any particular month from about 9
out of every 10 places to which forms are sent.
Information is requested on the questionnaire
as to the number and value of the new dwelling
units for which permits were issued, by type of
structure, as well as similar information for nonresidential building and for additions and altera­
tions. The front of the form BLS 404, containing
the portion relating to housing, is reproduced on
Sources
page 11. Forms are mailed about the twentyfourth of each month. Returns are usually suf­
The estimates of private nonfarm housing starts
ficient for preliminary estimates by the twelfth of
are derived from two basic sources: (1) monthly
the month and for final estimates by the eight­
summaries of building permits issued by local
eenth or twentieth. Editing and tabulation of the
building officials, and (2) field surveys in a sample
data for the final detailed estimates require ap­
of non-permit-issuing areas.
(1)
Practically all large cities of the United proximately 2 weeks more.
(2)
Not all areas of the country require building
States, a high proportion of smaller cities, and
permits, of course. In order to obtain an estimate
numerous unincorporated towns, townships, dis­
of the housing activity in such nonpermit areas,
tricts, and entire counties require that a building
on-the-spot field surveys are conducted in the non­
permit be taken out before construction can be
permit parts of 53 sample areas. Each of the 53
started on any type of new building and before
areas is visited once each quarter, but at each
certain types of repairs and alterations are made.
visit the number of dwelling units started in each
The permit requirement may arise out of zoning
of the three previous months is obtained. Ap­
ordinances, a building code, or both. The purpose
proximately one-third of the areas are surveyed
of the permit is to insure compliance with zoning
each month. Thus one group is visited in Jan­
restrictions and structural requirements related to
uary, April, July, and October; another in Febru­
safety, fire prevention, and health considerations.
ary, May, August, and November; and the last
The applicant for a building permit is normally
in March, June, September, and December.
required to furnish certain information regarding
Field investigators obtain leads on new homethe proposed construction; the detail required
building from local builders, utility companies,
varies among localities.
building-supply dealers, real estate agents, and a
A questionnaire form (BLS 404 or BLS 404B)
variety of other sources. The investigator then
is mailed by the Bureau 5each month to the buildsecures information on each house or project
ing-permit-issuing officers in approximately 7,000
directly from the builder or owner regarding the
places throughout the country. Almost 1,000 of
date construction was begun, and the number and
this number were added during a recent intensive
estimated cost of units in the project. Finally, the
campaign to locate, and obtain reporting from, all
investigator canvasses his assigned territory to
places having permit systems. It is believed that
determine whether he has omitted any new homevirtually all permit-issuing places have now been
building begun in the three previous months. The
identified. The expanded coverage includes lo­
reports of the Bureau field agents are reviewed in
calities containing about 80 percent of the nonfarm
the Bureau’s five regional offices, and at periodic
6 E xcep t in seven States— Iow a , M assachusetts, N e w Jersey, N e w Y o rk ,
intervals, an on-the-spot check is made of the
N o rth C arolina, P en n sylva n ia , and T exas— w here the State D epartm en t o f
completeness and accuracy of field investigations.
L a b or or other cooperatin g a gen cy sends the form s d ire ctly to b u ild in g
officials in their State. T h ese agencies th en forw ard the perm it inform ation
The Bureau derives its estimate of total non­
to the Bureau of L a b or Statistics in W a sh in gton for use in preparing s u m ­
farm housing starts by adding the number of
m aries an d national estim ates.

Two-family structures are those having 1 unit
above the other or 2 units on the same floor with
a common entrance or common heating facilities.
Multifamily structures contain three or more
dwelling units and usually have centrally con­
trolled heating and utilities and a common en­
trance. In some types of apartment buildings
which have individual entrances for each apart­
ment, the units are defined as being multifamily
structures because of other common features
which prevent separate sale and maintenance of
the individual units.




S P E C IM E N

11

O F SC H ED U LE

U . S . D EP A R TM EN T O F LA B O R

B .L .S .4 0 4
(Rev. 1-1-64)

Form approved.
Ludget Bureau No. 44-R049.14. .

BUREAU OF LABOR STATISTICS

REPORT OF
BUILDING PERMITS ISSUED

W A S H IN G T O N 2 5 . D . C .
FOR BLS OFFICE USE ONLY
Kardex
In.

Tab.

Edit
Made

Ver.

Post

and

Mach. Hand

LOCAL PUBLIC CONSTRUCTION

A dd
Made

Ver.

If possible, p l e a s e r e t u r n o n e c o p y o n
o r before t h e 4 t h o f t h e m o n t h .

P le a se rep ort
f o r m on th o f —

I f no building' t o
rep ort th is m on th
en ter “ X ” h ere ■ —■
>
and return th is fo r m

(If above mailing address la incorrect or gone number omitted, please Indicate change)

_______
|
I
1
I
I

PART I—PRIVATELY OWNED
N umber of
Buildings

Classification

Estimated Cost
(Omit cents)

N umber of
H ousekeeping
U nits

Code

NEW HOUSEKEEPING UNITS
1. O n e -fa m ily u nits, detached.

(Each structure is a separate 1-family house.)

Q1

2 . O n e -fa m ily units, sem idetached and row . (Each structure contains two or more housekeeping
units separated by ground-to-roof party walls.)

91

3. T w o -fa m ily b uildin gs. (Each structure contains two housekeeping units not separated by ground-.
to-roof party wall, i. e., the units have a common attic, basement, heating plant, or other com­
mon feature.) Include structures containing 1 or 2 housekeeping units plus space for business or
professional use.

02

4 . A p a r tm e n t b uildin gs. (Each structure contains 3
or more housekeeping units having a common basement,
heating plant, stairs, or entrance.) Include structures
containing 3 or more housekeeping units plus space for
business or professional use; also, apartment hotels, in
which most of the space is devoted to housekeeping units.

( a ) T h r e e - and fo u r-fa m ily

03

( b ) F iv e -o r-m o re-fa m ily

04

Leave blank —

37

>
N umber

5 . H O U S E K E E P I N G U N I T S A D D E D O R L O S T B Y C O N V E R S I O N . Enter the total Before conversion
number of housekeeping units in all converted buildings before and after conversion. Enter the
difference between these numbers as Net Change. Include permit value under item 10 (a). If no
conversion permits were issued, enter "none” under Net Change.
N umber of
Buildings

of

Housekeeping U nits

After conversion

Code

Net change
32

N umber of Dwelling U nits

6. H O U S E K E E P IN G U N IT S L O S T B Y D E M O L IT IO N .

29
N umber of
Buildings

NEW NONHOUSEKEEPING RESIDENTIAL
7 . H o tels.

E stimated Cost
(Omit cents)

Code

Ebcclude apartment hotels in which most of the space is for housekeeping units. See item 4.

06
07

8. Tou rist cabins, courts, m otels and sea son al cam ps.
9 . O th er nonhousekeeping residential b uildin gs, include club and association buildings
bedrooms, such as YMCA’s, service clubs and fraternity houses.

with

08
31

L eave b la n k ------->■

ADDITIONS, ALTERATIONS, REPAIRS AND INSTALLATIONS

N umber of
Permits

E stimated Cost
(Omit cents)

Code

10 . A d d ition s and stru ctu ral alterations.
25
(a) To housekeeping buildings (homes and apartments).............................................................................
27

(b) To other buildings.............................................................................................................. ..
11 . R ep airs and im p rovem en ts (w ith no stru ctu ral ch a n g e ).

33
(a) To housekeeping buildings (homes and apartments)............................................................. ...
(b) To other buildings................................................................................... ...................................................

34

Leave blan k------ >

28

12 . In sta llation s, m echanical ( f o r w hich sep arate p erm its w ere issued b y your office).
Elevators, plumbing and electrical equipment, oil burners, stokers, water heaters, etc.




35

1— 731
0 6 6*
9

(OVER)

12

T E C H N I Q U E S

O F

P R E P A R I N G

publicly owned units started to the estimate of
private starts. For public housing the concept of
month of start varies somewhat according to pro­
gram and sponsorship. Federally owned projects
on Government installations are considered to
start in the month of contract award. Projects
under State and local programs are reported by
BLS regional offices to start during the month
construction begins. Projects under the United
States Housing Act of 1949 (reported by the
Public Housing Administration) are considered to
start the month the “ proceed order” is given.
Sampling Plan
Early in 1954 the Bureau placed in operation
the present sample of 53 nonpermit areas, replac­
ing the previous 96 county sample. In selecting
this new sample an intensive analysis was made
of data on housing activity available for a large
number of areas for which BLS had complete
reports, either from building permits or from regu­
lar quarterly field surveys. This analysis indicated
that a ratio type of estimate, based on the rela­
tionship between the volume of housing starts in
the nonpermit parts of an area and the volume
of units authorized in the permit parts, would be
approximately 50 percent more efficient than an
independent estimate of the nonpermit segment.
It was found that the efficiency of the ratio esti­
mate was improved by narrowing the strata
limits based on the percent of nonfarm popula­
tion in nonpermit-issuing places. (That is, each
stratum should contain only areas having approxi­
mately the same proportion of population in non­
permit areas.) Additional stratification by metro­
politan or nonmetropolitan location and by 4
broad geographic regions was decided upon, giving
8
primary strata.
The primary sampling unit, or “ p. s. u .,” which
was chosen consisted of a “ cluster” of counties
rather than a single county as was previously used.
Each of the 168 Standard Metropolitan Areas
made up a p. s. u.
(In the case of 7 areas,
whose boundaries extend across the broad region
lines, the areas were split into 2 p. s. u.’s, making a
total of 175.) The nonmetropolitan clusters con­
sisted of single counties or groups of two or more
contiguous counties. The clusters conformed, in
general, with those established by the Bureau of
the Census, with the exception that some clusters



M A J O R

BLS

STATISTICAL

SERIES

were enlarged in order to eliminate p. s. u.’s witb.
no permit-issuing places. Since a relatively large
primary sampling unit was being used, it was
found that it would be advantageous to sub­
sample minor civil divisions within some of the
sample areas rather than to cover each area com­
pletely.
Thirty-four metropolitan areas and 15 non­
metropolitan clusters were removed from con­
sideration because they were completely, or
virtually completely, covered by building permits.
In addition, the central city or cities were deleted
from 55 other metropolitan areas because it was
found that the housing volume in nonpermit
suburban places was more closely related to the
volume in suburban permit places than to the
volume in the larger centra] cities.
An optimum allocation of the sample areas to
the metropolitan and nonmetropolitan classifica­
tions was made. That is, the sample areas were
assigned to the two segments in such a way that
the derived estimate would have the minimum
possible variance for the expenditure of available
funds.6 Within the metropolitan and nonmetro­
politan segments the number of sample areas was
then allocated to each of the four broad geographic
regions in proportion to the nonfarm population in
each region. The actual sample in each of the
eight primary strata was then selected in the
following manner. The clusters in each stratum
were arrayed in ascending order by percent of
nonfarm population in nonpermit areas. Each
array was then subdivided into approximately
equal sized substrata, the number of which was
equal to the number of sample areas assigned to
that stratum.
One sample cluster was then
drawn from each subgroup using a table of random
numbers, with probability proportional to size.
The measure of size used was the total nonfarm
population in each cluster. The final sample con­
sists of 53 areas, 29 metropolitan and 24 non­
metropolitan, covering 131 counties.
As part of the optimum allocation, sample areas
having less than 23 nonpermit minor civil divi­
sions were given complete coverage. Areas with
more minor civil divisions were subsampled, the
subsampling rate varying from two-thirds in the
smaller areas to one-fourth in the larger ones.8
8 F o r the d evelop m en t an d solu tion o f the cost fu n ctio n app ropriate to this
ty p e of design— a stratified 2-stage, cluster sam ple— see H ansen, H u rw itz
an d M a d o w , Sam ple S u rv e y M e th o d s an d T h e o ry , v o l. 1, chap. 7, sec. 9.

ESTIMATING

N A T I O N A L

In each area in which subsampling was used the
minor civil divisions were classified on the basis of
growth rate, urban population, and other available
data into two groups: those likely to have a high
building volume and those with a probable lower
volume. All of the first group were listed for
survey and the remainder of the subsample
selected from the second group by the following
procedure. The group two places were located on
a map and numbered in a serpentine fashion.
Starting with a random number every nth place
was selected. This method was used to insure
adequate geographic dispersion of the subsample.

Estimating Procedures
Two estimates of housing volume are made for
each month: the preliminary and the revised
•estimates. Essentially the same procedures are
used for both except that the preliminary estimate
is not made in as great detail and is based on less
complete data.
The revised, or final, estimate of private housing
starts is made separately for the permit and for
the nonpermit segments. Places which were iden­
tified as being permit issuing as of January 1, 1954,
were classified by geographic division and State;
and within each State by metropolitan and non­
metropolitan location, by size of place, and, in
some cases, by high or low housing activity. In
addition, the places in some of the larger metro­
politan areas were grouped by individual area, by
size, and activity level. In making the monthly
estimates of dwelling units authorized in permit
places, the building permit data reported on the
form BLS 404 are tabulated for each type of
structure (i. e., 1-family, 2-family, etc.) by the
detailed classification outlined above. Since not
all places report every month it is necessary to
prepare an estimate for these nonreporting places.
This is done by applying the ratio between the
total number of such places in the cell and the
number reporting that month to the volume of
housing reported for each type of place. Virtually
all places of 25,000 population or over report
regularly. The proportion of reporting places in
a cell is usually 75 percent or over. Places having
an unusually high volume or erratic fluctuations
in volume are treated separately, and special
efforts are made to obtain permit reports.



H O U S I N G

V O L U M E

13

The reported and estimated data are added to
give State totals, by type of structure, for the
volume of housing authorized. Further cumula­
tions can be made to give any desired combina­
tions: geographic divisions, broad regions, metro­
politan-nonmetropolitan locality, and national
totals. These are estimates of dwelling units au­
thorized by permits, not of units actually started.
In order to translate building-permit volume into
dwelling units started, two adjustments are made:
one for permits which are never used and are
allowed to lapse, and the other for lag between
permit issuance and start of construction.
Factors for these adjustments are based on
periodic field studies in sample localities in which
the Bureau investigates (1) the elapsed time be­
tween issuance of a building permit and the start
of construction, and (2) the extent to which per­
mits issued are not used. The rate of lapsed
peimits has varied from over 7 percent in 1946, a
year of severe labor and material shortages, to
between 1 and 2 percent in recent years. Approxi­
mately 65 percent of dwelling units are started in
the month of permit issuance and 95 percent by
the end of the 2 following months. These per­
centages have remained fairly stable over the past
few years. Each month’s estimates of dwelling
units authorized is adjusted for such delays and
lapses; subtractions are made for abandoned per­
mits and for the proportion to be started in later
months; additions are made for units authorized
in previous months but not started until the month
of reference. The starts estimate for any month
is thus a total of contributions from the permit
volume of that and several previous months.
Separate adjustments are made for metropolitan
and nonmetropolitan areas within each of the four
broad geographic regions.
Estimates for nonpermit areas of the country
are derived from the results of the surveys in the
53 area sample by relating the activity in non­
permit places to that in permit places. This is
done as follows: in those sample areas where a
subsample of minor civil divisions was taken, an
estimate is first made of the housing volume in all
nonpermit parts of the area. A tabulation of the
volume of dwelling units authorized in the permit
places in the area is also made. Both the esti­
mated nonpermit starts and the permit authoriza­
tions are then weighted by the reciprocal of the
probability used in selecting the area. These

14

T E C H N I Q U E S

O F

P R E P A R I N G

weighted quantities for all 53 areas are then com­
bined and an overall ratio of nonpermit starts to
permit authorization is obtained. This ratio is
applied to the permit estimate for the entire per­
mit universe to derive the estimated nonpermit
units started. Independent estimates for each of
the eight primary strata are derived by a similar
procedure and are adjusted to the national total.
Because of the “ cycle” method used as an econ­
omy measure in conducting field surveys, whereby
only about one-third of the areas are surveyed
each month, there is a time lag of over three
months before all field results are available for a
specified month. In order to make some informa­
tion available more promptly the preliminary
estimate is prepared about the ll-1 3 th of the month
following the month of reference and is available
for publication a few days later. By the tenth of
each month a substantial number of permit re­
ports have been received, and a special effort is
made to secure data from almost all of the more
important localities. Data from these reports
are tabulated according to a less detailed strati­
fication than is used for the final estimate; a
geographic rather than a State classification is
used and no breakdown by type of structure is
attempted. The percent of change in the number
of dwelling units reported between the previous
and the current month for identical cities is applied
in each estimating cell to the previous month’s esti­
mate for all the cities represented by that cell.
B y this ratio procedure a preliminary estimate is
obtained of the total number of dwelling units
authorized in permit areas. The usual adjust­
ments are then made to translate this into the
number of units started in permit-issuing places.
Since no field survey returns are available in
time for use in the preliminary estimate, it is nec­
essary to estimate for this segment by other
methods. Ratios of nonpermit to permit activity
are obtained by using the most recent ratios
derived from complete survey results, modified by
appropriate seasonal considerations (i. e., activity
tends to drop more sharply in nonpermit than in
permit areas during winter months and to rise
more sharply in spring months).

Publication. The preliminary estimates, along
with a limited amount of historical data, are
presented in a press release each month. More
detailed summaries, showing estimates by type of



M A J O R

BLS

STATISTICAL

SERIES

structure, metropolitan or nonmetropolitan loca­
tion, public or private ownership, etc., are pub­
lished monthly in two Bureau publications—
Construction and the Monthly Labor Review— ►
and in detailed tables prepared for less general
distribution.

Limitations
Statistics on the number of dwelling units started
do not measure the number completed in any given
month. Dwelling units are usually not ready for
occupancy until several months after the start of
construction. Nor, as was explained earlier, can
total starts be considered as equivalent to the
increase in the housing inventory.
Conceptually, the series excludes all farm
housing but it is not possible to adhere strictly
to this distinction in practice. In survey areas
the field agents are instructed to report only non­
farm housing, based on the primary source of
income of the intended occupant. However,
some permit officers which cover extensive farm
areas, such as county and township systems, do
issue permits for farm houses. This relatively
small segment cannot be isolated and is included
with the nonfarm housing volume.
It tends to
be minimized by the fact that some States specifi­
cally exempt farm construction from permit re­
quirements, and by the concentration of county
and township systems in rapidly growing metro­
politan areas.

Reliability
Approximately 85 percent of the nonfarm esti­
mate is derived from building permits. This
segment consists largely of reported data and
contains little estimate. It is subject to some
nonsampling errors due to incorrect reporting by
building officials and possible omission of some
construction. Extensive work with local permit
data by the Bureau has, however, failed to un­
cover any serious reporting inaccuracies and a
limited number of permit adequacy checks have
indicated that only a negligible percentage of new
dwelling units is started in permit areas without
a permit being taken out. The Bureau main­
tains a continuing program to help reporting
officials submit accurate and consistent reports.

E S TIMATING

N A T I O N A L

The sampling error in the nonpermit segment is
estimated to be between 5 and 7 percent depend­
ing on the month involved. However, since this
segment comprises only about 15 percent of the
total private starts estimate, the overall effect
due to this sampling error would be about 1 per­
cent. In probability terms this means that the
chances are about 19 out of 20 that a total non­
farm housing count, including a complete enu­
meration of the nonpermit segment, would not
differ from the estimate by more than plus or

H O U S I N G

15

V O L U M E

minus 2 percent (twice the sampling error).
Study of the revisions that have occurred be­
tween the preliminary and the final estimates
shows that they are primarily caused by the differ­
ence between the estimate for nonpermit places
based on field survey data and the projected fig­
ure used for the preliminary estimate.

exceeded 6 percent and for most months they have
been less than 4 percent.

B IB L IO G R A P H Y

Monthly Labor Review, April
U. S. Department of Labor, Bureau of Labor

Housing and t e Increase in Population.
h
1942, pp.
Statistics.

869-880.

Techniques of Preparing Major B L S S a i t c l Series. (Chapter 3. Estimat­
ttsia
ing National Housing Volume.)
Labor Statistics. (Bull. 993)

U . S. Department of Labor, Bureau of

Building Construction, 1940. U. S. Department of Labor, Bureau of Labor
Statistics, p. 17.

(Bull. 693.)

Nonjarm Residential Construction 1920-36. B y David L. Wickens and Ray
R. Foster.

National Bureau of Economic Research, 1937.

Residential Real Estate. B y David L. Wickens.
nomic Research, 1941.




The ad­

justments in the total estimate have seldom

(Bull. 65.)

National Bureau of Eco­

Chapter 3. Estimating Expenditures for New Construction*
Background and Uses
The estimates of expenditures for new construc­
tion prepared jointly by the Bureau of Labor
Statistics and the Business and Defense Services
Administration of the U. S. Department of Com­
merce are widely used by private business analysts
and government economists as measures of con­
struction activity. They are also important com­
ponents in more comprehensive series, such as the
National Income and Gross National Product
series, which reflect the state of the general
economy.
The expenditures estimates are frequently re­
ferred to as a “ public policy” construction series
because of their wide use by government bodies
in studies relating to full employment, public
works, Federal-aid, and similar legislation. The
data are also used by private research organiza­
tions, industrial firms, and the like, for broad
market analysis and production control. A lesser
known use has been as a basis for estimating trends
in the volume and distribution of the total work
force on new construction— a difficult area for
measurement— by the application of factors ex­
pressing the value of work placed per man-month
on various types of construction.1
The uses of the expenditures estimates are dis­
tinct from those of the contract-award or buildingpermit data. Tbe latter indicate the value of
construction scheduled for early start, and are
therefore useful in forecasting construction activ­
ity. The expenditures estimates, on the other
hand, indicate current activity and are therefore
particularly suitable for use in making comparison
with related concurrent data, such as those for
employment and consumption of material. More­
over, for some kinds of historical analysis, the
expenditures type of construction data is fre♦Prepared jo in tly b y R o la n d V . M u r r a y o f the B u rea u ’s D iv is io n o f C o n ­
stru ction Statistics and B ru ce M . F o w le r o f the B u ild in g M aterials and C o n ­
stru ction D iv is io n o f the Business and D efense Services A d m in istra tion ,
U . S. D ep artm en t o f C om m erce.
3 See C h ap. 4, L a b o r R eq u ired for N e w C on stru ction , in this bu lletin
(p p . 30-32).

16



quently easier to use because of its inherent
smoothness of trend as compared with an award
series, in which the entire cost of a project is
necessarily included in a single time period.
These estimates represent the monetary value
of the construction work performed within the
continental United States during the periods
covered. This monetary value is equivalent to
the cost of the materials put in place or otherwise
consumed, the wages of the workers who placed
the materials, and appropriate charges to the
work for equipment depreciation and other over­
head costs and for profit on the construction
operation.
Annual estimates are available beginning with
1915; monthly figures, from January 1939.2
This series is an extension of yearly estimates
developed in the late 1930’s in the Bureau of
Foreign and Domestic Commerce of the U. S.
Department of Commerce and presented in Con­
struction Activity in the United States, 1915-37,
Domestic Commerce Series— No. 99 (out of
print). For some years after the publication of
the original series, several agencies prepared a
number of independent, and often conflicting,
projections of the series. In 1945, the Bureau of
the Budget, through its Division of Statistical
Standards, assigned the preparation of an official
Government estimate to the Bureau of Labor
Statistics and the Bureau of Foreign and Domestic
Commerce 3 jointly, and delineated the responsi3 P relim in ary m o n th ly estim ates o f con stru ction expenditures, w ith an
interp retative text, are released to the press jo in tly b y the tw o agencies
responsible for them ab o u t a w eek after the en d o f the m o n th o f reference.
T h ese first estim ates are subject to revision in each o f the 2 succeeding m on th s
as add ition al in form ation b ecom es available. T h e figures appear later, in
som ew h a t expan ded form , in separate m o n th ly p u b lication s o f the tw o agen­
cies: C on stru ction an d the M o n t h ly L a b o r R e v ie w o f the D e p a rtm e n t o f
L a b o r, and C on stru ction an d B u ild in g M aterials and the S u rvey o f C u rrent
Business o f the D epartm en t o f C o m m erce. C o m p le te historical series, w ith
statem ents o f sources, m eth ods, coverage, etc. are available in annual p u b li­
cation s o f the tw o agencies: N e w C on stru ction : E xpenditu res and L a b o r
R eq u irem en ts o f the D ep artm en t o f L a b o r and the Statistical S up plem ent
to the m o n th ly con stru ction p u b lica tio n o f the D ep artm en t o f C om m erce.
3 O w in g to organization al changes affecting the B u ild in g M aterials and
C o n stru ctio n D iv is io n o f the D e p a rtm e n t o f C om m erce, the responsibilities
o f the form er B F D C in the p reparation o f the figures rested w ith the N ation a l
P r o d u ctio n A u th o rity during its existence from 1950 to 1953, and n o w rests
w ith the B D S A .

E STIMATING

E X P E N D I T U R E S

bilities of each agency in the preparation of the
statistics.
Responsibility for estimating private housekeep­
ing residential construction and all public construc­
tion was given to the Bureau of Labor Statistics;
and for estimating all other private construction,
primarily private nonresidential building, farm
construction, and privately owned public-utilities
construction, to the Bureau of Foreign and
Domestic Commerce. Individual responsibilities
are for the work directly involved in developing
sources and processing the data. The two
agencies take joint responsibility for the overall
validity of the estimates, and the work of each
agency in the preparation of the series is at all
times subject to the review of the other.

Concepts and Scope
In these estimates, “ new construction” includes
the engineering, design, and production of all fixed
works and structures, whether by contract or
“ force-account,” 4 and whether under conventional
or work relief programs. Major additions and
alterations are covered, but maintenance and
minor repair work are excluded.5 The estimates
cover buildings; other structures, such as dams,
levees, and bridges; and nonstructural works such
as airfields, highways, canals, and navigation
channels. They include the installed value of
equipment generally considered an integral part
of a structure and commonly included in the
contract price, such as plumbing and heating
equipment and elevators. They exclude separa­
ble equipment, such as production machinery,
power-generating equipment, and furnishings.
Excluded also are the value of raw land but not
the costs of land improvements.
Several types of activity which have some of the
characteristics of construction are excluded be­
cause they are primarily industrial or agricultural
operations. Chief of these are: (1) oil and natural
gas well drilling; (2) mining operations (except
for the construction of mine buildings above
ground); (3) shipbuilding; and (4) farm work*
•
* F orce-accou n t w ork is don e, n o t th rou gh a con tractor, b u t d irectly b y a
business or G overn m en t agen cy using a separate w o rk force to perform n o n ­
m aintenance con stru ction o n the a ge n cy’s o w n properties.
• T h e Business an d D efense Services A d m in istra tio n prepares annual esti­
m ates o f total con stru ction a c tiv ity b y co m b in in g the n ew con stru ction
a c tiv ity estim ates w ith separate estim ates o f m aintenance an d repair. T h is
series is available b y years from 1915.




F O R

N E W

17

C O N S T R U C T I O N

which is an integral part of farm operations, such
as terracing and individual irrigation ditches.
Following general revision of the estimates in
1950, the entire series purports to represent the
total value of new construction, as previously
defined, within continental United States.6
The following tabulation lists the types of new
construction for which expenditures estimates are
regularly published. Somewhat greater detail is
available on an annual than on a monthly basis.

Type ofconstruction

Periodfor w
hich
available
Annually M
onthly

T otal new construction__________________

x

x

Private construction_____________________
Residential building (nonfarm )_______
New dwelling units_________________
Additions and alterations^__________
Nonhousekeeping___________________
Nonresidential building (nonfarm )____
Industrial___________________________
Com m ercial_________________________
Warehouse, office, and loft build­
ings____________________________
Stores, restaurants, and garages_
_
Other nonresidential building_______
Religious_________________________
Educational______________________
Social and recreational___________
Hospital and institutional________
M iscellaneous____________________
Farm construction____________________
Operators’ dwellings________________
Service buildings____________________
Public utilities_________________________
Railroad____________________________
Telephone and telegraph___________
Telephone________________________
Telegraph________________________
Other public utilities________________
Local transit_____________________
Petroleum pipe line_______________
Electric light and pow er__________
Gas_______________________________
M anufactured__________________
Natural________________________
All other private______________________
Sewer and w ater____________________
All other____________________________
Public construction______________________
Residential building___________________
Nonresidential building_______________
Industrial___________________________
Educational_________________________

x
x
x
x
x
x
x
x

x
x
x
x
x
x
x
x

x
x
x
x
x
x
x
x
x
x

x
x
x
x
x
x
x
x
x
------------------x
x
x
______
---------x
------------------------------------------------------x
---------______
x
x
x
x
x

x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x

• A previou s technica l n o te , p u b lish e d in the M o n t h ly L a b o r R e v ie w in
F eb ru ary 1950, an d reprin ted in B ureau o f L a b o r Statistics B u ll. N o . 993,
T e ch n iq u e s o f P reparing M a jo r B L S Statistical Series, discussed th e coverage
a n d m e th o d o lo g y app licable to the series at that tim e.

18

T E C H N I Q U E S

O F

Type of construction
Public construction— Continued
Nonresidential building— Continued
Hospital and institutional__________
All other nonresidential_____________
Public administration____________
Social and recreational___________
Miscellaneous___________________ _
M ilitary facilities______________________
H ighw ay______________________________
State________________________________
C ou n ty_____________________________
M unicipal___________________________
Federal_____________________________
Sewer and w ater______________________
Sewage disposal_____________________
W ater supply_______________________
Miscellaneous public service enterprises.
Conservation and developm ent_______
Bureau of Reclam ation_____________
Arm y Engineers____________________
Tennessee Valley A uthority________
Other_______________________________
All other public_______________________

P R E P A R I N G

Period, for w
hich
available
Annually M
onthly
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x

x
x
______
______
______
x
x
______
______
______
______
x
______
______
x
x
______
______
______
______
x

Sources and General Estimating Methods
Ideally, construction expenditures information
would be based upon monthly reports from each
construction project providing a cost accounting
figure combining the wages of the workers on the
project, the cost of the materials which they placed,
and appropriate charges for overhead and profit.
Although such figures exist for many projects, the
cost of collecting merely an adequate sample
would greatly exceed the Federal resources
currently made available for these estimates.
Therefore, the estimates are derived from data
collected from a wide variety of secondary sources
and from primary source material originally
intended to serve other purposes.
Few of these sources are static. In fact, the
outstanding characteristic of the list of such
sources is its constant change in content. This
results from: the continual search for more
complete, accurate, and timely information than
previously available; the undertaking and com­
pletion of public works programs; and the changes
in operating and reporting requirements of Federal
construction and regulatory agencies. It is there­
fore emphasized that the specific sources and
methods described in the following section were
those in use in the spring of 1954. No attempt



M A J O R

BLS

STATISTICAL

SERIES

has been made to discuss significant improve­
ments in techniques which were in the planning
stage at that time.
Three general methods are used in developing
the estimates from the various source materials.
In order of preferred methodology, they consist
of: ( 1) summarizing physical observations of
construction underway (or the cost records which
reflect such observations); (2) summarizing fiscal
statements or reports on additions to plant; and
(3) converting data on work started to estimates
of work put in place.
( 1) The summaries made from actual observa­
tions of progress on individual construction
projects are based primarily on the operating
reports of the Federal agencies supervising the
construction of public works, such as military
airfields, veterans, hospitals, flood control dams,
and the like. In designing such reports, the
operating agency and the Division of Statistical
Standards of the Bureau of the Budget consider
the Bureau of Labor Statistics* needs for ex­
penditures data.
M any non-Federal public construction agencies
make similar reports, but the systematic collec­
tion and use of them is not considered feasible
by the Bureau at present. Except in the case of
the New York City Housing Authority, such
progress reports are therefore used only with
respect to Federal construction for which they are
a readily available and accurate source of informa­
tion. They usually reflect the observation, or
in some cases the actual measurement, by a
Federal engineer of the status of a construction
job at uniform intervals (primarily to determine
the payments due to the contractor for work
accomplished during the interval). Tabulations
of data for all of the individual jobs in a program
for which progress reports are available are made
in some cases by the construction agency and in
others by the Bureau of Labor Statistics.
(2) The summaries of fiscal data are based on
the accounting records of private companies
such as privately owned public utilities, and of
public agencies which are required, in the public
interest, to maintain financial records. The
figures reflect disbursements for construction, and
are adjusted roughly whenever possible for
deferred charges, such as for large purchases of
materials to be used in a later period. In a few
instances, special summary tabulations must be

ESTIMATING

E X P E N D I T U R E S

F O R

N E W

C O N S T R U C T I O N

19

The first and third of these three general esti­
prepared from detailed records. These are made
mating methods yield monthly results directly.
in some instances by the trade association involved
and in others by the two Government agencies
The second, fiscal data, are usually available only
on an annual basis. Therefore, the monthly
responsible for the statistics. Generally, however,
figures are obtained by projecting the levels estab­
suitable basic data are in published form. For
lished for the previous year, month by month, on
example, some are summarized by trade associa­
the basis of the known movements of a related
tions for presentation to the public in yearbooks
series. A t the year’s end, an adjustment is made
or other periodical reports, and certain data are
to the new benchmark. This correction of level
summarized by Government regulatory agencies
is only one of several types of revision which may
for publication in their annual reports.
A special case is the table on appropriations and
be introduced during a comprehensive annual
re-examination of all components of the estimates.
expenditures for civil public works in the annual
These revisions frequently affect individual series
Budget of the United States, made available at
over periods longer than a year.
the time of the President’s annual budget message
to Congress. It consists of a tabulation of checks
The table on the following page shows, for each
issued against construction appropriations. After
class of construction, the type and agency source of
adjustment to eliminate operation, maintenance,
the basis for the estimates. These basic data are
equipment procurement, and other nonconstruc­
adjusted in varying degrees by the agencies
tion items, these data form the basis of the esti­
responsible for the construction expenditures
mates for construction by a few Federal agencies
series.
from which monthly data are not obtained at
present.
(3)
Conversion of work started to estimates of Specific Estimating Procedures— Type of Con­
struction
work put in place is the most important of the
three methods of deriving construction expendi­
Private Construction. The estimating procedures
tures estimates, from the standpoint of the dollar
for the private construction segment are as follows:
volume of the expenditures categories for which
Residential building (nonfarm) . For new dwell­
it is used. The value of work started each month
ing units, the monthly reports to the Bureau of
is spread over a period of time according to prede­
Labor Statistics on the value of residential building
termined patterns. Each pattern is a series of
authorized by local building permits are adjusted
percentages which represent the probable propor­
to reflect the construction cost of new permanent
tion of the total cost of construction which will be
nonfarm dwelling units started 7 in all permit­
performed in each month of the known or esti­
issuing places. Inflating factors are applied to
mated duration of a particular project or group of
compensate for the understatement of cost in­
projects. On a given type of construction, there­
herent in permit valuation. These are revised
fore, the expenditures for any month are the sum
periodically on the basis of information obtained
of the estimated expenditures during that month
from field surveys in which the permit valuation
on all projects estimated as under way, according
and the construction cost reported by builders
to the length of the expenditures pattern.
and contractors are compared for a large sample
Obviously, the use of these three different
of projects.
methods of estimating expenditures raises prob­
Construction cost of units started in nonpermit­
lems of comparability, both as to timing and
issuing places is based on monthly field studies.
content. Timing is a problem only in month-toEstimated construction costs are secured from
month comparisons. Over longer periods, the
builders and contractors for a large number of
three methods should give similar results. Com­
dwelling units in sample counties throughout the
parability in coverage is a more difficult problem.
country. From these an average construction cost
Therefore, all source material is carefully examined
for all units started in nonpermit-issuing areas is
and adjustments are made in it, or in the expendi­
derived.1
tures estimated from it, to insure that the results
conform with the general concepts previously
1 See C h a p . 2, E stim atin g ! N ation a l [H ousing V o lu m e , ^in this bu lletin
outlined.
(p p . 8-15).



20

TECHNIQUES OF PREPARING MAJOR BLS STATISTICAL SERIES

Sources used i e t m t n e p n i u e f r new c n t u t o ,by o n r h p t p o c n t u t o , and s u c o p b i funds
n siaig xedtrs o
osrcin
w e s i , y e f osrcin
ore f ulc
Basis of expenditures estim ate 1
O w nership and ty p e o f con stru ction

Source o f
p u b lic funds
T y p e o f basic d a t a 3

Source o f data (organization responsible for collection )

P R IV A T E
R e siden tial b u ild in g (n on farm ):
N e w d w ellin g u n its___________________________________
A d d itio n s and alterations_____________________________
N o n h o u s e k e e p in g ____________________________________

N ation a l housing s ta r ts .. .
B u ild in g p e r m it s .......... .....
C on tract a w a rd s__________

N onresiden tial b u ild in g (n on fa rm ): all t y p e s __________
F a rm con stru ction : a l ll y p e s .........1............12.................

_____d o ........................................
E xpenditu res s u r v e y s 4___

P u b lic utilities:
R a ilroa d s....................................................................................

B ureau o f L a b o r Statistics, U . S. D e p a rtm e n t o f L a b o r
D o.
Business a n d D efense Services A d m in istra tio n ,3 U . S. D e ­
partm en t o f C om m erce.
D o.
A gricultu ral M a rk e tin g Service, U . S. D e p a rtm e n t o f A g ri­
culture.

F iscal record s_____________
.........d o ________ _____________
.........d o ........ ...............................
_____d o ____ _________________

O th er p u b lic utilities:
L ocal transit___ ______ __________ ___________________
P etroleum p ip e lin e .............................................................
E lectric ligh t a n d p o w e r ................... ...............................
G as_________ _____ 2______ ____________ ______________
A ll oth er p riv a te ..........................................................................

Interstate C om m erce C om m ission .
A ssociation o f A m erican R ailroads.
A m erican T elep h on e an d T elegraph C o .
W estern U n ion T elegraph C o .

____ d o _____________________
_____d o ______________________
_____d o .............. ............ ...........
.........d o ........................ .............
C on tract a w a rd s..................

T elep h on e an d telegraph...... ........................................... ..

A m erican T ran sit A ssociation .
Interstate C om m erce C om m ission .
Federal P o w e r C om m ission .
A m erican G as A ssociation .
Business an d D efense Services A d m in istra tio n .3

P U B L IC
R esid en tia l b u ild in g ............................. .....................................

N on-F ederal

Progress reports___________
H ou sin g starts........... ...........
C on tract a w a rd s__________

N e w Y o r k C it y H o u sin g A u th o rity .
B u reau o f L a b o r Statistics.
Business a n d D efense Services A d m in istra tion .3

N on residen tial b u ild in g :
In d u stria l_________________ ________________ ________ ___

Federal

Progress r e p o r t s __________

A to m ic E n erg y C om m ission.
D e p a rtm e n t o f D efense:
A r m y — O ffice o f C h ief o f Engineers.
N a v y — B u reau o f Y a rd s and D o ck s .
A ir Force— A ir M ateriel C om m an d .
H ou sin g and H o m e F in an ce A g e n cy .
G eneral Services A d m in istra tion .
Business a n d D efense Services A d m in istra tion .3
H ou sin g an d H o m e F in an ce A g e n cy .
Veterans A d m in istra tion .
G eneral Services A d m in istra tion .
P u b lic H ealth Service, D ep a rtm en t o f H e a lth , E d u c a tio n ,
an d W elfare.
Business a n d D efense Services A d m in istra tio n .3
P u b lic H ealth Service.
G eneral Services A d m in istra tion .
Federal a gen cy supervising construction a n d the Bureau
o f the B u dget.
Federal a ge n cy a w ard in g contract.
Business an d D efense Services A d m in istra tio n .3
D e p a rtm e n t o f D efense:
A rm y:
O ffice o f C h ie f o f Engineers.
N ation a l G uard Bureau.
N a v y — B ureau o f Y a rd s an d D o ck s .
A ir F orce— A ir M ateriel C o m m a n d .
U . S. C oast G uard.
B ureau o f P u b lic R o a d s, U . S. D e p a rtm e n t o f C om m erce
D o.
D o.
D o.
D o.
H ou sin g a n d H o m e F in an ce A g e n cy .
P u b lic H ealth Service.
Business an d D efense Services A d m in istra tio n .3
H ou sin g an d H o m e F in an ce A g e n cy .
P u b lic H ealth Service.
C iv il A eronautics A d m in istra tio n , U . S. D e p a rtm e n t o
C om m erce.
Business an d D efense Services A d m in istra tio n .3
C iv il A eronautics A d m in istra tion .
O ffice o f C h ief of Engineers.
U. S. B u reau o f R eclam ation , U. S. D e p a rtm e n t o f Interior.
Tennessee V a lle y A u th o rity .
Federal a gen cy supervisin g construction a n d the B ureau
o f the B u dget.
Bureau o f the B u d get.
Business an d D efense Services A d m in istra tion .3

E d u c a tio n a l......... ....................................................................

H osp ita l a n d in stitu tion a l____________________________

.........d o ____________ ______ _
Progress reports *_________
_____d o *....................................
____d o
___ .........d o * _______ ___________
____ d o *.................................. .
N on-Federal. C on tract a w a rd s..................
Progress reports * _________
Progress r e p o r t s __________
F ed era l____
Progress reports *_________
_____d o *.............................. —
C on tract a w a rd s..................
Progress reports *___..........
F ed era l_____ .........d o * __________ _______ _
F iscal record s............. ...........

N on-F ederal.
O th er nonresidential b u i l d i n g .................................. .......

C on tract a w a rd s...................
N on-F ederal. .........d o ...................... .................
M ilit a r y facilities_______________________________________

H ig h w a y s ................................................. .....................................

Federal

F e d e ra l_____
N on-F ederal.

S ew er a n d w a ter________________________________________

F ed era l_____
N on-F ederal.

M iscella n eou s p u b lic service e n t e r p r is e s ______________

F ed era l.........
N on-Federal.

Progress r e p o r t s . . . ............
C on tract aw ards *________
Progress reports *_________
_____d o *__________ _________
C on tract aw ards *________
Progress reports........ .........
Finan cial record s_________
Progress reports------- --------F inan cial record s.............
C on tract a w a rd s__________
Progress reports * _________
____ d o *____________________
C on tract a w a rd s...................
Progress reports * .................
.........d o *....................................
.........d o *.......................— .......
C on tract aw a rd s...................
Progress reports *_________
Progress reports....................
_____d o .......................... .............
F iscal record s.........................
.........d o .......................................

C on serva tion a n d develop m en t _ _____________________

F ed era l_____

A ll other p u b l i c ________________________________________

F ed era l......... .........d o ........................................
N on-F ederal. C on tract aw a rd s__________

i F or the m eth od s o f in corp ora tin g the various ty p e s of data in to the overall
expenditures estim ates, see th e follow in g section, “ Specific E stim atin g P r o ­
cedures.”
3 D ata are in the form o f su m m ation s b y th e collectin g agen cy, except w here
the asterisk indicates tabu lation b y B L S .
*See footn ote 2 ab ove.




3 T h e B u ild in g M aterials and C on stru ction D iv is io n o f B D S A , w h ich
uses as a source F . W . D o d g e C orp oration an d other contract aw ards data.
* N o n p e rio d ic sam ple surveys o f farm constru ction expenditures. I n n o n ­
su rvey years, ben ch m arks are m o v e d in accordance w ith related e co n o m ic
data.

ESTIMATING EXPENDITURES FOR NEW CONSTRUCTION
The permit and nonpermit segments are then
combined to give a total estimated construction
cost of the dwelling units started in the given
period. A further adjustment is then applied to
this construction cost to cover architect and en­
gineering fees, and that part of site development
costs which are not accounted for elsewhere (ex­
penditures for streets, sewers, sidewalks, curbs,
and gutters which are built by municipalities are
included under public construction).
An expenditure pattern is then applied to this
adjusted cost figure to estimate the amount of
work put in place in the months following start
of construction. This pattern is derived from:
(1) special studies of construction time to obtain
a distribution of completions in the month of
start, in the following month, and so on; and (2)
studies of the progress on actual jobs to develop
typical patterns for jobs of 2 months’ duration,
3 months’ duration, and so on. The final ex­
penditure pattern is an average of these patterns
for different lengths of construction time weighted
by the proportion of the units started which are
completed in these various lengths of time.

Residential additions and alterations are also de­
rived from building-permit data. Estimates of
activity in permit-issuing places are adjusted to
cover all nonfarm areas, using the ratio of activity
in permit- to nonpermit-issuing places derived
for new housekeeping construction. A further
substantial adjustment, based on experience, is
made to allow for understatement of true construc­
tion cost and for work that is done without permits
in permit-issuing places. The resulting estimate
of the value of work started is distributed by
means of an expenditure pattern to estimate the
value of work put in place in the months following
start of construction. Because of the character
of the source of the basic data, these estimates
relate primarily to those types of residential addi­
tions and alterations which require building
permits, i. e., mostly those involving structural
change. They do not include a sizable volume
of minor repairs, improvements, and maintenance
work which is outside the coverage of the expend­
itures series.

21

Nonresidential buildings (nonfarm) are covered
in separate estimates made for each of the follow­
ing types of new private nonresidential buildings:
(1) industrial; (2) warehouse, office, and loft
buildings; (3) stores, restaurants, and garages;
(4) religious; (5) educational; (6) social and recre­
ational; (7) hospital and institutional; and (8)
miscellaneous.
Estimates of expenditures for each of these cate­
gories are derived by distributing the value of
construction started each month over the period
during which the work is presumed to be done.
The data on the value of work to be started are
based primarily on the statistics of contracts
awarded in the 37 eastern States compiled by
the F. W . Dodge Corporation.8 However, the
following adjustments are required in the Dodge
data in order to arrive at estimates of the value
of work actually started throughout the country:
(1) Cancellations: A contract for construction
may be canceled later or indefinitely postponed.
In the Dodge reports, adjustments for cancella­
tions and corrections are made in data for the
month in which cancellations or corrections are
ascertained, rather than in data for the month
in which the original entry was made. Where
such cancellations or corrections would signifi­
cantly affect measurements of the trend of con­
struction activity, it is necessary to carry them
back into data for the month in which the contract
awards were reported.
(2) Undercoverage in 37 eastern States: An
adjustment is made to allow for projects not
included in the Dodge reports. The omissions are
chiefly smaller projects and force-account work.
The adjustment, of necessity, involves consider­
able judgment because there has never been a
complete enumeration or controlled sampling of
such projects. It is based upon analyses of the
techniques employed by Dodge in the collection
and processing of contract-award information
and upon comparison with fragmentary data
developed from other sources, such as construc­
tion trade journals.
(3) Expansion to cover 11 western States: Since
the Dodge reports cover only the 37 eastern

Nonhousekeeping residential construction ex­
penditures cover hotels, dormitories, and tourist
courts, and are estimated in the same manner as
described below for private nonresidential building.



8 T h e D o d g e data are prepared m o n th ly b y the firm ’s Statistical and
Research D iv isio n , as a b y p r o d u ct o f its d aily new s reportin g service. R e ­
ports are o btain ed b y a staff o f in divid u als w h o in terv iew ow ners, architects,
engineers, contractors, financial institutions, real estate brokers, and others
able to s u p p ly reliable in form ation on the aw arding o f construction contracts.

22

TECHNIQUES OF PREPARING MAJOR BLS STATISTICAL SERIES

States, they do not reflect contracts awarded in the
1 1
States in the Rocky Mountain and Pacific
Coast regions. Building-permit data are available,
however, for practically all urban areas in the
United States. The percentages of the United
States totals indicated in these building-permit
data as being in the western States are used as
raising ratios to expand the 37 State totals to
estimated United States totals for each type of
private nonresidential building. Because build­
ing permits cover only a part of all private non­
residential construction work started, with the
coverage varying considerably among the various
types of construction and from one period of time
to another, the results are checked and augmented
whenever possible through the use of reports on
construction contract awards which appear in a
number of construction trade periodicals.
(4) Duplication of data on public utility build­
ings: Offices, warehouses, and other buildings
constructed by public utilities are included in the
total value of construction reported by the various
utilities and are also included in Dodge reports
for nonresidential buildings. To eliminate this
duplication, estimates for buildings constructed
by public utilities are subtracted from total values
of warehouse, office and loft buildings in the
private nonresidential building segment. Thus,
an office building constructed by an electric power
company is classified, not under nonresidential
building, but under utility construction.
(5) Translation of contract awards to work
started: The Dodge collection procedures produce
reports of contract awards due for early start.
The awards reported for a given month are there­
fore used as construction starts in the following
month.
Estimates thus obtained of the total value of
new work started are converted to estimates of
the value of work put in place each month by the
application of typical progress patterns. From
past surveys of actual construction projects,
several activity patterns have been developed
showing for each type of building the probable per­
centage of total cost which will be placed each
month, taking into account the average size of
project and the season in which work is begun.
These patterns, which tend to become obsolete
with technological changes in the industry, are
revised periodically as funds for this work are
made available.



For farm construction, annual estimates of total
expenditures on farm buildings and a breakdown
of the total as between expenditures on operators*
dwellings and expenditures on other farm struc­
tures are prepared by the Agricultural Marketing
Service of the Department of Agriculture.9 They
are based chiefly on data from sample surveys of
construction expenditures of farm operators in
1934-37, 1939, 1946, and 1949. Estimates for
other years are made by interpolation and extra­
polation, based in part on inference from data on
farm electric lighting systems, silos, domestic
water systems, etc., reported in the annual Census
of Manufacture and Sale of Farm Machinery and
Equipment. The bulk of the dollar amounts
involved, however, for other than benchmark
years represents approximations based on changes
in indices of farm construction costs and in such
indicators as estimated consumption of lumber on
farms, sales of building materials in rural areas,
and nonfarm residential construction. The sep­
aration of estimated expenditures for maintenance
and repairs from new construction expenditures
is based upon relationships indicated in some of
the source material. Current monthly estimates
of new farm construction are prepared by the
Department of Commerce by projecting annual
estimates for the preceding year on the basis of the
trend of farm income and applying a seasonal
pattern to the annual totals.
For public u i i i s construction, estimates of
tlte
expenditures are made basically from financial
data showing outlays for construction. Since
financial reports usually are made up sometime
after the close of a year, it is necessary to extra­
polate from other data during the current year in
order to provide preliminary monthly estimates;
these are subject to adjustment when complete
financial data become available. Sources of finan­
cial statistics and bases used for extrapolation in
preparing estimates of construction by various
major classes of privately owned public utilities
are described below:
(1)
Railroads. Final estimates are based on an
annual summary of construction expenditures
prepared by the Interstate Commerce Commission
from reports to that agency by all Class I railroads.
Construction expenditures by Class I railroads are
• A s described in A gricultu ral E stim atin g and R e p o rtin g Services o f the
U . S. D ep artm en t o f A g ricu ltu re, M iscellaneous P u b lica tio n N o . 703, 1949.

ESTIMATING EXPENDITURES FOR NEW CONSTRUCTION
adjusted upward to allow for construction by all
classes of railroads. Provisional data compiled
monthly by the Interstate Commerce Commission
are used for extrapolation to prepare preliminary
monthly estimates. These preliminary estimates
are first adjusted shortly after the close of the year
when the annual report of the Bureau of Kailway
Economics of the Association of American Rail­
roads becomes available. They are subject to
further adjustment to correspond with the official
figures of the Interstate Commerce Commission
which are issued subsequently.
(2) Local transit The Transit Fact Book,
.
annual publication of the American Transit Asso­
ciation, provides the basic source for estimates of
capital and maintenance expenditures of transit
companies in the United States. Monthly extra­
polations are based on the trend shown by other
public utilities.
(3) Petroleum 'pipelines Annual reports by oil
.
companies covering their capital expenditures filed
with the Interstate Commerce Commission form
the primary basis for final estimates. These re­
ports must be adjusted to eliminate purchases of
existing lines and to allow for expenditures of
companies not required to file reports with the
Interstate Commerce Commission. Monthly ex­
trapolations are made on the basis of the trend
shown by Dodge contract-award data and by
quarterly data of the Securities and Exchange
Commission.
(4) Electric l g t and power. Annual reports to
ih
the Federal Power Commission by Class A and B
electric utilities are used to prepare final esti­
mates. These reports are adjusted to exclude
purchases of existing facilities and to allow for
construction by small companies not required to
file reports. Monthly extrapolations are based on
the trend shown by Dodge contract-award data
and by quarterly reports of the Securities and
Exchange Commission on capital expenditures of
utility companies.
(5) Gas. Annual data published by the Amer­
ican Gas Association are the basis for final esti­
mates. They cover both manufactured and
natural gas facilities and they include gas trans­
mission lines as well as local distribution lines.
The A. G. A . data are adjusted to eliminate man­
ufacturing and pumping machinery and equip­
ment purchases. Monthly estimates are made by
extrapolations based on the trend of Dodge con­



23

tract awards and on quarterly data compiled by
the Securities and Exchange Commission on
capital expenditures of utilities.
(6)
Telephone and telegraph. Monthly esti­
mates of new construction expenditures by the
entire telephone industry in the United States are
used as prepared by the American Telephone and
Telegraph Company. The A .T .& T . summarizes
reports from member companies of the Bell System
and includes an estimate of construction by inde­
pendent companies. No futher adjustments are
necessary.
Monthly statements of construction expendi­
tures by the Western Union Telegraph Company
are used as received from the company.
For a l other private construction, expenditures
l
are estimated from the same sources, and in the
same general manner, as described for private
nonresidential building.

Public construction. Estimates of expenditures
for public construction are obtained by combining
separate estimates for two components: Federal
construction and all other public construction
(i. e., State, county, and municipal). Monthly
information currently available on Federal con­
struction is generally more satisfactory than in­
formation on State and local public construction;
the Bureau of Labor Statistics prepares a separate
report of monthly Federal expenditures. The fol­
lowing section describes, for each category of
public construction, the methods of estimating
first the Federal, and then the non-Federal com­
ponent, on the basis of the source of the construc­
tion funds.1
0

Residential building by the Federal Government,
except the temporary housing currently nearing
completion under the Defense Housing Program
(P. L. 139), has recently been confined to military
io T h e m ain division in con stru ction expenditures is betw een p rivate and
p u b lic projects. I t is based on the ow nersh ip o f the facilities u nd er con ­
struction. W ith in the p u b lic category, h ow ever, tw o types o f division
betw een Federal and other p u b lic con stru ction is possible, because o f the
grants o f funds un d er Federal-aid program s. O ne is o n the basis o f ow ner­
ship; the other, w h ich is th at used in this descrip tion o f m ethods, is on the
source o f the con stru ction funds. T o illustrate, the Federal-A id H ig h w a y
P rogram p rovid es Federal funds for State-ow ned h igh w a y construction.
T herefore, State expenditures for h ig h w a y con stru ction presented un d er an
ow nership classification exceed those for the sam e construction u nd er a
source-of-funds classification b y the a m ou n t o f the Federal grants.
T h e foregoing applies o n ly to Federal grants. Federal loans for construc­
tion , such as those b y the R u ral E lectrification A d m in istra tion for the exten­
sion o f pow er facilities, are considered to be th e funds o f the agency receiving
th em (i. e., the ow ner o f the facilities) and therefore d o n o t give rise to different
results under the tw o classification system s.

24

TECHNIQUES OF PREPARING MAJOR BLS STATISTICAL SERIES

installations, and to such other Federal property
as construction camps and project control areas.
Expenditures for such construction are included
in the “ Military facilities” or “ Conservation and
development” categories listed on page 18. All
data currently reported in the public residential
classification, therefore, can be considered to
represent outlays by non-Federal public agencies.
It should be noted that the actual construction
expenditures for public housing built by local
housing authorities under the Federal low-rent
program (U. S. Housing Act of 1949) are from
funds raised locally. Federal participation in this
program is limited to aid in planning and to annual
grants for operation, as required, to assure low
rentals.
B y far the most important of the local housing
agencies has been the New York City Housing
Authority from which construction expenditures
data are collected monthly. These data are a
reconciliation of estimates by the contractor and
by N Y C H A engineers of the amount of work
placed, and are prepared primarily to determine
monthly payments to the contractors. For the
smaller programs in other places, estimates are
made by applying typical residential construction
patterns to data collected by appropriate Bureau
of Labor Statistics regional offices on the cost and
estimated start and duration of the projects.
Estimates for the relatively small amounts of
nonhousekeeping public residential construction,
principally college dormitories, are based on a
distribution of contract-award data.
Nonresidential building data are derived for
each type of construction as follows:

Bureau of Yards and Docks. However, the
reported monthly figures occasionally show distor­
tions because previous errors in appraising prog­
ress are usually reflected in the data for the current
month. The report for any given month may
therefore require adjustment to present a trend
consistent with seasonal and other factors. To
maintain correct levels, totals of the expenditures
as reported and as used are reconciled at quarterly
intervals.
The relatively small amounts of non-Federal
public industrial construction are included in
miscellaneous nonresidential building by the
method described below for non-Federal non­
residential building.
(2)
Educational. The Federal component of
this category consists of: (a) construction under
the Federal School Construction Program; 1 and
1
(b) construction of an occasional specially author­
ized educational proj ect. (Military training build­
ings are included under military facilities.) Con­
struction of the specially authorized projects is
usually under the supervision of the Public
Buildings Service, and copies of progress reports
to that agency are supplied to BLS for tabulation.
The Federal School Construction Program is,
however, a grant-in-aid program, and as such
presents special estimating problems. Construc­
tion expenditures for the program as a whole, and
for the Federal contribution, are summarized by
BLS from individual project progress reports pre­
pared at the site by H H F A engineers and for­
warded to that agency’s Washington office. The
Federal contribution is combined with the outlays
on the PBS projects to obtain the Federal com­
ponent of the total public educational construction
(1)
Industrial. Federally owned and financed
expenditures.
industrial plants were of minor importance before
As with most non-Federal public construction
World War II. During and since that period,
which is not federally aided, the expenditures for
construction of such facilities has fluctuated
locally financed educational facilities are estimated,
widely, tied closely to international events. At
in general, by distributing the dollar value of
the present time, the major portion of the annual
contracts awarded over a number of months
expenditures are for the construction of facilities
according to a typical pattern developed from
for the Atomic Energy Commission. The remain­
experience records for actual construction projects.
der are for plants built by the military establish­
The contract-award series used is that compiled
ment. In all cases, expenditures estimates are
by the Business and Defense Services Administra­
based on monthly construction progress reports
tion of the U. S. Department of Commerce for
made available to the Bureau of Labor Statistics
by the administering agencies. The only routine
n T h e program authorized b y P u b lic L a w 815, 81st Congress, to p ro v id e
adjustment of the reported data is an inflation
assistance to local educational agencies for construction o f schools in areas
affected b y Federal activities. T h e program is adm inistered b y th e O ffice
for architectural and administrative costs in the
o f E d u cation , w h ich uses the services and facilities o f the H ousin g and H o m e
reports by the Atomic Energy Commission and
F inan ce A g e n c y to carry o u t its responsibilities.




ESTIMATING EXPENDITURES FOR NEW CONSTRUCTION

25

similar to that described for educational construc­
tion.
(4)
All other nonresidential. Separate expendi­
tures estimates are prepared for each type of
building in this category: Social and recreational,
public administration, penal and corrective, and
miscellaneous. The Federal expenditures for
these types of construction are relatively small,
and are frequently included in other major cate­
gories (recreational buildings for military person­
nel, for example, are reported under military
facilities). It has therefore been found practi­
cable to present Federal expenditures for all other
nonresidential building in only two subcategories:
public administration and miscellaneous. The
former covers construction by Public Buildings
These expenditures estimates for school con­
Service and frequently by the Architect of the
struction financed without Federal aid are com­
Capitol for the provision of office facilities. The
bined with the estimates of State and local funds
latter includes principally construction of civilian
contributed to the Federal School Construction
storage and research facilities by a considerable
Program to obtain the non-Federal component of
number of Federal agencies, some of which engage
the total public educational construction expendi­
only occasionally in construction activities. For
tures,
those agencies which supervise sizable and con­
(3)
Hospital and i s i u i n l The Federal
ntttoa.
tinuing programs, such as Public Buildings Service
component of this category reflects two major
and the National Advisory Committee for Aero­
programs of hospital construction— the Veterans
nautics, procedures have been established for
Administration Program and the National Hospi­
obtaining progress reports or statements of pay­
tal Program 1 — and occasional individual projects
3
ments to contractors. For the other agencies,
such as the Washington, D . C., Hospital Center.
estimates are based on annual expenditures data
Construction of the individual projects is gen­
from the Budget of the United States, and on
erally under the supervision of the Public Build­
contract-award information reported by the
ings Service, and copies of project progress reports
agency to the Bureau of Labor Statistics.
to that agency are supplied to the Bureau of
Estimates of expenditures for State and local
Labor Statistics for tabulation. Estimates for
other nonresidential building are obtained by a
the construction of veterans hospital facilities are
distribution of the B D SA contract award sum­
also based on project progress reports, but in this
maries, with the usual adjustments to compensate
case tabulation is by the Veterans Administration.
for undercoverage and to reflect normal season­
The National Hospital Program is a Federal-aid
ality.
activity, and expenditures under it are estimated
For militaryf c l t e , the expenditures reported
aiiis
from progress reports collected by the State
represent the volume of all new construction, re­
agencies supervising the program and submitted
gardless of type, at Federal military installations,
to the Hospital Facilities Division of the Public
and of new construction financed wholly or in
Health Service, which makes them available to
part with Federal funds on State-owned military
BLS for tabulation. The method of integrating
sites. The relatively small amount of military
these expenditures with those for independently
construction financed exclusively by the States
financed State and local construction (obtained by
(armories, rifle ranges, and the like) are included
a distribution of the B D SA contract-award data)
with other public construction categories according
and with those for direct Federal construction is1
to type of construction.
The data for military facilities construction
1 See footn ote 8,
S
administered by the Office of the Chief of Engi­
1 T h e constru ction program authorized b y the H ospital Su rvey an d Oon*
*
neers, Department of the Army, and by the Bureau
struction A c t of 1946, P u b lic L a w 725, 79th Congress.
State and local public construction, using informa­
tion collected by the F. W . Dodge Corporation
in the 37 eastern States.1 To obtain data for
2
the noncovered western States and to supplement
Dodge coverage in the eastern States, the BD SA
utilizes information from other construction news
sources, both private and public. The Bureau of
Labor Statistics adjusts the expenditures esti­
mates derived from the distribution of contracts
awarded to compensate for undercoverage, to
reflect normal seasonality and to eliminate the
duplication present when some of the contracts
represent work under a Federal-aid program, for
which the expenditures are obtained from progress
reports.

304523— 55— -3




26

TECHNIQUES OF PREPARING MAJOR BLS STATISTICAL SERIES

of Yards and Docks, Department of the Navy, are
based on monthly progress reports. These reports
reflect the observation or the actual measurement
by service engineers of the volume of work accom­
plished during the month. Data for Army con­
struction are obtained from a Corps of Engineers
monthly publication presenting a listing tabulation
of progress by individual project. Data for N avy
construction are tabulated by BLS from copies
of monthly reports prepared in the field offices of
the Bureau of Yards and Docks showing progress
on individual contracts. The figures for N avy
projects require an inflation for architectural and
administrative costs, and those for both agencies
occasionally require adjustment, within the limits
of the reported quarterly totals, to correct dis­
torted monthly trends, as described for public
industrial construction.
Relatively minor amounts of construction are
incorporated in the military facilities category for
work performed under the direct jurisdiction of
the Department of the Air Force and the N a­
tional Guard Bureau. Direct Air Force con­
struction consists of works of a highly specialized
nature and a program of jobs teimed “ Major re­
pairs and minor (new) construction.” The data
for these are obtained annually, based on financial
records. Monthly figures are obtained by divid­
ing the annual figures by twelve and adjusting
for seasonality. National Guard estimates are
obtained by distributing monthly contract-award
data.
Highway construction expenditures estimates are
the sum of five components— expenditures on the
Federal-Aid Highway Program,1 on State high­
4
ways (including toll facilities) independent of the
Federal-aid program, on county roads, on munic­
ipal streets, and on roads on Federal lands. Sat­
isfactory monthly data are currently available for
only one of these components— the Federal-aid
program, which accounts for roughly one-third of
total highway work. For this program, estimates
of the value of work actually placed each month
are available, based on observations by engineers
of the Bureau of Public Roads, U . S. Department
of Commerce. The latter agency tabulates these
data for internal use, primarily to determine the
14 T h e constru ction program u n d ertak en u n d er the term s o f the various
Federal-aid h ig h w a y acts w h ich p r o v id e F ederal fu n ds to assist the States
in road construction.




“ earnings” of States under the program, and sup­
plies pertinent aggregates for the expenditures
estimates, showing Federal grants separately.
These grants are added to the expenditures for
highway construction on Federal lands, derived
in the same manner as described below for State
and local work, to obtain total Federal expendi­
tures for highway construction.
The estimates for components of highway con­
struction not federally aided are derived from the
Bureau of Public Roads annual summaries of ex­
penditures for highway construction according to
Government jurisdiction. These are based pri­
marily on special financial reports submitted to
the BPR by the State highway departments.
These annual totals are distributed by month
on the basis of the reported monthly progress on
Federal-aid work by use of ratios of the reported
expenditures to the corresponding moving-average
values.
Current monthly estimates for these non-Federal-aid components are in effect extrapolations
of the previous year’s figures. Current levels are
established by: (1) a forecast prepared by BPR
from reports of anticipated expenditures by State
highway departments; and (2) BPR tabulations
of contracts awarded by State highway depart­
ments. Trends are based on reported progress of
the work on Federal-aid jobs.
The sewer and water expenditures estimates are
confined to projects which are non-Federal in
nature. The small amount of sewer and water
construction at Federal installations is included
with other major types of construction. The
Federal component of this category therefore
consists only of the Federal funds provided for
grants-in-aid to local projects under the provisions
of the “ Defense Housing and Communities Fa­
cilities and Services Act of 1951.” 1 Expendi­
5
tures under this program are determined from in­
dividual project progress reports collected in the
field and made available for summary to BLS by
H H F A and PHS, the two agencies administering
the program. Expenditures for the projects
financed without Federal aid are obtained from
a distribution of the B D SA contract-award sum­
maries, and the method of integrating the two
sets of data is the same as previously described
for educational.
i* P u b lic L a w 139, 82d Congress.

ESTIMATING EXPENDITURES FOR NEW CONSTRUCTION

Miscellaneous public s r i e enterprises expend­
evc
itures estimates cover outlays for such works as
publicly owned electric power facilities, transit
systems, wharves, and civilian airfields. Direct
Federal construction in these categories is rela­
tively small, is usually confined to Federal instal­
lations such as military bases, and is therefore
included in other major categories, e. g., the erec­
tion of a power line at a Federal dam construction
camp is included under conservation and de­
velopment.
In recent years, however, most
civilian airport construction has been undertaken
with Federal financial aid, under the provisions
of the Federal Airport Act of 1946. Progress of
construction under each Federal grant is reported
monthly by regional offices to the central office of
the Civil Aeronautics Administration which super­
vises the program, and these reports are made
available to the Bureau of Labor Statistics for
transcription and tabulation.
All other construction in this category is
wholly locally financed, and expenditures are
estimated from a distribution of contract-award
summaries supplied by the Business and Defense
Services Administration.
Conservation and development expenditures, as
reported currently, represent the volume of all
new construction, regardless of type, at the sites
of Federal projects for the conservation, develop­
ment, or control of the Nation’s natural resources.
The small amount of expenditures by non-Federal
public agencies for construction for these pur­
poses is represented chiefly in all other public.
Three agencies are principally responsible for
Federal work in this category: The Civil Works
Division of the Office of the Chief of Engineers,
the Bureau of Reclamation, and the Tennessee
Valley Authority.1 From each of these agencies,
6
summaries on a project basis are received each
month covering expenditures accruing during the
previous month. These accruals reflect primarily
the value of work actually put in place as deter­
mined by site observations by Government
engineei s.
From most of the agencies doing relatively small
amounts of conservation work, such as the Soil
Conservation Service and the International
E xpenditu res for T V A have been retained in the conservation and
developm en t category, even th ou gh for several years the con stru ction
activities of this agency h ave been directed tow a rd the p rovision o f steam
electric, rather than h ydroelectric, generating capacity.




27

Boundary and Water Commission, United States
and Mexico, monthly data are not at present
solicited. For these agencies, annual expendi­
tures data (actual for past periods, and estimated
for future) are obtained from the Budget of the
United States, and distributed by months on the
basis of the trends shown by the major agencies.
All other public construction not elsewhere
classified covers such projects as parks, athletic
fields, memorials, and the like. The small amount
of Federal outlay in this category is estimated
monthly from the annual figures presented in
the Budget of the United States. Non-Federal
expenditures are obtained by a distribution of
B D SA contract-award figures.

Limitations
As the preceding sections have shown, the
methods by which these estimates are compiled
result in measures in terms of dollars of a pur­
chasing power current during the period of refer­
ence. The figures therefore cannot be used as
indicators of the physical volume of construc­
tion placed without extensive adjustments for
differences in price levels and wage rates, techno­
logical changes, and other relevant factors.1
7
The degree of error in the estimates of expendi­
tures cannot be measured statistically and, because
of the uneven quality of the basic source data, the
accuracy of the figures varies considerably between
types. Thus, for example, the estimates for farm
construction are much less reliable than those
for public utilities. Moreover, the degree of
accuracy attained in the estimates has varied
with the resources available for searching and pro­
cessing appropriate secondary data, and for con­
ducting pertinent original surveys. To a greater
extent, probably, than in many statistical series,
crude construction expenditure estimates may be
obtained very inexpensively, whereas the prepara­
tion of highly accurate and detailed estimates is
quite costly. In general, the larger the coverage
T h e Business and D efense Services A d m in istra tion estim ates change
in the p hysical v o lu m e o f con stru ction p laced b y expressing current estim ates
in 1947-49 prices. T h is is d on e b y deflating the estim ate for each class o f
constru ction b y an appropriate constru ction cost index. T h is series is
available b y years from 1915 and b y m on th s from January 1939. (T w o
other series are d erived from the basic expenditures estim ates. O ne presents
seasonally adjusted new constru ction a c tiv ity , m o n th ly beginning in January
1939, and the other a d istribu tion o f n ew con stru ction a c tiv ity b y States,
ann ually beginning in 1939, and qu a rterly beginning in 1947.)

28

TECHNIQUES OF PREPARING MAJOR BLS STATISTICAL SERIES

of the expenditures the more reliable are the
fi u e . For instance, annual estimates are better
grs
than monthly, and the total for any period i
s
more nearly accurate than the data for any of the
individual types of work. Relatively small
month-to-month changes should be used with
caution because most monthly data are based
on normal construction patterns, and not on actual
observed progress ( . 19). In particular, sweeping
p
conclusions should not be drawn from preliminary
monthly f g r s in which, because of the timing
iue,
of the preliminary estimates, a substantial element
of judgment in forecasting i involved. The
s
year-to-year changes in the estimates for total
and major types of construction are correct as to

direction and are substantially correct in extent.
The figures by type of construction are not
adapted for use in making exceedingly fine com­
parisons, primarily because of some unavoidable
inconsistencies in classi i a i n For example,
fcto.
regardless of type of work (whether building con­
struction, road work, e c ) a l construction by
t., l
privately owned public u i i i s i included under
tlte s
public u i i i s a l military construction (except
tlte, l
industrial) by the Department of Defense i
s
represented in military f c l t e , and a l construc­
aiiis
l
tion by the c v l units of the Army Engineers, the
ii
Bureau of Reclamation, and other Federal con­
servation agencies i included in conservation
s
and development.

BIBLIOGRAPHY

Construction Activity in the United States, 1915-37.

Prepared under Lowell
J Chawner. Washington, U. S Department of Commerce, 1938. 93 pp.
.
.
(Domestic Commerce Series No. 99 )
.

Techniques of Preparing Major BLS Statistical Series. Chap. X. Estimat­
ing Expenditures for New Construction. Washington, U. S Depart­
.
ment of Labor, Bureau of Labor Sta i t c , 1950. 72 pp. ( u
tsis
B ll. 993.)

Construction Expenditures and Employment, 1925-1936. By Peter A. Stone.
Washington, Works Progress Administration, 1937.

Construction and Building Materials (Statistical Supplement to the M a y 1953
i s e . Appendix B: Derivation of Construction Estimates. Wash­
su)
ington, U. S Department of Commerce, 1953. 79 pp.
.

National Income and Product of the United States, 1929-1950. Part III:
Sources and Methods of National Income Estimation, Section 9; New
Construction. Washington, U. S Department of Commerce, 1951.
.
215 pp.

Public Works in Prosperity and Depression. Chap. Ill: Total Public and
Private Construction in the United States, 1923-1933. By Arthur D.
Gayer. New York, National Bureau of Economic Research, 1935.
460 pp. (Publication No. 29.)

Agricultural Estimating and Reporting Services of the U. S. Department of
Agriculture. Washington, U. S. Department of Agriculture, 1949.
266 pp.




(Miscellaneous Publication No. 703.)

ESTIMATING EXPENDITURES FOR NEW CONSTRUCTION

B I B L I O G R A P H Y — Continued

New and Maintenance Construction: Construction in the 194-7 Inter-Industry
Relations Study. Washington, U. S. Department of Labor, Bureau of
Labor Statis i s 1953. 58 pp.
tc,

(BLS Report No. 2 )
.

Fluctuation in the Capital Outlays of Municipalities. By Harold Wolkind.
Washington, U. S Department of Commerce, 1941. 87 pp.
.

Gross Capital Formation, 1919-1983. Appendix 2: The Volume of Total
Construction. By Simon Kuznets. New York, National Bureau of
Economic Research, 1934. 20 pp. (Bull. 5 .
3)




29

C h ap ter 4. L a b o r R e q u ired for N e w C o n stru ctio n *

Background and Uses
The s atistical series currently termed “Labor
t
Required for New Construction” was initiated
during the early 1930’ as a means of measuring
s
the volume of employment created by new con­
struction activity at construction s t s Until the
ie.
mid-forties these figures were accepted as actually
measuring construction employment and were,
accordingly, termed “Estimated Construction
Employment.” With the development and im­
provement of the “Contract Construction Employ­
ment” series (chap. 6— Measurement of Industrial
Employment),i became necessary to change the
t
the name of the former series to “Labor Required
for New Construction” in order to eliminate con­
fusion between the two related, but fundamentally
different, sets of data. The contract construction
series i an estimate of the number of f l - and
s
ul
part-time employees who actually worked during,
or received pay f r the payroll period ending
o,
nearest the fifteenth of the reporting month. It
covers a l s t and o f s t wage and salaried em­
l ie
f-ie
ployees of private establishments whose major
activity i construction, but excludes self-employed
s
construction workers, working proprietors, and
force-account employees of nonconstruction firms
and public agencies that perform their own con­
struction work. The series on labor requirements
i an estimate of the number of full-time workers
s
required to put in place the dollar volume of new
construction under way during a given period of
time. It covers a l workers, both s t and o f s t ,
l
ie
f-ie
of construction firms, as well as self-employed
construction workers, working proprietors, and
force-account employees engaged in new con­
struction.
The labor requirements estimates lend them­
selves to two basic uses. They approximate the
total number of employees engaged in new con­
struction activity, by type of construction, and by
s i l and occupation of workers, a s atistic not
kl
t
•Prepared b y E d w a r d M . G ord on o f the D iv is io n o f C on stru ction S tatistics.

30




available from any other source. The estimates,
therefore, provide a measure of the volume and
trend of employment created by new construction
activity, a very important segment of the overall
employment picture. Of perhaps equal value i
s
the fact that the basic data used in preparing the
regular estimates can be used to estimate the em­
ployment that would be required by a particular
expenditure for new construction, or that would be
generated by a proposed construction project or
program. Thus, they are useful in analyzing the
manpower feasibility of defense or emergency
construction, or the employment-creating potential
of proposed public works programs.
Concepts and Scope
An indirect approach in measuring the needs of
on-site construction employment seemed desirable
because of conditions peculiar to the construction
industry. Some of these conditions are: ( ) the
1
instability of employment at any one construction
s t ; ( ) the sensitivity of employment to weather
ie 2
conditions; and ( ) the difficulty of directly
3
measuring the volume of force-account employ­
ment.
The labor requirements series i designed to
s
measure the number of full-time workers required
to put in place the dollar volume of new construc­
tion under way during a given period of time. The
estimates project worker requirements at the s t
ie
of new construction, and in yards, shops, and
o f c s where worker time i chargeable to new
fie
s
construction operations. Consequently, the pro­
jections cover, in addition to employees of estab­
lishments primarily engaged in new construction,
self-employed persons, working proprietors, and
employees of nonconstruction establishments who
are engaged in new construction work. The
coverage i identical, therefore, to the coverage of
s
the series (chap. 3— Estimating Expenditures
for New Construction) which measures the volume
of new construction in monetary terms. Data

LABOR REQUIRED FOR NEW CONSTRUCTION

are regularly prepared on a quarterly basis;
quarterly estimates are available starting with
1939. In addition to these regular quarterly
estimates of labor requirements for a l new con­
l
struction activity, periodic estimates are prepared
for specific construction projects and programs,
either proposed or actually under way.
Estimating Procedures
The estimating techniques make use of the
“expenditure’ estimates for new construction and
’
“value of work put in place” factors; the direct
use of either a questionnaire or a sampling pro­
cedure i not involved. Essentially, the technique
s
consists o : ( ) developing, from special surveys
f 1
and studies, a dollar value of work put in place
per man-month (or man-year) for each major
type of construction for some given base period;
( ) adjusting, during the interim periods between
2
special studies, these “value of work put in place”
factors for changes in labor costs and material
prices that have occurred since the base period,
by the use of “construction cost” indexes; and
( ) dividing the estimated expenditures (chap. 3—
3
Estimating Expenditures for New Construction)
by these factors to derive the estimated number
of man-months (man-years) of full-time employ­
ment required to effectuate the given amount of
work.
The most complicated and time-consuming
operation involved in this technique i the develop­
s
ment of the “value of work put in place” factors
from special studies and surveys of completed
projects. Representative completed projects of
the various types of construction are selected for
these special surveys. Several different types of
data are utilized in making these special studies:
( ) summary reports of the number of man-hours
1
worked and of the amount of earnings on specific
projects of given value; ( ) summary reports of the
2
number of man-hours worked on specific construc­
tion programs involving various kinds and values
of projects; and ( ) copies of contractors’ and
3
subcontractors’weekly payrolls.
The most satisfactory sources of data for the
development of these “value of work put in place”
factors are actual copies of contractors’ and sub­




31

contractors’weekly payrolls. An analysis of such
payrolls provides “value of work put in place”
factors, timing patterns showing man-hour re­
quirements by period of operation (week or
month), and distribution of workers by s i l and
kls
occupations. For the projects selected for study,
copies are obtained of payrolls of a l contractors
l
and subcontractors engaged on the project. M a n ­
hours worked are then summarized by week of
operation and for each occupation involved during
each week of operation. Data for similar projects
(type and value) are then summarized to obtain
“overall” or average factors and patterns. These
special studies are conducted periodically as funds
are made available.
During the periods between the time that special
studies are made, “value of work put in place” fac­
tors are revised quarterly to adjust for changes in
labor costs and material prices that have occurred.
Currently, “construction cost” indexes, which
re l c the changes in construction costs, are used
fet
to make these adjustments. Inasmuch as the
Bureau of Labor Statistics does not prepare a
“construction cost” index, indexes prepared by
certain private firms and associations are used.
Among the indexes currently being used are the
E. H. Boeckh and Associates index for residential
construction, the Engineering News-Record index
for certain types of nonresidential construction,
and the Associated General Contractors index for
certain types of heavy construction.
Limitations
The series i limited in that the estimates
s
represent the number of full-time workers required
to perform a given volume of work without ad­
justments for certain variables (labor turnover,
weather conditions, changes in productivity, over­
time work, e c ) rather than a count of names
t.
actually appearing on payrolls at a given time; and
are therefore minimum estimates of employment.
The accuracy of the estimates themselves, depends
largely upon the accuracy of the “value of work
put in place” factors and the “expenditure” series
estimates. Therefore, the limitations inherent in
the “expenditures” estimates apply as well to
the labor requirements estimates.

32

TECHNIQUES OF PREPARING MAJOR BLS STATISTICAL SERIES

BIBLIOGRAPHY
P. W. A. and Industry. U. S. Department of Labor, Bureau of Labor
S
tatistics, 1938. (Bull. 658.)

Expenditures 1915-51, Labor Requirements 1939-51; Labor Requirements for
New Construction. January 1953. pp. 67. U. S Department of Labor,
.
Bureau of Labor Sta i t c .
tsis

Employment Created by P. W. A. Construction. Monthly Labor Review October
1936, pp. 838-845; reprinted as Serial No. R. 454. U. S Department of
.
Labor, Bureau of Labor Statis i s
tc.

Labor Requirements in Road Construction. Monthly Labor Review April 1939,
pp. 824-828; reprinted as Serial No. R. 919. U. S Department of Labor,
.
Bureau of Labor Sta i t c .
tsis

Labor Requirements in School Construction. Monthly Labor Review June
1939, pp. 1300-1301; reprinted as Serial No. R. 952. U. S Department
.
of Labor, Bureau of Labor Statis i s
tc.

Labor Utilization Patterns on Selected Housing Projects. Monthly Labor Review
M a y 1949, pp. 521-525; reprinted as Serial No. R. 1961. U. S. Depart­
ment of Labor, Bureau of Labor Sta i t c .
tsis

House Construction: Man-Hours by Occupation, 1946-47.

Monthly Labor
Review December 1948, pp. 611-614; reprinted as Serial No. R. 1964.
U. S. Department of Labor, Bureau of Labor S a istics.
tt




C h ap ter 5. W o rk -In ju ry and A ccid e n t-C au se S ta tistic s*
( ) Annual work-injury frequency rates and
2
injury-severity measures for a wide variety of
The Bureau's f r t report relating to work
is
manufacturing and nonmanufacturing industry
injuries— a study of European workmen's com­
c a s f c t o s These data are continuous for
lsiiain.
pensation procedures— was issued in 1893. This
a l manufacturing and for most industry c a s ­
l
lsi
was followed by a s ries of special reports on
e
fications from 1926.
workmen's compensation problems and of the
The annual injury rates constitute the basic
hazards associated with particular industrial
measures of work-injury occurrence in the United
operations. In 1910 a continuing se i s of annual
re
States. They permit direct comparison of the
injury-rate compilations for the iron and s e l
te
incidence of injuries and of the resulting losses in
industry was inaugurated. In 1925 the injurydifferent industries, in different States, and in
rate s ries was expanded to include 24 industries;
e
different categories of plant s z ; and in year-toie
by 1952 i covered more than 200 manufacturing
t
year comparisons they indicate the basic trends
and nonmanufacturing industry c a s f c t o s
lsiiain.
in injury occurrence. They indicate the indus­
The Bureau's work-injury and accident s a i t c
ttsis
t i s and areas in which accident prevention needs
re
program i designed as a service to the occupational
s
to be intensified and measure the success or failure
safety movement. It creates and maintains in­
of existing State or industrywide safety programs.
terest in accident prevention by providing national
Most important, they provide a norm or basis of
indicators of the magnitude of the injury problem ; comparison against which management can eval­
by providing measures indicating the relative level
uate the injury experience of individual establish­
of injury occurrence in various segments of in­ ments.
dustry and indicating the progress achieved in the
( ) Current monthly, quarterly, and monthly
3
prevention of injuries from year to year; and for
cumulative work-injury frequency rates for the
a limited number of selected industries provides
primary manufacturing industry clas i i a i n .
sfctos
the basic data on accident causes necessary for
This se i s was started in 1943.
re
effective planning of accident-prevention programs.
These rates provide measures of seasonal vari­
Through cooperative arrangements with certain
ations in injury occurrence; give early indications
States similar data are made available in State
of changes in the trend of injury incidence; and
detail for direct use in State and privately spon­
support the end-of-the-year estimates of the total
sored safety programs.
volume of work injuries in manufacturing. Their
Currently, the national work-injury and acci­
greatest importance in the safety movement,
dent-cause s a i t c f l into four groups. The
t t s i s al
however, i that they maintain interest in injury
s
groups and their uses are as follows:
records in the period between the basic annual
()
1
Annual estimates of the total volume of
surveys and provide current norms for comparison
disabling work injuries in each major industrial
with the current experience of individual estab­
c a s f c t o , and of the total economic l s , in
lsiiain
os
lishments.
terms of unproductive man-days, resulting from
( ) Detailed studies of the injury experience
4
these i j r e . These estimates are available for
nuis
and of the causes of accidents in selected industries,
each year starting with 1936. They are a primary
occupations, or activities during specified periods
stimulant in creating and maintaining general
of time. Two of these studies are made each
acceptance of the need for continuing accidentyear.
prevention activity.
The detailed injury-rate distributions developed
in these studies serve to identify particular oper­
♦Prepared b y F ran k S. M c E lr o y of the B ranch o f Industrial H azards.
Background

3 0 4 5 2 3 — 5 5 ---- 4




83

34

TECHNIQUES OF PREPARING MAJOR BLS STATISTICAL SERIES

ations within the industry which are most pro­
ductive of injur e . By so designating the problem
is
areas they a s the safety engineer in effectively
s ist
allocating his time and provide him with con­
vincing arguments in his efforts to s l safety to
el
workers in those operations.
By combining the experience of many establish­
ments, the accident-cause analyses reveal hazard
patterns which might never become evident in
the experience of an individual safety engineer or
of a single establishment. The studies do not
indicate how to prevent accidents in an engineer­
ing sense. They do, however, provide the safety
engineer with clues as to the conditions and ac­
tions which require his attention because of their
propensity to lead to accidents. They support
his appeals for management and worker coopera­
tion in eliminating particular hazards by providing
evidence that similar conditions have produced
accidents. They support the recommendations of
safety inspectors and direct their attention to
hazards which otherwise might be overlooked.
By detailing the hazards of specific types of equip­
ment, they establish the need for safety-code pro­
visions applying to those hazards and stimulate
engineering design to eliminate such accident
potentials at the point of manufacture.

Standardization. Efforts to standardize the meth­
ods of compiling work-injury s a i t c were i i i
ttsis
nt­
ated by the Bureau of Labor Statistics in 1911.
In 1914, the Bureau called a formal conference of
labor and workmen's compensation o f c a s and
fiil
others interested in this subject. The work of
this conference was carried forward in later years
by the International Association of Industrial
Accident Boards and Commissions, culminating
in the publication of the f r t standardized pro­
is
cedures in 1920.1 In 1926, a sectional committee
of the American Engineering Standards C o m ­
mittee, later the American Standards Association,
undertook a revision of these procedures. This
work led to the publication in 1937 of the f r t
is
American Standard Method of Compiling Indus­
t i l Injury Rates. This standard was revised in
ra
1954 and i continuously under review by a sec­
s
tional committee of the American Standards
Association. A second standard, the American
Recommended Practice for Compiling Industrial
i S tandardization o f In du strial A ccid e n t
Statistics, 1920 (B u ll. 276).




Statistics,

B u reau o f L a b or

Accident Causes, developed under the American
Standards Association procedures, was published
in 1941. These two standards constitute the
basis for the concepts utilized in the compilation
of a l injury and accident s a i
l
t t stics by the Bureau
of Labor Statis i s
tc.
Concepts and Scope

Injury-Frequency Rates. Injury-frequency rates
are the primary measures of the incidence of work
in u i s They indicate the relative level of in­
jre.
jury occurrence prevailing in different establish­
ments, operations, or industries during a specified
period of time, and provide a means of determining
trends in injury occurrence or of progress in acci­
dent prevention.
The standard injury-frequency rate i defined as
s
the average number of disabling work injuries for
each million employee-hours worked. The lack
of comparability inherent in simple injury t t
o als,
arising from variations in employment and operat­
ing time, i thus overcome by expressing the
s
injuries in terms of a standard unit of exposure.
A disabling injury i defined as any injury in­
s
curred in the course of and arising out of employ­
ment, which ( ) results in death or in any degree
1
of permanent physical impairment, or ( ) renders
2
the injured person unable to perform any regu­
larly established job, which i open and available
s
to him, during the entire time interval corre­
sponding to the hours of his regular shift on any
one or more days after the day of injury (including
Sundays, holidays, and days on which the plant i
s
shut down). Under this definition, the report­
ability of an injury for injury-statistics purposes
i in no way related to the e i i i i y of the injured
s
lgblt
person for workmen's compensation payments.
In case of doubt as to whether or not an injured
person i able to work, the attending physician's
s
decision i f n l
s ia.
Injury-Severity Measures. The severity of a tem­
porary injury i measured by the number of days
s
during which the injured person i unable to work.
s
For death and permanent impairment cases, the
American Standard provides a table of economic
time charges. These time charges, based upon
an average working-life expectancy of 20 years
for the entire working population, represent the
average percentage of working ability lost as the

WORK-INJURY AND ACCIDENT-CAUSE STATISTICS

result of specified impairments, expressed in terms
of unproductive days. For example, death, repre­
senting the complete loss of a l future production
l
by the injured person, i assigned a time charge
s
of 6,000 man-days (.e , 20 years of 300 days each).
i .
The complete loss or loss of use of an arm i
s
estimated as resulting in an average reduction of
75 percent in working eff c e c . By applying
iiny
this percentage to the 20-year working l f ex­
ie
pectancy, the time charge for this type of injury
i established as 4,500 man-days.
s
The standard injury-severity rate i commonly
s
used as a comparison measure indicating the rela­
tive level of economic loss resulting from work
i juries. It weights each disabling injury with i s
n
t
established time charge or days of disability, and
expresses the aggregate in terms of the average
number of days charged for each million employeehours worked.
The average severity i computed by adding the
s
actual days lost for a l temporary d s b l t e and
l
iaiiis
the time charges for a l deaths and permanent
l
impairments and dividing the total by the number
of disabling injuries. This measure constitutes
the basis for direct evaluation of the severity of
injuries in different industries, establishments, or
operations.
The formulas for these injury measures are:
requency ra

_ Number of disabling injuries x 1,000,000
number of employee-hours worked

Severity r a te =

T otal of days lost or charged x 1,000,000
T otal number of employee-hours worked

Average severity=

Total number of days lost or charged
Number of disabling injuries

Accident Causes. Accident-cause statistics are
designed to assist the accident preventionist by
identifying the events and circumstances which
most commonly lead to the occurrence of i j
n uries.
They identify the most significant hazards and
indicate the specific accident-prevention activities
which most need to be emphasized.
The standard procedure for compiling accidentcause s a i t c requires an analysis of the circum­
ttsis
stances involved in the occurrence of each accident
in order to determine five essential sets of facts
relating to the occurrence, grouped as follows: the
accident type; the agency of accident; the unsafe
mechanical or physical condition; the unsafe act;
and the unsafe personal factor. A wide variety



35

of subclassifications within each major category
provides for a large number of analytical cross
c a s f cations. The major categories of the anal­
lsii
ysis remain the same in a l studies, but the detail
l
must be modified in each study to r
eflect the
peculiar operations and hazards characteristic of
the industry, occupation, or operation under study.

Coverage. The Bureau’ annual estimates of
s
work-injury volume cover a l persons gainfully
l
employed, including self-employed persons, but
excluding those in domestic service, in the contL
nental United States.
The annual injury-rate surveys cover a l manu­
l
facturing industy classifications except petroleum
refining, smelting and refining of nonferrous
metals, cement and lime manufacturing, and coke
production. The excepted industries are covered
in similar surveys conducted by the Bureau of
Mines, Department of the Interior; data for these
industries are supplied to the Bureau of Labor
Statistics for inclusion in published reports pro­
viding complete coverage for manufacturing.
The manufacturing data are presented in detail
for approximately 160 industry classif c t o s
iain.
Annual injury-rate data are compiled for some
segments of nonmanufacturing activity. Agri­
culture, mining, domestic service, interstate and
marine transportation, and Federal Government
operations are not covered in the Bureau of Labor
Statistics’ surveys. Data on mining injuries,
provided by the Bureau of Mines, are included in
the annual report. Injury rates for railroads are
published by the Interstate Commerce Commis­
sion and rates for Federal Government operations
are published by the Bureau of Employees’ C o m ­
pensation. No rates for the other excluded activ­
i i s are available.
te
The quarterly injury-frequency rate surveys
cover most manufacturing a t v t e . Petroleum
ciiis
refining, cement and lime manufacturing, coke
production, and nonferrous smelting and refining
are omitted, since they are included in the Bureau
of Mines’surveys.
The detailed injury and accident-cause studies
are each restricted to a single industry, occupation,
or operation. These are onetime studies usually
based upon the experience of a single year.
Selection of the area to be studied i based on:
s
( ) a past record of high injury incidence; and ( )
a
b
the existence of a particular need for detailed

36

T E C H N I Q U E S

O F

P R E P A R I N G

M A J O R

BLS

STATISTICAL

SERIES

data to support the d e v e lopment of a n organized

cally complete reporting in accordance with their

accident-prevention p r o g r a m or for the develop­

respective regulations.

m e n t of safety codes or safe practice r e c o m m e n d a ­

cies

tions.

yielding only

All of the surveys cover the continental United
States.

T h e industry classifications used are those

operate

on

a

T h e other Federal age n ­

voluntary

sample

reporting

coverage.

basis

Reporting

re­

quirements of the State compensation agencies
vary widely, but reporting is compulsory

and

in the Standard Industrial Classification M a n u a l .

reasonably complete within the respective regu­

The

lations.

injury reporting requirements a n d

injury-

D a t a d r a w n f r o m the National Safety Council

rate computations conf o r m to the definitions a n d
Standard

surveys a n d f r o m surveys conducted b y various

Industrial Injury Kates

trade associations, such as the A m e r i c a n Petrole­

procedures specified in the A m e r i c a n
Method

of Compiling

except that the B u r e a u of L a b o r Statistics’ pro­

um

cedure,

tion supplement the data f r o m the public agencies

because

of reporting

limitations,

does

not include the use of percentage evaluations for

Institute a n d the Portland C e m e n t Associa­

a n d f l in s o m e of the gaps in the public data.
il
The

permanent-partial loss of use, as is permitted in

estimating procedure requires reconcilia­

tion of the various available data with standard

the Standard.

reporting definitions, evaluation of the coverage
in each

S u r v e y M e t h o d s a n d Estimating Procedures

segment

expansion

Annual Estimates.
injury v o l u m e

and

T h e annual estimates of workof the resulting m a n p o w e r
T h e y represent the c o m ­

bined j u d g m e n t of the technical staffs of the t w o

of

the

the

eco n o m y ,

adjusted

data

and

to

the

direct
total

estimated e m p l o y m e n t in each area of industrial
activity.

losses are prepared in cooperation with the N a ­
tional Safety Council.

of

T h e estimates constitute a n overall evaluation
of

the

magnitude

prob l e m

in the

of

the

United

occupational

States.

They

injury

indicate

organizations based u p o n a pooling of all data

the aggregate social a n d economic losses resulting

available to either group.

f r o m w o r k injuries a n d emphasize the national

In the absence of a centralized system of re­
porting w o r k injuries in the United States, the
accumulation of national totals m u s t be based
u p o n the assembly of m a n y bits of data d r a w n
f r o m a wide variety of sources.

The s e basic data

interest in advancing accident-prevention activi­
ties.
T h e estimates for mining a n d quarrying, m a n u ­
facturing, a n d rail transportation are based u p o n
very comprehensive data a n d are considered as

frequently overlap or omit entirely certain seg­

having a high degree of accuracy.

m e n t s of empl o y m e n t .

for construction,

Additional problems are

public

T h e estimates

utilities, miscellaneous

introduced b y a lack of uniformity in the reporting

transportation,

a n d compilation procedures of the organizations

government, a n d miscellaneous industries are based

f r o m w h i c h the basic data are drawn.

u p o n less comprehensive data, but are considered

T h e State w o r k m e n ’ compensation agencies a n d
s

trade,

reasonably accurate.

and

for finance, service,

T h e estimates for agricul­

certain Federal agencies constitute the primary

ture are based u p o n fragmentary data a n d m a y

sources of the data o n w h i c h the estimates are

reflect a

based.

Tests h a v e indicated that underreporting is prev­

for

In the Federal service, work-injury data

particular

regularly

segments

compiled

by

of
the

the

economy

Bureau

Statistics, the B u r e a u of Mines,

of

are

Labor

the Interstate

alent

in

comparatively
respect

to

high

degree

of

agricultural injuries.

error.
The

estimating error, therefore, is probably that of
underestimating rather than of overestimating.

C o m m e r c e Commission, the Office of Vital Sta­
tistics, a n d the B u r e a u of E m p l o y e e s ’ C o m p e n s a ­

Annual Injury Bates.

tion.

conducted b y mail o n a sampling basis.

The

D e p a r t m e n t of Agriculture a n d

the

Coast G u a r d provide intermittent data for opera­
tions

under

their jurisdiction.

The

Interstate

F o r m 1418, p. 37.)

T h e s e are based o n surveys
(See B L S

Reporting is entirely volun­

tary a n d all reports are confidential.

In a fe w

C o m m e r c e Commission, the Coast Guard, a n d the

States (Connecticut, N e w York, a n d Pennsylvania

B u r e a u of E m p l o y e e s ’ C o m p e n s a t i o n h a v e c o m ­

in 1954) the data are collected in cooperation with

pulsory reporting requirements a n d obtain practi­

the State L a b o r Departments, w h i c h conduct sim-




SPECIMEN OF SCHEDULE

37

B . l u S . 1418
(Rev. 9-10-53)

Budget Bureau No. 44-R002.7.
Approval expires Nov. 30,1954.

W O R K IN JU R IE S

U. S. DEPARTMENT OF LABOR

( P l e a s e c o m p le t e t h i s r e p o r t w h e t h e r o r

BUREAU OF LABOR STATISTICS

n o t t h e r e w e r e a n y d is a b l i n g i n j u r i e s )

W A S H IN G T O N 25. D . C .

IN J U R Y

S U M M A R Y , 1953

(Do not lis t any in ju ry on more than one lin e . I f no in ju rie s, enter “ 0” on lin e 33. See
instructions on other side.)
Type o f disability

Code

7 . D e a t h s . . ......................................................................................

EXPO SU R E D ATA
( S e e in s t r u c t io n s o n o th e r s id e )
(Please complete th is section even though there were no disabling in ju rie s)
1 . A v e r a g e n u m b e r o f e m p lo y e e s i n 1 9 5 3 :
(E n te r

a v e r a g e f o r y e a r ; i n c lu d e

10

8 . P e r m a n e n t - t o t a l im p a ir m e n t s
(Perm anently unable to work a t any jo b ; include
amputations or complete loss o f use o f both arms,
legs, hands, feet, eyes, or any combination o f these
m ajor body mem bers. D escribe on separate
sh ee t.)------------------------------------ -----------------

(laec a g m i i gad e si icret I c u epsa zn)
Pes h n e a l n d r s f norc— n l d otl oe

20

P e r m a n e n t - p a r t i a l i m p a ir m e n t s
(Include only amputations, permanent loss o f use,
or permanent im pairment o f functions.)

a l l c la s s e s o f

9 . 1 a r m ! _____________________________________ , ________
1 0 . 1 h a n d ______________________________________ ______
1 1 . 1 le g

2 . T o t a l h o u r s w o r k e d b y a l l e m p lo y e e s

________

1 2 . 1 fo n t

31
32
33

3 . N u m b e r o f w e e k s t h i s e s t a b l is h m e n t o p e r a t e d d u r in g

________________________

34

1 3 . 1 t h u m b ......................................................................................

d u r in g e n t ir e y e a r , 1 9 5 3 ................................................... ........................... ....................................

__________________

35

1 4 . 1 f i n g e r .........................................................................................

1 6 . 3 f in g e r s ( s a m e h a n d ) ...............................................

43

___________________

44

2 4 . T o e ( n o t g r e a t t o e ) _____

46

25. 1

— .......................... .........................................................................

a jt a

_____________

—

45

2 2 . 1 g re a t to e .

( lo s s o f s i g h t )

___________
...

2 6 - 1 e a r (lo s s o f h e a r in g )

(c) ...............................................................................................

_____

L

47

______ _______

2 7 - R o t h e a r s ( lo s s o f h e a r in g )

__________

48
49

................................................... ............................................... ...........................................................................................

2 8 . O t h e r ( d e s c r ib e o n s e p a r a t e s h e e t ) —

50

...............................................................................................................................................................................................

2 9 ............. . . ...................................................................................................

51

30.

6 . I f m a n u f a c t u r in g , p le a s e i n d i c a t e :
(a )

42

2 3 . 2 g r e a t t o e s . . _____________ _______________________

P e rc e n t o f to ta l
a n n u a l s a le s
v a lu e o r r e ­
c e ip ts

i b ) ............................................................................................................................................

()
d
()
e

41

2 1 . T h u m b a n d 4 f in g e r s ( s a m e h a n d ) —

( a ) .................................

40

2 0 . T h u m b a n d 3 f in g e r s ( s a m e h a n d ) . —

5 . E n t e r i n o r d e r o f im p o r t a n c e t h e p r i n c i p a l p r o d u c t s m a n u f a c t u r e d , lin e s o f t r a d e , s p e c if ic s e r v i c e , o r o t h e r a c t i v i t i e s d u r in g 1 9 5 3 .

39

1 9 . T h u m b a n d 2 f in g e r s (s a m e h a n d ) . . . .

4 . P r i n c i p a l t y p e o f a c t i v i t y o f t h i s e s t a b l is h m e n t ( i . e . , m a n u f a c t u r i n g ,
w h o le s a le , r e t a i l , c o n s t r u c t io n , p u b l i c u t i l i t y , e t c . ) :

38

1 8 . T h u m b a n d 1 f i n g e r ( s a m e h a n d ) ______

( S e e in s t r u c t i o n s o n o t h e r s i d e )

37

1 7 . 4 fin g e r s ( s a m e h a n d ) ______________________

D ATA

36

1 5 . 2 f in g e r s (s a m e h a n d ) ________________________

1 9 5 3 ......................................................................................................... r ..............................................................................
C L A S S IF IC A T IO N

Num ber o f cases

P r i n c i p a l m a t e r i a l s u s e d (e . g ., r o u g h c a s t i n g s , m a c h in e d p a r t s ,
a s s e m b le d p a r t s ; r a w c o t t o n , c o t t o n y a r n , o r c o t t o n f a b r i c s ,

_________

X

T e m p o ra ry - to ta l d is a b ilit ie s
Num ber
o fca se s

(A ll work In ju rie s, not listed above. Involving d is­
a b ility o f 1 fu ll calendar day or more after the day
o f in ju ry . Also include hernias wbdther tim e w as
lost or no t.)

e t c . ) .........................................................................................................................................................................

() G e n e r a l t y p e s o f o p e r a t io n s p e r f o r m e d
b

S u m o f it e m s 9 t o 2 9

( e . g . , f o u n d r y , m a c h in e

To ta l calendar
days o f d is­
a b ility

3 1 . C a s e s r e s u lt in g i n —

s h o p , a s s e m b l y ; s p in n in g , w e a v i n g , s e w in g , e t c . ) ---------------------

(a )

D is a b ilit y o f 1, 2 , o r 3 d a y s .

() D i s a b i l i t y
b
(c )

61
—

o f 4 o r m o re d a y s ....

62

-----------------------

63

X X

64

X X

H e r n ia ..—

( d ) D i s a b i l i t y o f u n k n o w n d u r a t io n
(d e s c r ib e o n s e p a r a t e s h e e t ) ..
32.
F i l l e d o u t b y ------------------------------------------------------------------------- -

1

S u m o f it e m s 3 1 ( a ) , ( 6 ) , ( c ) ,
and

()
d

_____

_____________

65

P o s i t i o n ............................................................................-................................




D a t e ---------- -

33f.

S u m o f it e m s 7 , 8 , 3 0 , a n d 3 2 ..

3 4 . F ir s t - a id a n d m e d ic a l c a s e s :
( I f records o f these cases are not read ily avail­
able, enter “ N . A .” )

X X
N um ber o f cases

G r a n d t o t a l— A l l d i s a b l i n g i n j u r i e s
X.

X

10— 68665-1

38

T E C H N I Q U E S

O F

P R E P A R I N G

ilar surveys within their o w n jurisdictions.

M A J O R

BLS

STATISTICAL

SERIES

Data

All reports received are reviewed individually to

for the automobile industry are obtained through

verify the assigned industry classification a n d to

the A u t o m o b i l e Manufacturers’ Association w h i c h

detect reporting errors.

cooperates in securing reports f r o m its membership.

returned for explanation or correction.

Direct mail reporting to the B u r e a u of L a b o r Sta­

Questionable reports are

After verification, all data are transferred to

tistics is maintained for all other covered indus­

punch

tries a n d for all other areas of the continental

a n d p e r m a n e n t im p a i r m e n t cases are c o m p u t e d

United States.

a n d p u n c h e d into the cards b y machine; a n d all

Participants in the survey are requested

to

cards; standard

time charges

data are s u m m a r i z e d mechanically.

for

death

In the final

supply the following information applying to the

computations, rates for individual industry classi­

year of reference:

fications are calculated as simple averages.

(1)

Aver a g e

employment

and

total m a n ­

The

rates for industry groups a n d for all m a n u f a c t u r ­

hours w o r k e d b y all employees during

experience of each industry is given a weight

A s u m m a r y of the principal products or

(2)

ing, however,

the year.

equivalent to its estimated total e m p l o y m e n t .

services rendered b y the establishment
during the period.
(3)

are weighted rates in w h i c h

T h e s u m m a r i z e d data are published in brief f o r m
as a m i m e o g r a p h e d release a n d in the M o n t h l y

A s u m m a r y of the disabling w o r k injuries

L a b o r Review.

experienced

annual bulletin.

by

employees

during

the

period in the following detail: (a) D e a t h
cases— aggregate
nent-total

number;

(b)

disabilities— the

Perma­

aggregate

n u m b e r ; (c) Permanent-partial disabili­
ties— distributed b y part of b o d y affect­
ed;

(d)

Temporary-total

disabilities—

distributed into categories “of 1 to 3
days of disability” a n d “of 4 or m o r e
days of disability” ; (e) T i m e lost b e ­
cause of temporary-total disabilities—
distributed

into

the

categories

“resulting

f r o m disabilities of 1 to 3 d a y s ” a n d “re­

Full detail is presented in a n
T h e published reports include

work-injury data for mining, c e m e n t m a n u f a c t u r ­
ing,

and

petroleum

refining

compiled

by

the

B u r e a u of Mines.
T h e B u r e a u ’ injury rates for manufacturing
s
are based u p o n broad a n d well-distributed s a m ­
ples

and

are

homogeneous

presented

in

classifications.

relatively

detailed

In s o m e

areas of

nonmanufacturing, however, coverage limitations
prevent the presentation of rates in the m o s t sig­
nificant detail a n d thereby impose s o m e limita­
tions u p o n the data as the basis for evaluation of
a n individual establishment’ experience.
s

sulting f r o m disabilities of 4 or m o r e
d a y s ’ duration.”
The

Quarterly Injury Rates.

sampling procedure is designed to yield

maximum

e m p l o y m e n t coverage subject to ade­

quate distribution b y States a n d b y establishment
size for each industry classification.

A permanent

sample of approximately 25,000 annual reporters
is maintained in the noncooperating States.

In

the tabulations, this is supplemented b y reports
received in the quarterly survey a n d through the
cooperating States to yield a total of approxi­
ma t e l y 40,000 manufacturing a n d 30,000 n o n m a n ­

T h e s e are based o n q uar­

terly surveys which are also conducted b y mail
o n a voluntary reporting basis.

C overage is lim­

ited to 15,000 manufacturing establishments a n d
about

13,000 reports are received in time

each quarterly tabulation.

for

In M a i n e a n d M i c h i ­

g a n (also in I o w a starting in 1954), the reports
are collected in cooperation with similar surveys
of the State L a b o r Departments.

In all other

areas the B u r e a u contacts the reporting estab­
lishments directly.

ufacturing establishments.
R e p o r t forms are mailed to each annual report­
ing establishment at the e n d of each year.

Se c o n d

requests are mailed about F e b r u a r y 15, to all es­
tablishments w h i c h h a v e not reported b y
date.

that

Acceptance of reports is terminated a n d

Participants in the survey are supplied with
questionnaires, at the e n d of each quarter, request­
ing the following information relating to each of
the preceding 3 months:
(1)

data are released about October 1.




Average

employment

and

total m a n -

hours worked.

tabulations started about J u n e 30, a n d s u m m a r y
(2)

Principal products manufactured.

W O R K - I N J U R Y

(3)

A N D

A C C IDENT-CAUSE

A s u m m a r y of the disabling injuries ex­

39

STATISTICS

for a w id e range of industries, the special studies

perienced b y employees in the following

are designed to provide specific a n d detailed in­

detail:

formation for direct application in the accident-

(a) N u m b e r resulting in death; (b) N u m ­

prevention p r o g r a m s of the industries or opera­

ber resulting in p e r m a n e n t impairment;

tions studied.

(c) N u m b e r resulting in temporary-total

categories: (a) detailed injury-rate studies; a n d (b)

disability.

accident-cause studies.

S a m p l i n g in this survey stresses m a x i m u m cov­
erage in terms of e m p l o y m e n t
distribution.

The

and

geographic

reporting group includes a n

overly high proportion of large establishments a n d

T h e s e surveys are divided into t w o

T h e detailed injury-rate studies are conducted
b y mail a n d the reports are processed in the s a m e
m a n n e r outlined for the regular surveys.

The

questionnaires cover the s a m e items included in

the unadjusted rates s h o w s o m e d o w n w a r d bias.

the annual survey form, but request a distribution

This bias is corrected b y adjusting the c o m p u t e d

of the figures b y operating divisions of the report­

rates to the levels determined in the m o r e c o m ­

ing establishments.

prehensive a n d m o r e adequately balanced annual

frequency a n d severity measures are c o m p u t e d for

survey.

Preliminary adjustments are m a d e

F r o m these reports, injury-

on

each type of operation c o m m o n l y f ound in the in­

the basis of the previous year's annual survey a n d

dustry, for establishments of various sizes, a n d

final adjustments are m a d e after the annual data

for establishments in various geographic areas.

for the year of reference are compiled.

The s e a d ­

Because of the detail in w h i c h the data are pre­

justments correct the level of the m o n t h l y a n d

sented, these surveys require a substantially larger

quarterly rates b ut preserve the m o n t h - to - m o n t h

coverage than is necessary to support the industry­

fluctuations a n d short-term trend indications.

wide averages of the regular surveys.

R e p o r t forms are mailed to all cooperating firms
at the e n d of each quarter.

S e c o n d requests are

sent to all establishments which

d o not report

Sampling

procedures are employed, therefore, only w h e n the
industry under study is very large.

In m o s t in­

stances reports are requested f r o m all establish­

within 4 w e e k s a n d tabulations are closed approxi­

m e n t s in the selected industry.

m a tely 7 w e e k s after the en d of the quarter of

is normally about 60 percent.

T h e response rate

S u m m a r y data are released in m i m e o ­

In the accident-cause studies the data are col­

graph f o r m about 11 w e e k s after the e n d of the

lected b y B u r e a u representatives in personal visits

reference.

quarter of reference.

All reports received after

to the cooperating establishments.

T h e data col­

the closing date for a n y quarter are p u n c h e d a n d

lected consist of detailed case records of individual

are included in a final end-of-year revised tabula­

accidents listing all available information relating
to each occurrence.

tion.
T h e quarterly surveys yield monthly, quarterly,

T h e s e data are obtained pri­

marily f r o m the original accident records of the

a n d m o n t h l y cumulative injury-frequency rates

establishment s u pplemented b y personal discus­

for all manufacturing, a n d for 130 manufacturing

sion with informed persons and, frequently, b y in­

industry classifications.

spection of the accident site a n d observance of

No

injury-severity data are collected in the

the operation in w h i c h the accident occurred.

The

quarterly surveys since the final degree of disa­

objective is to determine for each case: (1) h o w ,

bility for m a n y injuries cannot be determined in

when, a n d w h e r e the accident occurred; (2) w h a t

the short period allowed for reporting after the

unsafe conditions and/or unsafe acts contributed

e n d of the quarter.

T h e processing of the quar­

terly reports a n d the computation of the average
frequency

rates

follow

the

procedure

outlined

a b o v e for the annual injury-rate surveys.

The

to the occurrence; a n d (3) w h a t type of injury
resulted.
The s e case records are analyzed individually fol­
lowing the A m e r i c a n R e c o m m e n d e d Procedure for

quarterly injury rates are published in quarterly

Compiling Industrial Accident

processed releases a n d

data are mechanically tabulated in a wide range of

are s u m m a r i z e d

in the

M o n t h l y L a b o r R e v i e w a n d in the annual bulletin.

intercorrelations.

Causes

and

the

F r o m these s u m m a r i e s it is pos­

sible to determine the specific hazards w h i c h m o s t

SpecialStudies.

I n contrast to the regular surveys,

c o m m o n l y produce accidents in the industry, to

w h i c h provide general measures of injury incidence

identify t h e m in relation to particular items of




40

T E C H N I Q U E S

O F

P R E P A R I N G

M A J O R

BLS

STATISTICAL

SERIES

e q u i p m e n t or specific personal actions, a n d to in­

products or services rather than in terms of pro­

dicate their relative potential for inflicting injury.

cesses or operations.

s u m m a r y of each special study is published

Because of resource limitations only a small

in the M o n t h l y L a b o r R e v i e w a n d a fully detailed

proportion of the nonrespondents in the mail sur­

report o n each study is published as a B u r e a u

veys can be visited to determine the possible bias

bulletin.

due to nonreporting.

A

A l t h o u g h there is n o “ c o n ­

test” incentive element involved in the B u r e a u ’
s
surveys, there is a possibility that establishments
Limitations of the Surveys

with unusually high injury rates m a y be reluctant
to report their experience.

T h e B u r e a u ’ injury-rate surveys provide in­
s
formation o n a broad national basis.

ments.

Because of

Since small- a n d medium-size establish­

m e n t s c o m m o n l y tend to h a v e s o m e w h a t higher

coverage limitations, however, the data cannot be
presented in State or local breakdowns.

I n general, the re­

sponse rate is lowest a m o n g the smaller establish­

Supple­

than average injury-frequency rates, the published

m e n t a r y State details are available in a fe w States

averages are m o r e likely to be m i n i m a than m a x ­

f r o m similar surveys conducted b y the State L a b o r

i m a without regard to sampling error.

Department.
From

T h e estimates of total work-injury v o l u m e are

an accident-prevention standpoint, it is

measures of the injury p r o b l e m as of a given time.

recognized that the m o s t useful injury a n d acci­

From

dent information is that relating to particular pro­

changes in the v o l u m e of e m p l o y m e n t ,

cesses a n d operations.

Operating requirements,

industrial activity, a n d technological changes in

restrict the presentation of quarterly

industry as well as changes in the level of w o r k

however,

period

to

a n d annual injury-rate data to the standard indus­

safety.

trial classifications.

ures of progress or

Reporting establishments are

period,

however,

T h e y are not, therefore, satisfactory m e a s ­
retrogression in accident pre­

BIBLIOGRAPHY

American Standard Method oj Compiling Industrial Injury Rates. A m e r i c a n
N e w York, 1954.

American Recommended Practice for Compiling Industrial Accident Causes.
A m e r i c a n Standards Association.

Z16.2.

Selection of Accident Factors.

Part II.— Detailed Classification of

N e w York, 1941.

Part I.—

Accident Factors.

Industrial Accident S a i t c .
ttsis

Washington, 1915. U . S. D e p a r t m e n t of Labor,

B u r e a u of L a b o r Statistics.

(Bull. 157.)

Report of the Committee on S a i t c and Insurance Costs of the International
ttsis
Association of Industrial Accident Boards and Commissions. Washington,
1916.

(Bull. 201.)

(Also see other annual reports of the International

Association of Industrial Accident Bo a r d s a n d Commissions.)

Standardization of Industrial Accident S a i t c .
ttsis

Washington, 1920.

D e p a r t m e n t of Labor, B u r e a u of L a b o r Statistics.

Manual of Industrial-Injury S a i t c .
ttsis

U. S.

(Bull. 276).

Washington, 1940. U . S. D e p a r t m e n t

of Labor, B u r e a u of L a b o r Statistics.




shifts in

vention, particularly in long-term comparisons.

classified according to the value of their leading

Standards Association, Z16.1.

they reflect

(Bull. 667.)

W O R K - I N J U R Y

A N D

ACCIDENT-CAUSE

STATISTICS

4 1

B I B L I O G R A P H Y — Continued

Accident-Record Manual for Industrial Plants.

Washington,

D e p a r t m e n t of Labor, B u r e a u of L a b o r Statistics.

Industrial Accident Prevention.
New

Third revised edition.

York, M c G r a w - H i l l B o o k Co., Inc., 1950.

1944.

U.

S.

(Bull. 772.)
B y H . W . Heinrich.
(Chap. 18, Accident

Statistics.)

Accident Prevention Manual for Industrial Operations.

S e c o n d edition.

Na­

tional Safety Council. Chicago, 111., 1951. (Sec. 25, Accident Records.)

Estimating Accident Costs in Industrial Plants.




Safe Practices P a m p h l e t N o . 111.

National Safety Council.

Chicago, 1950.

C h ap ter 6. M easu rem en t o f In d u stria l Em p lo ym ent*

of

Background

em p l o y m e n t .

Similarly,

relatively simple
T h e first m o n t h l y studies of e m p l o y m e n t a n d

symbol

employment

of

economic

is

a

activity

w h i c h is readily understood.

payrolls b y the B u r e a u of L a b o r Statistics b e g a n

Statistics o n e m p l o y m e n t are used widely b y

in October 1915 a n d covered four manufacturing

business an d

banking firms, c h a m b e r s

of c o m ­

industries.

merce, Federal a n d State g o v e r n m e n t

agencies,

By

November

1916,

these surveys

were exp a n d e d to cover 13 industries, a n d this

a n d private research organizations.

number

The

statistics trends m e a s u r e changes in the economic

the

structure of the country a n d indicate the general

remained

depression

of

unchanged

1921

directed

until

1922.

attention

to

Employment

importance of current e m p l o y m e n t statistics, a n d

direction of industry developments.

in

of diversity of current economic

1922

provide

Congress
for

granted

program

additional

expansion.

funds

In

to

ensuing

years, other manufacturing industries were added,
and

the p r o g r a m

was

extended

by

employment

data

is

as

especially

helpful in framing economic policies.

to cover n o n ­

manufacturing em p l o y m e n t .
By

indicated

Knowledge

conditions

Concepts a n d Scope

1937, the B u r e a u w a s able to release es­

timates of total e m p l o y m e n t

F o r m o s t purposes, e m p l o y m e n t

in nonagricultural

establishments, based o n estimates of e m p l o y m e n t
in various industry divisions.

Many

improve­

trends h a v e

the greatest value as economic indicators if data
are available soon
A

the years, a n d the industries for w h i c h data are

takes a great a m o u n t of time because of collection

published h a v e continued to increase in nu m b e r .

complete

after the date of reference.

m e n t s a n d refinements h a v e bee n introduced over

and

census

of

employment

tabulation problems,

and

the

necessarily
cost is too

great for such surveys at frequent intervals.

In

integrated Federal-State project w h i c h provides

order to m e a s u r e

in­

industrial e m p l o y m e n t information o n a national,

dustry o n a n area, State, a n d national basis with

T h e current e m p l o y m e n t statistics p r o g r a m is an

State, a n d area basis.

In accordance with a u ­

a minimum

employment

monthly b y

of cost a n d to produce reasonably

thority granted in a Congressional act of July 7,

current

1930 (ch. 873, 46 Stat. 1019; 29 U. S. C. 2), a n d

based o n a n e m p l o y m e n t sample.

in order to minimize the reporting requirements
for cooperating
Labor

establishments,

Statistics entered

into

the

Bureau

agreements

of

with

data,

the

Bureau

prepares

estimates

T h e basic unit in the B L S sample is the n o n ­
f a r m establishment, f r o m w h i c h payroll data are
compiled on the n u m b e r of employees w h o received

State agencies, w h i c h h a v e resulted in the issuance

p a y for a n y part of a specified p a y period.

of

method

employment

metropolitan

data

for

all States

and

most

of

collection

has

several

This

advantages.

Since establishment e m p l o y m e n t is readily avail­

areas.

able f r o m payroll records, the data are easy to
collect, a n d establishments can be classified into

Uses

significant
E m p l o y m e n t levels are generally accepted as
the

common

denominator

for

measuring

economic well-being of the c o m m u n i t y .

economic

groups.

Thus,

estimates

based o n establishment reports yield not only a

the

current m e a s u r e of total nonagricultural e m p l o y ­

Invest­

ment, but also e m p l o y m e n t b y industry divisions

m e n t a n d saving, capital expansion a n d decline,
all are closely associated with the rise a n d fall

a n d groups.
The

standard

definition

used (chap. 1, p. 2).

of

establishment

is

In brief, a n establishment is

♦Prepared in the B u rea u ’s D iv is io n o f M a n p o w e r an d E m p lo y m e n t
Satistics.

defined as a single physical location, such as a

42




M E A S U R E M E N T

O F

INDUSTRIAL

43

E M P L O Y M E N T

factory, mine, or store w h e r e business is conducted,

workers d o not h a v e the status of “ employees,”

or a unit for w h i c h separate inventory a n d m o n t h l y

they are not

payroll records are maintained.

workers or domestic workers in households are

When

a com­

covered b y

p a n y has several plants or establishments, the

not

BLS

establishments.

endeavors to

obtain separate reports for

each establishment, for purposes of industry a n d
area classification, since each m a y

be classified

in a different industry a n d h a v e a different area
location.

H o w e v e r , w h e n a c o m p a n y has m o r e

than one establishment in a single industry a n d
area, the separate establishments m a y be covered
b y a c o m b i n e d report.

included

in

the

BLS

data

reports.

for

Government

Farm

nonagricultural

employment

sta­

tistics refer to civilian employees only.
Distinction m u s t be m a d e b e t w e e n t w o cate­
gories of workers s h o w n in industry e m p l o y m e n t
estimates.

“ All employees” include all persons

w h o s e e m p l o y m e n t meets the a b o v e definitions.
T h e standard definition of production workers
is used (chap. 1, footnote 14, p. 6).

A s defined,

Because a payroll count includes persons w h o

“production workers” include those in the all­

received p a y for a n y part of the p a y period, the

employees g roup w h o are engaged in the following

employment

series are affected b y

turnover of

activities: work i n g f o remen a n d all nonsupervisory

personnel; the s a m e person m a y appear o n t w o

workers (including l e a d m e n a n d trainees) engaged

separate establishment payrolls in the s a m e period.

in fabricating, processing, assembling, inspection,

Thus, the e m p l o y m e n t count is not a m e a s u r e of

receiving, storage, handling, packing, warehousing,

the n u m b e r of available full-time jobs, nor is it

shipping, maintenance, repair, janitorial, w a t c h ­

an

man

unduplicated

count

of paid

workers.

The

services,

products

development,

auxiliary

data d o not refer to e m p l o y m e n t throughout the

production for plant’ o w n use (e. g., powerplant),
s

m o n t h nor to e m p l o y m e n t o n a n y one d a y in

and

the m o n t h .

associated with the a b o v e production operations.

record-keeping

and

other

services

closely

E m p l o y m e n t statistics published b y B L S repre­
sent the total n u m b e r

of persons e m p l o y e d in

Universe.

The

e m p l o y m e n t estimates represent

nonagricultural establishments during a specified

the total n u m b e r of persons e m p l o y e d in nonagri­

payroll period.

cultural establishments, b y industry, in the c o n ­

E m p l o y m e n t data for n o n g o v e r n ­

mental establishments refer to persons w h o w o r k e d

tinental

during, or received p a y for, a n y part of the p a y

e m p l o y m e n t in these establishments are available

period ending nearest the

f r o m social insurance reports, except for noncovered

Data

for

Federal

15th of the m o n t h .

Government

generally refer to persons w h o

establishments
worked

on, or

United

States.

industries w h e r e

Complete

counts

special sources m u s t

of

be used.

Th e s e complete counts, in addition to representing

received p a y for, the last d a y of the m o n t h ; for

the

State a n d local government, persons w h o received

serve as b e n c h m a r k s for the estimates.

universe

of

employment

being

measured,

p a y for a n y part of the p a y period ending on, or

T h e establishments are classified into various

immediately prior to, the last d a y of the m o n t h .

industries, b o t h in the b e n c h m a r k s a n d in the

E m p l o y e d persons include those w h o are w orking

sample, according to standard classification m a n ­

full or part time o n a p e r m a n e n t or t e m p o r a r y

uals described in the section o n estimating pro­

basis.

cedure (p. 47).

W o r k e r s o n a n establishment payroll w h o

are o n paid sick leave, paid holiday or paid v a c a ­
tion, or w h o w o r k during a part of a specified p a y

Time Periods.

period a n d are u n e m p l o y e d or o n strike during the

e m p l o y m e n t generally for the p a y period ending

The

BLS

policy of measuring

other part of the period are considered employed.

nearest the 15th of the m o n t h is standard for all

Persons o n the payroll of m o r e than one establish­

Federal agencies.

ment

U. S. B u r e a u of the B u d g e t in establishing this

during the p a y

time reported.

On

period are counted each

The

p rimary purpose of the

the other hand, persons are

standard procedure w a s to establish a uniform

not considered e m p l o y e d w h o are laid off or are

reference period for Federal statistics, in order to

o n leave without pay, w h o are o n strike for the

facilitate comparisons a m o n g the various economic

entire p a y period, or w h o are
report to w o r k

hired but d o not

during the p a y

period.

Since

proprietors, the self-employed, a n d unpaid family




series, a n d to avoid burdening business establish­
m e n t s with requests for data relating to various
periods throughout the m o n t h .

44

T E C H N I Q U E S

Sample

data

for preparing

O F

P R E P A R I N G

employment

m a t e s are collected m o n t h l y .

esti­

T h e estimates are

M A J O R

in

and

Labor

Earnings

report a n d

in the

Statistics section of the

Current

Monthly

Labor

STATISTICAL

order

to

eliminate

duplicate

reporting

by

D a t a o n payroll a n d h o u r s of w o r k , a n d o n t h e
n u m b e r of n onsupervisory e m p l o y e e s in industries
other t h a n m i n i n g a n d
collected.

Review.

SERIES

s a m p l e establishments.

published regularly e a c h m o n t h in the E m p l o y ­
ment

BLS

m a n u facturing,

are also

T h e s e figures are u s e d in c o m p u t i n g

average h o u r s a n d earnings.

Sampling Procedure.
Survey M e t h o d s

S a m p l i n g is u s e d b y

BLS

for collecting d a t a in m o s t industries, since full
coverage w o u l d b e prohibitively costly a n d time-

For

most

industries, d a t a for c o m p u t i n g

the

consuming.

The

sample

design

used

is cutoff

trend of e m p l o y m e n t are collected b y m e a n s of

sampling, w h i c h includes all firms h a v i n g e m p l o y ­

schedules mai l e d m o n t h l y to individual establish­

m e n t over a certain size.

men t s .

to

T h e returns are tabulated b y industry.

Questionnaire.
for

each

period.

include

order
A single “ shuttle” schedule is u s e d

reporting

unit

over

a

T h e s e schedules ( B L S

calendar

form

year

7 90 series)

to

accu r a c y

enough
provide

as well

T h e cutoff point is set

reporting
an

as

establishments

appropriate
to represent

standard
a

in
of

substantial

proportion of total e m p l o y m e n t in a n industry.
T h i s proportion varies a m o n g industries, d e p e n d ­

provide for the entry of identification a n d activity

ing o n the percent of total e m p l o y m e n t o n

information

payrolls of large firms, usually d e t e r m i n e d f r o m

(for use in industrial classification)

a n d for e m p l o y m e n t d a t a for e a c h m o n t h of the

social-insurance

tabulations.

year.

which

feasible

F o r all industries, the total n u m b e r of “ all

it is n o t

to

In

industries

secure

the

in

100-percent

e m p l o y e e s ” — i e., all full- a n d part-time e m p l o y e e s
.

response f r o m firms a b o v e the cutoff point, t h e

on

basic design is modified s o m e w h a t to include small

the

payroll

who

received

pay

for the

pay

period e n d i n g nearest the 15th of the m o n t h — is
requested e a c h m o n t h .

establishments.

T a r g e t specifications for a c c u r a c y

For mining a n d m a n u ­

a n d corresponding size of s a m p l e are prescribed in

facturing establishments, the n u m b e r of p r o d u c ­

p rocedure m a n u a l s in acc o r d a n c e w i t h principles

tion

just stated.

and

related

workers

e m p l o y e e figure is requested.
ing division, the

included

in

the

all­

I n the m a n u f a c t u r ­

establishments report m o n t h l y

d a t a o n the n u m b e r of w o m e n included in the all­

E m p l o y m e n t a n d payroll schedules are collected
monthly

for a p p r o x i m a t e l y

establishments.

155,000

cooperating

(See table.)

e m p l o y e e figure.
The

technical

schedule,

used

characteristics

in this p r o g r a m

of

the

since

shuttle

1930,

Approximate size and coverage of monthly sample used in
BLS employment and payroll statistics

are

particularly i m p o r t a n t in mai n t a i n i n g continuity.
The

design exhibits automatically the trend of

reported data, a n d therefore the relationship of the
current figure to the previous m o n t h ’ data.
s

D ivision or industry

The

f o r m h a s n u m e r o u s operational a d v a n t a g e s w i t h
respect

to

both

accuracy

and

economy;

for

example, identifying codes a n d the r e s p o n d e n t ’
s
address are entered o nly o n c e a year.
schedules received e a c h m o n t h ,

Also, the

f r o m w h i c h the

d a t a are transcribed, are returned to the reporting
establishment for the next m o n t h ’ data.
s
C o o p e r a t i n g State agencies mail the f o r m s to the
reporting establishments a n d edit t h e m w h e n re­
turned.

T h e s a m e establishment reports are used

for preparing State, area, a n d national estimates,




M in in g ______________________________ __
Contract construction___________________
M anufacturing____________________ ____
Transportation and public utilities:
In terstate railroads ( IC C ) ___________
Other transportation and public
utilities ( B L S ) ____________________
W holesale and retail tra d e._____ _________
Finance, insurance, and real estate..............
Service and miscellaneous:
Hotels and lodging places_________ __
Personal services:
Laundries and cleaning and dye­
ing plan ts______________________
Governm ent:
Federal (C ivil Service Commission) __
State and local (Bureau of the Census
q u arterly ). _____________ _________

Em ployees in
sample
N um ber of
establish­
m ents in
Percent
N um ber of total
sample
(thou­
industry
sands)
em ploy­
m ent
3,300
19,700
44,100

440
783
11,207

50
28

1,357

96

13.600
60,300
10.600

1,430
1,889
486

51
19
25‘

1,300

145

31

2,300

68

99

10

2,368

100

2,760

67

S P E C IM E N

O F SC H ED U LE

45

Industry Class Supplement

Budget Bureau No. 44-R745.5.
Approval expires January 31, 1955.

to Form BLS 790C

PRODUCT STATEMENT

U. S DEPARTMENT OF LABOR
.
BUREAU OF LABOR STATISTICS
WASHINGTON 25. D. C.

l o r C O N F ID E N T IA L R E P O R T O N

EMPLOYMENT, PAYROLL, AND HOURS
C o o p e ra tiv e P r o je c t

~j

r

This report should cover the entire activity of the same
establishment covered by your regular Employment, Pay­
r l ,and Hours report.
ol
Please return this form as soon as possible in the at­
tached envelope which requires no postage.

L

Report No.

State

Tab.

Size

Proposed Ind.

Y o u r R e p o r t o n E m p lo y m e n t , P a y r o ll, a n d H o u r s w il l b e c la s s ifie d b y in d u s t r y o n th e b a s is o f th e p r in c ip a l a c t iv it y in w h ic h y o u r
e s t a b lis h m e n t w a s e n g a g e d d u r in g th e c a le n d a r y e a r 1953. T h e in fo r m a t io n r e q u e s t e d o n t h is f o r m is n e e d e d t o e n s u r e th e p r o p e r
c la s s ific a t io n . A lis t o f s p e c ia l c h a r a c t e r is t ic s im p o r t a n t in d e s c r ib in g a c t iv it ie s in s e le c t e d in d u s tr ie s is p r o v id e d o n th e b a c k o f th is
fo r m . P L E A S E R E V IE W T H E L IS T O N T H E R E V E R S E S ID E A N D R E A D T H E IN S T R U C T IO N S B E L O W B E F O R E E N T E R IN G
T H E IN F O R M A T IO N R E Q U E S T E D IN C O L U M N S ( a ), ( 6 ), A N D ( c ) .
IN S T R U C T IO N S F O R C O M P L E T IN G T H IS F O R M

(a).

C olu m n
E n t e r o n a s e p a r a t e lin e e a c h o f th e p r in c ip a l p r o d u c t s o r a c t iv it ie s o f y o u r e s ta b lis h m e n t d u r in g t h e c a le n d a r
v e a r 1953 in o r d e r o f im p o r t a n c e in te r m s o f s a le s v a lu e . C o m b in e o n lin e 4 a ll e x c e p t th e th r e e m o s t im p o r t a n t p r o d u c t s o r m a n u ­
f a c t u r i n g a c t iv it ie s . T o e n s u r e p r o p e r c la s s ific a tio n , p le a s e d e s c r ib e p r o d u c t s o r a c t iv it ie s a s f u l l y a s p o s s ib le — f o r e x a m p le :
in s t e a d o f “ f u r n it u r e ” ;
, in s te a d o f “ a i r b r a k e s ” ;
in s te a d o f “ in s u la te d c a b le ” o r “ c a b le ” ;
in s te a d o f “ h o s ie r y ” ;
, in s te a d o f
“ u n d erw ear” ;
in s te a d o f “ m e t a lw o r k in g t o o ls ” o r “ t o o ls ” ;
in s te a d
o f “ s t a m p in g ” o r “ a u to m o b ile p a r t s ” ; e tc . I f y o u r r e g u la r r e p o r t a ls o c o v e r s a
a t th is lo c a tio n , e n t e r t h a t
a c t iv it y o n lin e 5.
U s e “ S p a c e f o r C o m m e n t s ,” i f n e c e s s a r y , t o p r o v id e f u r t h e r d e s c r ip t io n o f p r o d u c t s o r a c t iv it ie s o f y o u r
e s t a b lis h m e n t .
C olu m n ( 6 ) . E n t e r o p p o s it e
ite m in c o lu m n ( a ) th e a p p r o x im a t e p e r c e n t o f
s a le s v a lu e ( in c lu d in g r e c e ip t s f r o m n o n ­
m a n u f a c t u r in g a c t iv it y , i f a n y ) r e p r e s e n t e d b y t h a t p r o d u c t o r a c t iv it y .
E n tr ie s in c o lu m n ( 6 ) s h o u ld t o t a l 1 0 0 % .
C o lu m n ( c ) . E n t e r f o r e a c h ite m in co lu m n ( a ) th e p r in c ip a l m a t e r ia l u s e d in m a k in g th e p r o d u c t o r p e r f o r m i n g th e a c t iv it y .
N o t e .— F o r so m e in d u s t r ie s s u ch a s t e x t ile s , a p p a r e l, w o o d -p r o d u c ts , m e t a l-fa b r ic a t in g , p a p e r , le a th e r , g la s s , e tc ., i t is im p o r t a n t t o
a ls o in d ic a te w h e t h e r th e m a t e r ia l u s e d w a s p r o d u c e d in th e s a m e e s ta b lis h m e n t a s th e fin is h e d p r o d u c t . I f a m a t e r ia l lis te d in
c o lu m n ( c ) w a s p r o d u c e d in th e s a m e e s ta b lis h m e n t a s th e p r o d u c t lis t e d in c o lu m n
p le a s e m e n tio n t h is in th e “ S p a c e f o r C o m m e n t s .”

household furniture,
air brakes for trucks and busses
chased wire,
seamless hosiery,
portable power-driven metalworking tools,

upholstered
insulated cable made from pur­
men's and boys' underwear
stamping automobile parts,
nomnanufactuHng activity

each

total

(a)

FOR ITEMS IN COLUMN (o)
P rincipal P roducts or A ctivities D uring 1953

Percent op T otal
Sales V alue (including
receipts from non­
manufacturing
activities, if any)
D uring 1953
<b)

Please list in order of importance based on 1953 sales value.
Enter nonmanufacturing activity, if any, on line 5.
(o )

.......______

____________

P rincipal Material U sed in 1953
(c)

%

________ ...
.. %

A ll n fh o r m a n u f a c t u r in g ( S p p r i f y g e n e r a l t y p e )

.......

N o n m a n u fa c t u r in g ( D e s c r i b e ) .................................................................................

...%
................................... %
100%

S p a c e F or C o m m e n t s .
( U s e t h is s p a c e f o r f u r t h e r e x p la n a t io n o f in fo r m a t io n in a n y o f t h e c o lu m n s a b o v e , o r , f o r d e s c r ib in g
a n y c h a r a c t e r is t ic s o f y o u r a c t iv it y n o t a p p a r e n t f r o m t h e a b o v e , s u c h a s th o s e in d ic a te d o n th e b a c k o f t h is f o r m .)

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




(Position)

1«—6731S-3

B. L. S. Codes
1
1 State

Report No.

Tab.

PRODUCT STATEM ENT

Size

DO

NOT

O*

Fonn B. L. S. 790C
Before entering data please see explanations on other side

Ind.

U SE

THIS

LOCATION OF ESTABLISHMENT(S) COVERED IN THIS REPORT
(Number of establishments)
(City)
(County)
(State)

SPACE

ALL EMPLOYEES

PERIOD REPORTED

PRODUCTION AND RELATED WORKERS
COM M EN TS

(B dlet in siv
oth a clu e)
r

<2)

(3)

(4)

DO
NOT
USE

Plea:se enter in column 14 the main factors responsible for significant month-to-month
changes>in this report. Examples are:

M ov e
ore ertim
S
trike
S alex an
eason p sion
P sh t-dw for rep or inen -takin
artial u o n
airs v tory g
M hh p w
ore iger aid orkers L p ork W er
ess iecew
eath
P iu payforh ayw
rem m
olid ork
L in tiv pay
ess cen e
M shrta e
aterials o g
H gd eton con
irin u ew tracts

Both sexes
L/P

(7)

N umber of
Production
W orkers

P roductionWorker
P ayroll
)

(om cen
it ts

P roductionW orker
M an-Hours

(om fraction
it
s)

DO
NOT
USE
Expl.
Code

If any general wage-rate changes (not individual changes for length of serv­
ice, merit, or promotion) have occurred since last month’s report, note the
amount of increase or decrease (as +2%, —5*t), the effective date of the change,
and the approximate number of production workers affected

(8 )

(9)

(10)

(1 1 )

(1 9 )

(13)

(14)

NE

(6)

Women
only

S C H E D U L E

(1)
1953 ^
D e c ...
1954
J an

During
7-day
period
ending
nearest
15th of
month
(5)

Include all persons who worked
during or received pay for any
part of period regardless of
type of work performed

Enter In these columns the number of production and re­
lated, workers who worked during or received pay for any
part of the period reported, the pay earned, and all hours
worked or paid for. Include pay and man-hours for over­
time, sick leave, holidays, and vacations

1
$ -----------------------1

Feb

1

M a r ..

1

Apr

1

M ay

1

J u n e ..

1

J u ly

1

Au

1

S e p t ..

1

O ct

1
1

D ec—




1

( e s n t be a d e s d i q e t o sa ier g r i gt i r p r )
P r o o d r s e f u s i n rs e a d n h s e o t

O F

During
the
entire
period

clu e
1 w (p
eek)referably paid h ay an vIn ds
olid s d acation
(n H d )
earest ay

NUMBER

S P E C I M E N

and
M onth

N UM BER OF DAYS on
which majority of employees
worked during the pay period
shown in cols. 2 and 3.

From— Through

Y ear

PAY PERIOD
One pay period
only
ending
nearest 15th of
month

(Position)

M E A S U R E M E N T

Estimating Procedure.

O F

INDUSTRIAL

I n the e m p l o y m e n t series

47

E M P L O Y M E N T

m i t s smaller s a m p l e s w h e n

the link or ratio of

(as well as those o n h o u r s a n d earnings), reporting

d a t a for successive m o n t h s is u s e d t h a n w o u l d b e

establishments

necessary if the s a m p l e itself w e r e inflated to a

are

generally classified into

sig­

nificant e c o n o m i c g r o u p s o n the basis of m a j o r
p r o d u c t or activity as d e t e r m i n e d f r o m

sales or receipts d a t a for the previous calendar
year.

The

published

BLS

estimates

universe total.
I n addition to estimates of total e m p l o y m e n t

annual

are

for

b y industry, the B u r e a u publishes d a t a o n p r o ­
d u c t i on-worker e m p l o y m e n t for m i n i n g a n d m a n u ­

industry g r o u p s a n d in s o m e cases c o m b i n a t i o n s of

facturing industries.

industries listed in the S I C a n d S S B m a n u a l s . 1

ratio for the current m o n t h of produ c t i o n w o r k e r s

F o r this purpose, the s a m p l e

T o obtain e m p l o y m e n t estimates for the various

to total e m p l o y m e n t is used. T h e 60 s a m p l e firms,

industry classifications, the following three steps

w h i c h h a d 26,000 e m p l o y e e s in A u g u s t , reported

are necessary:

an

August

production-worker

figure

of

19,500

(1) A total e m p l o y m e n t figure ( b e n c h m a r k ) for
resulting in a ratio of

A n d or .750.

a n industry, as of a specified period, is o b t ained
f r o m sources w h i c h provide a c o m p l e t e c o u n t of

each

ratio, p r o d u c tion-worker e m p l o y m e n t in A u g u s t is
estimated to b e 39,000 (52,000 multiplied b y . 7 5 0 =

e m p l o y m e n t for the industry.
(2) F o r

U s i n g this

.Z t),U U U

industry, the

ratio of e m p l o y ­

m e n t in o n e m o n t h to that in the preceding m o n t h

39,000).
A similar ratio m e t h o d is u s e d for the quarterly

( . e., the link relative) is c o m p u t e d for s a m p l e
i

estimate of the n u m b e r

establishments w h i c h reported in b o t h m o n t h s .

m a n u f a c t u r i n g industries.

(3) B e g i n n i n g w i t h the last m o n t h of the b e n c h ­
mark

period,

o btained

by

the

estimate

multiplying

for

the

each

month

estimate

for

is
the

Appropriate

of w o m e n

revisions,

based

e m p l o y e d in

on

new

bench­

m a r k s , are introduced into the e m p l o y m e n t series
as required to correct for classification c h a n g e s a n d

previous m o n t h b y the link relative for the current

for deviations resulting f r o m

month.

trends.

Application

of

the

estimating

p r o cedure

in

preparing a n industry series is illustrated b y the

Experience
program

has

with

the

shown

the use of s a m p l e

employment

that,

without

statistics
benchmark

following: T o t a l e m p l o y m e n t for a given industry

adjustments, the e m p l o y m e n t d a t a t e n d t o w a r d

w a s 50,000 in July.

u n d e r s t a t e m e n t w h i c h b e c o m e s larger f r o m year to

sample,
25,000

60 establishments in that industry h a d
e m p l o y e e s in J u l y a n d 26,000 in A u g u s t , a

4-percent increase.
mate,

A c c o r d i n g to the reporting

the

change

To

derive the A u g u s t

for

identical

esti­

establishments

year.

T h i s error c a n n o t b e adjusted precisely o n a

current

basis;

however,

a v e rage

adjustment

is

m a d e t h r o u g h the use of bias a d j u s t m e n t factors.
I n general, the b e n c h m a r k period is the first

reported in the J u l y - A u g u s t s a m p l e is applied to

quarter of the year.

T h e monthly employment

the Ju l y estimate:

estimates w h i c h

been

for

50,000xf | S (or L04)= 52>
000

that

had

quarter

b e n c h m a r k data.

are

published

compared

with

previously
the

new

T h e n e e d for a d j u s t m e n t of the

published e m p l o y m e n t information is d e t e r m i n e d
T h e proc e d u r e for estimating current e m p l o y ­
f r o m this comparison.
m e n t , previously described, h a s c o m e to b e k n o w n
Since 1939, the basic sources of b e n c h m a r k in­
as the b e n c h m a r k a n d link-relative technique.

It
fo r m a t i o n for “ all e m p l o y e e s ” are periodic tabula­

is a n efficient one, taking a d v a n t a g e of a b e n c h ­
tions of e m p l o y m e n t data, b y industry, c o m p i l e d
m a r k , w h i c h is a b y p r o d u c t of other g o v e r n m e n t a l
b y State agencies f r o m reports of establishments
functions,

and

of the h i g h

correlation b e t w e e n
covered

levels of e m p l o y m e n t

in successive m o n t h s

laws.
identical establishments.

under

State

unemployment

insurance

for
Supplementary

tabulations

prepared

by

T h e latter, in turn, perthe U . S. B u r e a u of O l d A g e a n d Survivors Insur­

1 Industry classifications currently used are defined in the following docu­
m ents: (1) for manufacturing industries— Standard Ind ustrial Glassification
M anual, volume I, M anufacturing Industries, Bureau of the Budget, N ovem ­
ber 1945; (2) for government— Standard In d ustrial Glassification M anual,
volume I I , Nonm anufacturing Industries, Bu reau of the Budget, M ay 1949;
(3) for other nonmanufacturing industries— Industrial Classification Code,
Federal Security Agency, Social Security Board, 1942.




a n c e are u s e d for the g r o u p of establishments ex­
empt

from

State u n e m p l o y m e n t

b e c ause of their small size.
covered b y
marks

are

either of the t w o
compiled

from

insurance l a w s

F o r industries n o t
prog r a m s ,

bench­

special establishment

48

T E C H N I Q U E S

censuses:

for

example,

for

O F

P R E P A R I N G

interstate

M A J O R

railroads,

f r o m establishment dat a reported to the Interstate

BLS

STATISTICAL

count

of

late

SERIES

reports.

The

Bureau

issues

a

m o n t h l y press release during the m o n t h i m m e d i ­

C o m m e r c e C o m m i s s i o n ; for State a n d local g o v ­

ately following the m o n t h of reference.

e r n m e n t , f r o m d a t a reported to the B u r e a u of the

tains preliminary information o n

C e n s u s ; for the Federal G o v e r n m e n t , f r o m a g e n c y

cultural e m p l o y m e n t ,

d a t a c o m p i l e d b y the Civil Service C o m m i s s i o n .

b y m a j o r industry groups, b a s e d u p o n tabulations

Establishments

are

classified

into

the

same

by

It c o n ­

total n o nagri­

industry divisions a n d

of d a t a that h a v e b e e n received in t i m e for the

industrial groupings for b e n c h m a r k purposes as

release.

t h e y are for m o n t h l y reporting.

presented in the E m p l o y m e n t a n d E a r n i n g s report

T h e s e d a t a are s u b s e quently revised a n d

a n d in the M o n t h l y L a b o r R e v i e w .
T h e m o s t recent b e n c h m a r k a d j u s t m e n t w a s to

Publication a n d Revisions

first quarter
E a c h m o n t h , B L S publishes continuous national

1953.

The

adjusted series for d e ­

tailed industries w e r e first published in the M a y

series o n total e m p l o y m e n t in all nonagricultural

1954 E m p l o y m e n t

establishments a n d in the eight m a j o r industry

June

divisions: m a n u f a c t u r i n g ; m i n i n g ; contract c o n ­

sheets s h o w i n g historical data, b y industry, h a v e

struction;

b e e n p r e p a r e d a n d are available u p o n request.

transportation

and

public

utilities;

195 4

a n d E a r n i n g s report a n d

Monthly

Labor

Review.

the

Summary

wholesale a n d retail trade; finance, insurance, a n d
real estate; service; a n d g o v e r n m e n t .

B o t h total

a n d p r o d u c t ion-worker e m p l o y m e n t series are also

Differences B e t w e e n B L S a n d O t h e r E m p l o y m e n t
Statistics

presented for 21 m a j o r m a n u f a c t u r i n g gr o u p s a n d
131 subgroups.

W i t h i n n o n m a n u f a c t u r i n g , total

e m p l o y m e n t information is published for over 4 0
industry

groups.

Production-worker

T h e B L S total of “ all e m p l o y e e s ” in nonagricul­
tural establishments should n o t b e c o m p a r e d w ith

employ­

the C e n s u s B u r e a u ’ estimates of the n u m b e r of
s

m e n t is also s h o w n for industry c o m p o n e n t s of the

persons e m p l o y e d in nonagricultural industries as

mining

given in the M o n t h l y R e p o r t o n the L a b o r Force.

division.

Earliest

date

of

availability

varies for the different series.

The B L S

industries

are

also

series excludes u n p a i d family workers,

in m a n u f a c t u r i n g

currently

domestics, a n d proprietors a n d self-employed per­

published

Series covering e m p l o y m e n t

sons.

for

ah

T h e o n l y conceptually valid c o m p a r i s o n is

States a n d m o s t of the m a j o r metropolitan areas.

w i t h the M R L F

Employment

e m p l o y e d in nonagricultural industries, after ex­

and

in

nonagricultural

establishments

in e a c h of the m a j o r industry divisions is

clusion

of

total of w a g e or salary w o r k e r s

those

engaged

in

domestic

service.

available for all States f r o m 1939 to 1952, a n d is

Despite similarity of definition, there are generally

p r e p a r e d currently for all b u t a f e w States a n d

differences in m o n t h l y levels a n d in the m a g n i t u d e

metropolitan areas.
now

E x p a n s i o n of the p r o g r a m ,

u n d e r w a y , is designed to p r o d u c e current

series for all States a n d

114 metropolitan areas.

C o o p e r a t i n g State agencies prepare State a n d
area

estimates.

Statistical standards,

set forth

and

are

followed in

order

nonfarm

parable

changes

employment

M R L F

primarily,

total.

from

the

between

series a n d

These

differences

different

the

the c o m ­
stem,

approaches

in

methodology.
The M R L F

in a B L S - S t a t e procedures m a n u a l a n d in related
instructional m e m o r a n d a ,

direction of m o n t h l y

BLS

v i ews

d a t a are b a s e d u p o n personal inter­

each m o n t h

with

a

scientifically selected

to m a i n t a i n reasonably c o m p a r a b l e d a t a a m o n g

s a m p l e of households.

area, State, a n d

responses, the population 14 years of a ge a n d o v e r

national series.

Because s o m e

I n ac c o r d a n c e w i t h s u c h

States h a v e m o r e recent b e n c h m a r k s t h a n others,

is classified into those in a n d

a n d b e c a u s e of the effects of differing industrial

labor force.

a n d g eographic stratification, the s u m of the State

classified

figures differs f r o m the official U n i t e d States totals

Further

p r e p a r e d b y the B u r e a u of L a b o r Statistics.

agricultural a n d

In

addition

discussed

in

to

the

benchmark

connection

with

adjustments,

the

estimating

procedure, current d a t a are revised to take ac­




of

into

the

and

etc.

unified

unemployed.

with

respect

to

nonagricultural activities, class
The

industry-by-industry
and

employed

classification is m a d e

worker,

those n o t in the

T h o s e in the labor force are further

BLS
samples

approach
of

involves

establishments

reports covering e m p l o y m e n t ,

pay­

M E A S U R E M E N T

rolls, a n d m a n - h o u r s .

O F

INDUSTRIAL

T h e B L S nonfarm employ­

49

E M P L O Y M E N T

other i m p o r t a n t

m e n t total is therefore the aggregate of the esti­

overstatement

m a t e s for the specific industries.

activities w i t h

a

A

ence in the source of response p r o b a b l y accounts
for m o s t of the variations in the final data.
example, in the B L S

For

series, persons w h o w o r k e d

in m o r e t h a n o n e establishment during the report­
ing period w o u l d

be

counted

more

than

once.

E m p l o y m e n t estimates derived b y the B u r e a u

employment

s i m ultaneous

activity.

T h e basic differ­

of

comprehensive

measure

secured is p r o v i d e d b y

square discrepancy” ( R M S D ) .

e m p l o y m e n t sta­
reasons

the

important

for

dis­

Periodically, the

the total for the universe or b e n c h m a r k .

various industries h a v e

Among

accuracy

F o r each

industry, the relative difference b e t w e e n the t w o
is t e r m e d the discrepancy.

tistics.

the

major

B L S estimate for e a c h industry is c o m p a r e d w i t h

a n n u a l s a m p l e surveys of m a n u f a c t u r i n g
lishments also differ f r o m B L S

of

the

the statistic, “ root m e a n

of the C e n s u s f r o m its quinquennial census a n d
estab­

in

Discrepancies for the

a bell-shaped freq u e n c y

distribution w h i c h a p p r o a c h e s the familiar n o r m a l
curve.

T h e square root of the m e a n of the squares

a g r e e m e n t are differences in the industries covered,

of the discrepancies is the R M S D .

in the business units considered parts of a n estab­

m e a s u r e s o m e w h a t similar to the relative s t a n d a r d

and

in the industrial classification of

establishments.

sampling

error.

however,

since it is the

sampling

lishment,

The

R M S D

error, b u t

T h u s , it is a

is m o r e

resultant

inclusive,

not

only

of

also of variations b e t w e e n

b e n c h m a r k a n d estimate in response, classification,

Limitations

a n d other procedural processes.
The

T h e m o s t recent m e a s u r e m e n t of R M S D

limitations of the classification structure

also affect the e m p l o y m e n t data.

T h u s , it is n o t

computed

for

all m a n u f a c t u r i n g

industries

was
for

possible to provide detailed e m p l o y m e n t i n f o r m a ­

M a r c h 1953, a date t w o years s u b s e q u e n t to the

tion for specific products.

last previous a d j u s t m e n t

establishments

shall

be

T h e r e q u i r e m e n t that
classified

according

to

to a n e w

T h i s test p r o d u c e d a R M S D

m a j o r p r o d u c t or activity m a y result in the “ c o n ­

2-digit

c e a l m e n t ” or u n d e r s t a t e m e n t of e m p l o y m e n t

and

5.0

of 1.8 percent for

industries.

in

industries

percent

B I B L I O G R A P H Y

The Employment Statistics Program of the Bureau of Labor Statistics.
Advisory Committee.

ASA

T h e A m e r i c a n Statistician, April 1948.

Employment in Manufacturing, 1899-1939.

By

Solomon

Fabricant.

Na­

tional B u r e a u of E c o n o m i c Research, 1942.

Employment Statistics for the United States.

By

Hurlin

and

Berridge.

Russell S a g e F o u n d a t i o n , 1926.

Employment and Unemployment Statistics.
tion.

International L a b o u r O r g a n i z a ­

R e p o r t I/II, International L a b o u r Office, 1947.

Manpower Resources and Utilization.

B y A . J. Jaffe a n d Charles D . Stewart.

J o h n W i l e y a n d Sons, Inc., 1951.

Recent Progress in Employment Statistics.

B y A r y n e s s Joy.

A m e r i c a n Statistical Association, D e c e m b e r 1934.




benchmark.

Journal of the

for

3-digit

50

T E C H N I Q U E S

O F

P R E P A R I N G

M A J O R

BLS

STATISTICAL

SERIES

B I B L I O G R A P H Y — Continued

Adequacy of Employment Statistics.

By

Arthur H . Reede.

Journal of the

A m e r i c a n Statistical Association, M a r c h 1941.

The Elements of an Industrial Classification Policy.

By

W a l t R> S i m m o n s .

Journal of the A m e r i c a n Statistical Association, S e p t e m b e r 1953.

Adjustment of Indexes to Benchmarks.
Duncan.

B y J a m e s G . S m i t h a n d A c h e s o n J.

E l e m e n t a r y Statistics a n d Applications, 1944.

Guide to Employment Statistics of Bureau of Labor Statistics.
m e n t of L a b o r , B u r e a u of L a b o r Statistics, 1954.




U . S. D e p a r t ­

Chapter 7. Hours and Earnings in Nonagricultural Industries*
Background and Uses

Organizations m a k i n g studies of c o n s u m e r in­
come,

Monthly

studies of e m p l o y m e n t

and

expenditures,

and

purch a s i n g p o w e r

find

payrolls

a verage earnings d a t a essential in their analyses,

b y the B u r e a u of L a b o r Statistics b e g a n in 1 915

as d o persons e n g a g e d in plant-location planning.

a n d covered four m a n u f a c t u r i n g industries.
sequently,

other

added, a n d

manufacturing

the p r o g r a m w a s

Sub­

industries w e r e

e x t e n d e d to cover

nonmanufacturing employment.

T h e earnings series are often utilized also in w a g e
negotiations.

M a n y c o m p a n i e s use earnings d a t a

for a d j u s t m e n t of labor costs in escalator clauses
pro v i d e d in sales contracts.

T h e collection of m a n - h o u r d a t a n e e d e d for the
preparation of estimates of h o u r s a n d

earnings

Concepts

m a d e it possible in 1933 to publish av e r a g e w e e k l y
h o u r s a n d ho u r l y earnings for 15 selected m a n u ­
facturing industries.
ment

and

B y D e c e m b e r 1935, e m p l o y ­

payroll indexes w e r e being published

for 90 m a n u f a c t u r i n g industries, b u t h o u r s a n d

T h e B L S h o u r s a n d earnings series m e a s u r e the
trend a n d level of average w e e k l y h o u r s a n d hourly
a n d w e e k l y earnings in b o t h m a n u f a c t u r i n g a n d
n o n m a n u f a c t u r i n g industries.

earnings series w e r e available for o n l y 2 0 of these

T h e series are b a s e d o n reports of gross payroll

industries, bec a u s e m a n y c o m p a n i e s did n o t m a i n ­

a n d corresponding paid m a n - h o u r s for production

tain a d e q u a t e

records of hours.

As

additional

or n o n supervisory w o r k e r s only, a n easily identi­

firms b e g a n to k e e p s u c h records, the m a n - h o u r

fiable g r o u p for u n i f o r m reporting.

s a m p l e c o ntinued to increase.

are usually available f r o m regular payroll records.

all

firms

reporting

By

1940, a l m o s t

employment

and

payrolls

The
ment,

also reported m a n - h o u r s .

G r o s s figures

basic data-collection unit is a n establish­
which

is defined

(standard

definition of

T h e current e m p l o y m e n t statistics p r o g r a m is

establishment in chap. 1, p. 2) as a single physical

a n integrated Federal-State project w h i c h provides

location, s u c h as a factory, mine, or store, w h e r e

e m p l o y m e n t , hours, a n d earnings information o n

business is conducted.

a national, State, a n d area basis.*
1

activities are c o n d u c t e d at the location a n d sep a ­

I n a ccor d a n c e

If t w o or m o r e distinct

w i t h statutory authority, a n d in order to m i n i ­

rate inventory a n d payroll records are m a i n t a i n e d

m i z e the reporting r e q u i rements for cooperating

for each, the B L S

establishments,

e a c h activity.

the

BLS

contracted

with

State

agencies for the collection a n d publication of h o u r s
and

earnings d a t a for the 4 8

States a n d

most

metropolitan areas.
Hours

and

applications

necessarily expensive to take a c o m p l e t e census
e v e r y m o n t h , reports are collected f r o m s a m p l e s
of establishments in the various industrial groupings.

earnings
in

requests separate reports for

B e c a u s e it is impractical a n d u n ­

information

economic

has

analysis.

various

These

data

Scope

are u s e d b y b u s i n e s s m e n a n d m e r c h a n t s in a n a ­
lyzing markets, since t h e y provide a c o m p a r i s o n

F o r the h o u r s a n d earnings series, B L S collects

of trends in earnings, industry b y industry a n d

the following information:

area

finding organizations use h o u r s a n d earnings d a t a

The number of full- and 'part-time production
workers or nonsupervisory employees w h o w o r k e d

in compiling national a n d local business indexes.

during, or received p a y for, a n y part of the p a y

Such

period

by

area.

Banks,

information

universities,

is u s e d

also

by

and

fact­

government

(1)

ending

nearest

the

15th

of the

month.

agencies as a n i m p o r t a n t factor in the analysis

F o r manufacturing, mining, laundries, a n d clean­

of m a n p o w e r utilization problems.

ing a n d d y e i n g plants, the d a t a cover p r oduction
a n d related w o r k e r s only.

♦Prepared in the D iv is io n o f M a n p o w e r an d E m p lo y m e n t Statistics.
i See also M easurem ent o f Industrial E m p lo y m e n t, chap. 6, p . 42.




W o r k i n g foremen a n d

all n o n supervisory w o r k e r s are included if e n g a g e d

51

52

T E C H N I Q U E S

O F

P R E P A R I N G

in such activities as fabricating, processing, inspec­
tion, handling, warehousing, maintenance, custo­
dial services, product development, auxiliary
production for plant’s own use (e. g., powerplant),
and record keeping and other services closely asso­
ciated with the production operations. For most
other industries, the data refer to nonsupervisory
employees and working supervisors, in accordance
with detailed definitions on the report form (BLS
790). (See standard definition of “ production
workers” in chap. 1, footnote 13, p. 6.)
(2) Total gross 'payrolls for the workers specified
above, before such deductions as social-security
and withholding taxes, bonds, union dues, and
occupational supplies. The payroll figures also
include pay for overtime, shift premiums, sick
leave, holidays, vacations, and production bonuses.
They exclude cash payments for vacations not
taken, retroactive pay not earned during the
period reported, value of payments in kind, em­
ployer contributions to welfare funds and insur­
ance or pension plans, and bonuses, unless earned
and paid regularly each pay period.
(3) Total man-hours for which pay is received
by full- and part-time production or nonsuper­
visory workers including hours paid for holidays,
sick leave, and vacations taken.

Universe. The hours and earnings series cover
all manufacturing industries and selected groups
of nonmanufacturing industries. Some of the in­
dustries for which estimates are not prepared are
characterized by small establishments, thus mak­
ing adequate sampling expensive, and for others
the hours and earnings data cannot be collected
on a basis comparable to that for covered in­
dustries.
Time Periods. The BLS policy of measuring em­
ployment, hours, and earnings for the week ending
nearest the 15th of the month has been made
standard by the U. S. Bureau of the Budget for
all Federal agencies collecting employment data
on an establishment basis. Use of this uniform
reference period for Federal statistics facilitates
comparisons among the various economic series
and avoids burdening business establishments
with requests for data relating to various periods
throughout the month. Data are collected and
estimates are published monthly.




M A J O R

BLS

STATISTICAL

SERIES

Survey Methods
Data for computing average hours and earnings
are collected by means of schedules mailed monthly
to individual establishments. The reports are
tabulated by industry. They are used for pre­
paring State, area, and national estimates.

Questionnaire. The schedules used in collecting
data for the respective industries are keyed to
their special characteristics. A separate schedule
(BLS Form 790) is sent for each reporting unit.
It provides for the entry of identifying information
and employment, hours, and payroll data for a
pay period in each month of the year. Product
or activity information is collected annually for
use in industrial classification.
Most establishment reports cover a 1-week pay
period. For those covering a longer period, the
number of days worked by the majority of the
employees during the entire pay period as well as
during the week ending nearest the 15th are ob­
tained, for use in converting payroll and man-hour
data to a weekly basis. The schedule also pro­
vides for the entry of an explanation of any un­
usual changes in the data reported from monthto-month. When no explanation is provided,
the schedule is returned to the reporter with a
request for comments.
The BLS 790 schedules are “ shuttle” forms,
that is, data are transcribed from the forms sub­
mitted by reporting establishments each month
and the same forms are returned for entry of the
following month’s data.
The shuttle schedule has been used continu­
ously in the employment program since 1930. It
is designed to facilitate reporting and analysis of
the data, and to help maintain statistical con­
tinuity. The schedule also has numerous opera­
tional advantages, for example, accuracy and
economy are obtained by entering identifying
codes and the address of the respondent only once
a year. The schedule design is reviewed an­
nually to introduce improvements and to take
account of changing economic conditions and in­
dustry characteristics.
Sampling Procedure.

In the hours and earnings
series BLS uses “ cutoff” sampling, which provides
for the inclusion of all firms having employment

H O U R S

A N D

E A R N I N G S

IN

N O N A G R I C U L T U R A L

over a specified size. The cutoff is set at a point
which will cover enough reporting establishments
to provide a defined standard of accuracy, as well
as to represent a substantial proportion of total
employment in an industry. This proportion
varies among industries, depending on the percent
of total employment on the payrolls of large estab­
lishments, a statistic usually determined from
social-insurance tabulations. In industries in
which it is not feasible to secure reports from all
firms above the cutoff point, the basic design is
modified somewhat to include smaller establish­
ments.
Hours and earnings estimates are based on a
slightly smaller sample than that for employment
estimates, because some establishments which
report employment do not furnish payroll and
man-hour information. The following table shows
the size of the employment sample for broad
industry categories within which hours and
earnings series are compiled.

App o i a e sz and c v r g o m n h y s m l u e i
r x m t ie
oeae f o t l a p e s d n
BLS e p o m and p y o lsaitc »
m l y ent
a r l ttsis
Em
ployees in
sam
ple
Division or industry

M
ining___________ ____-___ ____
Contract construction_____________
M
anufacturing . _______________
Transportation and public utilities:
Class I railroads (ICC)__________
Local railways and buslines_______
Telephone.-. ______ ________
Telegraph
_ _______ _____
_
G and electric utilities._________
as
W
holesale and retail trade___ __
_
Finance, insurance, and real estate_____
Service and m
iscellaneous:
Hotels and lodging places________
Personal services:
Laundries and cleaning and dye­
ing plants_______________

Number of
establish­
m in Number Percent
ents
of total
sam
ple
(thou­ industry
sands) em
ploy­
m
ent

410
490
4,000
4,700
60,300
10, 600
1,300

440
783
11,207
1,238
97
614
40
412
1,889
486
145

50
28
68
100
71
90
87
76
19
25
31

2,300

99

19

3,300
19,700
44,100

i Excludes industry groups for which no hours and earnings series are
com
piled.

Estimating Procedure.

Reporting establishments
are classified into significant economic groups on
the basis of major product or activity as deter­
mined from annual sales or receipts data for the
previous calendar year. Industry classifications
currently used are defined in the SIC and SSB
manuals;2 in some cases the data relate to com­
binations of industries.
The BLS employment estimates are adjusted
periodically in the light of complete employment



INDUSTRIES

53

counts or “ benchmarks,” but such adjustments
are not made for the hours and earnings series.
Although counts of payrolls and hours for many
of the industries covered in the BLS program can
be obtained from various sources, these totals
cannot be used as benchmarks, because they vary
with respect to coverage and definitions.
Benchmarks are less necessary for the hours
and earnings series since these series are estimates
of ratios of closely related factors— total payroll,
total employment, and total man-hours are
highly correlated with one another from plant to
plant. Therefore, the ratio of one of these items
to another is an efficient statistic which tends
to have a low variance.
( 1) Hours and gross earnings. To obtain average
weekly hours for an individual industry, the sum
of the man-hour totals reported by the plants
classified in that industry is divided by the total
number of production (or nonsupervisory) workers
reported for the same establishments. Similarly,
in computing average hourly earnings, the reported
payroll total is divided by the reported man-hour
total. These industry averages are derived from
a sample of firms that have reported for both the
month of reference and the preceding month.
Weekly hours and hourly earnings for major
industrial groups and subgroups in manufac­
turing, for all manufacturing, and for major
nonmanufacturing groups are weighted averages
of the figures for individual industries.
The
average weekly hours for individual industries
are multiplied by the estimates of total produc­
tion-worker employment in the industry to derive
aggregate man-hours.
Payroll aggregates for
individual industries are the product of the
aggregate man-hours and the average hourly
earnings. Payroll and man-hour aggregates for
industry groups are obtained by summation of
the component industries.
Average weekly hours for industry groups are
obtained by dividing the man-hour aggregates
by the corresponding production-worker employ­
ment estimates.
Average hourly earnings for
groups are computed by dividing the payroll
aggregates by the man-hour aggregates.
This
2 (1) For m
anufacturing industries—
Standard Industrial Classification
M
anual, V I, M
ol.
anufacturing Industries, Bureau of the Budget, Novem­
ber 1945; (2) fornonm
anufacturingindustries—
Industrial Classification Code.
Federal Security Agency, Social Security Board, 1942.

54

T E C H N I Q U E S

O F

P R E P A R I N G

M A J O R

method is equivalent to weighting weekly hours
and earnings by estimated universe employment
and hourly earnings by estimated universe
man-hours.
For both individual industries and major
industry groups, average weekly earnings are
computed by multiplying average hourly earnings
by average weekly hours.
Man-hour data are
not collected for a few industries in the finance
and service divisions; in these industries, average
weekly earnings are obtained by dividing the sum
of the reported payroll totals by the total number
of nonsupervisory workers for the same estab­
lishments.
National estimates are prepared by BLS and
State and area estimates by cooperating State
agencies. Statistical standards are set forth in a
BLS-State procedures manual and in related
instructional memoranda, in order to maintain
comparable data among national, State, and
area series.
(2)
Net spendable average weekly earnings?
When a majority of workers in lower income
brackets were not subject to Federal income
taxes, gross average weekly earnings were a
satisfactory measure of trends in weekly earnings
available for spending.
After Federal income
taxes began to affect spendable earnings of an
appreciable number of workers, a method was
developed for approximating net spendable earn­
ings by deducting Federal income and social
security taxes from gross earnings.
The amount of individual income tax liability
depends on the number of dependents supported
by a worker as well as on the level of his gross
income. Net spendable earnings for workers in
all manufacturing are published, therefore, for a
worker with no dependents and a worker with
three dependents.
Net spendable weekly earnings are also pub­
lished in terms of 1947-49 dollars to give an ap­
proximate measure of changes in “real” net
spendable weekly earnings or in purchasing power
since that base period. This series is computed
by dividing the spendable earnings average (in
current dollars) by the BLS Consumer Price Index
for the same month.
* See “Technical Note on the Calculation and Uses of the Net Spendable
Earnings Series” (processed report, revised, 1953). It contains a table of
form used in excluding Federal incom and social security taxes from
ulas
e
gross earnings, and an explanation of the derivation of the form
ulas.



BLS

STATISTICAL

SERIES

(3) Gross average weekly earnings in 1947-49 dol­
Gross weekly earnings are also published in
terms of 1947-49 dollars for all manufacturing,
bituminous-coal mining, and laundries. The con*
version is made in the same way as that for net
spendable earnings.
(4) Average hourly earnings excluding overtime.
As indicated previously, the basic payroll and man­
hour data from which gross average hourly earn­
ings are computed include both straight time and
overtime. In order to estimate average hourly
earnings excluding overtime for all manufacturing
and for the durable and nondurable goods industry
subdivisions, adjustment factors 4 are applied to
gross average hourly earnings. These factors
eliminate premium pay at the rate of time and a
half for hours in excess of 40 per week. The
factors are based on a special study of the relation­
ship between gross average weekly hours and
average weekly overtime hours.
The adjustment factors are applied separately
to the gross average hourly earnings for each of
the major manufacturing industry groups, and the
adjusted figures are then weighted by the respec­
tive man-hour aggregates. These figures may
differ somewhat from the results which would be
obtained by direct application of the adjustment
factors to gross average hourly earnings for all
manufacturing and the durable and nondurable
goods subdivisions.

lars.

Publication and Revisions
The BLS issues a monthly press release con­
taining preliminary national estimates for the
preceding month for all manufacturing, durable
and nondurable goods industry subdivisions, and
21 major manufacturing industry groups. These
estimates are based upon tabulations of data for
less than the full sample; only reports received by
a stipulated date are included in order to permit
early release of the figures.
Revised data based on additional reports are
published later in both the monthly Employment
and Earnings report and the Monthly Labor
Review. These publications also present average
weekly hours, average hourly earnings, and aver­
age weekly earnings of production workers in about
4
See “Eliminating Premium Overtim From Hourly Earnings in Manu­
e
facturing,” M
onthly Labor Review, May 1950 (p. 537).

H O U R S

A N D

E A R N I N G S

IN

N O N A G R I C U L T U R A L

300 manufacturing subgroups and separate manu­
facturing industries, as well as in about 50 non­
manufacturing groups and divisions. Gross
weekly earnings in 1947-49 dollars, net spendable
earnings, and hourly earnings exclusive of over­
time are also published. Average hours and earn­
ings in all manufacturing are published monthly
for each State and most major metropolitan
areas.5 Current expansion of the program is de­
signed to produce series for 114 metropolitan areas.
National series for the two most recent months
are subject to revision. For State and area data
only the most recent month is subject to revision.
Limitations
The gross average hourly earnings series reflect
actual earnings of workers including premium pay.
They differ from wage rates, which are the amounts
stipulated for a given unit of work or time. Nor
do gross average hourly earnings represent total
labor costs per man-hour for the employer, for
they exclude retroactive payments and irregular
bonuses, various welfare benefits, and earnings for
those employees not covered under the productionworker and nonsupervisory-employee definitions.
The workweek information relates to average
hours paid for, which differs from scheduled hours,
because average weekly hours reflect the effects of
such factors as absenteeism, labor turnover, parttime work, strikes, accidents, and machine break­
downs.
Gross average weekly earnings are not the
amounts actually available to workers for spend-*
* These dataappear quarterly inthe M
onthly Labor Review(inthe March,
June, Septem and D
ber,
ecem issues).
ber




INDUSTRIES

55

ing. This is due, in part, to the fact that they do
not reflect such deductions as those for income and
social security taxes.
The computation of net spendable average week­
ly earnings is based upon gross average weekly earn­
ings for all production workers without regard to
marital status, family composition, and total family
income. Neither the gross nor net spendable earn­
ings data reflect actual differences in levels of earn­
ings for workers of varying ages, occupations, and
skills. Spendable earnings reflect deductions only
for Federal income and social security taxes, and
hence represent only a rough approximation of
changes in disposable earnings for 2 types of work­
ers— 1 with no dependents and 1 with 3 dependents.
The “real” earnings data (those expressed in
1947-49 dollars) resulting from the adjustment of
gross and net spendable average weekly earnings
by the Bureau’s Consumer Price Index indicate
the changes in the purchasing power of money
earnings as a result of changes in prices for con­
sumer goods and services. These data cannot be
used to measure changes in living standards as a
whole, which are affected by such other factors as
total family income, the extension and incidence
of various social services and benefits, and the
duration and extent of employment and unem­
ployment.
To approximate straight time average hourly
earnings, gross average hourly earnings are ad­
justed by eliminating only premium pay for over­
time at the rate of time and a half for all hours in
excess of 40 a week. Thus, no adjustment is made
for other premium payment provisions such as
holiday work, late shift work, and premium over­
time rates other than time and a half.

56

T E C H N I Q U E S

O F

P R E P A R I N G

M A J O R

BLS

STATISTICAL

SERIES

B IB L IO G R A P H Y

Average Man-Hours Worked and Average Hourly Earnings. Monthly Labor
Review, January 1933, pp. 205- 208.
of Labor Statistics.

U. S. Department of Labor, Bureau

Real Wages in the United States 1890- 1926.

B y Paul H . Douglas.

Houghton

Mifflin and Co., 1930.

Fact-Finding Activities of the Bureau of Labor Statistics.
Labor, Bureau of Labor Statistics, 1945.

U. S. Department of
(Bull. 831.)

National Income and Its Composition 1919- 88.

B y Simon S. Kuznets.

N a­

tional Bureau of Economic Research, 1941.

Earnings of Nonfarm Employeesin the U. S., 1890- 1946.

By Stanley Lebergott.
Journal of the American Statistical Association, March 1948.

Hours and Earnings in the United States, 1982-lfi.
Labor, Bureau of Labor Statistics, 1942.

U. S. Department of
(Bull. 699.)

Spendable Earnings of Factory Workers, 1941- 43.
March 1944, pp. 477- 489.
Labor Statistics.

Monthly Labor Review
U. S. Department of Labor, Bureau of

B LS Earnings Series as Applied to Price Escalation.
July 1952, pp. 57- 59.
Statistics.




Monthly Labor Review
U. S. Department of Labor, Bureau of Labor

C h a p t e r 8.

M e a s u r e m e n t

Background
Industry turnover rates are valuable for per­
sonnel and economic planning and analysis. Em ­
ployers use these rates as a yardstick against which
to measure the perfoimance of their plants; they
consider low turnover rates an indicator of efficient
operations and good management-labor relations.
The rates are particularly significant in a defense
economy, as a consideration of turnover is essen­
tial for scheduling production and for planning the
orderly recruitment and maintenance of an ade­
quate manpower supply for critical industries.
The greatest single cause of movement in laborturnover rates is industrial expansion and contrac­
tion. In prosperous times, quit rates and acces­
sion rates are high because of job availability; in
periods of economic recession, high layoff rates are
coupled with low quit and accession rates. Turn­
over rates are, therefore, valuable indicators of
economic health.
Within the above framework, turnover is caused
mainly by the job instability of certain groups of
workers— young, unskilled, low-paid, temporary,
and women. Hence, turnover is to a great extent
related to age, sex, and the character of the job,
with the work force of a factory generally consist­
ing of a large segment of relatively stable employ­
ees and this relatively unstable segment.
The Bureau of Labor Statistics publishes, on a
national basis, monthly series of labor-turnover
rates for selected industries. These series show
the rate at which employees move into and out of
jobs in individual establishments. They are cur­
rently published for 20 major industry groups in
manufacturing,* 91 individual manufacturing in­
1
dustries, and 8 nonmanufacturing industries in
mining and communications.
The Bureau’s series for manufacturing as a
whole is a continuation of a series begun by the
Metropolitan Life Insurance Co. in January 1926.
•Preparedby Jeanette G Siegel ofthe Division ofM
.
anpower and Employ­
ment Statistics.
i The industry group—
printing, publishing, and allied industries— ex­
is
cluded fromthe turnover survey.
3 For com
plete M
etropolitan Life Insurance Co. series, see Labor Turnover
in Am
erican Factories, in the July 1929 Monthly Labor Review (p. 62).
3 0 4 5 2 3 — 55---- 5




of L a b o r Turnover*

Manufacturers then, as now, participated in the
project in order to provide a measure of factory
labor instability. The rates computed by the in­
surance company were median rates for all items
except total separations, which were the sum of the
component rates. The median was used because
the sample was small and its composition unstable.
Ratios of quits, discharges, and the other variables
to the mean number on the payroll were computed
for each manufacturer on a company, rather than
establishment, basis. They were then arranged
in order of magnitude and the median selected for
each item.
B y 1929, enough earlier data had been obtained
from the participants to permit the extension of a
monthly series back to January 1919. The pub­
lished data showed rates of accessions, total
separations, voluntary quits, discharges, and lay­
offs for total manufacturing.2 On July 1, 1929, the
3
Metropolitan Life Insurance Co. transferred the
responsibility for the collection and compilation of
labor-turnover rates to the Bureau of Labor Sta­
tistics. Approximately 350 large manufacturers,
employing 700,000 workers, comprised the sample
at that time.
Concepts and Scope
Labor-turnover rates are divided into two broad
groups: Accessions or additions to employment,
and separations or terminations of employment.
Accession and separation rates are important for
interpreting changes in the Bureau’s employment
series, since each monthly net change in an in­
dustry is the result of employment additions and
separations.
Separations are reported as quits, discharges^
layoffs, and military and miscellaneous separations.
They are expressed in the BLS series as a rate per
100 employees, with separate rates for each of the
component items computed for each published
industry.
The primary difference between types of sep­
arations is whether action is initiated by the
employee or employer, i. e., whether it is voluntary
on the employee’s part or involuntary. Voluntary
57

58

T E C H N I Q U E S

O F

P R E P A R I N G

actions— quits— are initiated by the employee for
an almost unlimited variety of reasons, generally
financial, personal, or social (social reasons are
lack of housing and transportation, poor com­
munity facilities, etc.). Involuntary actions may
either be initiated by the employer or be beyond
the control of both employer and employee; these
actions may arise from economic causes such as
business conditions, physiological reasons such as
old age, and performance reasons such as incom­
petence. Discharges, layoffs, and miscellaneous
separations are considered involuntary. Within
the involuntary group of separations, the reason
for the action determines the particular category
in the Bureau's turnover rates.
Quits are terminations of employment initiated
by employees. They may be due to job dissatis­
faction, return to school, marriage, maternity,
acceptance of other job, ill health, or voluntary
retirement without a company pension. Unau­
thorized absences of more than 7 consecutive
calendar days also are considered quits.
Discharges are terminations of employment initi­
ated by management and occasioned by employees'
incompetence, violation of rules, dishonesty, in­
subordination, laziness, habitual absenteeism, or
inability to meet the organization's physical
standards.
Layoffs are unpaid terminations of employment
for more than 7 consecutive calendar days which
are initiated by management without prejudice
to the worker. They result from reasons such as
lack of orders, materials shortages, conversion of
plant to new product, or introduction of improved
machinery or processes.
Military separations are terminations of employ­
ment for military duty lasting or expected to last
more than 30 consecutive calendar days. From
January 1942 through June 1944, the military
separation rate was published separately. It has
since been included in the miscellaneous separation
rate.
Miscellaneous separations are terminations for
reasons other than those itemized such as retire­
ment on company pension, death, or permanent
disability. Prior to 1940, miscellaneous separa­
tions were included with quits.
Persons on paid or unpaid authorized leaves of
absence are not counted as separations until it is
definitely determined that such persons will not
return to work A t that time, a separation is



M A J O R

BLS

STATISTICAL

SERIES

reported as one of the above types, depending on
the circumstances.
Accessions are all permanent and temporary
additions to the employment roll, whether of new
or rehired employees.
New hires are permanent and temporary addi­
tions to the employment roll that have not been
specifically recalled by the employer.
BLS turnover series are prepared on a national
basis only. Both the turnover items reported and
the employment base used to derive the rates ap­
ply to total employment, whether full or part
time, permanent or temporary. Separate data
for production workers are not reported. Trans­
fers from one department or plant of a multiunit
firm to another are not considered turnover.
Monthly data on transfers, however, are collected
because of their value as editing aids.

Universe. All manufacturing industries are repre­
sented in the labor-turnover universe, with the
exception of the entire printing, publishing, and
allied industries group and certain seasonal in­
dustries such as women's and misses' outerwear,
canning and preserving, and fertilizer manufac­
turing. These industries are excluded because
their seasonality or small-establishment character
makes it difficult to sustain sample adequacy.
Individual rates are not published for each covered
industry, as some industry samples are too small
to permit separate publication.
Approximately 1.5 million manufacturing em­
ployees, about 8 percent of total manufacturing
employment, are outside the scope of the turnover
survey. The only non manufacturing industries
covered are metal mining, coal mining, and
communications. (See table.)

C v r g o BLS l b rt r o e s m l
oeae f
ao un v r a p e

Industry group

M
anufacturing_____ __________
Durable goods____________
Nondurable goods.....................
Metal mining_______________
Coal m
ining:
Anthracite._______________
Bituminous_______________
Com unications:
m
Telephone___________ ____
Telegraph________________

Employment
Number of
establish­
ments in In report­ Percent
sam
ple ing estab­ of uni­
lishm
ents
verse
6,600
4,000
2,600
130
40
275
(2
)
(2
)

4,800,000
3,400,000
1,400,000
63,000
30,000
120,000
582,000
28,000

*34
!38
127
60
45
33
89
60

1Percents for m
anufacturing relate to em
ploym in industries within
ent
the scope of the survey.
2Data are not available.

M E A S U R E M E N T

O F

Publication
Three series of turnover rates on a national
basis are prepared by the Bureau of Labor Sta­
tistics: All employees, and men and women sepa­
rately. For all employees, monthly rates for all
variables (quits, discharges, etc.) are shown for
each industry in the survey. For men and women,
rates of accessions, total separations, and quits
are published quarterly for the manufacturing
industry groups and subdivisions.

Frequency and Medium oj Publication. Prelim­
inary turnover rates for total employment are
published monthly in a BLS press release about a
month after the reference month. Preliminary
rates for detailed industries are published by the
Bureau in the Employment and Earnings report
and the Monthly Labor Review about 2 months
after the month of reference.3 Final rates are
available in these publications a month after the
preliminary rates.
Separate rates for men and women were pub­
lished monthly from March 1944 through July
1947. A t that time, the rates were discontinued
until January 1950, when publication was resumed
on a quarterly basis for the first month of each
quarter.
The Bureau does not publish turnover rates for
any time period longer than a month. For a
yearly period, either average monthly rates for
each variable, or annual rates, can be computed.
The average monthly rate for a turnover item is,
of course, the mean of the rates for the 12 months.
An annual rate is the sum of the 12 monthly rates.
Technically, a yearly rate should be this cumulated
rate. For example, if monthly quit rates were
not available, an annual quit rate would be de­
rived by dividing average plant employment into
the total number of workers who quit during the
year. The result would be equivalent to that
obtained by cumulating the 12 monthly rates.
However, this cumulated rate is difficult to in­
terpret; an annual quit rate amounting to 50 per
100 employees seems to imply that 50 percent of
all the persons employed in January voluntarily
left their jobs by the end of December. It may be
that half of all the employees quit, but it is more
3O prelim
ne
inary series is published for each month. In the monthly
publications, the prelim
inary rates for the current month are printed with
the final estim for the previous month.
ates
L



L A B O R

T U R N O V E R

59

likely that most of those who quit held largely
the same jobs— that is, it was largely the same
jobs which were vacated and refilled. As the
Bureau does not have information on the number
of employees who remained with the establishment
during the entire year, annual rates cannot be
properly interpreted. Over short periods of time,
it is believed that the turnover items measured
include little repetitive counting of employees who
have left the same jobs, while over a period as long
as a year there is considerable duplication. An
average of the 12 monthly rates may provide a
useful measure if a 1-month rate is not suitable for
certain purposes, or if it is considered to be unusual
or unduly influenced by seasonality.

Sources and Estimating Procedures

Questionnaire and Collection. A shuttle schedule
is mailed to cooperating employers; that is, the
same form is returned to the respondent each
month for the entry of current data. The cumu­
lated total of each turnover item for the calendar
month is reported. Total employment, the base
used to compute the rates, is reported for 1 week
ending nearest the 15th of the month, except for
the telephone and telegraph industries, for which
employment at the end of the current month is
reported.
The only turnover items requested for women
are total accessions, total separations, and quits.
The employment base is the number of women on
the payroll during the week ending nearest the
15th of the month.
Industrial Classification. Since December 1949,
manufacturing firms have been classified in ac­
cordance with the Standard Industrial Classifica­
tion Manual ( 1945). From 1943 through 1949,
the Social Security Board ( 1942) code structure
was used.
Classification of nonmanufacturing reporters
is based on the Social Security Board structure.
Method of Computation.

Turnover rates are esti­
mates of ratios. For individual industries, the
rates are computed by dividing the amount of
turnover items of each type, reported by the
sample establishments, by the total number of
employees reported by those establishments. The
result is multiplied by 100. In an industry

S P E C IM E N O F S C H E D U L E

60
B.

lu S. 1219

Budget Bureau No. 44-R290.14.
Approval expires January 31,4955.

U. S. DEPARTMENT O F LABOR
BUREAU OF LABOR STATISTICS
WASHINGTON
D. C,

State

......................... |
.................. !i.........................
Tab
1
•
!
Ind.

Report No.

2
$.

CONFIDENTIAL REPORT O N
LABOR

TURNOVER

P le a s e e n t e r th e d a t a r e q u e s t e d a n d r e tu r n th e w h it e c o p y in th e e n c lo s e d e n v e lo p e
a s s o o n a s th e in fo r m a t io n is a v a ila b le e a c h m o n th . T h e y e llo w c o p y is f o r y o u r file.
B e fo r e e n te r in g d a ta p le a s e s e e e x p la n a tio n s o n o t h e r s ia e
<CHANGE MAILING ADDRESS IF INCORRECT—INCLUDE POSTAL ZONE NUMBER)

r

n

I n fo r m a tio n r e p o r te d o n

th is f o r m

i s s tr ic tly c o n fid e n tia l, w ill b e s e e n

o n l y b y s w o r n e m p lo y e e s o f th e B u r e a u
b e r e v e a le d to a n y o th e r p e r s o n

o f L a b o r S ta tis tic s , a n d w ill n o t

o r a g en cy n o r p u b lish ed in

n e r th a t d a ta r e la tin g to a n in d iv id u a l c o m p a n y c a n

such a

m an­

b e id e n tifie d .

LOCATION OF ESTABLISHMENT COVERED IN THIS REPORT
(City)
(County)
(State)

L

J
L

ALL EM PLO YEES

A ccessions
Separations Except Transfers (during calendar month)
N umberopE mploykrs
T ransfers
Except Transfers (during
who worked during
calendar month)
or received pay for
Y ear
any part of the pay
AND
period
T o other From other
M onth
Miscella­
Military
ending nearest Total (Columns
establish­
Discharges Lay-offs
Quits
neous ■ Total
New hires establish­
4 through 8)
ments of
the 15th of the month
separations separations
ments of
firm
firm
(3)
(4)
(10)
(5)
(2)
(12)
(7)
(9)
(6)
(8)
(ID
0)

w {p
eek) referably t

Period C overed by
Labor
T urnover
Items (prcf.rably 1
calendar month)
From—

j Through
|

(Both date!9inclusive)
(13)

(14)

1953
D ec.
1954
Jan.
Feb.
M ar.
A p r.

1

i
.................. |
...................

M ay

j

1

June

1

I

J u ly

........................................1
..........................

|

Aug.

.......................... 1
.........................
i

J

S e p t.

i
1

O ct.
N ov.
D ec.

II.

WOMEN

Y ear N timber ov W omen
E mployees included
AND
in column 2
M onth
(15)

(16)

III.

EM PLOYEES

Separations
Except Transfers
Total
(17)

Quits only
(18)

A ccessions
Except
Transfers
Total
(19)

DO
NOT
USE

COM M ENTS

M F R on pforsion significant month-to-month changes in Sections I­
ain actors easonsible any
esp
u
airs v tory g
offsd etocon comletionorcanan ,,partialfire.t-d nfor rep orinen -takin, lay
u tract pS alexcellation strike, sh ow

Please enter
and II. Examples are:

(20)

(21)

1953
D ec.
1954
Jan.
F eb.
M ar.
A p r.
M ay June
J u ly
Aug.
S ep t.
O ct.
N ov.
D ec.

1 6 -4 0 8 7 9 - 9




( P e r s o n to b o a d d r e s s e d i f q u e s t io n s a r is e r e g a r d in g t h i s r e p o r t )

(Position)'

M E A S U R E M E N T

s a m p le ,

fo r

J a n u a ry

e x a m p le , 6 2 3

1 an d

o r r e c e iv e d
T h e

e m p lo y e e s

3 1 , w h ile

3 0 ,0 6 2

q u it

q u it

ra te

fo r

th e

in d u s tr y

L A B O R

b etw een

e m p lo y e e s

w ork ed

p a y d u r in g th e w e e k o f J a n u a r y

J a n u a ry

O F

1 1 -1 7 .

is :

In

1943,

m en t.
base

623

th e

ch a n g e d fro m

o f

th e

to

th e

th e

base

o f

th e

p r o d u c tio n

P r io r

w as

d a y

61

T U R N O V E R

O ctob er

average

cu rren t m o n th ;

1945,

o f

p r e c e d in g

tu rn ov er

w ork ers to

th is

th e

on

th e

an d

th e

w as

b ase

w as

e m p lo y m e n t

e m p lo y m e n t

m on th

r a t io

to ta l e m p lo y ­

la s t

ch a n ged

la s t

d a y
to

o f

em ­

X 1 0 0 = 2 .1
p lo y m e n t

3 0 ,0 6 2

d u r in g

th e

m id w e e k .6

th e r a te s r e s u ltin g fr o m
T u rn ov er
p u ted

b y

ra tes

in d u s t r ie s

b y

e s t im a t e s .
g ood s
are

fo r

w e ig h tin g
th e

in d u s tr y

th e

B u r e a u ’s

K a tes fo r

s u b d iv is io n s

w e ig h te d

b y

ra tes

th e

an d

grou p s

fo r

th e

u n iv e r s e

d u r a b le
fo r

ov er

ite m s

tu rn over
b y

ite m s

fo r

w e ig h t in g

fo r

w om en

tu rn ov er

m en .

ra tes

th e B L S

A s

n o n d u r a b le

th e

m a jo r

in ­

th e

B u r e a u ’s

fo r

S e p a ra te

in d u s tr y

th e ra tes

q u a r te r ly

are su b tra cte d

ite m s

in

to

fro m

o b ta in

m en

an d

grou p s

are

tu rn ­

w om en
o b ta in e d

in d iv id u a l in d u s tr ie s

e m p lo y m e n t

b y

e s t im a t e s f o r m e n

tu rn ov er

s ta b le

th a n

ra tes

th ey

fir m s

h ig h e r

are

ra tes,

e x te n s iv e

g rea ter

C o n t i n u i t y

a b le

fo r

an d

o f

S e r i e s .

C o m p a r a b le

“ a ll m a n u f a c t u r in g ”

fo r

tw o

c o a l-m in in g
1943.

an d

in d u s t r ie s

fro m

o f th e S IC

c o d e s tr u c tu r e in

ra tes

fro m
tw o

B eca u se

are

J a n u a ry

a v a il­
1930

fro m

m ore

a d va n cem en t

on e

o f

th e

D ecem b er

a d o p tio n

1949, co m ­

p a r a b le r a te s f o r in d iv id u a l in d u s tr ie s a re a v a ila b le
o n ly

fro m

ra tes
b o th
th e

th a t

fo r m a n y
th e

S S B

an d

c la s s ific a tio n

m en t

in

v io u s ly
s a m p le .
tu r in g
d e r iv e d

in

th e

th ose
b een

S IC

b y

m a y

b een

so

th a t

b e

th e

G rou p

d ir e c tly

o f

w e ig h t in g
th ose

th e

o f

S IC ,

w e ig h t in g

b y

ra tes

e m p lo y ­
h a d

th e

p re­

g rou p

to ta l-m a n u fa c ­

n o n d u r a b le

ra tes

in d u s tr y -g r o u p

w ere

ra tes

b y

grou p s.

4
P rior to this date, m edian rates w ere used. S u b stitu tion o f the a rith m etic
average resulted in rates 25 to 100 percent higher than th e m edian rates.




tu rn ov er

T h e

u se

th e

to

a n oth er

ite m s

o f

fo r

th e

try

fro m

cov era g e

p u b lis h in g

p r o m in e n t

th e

c lu d e d
If

b e n e fits ,

b etter

n o t

re ­

fro m

to

s m a ll

as

is

T h e

la b o r -

th e

c a le n ­

d u r in g

s e r ie s

th e

ch an ges
s e r ie s

m easu re

(2 )

in d u s ­

p r in t in g

season al

an d

in d u s tr ie s

tu rn o v e r

are

fir m s

are
as

in

n o t
th e

as
em ­

(4 ) if a p la n t is a ffe c t e d b y

rep ort

w id e s p r e a d

s e r ie s r e fle c t s u c h

(1 )

s a m p le

fo r
ra tes

an d

n u m b e r o f r e p o r t in g fir m s in
in d u s tr y

in te r p r e t

m id m o n th ;

som e

tu rn ov er

th e

th e

in

tu r n o v e r ; (3 ) th e ra te s te n d t o b e

th e

are

to

ch an ges

an d

tu rn ­

n o t r e fle c te d

e m p lo y m e n t

id e n tic a l,

b eca u se
in

c o n s id e r e d

is

reason s:

m id m o n th
is

stop p a g e,

s t r ik e s

th a t

c o n d it io n s ,

fr in g e

e m p lo y m e n t

p lo y m e n t s a m p le ; a n d
w ork

L a rg eg e n e r a lly

fir m s .

ra tes

fo llo w in g

in d u s tr y

u n d ersta ted

are n o t

m o n th ly

m o n t h , w h ile

ch a n ges

m e d iu m

a d d itio n , a s tr a n s fe r s

o f la r g e

t u r n o v e r s e r ie s m e a s u r e
d a r

o f

w o r k in g
lib e r a l

s h iftin g

tu rn ov er

B u r e a u ’s

lim it e d

an d

becau se

In

a ll i n t r a c o m p a n y

in

s m a ll

d e p a r t m e n t o r p la n t o f a m u ltie s t a b lis h ­

a re e x c lu d e d fr o m

th e

b y

fro m

sy stem s, th e
an d

e ffe c t

on

m easu red.

a d o p tio n

in d u s t r ie s .

1949

com p u ted

c o m p o n e n t in d u s tr ie s

com p u te d

in

D ecem b er

r a te s w e r e c a lc u la t e d

d u r a b le

e m p lo y m e n t

bases

th e

U n d er b o th
an d

h a v e

r e v is io n

w it h

in d u s tr y -g r o u p
ra tes

H ow ev er,

in d u s t r ie s

C on cu rren t

th e

d a te.

c o m p r is e d

o p p o r tu n itie s ,

con cern

th e

if

b etter

an d

c r u it in g p r o c e d u r e s , e tc .

4

c o m m u n ic a t io n

is

r e p r e s e n t a t io n .

lo w e r

m en t

w om en .

b e

g rea ter

u s u a lly

w age

m ore

w o u ld

h a d

over,

an d

s a m p le

m a in ly o f la r g e fir m s , t h e r a t e s a r e lo w e r a n d m o r e

fir m

d u stry grou p s.
T u rn ov er

L im ita tio n s

s iz e

t o t a l-e m p lo y m e n t

on

e m p lo y m e n t

m a n u fa c t u r in g ”

in

e ffe c t

co m ­

com p on en t

an d

“ a ll

e m p lo y m e n t

are

T h e

th is c h a n g e w a s n e g lig ib le .

th a t
fo r

a ffe c t

p la n t
th e
a

is

a

ex­

in d u s tr y .

s u b s ta n tia l

a n in d u s tr y , ra te s fo r

o m itte d .

T h e

e m p lo y m e n t

stop p a g es.

6 F o r the telep hone an d telegraph industries, the e m p lo y m e n t base is still
the average o f e m p lo y m e n t on the last d a y o f th e p recedin g and current
m on th .

62

T E C H N I Q U E S

O F

P R E P A R I N G

M A J O R

BLS

STATISTICAL

SERIES

B IB L IO G R A P H Y

T h e

T u r n o v e r

o f

F a c t o r y

C o ., N . Y .,

L a b o r

T u r n o v e r

E .

T r e n d s

M

A

S u m n er

S t a t i s t i c a l

M a c m illa n

i n

L a b o r

o f

C o .,

T u r n o v e r

W la d im ir

S c ie n c e

A s p e c t s

o n

,

I n d u s t r y

B y

a r k e t .

S o c ia l

T h r e e

i n

F r a n k e l.

R e c e n t

B y

L a b o r .

H .

S lic h te r .

D .

A p p le to n

&

1919.

S.

R esea rch

L a b o r

D

S o c ia l S e c u r ity ,

,

T h e i r

C a u s e s

S o c ia l S c ie n c e

P . F . B r is s e n d e n

a n d

T h e i r

E f f e c t s

C o m m itte e

W a s h in g to n , D .

B y

i c s .

B y

n a l y s i s .

an d

1922.

W o y tin s k y .

C o u n c il,

y n a m

A

N . Y .,

W la d im ir
R esea rch

on

C .,

o n

th e

S o c ia l

L a b o r

S e c u r ity ,

1939.

S . W o y tin s k y .

C o m m itte e

C o u n c il, W a s h in g t o n ,

D .

C .,

1942.

T h e

M

a n a g e m

D o d d ,
Y o rk ,

F a c t o r y

e n t

o f

P e r s o n n e l

M cN a u g h to n ,
1950

L a b o r

a n d

an d

L a b o r

S econ d

R e l a t i o n s .

P ra sow .

M c G r a w -H ill

ed.

B o o k

B y
C o .,

W a tk in s ,
I n c .,

N ew

(C h a p . X I Y ).

T u r n o v e r

v ie w , M a r c h

—

1927, p.

T w

o * N

9.

e w

M

o n t h l y

I n d e x e s .

U . S. D ep a rtm en t

o f

M o n th ly

L a b o r

L a b or, B u rea u

R e ­

o f L a b o r

S ta tis tic s .

L a b o r

p .

A

T u r n o v e r

62.

S t a n d a r d

U .

i n

S.

A m

P r o c e d u r e

v ie w , J u n e

e r i c a n

f o r

1931, p .

C o m

126.

M o n th ly

F a c t o r i e s .

D ep a rtm en t

o f

L a b or,

p i l i n g

U . S.

B u rea u

T u r n o v e r

L a b o r
o f

S t a t i s t i c s .

D ep a rtm en t

o f

R e v ie w ,

L a b o r

J u ly

1929,

S ta tis tic s .

M o n th ly

L a b o r R e ­

L a b o r, B u rea u

o f

L a b o r

S ta tis tic s .

S t a n d a r d

P r o c e d u r e

R e v ie w ,

f o r g C

D ece m b e r

o m

p u t i n g

1936,

p .

L a b o r

1486.

T u r n o v e r

M o n th ly

{ r e v i s e d ) .

U . S . D ep a rtm en t

o f

L a b or,

L a b o r
B u rea u

o f L a b o r S ta tis tic s .

L a b o r

T u r n o v e r

1942, p.




i n

1193.

M

a n u f a c t u r i n g

1 9 3 0 - 4 1 .

M o n th ly

U . S. D ep a rtm en t o f L a b o r,

B u rea u

L a b o r

R e v ie w ,

M a y

o f L a b o r S ta tis tic s .

Chapter 9. The Consum er Price Index*

B a ck grou n d

an d

s e n tin g

U ses

1 9 5 1 -5 2

s p e n d in g

p a ttern s

w ere

in tr o ­

d u ced .
T h e

C on su m er

B u rea u
o f

ch an ges

in

b ou g h t b y
cal

p r ic e s

fa m ilie s

w ork ers.

W o r ld

W a r

w age

cen ters.

T h e

w ere

O cto b e r

in d e x e s
tu res

b y

1921.

In

th e

im p r o v e d

in

o n

su rveys

d u r in g

fa ll o f

m eth od s

th e

1935

th e
in

o f

in

to

cou n try
con su m er

b e g in n in g

in
in

b eg u n

th e se

o f fa m ily

e a r ly

e x p e n d i­

fro m

B u rea u

c a lc u la t in g

use

w as

in

p e r io d

th e

d u r in g

ex ten d ed

ch an ges

u sed

c le r i­

s h ip b u ild in g

in te r v a ls

W e ig h ts

a n d

r a p id ly , fo r

th rou g h ou t

a t

s e r v ic e s

in itia te d

rose

g r a d u a lly

c itie s

b a sed

th e

earn ers

w as

w as

an d

R e g u la r p u b lic a t io n

con d u cted

1919.

w age

p a r t ic u la r ly

p u b lis h e d

w ere

g ood s

o f n a tio n w id e

1919.

F eb ru a ry

c it y

p r ic e s

C ov era g e

e s tim a te s

th e

in d e x

I, w h en

in d u s tr ia l

p r ic e s

In d ex 1 p rep ared

o f

o f

n e g o t ia t io n s ,

in c lu d e
an d

P r ic e

o f L a b o r S t a t is t ic s is a s t a t is t ic a l m e a s u r e

1917

to

in tr o d u c e d

th e

in d e x ,

S in c e p r ic e

1 9 4 0 c o m p le t e d r e v is io n o f th e w e ig h t s t o

th e

p e r io d s

o f

th e

w ith

1 9 3 4 -3 6

fa m ily

e x p e n d itu r e

t im e ,

s a tis fa c to r y
o f liv in g

sh ow n

o f th e m o s t im p o r ta n t

cost

o f

th e

o f

in

has

on

th e

b een

In d ex ,

e s tim a te d

s e v e r a l m illio n
to

ch an ges

in

o f

th is

th e

a

cost

u se

a d ju s t m e n t
a fte r

is

e a r ly

C on su m er

1951,

P r ic e

c la u s e s

1950.

e m p lo y e e s w e r e a d ju s t e d

in

th e

c le r ic a l-w o r k e r

p a r t ic u la r ly
th a t,

in

la b o r -m a n a g e m e n t

a g re e m e n ts o f a u to m a tic w a g e
b a sed

sh ort

p r o v id e s

ch an ges

a ccep ta n ce

in c lu s io n

ov er

in d e x

w a g e -e a r n e r a n d

W id e s p r e a d
b y

liv in g

B u r e a u ’s

a p p r o x im a t io n

o f u rb a n

fa m ilie s .

It

w ages

o f

a c c o r d in g

I n d e x .3

In

a d d it io n , t h e in d e x is u s e d a s a m e a s u r e o f c h a n g e s
in

th e

an d

p u r c h a s in g

as

n o m ic

a

g u id e

an d

p ow er

in

th e

o f

th e

c o n s u m e r ’s

fo rm u la tio n

o f

d o lla r ,

b roa d

e co ­

s o c ia l p o lic y .

an d
1951,

a

S p e c ia l

S u b c o m m itte e

o f

th e

C o m ­

corre­
m it t e e

sp on d

is o n e

a ffe c tin g

In
in

ch an ge

fa c to r s

on

E d u c a t io n

an d

L a b or

o f

th e

H ou se

o f

p a ttern s
R e p r e s e n ta tiv e s

h e ld

e x te n s iv e

h e a r in g s

con cern ­

a s d e te r m in e d b y a n o t h e r e x te n s iv e s t u d y o f fa m ily
in g
c o n s u m p tio n .

D u r in g W o r ld

th e

C o n s u m e r P r ic e

m it t e e ’s r e a s o n s
ite m s

w ere

scarce

an d

In d ex .

O n e

o f

th e

C o m ­

W a r II, w h en m a n y

g ood s

w ere

r a tio n e d ,

fo r

u n d e r t a k in g

th e

in v e s tig a tio n

th e
w a s th a t “ a n y g o v e r n m e n ta l s ta tis tic o f s u c h p a r a

w e ig h t s

w ere

a d ju s te d

to

r e fle c t

th ese

c o n d it io n s ;
m ou n t

1950

r e fle c t

th e

th e

B u rea u

e ffe c t

o f

a g a in

a d ju s t e d

p ostw a r

ch an ges

w e ig h ts
in

im p o r ta n c e

s h o u ld

in

b e

T h e

m ost

recen t

c o m p r e h e n s iv e

o f

th e

in d e x ,

b egu n

in

N ov em b er

p rop er

1949,

in

J a n u a ry

1953,

a n d

w e ig h t s

p u b lic

P r ic e

so

In d ex

t h a t it w ill

c o n fid e n c e
h eard

m ore

an d

r e s p e c t .”

th a n

30

4*

T h e

w itn e s s e s ,

th e

B u rea u

o ffic ia ls

r e s p o n s ib le

fo r

in ­
th e

rep rein d e x

•Prepared in the D iv is io n o f P rices an d C o st o f L iv in g .
i T k e t itle, C on sum ers’ P rice In d e x for M o d e ra te In co m e Fam ilies in Large
C ities, w as a d o p te d in 1945. P re vio u sly, this in dex had been precisely
designated, Changes in the C ost o f G oods a n d Services P u rchased b y W age
Earners and L ow er-S alaried Clerical W orkers in 1934-36. In p opu lar usage,
this title w as later shortened to C o st-o f-L iv in g Index. T h e latter designa­
tion gave rise to som e m isu nderstanding o f the scope o f the series, an d there­
fore the current term , C on sum er P rice Index, w as in trod u ced .
* See: (a) Bureau o f L a b o r Statistics B u ll. N o . 699, C hanges in C ost o f
L iv in g in Large C ities in the U n ited States.
(b ) Bureau o f L a b or Statistics B u ll. N o . 1039, In terim A d ju stm e n t o f C o n ­
sum ers’ Price Index.
(c) B ureau o f L a b or Statistics B u ll. N o . 966, C on sum ers’ Prices in the
U n ited States, 1942-48.
(d) R e p o rt o f the P residen t’ s C om m ittee o n the C ost o f L iv in g , O ffice o f
E co n o m ic Stabilization, W ash in gton , 1945.
(e) C on sum ers’ P rice Index— H earings B efore a S u b com m ittee o f the C o m ­
m ittee on E d u ca tion a n d L a b or, H ou se o f Represen tatives (82d Congress,
2d Session, H ou se D o cu m e n t 404), W ash in gton , 1952.




C on su m er

th e

w as
c lu d in g

c o m p le t e d

b y

r e v i­
S u b c o m m itte e

s io n

th e

u n d erstood

s p e n d in g
r e c e iv e

p a t t e r n s .2

as

to

fro m

an d
b o th

m it t e e

a

a ls o

v is o r y

la r g e

la b o r

h eard

tio n s

th e
a n d

th e

o f

th e

rep orted

o f

fo r w h ic h

w as

g e n e r a lly

o f

u sers

S u b com ­

T e c h n ic a l

its

A d ­

S ta tis tic a l
in v e s tig a ­

its r e c o m m e n d a ­

c o m m e n t s ,6 c o n c lu d in g
In d ex

T h e

A m e r ic a n

c o m p le tio n

S u b c o m m itte e

s u m e r P r ic e
pu rposes

o f

U p o n

g rou p

m a n a g em en t.

m em bers

C o m m itte e

A s s o c ia tio n .
t io n ,

r e p r e s e n t a t iv e

an d

th a t

th e

a d eq u a te

C o n ­

fo r

th e

it w a s in te n d e d .

3 See: “ W age E scalators a n d the A d ju s te d C P I , ’ ’ M o n t h ly L a b o r R e v ie w ,
M a y 1951.
4 C onsum ers’ P rice In dex— R e p o rt o f a Special S u b com m ittee o f the C o m ­
m ittee o n E d u ca tio n a n d L a bor. H ou se o f R epresen tatives, 82/1, S u b ­
com m ittee R ep ort N o . 2, W ash in gton , 1951 (p . 1).
« Ib id ., (p p . 31-39).

63

64

T E C H N I Q U E S

In d e x

O F

P R E P A R I N G

M A J O R

M ea su rem en t

BLS

STATISTICAL

G ov ern m en t
O ffic e

T h e

c o m p le t e

fe rr e d

to

“ In d e x

as

title

“ T h e

o f

b y

in d e x ,

C on su m er

o f C h a n g e in

P u rch a sed

th is

p o p u la r ly

re

I n d e x ,”

is

P r ic e

P r ic e s o f G o o d s

C ity

W a g e -E a r n e r

an d

S e r v ic e s

an d

T h e

in d e x

v o lv in g

is

fu r n is h in g s ,
d octors
oth er
fo r

p r ic e s

fu e l,

an d

o f

an d

etc.

T h e

g o o d s;
in

d iffe r e n t

b y

fa m ilie s

are

s a le s

g o o d s

o f

fa m ilie s
w h o

w a g e -e a r n e r
r e p la c e ,

o f

th e

o f

th e

u n its

th ese

an d

an d

fo r

th e

s e r v ic e s

to

th e ir

p os­

o f

2

m ore

p erson s

a n d

su bu rbs

c itie s ,

r a n g in g

in

to

fa m ilie s

w ork ers,

or

s iz e

fro m

s m a ll

la r g e s t

th e
are

T h ese

c it ie s .

w age

earn ers

in c lu d in g

m on th

are

in

in

are

c itie s

s e r v ic e

as

h a v e

a

tw o

r e s u lt,

or

m ore

a vera ge

w age

fa m ily

or

are

(F a m ilie s

w it h

m ore

are

fa m ilie s

in ­

in c o m e s

e x c lu d e d .)

th e

46

T h e

th e

in

a fte r

T h e

ta x es

o f

average

th e in d e x

in d e x

th e

m easu res

w as

e s t im a t e d

represen t
u rb a n

t o t a l U n ite d

$ 1 0 ,0 0 0

s iz e

o f

or

th e

e s tim a te d

p ercen ta g e
a n d

a t

a b ou t

p la c e s

to

b e

a b o u t 3 .3

a b ou t

64

an d

$ 4 ,1 6 0 .

p ercen t

a b ou t 40

o f

a ll p e r s o n s

p ercen t o f

term s,

are

s e r v ic e s .

m easu re

o f

(e x p re sse d

som e

“ m a rk et

b a s k e t .”

b a sk e t” — th a t
good s

a n d

b ou g h t
sam e,
m on th
in d e x

d oes

th e ir

th e

th e

in

to

w as

e ffe c t

5

con ten ts

th a t

e n tir e
S ta tes.

in to

th e

la r g e s t,

an d

o f

in

o f

c h a n g e s

to

liv in g .

It

ca u sed

w h at

i n

r e s u lt

“ m a rk et

q u a litie s

th e

m on th
.

p r i c e s

th e

to

T h e

ch an ges

fro m

in

ch an ges

m easu res

b y

o f

fa m ilie s

r e m a in

fro m

m easu re

th a t

th e

to

cost

ch an ges

th e fa m ily

a n d

assu m ed

p u rp ort

s p e n d in g

p r ic e

rep resen t

ch an ge

o f

o f

q u a n titie s

th a t

fa m ilie s

sta n d a rd s

ch an ge

T h e
th e

r e s u lt

n ot

o f

th e

a n d s e r v ic e s in

1 9 5 1 -5 2 — is

th a t

is

s p e n d in g

is ,

s e r v ic e s

in

so

T h e

“ In d ex

o n ly

ch an ges

in

in
th e

p r ic e s .

T h e

M a rk et B a sk et”

B u rea u

con d u cted

avera ged

T h e
p r ic e
as

D e ce m b e r

th en

th e

fo r

r e s u ltin g
ch an ge

100)

to

th e

v a r io u s

in d e x

n u m b er

fr o m
a n y

th a t
la te r

to

p ast
d a te.

1 9 5 2 , th e in d e x w a s c a lc u la t e d

ch a n ged

corresp on d

d a te , in

to

th e

oth e r

base

o f

in d e x e s

N a tio n w id e

S u rv ey

o f

1 9 5 0 t o d e t e r m in e w h a t

g o o d s a n d s e r v ic e s u r b a n w a g e -e a r n e r a n d c le r ic a lw o r k e r fa m ilie s
o f

c itie s

in

b u y .8

th is

la r g e s t u r b a n

T h e

su rv ey

a re a s w it h

w as

p e o p le ,

s e le c te d

d iffe r e n t

to

c it y

th e ir

In
tiv e

ea ch

a

s a m p le

fo r

T h e

m ost

s iz e , c lim a t e ,

th e

in

B u rea u

s a m p le o f fa m ilie s f r o m

in c lu d in g

a ll

I n te r v ie w e r s

th e

a ffe c t

le v e l o f in c o m e
c it y

fa m ily
v is it e d

s a m p le

o f

c o v e r in g

s m a ll c it ie s .

w h ic h

m o n e y .9

a ll

th e

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

a ccou n t

ty p es

a c te r is tic s w e r e
la tio n , a n d

an d

r e p r e s e n ta tiv e

in c lu d e d

ty p es
a n d

o f th e

T h is s a m p le

c h a r a c t e r is t ic s
th e

w a y

o f

fa m ilie s

im p o rta n t

d e n s ity
th e

85

12

th a n

o f th e

ch a r­
p o p u ­

c o m m u n ity .

s e le c te d

a

rep resen ta ­

th e e n tir e p o p u la t io n ,
a n d

in c o m e

in te r v ie w e d

ea ch

c la s s e s .
fa m ily

as a base.

1 9 4 7 -4 9 = 1 0 0
p u b lis h e d

b y

• See: M o n t h ly L a b or R e v ie w , Jan uary 1951— C on su m er E x pen ditu re
S tu d y , 1950: F ie ld M e th o d s a n d Pu rposes.




a

C o n s u m e r E x p e n d itu r e s in

sp en d

p a s t r e fe r e n c e

u s in g th e a v e r a g e o f th e 5 y e a r s 1 9 3 5 -3 9
It

T h ese

S ta te s p o p u la t io n .

ch a n g es fro m

T h rou g h

th e

c o m b in e d

fo r

th e

co st o f th e g o o d s

1 ,0 0 0 ,0 0 0

w as

p e r io d

o f

15 oth ers.

la r g e , m e d iu m -s iz e , a n d

th e

th en

c itie s — m o n t h ly

q u a r te r ly fo r

ta x es

is

s e le c te d

S e p a r a te in d e x e s a re c a lc u la te d fo r th e 2 0 la r g e s t
o f

p e r s o n s , a n d th e ir 1 9 5 2 a v e r a g e fa m ily in c o m e a ft e r

g ood s

so

N a t io n a l In d e x .

s a la r y

in c o m e s

h ig h e r th a n a v e r a g e in d iv id u a l e a r n in g s .

P r ic e

c itie s

d a t e w it h

3 years.

M a n y

fa m ilie s

fa m ilie s

th e se

fro m

c itie s in t h e U n it e d

are

th e

p u b lis h e d

r e p r e s e n t a t iv e

o f t h e 3 ,0 0 0

a ll 4 6

46

th e

o f

c r a fts m e n ,

(e x c e p t d o m e s t ic s e r v ic e w o r k e r s ).

liv in g in

as

c o m p a r e p r ic e s a t e a c h

o b ta in e d

b y

B u rea u

or

c le r k s , s a le s a n d

w ork ers;

c lu d e d

recom m en d ed

n u m bers

p o p u la t io n s

P r ic e s

co n ­

c le r ic a l-w o r k e r

a d d

tow n s,

p o p u la tio n

o f

p r ic e d

to

as

S ta n d a rd s,

a v e r a g e le v e l o f p r ic e s in

p o p u la t io n

on

e x p e n d it u r e s .•
6

w o r k e r s , la b o r e r s ,

w ork ers
th e

as

to

c o m p r e h e n s iv e s u r v e y

a n d

S ta tes,

c le r ic a l

fa c to r y

a

o th er

In d ex

P r ic e s

and

ch arged

an d

g ood s

an d

in

3 ,0 0 0

2 ,5 0 0

h ead s

s a la r ie d

o f

d e fin e d

in

U n it e d

c itie s
T h e

in c o m e s

are

liv e

th e

to

ta x es.

s e r v ic e s

o f

use,

fa m ily

p a id

ch arged

e x c is e

an d

s e s s io n s , a s d e t e r m in e d

gas,

th ose

an d

c ity

to

fe e s

in ­

h ou se-

b a rb ersh op s

e le c tr ic ity ,

a r e r e p r e s e n t a t iv e

b o u g h t

ch an ges

c lo t h in g ,

p r ic e s

P r ic e s

s u m e r s , in c lu d in g

in d e x

p r ic e

e s ta b lis h m e n ts ; r e n t s ; r a te s

tr a n s p o r ta tio n ,

u t ilit ie s ;

w it h
fo o d s ,

oth er

d e n tis ts ;

s e r v ic e

th e

th e ir

con cern ed

r e ta il

m on th

a g e n c ie s ,

S ta tis tic a l

B u d g e t .7

C le r ic a l-

W o r k e r F a m ilie s .”

o f

SERIES

* T h e indexes th rou gh D e ce m b e r 1952 h ave been recalculated on th e base
1947-49 =» 100 to m ake th e m com parable w ith the indexes from Jan uary 1953
forw ard.
8 See fo otn ote 6.
®See M o n t h ly L a b o r R e v ie w A p ril 1951— Selection o f C ities for C on su m er
E x p en d itu re Su rvey, 1950.

T H E

a n d

o b ta in e d

q u a litie s ,
tu re,

a ll

a

a n d

a n d

b o u g h t
fo r

in

each

a n d

c o m p le t e

a m ou n ts
oth er

1950,

g ood s

T h ese

c le r ic a l-w o r k e r

son s

w ere

fo rm

th e

T h e

th e
fo r

o f

r e s u lts

o f

in d e x

in v o lv e d

tw o

sp en t

m ore

each

in d iv id u a l fa m ilie s ,

s a m p lin g

fo r

u n u s u a lly
an d
(2 )

an d

p er­

c ity ,

to

th e

o f

(1 )

re­

d a ta

a d ju s tin g

g ood s

d a ta

in

T V

1950,

fo r p r ic e

an d

a fte r th e s u r v e y

1950.

T h e

fir s t

a n d

r e q u ir e d

average

c a te g o r ie s
a ls o

step

r e la tio n s h ip s

com e

o f

th e

fa m ily

a n d

on

grou p s.

r e la tio n s h ip s

c o m m o d it y

T h ese

th ro u g h

a

m a jo r

average

c itie s

in c lu d e d

fin e d

th e

in c o m e

th e

a n d

average

th ese
d is ­
1950

S u r v e y r e s u lts w h ic h

co m ­

a n a ly s is

p a ttern s

su rvey.
b etw een

o f

a m on g

T h is

th e

s p e n d in g

p a ttern

w as

fo r

e s t im a t e d

e x p e n d itu r e s

T h e

secon d

o f

average

c a t e g o r ie s

to

e x p e n d it u r e s

s u c c e s s iv e

grou p s

a n d

tu re s

th e fis c a l y e a r

to

p lis h e d b y

average

e x p e n d it u r e s
th a n

c lo t h in g ,

th e

g o in g

m e n 's

c lo t h in g
so

fo o d

p r o p o r tio n

o f

c lo th in g ,

e x p e n d itu r e s

on

a n d

a ll

th e

tim e .

w ere

c lo t h in g

th e

g o in g

to

an d

o f

S u rv ey

on

ou terw ea r,

a n d

S in c e
a ffe c t

F in a lly ,

th e

d is tr ib u tio n s

o f

e x p e n d itu r e s

to

lo c a l

le v e l

o f

c itie s

th a t

tio n s h ip s .
s p e n d in g

sh ow ed

a p p r o x im a t e ly

A d ju s t m e n t s
fo r

w ere b a sed

o n

fo r

a u t o m o b ile s
tim e

3 0 4 5 2 3 — 5 5 --------- 6




o n

a v e r a g e r a tio s

e x p e n d it u r e s w it h in
th e

an d

som e

r e la ­

h ig h

costs,
b e

n o

ow n ers

on

to

ren t,

p r ice

th is

ren ters

1950

th e

r e p a ir ,
s in c e

a n d

fro m

in d e x

1950
a n d

rep orted

r e la ­

a

ago,

T h e re fo r e ,

F o r

o n ly

e x p e n d itu r e s
ite m s ,

fo r

h o m e o w n e r s h ip

a n d

fo r

h om e

p u r­

th e ra te o f h o m e
th e

d e v e lo p e d

1 9 5 1 -5 2
fro m

le v e l

th e

1950

cen su s d a ta .

p a ttern

p a rt
an d

o f

c o u ld

o f h om e-

m a in te n a n c e

m a in ta in

w ere

t e le v is io n

q u a litie s

in c o m e

a n d

fo r h o u s in g r e q u ir e d

th u s rep resen ts

o f

c le r ic a l-w o r k e r fa m ilie s in

years

o f

s ig n ific a n tly

p e r io d .

“ m a rk et b a sk e t"

n o t

th a n

r a t io

e x p e n d it u r e s

to

b u y in g

in c lu d e s

fe w

e a r n in g s

ch a n ged

1950.

o f

r e q u ir e d

w ere

avera ge

E x p e n d itu r e

r e la tio n s h ip
T h e

in te re s t p a y m e n ts

cu stom a ry

It

n ot

in c o m e s

1950

oth e r

1 9 5 1 -5 2

w e ig h ts

h o m e o w n e r s h ip

an d

n o t

th e

e s t im a t io n

p u rch ase

o f

e x p e n d itu r e s

grou p .

h a d

a n d

fu e ls ,

an d

w as

c o m p o n e n t p a rts o f to ta l h o u s in g

fo r

ch an ges

T h e

fa cto rs

in c o m e -e x p e n d it u r e

e s ta b lis h e d

b etw een

1952

c it y

th e p e r io d

r e c e iv e r s

an d

o f

liv in g

it

fa m ily
in c lu d e s

th in g s

in

p e o p le

th e

w a g e -e a r n e r
1 9 5 1 -5 2 .

fro z e n

oth er

fo o d s

p a ttern s

a

im p o r ta n t

th e a m o u n ts , k in d s ,
b u y .

1950

oth e r

s e r ie s s t u d ie s w h ic h

p e r io d .

grou p s o f

sam e

u n u s u a lly

a cco m ­

e s t im a t e d

1 9 5 1 -5 2

w e e k ly

h o u s in g

an d

s e r v ic e s w e r e b a s e d

to

y ea r

gross

o f g ood s a n d

su b grou p

w as

1 9 5 1 -5 2

C on su m er

ch a n ges th a t h a v e occu rre d

to

th e

e x p e n d i­

w ork ers.

v a r io u s

th e

th e

in d iv id u a l ite m s in c lu d e d in th e s m a lle s t s u b g r o u p s

o f ite m

1950
th e

r e g r e s s io n s

fro m

t io n s h ip s a m o n g

th a t

on .

T h is

A v era g e

average

p r o d u c tio n

to

m e n 's

fo r
fo r

c a le n d a r

fro m

in c o m e

costs,

e x p e n d it u r e s

p r o p o r tio n

a t

e s t im a t e d

fa m ily

ch ase

g o in g

1950

fo r

a vera ge

1 9 5 1 -5 2 .

in c o m e s

th e

th e se

g ood s

h o u s in g

th e se

a vera ge

w e ig h ts

th ese

e s t a b lis h e d

fa m ily

fo r

su rv ey

o f

to

th e s ta b le in c o m e -e x p e n d it u r e

in fo r m a tio n

p r o p o r tio n

oth er

o u tb re a k ,

T h is fis c a l p e r io d w a s t a k e n o n l y b e c a u s e n e c e s s a r y

o f

to

a p p ly in g

r e la tio n s h ip s

N ex t,

su b ­

a b n orm a l

c r e a tin g

a d ju s t e d

a d ju s t m e n t o f

on

fo r

th e

o f exp en se; a n d

in

step

th e

m a jo r

w a ge-

K orea n

th e

ite m

o f

a d ju s te d

a n d

r e la te d

in d e x

average

th ree

errors,

w ere

r e v is e d

e x p e n d itu r e

a lc o h o lic b e v e r a g e s , h o u s in g ,

e x p e n d it u r e

o n

fa m ily in c o m e .

g r o u p s o f ite m s w e re d e t e r m in e d ; fo r e x a m p le , th e

s e r v ic e s

each

e x p e n d itu r e s

fa m ilie s ,

fo llo w in g

fo r

th e

a n d a ll o t h e r g o o d s a n d s e r v ic e s c o m b in e d .
d is tr ib u tio n s

91

fa m ily

1950

r e p o r t in g

d e­

a n a ly s is

fa m ily

e x p e n d it u r e s

a n d

an d

th e

r e la tio n s h ip

c a te g o r ie s — fo o d

m a jo r

a vera ge

in

c le r ic a l-w o r k e r

a n d

b etw een

w ere

e x p e n d itu r e
in

an d

grou p s

r e la tio n s h ip s

d e ta ile d

C o n s u m e r E x p e n d itu r e
p ared

in ­

s e r v ic e s ,

e x p e n d it u r e s f o r s u b g r o u p s a n d ite m s w it h in

cov ered

o f

fa m ily

e x p e n d itu r e s

o f

m a jo r

d e t e r m in a tio n

average

g ood s

d e v e lo p m e n t
o n

th e

b etw een

con su m er

e x p e n d it u r e s

m a jo r

an

an d

a v a ila b le

in c o m e ch a n g e s th a t h a d o c c u r r e d

s ta b le

o f g row th

s a m p lin g

th e

a u t o m o b ile s ,

d u r a b le

a d ju s t in g o f s u r v e y

th e se

th e

an d

earn er

ite m

p a ttern s

c o r re c tin g

errors

p u rch ases

con su m er

fro m

ste p s:

s p e n d in g

r e p o r t in g

h ig h

oth er

in

m a jo r

p orted

b y

v a r ia t io n s

fo r

y ea r

or

fo r

T h u s,

fa m ily

a ll w a g e -e a r n e r

w e ig h t s

o f

an d

n o rm a l ra tes
th e s e ite m s .

b a s is f o r in d e x w e ig h t d e t e r m in a tio n .

a v e r a g in g

sets,

th e

65

I N D E X

fu r n i­

a m ou n t

tw o

tog eth er

PRICE

k in d s ,

th e

c lo th in g ,

s e r v ic e s

w it h

fa m ilie s

d e v e lo p m e n t

su rvey

a n d

record s

a vera ged

o f

fo o d s ,

tog eth er

ite m .

record

o f

C O N S U M E R

ite m s

e s tim a te d

P r ic e s

T h e
r e v is e d

U sed

in

s a m p le
in d e x ,

th e

o f

In d ex

a b ou t
w as

C a lc u la tio n

300

ite m s ,

s e le cte d

to

p r ice d

fo r

rep resen t

th e
th e

66

T E C H N I Q U E S

average

p r ic e

b ou g h t

b y

m ov em en t

c ity

fa m ilie s .

It

im p o r ta n t

r e p r e s e n ta tiv e
r e la te d

o f

p r ic e

cases,

p r ic e

q u a litie s

are

o f

fo r

th a t

are

la r g e

grou p s

th a t

h a v e

th e ir

are

s e r v ic e s

r e la tiv e ly

ite m s

ite m s

m ov em en ts

several

th a t

ch a n ge
an d

an d

M A J O R

c le r ic a l-w o r k e r

s p e n d in g ,

c o m m o d itie s ,

t in c t iv e

an d

ite m s

fa m ily

P R E P A R I N G

a ll g o o d s

w a g e -e a r n e r

in c lu d e s

in

o f

O F

ow n .

p r ic e d

In

to

o f

d is ­
som e

rep resen t

a s in g le it e m .
D u r in g

th e

in

to

ord er

an d

u se,

w h ose

p r ic e s

in

o f

th e

to

s im ila r ly

th e

o f

ite m s

r e la tiv e
o n ly

w it h in

ite m

sen ted ; w h ere
w e ig h t

th em
th e

tim e ,

th e

in d e x
to

“ p r ic e

ite m

p a ttern s

o r m ore

to

grou p .
on

it

w as

th e

th e

h ig h

W h ere

a s s ig n e d
it

th e

rep re­

ch osen , th e

w as

a n d th e s u c c e s s iv e p r ic e s a re c o m p a r e d
p r ic e c h a n g e s .
ever,
a n d

fa m ily

d ir e c tly

w h ere
w ere

o f ite m s

ov er

e s ta b lis h e d

fo r

r e e x a m in e d

p e r io d ic a lly

ite m s

pu rch ases,

rep resen t

ite m s

h ig h ly
o f

p r icin g

th e

in

th e

in

th e

d iffe r e n c e s

lim it e d
th e

s ig n ific a n t,

to

k in d s
su ch

p r ice d
o f

in

th e

c o m m o d it y
o f g ood s
as

ite m s

to t a l fa m ily

fu e ls

lis t

p u rch a sed

an d

c e r ta in

to

s ta n d a r d iz e

p roced u res

as

m u ch

as

p o s s ib le .

in

q u a lit ie s

in

o b ta in in g
o f

c itie s
th e

o f ite m s

are

o ffe r e d

r e fle c te d

d e s c r ip tiv e

in

o f

grou p s

ord er

r e s p e c t iv e

P r ic e s

th a t

g rea ter p a rt

In te r c ity
w ere

fo r

th e

S m a ll
s a le

in

c ity -to -c ity

s p e c ific a tio n s

u sed

c u r r e n t p r ic e s .
th e

in t e r v a ls — s o m e

300

ite m s

m o n th ly ,




are

1

p ork

B u t in

u p on

cu t.

m on th
ch op s

fa ct

an d

seem

p o s s ib le ,

th e

fo r

th e

to

B u rea u

T h ese

w ith

th e

to

cen ter

th e
are

n ex t,

h a v e

th e

g on e

d iffe r e n c e

p r ice
d ow n .

in

q u a l­

has

p rep a red

d e ta ile d

th e ite m s th a t a re p r ic e d

s p e c ific a t io n s

a d v ic e

r e t a ile r s o f t h e ite m s .

o f

ch op s

p o rk

th e

ex­

c o n s id e r ­

T o p r e v e n t th is , in s o fa r

d e s c r ib e

in d e x .

w r itte n

ch an ge
fa c to r s ,
F o r

v a ry

th e

r e fle c t a

ity , n o t a c h a n g e in p r ic e .
as

n ear

e n d -cu t

m ig h t

p r ic e
oth er

ca n

c e n te r -c u t

th is w o u ld

s p e c ific a tio n s

to

d iffe r e n c e s .

ch op s

h ow

I f

o n ly

d u e

q u a lit y

o f p ork

d e p e n d in g
th ey

sh ow s
are

o f

are

c a r e fu lly

m a n u fa c tu r e r s

an d

F o r e x a m p le , th e fo llo w in g

is a s p e c ific a t io n f o r o n e o f t h e m e n ’s s h ir t s p r i c e d :

Style__________ Business, fused or similarly constructed
collar, attached; barrel cuffs.
Fabric_________ Cotton broadcloth, white.
Yarn__________ Combed.
Thread count_ 136 x 60 or 128 x 68.
_
Finish_________ Residual shrinkage 1 percent or less.
Construction___ Full cut; clean workmanship; 31 to 32
yards per dozen based on 36-inch
fabric.
Size range______14 to 17 inch neckband.
Brand_________ Manufacturer’s nationally advertised.
W h en
th ey

th e

B u r e a u ’s

e x a m in e

m a k e

su re

th e

th a t

a g en ts

p r ic e

m e r ch a n d is e

th e

p r ice s

th ey

th e se

in

th e

s h ir ts ,

stores

record

m eet

to
th is

s p e c ific a tio n .

are

M e th o d s

s a m p le

in

v a r ia t io n s
in

so

th e

or

p r ic e

S a m p lin g

in c lu d e d

c lo th in g ,

d iffe r e n c e s

th e

w h ic h

im p u t a t io n

a d ju s t m e n t .

300

d iffe r e n c e s

ty p es

q u a n tity

a b ly ,

in

ch an ge

p r ic e -c h a n g e

w h eth er

e x p e n d it u r e s .
p r ic e d

as

lo in

o f

c a lc u la t io n

ch an ges

a m p le ,

T h e

a r e a ll t h e g o o d s a n d s e r v ic e s t h a t a r e o u t s t a n d in g
in

th a t th e
n o t

su ch

to c a lc u la te

I t is i m p o r t a n t t o b e c e r t a in , h o w ­

to

im p o r ta n c e

ow n

a s s ig n e d

r e la tio n s h ip s

are

T h e
p rev a ­

w ith

grou p

SERIES

fa m ily ”

re p re s e n t p r ice

ite m s w e re

th e ir

p r ic e

s e le ctio n

th e

ite m s

r e a s o n a b ly

fa m ily ”

ite m s

fa m ilie s ”

r e q u ir e

A m o n g

o f

u n p r ic e d

S in c e

d e te r m in e

“ p r ic e

s e le c te d ,

p r o p o r t io n a t e

grou p .

o f

t o t a l e x p e n d itu r e s .

w e ig h t

tw o
o f

in

d ep en d ed

a

to

w as

e x p e n d it u r e

to ta l

ite m s

s e le cte d

im p o rta n ce

on e

tota l

p h y s ic a l

“ p r ic e

to

le n c e

h a v in g

w e re o f o u ts ta n d in g im p o r ta n c e

oth er

n u m b e r o f ite m s

record s.

to

ov er

each

ch an ges

a ll

p r ic e

d e te r m in in g

fa m ilie s ”

in fa m ily s p e n d in g w e r e s e le c t e d
on

th e

grou p s

p r ic e

W ith in

ite m s

B u r e a u ’s

resp ect

an d

o f

d a te

w it h in

“ p r ice

tim e .

th o s e ite m s w h ic h

u p

oth er

in to

p r ic e d

h u n d red s

w it h

a n d

flu c tu a te

p e r io d s

B u rea u

o f

s t r a t ifie d

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

c h a r a c t e r is t ic s ,

th e

b r in g

a v a ila b le
th en

d e s c r ip tio n ,

lo n g

1951

ch an ges

exp an d

w ere

s im ila r

a n d

p r ice

in fo r m a tio n
Item s

STATISTICAL

p r ic e d

1950

s tu d ie d

BLS

B u rea u

s a m p le

o f

46

cov ered

b y

th e

46

a t

r e g u la r

o t h e r s le s s fr e q u e n t ly —

c itie s

th e

B u rea u

p r ic e s

s e le cte d

su rv ey

c itie s in c lu d e t h e

9 m e d iu m -s iz e ,

fo r

a

r e p r e s e n t a t iv e

fro m

o f fa m ily

th e

97

c it ie s

e x p e n d it u r e s ; th e

12 la r g e s t, 9 o t h e r la r g e c itie s ,

an d

16

s e le c te d

a

s m a ll c itie s .
lis t

o f

In

each

a n d

stores

a ll

c ity ,
oth er

t y p e s o f e s t a b lis h m e n t s w h e r e fa m ilie s o f w a g e a n d
s a la r y

w ork ers

in c lu d e s
stores,

ted
fie d

b y

c it y

fro m
b y

g ood s

d ep a rtm en t

rep o rte d
each

b u y

r e p r e s e n t a t iv e
an d

d e te r m in e
o f

o f

s p e c ia lty

fo o d

in

term s

in

T h is

lis t

in d e p e n d e n t

stores.

a v e r a g e p r ic e

a ll o u t le t s

o f store

s e r v ic e s .
stores,

are a v era g ed

in d e p e n d e n t

lis tin g s
ty p e

an d

c h a in

th ese stores

to

S a m p le s
c o lle c te d

c o lle c t s

P r ic e s

to g e th e r fo r
ch an ges.

stores
each

o f fo o d s

w ere

s e le c ­

c it y , s tr a ti­
s o ld

(m e a t

T H E

m a rk ets,

su p erm a rk ets,

m easu red

b y

lo c a tio n
store

e t c .),

sy stem s

th e

are

c ity .

A ll

in c lu d e d

c ity .
stores

are

in

P r ic e s o b t a in e d fr o m
averaged

based

on

th e

th e

an d

ren ta l

s tr a tifie d

are

w it h in

h o u s in g

a c c o r d in g

th e

a r e a . 10

fo o d s

th a n

an d

to

s e le c te d
m en ts

to

F o r

in c lu d e

w h ic h

are

w a g e -e a r n e r

b lo c k

w ith

d e n s ity
an d

an d

p ro b a ­

lis t in g s

in

each

an d

o f

lo c a tio n
oth er

o u tle ts

s e r v ic e

fr e q u e n t ly

are

e s t a b lis h ­

p a tr o n iz e d

c le r ic a l-w o r k e r

o f

c ity ,

s e r v ic e s

s a m p le s

stores

an d

each

P r ic e s

b y

fa m ilie s ,

an d

o p e r a tio n s — d e p a r tm e n t

s p e c ia lty
o n ly
fo r

a

sh ops,

v e ry

a n y

b ility

etc.

s m a ll

on e

B eca u se

s a m p le

ite m ,

a n d

o f

a

stores,

o f c o s t lim it a t io n s ,

stores

ca n

b e

p r ice d

r e p r e s e n t a t iv e

p ro b a ­

s a m p le in c lu d in g a ll t y p e s a n d s iz e s o f e s t a b ­

lis h m e n ts
m ost

is

im p r a c tic a b le .

im p o rta n t

m u n ity

w h ere

m a x im u m
T h e

in

fo r

fr e q u e n t ly

s m a ll

p r ice s

in c lu d e d in

th e

c ity .

each

fo r

s m a ll

b o u g h t

th e

s e le c te d ,

s iz e

w h ere

are

c itie s
fo r

a ls o ,

c e r ta in

“ o u t -o f-t o w n ,”

fro m

o f p r ic e
an

w h o

g ood s

an d

m e n tio n e d
c h e c k in g

b u y in g

c a ta lo g s
ch a n ge

is

an d

fo r

c itie s ,

an d

in

ev ery

F o o d
each
o fte n

are

s p e c ia lly

p roced u res

c a ta lo g s ,

an d

fro m

cen ters,

w e ig h t e d

ta n ce

su ch

o f

o u tle ts

in

b u y in g

as

rep orted

th e

t r a in e d

an d

fu ll-t im e

fie ld

fo o d s ,

c o lle c te d

on ce

s c h e d u le

th e

o f

m id d le

a g en ts;

U n it e d

to

fo llo w

a g en ts,

w h o

are

C iv il

an d w h o

sta n d a rd

p r icin g

C o m m o d it ie s

are

o f

th e se

S ta tes

a re p r ic e d b y

th e

R e n t

S e r v ic e

in fo r m a tio n

m on th

fro m

B u r e a u ’s

each

a g en ts

s e n ta tiv e
m a il

C iv il

an d

th e B u r e a u ’s

c a r e fu lly

v is it

e le c tr ic ity ,

o n

ch osen

o f

e t c .,

r e n t in g
an d

in c lu d e
In

a d d it io n

le c te d

to

in

m a il.

T h e

o b ta in

stre e tca r

ite m s

s io n a lly

p r ic e s

fro m

m a il-o r d e r

an d

w h ic h
d o

a g en ts.

p osta g e,

e t c .,

ren t

u ses

a n d

fe w

p r ic e

th e

im p o r ­

in

th e

p r ic e s

b u s

in

In d ex

are

su ch

F o r m u la

R

o n

_

th e fo r m u la :

2 ,q a

p i
V o

are

c o l­

q u e s tio n ­
p u b lic

o n ly

an d

o cca ­

v is its
as

b y

e le c tr ic

o b ta in e d

S u rv ey
T h e in d e x is b a s e d

d a te

o f fu e ls

p erson al

ite m s

d a ta

to

fa re s ,

p r ic e

G ov ern m en t record s.

T h e

h ea t,

p a y m en ts.

m a il

m a r k e t in g

to

v e r ify

as

b u ilt d w e llin g s .

oth er

r e q u ir e
a

to

su ch

p r ic e s , p r ic e s

ch a n ge

n o t
F o r

th e

la r g e , r e p r e ­

o f r e n t in fo r m a tio n ,

B u rea u

is

a

every

years,

o f ren ters u p

fe w

b y

c e r ta in

m a il
2

fa m ilie s

n e w ly

ren ts, a

o f

in

b r in g s its s a m p le
th o s e liv in g

b y

fa c ilitie s

in c lu d e d

to

T h u s,

h om es

D u r in g th e p e r s o n a l c o lle c tio n

to

in t e n s iv e ly

T h en , ev ery

th e

ren t

an d

c o lle c t e d

c ity .

s a m p le

rep orts

is

sy stem ,

* F o r design o f ren t sam ple see M o n t h ly L a b o r R e v ie w , January 1 9 4 9 -




la r g e s t

m e d iu m -

th a n

th e

a b ou t

s p e c ific a tio n s .

ra tes, n e w sp a p e r

o f C o n s u m e r E x p e n d itu r e s .

R e n t Index— M e th o d o lo g y an d M easurem ent.

are

m eet

n a ir e s

la r g e r

p r o p o r tio n a te ly

w h o

u tility

o n

th e

ev ery 3 m on th s;

1 fo r

p a r t-tim e

are

fr o m

s e r v ic e s

fiv e

oth er

th ey

c o lle c t e d

lo c a l,

fu r n it u r e ,

as

in

c ity ;
tra n s­

c it ie s .)

s e r v ic e s o t h e r t h a n f o o d

ra tes,

c it ie s ,

are

b y

h o u s e w iv e s ,

b a sed

are

s a m p le

p r ice s

an d

an d

ta b le

in d e x

lo c a l

th e

o n ce

im p o r ta n t
each

S e r v ic e r e q u ir e m e n ts f o r w o r k o f th is k in d

th e

a vera ge

c itie s

a n d

in

ite m s

(S e e

th e 46

m on th

B u rea u

th e

s m a ll

m on th s.

p r ic in g in

s m a ll c itie s in c lu d e d in

in

th e

4

o f
in

in

g ood s

fu e ls , a n d r e n t s a r e o b t a in e d

th e m o v e m e n t s o f p r ic e s in
n a tio n a l

fo r

p a rt

oth er

fu e ls ,

4

c o lle c te d

fe w

m on th

c it ie s

ev ery

im p o r ta n t
are

A

in t e r v a ls

fr e q u e n t ly

p r ice s

oth er

la r g e

ch a n ge

v e ry

m on th

p a rt

r e p r e s e n t e d b y p r ic e c h a n g e s in la r g e c it ie s .

o u tle ts

o f

ev ery

p r ic e s

on ce

each

th a t

a p p r o p r ia te

c o m m o d it ie s

su ch

a

c ig a r e tt e s ,

oth er

th e B u rea u

m a il-o r d e r

o b ta in e d

In

a t

to

fo o d

m on th .

P r ic e s

c ity

p r ic e s

are

p r ic e d

c o lle c t e d

c it ie s .

each
m on th

t r a in e d .

e x p e n d itu r e s .

a fte r

a ls o

p o r t a t io n .

fa m ily

C on su m er

w ere

fo o d s

e x a m p le ,

are

fo o d

s p e n d in g ,

ev ery

are

th ro u g h

in

o f

w h ic h

c ity

in

ev ery

B eca u se

beca u se

th e

fa m ilie s ,

rep orted

c a lc u la t io n

ch an ges

co m ­

a s s o c ia tio n s .

c itie s ,

im p o r ta n t,

F o r

w ere

th e

on ce

to ta l fa m ily

s e le cte d .

w ere

stores

b o u g h t

th ey

ty p e s

lo c a l b u s in e s s

each

S u rv ey

th ey

m o st

s a le s ,

a s k in g

1950

w h ere

w ith

p r ic e

b y

d iffe r e n t

o f

F o r

r e ta il

w h ic h

in

o n ly

b u y , r e p r e s e n t in g

in d iv id u a l

th e

E x p e n d itu r e s ,

S tores

o f

o f

e s ta b lis h e d

coop era ted

s e r v ic e s

earn ers

n u m b er

w as

T h e re fo r e ,

e s t a b lis h m e n t s

w age

im p o r ta n c e

b u y in g

o f

s to r e s , fa m ily

c o lle c te d

fro m

m on th s.

w h ic h r e p r e s e n t a ll im p o r t a n t t y p e s o f m e r c h a n d is ­
in g

are

r a n g in g

an d

67

I N D E X

ite m s

s e le c te d , b y

g ood s

m ost

fo r

c o m b in e d

m a rk et

b lo c k

ren ts,

c h a in -

d a ta .

s a m p lin g p r o c e d u r e s , fr o m
tota l

s a m p le

PRICE

as

c h a in a n d in d e p e n d e n t

s e p a r a te ly

u n its

store

g e o g r a p h ic

im p o r ta n t

s a le s v o lu m e

S a m p le s o f r e n ta l
b ility

o f

a im u a l s a le s v o lu m e , a n d

w it h in

w e ig h t s

s iz e

C O N S U M E R

fro m

68

T E C H N IQ U E S

w h ere
o f

th e

each

a’s

q

ite m

are

u sed

th e
b y

c le r ic a l w o r k e r s in
th e

s

P o

are

th e

th e b a s e p e r io d
p r ice s
In
a

in

a

fa m ilie s

1 9 5 1 -5 2 ,

average

an n u al

o f w age

th e

base

p r ic e s

fo r

M A JO R

th e

o f

B u rea u

th is

r e la tiv e s

fo r

each

as

a

S E R IE S
R ela tiv e
im p o r ta n c e

G roup

All items_ _________________
_

earn ers a n d

th ese

c a lc u la te s

fo r m u la

S T A T IS T IC A L

____

N um ber o f
i te m s p r ic e d

100.0

298

30. 1
9 .7
3 2 .0
5 .3
11. 9
3 .2
6 .6
5 .0
11.0
4. 7
2. 1
5 .4
5 .0

90
75
72
*1
14
10
35
12
18
18
13
8
4

w e ig h t y e a r ;
ite m s

( 1 9 4 7 -4 9 ); a n d th e jp /s th e

p r a c t ic e ,

BLS

q u a n titie s

F ood_____ __
...
_____ _______
Apparel.
____
____
Housing. __
____
R en t_______
.
____ - _____
Other shelter______
_ ______
Fuels, gas and electricity. _
_____
Housefurnishings________
_____
Household operation. _
_____
Transportation______
_____
_____
M edical care_____
_____
_____
Personal care___ __
Reading and recreation______
_____
Other goods and services___
_ _._____

in

average

cu r r e n t p e r io d .

v a r ia t io n

o f p r ic e

a vera ge

O F P R E P A R IN G

th e

in d e x

w e ig h t e d

on

average

i t e m : 11

*32,000 dwelling units priced for rent information.
w h ere
th e

is t h e

i - i

th e

th e

cost

p r ic e s

in d e x

th e

are

th e

p r ic e d

rep resen t
p r ic e s
th e
in

in

o f a ll th e
m a tio n
th is

cu rren t

a t

b e

w h ic h

th e

o f

th e

p e r io d

is

in

a d d ed
g iv e n

it

k in d s

a

a n d

sam e
are

o f

ite m s

D ecem b er

each

ite m
im ­

th e

su m ­

ite m s

id e n tify

in d e x

in
th e

ite m ,

it

th e m a n y r e s p e c ts in

g rou p

are

q u a lit ie s

q u a n t it y

r e la te d ,

an d

u n its .

im p lic it

in

in g

th ey

ca n n ot

b e

Q u a n tity
th e

an d

C a lc u la t in g

in

th e

a n d

in d e x

th e

p r ic e

r e la tiv e s

m o d itie s

in

com p a red

a vera ge

P r ic e

in

in

th e

each

in d e x

sh ow s

th e

1952

o f m a jo r

grou p s

o f g ood s

an d

ite m

b y

th e

in d e x

an d

2,

an d
are

fo r

fro m

p r e c e d in g
ba sed

o n

th e

a p p r o x im a te

d u r­

ch an ge

is c a lc u la t e d .
m ost

c o m p a r in g

s p e c ific a t io n

cu rren t

o b ta in e d

th e p e rce n ta g e

th e

th e sa m e

p r ic in g

co m ­

su m

p e r io d .

w e ig h te d

F o r

averages

q u o t a t io n s fo r c h a in a n d in d e p e n d e n t s to r e s .
c h a in
th e

store

q u o ta tio n s

im p o r ta n c e

I n t e r im
ite m s

e s tim a te s

n o t

p r e c e d in g

la s t

or

p r ic in g

c a lc u la te d

b y

in

oth er

a

rep orted

cu rren t

T h is

fo r

p e r io d .

“ lo n g -tim e ”

a ll
F o r

in

th e

r e la tiv e

p r ic e s

m ak es

to

stores.

are m a d e

n o t

o f

T h e

a c c o r d in g

cu rren t

ite m s

p e r io d ,

p r ic e s .

o f in te r im

ch an ge

th e

c o m p a r in g

rep orted

w e ig h te d

in d iv id u a l c h a in

o f p r ic e

rep orted

s e a s o n a l ite m s

are

o f s a le s in

o f

o u tle ts

w ith

p o s s ib le

a

is

th e
cor­

e s t im a t e s .
th e c a lc u la tio n o f th e in d e x

r e la tiv e
fo r

d e ta ile d

s p e c ific a t io n s

o f

g ood s

an d

s e r v ic e s
s e r v ic e s , a n d in c lu d e s a le s a n d e x c is e t a x e s .

in

im ­

ta b le

in a c it y , t h e y a r e

p r ic e s

c a lc u la te d

R e t a il p r ic e s u s e d in
b e lo w

w it h

o f each

are

r e la tiv e s

fo o d ,

are
im p o r ta n c e

r e la tiv e

P roced u re

t h e p r e c e d in g v is it , a n d

r e c tio n

ta b u la tio n

th e ir

tim e p r ic e s a r e c o lle c t e d

p r ic e s fo r

im p o r ta n c e

o f

to

fo r

ow n

A lth o u g h

ea ch

o f

th ey

stru ctu re .
T h e

a n d

1 9 5 2 , is g iv e n

73.

E a ch

1 9 5 1 -5 2

its

grou p s

to

o n ly

to

th e

im p o s s ib le

w ith in

ite m s

tog eth er

to

p lu s

fo r

a tta ch ed

th e

p a ge

E s t im a t in g

in

m ov em en t

w e ig h ts —

equ a l

s p e n d in g

w e ig h ts

th e r e fo r e

lis t

th e

p r e v a ilin g

th e

v a lu e

th a t d e s p ite

ite m s

d iffe r in g

d e s c r ib e d

o n

c a lc u la tio n

u n p r ic e d

im p o rta n ce

m ak es

n o te d

d e t a ile d

p orta n ces, fo r

an d

r e p r e s e n tin g

p r ic e s

im p u t in g

th e r e fo r e

fa cto rs

s h o u ld

w e ig h ts

a

w e ig h t s ”

in d e x ,

v a lu e

m a n n er

o f

in

ite m s it r e p r e s e n ts .

q u a n tity

are

o f

fa m ily

o f

p e r io d ;

p r e c e d in g

A

i - i ’s

a vera ged

g rou p s

T h e

in

u sed

q u a n titie s — w e r e

in d e x

p orta n ce

th e

p

base.

“ v a lu e

th e

grou p s.
th e

fo r

p t S

p e r io d .

to

tim e s

p e r io d ;

p r e c e d in g

q u a n t it ie s

p rocess

ite m s

q u a n t it ie s ;

cu rren t

th e

n u m b er

1 9 5 1 -5 2

th e p r e c e d in g

1 9 5 1 -5 2
th e

o f

w e ig h ts

in d e x

o f

In

o f

1 9 4 7 -4 9 = 1 0 0

T h u s
o f

th e

p r ic e s

average

o n

are

q € ’s

a vera ge

th e
R

th e

n u m b er

W h en

o f
a n a r t ic le c a n n o lo n g e r b e p r ic e d , a s u b s t it u t io n is

ite m s p r ic e d :
m a d e

11 W hen the specification of th e priced com m odity changes, the formula is
n ot a precise representation.

T h e relative

/

P i
—

\
J

(

would be

P fi
—

\
J

(1 )

o f

a n oth er

d e s c r ib e d

b y

th e

a r tic le
a

where P ' t is the current price of th e new item and P ' i - i is last m onth’s price
of the new item . T h e price change due to th e specification substitution is
excluded. Only the trend of price change would affect the index.




s e r v in g

d iffe r e n t

p r ic e
p a red

o f

th e

th e

a r t ic le

sam e
sam e

p u rp ose

s p e c ific a t io n .
o r ig in a l

d ir e c tly

w it h

w h ic h

is

s p e c ific a t io n ,

In

a r t ic le
th e

in

p r ice

b u t

a d e q u a t e ly
or

o f

an

d e s c r ib e d

(2 )

b y

th e

fir s t

on e

p e r io d

o f

th e

ty p e,
is

th e
co m ­

s u b s titu te

THE

a r tic le

in

th e

n ex t

p r ic e b e tw e e n
sh ow n
In

as

a

p r ic e

th e se co n d

th e

p e r io d ,

a n d

t h e o r ig in a l a n d
ch a n ge

in

a n y

CON SU M ER

d iffe r e n c e

s u b s titu te

th e

in d e x

in

a r t ic l e is

c a lc u la t io n .

t y p e , p r ic e s o f t h e o r ig in a l a r t ic le in

p r e c e d in g

p e r io d

a n d

th e

cu rren t

P R IC E

p e r io d

are

In

th e

a ctu a l

t io n

an d

th a t

in d e x

v a lu e

fa cto rs — b a se
cu rren t
in d e x

a r tic le

s u m m a tio n

s u c c e e d in g

p e r io d

m o n t h ’s
w h ic h

is

d u e

fle c t e d

in

k n ow n

as a

In

to

th e

th e

in
fo r

th e p r ic e

fo r

are

errors

th e

th e

in

in

is

re­

T h is

is d o n e

o b ta in e d

an d

each

o f

p r ic e

th e

u s in g

fo r

S ta tes

w a g e -e a r n e r
in

la r g e s t

p r ic e d

c it ie s

c ity ,

p r ice

has

Y o rk

U n it e d

S ta tes

D e tr o it.

c a lc u la t e
o f

a ll c i t y

in d e x ,

w e ig h t

c a r r ie d

c ity

to

p o p u la tio n
E a ch

o f

is

it

th e

w e ig h t

p r o p o r t io n a t e

to

area

Y o rk

fo u r

c le r ic a l-w o r k e r

in d e x

c o m b in e d

o f

N ew

t im e s

as

its

m a n y

fa m ilie s

12

as

an

equ a l

as

th e

la r g e s t

c it ie s

o n e -fifth

represen t
o f

th e

a

w e ig h t in

p r ice

T h e

c la s s

u rb a n

o f

th e 9 m e d iu m -s iz e

c it ie s h a v e

c it ie s

a b ou t

C en su s

fig u r e s

fig u r e s
th e

fo r

b ecom e

c it y

w e ig h ts

in

h a v e

o t h e r 9 la r g e
c it ie s

h a v in g

p o p u la t io n ,

an d

S im ila r ly ,

a b o u t o n e -fifth , a n d

o n e -fifth

T h e im p o r t a n c e o f c it ie s in

th e

ch an ge

c o m b in e d

t h e r e fo r e a b o u t o n e -fift h o f th e w e ig h t .

w ill a d ju s t

ou t

c it ie s

u rb a n

th e

a b o u t t w o -fift h s o f t h e w e ig h t .

p o p u la t io n

th e

each

1 ).

h a s f o u r t im e s a s m u c h

T h e

s m a ll

an d

p r o p o r tio n a te

c le r ic a l-w o r k e r

a

th e

g o o d s

is

o f

th e

w e ig h t.

t h e i n d e x is n o w
1950.

A s

a v a ila b le ,

n ew
th e

ba sed
C en su s

B u rea u

a c c o r d in g ly .

to

is

th e

U n it e d

c a lc u la t e d
fo r

b y

an d

S ta tes

a

th e

so

th ree

p o p u la t io n ,

fo r

w e ig h ts

th e

presen t
m ak es

a llo t t e d

to

to

s im p le

in d iv id u a l

n a tu re

o f

in

k in d s

th e

m ea su rem en t.

o f lim it a t io n s

s ta tis tic a l
e ffo r t,

k eep

th e

m in im u m ,

T h e C on su m er

e n t .

exa ct

ev ery

it, t o

a

e a s u r e m

an

m a n y

a lw a y s

errors

o f m

n ot

B u rea u

I t

th a t

c a lc u la t io n s .

w it h in

th e

is
are

T h e

resou rces

t o t a l e ffe c t o f s t a t is t ic a l

an d

c o n t in u a lly

e rro rs , lo o k in g

fo r

s tu d ie s

w ays

to

th e

im p r o v e

th e in d e x .
O n e

k in d

b a sk et”

o f

are b a se d

ch an ges

a r is e s

fro m

o n

a b ou t

fro m

c o lle c t e d

in

p r ic e s

2 ,0 0 0

stores

o b ta in e d

in t e r v ie w s

an d

a b ou t

46

w it h

c le r ic a l-w o r k e r

b a sed

in

r e t a il

o n

an d

are

c o lle c t e d
oth e r

lim it a t io n

s a m p lin g

E x p e n d i t u r e s f o r i t e m s i n t h e ‘ ‘m a r k e t

w a g e -e a r n e r

o f

a b ou t

c itie s ,

300

ite m s ,

stores

fo o d

an d

4 ,0 0 0

ren ts

ev ery

are

P r ic e s

ten a n ts.

som e

p r ice

a b ou t

e s t a b lis h m e n t s ;

3 0 ,0 0 0

8 ,0 0 0

fa m ilie s ;

are

m on th ,

som e

e v e ry 3 m on th s, an d som e ev ery 4 m on th s.

T h u s,

th e

fa m ilie s ,

ite m s ,

fr a c tio n

o f

in d e x

is

b a sed

stores,

an d

t o ta l.

T h ere

c it ie s

in fo r m a tio n
T h e

is

o n

s a m p le s

th a t

are

even

a

o f

o n ly

o n ly

error

a

“ s a m p le ”

is c o ll e c t e d

degree

o f

at

o f

tim e ,

c e r ta in

in tro d u c e d

th e

s in c e

p e r io d s .

in to

th e

in d e x

t h r o u g h s a m p lin g d e p e n d s p r im a r ily o n th e a m o u n t
o f

v a r ia t io n

grou p s
T o

p r ic e

ch an ge

ite m s

an d

b etw een

a b ou t

th e

sam e

o f

g a in

th rou g h ou t
p r ic e

th e

in

th e

in d e x ,

o b s e r v a tio n s

d itio n e d b y
in

p a ttern s

s id e r a b ly
store.

th em

m u st
each

d iffe r e n t

m easu re

b e

o f

th e

a n y

w ith in

an d

c it ie s .

a ccu ra cy
n u m b er

ite m

is

o f

con ­

a n d its im p o r t a n c e
p r ic e s

o f

fr e s h

a re im p o r t a n t in th e fa m ily fo o d

ite m

a ll v e g e t a b le s

stores

fo r

e x a m p le ,

fr e q u e n tly
in

fro m

T o

th e r e fo r e ,

F or

e x is ts

stores

degree

o b ta in e d

in d e x .

b u d g e t, ch a n g e
son al

th a t

its p r ic e v a r ia b ilit y

tota l

v e g e ta b le s , w h ic h

o f

12 C ity areas are defined as the Census “urbanized area” which consists of
the central city and the surrounding urbanized areas according to popula­
tion density.




b e

v a lu e

i t a t i o n s

In d ex

s u b je c t

T h e r e fo r e , th e a v e r a g e p r ic e c h a n g e

in N e w

th e

W h en

e s tim a tin g

c o m b in in g

i n d e x 12 ( t a b l e

an d

D e tr o it a rea .

to

c o m b in e d

e x a m p le , r e p r e s e n ts

w a g e -e a r n e r

16

ev ery

in fr e q u e n tly ,

p e r io d .

grou p s

In

or

an d

th e

p o p u la t io n :
fo r

fo r

a ll it e m s

im p o r ta n c e

rep resen ts

a b ou t

c it y

ch an ges

L i m

P r ic e

p roced u res.

s e p a r a te ly .

U n it e d

an

c it ie s

th a t

“ lo n g -tim e ”

r e la tiv e s

ch an ge

c ity

th e

C ity ,

fo r

b y

th e r e fo r e

o f

L im it a t io n s

th e p r e v io u s to th e c u rre n t p e r io d — a s

p r ic e

s e r v ic e s

ow n

th e

p rod u ct

q u a n titie s ,

A g g re g a te s

o f

th e

p o p u la ­

c o m b in e d ,

is

fo r s e a s o n a l ite m s .

average

g iv e n

c itie s
ch an ge

con sta n t o v e r

corrected

W e ig h t in g

in to

la r g e s t

fo r

average

are

in d e x ,

are

c it ie s .

(1 )

to

th a t

ca n

th e

p r ic e

n o t

in d e x .

r e la tiv e s

r e fe r e n c e

ite m s

a g a in

ch a n g e fro m

on

fo llo w in g

q u a lity

th e

th e

process.

fiv e

som e

are

th e

an d

d iffe r e n tia l

o f

in d e x , p r ic e
b y

is h e ld

p r ic e s

12

a n y

d iffe r e n c e s

“ lin k in g ”

in

ob serv ed
m o n th ;

th e

com p a red

th a t

m ov em en t

e s tim a te d

fo r

so

p e r io d

p e r io d s w h e n p r ic e s a re n o t c o lle c t e d in a c it y

in c lu d e d
are

are

r e la tiv e

cu rren t

o f

w e ig h t s

w e ig h ts

y ea r

p r ic e s .

c o m p a r e d fo r th e c u r r e n t r e la tiv e , a n d p r ic e s o f th e
th e

c a lc u la t io n

e x p e n d itu r e

s u b s titu te

in

69

IN D E X

to
th e

an d

ite m

average

p r ice d
in

in

a

d iffe r e n t s e a ­

th ey

an d

s a t is fa c t o r ily ,

m on th

h a v e

c itie s ;

d iffe r

fro m

ch an ge

co n ­

store
in

to

p r ic e s

a

la r g e

n u m b er

o f

fa ir ly

la r g e

n u m b er

o f

ev ery

c ity .

O n

th e

oth er

T

a ble

1.— Cities in which prices are collected for the Consumer Price Index, their relative importance in the United States Index, and the months in which all items
are priced 1

Cities
(A ll urban places 2,500 and over: T o ta l 1950 population
95,086,000; in wage and clerical families 60,706,000)

Relative
population
weight

O

Pricing m onths for m ost commodities other than food, fuel, and rent

Relative
cost-popu­
lation
weights
D ec. 1952

Ja n .

F eb .

M ar.

Apr.

M ay

Ju n e

Ju ly

Aug.

Sept.

Oct.

N ov.

D ec.

X
X
X
X
X
X
X

X
X
X
X
x

X
X
X
X
X

X
X
X
X
X
X
X

X
X
X
X
X

X
X
X
X
X

X
X
X
X
X
X
X

X
X
X
X
X

X
X
X
X
X

X
X
X
X
X
X
X

X
X
X
X
X

X
X
X
X
X

A l l u r b a n a r e a s o v er 1 ,0 0 0 ,0 0 0

100.0

•San Francisco, C alif........................................................................_..........

12.5
5.2
4.4
3.0
2.8
1.7
1.6
1.6
1.4
1.2
1.5
1.7

13.2
5.8
5.0
3 .3
3 .0
1.8
1. 7
1.8
1.6
1.1
1.5
1.9

T o ta l................................................. ..................................................

38.6

41.7

2.3
2.3
2.4
2.4
2.3
2.3
2.4
2.3
2.3

2.4
2. 5
2.4
2.4
2.1
2.7

21.0

21.2

2.1
2.2
2.4
2.4
2. 2
2.1
2.1
2.2
2.4

2.0
2.4
2.2
2. 0
1.9
2.5
2.3
1.9
2.4

20.1

19.6

•New Y o rk , N . Y .-N o rth ea ste m New Jersey ....... ............................
•Chicago, 111.....................................................................................................
•Los Angeles, C alif____________________________________________
•D etroit, M ic h ________________________________________________
•Philadelphia, P a -C a m d e n , N . J _____________________________

42 u r b a n

=

_

X
X

_

X
X

X
X
X

X
X

X
X
X

X
X
X

_ ________ ...... ......

________

=

X
X

X
X
X
________

-

- _

-

-

a r e a s o f 2 4 0 ,0 0 0 - 1 ,0 0 0 ,0 0 0

(T o ta l 1950 population 18,858,000; in wage and clerical families
12,808,000). Represented by :
♦Kansas CJity
Mn
*M in n eapn lis-St Paul TVTinn
♦Portland, Or eg
♦Houston, T p.x
•Scranton, P a
♦Seattle, Wash
♦A tlanta, Oa
♦Cincinnati, Ohio
Youngstow n, Ohio
T o ta l................... .................................................... ........................

x
x
x

X
X
X

2 .1

2. 2
2.4

X
x
x

X
X
X
X
X
X

X
X
X

X
X
X

X
X
X

X
X
X
X
X
X

X
X
X

X
X
X

2 1 6 c itie s a n d u r b a n a rea s o f 8 0 ,5 0 0 -2 4 0 ,0 0 0

(T o ta l 1950 population 19,012,000; in wage and clerical families
12,165,000). Represented by :
O an ton Ohio
Ohafleston W V a
^
T.ynehhnrg "y"a
P. ya'PS'^’hle Tr»d
HnntingtQ'n W Y a —
Ashland, TCy
1VT|ddletowp f!nnn
TVTadison 'Wis
N ewark Ohio
Ran Jose Oalif
T o ta l.............................................................- ....................................




x
x
x

X
X
X

X
x
X

X
X
X

X
X
X
X
X
X

X
X
X

X
X
X

X
X
X

X
X
X

X
X
X
X
X
X

TECHNIQUES OF PREPARING MAJOR BLS STATISTICAL SERIES

(T o ta l 1950 population 36,868,000; in wage and clerical families
23,417,000)......................

2 ,5 2 7

citiesunder 30 ,5 0 0

(Total 1950 population 21,348,000; in wage and clerical families
12,316,000). Represented by :
Grand Forks, N . D ak.
M adill, Okla________
Pulaski, V a __________
Ravenna, Ohio______
Camden, A rk................
G arrett, In d _________
Rawlins, W y o _______
Shawnee, Okla_______
Anna, 111____________
Glendale, Ariz...............
Grand Island, N e b r ..
Laconia, N . H _............
Lodi, Calif___________
Middlesboro, K y .........
Sandpoint, Idaho____
Shenandoah, Iowa___

1.2
1.4
1.2
1.3
1.4
1.3

1.3

1.3
1.2
1.1
1.0
1.2
1.1
1.0
1.5
.8
1.0
1.1

Total.

20.3

x
x
X
X

17.5

♦Cities for which indexes are published.

1.4
1.3

1.2
1.4

1.2
1.1

X
X
X
X

.9

X
X
X
X

X
X
X
X

X
X
X
X

Food, rent, and certain other items are priced m onthly in all cities.

THE CONSUMER PRICE INDEX




1.2
1.2
1.2

1.1
1.0
1.0
1.2

72

T E C H N IQ U E S

h a n d , p r ic e s
s h ir ts
s h ir t

d o

n o t

s e lls

T h ese

ch an ge

fo r

th e

o fte n ,

sam e

a d v e r tis e d

an d

p r ic e

P R E P A R IN G

th e

in

sam e

a lm o s t

M A JO R

b ra n d

k in d

o f

a ll s t o r e s .

b e

an d

p r ic e d

s t ill

le s s

fr e q u e n t ly

m easu re

th e

an d

p e o p le

w h o

e x a c tly .

e x p e n d itu r e s
b a s k e t ,”
e s t im a t e

p r ice

v e ry

a ll

q u e n tly .

th e ir
or

ten d

to

m od ern

su rv ey

v ie w e r s

to

“ m a rk et

a

th a n

b e

B u rea u

or

s e r io u s ly .

th e

m ost

an d

in te r ­
in

th e

th e

su rv ey

o b ta in e d
so

th a t

to

gu ard

a g a in s t

P r ic e

q u a lit ie s
ta k e

th e

b y

a g en ts

o f

g o o d s

s e llin g

th e

a r e w e ll
on

th e

p r ic e s

m erch a n t.

t r a in e d

store

as

m a rk ed

S a le s

on

in d e x

s a le

are

a llo w

p r ic e s

a p p ly

T h e

o f

s a v in g s

a r o u n d .”
as

m eet

th e

to

ta k e

B u r e a u ’s

to

to

a ll

p r ic e s

are

cu stom ers;

s p e c ia l t y p e s

o f th e
u sed

th ey

o f bu yers

if
are

d oes

in

h o u s e w ife
d oes

an d

it

n o t

m a y

r e fle c t

m a k e

r e fle c t

a ll

in

are

n o t

rep orted

to

th e

o f

p r in c ip a l

in t h e in d e x is in
ite m s w h ic h
in c lu d e d

th e

sou rces

o f

reau n ow

fo o d s

n ow

th a t

u sed

cars




lis t

o f

ite m s

th e

an d

m ost

a n ew

fo r

ch eck

to

k eep

com p reh en ­
an d

w as

“ m a rk et b a sk e t”

in tr o d u c e d

in

p r ic in g

p r ic e d

in

an d

d ir e c tly

ch an ges

m easu red
fro m

A lth o u g h

th ese

p r ic e s

stores.

th e y w e re im p u te d

fo r

b y

re sta u ra n t

are

m o b ile s .

m a n y

im ­

c a lc u la t io n

w h ere

in

fo r m e r ly

ren ts;

ite m s

d ir e c tly
p r ice

th e

are

m o v e

lik e

C h an ges

th e

w h ere

an d

oth er

p r ic in g

lis t

to

o f
o f

fo r m e r ly

an d

th ey

th e

u sed

rep resen t

M a n y ite m s

s e r v ic e s

im p ro v e

a u to­

p roced u res

s t ill im p e r f e c t ,

g ood s

p r ice s

tren d s o f n e w

p r ic in g

B u ­

o f as­

p r ice s

in

a n im p r o v e m e n t o v e r p a s t p r a c t ic e s .

w ere

a ccu ra cy

a d d ed
o f

th e

in d e x m e a s u re m e n t.

S m a ll c itie s h a v e b e e n a d d e d

to

to

th e in d e x

tiv e

o f

u rb a n
s in c e

cov era g e

p r ic e

ch an ges

w a g e -e a r n e r
p r ic e

tren d s

(2 )

L i m

In d ex

is

in

i t a t i o n s

ch a n ge

in

u rb a n

it m o r e r e p r e s e n ta ­

are

e x p e r ie n c e d

c le r ic a l-w o r k e r

la r g e

an d

s m a ll

b y

a ll

fa m ilie s ,

c it ie s

m a y

c ir c u m s ta n c e s .
i n

s p e c ific a lly

b y

m a k e

th a t

an d

d iffe r u n d e r c e r ta in

average

u s e

.

T h e

d e s ig n e d

p r ice s

o f

C on su m er

to

m easu re

g ood s

w a g e -e a r n e r

an d

an d

P r ic e
th e

s e r v ic e s

c le r ic a l-w o r k e r

fa m ilie s .

C o n s e q u e n t ly , th e in d e x m u s t b e a p p lie d

c a r e fu lly

w h en

u sed

fo r

oth er

p u rp oses.

T h e

p r e m iu m

in d e x

B u r e a u ’s

w o r k e r fa m ilie s , b u t n o t n e c e s s a r ily a n y o n e f a m ily

p o te n tia l

error

th e e s t im a t io n o f p r ic e c h a n g e fo r

th e

areas

to

p r ic e s m e a ls in r e s ta u r a n ts in s te a d

p u rch a sed

b ou g h t

a re im p o r t a n t in fa m ily s p e n d in g , b u t
in

a v a ila b le

m a d e

m id -t h ir t ie s ,

B u rea u

m easu red

rep resen ts

o r s m a ll g r o u p s

th e

th e

d e v e lo p in g

are

s a le s

ch arges,

o n ly .

F o r e x a m p le , c h a n g e s in c o s t s o f s h e lte r

w ere

e ffe c t

“ s h o p p in g

s p e c ia l

“ u n d e r-th e -co u n te r”

a ll
th e

1953, w as
s in c e

th ey

o n ly ,

t h e b a r g a in in g s k ills o f t h e b u y e r .

r e ta il s to r e s , o r

th a t

o ffe r e d

a d v a n ta g e

o ffe r e d

N o r
t ip s

g ood s

a g en t.

O n e

n o t

c o n d itio n ,

th e

th e r e fo r e ,

th e

p a y m en ts,
p r ic e

b y

if

D is c o u n te d

if o ffe r e d

in d e x ,

su ch

o n ly

t h e s a le is o f s u ffic ie n t d u r a t io n

g e n e r a lly

d is c o u n ts

d is ­

fu n d s

w ere

an d

c itie s

lo w .

o f h om es,

th e

r e d u c t io n s .

th e y

an d

an d

re­

p a st,

t o h o m e o w n e r s , in c lu d in g r e p a ir s a n d m a in t e n a n c e

to

g o o d

p r ic e

o f if a ffe c te d

as

la r g e

n on cov ered

im p ro v e m e n ts

fo o d

m ost con su m ers

n o t u sed

or

and

to

m eth od s.

o f

s p e c ific a t io n s , a n d
to

re co g ­

o f

e ffo r ts

th e

s a t is fa c t o r ily ,

to

lim it s

In

o f th e C o n s u m e r P r ic e In d e x , c o m ­

in d e x ,

p orta n t

p r ic e s a n d

c a lc u la t io n
in

th e

H o w e v e r , s a le s p r ic e s a re in c lu d e d

s p e c ia l c h a r g e s .
th e

to

s h e lv e s ,

in

J a n u a ry

a d d itio n

s u m in g

if n e ce ssa ry .

c o u n t s a r e r e c o r d e d , a s w e ll a s p r e m iu m

in

in

d e s ig n e d t o r e d u c e s t ill fu r t h e r t h e e ffe c t s o f e r r o r s .
In

t r a in e d

th e

u n d erta k en

fo r

p o s s ib le

p r e c a u tio n s

s iv e

to

w ork ,

tren d s

in

n a tio n a l tr e n d .

c o lle c t io n s

w ith in

T h e r e v is io n
p le te d

r e c a ll

errors

p r ic e

c o lle c tio n

p r ice

a c t u a lly

in fo r m a tio n

a d ju s t e d

ta k es

s h ir ts ,

th e

e r r o r o f e s t im a t io n

o f

h ig h ly

w h en ever

on

o f

d iffic u lt

its

H ow ev er,
p r ic e

uses

m in im u m ,
w ith

a ll c a n

w ere

lim ite d

y e a r fo r

th ey

B u rea u

an d

a
n ot

e r r o rs in p r ic in g w h ic h m ig h t a ffe c t th e in d e x m o s t

p orted

lo c a litie s

a re c o lle c t e d , in t r o d u c e s e r r o r s o f e s t im a t io n in t h e

errors

r e p o r t in g

o r g a n iz a t io n s

fig u r e s c a n

in

ca n

are b o u g h t fre ­

th ese

th ese
to

th a t

le s s

m eth od s

com p a red

“ m a rk et

m e n ’s

th a t

T h e

a lw a y s

fa m ilie s

b u t

fo r

th in g s

so

ou t.

b a sk e t”

oth er

th e y

in

th o s e in w h ic h p r ic e s

p r ice

con su m er

sp en d

expen ses

m ore,

k eep

are

th ey

rep ort

ca n cel

n iz e

ch a n ges

its p r ic in g lis t s o m e ite m s

o f

th a t

a u t o m o b ile ,

oth er

S om e
som e

T h e

p r ic e

th e B u re a u o m itte d fr o m

b a s ic

th e

fo u n d

w e ll w h a t

b o u g h t,

th e

h as

ca n n ot

su rveys

d e t e r m in e

B u rea u

w o m e n ’s h o s e

r e s u lts

ob serv e

w h ic h p r ic e tr e n d s d iffe r fr o m

s a tis ­

ch a n ge

in fo r m a tio n

m a k in g

e le c t r ic it y , o r

rem em b er

b y

g iv e
In

to

th e

ren t, o r

to

S E R IE S

fe w e r

in

A n o th e r k in d o f e r r o r m a y o c c u r in th e in d e x b e ­
cau se

fa ilu r e

S T A T IS T IC A L

m easu rem en t

fa c to r ily .

rep ort

BLS

w h ic h

ca n

stores,

o f m e n ’s n a t io n a lly

OF

p r ice d .

A ls o ,

on

in c o m e

o f

liv in g

an d

T h ere

o f th e in d e x to

grou p s,

w ork ers, or to

w a g e -e a r n e r

o f fa m ilie s .

th e a p p lic a t io n

h ig h

a ll

to

e ld e r ly

oth er g rou p s
s p e n d in g

an d

c le r ic a l-

a re lim it a t io n s

v e r y lo w ' o r v e r y
c o u p le s ,

to

s in g le

w h o s e le v e l o r m a n n e r

are

d iffe r e n t

fro m

th e

THE

a v e r a g e o f a ll w o r k e r fa m ilie s .

T o

CONSUM ER

th e e x te n t th a t

P R IC E

e x p e r ie n c e d

th e s e g r o u p s s p e n d th e ir in c o m e d iffe r e n t ly a n d a re

to

th e r e fo r e d iffe r e n tly

th e ir o w n

in d e x

is

n o t

h a n d , w h en

a ffe c te d

e x a c tly

b y

p r ice

a p p lic a b le .

t h e in d e x is a p p lie d

ch a n g e s, th e

O n

to

th e

a ll c i t y

oth er

fa m ilie s

p r ic e s

n o t

t o b e s e r io u s , s in c e t h e w a g e -e a r n e r

c le r ic a l-w o r k e r

fa m ily

p r o p o r tio n

g rou p

(n e a r ly

rep resen ts

tw o -th ird s )

o f

su ch

T h e

o n ly
in to

th e

r e fle c t
as

is

n o t

t o t a l f a m

e ffe c t

o f

to

i l y

b e

u sed

p r i c e

ch an ge

or

th e

in c o m e

ta x es.

e x p e r ie n c e

o f

an d

she

“ sh op s

a rou n d ”

to

ta k e

p r ic e s ,

n or

it

sh ow

p a y in g

p r e m iu m

in d e x

a ls o

T

2.

a ble

d oes

p r ic e s
n o t

fo r

r e fle c t

th e

th a n

in

th e

d oes

n o t

v id e

ta k e

to

in d e x

d oes

a d v a n ta g e
th e

scarce
th e

fu ll

ite m s .

ch an ge

o f

in

c o n s u lt

th e

an d

T h e

fro m

b u s in e s s

a r is e ;

O th e r
on

h ow

m u ch

com p a red

1 9 4 7 -4 9 .

w ith

T h e y

a re h ig h e r o r lo w e r in

lik e

th ey

on

th e

an

d o
on e

oth er

e c o n o m ic

e ffo r t is m a d e

an d

o f m a k in g

C o m m itte e s
la b o r

a s s o c ia tio n s

w ere

to

p ro ­

a b o u t it a s p o s s ib le , a n d

w a y s

u s e fu l.

th a t

costs

sh ow

c ity

o w n in g

th e B u re a u , serv es th e n eed s o f

u sers

m ore

p r o fe s s io n a l

p rog ra m

on e
to

c ity

p e r io d

o f th e p u b lic ,

d ra w n

o f

b ase

on e

in d e x ,
b y

fro m

th e

e ffe c t

fro m

r e n t in g

in d e x e s

in

as m u c h in fo r m a tio n

b etter

n ot

m o v e

fro m

a n oth er.
th e

a ll s e c t io n s

it m ea su res

in d iv id u a l h o u s e w ife ,

lo w e s t

d oes

m easu re

c it y

w h e th e r p r ic e s

B eca u se

a s h ig h e r o r lo w e r

T h e

th e

to

s in c e

s p e n d i n g ,

a c c o u n t o th e r fa c to r s , s u ch

in c o m e s

o f

s e r ie s p r e p a r e d

in d e x

w h o

ch a n ge

ch a n ged

s in c e

sh ow

c ity

th ese

p o p u la t io n s .

ch a n g e s in

fa m ilie s

w h o

h om e.

h a v e

n o t c o n s id e r e d

la r g e

or

C o m p a r is o n s

a n oth er

a

b y

a n oth er

o r to th e t o t a l u r b a n p o p u la t io n , th e lim ita tio n s a re

an d

73

IN D E X

a c t iv e

in d e x

a d v is o r s

o r g a n iz a t io n s

a d v is e

in

th e

o f

th e

on

an d

p r o b le m s

c o m p r e h e n s iv e

o f in d e x r e v is io n c o m p le te d J a n u a r y 1 9 5 3 .

o u ts id e

te c h n ica l e x p e r ts

are

a ls o

c o n s u lte d

o c c a s io n .

—List of items priced and the relative importance of each item in the major groups of items and in the total index,
December 1952 {after revision)
Percent to—
Item

All items
total

Percent to—
Item

Group
total

All items
total

F O O D ......................................................... - ..................... -

29.84

100.00

Food a t hom e_____________________________________
Cereals and bakery products____________________
Cereals:
Flou r, w h eat________________________________
B iscu it m i* __________________________________
C om flakes__________________________________
Rolled oats__________________________________
C om m eal________ __________________________
R ice .
- - _______ ___ - ______________
B ak ery products:
Bread, w h ite_______ ________________________
Soda crackers_______________________________
V anilla cookies______________________________
M eats, poultry, and fish_________________________
Beef:
Round steak ________________________________
R ib roast
______________________ _________
Chuck ro a st-. ______________________________
H am burger__________________________________
Veal:
Veal c u t l e t __ ______________________________
Pork:
Pork chops__________________________________
Smoked ham
_____________________________
Bacon
______ __ _______________________
Lam b:
Leg of lam b__________ _______________ ______
Other meats:
Frankfurters_____________________________ -Canned luncheon m eat______________________
P oultry:
F ryin g chickens - _ _____________________
F ish :
Fresh and frozen fin fish________ ___________
Canned salmon______________________________
Canned tu n a____________________________ ___
D airy products__________________________________
B u tte r____ ___________________________________
Cheese, American process_____________________
M ilk , fresh (delivered)________________________
M ilk , fresh (grocery)__________________________
M ilk , evaporated______________________________
Ice cream ______________________ ____ __________
See footnotes a t end of table.

25.28
3.08

84.72
10.33




.54
.16
.10
.07
.05
.09

1.84
.54
.32
.24
.15
.29

1.43
.15
.49
7.70

4.82
.50
1.63
25.79

.92
.17
.58
.61

3.09
.57
1.95
2.05

.20

.67

.73
.66
.84

2.44
2.22
2.80

.19

.62

.74
.26

2.49
.87

1.23

4.12

.31
.09
.17
4.18
.49
.52
1.25
1.30
.29
.33

1.02
.30
.58
14.02
1. 66
1.75
4.18
4.33
.98
1.12

F O O D —Continued
Food at home—Continued
F ru its and vegetables
__
__ _
Fresh fruits:
Oranges_____________________________________
Lem ons.
_
_
_
Grapefruit
_ _
Apples
_
_
Bananas
_
_
Peaches
Orapes
Straw berries___
_________________________
W aterm elons
_ _
Fresh vegetables:
Potatoes
Sweetpotatoes
_
_ _
Beans, green________________________________
Cahhage
_ _
_____
r 1arrets
,
Onions
_ _
Tom atoes
_ _ _
_ _ __
Celery____ - _ ________ ___________________
Lettuce, head
Canned fruits:
Orange juice
____ - - __ ___________
Peaehes
_
__
___
Pineapple, sliced
F ru it cocktail_ _____________ ______________
_
Canned vegetables:
Corn _____ ________________________________
Peas
-____
___
'Pomatees
Strained baby food__________________________
Frozen fruits:
Orange juice, concentrate__________________
Strawberries
Frozen vegetables:
Pea s
-- -Green beans
_________________________
Dried fruits and vegetables:
Prunes
__ ____
______________
N avy beans
—
_______________
Other foods a t home
- - - _______________
Partially prepared foods:
Soup vegetable
- ___ _________________
Beans w ith pork------- ------------------------------------

Group
total

4.55

15.25

.33
.05
.06
.34
.23
.10
.07
.08
.16

1.13
.17
.21
1.13
.79
.34
.24
.25
.53

.54
.07
.13
.04
.10
.11
.22
.10
.18

1.86
.23
.42
.14
.33
.38
.75
.34
.60

.20
.17
.10

.67
.57
.33
.29

.14
.16
.20
.14

.46
.53
.66
.46

.11
.03

.35
.10

.08
.05

.27
.17

.08
.09
5.77

.25
.30
19.33

.38
.15

1.26
.51

74
T a b le 2.

T E C H N IQ U E S

OP

P R E P A R IN G

M A JO R

BLS

S T A T IS T IC A L

S E R IE S

—List of items priced and the relative importance of each item in the major groups of items and in the total index,
December 1952 (after revision)— Continued
Percent to—
Item
All items
total

F O O D — Continued
Food a t home—Continued
Other foods a t home—Continued
Condim ents and sauces:
Sweet gherkins_________________________
T om ato catsu p________________ ________
Nonalcoholic beverages:
C o ffe e ..____ ___________________________
T e a ____________________________________
Cola drinks__________________ _____ ___
F a ts and oils:
M argarine__________ ___________________
L a rd ___________________________________
Vegetable shortening___________________
Salad dressing__________________________
Pean ut bu tter__________________________
Sugar and sweets:
Sugar, w h ite___________________________
Corn syrup________________ _____________
Grape je lly ____ ____ ___________________
Chocolate b ar____ _____________________
Eggs, fresh____ __________________________
Miscellaneous foods:
Flavored gelatin dessert____ ____________

Percent to—

Group
total

0.24
.10

0.79
.34

1.12
.12
.33

3.76
.40
1.10

.24
.08
.29
.17
.10

.82
.28
.96
.59
.32

.38
.13
.13
.27
1.43

1.29
.42
.42
.90
4. 81

.11

.3 6

Food away from home:
Restaurant m eals._______ ________ ______

4.56

15.28

H O U S IN G ________ _____ ________ - ............

32.19

100.00

Item
All items
total
H O U S IN G —Continued
Housefurnishings—Continued
M ajor household appliances—Continued
Vacuum cleaners, electric______________________
Sewing m achines, electric____________ . . . ______
Sm all household appliances:
Toasters, electric________________________ ______
Housewares:
Dinnerware, 53-piece set_____ _________________
Saucepans, alum inum _________________________
Broom s_____________________ ______ __________
Miscellaneous:
N apkins, paper_____ ____________________ ______
T o ilet tissue___ _____________________________
E lectric light bu lbs______ _____ _____ _________

.22

.70
.49
.69
.31

.04
.19
.05

.11
.5 9
.15

Household operation______________________________
Laundry soap and detergents____________________
D ry cleaning_______________________________ _____
Lau ndry service_______ __ ______________________
Autom atic laundry service_____ ____ ____________
D om estic services......... ............. ............... .......................
Telephone rates______ _______________
____
Residential w ater rates_____________________ ____
Postage_________________________________________
Ic e ____ _________________________________________

5.03
.61
1.25
.74
.11
.56
1.13
.29
.25
.09

15.62
1.90
3.86
2.29
.35
1.74
3.49
.9 0
.78
.31

A P P A R E L ...............................................................................

9.41

100.00

M e n ’s apparel_____________________________________
Topcoats. ______________________________________
Ja ck ets___________________________________ ____
Sw eaters_______________________________________
Suits, heavy wool_______________________________
Suits, light wool____ ____________________________
Suits, rayon__________________________ __________
Slacks, wool_______ __ ______________ ________
Slacks, rayon____________________________________
Trousers, w ork_____ _________________ ____ ______
Overalls_________________________________________
Shirts, w ork____ ________________________________
Gloves, w ork_______ __
_________ _____________
Shirts, sport________ _____________
__________
Shirts, business_____________ ______ _____________
Shorts, co tto n _______ ________________________
Undershirts, k n it___
_ _________ ____________
P a ja m a s.. . . . ____ ________
. . ...
Socks, cotton____________________________________
Socks, rayon_____________________________________
H ats, felt____________ ______ _______ ________

2. 55
.23
.14
.05
.41
.10
.12
.15
.05
.21
.1 3
.07
.04
.11
.19
.0 5
.16
.06
.13
.07
.08

27.07
2.41
1.46
.58
4.31
1.09
1.26
1.59
.54
2.22
1.39
.78
.43
1.15
1.98
.52
1.75
.62
1.41
.78
.80

B o y s’ apparel_____ _____________________ ________
Suits, wool________________________ . ________
Jack ets, rayon___________________ ______ _________
S la ck s._________ __ ______ _____ __
__________
Dungarees, blue je a n s_______ _______ ___________
Shirts, sport, w o v e n ______________ _ _________
Undershorts, k n it____ __________________________

.45
.12
.06
.04
.09
.10
.04

4. 79
1.27
.61
.44
.97
1.05
.45

3.46
.39
.09
.18
.10
.26
.09
.09
.39
.19
.14
.03
.09
.14
.08
.03
.07
.11
.10
.12
.10
.10
.42
.04
.11

37.03
4.16
.97
1.92
1.11
2. 79
.98
.96
4.14
1.99
1.46
.31
.95
1.53
.88
.29
.76
1.19
1.02
1.30
1.06
1.11
4. 50
.47
1.18

.70
.20
.14

7.19
2.07
1.45

5.46
12.00
.37

16.95
37.29
1.17

6.02
.99
1. 54
.21

18. 70
3.08
4. 77
.66

.14
.2 6
.27
.32
.29
.74
.12
.29
.16
.28

.45
.81
.83
.98
.90
2.29
.38
.90
.50
.87

Gas and electricity ......................... .............................
G as: Residential heating.................................. .
Other than residential h ea tin g ________
E le ctricity ______________ _______ __________

1.93
.3 2
.60
1.01

6.00
.99
1.88
3.13

Solid fuels and fuel o il________________________
A n th racite_________________________________
Bitum inous coal____ _______________________
B riq u ets___________________________________
Wood and prestologs......... ............. ............. ..........
Fuel oil....................................... ............. ...................
Range oil____ ______________________________

1.32
.25
.53
.0 2
.48
.04

4.09
.78
1.60
.01
.06
1.50
.14

6.45

20. 05

.23
.09
.09
.07
.04
.18
.17

.73
.27
.27
.23
.11
.57
.53

.41
.06
.13

1.28
.19
.39

.53
.14
.21
.53
.18
.07
.17

1.65
.42
.66
1.67
.55
.20
.53

W om en’s apparel_______ ________________________
Coats, heavy wool, p lain ______________ ______ _
Coats, heavy wool, fur-trim m ed_________________
Coats, light-weight wool_________________________
Coats, fu r_________________
___________________
Suits, wool____ _______________ ________ ______ _
Suits, r a y o n ...____ ____ __________
___________
Dresses, wool________________________ __________
Dresses, rayon_____ _ ________________ __________
Dresses, cotton, street____ ______________________
_____ ____________
H o u sed resses................... . . .
Skirts, wool_______________________ ____ ______
Skirts, rayon__________________ _____ _______ ____
Blouses, rayon_____________________________ _____
Sweaters, wool_____ ____________________________
Shorts, cotton, sport_____________________________
Slips, nylon trico t______________________ _____ _
Slips, rayon_____________________________________
Panties, rayon-------------- ------------------------------------Girdles__________________________________________
Brassieres____ _____ _____________ ____ _________
Nightgowns, rayon and cotton____ _________ ___
Stockings, nylon-------------------------------------------------Gloves, cotton and l e a t h e r . . . ___ ________. . . _
Handbags, fabric_______ _____________
________

.84
.43
0.51

2.63
1.34
1. 59

G irls’ apparel______________________________________
C oats___ _________ ______ __ ___________________
Dresses, co tto n -------------- ------- ------------------------------

H ousefum ishings...................... ......................... ..........
T extile housefurnishings:
Sheets____ _______________________________
B la n k ets_________________________________
Bedspreads, cotton _____ _________________
Tow els__________ _______ ________________
T ablecloths, cotton_______________________
D rapery fabrics, cotton____ ______________
Curtain, cotton and rayon________________
Floor coverings:
Rugs, wool, Axm inster and broadloom ___
Rugs, cotton, scatter_____________________
Rugs, felt base____________________________
Furniture:
Living room suites_________ _____ ________
D in ette sets, wood_______________________
D in ette sets, chrome______________________
Bedroom suites___________________________
Sofa beds_________________________________
Bedsprings, coil___________________ _______
M attresses, innerspring construction............
M ajor household appliances:
Refrigerators, electric_____________________
Cookstoves_______________________________
W ashing m achines, ele ctric................... ..........
See footnotes a t end of tab le .




(3)

0.68
.52

.1 6
.22
.10

Residential ren ts_________________ ___________
Other shelter_________________________________
Housing away from home 1_________________
Homeowner expenditures:
Sales prices of hom es_____________________
R eal estate taxes__________________________
Mortgage interest rates___________________
Property insurance rates__________________
Repairs and improvem ents:
Garage repaint jo b ______________________
Exterior house p ain t____ ________________
C ontract price of repainting dining room.
P a in t brush____________________________
Reshingling house roof__________________
Replacing hot water heater_____________
K itch en cabinet sink, noninstalled______
Sink faucet, in stalled.......................................
Refinishing dining room floor___________
Lum ber for porch flooring_______ _______

•

0.22
.17

Group
total

THE
T able

2.

CONSUM ER

P R IC E

75

IN D E X

—Last of items priced and the relative importance of each item in the major groups of items and in the total index,
December 1952 {after revision)—Continued
Percent to—

Percent to—
Item
All items
total
A P P A R E L — Continued
G irls’ apparel—Continued
Skirts, w o o l.......................... ...............
Sweaters, cardigan, wool________
P an ties__________ ____ __________
A nklets---------------------------------------

Group
total

0.08
.08
.12
.08

0.81
.80
1.25
.81

Footw ear_______ _____________ ____
M e n ’s:
O xfords_____ _________________
W ork shoes........ ................. .............
Ru bbers, dress....... .........................
W om en’s:
Oxfords and pumps, street_____
P la y shoes______________ _____ _
Children’s oxfords----------------------Shoe repairs, m en’s and women's.

1.44

15.25

.28
.13
.08

3.01
1.33
.88

.36
.15
.28
.16

3.77
1.60
3.01
1.65

Other apparel......... ..................... ...........
D iapers........................._....................... .
Y ard goods:
C o tton ______________ __________
R a y o n ...................................... .........
M iscellaneous 12___ _____ _______
_

.81
.19

8.67
2.06

.12
.04
.46

1.33
.40
4.88

T R A N S P O R T A T IO N ____ ____

11.33

100.00

A utom obiles:
New cars__________________ ____ _
Used cars, 3 4- 5-years old----------Auto repairs_______________________
T ires______________________________
Gasoline__________________________
M otor oil________________ ____ ____
Auto insurance____________________
Registration and license fees.........

2.91
2.04
1.08
.35
2.23
.21
.96
.28

25.70
18.00
9. 55
3.05
19.66
1.84
8.49
2.44

Local public transportation:
Streetcar and bus fares................... .

.99

8.76

Item

M E D IC A L C A R E —Continued
O ptom etrist: Eyeglasses, com plete................. - .............
H ospital rates:
M e n ’s pay w ard-------------------------------------------------R oom _______________________________ ___________

All items
total

Group
total

0.28

5.78

.07
.14

1.40
2.79

Group hospitalization_____________________ _______
Prescriptions and drugs:
Prescriptions, narcotic and nonnarcotic.....................
Penicillin ta b lets__________________ _____________
M u ltiple vitam in concentrates_______ __________
Aspirin___________________________ _______________
M ilk of m agnesia__________________ ______________

.81

17.14

.26
.09
.19
.18
.06

5.52
1.81
4.03
3.80
1.17

P E R S O N A L C A R E ................. .........................................

2.12

100.00

M e n ’s h aircu t........................................................................
Perm anent w ave...................................... - ...........................
Shampoo and wave se t........... .............................................
T oilet soap______________________ _________________
Cleansing tissues......... ......................... ................................
T oothpaste____________ _________ _______ _________
Shampoo, liquid............ _......................... ......... ............. .
Shaving cream _______ ____________________________
Home perm anent r e fill............ ............. ................. ...........
Face powder________________________ _____________
Face cream _____________________________________ __
Razor blades___ ___________ _____ ______ _________
Sanitary napkin s----------------------------------------------------

.60
.13
.19
.21
.14
.2 0
.11
.06
.04
.12
.12
.14
.06

28.68
6.00
8.89
9.98
6.41
9.52
5.22
2.85
1.96
5.61
5.62
6.50
2.76

R E A D IN G A N D R E C R E A T I O N ______ _______

5.32

100.00

.34
1.04
.04

6.38
19. 51
.78

1.04
.28
.31
1.28

19.60
5.17
5. 78
24.20
18.58

Railroad fa re s ._____ ______________

.28

2. 51

Radios, table m odel_______ ____ __________________
Television sets___________________________ _______
Television repairs------- -------------------------------------------M otion picture admissions:
A d u lt___________________________________________
C hild___________________________________________
T o y s----------------------------------------------------------------------Sporting goods------- --------------------------- ------- ------------Newspapers_______________________________________

M E D IC A L C A R E _____ _________

4.78

100.00

O T H E R G O O D S A N D S E R V I C E S ____________

5.01

100.00

.71
.72
.17

15.00
15.08
3.57

1.65
.15
1.50

.17
.09

3.54
1.79

C igarettes_________________________________________
Cigars____________________ _______ ____ _________
B eer______________________________________________
W h iskey________ _________________________________
Miscellaneous 13__________________________________

32.84
3.03
29.99
17.57
16.57

.6 7

14.13
3.45

Physician:
Office v isit_____ _______ _____ _
H om e v isit______________________
Obstetrical c a r e .._____ _________
Surgeon: A pp endectom y...................
Specialist: Tonsillectom y_________
D en tist:
F illin g ........................................ ...........
E x tra c tio n ______________________

.17

1 N ot actu ally priced; im puted to another priced item or group of item s.
2 0.005 percent or less.




.9
9

.8 8

.83

* Miscellaneous service,' such a [legal services banking fees, burial services, etc.

S P E C I M E N

7 6

CONFIDENTIAL

U.

O F

S C H E D U L E

Budget Bureau N 44-R433.A
o.

RENTS

S. D E P A R T M E N T O F L A B O R

BUREAU OF LABOR S
TATISTICS
W ashington 2,D C
5 ..

District

Schedule No.

Block

Special

H Group
ens

C it y , Z on e, S t a t e .......................................................
A ddress*.............................................—

A p t. N o . .

Sam ple N o . .

S u b u r b ------------------

O w ner □
A gent □

M a n a ged b y — N am e and a d d ress______________

Single
Detached □
Semi
□
Attached Q

1p h o n o N o . .
J

TT'imH eTOateiS'W*sTructwa£ conwrsfon, enter year.
D E S C R IP T IO N O F D W E L L IN G U N IT :
Y e a r b u ilt:

B efore 1920 □
1920 t o 1939 □
1940 and after □
S p ecify y e a r ______ _

2.

C o n d itio n :

3.

N u m b er o f room s:

4.

R u n n in g w a te r in u n it :

5.

B a th ro o m :

□

□

H o t and c o ld □

3

4

5

6

Ice □

E le ctricity □

O th er Q

H ea tin g e q u ip m en t:

G a ra ge:

C en tral □
n o t installed o r n on e □
Y es □

N one Q

O th er installed Q

O th er

No □

7

8

9

10

O
ther
Specut
12

11

—

—

O nkr| acan
w
V t

Tenant
C
O

i

13

14

15

—

—

—

—

—

Explain
on Back
16

—

Rent

CONTACT

OCCUPANCY

Heat­ Cook­ Inst. Refrig­
in
g
­
in
g Co k era­ Ga
o
n
EQUIP­ Fuel Sto
ve tio rage
MN
ET
Unit

-------

—

E le ctricity Q

G as □

N one □

N on e □

o
Light W
ater H t H
eat
W
ater

2

G as □

C o o k in g f u e l :

□

No.
Per­
sons

1

R e fr ig e r a tio n :

8.

□

Flush toilet □

+

G.

9.

H a lf b a th

1 2 3 4 5 6 7 8

□

|New

Part

White □
Negro □
Other □
1 1674 Page No.

Shared

FACILITIES: CHECK IF INCLUDED IN BENT

Full

Back

7.

C om p lete

D ilap id ated □
N o t dilapid ated □

C o ld o n ly □

P rivate

Apt. □
Other □

17

—

i
£

Mail

1.

No. or
U its
n

Tfpe

T im e t o c o n t a c t .............

N a m e o f tenant ( o p t i o n a l ) _________________ ____

Personal

P h o n e ....................................

18

19

£0

~ ~

—

—

Date
21

—

t
o

Per Week

Per Month

22

23

24

O
ffice U
se
25

26

—

—

—

—

—

—

—

—

—

—

—

—

—

—

......................
i
!
1
.......- J ...........
*If m address differs, eater under note 2 on back.
aQ
NOTES
1. C a p ital im p rovem en ts and changes in facilities and in services
(explain o n b a c k ).
2. See com m en ts on b ack .
C od e:

C olu m n s IS , 19, and 20: 1— T e n a n t, 2— O w ner, 3— L a ndlord ,




4 — M an ager, 5— N eigh bor.

S easonfor Bent Change

S P E C I M E N

BLS 2300
(--3
915)

O F

7 7

S C H E D U L E

CONFIDENTIAL
U. S .

Budget Bureau No. 44-R224.10.
Approval expires Dec. 31,1956.

DEPARTM EN T O F LABO R

BUREAU OF LABOR STATISTICS
W ASH IN GTON 25, D. C .

FO DSTO ES—MSTERSC ED LE
O R A HU
R E T A I L

C* andstate
i

PRICES

O u t l e t N o .....................................................................................................................

N a m e o f S t o r e .......................................................................................................................................................................................................................................................
S t r e e t A d d r e s s ......................................................................................................................
I f in fo r m a tio n □

o r a u t h o r iz a t io n □

Z o n e ...................

T e l e p h o n e N o . .............................................

i s o b t a i n e d e l s e w h e r e , e n t e r : ..................................................................................................................
(Name of organization)

A d d r e s s ........................................................................................................................................

Z o n e __________

T e l e p h o n e N o .............. .................................

P e r s o n s w h o a u th o r iz e r e p o r t in g o f in fo r m a t io n :

Name

T te
il

A p p o in tm e n t n e c e s s a r y :

Y es □

N o □

S h o p p in g a r e a :

Lcto
oain

C e n tra l □

S u b u rban □

Etnin
xeso

N e ig h b o r h o o d □

T i m e t o v i s i t s t o r e .......................................................................................................................................................................................................................................

N e a r e s t tr a n s p o r t a t io n

(if n o t in c e n tr a l s h o p p in g a re a )

SA LE S

TA X

T a x in p e r c e n t t o b e a d d e d t o a ll p r ic e s , e x c e p t ite m s n o t e d b e lo w

as ex em p t:
CHANGES

S a le s t a x in e ffe c t :
D ate

N ature

op

C han g e

F O O D S
C ity

D a te

%

S t a t e ...

%

N O N F O O D S
D a t e ..... .. .

C i t y ______ %

S t a t e ...

Exempt Hems:
R em ark s:

P R IC IN G
F ie ld

R e p re se n ta tiv e




P r icin g

R E C O R D

D a te

F ie ld

(i)

R e p re se n ta tiv e

P r icin g

D a te

16—

Page 2

FO O D S
Line

Commodity Code and Title

Brand and Grade

Unit
Quoted

195 —
Dec.

Year: 195 —
Jan.

Feb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

5 -lb .
sack

CEREALS
1

£o

F - 1 0 0 .0 — F l o u r ,
w h ite ,
w h e a t , a ll p u r p o s e .

2 0 -o z .
Pkg.
2

F - 1 0 6 .0 — B i s c u i t m ix .

-------- o z .
pkg.
F - 1 1 0 .0 — C o r n m e a l , w h it e
o r y e l lo w .

1 6 -o z .
Pkg.
4

F -1 2 0 .0 — R ic e ,
w h o le g r a in .

fa n cy ,

S P E C IM E N

3

O F

5

F - 1 2 6 .0 — R o l l e d o a t s , r e g u ­
la r o r q u ic k .

6

_____ o z .
Pkg.
7

F -1 3 0 .0 — C o r n fla k e s .

8

9




S C H E D U L E

2 0 -o z .
Pkg.

T H E

C O N S U M E R

PRICE

I N D E X

7 9

B IB L IO G R A P H Y

T h e

C o n s u m

e r

B u rea u

T h e

C o n s u m

A

e r

I n d e x :

P r i c e

J a n u a ry

L a b o r

T h e

P r i c e

o f L a b o r

A

L a y m

S ta tis tic s ,

I n d e x :

1953

A

a n ’s

s h o r t

r e le a s e

o f

D

th e

U . S. D ep a rtm en t

G u i d e .

1953.

(B u ll.

e s c r i p t i o n

U .

S.

o f L a b or,

1 1 4 0 .)

o f

th e

I n d e x

D ep a rtm en t

o f

a s

R e v i s e d

L a b or,

,

1 9 5 8 .

B u rea u

o f

S ta tis tic s .

R e v i s e d

1953,

C o n s u m

p p .

e r

P r i c e

1 6 1 -1 7 5 .

M o n th ly

I n d e x .

U .

S.

D ep a rtm en t

L a b o r

o f

R e v ie w ,

L a b or,

F eb ru a ry

B u rea u

o f

L a b o r

S ta tis tic s .

R e v i s i o n

o f

1950,

th e

C o n s u m

p p .

e r s ’

1 2 9 -1 3 2 .

P r i c e

U .

S.

M o n th ly

I n d e x .

D ep a rtm en t

o f

L a b o r

L a b or,

R e v ie w ,

B u rea u

o f

J u ly
L a b o r

S ta tis tic s .

C o n s u m

e r

E x p e n d i t u r e

L a b o r

R e v ie w ,

B u rea u

S e l e c t i o n

o f L a b o r

o f

L a b o r

S u r v e y

G i t i e s

o f

C o n s u m

e r

i n

C o s t

o f

C o n s u m

e r s ’

P r i c e s

I n t e r i m

A d j u s t m

B u rea u

A

n

A

p p r a i s a l

a n d

A

o f

1943

R

e p o r t

o f

an d

t h e

th e

e r s ’

i n

1 9 5 0 :

S .

a

o f

M o n th ly

P u r p o s e s .

D ep a rtm en t

S u r v e y

U .

S.

,

o f L a b or,

M o n th ly

1 9 5 0 .

D ep a rtm en t

B

o f L a b o r

i n

,

u r e a u

S p e c ia l

th e

o f

L a b o r,

n i t e d

(B u ll.

th e

,

S t a t e s

1 9 1 8 - 4 1 .

1941.

U .

S.

(B u ll.

U .

S.

6 9 9 .)

D ep a rtm en t

o f

9 6 6 .)

1 0 3 9 .)

S t a t i s t i c s ’

C o m m itte e

A m e r ic a n

o f

4 2 5 -4 2 8 .

U . S. D ep a rtm en t o f L a b or,

I n d e x .

L a b o r

U s e

p p .

S ta tis tic s .

1 9 4 2 - 1 9 4 8 .

(B u ll.

o f

U

a n d

1952,

S ta tis tic s ,

1949.

e r s ’ P r i c e

1951.

I n t e r p r e t a t i o n

O cto b e r

L a b o r

S t a t e s

S ta tis tic s ,

C o n s u m

U .

o f

th e

C o s t

o f

L i v i n g

A m e r ic a n

I n d e x

S ta tis tic a l

S ta tis tic a l A s s o c ia t io n , D e c e m b e r

1944.

I n d e x .

1st

S e s s .,




S.

C o m

m

i t t e e

o n

th e

C o s t

o f

L i v i n g .

O ffic e

o f E c o n o m ic

1945.

E d u c a tio n
w it h

S ess.

E x p e n d i t u r e

C i t i e s

n i t e d

J o u rn a l o f th e

on

82d , 2d

a n d

U .

4 3 0 -4 3 6 .

B u rea u

S ta tis tic s ,

P r e s i d e n t ’s

P r i c e

e t h o d s

R e v ie w ,

L a r g e

U

B y

M a rch

S t a b iliz a t io n ,

C o n s u m

th e

o f th e

p p e n d i x .

A s s o c ia t io n .

i n

o f L a b o r

o f L a b o r

M

5 6 -5 9 .

o f L a b or, B u rea u

L a b or,

i n

e n t

e r

p p .

L a b o r

L i v i n g

o f

L a b or, B u rea u

1951,

E x p e n d i t u r e s

M o n th ly

D ep a rtm en t

F i e l d

p p .

S ta tis tic s .

U . S. D ep a rtm en t

C h a n g e s

C o n s u m

A p r il

o f L a b o r

R e s u l t s .

1 9 5 0 :

1951,

S ta tis tic s .

f o r

R e v ie w ,

B u rea u

,

S t u d y

J a n u a ry

an d

H e a r in g s
L a b or,

R e p o rt

o f

b e fo re

H ou se

o f

a S u b c o m m itte e

o f th e

R e p r e s e n ta tiv e s ,

S u b c o m m itte e

a p p en d ed .

8 2 d

H ou se

C o m m itte e
C on gress,
D o c.

404,

80

T E C H N I Q U E S

O F

P R E P A R I N G

M A J O R

BLS

STATISTICAL

SERIES

B I B L I O G R A P H Y — C o n tin u e d

T h e

E c o n o m

i c

T h e o r y

o f

I n d e x

N

u m

b e r s

.

B y

R .

G .

D .

A lle n .

E c o n o m ic a ,

1949.

D

i e

K

a u f k r a f t

d e s

G e ld e s

u n d

I h r e

S t a t is tic a l J o u r n a l, V o l. 4 ,

T h e

P r o b l e m

Y o l.

L

o f

38,

’I n d i c e

m

I n d e x

M

o n e t a i r e

a k i n g

T o t a l

B y

L .

V . B o r tk ie w ic z .

N o r d ic

A .

L .

B o w le y .

E c o n o m ic

J o u r n a l,

e t

la

t h e o r i a

d e

la

I n d e x

N

u m

B y

b e r s .

m

39,

I.

B y

o n n a i e .

1925,

an d

F is h e r .

F .

D iv is ia .

V o l. 4 0 ,

R e v u e

1926.

H o u g h to n

M ifflin

C om p a n y ,

1927.

V a l u e

I.

B y

b e r s .

p o lit iq u e , P a r is , V o l.

o f

B o ston ,

T h e

u m

B y

e s s u n g .

1928.

d ’e c o n o m ie

T h e

N

M

1932.

C r i t e r i o n :

F is h e r .

A

Jou rn a l

N

o f

e w

P r i n c i p l e

th e

i n

A m e r ic a n

I n d e x

N

S ta tis tic a l

u m

b e r

C o n s t r u c t i o n .

A s s o c ia t io n ,

V o l.

22,

N

b e r

1927.

N

e c e s s a r y
W

th e

T h e

M

e e t

C o n d i t i o n s

C e r t a i n

o f

F r is c h .

C i r c u l a r

T e s t

o f

a k i n g

E

c o n o m

i c

N

u m

Y o rk ,

o f

th e

a n d

I n d e x

T r u e

U

N

u m

I n d e x

7,

o f

T h e

D

M

o f

B .

I n d e x

D .

e f i n i t i o n

a n d

i n

I n d e x

o f

L i v i n g

M

R e v ie w

E c o n o m

e t h o d

7,

th e

o f E c o n o m ic

i c

C o lu m b ia




f o r

T h e o r y

o f

I n d e x - N

E c o n o m e tr ic a , V o l.

T h e

N

u m

I n d e x

C o n fe r e n c e

i s u n d e r s t a n d i n g

G e n e r a l

I n d e x

u m

J ou rn a l

o f

1930.

T h e

C .

C o s t

P r o b l e m

G in i.

o f

o f

I n d e x

M etron ,

B y

L i v i n g .

B y

b e r s .

o f L a b o r

M u d g e tt.

C o n s i s t e n c y

R esea rch

C o s t

A

a n

F r is c h .

N

u m

b e r s .

V o l.

A .

9,

A .

1931.

K o m is .

W .

C .

S ta tis tic s ,

J oh n

W ile y

M it c h e ll.

1938.

an d

(B u ll.

S on s,

U .

S.

6 5 6 .)

I n c .,

N ew

1951.

p o rt o f th e

A

th e

25,

o f

R .

1936.

B y

b e r s .

F o r m

B y

1939.

s i n g

B y

b e r s .

T h e o r y :

E c o n o m e tr ic a , V o l. 4 ,

D ep a rtm en t o f L a b or, B u rea u

I n d e x

th e

T e s t s .

G e n e r a l

R .

P r o b l e m

M

R e g a r d i n g

F i s h e r ’s

S ta tis tic a l A s s o c ia t io n , V o l.

E c o n o m e tr ic a , V o l.

T h e

o f

S u r v e y

B y

th e

S u f f i c i e n t

S h a l l

A m e r ic a n

A n n u a l

O n

a n d

h i c h

o f

U n iv e r s it y

N

u m

u m

b e r

b e r s

N

u m

o f th e

T h e o r y :
a n d

B y

b e r s .

C o w le s

I t s

T h e
L i m

T .

H .

R a w le s .

C o m m is s io n ,

K

o n u s

i t a t i o n s .

T r u e

B y

R e ­

1936.

C o n d i t i o n

H .

o n

S c h u ltz ,

1939.

C o m

p a r i s o n

o f

S tu d ie s , V o l. 4 ,

C o s t

o f

L i v i n g

P ress, N ew

th e

P r i c e ^ o f

B y

L i v i n g .

H .

S ta e h le .

1937.

I n d e x

Y o rk ,

N

1949.

u m

b e r s .

B y

M .

J.

U lm e r .

T H E

C O N S U M E R

PRICE

B IB L IO G R A P H Y —

P r i c e

I n d e x e s

U n w in

C o s t

o f

a n d

Q

L i v i n g

S t a t i s t i c s

I n t e r n a t io n a l

,

L a b o r

p a rt 2, G en ev a ,

(F o r

u a l i t y

L t d ., L o n d o n ,

C h a n g e s .

B y

E .

C o n tin u e d

v a n




H o fs te n .

G eorg e

A lle n

an d

1952.

M

e t h o d s

O ffic e ,

a n d

T e c h n i q u e s

S tu d ie s

an d

f o r

R ep orts,

th e

P o s t

N e w

W

a r

S e r ie s ,

P e r i o d .

N o .

7,

1947.

a d d it io n a l r e fe r e n c e s , s e e b ib lio g r a p h ie s in
an d

81

I N D E X

M . J . U lm e r .)

th e

w ork s b y

E . v a n

H o fs te n

Chapter 10. Whole s a l e Price Indexes*

T h e

B u rea u

o f

c o m p ile s

an d

is s u e s

m ov em en ts
h e n s iv e

in

L a b or

p r im a r y

m o n th ly

w h a t th e m o n th ly

(2 )

in d e x

a

(1 )

22

w eek ;

w o u ld

b e

exch an ges.
1952
th e

as

tra d ed

A ll th re e

p art

o f

th e

m a in te n a n c e

on

p r ice

com p re­

e s tim a te

if a ll t h e
an d

(3 ) a d a ily in d e x b a s e d o n

c o m m o d it ie s

n u m b er

th e

w e e k ly

in t h e m o n t h ly in d e x w e r e c o lle c t e d
each

p r ic e

o f

m easu res

m a rk ets—

in d e x ;

r e g u la r ly

S ta tis tic s

th ree

m ost

m a rk ets

gen eral

or

d u r in g

p rogra m

m o d e r n iz a tio n

o f

its

fo r

s t a t is ­

t ic a l s e r ie s .

o f

w h o le s a le

th e

p r ic e

o ld e s t

G o v e rn m e n t.
a s s o c ia te d

in d e x

is

T h e

w it h

th e

m a jo r

th e

fo r

a v a ila b le

an d

th e

in d e x

o f

S ta tes
o f

an d

m a n y

T h ese

an d

an d

it

in

ch an ges

h a v e

fo r

c o m m o d it ie s .

cov ered ,

h a v e

In

in fo r m a tio n ,
m e a s u r in g

T h is

o n

an d

p r ic e s .
a s s ig n e d

th e

p r ic e s
s lo w ly

900

in

th e

S in c e t h a t
b o th
th e

in

in d e x .
o f

an d

a d va n ce

in

p h en om en a.
a b ou t

in c r e a s e d

2 ,0 0 0

82

to

w e ll

as

A

fo r

fin e r

c o m m o d it ie s
a

b a ck

th ird

is

le v e l

o f

i n t r o d u c e d ;

to

1947.

an d

B u rea u

fo r

is

has

is

w as

th e

com p on en ts,

as

as

1926

b a s is

th e

o f

th e

th ro u g h

1948,

in d e x

in d e x

J a n u a ry

p r io r

an d

a n a ly tic a l

a d d it io n ,
o f

in d e x ,

th e

m a n y

b a ck

J a n u a ry

1947.

r e p la c e d

fro m
b y

in d e x .

T h is

s a m p le

o f

1932

an

in d e x

a s m a ll s a m p le o f th e c o m m o d it ie s in

c o m p r e h e n s iv e

to

m o v e ­

in d e p e n d e n t

m a in ta in e d

w as

to

th is in d e x

to

in d e x

in

1947

1952

In

tota l

p r ic e

it

r e v is e d

p u b lis h e d

m o n th -to -m o n th

w as

w h en

th e

m ov em en ts

th e

th e

w h o le s a le

m o n th ly

b a sed on

o f

fo rm e r

w e e k ly

th e

w e ll

in

in d e x ,

D ecem b er

o n

h is to ric a l

p r ic e

on

fro m

J a n u a ry

o ffic ia l.

(a n d

r e v is e d

b een

p e r io d

fo r

n o t

has

to

s e r ie s

c o m m e n c in g

s e r ie s

th e

b a sed

(1 ) u p

o ffic ia l

(2 )

o ffic ia l

in d e x

o n ly

th e

m ov em en t

1952

tra ce d

in d e x

th e
w as

c lo s e ly tie d t o th e m o n t h ly in d e x a n d w a s a d ju s t e d
p e r io d ic a lly fo r d e v ia tio n s fr o m
to fo rm
th e

a c o n t in u o u s s e r ie s .

w e e k ly

an d

m a d e

sep a ra te

d e ta il

1951,

o n ly

T h e

u sed

o f

w ere

o f tw o seg m en ts:

is s u e d )

r e v is e d

b e

250

♦Prepared b y E d ga r I. E a ton o f the D iv is io n o f Prices and C ost o f L iv in g .




o f

1 9 2 6 = 1 0 0 ;

th e

s e r ie s

pu rposes

A

fo r

as

c la s s — w a s

H o w e v e r , p r io r t o

m en ts

c o m m o d it ie s

a p p r o x im a t e ly

T h e

c o m p le t e

L a b o r

c o m p le t e

e c o n o m ic

n u m b er

th e b a s is

d e v e lo p m e n t

m ore

in c lu d e d

a p p r o x im a t e ly
based

th e

an d

in d e x ,

J a n u a ry

in d e x .

p red e­

m a d e

o f
a p ­

d u r a b le

1890.

1952,

ex ten d ed

1952,

o n ly

to

o f

1890.

area

con su m er

s in c e

su bgrou p s

1 9 4 7 -4 9 = 1 0 0 .
1951

th e

B u rea u

c a lc u la t in g

fo r

th e

is

m a in ta in e d

r e fle c te d

fa ct

a g r ic u l­

w as

th e

m a c h in e r y ,

c o m m o d it ie s ,

D ecem b er

fo rm e r

d a te.

m ark et

b een

o f

in c lu d in g

g row th ,

h om e

o f L a b or,

b een

d em an d s

o r ig in a l d a t a

1940

are

S ta tes

o f

at

th is w o r k

cu rren t

has

th e

e s ta b lis h e d

p r im a r y

m eth od s

th e

d e t a ile d

te c h n iq u e s
T h e

F ed era l

in d e x

p r ic e s

a r t ic le s

B u rea u

th e

ch an ges

N a tio n ,

m ore

th e

U n it e d

ex p orts,

o f c o n t in u in g

a gen cy

con ten t

b y

th e

in

as

an d

p e r io d

1913.

b een

J a n u a ry

th e

a s a c o n t in u o u s s e r ie s s in c e

tim e

th e

an d

p r o d u c tio n ,

fir s t

h a v e

th e

o f
o f

T h is in v e s t ig a tio n

S ta tis tic s ,
B L S

b y

s in c e

is

t h e e ffe c ts o f th e t a r iff la w s

m a n u fa ctu re d

U n it e d

cessor

o f

th e

c la s s ific a t io n

in

o f

o r ig in s

im p o rts

th e

fo r

o ld e s t c o n tin u ­

s e r ie s

r e s o lu tio n

th e

T h e fu n c tio n
to

a

in v e s t ig a te

a b r o a d ."

grou p s

t o t a l,

th e B u rea u , a n d

b y

m a d e

su ch

th e

co v e re d ;

T h e m o n t h l y in d e x is t h e o f fic ia l w h o le s a le p r ic e

1 8 9 1 w h ic h a u th o r iz e d th e C o m m it te e o n

d e v e lo p m e n t,
tu ra l

n o n fis c a l

to

“ u p on

w ere

p rod u cts

i n d e x w h ic h is m a d e u p

o u s s t a t is t ic a l s e r ie s p u b lis h e d

F in a n ce

a d d itio n s

d o u b le d

q u o ta tio n s

O ffic ia l m o n t h ly in d e x e s a r e a v a ila b le s e p a r a t e ly
fo r

and

S e n a te in

th e

r e v is io n

an d

c la s s ific a tio n — p r o d u c t

Background and Uses

o f

1952

p a r e l, in d u s tr ia l c h e m ic a ls ,

Monthly and Weekly Indexes

on e

T h e

c o m m o d it ie s

g ood s.

th e se

T h e

o f

m a n u fa c tu r e d

th e p r ic e s o f

o r g a n iz e d

B u r e a u 's

p i ic e s

ta b u la te d

in d e x e s w e r e r e v is e d

an d

o f

q u o ta tio n s .

th e

soon

in d e x

m o n th ly
to
as

su persedes
m on th .

in d e x

m a in ta in
a

w as

it

m o n th ly
a ll t h e

In

th e m o n t h ly in d e x
th e

r e d e s ig n e d
b u t
as

a

in d e x

w e e k ly

n o

1 9 5 2 r e v is io n ,

as

an

a ttem p t

c o n tin u o u s
b ecom es
in d e x e s

e s t im a t e
h as

b een

s e r ie s .

A s

a v a ila b le ,

r e la tin g

to

it

th a t

W H O L E S A L E

T h e

in d e x h a s

F ir s t,

m easu re

th a n

oth e r

th e
th e

r e t a il

in d ic a to r

o f

is w id e l y

u sed

in

s e t t in g

a n d

th re e m a in

as

in

ch an ge
b y

th e

th e

th e

p u r c h a s in g

is

an d

p ow er

is

o f

th e ir

o f su ch

u sed

th e

as

is

th e r e fo r e

a d ju s tm e n t

or

a

k e y

o f

ch a se o r re n ta l a g reem en ts.
fo r

e s c a la t io n
(1 )

c o u p le d

a n a ly s t s

e ffe c tiv e n e s s ,

in

o f

a

in

th e

r e ta il,

co n stru cte d
b ro a d

p r ic e
ta in

w h ic h

p ro d u ct

g o

th e

in to

w h ic h

p r ic e

th ou g h

o f

th e

p e r io d ic
p u r­

(s o m e tim e s
on

w ages

u sed

th e

to

s a tis fa c to r y
(2 )

T h e

a cco u n t
d o lla r

o f

in

le a s e

a g reem en t;
or

p ow er.

or

n o t

th e

th e se

e s ta b lis h e d ,

a n d

th e

in

ch an ges

tra cts,

th e

P rod u cts
in d e x
in

a n d

s e m i­

o f

or

t im e .

a c t u a lly
th a t

co n ­
en ter

p r ic e

th e n

o f

u se

th e

b o th

le v e l.

p a r tie s

co m ­

o f

a

e le c tr ic
p r ic e

o f

th ese

in d e x — A ll

T h e

a g a in s t
a n y

co m ­

p e r io d ic a lly

oth er

F ood s.

A g a in , in

or

th e

lic e n s in g

base

m ost

tota l

w id e

b y

co n ­
C o m ­

th a n
use

is

b e

d e fin e d

in

term s

s e r v ic e s b o u g h t w it h

th e

o f

th e

o f

th e

ch an ges

in d iv id u a l c a s e ,

c o m m o d it ie s

an d

s a le s
th e
th e

o f

d o lla r .

c o m m o d it ie s — p u r c h a s in g

m an agers.

In

t o t a l in d e x ,

b u t

in d iv id u a l

B u yers

p r ic e

m ost

s e r ie s

o f c o m m o d it ie s

a m o u n ts w h ic h

o f

ra th er

are

th ese

th e

to

are

an d
is

in d e x e s

T h e

o n ly

in c id e n ta lly

o f gen eral a n d
u sed

o f p la n t

b y

in

T h e

som e

s p e c ific

b u d g e t m a k in g

a n d

in

in d u s tr y ;

e x p a n s io n

in v e n t o r ie s ; in

p rog ra m s;

e s t a b lis h in g

in d e x is a ls o

r e p la c e ­

u s e d in

L IF O

1

o r g a n iz a tio n s .

w h o le s a le

p r ic e

to

p r ic e

fo r

a ll

o f

in

ch an ges

U n it e d

p r im a r y
fo r

T h e

s e le c te d

n ot

b o th

th e

th e gen era l

c a r e fu lly

a n d
a n d

“ W h o le s a le ”
r e fe r s

to

s a le s

as
in

u sed

la r g e

in d e x

s p e c ific

in

m ea s­

ra tes

or

an d

g rou p s

d ir e c tio n
c la s s ifie d

m o d itie s , s p e c ific a tio n s , a n d

com ­

p r im a r y

o f p r ice m o v e ­

c o m m o d it ie s

ra te

in

in

T h e

an d

p u rp ose
m o n th ly

a n d

s o ld

d ir e c tio n

m a rk ets

in d iv id u a l

gen eral

s in g ly

S ta tes.

a n d

c o m m o d itie s .
a

a

c o n t in u o u s

ch an ges,

gen era l ra te

m en ts

th e

is

a

c o m m o d it ie s

u res

th e

in d e x

p r o v id e

m a rk ets

are

lis t

o f

ga ged

o f

co m ­

m a rk ets.
th e

lo ts ,

title

n o t

to

o f

th e

th is

in d e x

p r ic e s

p a id

o r r e c e iv e d b y w h o le s a le r s , d is t r ib u t o r s , o r jo b b e r s .
T h e

p r ic e

d a ta

a re th o s e w h ic h

u sed

in

a p p ly

a t

c o n s tr u c tin g

th is

p r im a r y m a r k e t

in d e x

le v e ls —

t h a t is , t h e fir s t i m p o r t a n t c o m m e r c i a l t r a n s a c t io n
fo r

each

th e
or

c o m m o d ity .

s e llin g

p r ic e s

p rod u cers,

or

M o s t

o f

th e

o f r e p r e s e n t a t iv e
p r ic e s

q u oted

q u o ta tio n s

are

m a n u fa c tu r e r s

o n

o r g a n iz e d

ex­

ch a n g es o r m a rk ets.
T h e

in d e x

m en ts

o f

d oes

r e ta il

(in c lu d in g

tu res

o f

or

rep rod u ced

oth er
o n

n ot

m easu re

th e

t r a n s a c t io n s ,

s e r v ic e s

c o n s tr u c tio n
c o m p o s ite

a

o f

ite m s

r e p e t it iv e

p r ic e

B u t

th e

p r ic e s

m a te r ia ls u s e d in

o f

fin is h e d
w h ic h

b a s e ),

c o n s tr u c tio n

p u b lis h in g — lu m b e r ,

b r ick s ,

w o r k , in k , p a p e r , e t c .— a r e
A ll

s a le s

o f

g ood s

p rod u cers

(e x c e p t

in t e r p la n t

tr a n s fe rs

1

L ast-in, first ou t.

th e

b y

th o se

ra w
a n d in

to

are

n ot

an d

an d

s e c u r i­
fin is h e d

p r in t in g a n d

in

s te e l,
th e

m ill-

in d e x .

m a n u fa c tu r e r s

s a le s

w it h in

fo r

stru c­

p r in tin g

stru ctu ra l

r e fle c te d
or

m o v e ­

t r a n s a c t io n s

p u b lis h in g , r e a l e s ta te , t r a n s p o r t a t io n , a n d

an d

e m p lo y e d .

ch eck

th e y p a y fo r g o o d s a n d




a g en ts

ca ses, it

g rou p

w h ic h
a b le

T h e

Concepts and Scope

t ie s .

T h e t h ir d m a in u s e o f t h e in d e x is b y b u y e r s a n d
s e lle r s

a c c o u n tin g

F a rm

th e in d e x m a y n o t b e e x a c t, s in c e p u r c h a s in g p o w e r
m u st

a p p r a is in g

b u s in e s s

or

gas

th e

C o m m o d it ie s

ta k in g

e x a m p le ,

p a ten t

a d ju s t e d

th e

o f

d e liv e r y

In

an d

G ov ern m en t

b y

tren d s.

n a tu ra l

in d e x .

P rocessed

p ro te cts

th e

is

th e

A ll

as

co n tra cts,

p a r tie s

m o d itie s — o r

or

c o n t in u o u s
su ch

in

in

cost

s h o w in g

in d u s tr ia l,

r o y a lty

h ow ever.

to m e a s u re th e d ir e c ­

ch an ge,

m easu re

m e n t co sts, etc.

s e r ie s

m ean s

p ow er

b u s in e s s ,
a

th e

b in a tio n ,

p e r io d

co n tra cts — fo r

fo r

s e r v ic e

In

a

a

r e v ie w , b o t h

p la n n in g

p rod u ced

m a te r ia ls

as

p u r c h a s in g

p ro p e rty ;

m o d ity

u sed

lo n g -te r m

lo n g -te r m
m e r cia l

th e

is

in d e x , a s

d e s ig n e d

b e

a d ju s t m e n t fo r p r ic e

in d e x

o f

lim it e d ,

t r e n d s , is a ls o w id e l y

in

a d ju s t

a n d

in t o t h e fin a l p r o d u c t b e in g e s c a la t e d , m a y p r o d u c e
a

th e

a c t u a l s e llin g p r ic e s .

c o n s tr u c tio n

th e

lo n g

s p e c ific

an d

s h a r p ly

a m ou n t

m easu re

p r ic e

a g a in s t

or

t h e B u r e a u ’s w h o le s a l e

it m a y

an d

is

in d e x

raw

m u st

o v e r a r e la tiv e ly

even

in d e x

are

o f

g e n e r a l in d e x lik e

in d e x ,

th e

lo n g -te r m

s ta tis tic s

p r ice s

tio n
to

p r ic e s

c a t e g o r ie s :

th e

in d u s tr ie s )

th e

m a te r ia ls

fin is h e d

m a in

o f

B u r e a u ’s

s p e c ific

ch an ges

fin is h e d

A

th e

in

le v e ls

T h e
o f

T h e u se s o f th e in d e x

tw o

seg m en ts

w ith

e a r n in g s
fo r

fa ll in t o

S p e c ific

p u rch ase

p r ic e

(e x c lu d in g

m a n y

th e ir

B u r e a u ’s m a in g o a l h a s b e e n

in d e x

m easu re

fa cto r

e s c a la t io n

o f

T h e u se o f th e in d e x fo r c h e c k in g a b s o lu te

im p o r ta n t

w h e r e t h e B u r e a u ’s C o n s u m e r P r ic e I n d e x is u s e d ) ,
and

in d e x .

p o lic ie s .

a

d o lla r

at

T h e

e c o n o m ic

m e a s u r in g

in d e x

on e

econ om y .

b u s in e s s

a d m in is tr a tio n

S econ d ,

it

m ov em en ts

83

I N D E X E S

m ov em en t

p r ic e

le v e l,

in

p o lic ie s ,

u ses:

o f

PRICE

th e

or

w h ic h

rep resen t

sam e

co m p a n y

84

T E C H N IQ U E S

OF

P R E P A R IN G

and are therefore only internal book transactions)
are included in the base weights. Thus, the
“ universe” or coverage is the total of primarymarket transactions in the United States. Each
commodity price series in the index, as a repre­
sentative of a class of prices, is assigned its own
weight (i. e., the direct sales of that individual
commodity) plus the weight of other commodities
not directly priced in the index, but known or
assumed to move similarly pricewise. The com­
modity universe includes imports because they
are sold in domestic markets; it also includes
transactions in exports up to the point at which
they leave the domestic market.
For certain commodities, such as ships and
railroad rolling stock, fabricated plastic products,
and some machinery which is largely custom-made,
it has not been possible for the Bureau to obtain
any direct measures of price movement. For
these, the Bureau obtained advice from industry
and other experts, and assigned their weight to
other commodities or groups of commodities in­
cluded in the index. In some instances, this
assignment was made to the most important raw
materials used in the manufacture of the unpriced
commodity; in others, to priced commodities
which have a similar manufacturing process.
In so doing, the Bureau decided that it is more
realistic to assign the weight for this type of prod­
uct specifically to priced commodities than to
assume that its price will move with the all­
commodities index which includes farm products
and foods. This last assumption would be implicit
in excluding the weight from the index structure.
The use of the index is such that if the Bureau
failed to make the specific imputation, the users
would do so implicitly whenever they used the
total index to measure the purchasing power of
the dollar in primary markets, or to compare
price movements with total production or similar
data.
New items are not included in the index until
they have become established both technologically
and in the market. During their first few years
of production, the changes in the prices of such
items may reflect product changes rather than
those price changes which the index is designed to
measure. In the developmental stage, too, the
sales volume of these new items is usually too
limited to influence the index appreciably.




M A JO R

BLS

S T A T IS T IC A L

S E R IE S

The index is intended to measure “ real” or
“ pure” price changes between two periods of time,
i. e., to measure price changes not influenced by
changes in quality, quantity, terms of delivery,
etc. Therefore, identical lists of commodities
must be used in the periods compared in order to
prevent the index from measuring changes in the
product-mix or “ nonprice” factors. To do this,
the commodities included in the index are defined
by precise specifications which incorporate the
principal price-determining characteristics of the
commodities and also the terms of sale from speci­
fied types of sellers to specified types of purchasers.
In general, the prices used in the index are
selected to conform with the concept of seller’s
net realization per unit of precise specification.
As far as possible, the commodities are priced at
the focal point of price making.
Machinery,
therefore, is priced f. o. b. factory; grains on the
organized exchanges; fresh produce at central
auction markets, etc. Net realization, as defined
by market practice, means actual sales of precisely
defined commodities, less normal discounts, in
approximately similar quantities to similar classes
of buyers— it does not mean an average realized
value per unit for a range of similar commodities.
In other words, net realization means the price for
a steel girder of precise size, shape, and quality to
a precise class of buyers at a precise shipping
point— not for a range of girders, buyers, or ship­
ping points.
List or nominal prices quoted by trade journals
and manufacturers have a proper place in the
structure of the index when they satisfy the above
criteria and reflect the industry’s customary
pricing practices. These types of prices satisfy the
purposes of the index since they indicate price
movements and relationships, even though they
are not always good measures of the absolute level
of prices.
Transportation costs are included in the index
only insofar as they are directly included in the
primary market price. Usually, prices are selected
f. o. b. production or central marketing points,
in order to avoid direct reflection of changes in
transportation costs in the index. Delivered prices
are included only when the customary practice of
the industry is to quote on this basis. Subsidies
and direct excise taxes are similarly excluded from
the index as far as possible; these are not considered

W H OLESALE

part of the “ price” as defined above for purposes
of the Bureau's index.
The classification system of the wholesale price
index is essentially based on products or com­
modities rather than on industry, source, or enduse. It does not exactly match either the Standard
Industrial Classification, the Standard Commodity
Classification, or the United Nations Commodity
Classification. However, regroupings of the cur­
rent classification can be made which will closely
approximate any of these three classifications.
The basic index is divided into 15 major groups and
8 8 subgroups. In addition, in the 1952 revision,
a third layer of classification called the “ product
class” was added. A product class approximates
a grouping of commodities produced by a single
industry or by related industries characterized by
similarity of raw materials or production processes.
The index is so designed, however, that it can
be readily recomputed in accordance with any
acceptable classification scheme.
Each com­
modity is a separate cell, and these cells can be
easily combined in any desired way. The general
approach of flexibility is carried throughout the
index, so that product classes, subgroups, and
groups can also be readily added.
The classification of the revised index is con­
siderably different from that of the former index
(which had only 1 0 groups and 50 subgroups). It
is closely related to and dictated by the needs of
the users of the data. Care should be taken in
making detailed comparisons between the former
and revised indexes to be certain that groups with
similar titles are actually comparable.
For
example, the former group for Metals and Metal
Products was divided into two new groups— ( 1 )
Metals and Metal Products, and (2 ) Machinery
and Allied Products— neither of which is compar­
able with the former group index.
Survey Methods and Estimating Procedures

Selection of Sources. The monthly index is based
upon a sample of commodities, specifications, re­
porters, and primary-market levels of transactions,
because it is neither necessary nor possible to
cover all specifications, producers, markets, and
buyers. Although a comparatively small list of
commodities might suffice for a reliable summary
all-items index, the Bureau has included some
2 ,0 0 0 separate commodities in response to the



P R IC E

IN D E X E S

85

demands of the users of the index. This permits
the development of reliable indexes for small sub­
divisions of the economy. For example, the prices
of one type of cotton and one type of raw wool
could yield general measures of the price move­
ments of plant and animal fibers for the all­
commodities index; the prices of abaca and other
minor fibers are necessary to support a subindex
for hard fibers, within the plant-and-animal-fibers
classification, as more detail is needed, especially
by business users of the index.
The commodities included in the index are not
chosen by probability sampling. The selections
are based upon knowledge of each industry and
its important products, and are made after con­
sultation with leading trade associations and man­
ufacturers within each field. In general, the
commodities included in the index are the most
important ones in each field (using Census and
similar data to determine importance); some,
although not important in terms of sales volume,
were selected since they appear to offer good
representation of price movements because of
particular industry or trade characteristics.
The particular specifications for each com­
modity were also selected on the basis of advice
from the industry and other expert sources. They
are designed to represent, in combination, the
various qualities, grades, levels of distribution,
markets, or producers of each commodity. In
some instances, a single specification is used by
the producers and sellers as a standard and all
others are quoted as differentials from the stand­
ard. Samples of such standards are
cotton,
or No. 2 hard winter wheat, or tin of a specific
purity. When there is no standard commodity,
the Bureau has made a judgment selection, tak­
ing into account that one requisite of a price
index is comparability from period to period. It
is thus essential to price a specification which is
precise or which does not change from period
to period.
Examples of specifications of commodities in­
cluded in the index are:
Pears, California, Bartletts (except early
Bartletts), Oregon Rose, U. S. No. 1 grade,
Oregon Nelis, U. S. No. 1 grade, Oregon Anjous, U. S. No. 1 and fancy grades, Wash­
ington an j ous, fancy and com bination
(extra and fancy) grades, average market
price, New Y ork auction m arket___________

Box

86

T E C H N IQ U E S O F P R E P A R IN G

B oys’ mackinaw, 3 5 % virgin wool, 6 5 % re­
processed wool, 32 oz./yd., junior boys’
sizes, manufacturer to retailer, f. o. b.
fa ctory ______________________________________ Each
Bails, standard, carbon steel, No. 1 O. H. with
8 % seconds arising, 39' std. lengths with
usual shorts, section No. 11525 (115 lbs. per
lineal yard), A S T M , A R E A or equivalent
spec., control cooled, base quantity, mill to
user, f. o. b. mill, extra for controlled
cooling____________________________________ 100 lbs.
End mill, high speed steel,
straight or
taper shank, manufacturer to users, f. o. b.
factory _______________________________________ Each

A detailed report describing all of the price­
making characteristics of the commodity is pre­
pared each time a reporter is added to the index.
A copy of this report (Form BLS 1810) is shown
on the following page.
In selecting the price reporters for each series,
informed judgment and industry advice were also
relied upon. If any organized exchange or market
exists for a product, the exchange or market price
is used. If a trade journal is generally recognized
as reliable by industry, and independent spot
checks by the Bureau confirm its accuracy, the
quotation is used. In other instances, such as for
most agricultural products and fish, prices for
individual specifications are officially collected and
published by other Government agencies. For
quotations from individual sellers (the Bureau
does not use prices from buyers) reporters are
selected by taking into account the distribution of
sellers by geographic region (where such distribu­
tion is important), by degree of integration, by
volume, by market and by degree of “ price leader­
sh ip /; Whenever possible, at least three reporters
are obtained for each specification. In the case of
a commodity such as brick which is locally pro­
duced for a small geographic market, reporters are
selected to represent all important markets. In
order to avoid disclosure of information collected
on a confidential basis, the Bureau does not
publish composite prices which are based on quota­
tions from less than three individual reporters.

Weights. The basic weights for the revised index
are total transactions as reported in the Census of
Manufactures for 1947. Interplant transfers are
excluded insofar as available data permit. Data
for agricultural and extractive industry products
were obtained from the Agriculture and Minerals
Yearbooks for 1947; import data cover the year



M A JO R

BLS

S T A T IS T IC A L

S E R IE S

1947, as reported by the U. S. Department of
Commerce. The data for 1947 were used to
establish the relationship among the groups, sub­
groups, and product classes. Within product
classes, however, the Bureau has attempted to
approximate the most typical postwar (up to 1950)
relationship between commodities within the same
class. Therefore, the best information available
is used for this purpose, and it does not necessarily
relate to 1947. For example, 1947 was a year in
which the production pattern for agricultural
machinery was seriously distorted by the prolonged
closing of one major plant and industry data for
1949 were used to determine the relative weights
within the product class. The relationship of
agricultural machinery to total agricultural equip­
ment and the relationship of each to construction
machinery, however, are based upon the 1947
experience. In moving from individual com­
modities to larger groupings, any distortions which
existed in 1947 become progressively less im­
portant. Moreover, any such distortions are
more than offset by the advantage of having the
general pattern of the index reflect a concrete time
period and set of conditions— mutually consistent,
marketwise and valuewise. Finally, 1947 is the
only postwar year for which complete censuses for
manufacturing, mining, and agriculture are avail­
able. The base value weights and their percentage
distribution among groups of commodities is
shown in table on page 91.

Calculation. The base period for the Bureau’s
revised wholesale price index is the average of
three years, 1947, 1948, and 1949, which conforms
to the postwar base period for Federal index
numbers, recommended by the Bureau of the
Budget.
The index was formerly computed by clerks
using standard desk calculating machines. In
the 1952 revision the increase in the number of
series, the expanded classification system, and
the expectation that many special index numbers
would have to be calculated (for example, for use
in deflating dollar values in interindustry analysis
techniques) led the Bureau to shift to punch card
techniques. Briefly, the procedure followed in
calculation is as follows:
( 1 ) All individual price reports (BLS Form 473)
are edited for changes in specifications, etc., and
then posted to summary records. Commodity

SPECIMEN OF SCHEDULE
CONFIDENTIAL

B L S 1810
(Rev. 1—
4-52)

U. S. DEPARTMENT OF LABOR

87
Budget Bureau No. 44-R602.2.
Approval expires 12-31-54.

Code No. ..

BUREAU OF LABOR STATISTICS
WASHINGTON 25 , D. C.

Com odity
m

COMMODITY PRICE INFORMATION SHEET
1. (a) Firm nam ___ ________ ____ -............... .
e
...............

(b) Plant or division nam .............................
e
Address .....................................................

(c Mfr. □
)

(Postal zone)

(Street)

(d) Other......................
(Specify)

(City and State)

( ) Information authorized by.........................
e

............................

Title .....................................

(/) Inform
ation furnished by .........................

............................

Title ......................................

............................

Title .....................................

(p) Schedule to be m
ailed to............................

(Informant)

Address ......................................................
(Street)

2. Description of commodity: Mfr’s ( ) Style No. ..
a
(c) M
odel No................................

( ) Grade
d

(Postal zone)

......................
..

(City and State)

(b) Lot No....................................

(e) Brand nam ...............................................
e

(/) Additional .................................................

.................................. ............................................... .......................... .

(0 ) C
heck sheet attached: Yes □

No □

3. (a) Price quoted is from - ................................................................... to ...................................................................
(Class of seller)

(Class of purchaser)

(b) Type of quotation: (1) List price....................................

(2) Actual transaction price ....................................

(3) Other (specify) ................................................................................................................................................
(c) Unit quoted ............................ ...............................................................................................................................

( ) Minimum and piaximum size of sale to which price applies ....................................................................................
d
(e) Current delivery period.............................................

(/) Normal delivery period..............................................

4. (a) Delivery terms (f. o. b., etc.).................................................................................................................................. .
(6) Principal m
eans of delivery (carrier) ........................................ ......... .................................................................
5. Type of package used,
6

(a) Crate □

(b) Carton □

() Bag □
c

( ) Other (specify) .................................. .....
d

. Refund for returnable containers? (Explain) ................................................. ............................................................




16-66771-1

88

S P E C IM E N

7.

O F SC H ED U LE

Discounts applicable to prices for the com odity described above w
m
hen sold to the class of purchaser listed in question
3 ()
a.

( ) Trade........... percent (6) Quantity .............. percent on purchases o f..... ........... ............. ..... ......................... .
a
( ) (1) Cash discount terms..................................... .
c

(2) Extent of use...............................................................

( ) Other discounts, allowances, or free deals (explain in detail) ........................................................................... d

8

.

(e) Circle any of these discounts w
hich have been deducted in arriving at the prices listed in question 13.
Duties or excise and other taxes applicable to prices listed under question 13 w
hich have:
(a) Been included in prices quoted (specify) ............................. ...... ............................... ........................... ..............

9.

(b) Not been included in prices quoted (specify) _______ _____________ ____ ___ _______ __________ ________ —
Usual m
ethod of effecting price changes:
(a) Change in list price □ (b) Change in discounts □
(c) Other (explain) ......................................................... ....... ..................... ................... ........................................

10. Channels of distribution, percentage of sales m
ade, discounts and other allow
ances by type of distributor for type of
com odity described in No. 2 above.
m
Other mfr.
(assembler)

Sales and
discounts

Wholesaler

Jobber

Distributor

Retailer

Consumer

Other (specify)

(a) Sales (percent)__

( ) Cash discount.......
b
(c) Trade discount......
(d) Quantity discount..
11. M
arket area served ................................................................... ...................................................................... ..........
12. Major products m
anufactured or distributed by this firm List products in descending order as percent of total sales
.
during the last typical year.
—%

(c) -.......................................

(e) .

...%

(d) ...................... ........................ %

(/) -

%

13. History of prices for com odity described in questions 2 to 5.
m
Date

Price

Remarks

Date

Price

!

14. BLS Representative ...




Date
U S GV R MN P ININ OF E IS—
. . OE N E T R T G F IC
66771-1

Remarks

S P E C IM E N
B L S 473
( R e v . 8 -1 5 -5 3 )

U.

PERMANENT OFFICE RECORD

B u d g e t B u rea u N o , 4 4 -R 1 9 4 A

Approval expires 1-31-56.

S. DEPARTMENT OF LABOR

BUREAU OF LABOR STATISTICS
WASHINGTON 25 . D. C.

K d r t r po ply
in ly eun r mt
1.

89

O F SC H ED U LE

C O N F ID E N T IA L

Code No.................. ...... ........... —
INFORM ATION FOR WHOLESALE
PRICE INDEX

F ir m :

1 9 5 4 -1 9 5 5

2 . A r t i c l e :'

3 . B a s is

4.

o p q u o t a t io n :

Trade.............................................................................. Cash.............................................................
Other allow
ances (explain).........................................................................................................................................

D is c o u n t s :

5. Have

t h e d is c o u n t s b e e n d e d u c t e d fr o m t h e p r ic e s sh o w n b e l o w

Trade: Yes □
6.

No □

Cash: Yes □

M a n u f a c t u r e r 's e x c i s e t a x :

7 . P r ic e

a s f u r n is h e d f o r

No □

........ percent or $..............

.................................................................... :

?

Other: Yes □

No □

Has this tax been included in prices below Yes I I No I 1
?

$ ...............................

(D a te )

8

. P
lease enter below prices as of the dates indicated
19 54

Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.

P R IC E

D A TE

O F P R IC E C H A N G E
(IF A N Y ) »

1955

Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.

12
16
16
13
11
15
13
17
14
12
16
14

D A TE

P R IC E

O F P R IC E C H A N G E
(IF A N Y ) *

11
15
15
12
10
14
12
16
13
1
1
15
13

9. If there have been any changes in discounts or specification since the last report please enter appropriate note below:5
D IS C O U N T S

D A TE OF
CH A N G E

T Y P E OF
D IS C O U N T

S P E C IF IC A T IO N

A M O U N T OF
N E W D IS C O U N T

D A TE OF
C H A N G E

L IS T

N A TU R E OF
D E T A IL E D

C H A N G E O R IN D IC A T E W H E R E
I N F O R M A T I O N IS G I V E N

J I f m o r e t h a n o n e p r i c e c h a n g e o c c u r r e d d u r i n g m o n t h , p le a s e s h o w a ll c h a n g e s a s a f o o t n o t e o n r e v e r s e s id e .
* P le a s e s h o w c h a n g e in a p p r o p r i a t e c o lu m n , o r b y lin in g o u t o ld in fo r m a t io n a n d in s e r tin g n e w in fo r m a t io n in it e m s 2 a n d /o r 3 a n d /o r 4 a b o v e , o r o n r e v e r s e s id e , o r o n
s e p a r a t e s h e e t o f p a p e r , w h i c h e v e r is m o s t c o n v e n i e n t .

please Make Any Other Explanatory Remarks on the Reverse Side
304523—55----- 7



le—

90

T E C H N IQ U E S

OF

P R E P A R IN G

specialists are informed, in accordance with a
progressive time-schedule, of missing reports and
they are responsible for supplying data by specified
dates.
(2 ) An average price is computed for each
commodity, taking account of changes in speci­
fications, numbers of reporters, etc.
(3 ) These average prices are then turned over
to the Machine Tabulation Unit. The first
major tabulation results in a listing, by com­
modity, of absolute prices and the percent changes
in prices over the month. This listing is reviewed
by the commodity specialists with particular
attention to relatively large changes.
(4) Chain relatives [i. e., (current monthly
percent changed-1 0 0 ) times previous index] are
then computed for each commodity. These
relatives are weighted, and the aggregates are
totaled by product classes, subgroups, groups,
special combinations, and all commodities. The
aggregates are then converted back to indexes.
(5 ) The machine tabulation system also pre­
pares a detailed report which is photographed for
publication with a minimum of typing or other
clerical assistance.
Each month a small percentage of the prices
used in constructing the index is not available.
The Bureau has a specific system both to minimize
the effect of the missing prices and to fill in the
gaps. Inasmuch as the initial index is preliminary
and subject to revision, estimates can be used in
the first month when necessary. Standard esti­
mating procedures have been established for each
commodity, to be applied in the first month a quo­
tation is unavailable. In general, in the case of
commodities where there is more than one re­
porter, the average of the others is used. If there
is only a single reporter for the commodity, or all
reporters are missing, the price is estimated to
move like that of another commodity or to be
unchanged from the previous month. The deci­
sion as to which course to follow is based upon
the price history of the commodity.
When an estimated price is still unavailable at
the time of mailing of schedules for the following
month, a duplicate schedule is sent out, and the
commodity specialist is responsible for checking
on the reporter, obtaining a new reporter or
specification, or supplying an estimated price.
A missing quotation cannot be estimated for
more than 3 months; after that the series is




M A JO R

BLS

S T A T IS T IC A L

S E R IE S

dropped from the index. This procedure is not
applied to commodities which are regularly mar­
keted in only part of the year, because the price
can be estimated for the entire “ off-season,”
regardless of length.

Publication and Revisions. In the first month of
publication the monthly indexes are preliminary
and subject to revision. In the following month
all available revisions and substitutions of actual
for estimated prices are incorporated. The in­
dexes published at this time are final. Any revi­
sions which come to light after the final index has
been published are fully incorporated in the in­
dexes then being computed, but previous indexes
are not adjusted because of their use in contracts.
The individual commodity price records of the
Bureau will show the revisions as of the actual
date to which they apply, and are furnished to
users on a corrected or revised basis. If such
pi ice histories are released in answer to a specific
request, the correct data are given out, but carry
footnotes indicating when the revision was actually
incorporated in the index.

The Weekly Index. The weekly index represents
the Bureau’s best estimate of what the compre­
hensive index would be if all 5,000 individual quo­
tations for the approximately 2 ,0 0 0 series were
collected each week, and if the complete index
was calculated. The weekly index is based on
actual prices for fewer than 2 0 0 commodities and
estimated prices for all others. It is calculated as
a percent change from the latest monthly index
and converted to index form for publication. As
soon as a comprehensive index is published for
any month, all weekly indexes falling in that month
are replaced by the monthly index. No attempt
is made to maintain a continuous series by correct­
ing these indexes.
The index is a chain of relatives
each calculated by the Laspeyres formula. This

Index Formula.

2 p Q \
(2 pl
~Q°)’where Pi and P 0 are current

and base period commodity prices and Q0is the base
period quantity is one widely used in the con­
struction of current index numbers. In theory,
most authorities agree that the ideal formula for
determining a wholesale price index would be one
in which the weights represent the conditions

W H OLESALE

P R IC E

existing in both of the periods which are com­
pared. In practice, however, there is no practical
method of obtaining and using data which reflect
the current quantity relationships; it is generally
accepted that use of the Laspeyres indexes, chained
together with fairly frequent revisions of the

91

IN D E X E S

weights, will give a satisfactory approximation of
the ideal situation.
In actual operation, the necessity for making
allowance for changing specifications of individ­
ual commodities raises certain difficulties. Strict
observance of the Laspeyres formula, using quan-

R v s d W o e a e P i eI d x
eie hlsl rc n e
B s w i h sf rg o p and s b r u s
a e egt o r u s
ugop
[1947-49=100]
R elative im­
portance

T otal

W ith ­
in
group

$6,961

3.4

100.0

889
124
1, 797
581
3,409
161

.4
,i
.9
.3
1.6
.1

12.8
1.8
25.8
8 .3
49.0
2.3

M etals and m etal products________________________

23,814

11.7

100.0

Iron and steel____________________________________
Nonferrous m etals_______________________________
M etal containers_________________ _____________
"FTarHwarp.
Plum bing equipm ent____________________________
H eating equipm ent______________________________
Fabricated structural products___________________
Fabricated nonstructural products____ __________

10,420
4,883
819
1,001
366
1,029
2,124
3,172

5.1
2.4
.4
.5
.2
.5
1.0
1.6

43.8
20.5
3.4
4.2
1.6
4.3
8 .9
13.3

M achinery and m otive products___________________

28,688

14.1

100.0

Agricultural m achinery____________ _ __________
Construction m a c h in e r y .____ _____________ ____
M etal working m achinery_______________________
Gpnpral pnrpnsp. map.hi n firy
Miscellaneous m achinery________________________
Electrical m achinery____________________________
M otor vehicles________ _________________________
_____ _________ _ _
___
Assigned to group

1,653
1,004
1,704
2,941
1,’ 945
2,586
6, 535
10,320

1.3
.8
1.3
2 .3
1. 5
2 .0
5.0

9.0
5.5
9.3
16.0
10.6
14.1
35.5

Furniture and household durables_________________

7,862

3.9

100.0

16. 0
22.8
44.1
17.1

Household furniture_______ _____________________
Cnmrnprp.ial furniture
Floor covering-______________ __________________
____________ ________________
Appliances____
Radio and television. _. . . . ______ _________
..
Other_____________________________ ____________

1,865
594
716
2,194
896
1, 597

.9
.3
.4
1.1
.4
.8

23.7
7. 6
9.1
27.9
11.4
20.3

8.7

100.0

N onm etallic m inerals____________________________ .

2, 790

1.4

100.0

1.5
.1
.7
1.9
4.5

17.5
1.1
8.2
22.4
50.8

F la t glass__________ ______ ______________________
Concrete ingredients_____________________ ______
Concrete products_______________________________
Structural clay prod u cts.-------- ------------------------Gypsum products_______________ . . .
Prepared asphalt ro o fin g ________________________
Other_________ _________________________________

265
950
413
502
136
352
172

.1
.5
.2
.2
.1
.2
.1

9.5
34.0
14.8
18.0
4.9
12.6
6.2

Tobacco m anufactures and bottled beverages______

4, 776

2.4

100.0

Cigarettes_______________________________________
Cigars___________________________________________
Other tobacco products_____ ____ _________ . . . .
Alcoholic beverages---------------------------------------------Nonalcoholic beverages__________________________

1,143
313
135
2,433
752

.6
.1
.1
1.2
.4

23.9
6.6
2.8
50.9
15.8

T otal

All com m odities_____________________

$205,940

100.0

F arm products______________________

30,089

14.6

100.0

Fresh and dried produce___________
G rains_____________________________
Livestock and po u ltry -------- ----------P la n t and anim al fibers____________
Fluid m ilk ________________________
Eggs----------------------------------------------H ay and seeds-------------------------------O ther______________________________

2,690
4,395
10, 712
2, 745
4, 095
1,855
1,737
1,860

1.3
2.1
5.2
1.3
2.0
.9
.9
.9

8.9
14.6
35.6
9.1
13.6
6.2
5.8
6.2

Processed foods______________________

31,807

15.4

100.0

Cereal and bakery products...... .........
M eats, poultry, fish_______________
D airy products------------------------------Canned, frozen fruit and vegetables.
Sugar and confectionery___________
Packaged beverage m aterials_______
F a ts and oils______________________
O ther_________________ _____ ______

5,583
9,256
6, 974
1, 750
3,445
946
2,154
1,699

2.7
4.5
3.4
.8
1.7
.5
1.0
.8

17.6
29.1
21.9
5.5
10.8
3.0
6.8
5.3

T extiles and apparel_______ _________

19, 771

9.8

100.0

Cotton products___________________
W ool products_____________________
Sy n th etics_________________________
Silk products______________________
Apparel___________________________
O ther______________________________

5, 534
2,212
2, 361
28
9,199
437

2.7
1.1
1.2
0)
4.6
.2

28.0
11.2
11.9
.1
46.6
2.2

H ides, skins, and leather products___

4,235

2.1

100.0

Hides and skins___________________
Leath er____ ___________ ___________
Footw ear__________________________
O ther______________________________

678
967
1,869
721

.3
.5
.9
.4

F u el, power, light m aterials__________

17, 556

C oal_______________________________
C oke______________________________
G as________________________________
E le ctricity ________________ - _______
Petroleum and products___________

3,063
193
1,440
3, 933
8,927

Chem icals and products_____________

Group and subgroup

W ith ­
in
group

10,754

5.3

100.0

4, 009
1, 754
1,594
553
404
388
2,052

1.9
.9
.8
.3
.2
.2
1.0

37.3
16.3
14.8
5.1
3.8
3.6
19.1

R u bber and products-------------------------

3,185

1.6

100.0

Crude ru bb er______________________
T ire s ______________________________
Other______________ ____ ___ _____ _

594
1,475
1,116

.3
.7
.6

18.7
46.3
35.0

Lum ber and wood products__________

5,363

2.6

100.0

4,329
670
364

2.1
.3
.2

80. 7
12.5
6.8

1 Less than 0.05 percent




Group and subgroup

Pulp, paper, and products - _

Industrial chem icals-----------------------P a in t and m aterials________________
Drugs, pharm aceuticals, cosm etics..
F a ts and oils, ined ible_____________
M ixed fertilizer____________________
Fertilizer m aterials________________
Other________ ____ ________________

L u m ber___________________________
M illw ork__________________________
Plyw ood___________________________1

Relative im ­
portance

Value
(m il­
lions of
dollars)

Value
(mil­
lions of
dollars)

__ __________

W oodpulp------------------------------- ---------------------------"Wast.fi papp.r
Pap er______ . ____ _____ ________________________
Paperboard___ _____ _______ . ____ . . ____________
Converted paper products_______________________
Building paper__________________________________

..

6,096

3.0

100.0

Toys and sporting goods_______ ________________
M anufacturing anim al feed____ __ _________ ____
Notions and accessories_____________________ * ____
Jew elry and photo equipm ent_________ __________
Other___________________________________ ________

764
3,152
181
1,290
709

.4
1.6
.1
.6
.3

12.5
51.7
3.0
21.2
11.6

All excluding farm and food total _
__________
Assigned to all excluding farm and food
______

144,044
2,193

70.0

M iscellaneous._________________________ _______

92

T E C H N I Q U E S

OF

P R E P A R I N G

M A J O R

titv weights, w o u l d require adjustments in both

BLS

STATISTICAL

SERIES

Limitations

prices a n d quantities to prevent index distortion
w h e n e v e r there is a change in the specification of an
individual c o m m o d i t y .

To

avoid this constant

S o m e limitations o n the use of the wholesale
price index h a v e already been mentioned.

The

adjustment process the B u r e a u uses a modifica­

index is designed to m e a s u r e change, not abso­

tion of the formula, in w h i c h the individual c o m ­

lute levels of prices, a n d the quotations used in

m o d i t y indexes are c o m p u t e d b y chaining together

the

the m o n t h - t o - m o n t h price relatives a n d weighting

necessarily me a s u r e the average dollars-and-cents

these b y the value of sales, rather than using abso­

levels of prices.

lute prices weighted b y physical quantities related

of the general purchasing p o w e r of the dollar— it

to the base period.

does not include prices at retail, prices for securi­

T h e net result is equivalent

index

for

individual

commodities

do

not

T h e index is not a true me a s u r e

to using the Laspeyres formula a n d adjusting the

ties, real estate, services, construction, or trans­

base quantities w h e n e v e r a price change results

portation.

solely f rom a change in specification.

levels, the index, while a g o o d approximation, is

This procedure has certain advantages in cal­

E v e n at wholesale or p rimary m a r k e t

not a perfect m e asure— since it is based o n

a

culation, not only because ready substitution of

relatively small sample of the m a n y commodities

one c o m m o d i t y for another can be m a d e without

w h i c h flow through these markets.

introducing adjustment factors to eliminate dis­

there are s o m e real price changes w h i c h the B u r e a u

In addition,

tortions in level, but also because it permits ready

cannot m e a s u r e — for example, s o m e i m p r o v e m e n t s

substitution of a n e w weighting diagram a n d lends

in quality, hidden discounts, differences in deliv­

itself to automatic calculation with built-in m e ­

ery schedules, etc.
The

chanical checks.
T h e prices used in the indexes f r o m 1947 through

index has not been

designed for use in

measuring margins b e tween primary markets a n d

1951 are the simple arithmetic averages of the 4

other distributive levels.

or 5 we e k s in each m o n t h ; each weekly price is

sons of the wholesale a n d c o n s u m e r price indexes

Thus, direct comp a r i ­

that w h i c h prevailed o n a specific d a y of the week.

cannot be used to estimate or evaluate margins.

Beginning in 1952, the prices used in the indexes

T h e index does not meas u r e prices paid b y indus­

are those w h i c h prevail o n a particular d a y of the

trial consumers since it normally excludes trans­

m o n t h — in m o s t cases T u e s d a y of the w e e k con­

portation costs a n d similar factors affecting final

taining the 15th.

A

careful comparison of the

m o v e m e n t of an index based o n 1-day-a-week with

prices.

Finally, the index should not be used to

forecast m o v e m e n t s of the C o n s u m e r Price Index,

a n index based o n 1-day-a-month prices revealed

particularly over the short run.

no

since

nents of the wholesale price index never enter

a n y of the m i n o r differences w h i c h mi g h t occur

retail markets (for example, m a c h i n e r y ) ;similarly,

are not systematically biased in one direction or

m a n y c o m p o n e n t s of the C o n s u m e r Price Index

significant differences.1

Furthermore,

Many

compo­

another, n o cumulative error arises in the index

(such as services a n d rents) are not covered b y the

f r o m the choice of a single pricing date.

wholesale price index.

1T h e actual tests of the differences between indexes calculated on 1-day-aweek and 1-day-a-month prices covered the period 1947-51, a period of great
price m ovem ent and variability. One test was based on an unweighted
average of 12 very sensitive commodities, the other on the complete index.

Reliability

T h e first test (12 sensitive commodities), for two separate 12-month periods,
indicated th a t the direction of movement in the indexes was identical in all
but 2 m onths. T h e degree of movement between successive m onths varied
as m uch as 50 percent, but these differences tended to be offsetting. F o r
example, if one of the indexes dropped excessively from January to February,
the February to M arch decline was smaller in this index than in the other so
that the Jan u ary-M arch changes were approximately equal.
In the second test, which covered 59 m onths (January 1947 through N ovem ­
ber 1951) there were only 2 instances in wnich the index for all commodities,
based on once-a-month prices, differed by as m uch as 2 percent from the index
based on 1-day-a-week prices. In both these cases, the differences were bal­
anced out w ithin the next 2 m onths. In the case of the index for all com­
modities other than farm products and foods, the two indexes were never
as m uch as 1 percent apart.




T h e wholesale price index is based o n a sample
of commodities w h i c h h a v e been purposively se­
lected rather than chosen b y r a n d o m methods.
T h e standard statistical techniques for evaluating
the error in a sample are, therefore, not applicable.
T h e B u r e a u is currently experimenting with sev­
eral approaches to the p r o b l e m of measuring the
reliability of this index, but results of this inves­
tigation will not be available for s o m e time.

How­

ever, experience with the index over a long period
of time suggests that the index b e c o m e s increas­

W H O L E S A L E

PRICE

93

I N D E X E S

ingly reliable as the group of prices covered is

various commodities w h i c h are important in in­

larger.

ternational trade.

T h a t is, in m o s t cases the reliability of a

subgroup is greater than that of a product class,

The

specifications of all the commodities in­

a group is m o r e reliable than a subgroup, a n d the

cluded in the former index were reviewed in 1951

all commodities index is m o r e reliable than a group

a n d 1952 in light of m a r k e t developments since

index.

W o r l d W a r II, a n d in s o m e cases they were m o d i ­
fied at that time.

The Daily Index

Six of the commodities included

in the former index h a v e bee n excluded because
T h e B u r e a u of L a b o r Statistics, as part of its

they either are n o longer traded in large e n o u g h

general p r o g r a m for maintaining the currency of

v o l u m e to permit accurate daily pricing, or their

its various price indexes, revised the daily index

prices tend to be stable over long periods of time,

of commodities traded o n spot markets a n d or­

or because they react to forces w h i c h reflect spe­

ganized exchanges in the a u t u m n of 1952.

The

base for the revised index is the average for the
years 1947, 1948, a n d 1949; the index formerly w a s
based o n A u g u s t 1939.

T h e revised daily index

cialized conditions a n d not broad economic c o n ­
ditions.
The

daily index is a n u n weighted geometric

m e a n of the individual c o m m o d i t y price relatives,

is based o n the prices of 22 commodities a n d re­

i e., of the ratios of the current prices to the base
.

places the index based o n 28 commodities, w h i c h

period prices.

had

a m o n g the commodities h a v e n o distorting effect

been

published since Januar}^

1940.

The

This m e a n s that price differentials

daily index is designed to m e a s u r e the price trend

upon

a n d m o v e m e n t of these commodities which, as a

price change in tallow w h i c h is quoted in cents-

the index numbers.

Thus,

a

10 percent

result of daily trading in fairly large v o l u m e of

per-pound has the s a m e effect as a n equal percent

standardized qualities, are particularly sensitive

change in the price of steers which is quoted in

to factors affecting spot markets a n d trade’ esti­
s

dollars per 100 pounds.

mat e s of current a n d future economic forces a n d
T h e revised index is not a continuation of the

change for rosin, a comparatively unimportant

It is a separate a n d distinct

co m m o d i t y , has as m u c h effect as a n equal per­

A comparison of the t w o indexes over the

centage m o v e m e n t in the price of a very important

earlier daily index.
index.

H o w e v e r , the fact that each of the commodities
in this index has equal weight m e a n s that a price

conditions.

past several years s h o w s that the amplitude of

c o m m o d i t y such as wheat, cotton, or steel scrap.

the fluctuations in the revised index is greater

T h e basic reason w h y n o weights are assigned to
the individual commodities

than in the former index.
T h e commodities included in the revised daily

is that

each

com­

m o d i t y tends to reflect the appraisal b y experi­

index are in m o s t cases either r a w materials or

enced traders of the current a n d future economic

commodities very close to the initial production

forces affecting the organized markets, w h i c h is a

stage.

principal purpose for the index.

Highly fabricated commodities w h i c h h a v e

relatively large fixed costs reflected in their prices
are not included.

In order to avoid having the

In maintaining the index over time, it occasion­
ally b e c o m e s necessary to change or mo d i f y c o m ­

index d o m i n a t e d b y the influence of specific agri­

modity

cultural conditions or a seasonal pattern for a few

fications are handled

so

r a w commodities, certain commodities are priced

price

reflected

at the semifabricated stage a n d s o m e agricultural

substitution of commodities or specifications of

products h a v e not been included.

a c o m m o d i t y does not in itself affect the level of

T h e exclusion

specifications.

movements

the
the

commodities a n d the careful selection of c o m m o d i ­
and

organized exchanges

will be

actual
index;

indicated in the daily reports o n the index.

o p e n markets

substitutions

in

the

ing o n

All

changes in speci­

that only

of fabricated products a n d m o s t semifabricated
ties w h i c h are particularly sensitive to forces act­

index.

are

The s e

properly

In addition to the index based u p o n the prices
of all 22 commodities, indexes are calculated a n d

contribute to the greater sensitivity of this index

published according to the unique classification

c o m p a r e d with the B u r e a u ’ Wholesale Price Index.
s

of each c o m m o d i t y as either a R a w

T h e influence of s o m e international markets u p o n

c o m m o d i t y or as a Foodstuffs c o m m o d i t y .

the e c o n o m y is also reflected b}^ the inclusion of

are also four special group




Industrial
Th e r e

indexes— Livestock

94

T E C H N I Q U E S

O F

P R E P A R I N G

M A J O R

a n d Products, Metals, Textiles a n d Fibers, a n d
Fats a n d Oils.

N o t all commodities fall into one

of these four groupings.

N o r is each grouping

mutually exclusive; lard, for instance, is included
in both

the Livestock a n d

indexes.

the Fats

and

Oils

T h e s e group indexes are based o n the

prices for relatively few

commodities,

selected

because of their extreme price sensitivity; conse­

they are in no way comparable t corre­
o
sponding groups in t e comprehensive Wholesale
h
Price Index.

quently,

Because of interest that has developed through
the years in the actual prices for commodities
in the daily index, prices for five of the commodities
(barley, coffee, copper ingot, lead, a n d shellac)
included in the former index but not included in
the revised index are published daily.

However,

the prices for these commodities are not used
in the computation of either the

All Commodities

index or a n y of the special group indexes.

The

following tabulation lists the commodities

and

specifications for the daily index.
(1) Com m odities included in index:

Specification

M
arket

4 0 ", 10 ounce yard__
Grade A, 92 score____
Accra
N o. 1 heavy copper
and wire, refiners’
buying price.
N o. 3 yellow .
15/16" middling staple
Crude, Southeast and
Valley.
Cow, light native pack­
ers.
G ood to choice, 200220 pounds.

New York.
Chicago.
New Y ork.
New York.

Com odity
m
Burlap, y d ___
Butter, lb ----C ocoa beans, lb__
Copper scrap, lb _.

Corn, bu__
Cotton, lb
Cottonseed oil, lb_
Hides, lb__
Hogs, 100 lb ____




Chicago.
10 markets.
Memphis.
Chicago.
Chicago.

BLS

STATISTICAL

Com odity
m

SERIES

Specification

M
arket

Prime steam, in tierces Chicago.
Battery
plates, flat Chicago.
price, smelters.
Print cloth, y d ___ 3 9 ", 80 x 80 count, 4 New Y ork.
y d s./lb.; average of
spot and forward.
New Y ork.
W G grade.
Rosin, lb
P l a n t a t i o n r i b b e d New York.
Rubber, lb_
smoked sheets.
Steel scrap, ton__ No. 1 heavy melting, Chicago.
consumers
buying
price.
G ood, 900-1100 pounds Chicago.
Steers, 100 lb -----Raw, 96°, duty paid__ New York.
Sugar, 100 lb ____
Packers prime inedible
Chicago.
Tallow, lb _
Grade A, prom pt de­ New York.
Tin, lb ___________
livery.
Average of:
Wheat, bu _
N o. 2 hard w in te r-_ Kansas City.
N o. 1 dark northern Minneapolis.
spring.
New Y ork.
W ool tops, lb ____
Spot m arket.
New Y ork.
Prime western, p ig ___
Zinc, lb_ _
(2) Com modities for which prices are published but not
included in the index com putation:
Barley, bu.— G ood malting, Minneapolis.
Coffee, lb.— Santos N o. 4, New York.
Copper, lb.— Electrolytic ingot, New York.
Lead, lb.— Desilverized pig, New York.
Shellac, lb.— T N grade, New York.
(3) Special groupings:
(a) Foodstuffs— butter, cocoa beans, com , cottonseed
oil, hogs, lard, steers, sugar, and wheat.
(b) Raw industrials— burlap, copper scrap, cotton,
hides, lead scrap, print cloth, rosin, rubber, steel scrap,
tallow, tin, w ool tops, and zinc.
(c) Livestock and products— hides, hogs, lard, steers,
and tallow.
(d) Metals— copper scrap, lead scrap, steel scrap, tin,
and zinc.
(e) Textiles and fibers— burlap, cotton, print cloth, and
wool tops.
(f) Fats and oils— butter, cottonseed oil, lard, and tallow.

Lard, lb
Lead scrap, lb ___

W H O L E S A L E

PRICE

95

I N D E X E S

BIBLIOGRAPHY

A

Description of t e Revised Wholesale Price Index.
h

Monthly

Labor

Review, Feb r u a r y 1952, pp. 180-187; reprinted as Serial N o . R. 2067.

A Closer Look at Prices.

B y E d g a r I. Eaton.

{In D u n ’ Review,
s

The Making and Using of Index Numbers.

By

W.

April 1952.)

C. Mitchell.

D e p a r t m e n t of Labor, B u r e a u of L a b o r Statistics.

U.

(Bull. 656.)

S.

(Re­

print f r o m Bull. 284.)

Index Numbers.

B y B r u c e D . Mud g e t t .

Government S a i t c for Business Use.
ttsis

J o h n Wiley, N e w York, 1951.

B y P. M . H a u s e r & W . R. Leonard.

J o h n Wiley, N e w York, 1946.

Price Quantity Interactions in Business Cycles.

B y F. C. Mills.

National

B u r e a u of E c o n o m i c Research Publications, 1946.

Business Cycles: Problem and Setting.

B y W . C. Mitchell.

National B u r e a u

of E c o n o m i c Research Publications, 1927.

Prices in Recession and Recovery.

By

F. C. Mills.

National B u r e a u of

E c o n o m i c Research Publications, 1936.

Price Behavior and Business Policy.
mittee, M o n o g r a p h #1, 1940.




T e m p o r a r y National E c o n o m i c C o m ­

Chapter 11. Studies of Occupational Wages and Supplementary Benefits*
Background and Uses

m o n t h l y estimates of average hours a n d earnings,
b y industry, derived f r o m a regular group of re­

Surveys of w a g e s h a v e bee n m a d e b y the B u r e a u
of L a b o r Statistics since 1888.
earlier surveys were

T h e bulk of the

in selected manufacturing

porters w h o furnish information o n total e m p l o y ­
ment,

man-hours

of work,

and

payrolls.

The

earnings figures include various forms of p r e m i u m

industries, such as steel, meatpacking, a n d cotton

pay.

textiles.

provided, nor is a n y distribution of individual

T h e primary result w a s information o n

No

data

for individual

occupations

are

hours a n d earnings of workers in selected pr o d u c ­

employee’
s

tion or plant occupations, generally o n a nation­

supplementary benefits as such are obtained.

wide basis s u pplemented b y broad regional t abu­
lations.

earnings

presented.

No

data

In the occupational w a g e surveys, the principal
interest centers o n the straight-time earnings or

In recent years, a n effort has been m a d e

to

rates of pay,

excluding

shift differentials

provide industry w a g e information o n a narrower

p r e m i u m overtime, for specific occupations.

geographic basis.

most

Increased emphasis has been

approximation to the hourly rate of pay.

a n d the collection of information has been broad­

case of professional a n d

to give m u c h

more

and
In

cases, this approach provides the closest

placed o n collecting data for office clerical workers,
ened

on

In the

office clerical workers,

attention to supple­

the primary data are standard w e e k l y hours and

m e n t a r y benefits such as insurance a n d pension

salaries, rather than actual hours a n d earnings.

plans, paid vacations, paid holidays, a n d

shift

differentials.
A n e w type of survey has also b een developed,
in w h i c h the principal emphasis is o n the area
rather than o n the industry being studied.
community

Production

bonuses,

commissions,

and

cost-of-

living bonuses are counted as earnings, but non-

wage

surveys

are

The s e

concerned

with

w a g e s of occupations c o m m o n to a wide variety
of industries.

production

bonus

payments

(e. g.,

Christmas

payments) are not.
N o attempt is m a d e to evaluate meals or other
payments

in kind, nor does the calculation of

earnings take account of employer expenses for
vacation pay, insurance, pension plans, or a n y

T h e findings of all of these studies are used in
w a g e determination through collective bargaining
or employer personnel action.

T h e y are also used

for comparison of w a g e levels in various parts of

other fringe benefits.

Thus, the earnings figures

represent cash w a g e s

(before tax a n d social se­

curity deductions) after the exclusion of p r e m i u m
payments.

the country, a n d b y public agencies in m a k i n g
In w a g e surveys, the rate of p a y is obtained for
w a g e determinations for employees w h o are paid
each w o rker individually, m a k i n g it possible to
o n the basis of prevailing rates.

In addition, the}7
calculate a distribution of earnings as well as an

provide necessary information for formulation of
public policy o n
legislation,

and

wages,
for

the

as in m i n i m u m
analysis

of

wage

trends

in

average.
The

occupational classifications surveyed

carefully defined in a d v a n c e of the survey.

economic developments.

objective is to obtain m a x i m u m

are
The

correspondence

b e t w e e n the duties of the employee, an d the d e ­

Concepts

scriptions provided b y the Bureau, regardless of
Occupational
guished
Hours

wage

carefully
and

surveys

from

Earnings

the

must

be

Bureau’
s

Series.

The

distin­

monthly

latter

are

^Prepared by Samuel E . Cohen of the D ivision of Wages and Industrial
Relations.
96




the plant job title.

W a g e s of workers not falling

within one of the selected occupations m a y
collected in s o m e

surveys

in order

be

to develop

overall averages a n d distributions, regardless of
occupation.

STUDIES

O F

O C C U P A T I O N A L

W A G E S

Scope of Survey

A N D

S U P P L E M E N T A R Y

wide surveys.

97

B E N EFITS

T h e principal advantages of the

localized industry surveys are comparatively low
Before collection w o r k is started in a n y survey,

collection costs a n d speed of publication.

the scope of the study is rigorously defined as to

A r e a studies are generally limited to w a g e data

industry, geographic a n d occupational coverage,

for a selected list of occupations a n d information o n

size of establishments to be included, a n d payroll

related benefits— generally for a standard m e t r o ­

period to be covered.

politan area.

T w o distinct types of w a g e surveys— c o m m u n i t y
a n d industry— are m a d e .

In nationwide studies, earnings data

are also obtained for workers in other occupations
for presentation of data o n the entire w a g e struc­

C o m m u n i t y w a g e studies are designed to provide

ture.

In addition to data for the N a t i o n as a

earnings information o n a n area basis for oc c u p a ­

whole, regional a n d area data m a y

tions c o m m o n to a variety of manufacturing a n d

sented for s o m e industries.

nonmanufacturing industries.

standard metropolitan area, a State, a group of

T h e “c o m m u n i t y ”

covered is generally a standard metropolitan area.

also be pre­

T h e area m a y be a

counties, etc.

Industry divisions included are (1) manufacturing,
(2)

transportation

(excluding railroads),

com­

Survey Methods and Estimating Procedure

munication, a n d other public utilities, (3) w h o l e ­
sale trade, (4) retail trade, (5) finance, insurance,

Planning.

a n d real estate, a n d (6) a selected group of service

sultations are held directly with appropriate m a n ­

industries.

W i t h respect to specific studies, c o n ­

Separate data are provided wherever

agement, labor, a n d G o v e r n m e n t representatives.

possible for a limited n u m b e r of industry divisions

Subjects dealt with generally relate to technical

in addition to the all-industry averages a n d distri­

matters of industry definition or scope of study,

butions of workers b y earnings classes.

m i n i m u m size limitation, timing of studies, selec­

Cross-industry m e t h o d s of sampling are utilized

tion of jobs for study, preparation of job descrip­

in compiling earnings data for the following types

tions, a n d the need for additional data o n such

of occupations:

subjects as fringe benefits a n d for other data of

(1) office clerical, (2) professional

a n d technical, (3) m a i ntenance a n d powerplant,
a n d (4) custodial, warehousing, a n d shipping.

special interest.
T h e industry classification system used in w a g e

In addition, data are collected o n w e e k l y w o r k

surveys is practically always that in the S tandard

schedules, shift operations a n d differentials, a n d

Industrial Classification M a n u a l . 1

certain

range f r o m part of a 4-digit code for a n industry

supplementary

benefits.

These

studies

T h e scope m a y

also provide estimates of the proportions of plant

study to a combination of 2-digit codes for a c o m ­

a n d office workers covered b y union agreements,

m u n i t y w a g e study.

numbers

u nder incentive

the study should represent a fairly h o m o g e n e o u s

systems of w a g e p a y m e n t , a n d the extent to w h i c h

unit insofar as w a g e s a n d occupations are co n ­

establishments h a v e a formal w a g e structure for

cerned.

of workers

employed

T h e basic criterion is that

workers paid o n a time basis, providing a single

T h e m i n i m u m size of establishment covered in

rate or range of rates for individual job categories.

a n y one industry study is uniform for that indus­

The

Bureau

conducts

two

general

types

of

try: in c o m m u n i t y w a g e studies the m i n i m u m size

industry w a g e studies— nationwide a n d b y area.

usually

T h e majority of nationwide studies are m a d e in

T h e m i n i m u m size is established after a study of

varies for different industry

divisions.

industries in w h i c h there is little geographic c o n ­

the possible effects o n the results, i e., can repre­
.

centration, or in w h i c h interest of the users of the

sentative or useful results be obtained f r o m a study

data centers m a i n l y o n the industry as a whole

of the remaining establishments?

rather than o n particular areas.

tical reason for the adoption of size limitations is

Examples

are

Anot h e r prac­

basic iron a n d steel, nonferrous metals, a n d electric

the difficulty encountered in classifying workers in

a n d gas utilities.

small establishments w h e r e the degree of specializ­

A r e a studies are m a d e of geographically concen­
trated industries such as m a c h i n e r y a n d apparel,
w h i c h are a m o n g those found in large cities.

From

time to time these m a y be supplemented b y nation304523— 55— — 8




ation differs sharply f r o m that in large establish­
ments.
1 U . S. Bureau of the Budget, W ashington. Vol. I, M anufacturing Ind us­
tries, N ovem ber 1945; Voi II , N onm anufacturing Industries, M ay 1949.

98

T E C H N I Q U E S

OF

P R E P A R I N G

M A J O R

T i m i n g is an important factor in the conduct of
w a g e studies.

Because of the seasonal element in

BLS

STATISTICAL

characteristics.

SERIES

In c o m m u n i t y w a g e studies, addi­

tional occupations are studied to m e e t the needs of

m a n y industries, the time period of study m u s t be

government

selected with care in order to obtain useful results.

S o m e w a g e studies m a y also include information o n

agencies

in

wage

administration.

C o m m u n i t y w a g e studies are often timed to m e e t

certain establishment policies such as the pattern

the needs of g o v e r n m e n t agencies (Federal, State,

of rate setting for supervisory employees a n d the

and

prevalence of severance pay, in addition to the

local)

engaged

in w a g e

administration

as

required b y law.
Wage

usual fringe benefits.

surveys

occupations.

do

not

provide

data

for

all

In addition to the greater cost of

Questionnaires.

T w o schedules are used in obtain­

obtaining data for all jobs, the usefulness of such

ing data.

T h e first ( O W R - 1 ) contains questions

data w o u l d be limited because of the wide differ­

regarding product, size, unionization, paid v a c a ­

ences in occupational structure f r o m establishment

tions, insurance a n d pension plans, a n d related

to establishment.

Hence, lists of k e y jobs are

items applicable to the entire establishment.

selected for study.

In industry w a g e studies, the

The

second ( O W R - 2 ) is used in recording the o c c u p a ­

lists are, of course, confined to jobs found in the

tion, sex, m e t h o d of w a g e pa y m e n t , hours (where

specific industries being studied; in c o m m u n i t y

needed), a n d earnings of each emp l o y e e studied.

wage

studies,

the

lists include

occupations

operations c o m m o n to all industries.

in

In the selec­

Sampling Procedure.

The

sampling design e m ­

tion of such jobs, the following criteria h a v e been

ployed is almost always highty stratified.

useful: (1) numerical

by

the sample is selected, information o n all k n o w n

the n u m b e r of workers in the job; (2) clarity of

establishments that m i g h t possibly fall within the

importance,

measured

Before

content; (3) stability in terms of n u m b e r of workers

scope of the survey is compiled f r o m lists provided

a n d content, f r o m period to period; (4) prevalence

by

a m o n g establishments; a n d (5) historical i m p o r ­

mented

tance in w a g e

associations, labor unions, a n d other sources.

structure.

Occasionally

techno­

T h e entire list is selected

by

governmental

data

from

trade

agencies,

supple­

directories,

trade

Establishments are then stratified as precisely

logical changes require revision of job lists to
bring t h e m u p to date.

regulatory

as

available

information

permits.

Each

geo­

to represent a reasonably complete range of rates

graphic-industry unit for w h i c h a separate analysis

in the w a g e structure— o n the assumption that

is to

the rates of p a y for these k e y jobs can be used as

Wi t h i n these broad groupings, a finer stratification

b e n c h m a r k s for interpolating rates for other jobs.

b y product a n d size of establishment is m a d e .

E a c h k e y occupation is carefully defined in order
to obtain m a x i m u m

comparability of jobs f r o m

establishment to establishment.

S u c h definitions

be

presented

Stratification

may

is s a m p l e d

be

carried

independently.

still further

in

certain industries: textile mills, for instance, are
classified o n the basis of integration, i e., w h ether
.

are prepared f r o m studies of plant operations b y

they spin only, w e a v e only, or do both.

B u r e a u representatives a n d f r o m suggestions of

stratification is highly important if the oc c u p a ­

industry a n d labor representatives.

tional structure of the various industry segments

A job descrip­

tion that is to be used in a survey involving m a n y
establishments
classification

includes

the

characteristics

major
of

the

determining
job.

It

is

Such

differs widely.
T h e sample for each industry-area group is a
probability

sample,

each

establishment

having

flexible enough, however, to permit m i n o r varia­

a predetermined chance of selection.

tions in duties f r o m plant to plant.

A b o v e all,

secure m a x i m u m accuracy at a fixed level of cost

workers in the plants studied are classified o n the

(or a fixed level of accuracy at m i n i m u m cost),

In order to

basis of these job descriptions a n d not o n titles of

the sampling fraction used in the various strata

their jobs.

ranges d o w n w a r d

T h e needs for special data are quite broad in
nature.

In industry w a g e studies, separate ta b u ­

f r o m all large establishments

through progressively declining proportions of the
establishments

in

each

smaller

size group,

in

lations m a y relate w a g e s to unionization, m e t h o d

accordance with the principles of o p t i m u m allo­

of w a g e p a y m e n t , process of manufacture, w h o l e ­

cation.

sale

represented in the sample b y a n u m b e r of estab-

price

line,

or

other




significant

industry

Thus,

each

sampled

stratum

will be

STUDIES

O F

O C C U P A T I O N A L

W A G E S

A N D

S U P P L E M E N T A R Y

99

BENEFITS

lishments proportionate to its share of the total

of the data for the various establishments were

employment.

made.

T h o u g h this m a y

appear at first

to yield a sample biased b y the overrepresentation

Therefore, each establishment is assigned

a weight that is the inverse of the sampling rate

of large firms, the m e t h o d of estimation e m p l o y e d

for the stratum f r o m w h i c h it w a s selected— e. g.,

remo v e s this bias b y the assignment of proper

if a third of the establishments in one stratum are

weights to the sample establishments.

selected, each of the sa m p l e d establishments is

T h e size of the sample in a particular survey

given a weight of 3.

depends o n the size of the universe, the diversity

To

illustrate the use of weights, suppose the

of occupations a n d their distribution, the relative

universe were

dispersion of earnings a m o n g establishments, the

sample of 3 w a s selected.

distribution of the establishments b y size, a n d the

ment A

degree of accuracy required.

w h i c h half of the plants were used in the sample.

Estimates of vari­

7

establishments, f r o m

which

a

A s s u m e that establish­

w a s d r a w n f r o m a cell, or stratum, in

ance based o n data f r o m previous surveys are used

It is therefore given a weight of 2. Establishment

in determining the size of the sample needed.

B, o n the other hand, w a s taken with certainty

Cleto.
olcin

of 1.

(or a probability of 1) a n d is thus given a weight
B u r e a u agents generally collect data

b y personal visit to each of the sample establish­
ments.

Establishment C

w a s taken f r o m a group

w h e r e a fourth of all plants were used in the

T h e y secure data o n w a g e s f r o m payroll

sample, and hence is given a weight of 4.

records a n d those o n supplementary benefits a n d

following

other information pertaining to the plant as a

The

average earnings for a given occupation.

whole f r o m c o m p a n y officials.

calculations

Earnings data are

confined to the rate of p a y for employees o n a time
basis;

for

incentive

employees,

both

earnings

(exclusive of p r e m i u m overtime a n d shift p r e m i u m

Estab­
lish­
m
ent W
eight

are obtained.

F o r salaried workers, the standard

week l y hours a n d salary are obtained.

Occupa­

tional classifications are generally obtained

by

made

in

estimating

W
orkers in occupation
in sam establish­
ple
m a specified ra
ents t
te
Average
Esti m oftotal in stratum
ates
Total
hourly
Earnings
num
ber earnings W
orkers

A

estimated

2
1
1
4

2

The

pay) a n d the corresponding hours actually w o r k e d

are

2 x 40
40
$1. 50
1. 70
1 x 30
(30
B
1
1. 95
1 x 20
120
C
4
4 x 10
10
1. 20
Estimated universe________________170

x
x
x
x

40
30
20
10

x $1.
x 1.
x 1.
x 1.
$258.

50
70
95
20
00

discussing with c o m p a n y officials the m a t c h i n g of
average hourly

earning is thus

the B u r e a u ’ descriptions a n d the plant job titles.
s
$258. 00
or $1.52.

Estimating Procedure.

170

Estimated average hourly

earnings for a n industry or a n occupation are c o m ­
A

puted as the arithmetic m e a n of the individual
employees’ earnings.

T h e y are not estimated b y

dividing total payrolls b y
since these

are

almost

total hours worked,

never

available

on

an

All estimates are derived f r o m the sample data.
T h e averages for occupations, as well as for in­
dustries, are weighted averages of individual earn­
ings a n d not c o m p u t e d o n a n establishment basis.
proportion of employees

affected b y

fringe provision is likewise estimated f r o m

any
the

sample; all workers in each establishment are co n ­
sidered to be covered b y the predominant benefit
policy in effect, a n d the entire e m p l o y m e n t of the
establishment is classified accordingly.
A s menti o n e d previously, the use of a variable
sampling ratio in different strata of the population
w o u l d result in biased estimates if straight addition




T o estimate the pro­

portion of employees in establishments granting
paid vacations of 2 w eeks after 2 years of service,
for instance, the establishments are classified ac­

occupational basis.

The

similar m e t h o d applies to a n y characteristic

estimated f r o m the sample.

cording to the length of vacation granted after 2
years’ service, establishment weights are applied
to e m p l o y m e n t , as in the previous example, a n d
the proportion of the estimated e m p l o y m e n t in the
2

-week category of the estimated total e m p l o y m e n t

is then computed.

Us i n g the s a m e three estab­

lishments as in the previous example, this can be
illustrated as follows:

Establishm
ent

W
eight

A
2
B
1
4
C
Estimated universe.

Actual total
establishm
ent W
eighted
em
ploym
ent em
ploym
ent
100
500
75

200
500
300
_1, 000

Vacation
provisions
after 2 years
1 week
2 weeks
1 week

1 0 0

T E C H N IQ U E S

OF

P R E P A R IN G

M A JO R

Thus, the estimated percentage of workers in
establishments granting 2 weeks’ vacation after 2
,
. .
500
years of service is :
or 50 percent.
J

1 ,0 0 0

^

P u b lic a tio n

Data for each important subunit of an industry
are published only when information is available
from all sample firms in that unit. Such data for
individual segments of a survey may be published
in advance of the broader survey. Thus, in a
survey such as that of the machinery industry,
publication of results for an individual city does
not wait upon the completion of the survey in the
rest of the country. Preprinted forms are utilized
for the quick release of detailed data in local areas
to supplement summary press releases. In nation­
wide surveys, preliminary data are also released in
advance of the issuance of a printed bulletin, which
gives detailed results for the country as a whole and
for geographic breakdowns. Summaries of the
data in these bulletins frequently appear also in
the Monthly Labor Review.
L im ita tio n s

It must be remembered that some flexibility in
the use of wage data is necessary. All occupa­
tions may not be studied, and the user must be
prepared to interpolate for missing occupations on
the basis of traditional rate relationships. The
same kind of consideration applies to surveys in
which data are presented for certain areas only.
A further limitation is the elimination of smaller
firms from the universe. This is not serious with
respect to occupational data, because small firms
often do not have a degree of occupational special­
ization that permits meaningful classification for
this purpose. The size-of-establisbment limits in
most surveys is such that a comparatively small
part of the total employment is omitted.
The survey averages for a series of occupations
do not necessarily show the same rate relationships
as those found in the majority of establishments.
If employment of workers in a given occupation is
concentrated in a high (or low) paying establish­
ment, the occupational average may be higher (or
lower) than the traditional rate relationships
would indicate. Then, too, incentive methods of
wage payment may raise the earnings of specific



BLS

S T A T IS T IC A L

S E R IE S

occupations above those of related jobs for which
skill requirements may be higher, but which are
customarily paid on a time basis.
Year-to-year changes may be affected by
changes in the scope of the survey, changes in the
distribution of the labor force among and within
establishments, and changes in methods of per­
forming work. For instance, shifts in employ­
ment from low to high paying establishments may
cause an increase in average hourly earnings when
no change in establishments scales has occurred.

Reliability of Surveys.

Results of the surveys
generally will be subject to sampling error. This
error will not be uniform, since, for most occupa­
tions, the dispersion of earnings among establish­
ments and frequency of occurrence differ. In
general, the sample is so designed that the chances
are 9 out of 10 that the published average does not
differ by more than 5 percent from the average
that would be obtained by enumeration of all
establishments in the universe. That error applies
to the smallest breakdown published. Hence, the
error of broader groupings will be somewhat less.
The sampling error of the percentage of workers
receiving any given supplementary benefit differs
widely with the size of the percentage. However,
the error is such that rankings of predominant
practices will almost always appear in their true
position. Small percentages may be subject to
considerable error, but will always remain in the
same scale of magnitude. For instance, the pro­
portion of employees receiving 4 weeks’ paid vaca­
tion may be given as 2 percent, when the true
percentage for all establishments might be only
1 percent. Such a sampling error, while consider­
able, does not affect the essential inference that
the practice is a rare one.
Estimates of the number of workers in a given
occupation are subject to considerable sampling
error, due to the wide variation among establish­
ments in the proportion of workers found in
individual occupations. Hence, the estimated
numbers of workers can be interpreted only as a
rough measure of the relative importance of
various occupations. The greatest degree of ac­
curacy in these employment counts is for those
occupations found principally in large establish­
ments. This sampling error, however, does not
materially affect the accuracy of the average earn­
ings shown for the occupations. The estimate of

S T U D IE S

OF

O C C U P A T IO N A L

W AG ES

AND

average earnings is technically known as a “ratio
estimate,” i. e., it is the ratio of total earnings
{not payrolls) to total employment in the occupa­
tion. Since these two variables are highly cor­
related (i. e., the errors tend to be in the same
direction), the sampling error of the estimate
(average hourly earnings) is considerably smaller
than the sampling error of either total earnings or
total employment.

SU PPLEM EN TA RY

B E N E F IT S

1 0 1

Since completely current and accurate informa­
tion regarding establishment products is not
available, the universe from which the sample is
drawn may be incomplete. Sample firms incor­
rectly classified are accounted for in the actual
field work, and the universe estimates are revised
accordingly. Those which should have been in­
cluded but are erroneously classified in other
industries cannot be accounted for.

SPECIMEN OF SCHEDULE
BUS 1476
O W R -1
{Rev. '63)

Budget Bureau No. 44-R33S.12.
Expires September 30,1050.

CONFIDENTIAL
U. S. DEPARTMENT OF LABOR
BUREAU

O F

LABO R

W a sh in g to n

S T A T IS T IC S

25, D. C.

GENERAL ESTABLISHMENT INFORMATION
I. ESTABLISHMENT IDENTIFICATION

S

u rvey

— ...................

Payroll Period

A . E s ta b lis h m e n t S c h e d u le d
.........................................

1 9 5 ..................................................

(Name)
(City)
(County and State)
N ame

and

T itle

of

Authorizing Official

......................................................

1 9 5 ..............................................................

......................................................

(Street address)

1 9 5 ..............................................................

N ame

and

T it l e

of

O fficial S u p p l y in g D a t a

195.
195.
195.

(Address of office from which information was obtained, if different from above)
B . C e n tr a l O ffic e ( i f a n y )
(Name)
(Street address)

II. CURRENT PRODUCTS OR SERVICES AND PROCESSES
A . P r o d u c t o r S e r v i c e ( T o b e u s e d to a s s ig n in d u s tr y c la s s ific a tio n )




(City and State)

102

S P E C IM E N

O F SC H ED U LE

E . W o rk S c h e d u le (D a y s h ift)
I n d ic a te h o u rs a n d d a y s t o o n e d e c im a l, e . g . 1 3 7 5 1 f o r 3 7 # h o u rs o r f 5 5 ] f o r 5 # d a y s .

Production (P la n t)

O f f ic e
W omen

W om en

Hours Per Week

Days Per
Week

Hours Per Week

Days Per
Week

Hours Per Week

Days Per
Week

4 6 -5 1

5 3 -5 3

4 4 -4 6

4 7 -4 8

4 6 -5 1

5 3 -5 3

|

P . R a t e o f P a y fo r O v e r tim e W o r k
I n d ic a te th e h o u rs t o o n e d e c im a l, e - g . 4 0 0 fo r 4 0 h o u rs, o r 0 7 5 fo r 7 # h o u rs, th e p re d o m in a n t p o lic y is t o b e co d e d .
p re m iu m is p a id , i . e ., co d e s 0 , 1, o r 8 b e lo w , e n te r sch e d u le d w e ek ly o r d a ily h o u rs.

P roduction (P l a n t )

O ffice
O v e r t im e R a t e

O v e r t im e R a t e
W

W eekly

D a il y

eekly

Hours After Which
Effective

Rate of
Pay Code

5 4 -5 6

57

I f n o o v e rtim e

Hours After Which
Effective
5 8 -6 0

D a il y

Hours After Which
Effective

Rate of
Pay Code

Rate of
Pay Code

Hours After Which
Effective

Rate of
Pay Code

5 4 -5 6

57

5 8 -6 0

61

j

61

i

195—

195—
195—

C odes (B lo c k s 5 7 , 6 1 , 6 4 , 6 7 )
. N o pay
S t r a ig h t tim e
2 * T im e a n d o n e -h a lf
0

1.




3 . D o u b le tim e
4 . D o u b le tim e a n d o n e -h a lf
5 . T r ip le tim e

. E q u a l tim e o ft
7 . O th e r p la n (s p e c ify in re m a rk s )
8 . N o fo r m a l p o lic y
6

S P E C IM E N
B. J.S. 1475
j
OWR-2
(Rev. * 3
6)

103

O F SC H ED U LE

U. S. DEPARTMENT OF LABOR

Budget Bureau No. 44-R486.9.
Approval expires 7-1-54.

B R
U EAU OF LABOR S A IS IC
TT T S
W in
ash gton 25, D C
. .

CONFIDENTIAL

WAGE-RATE INFORMATION
P a g e 1 o f ------

Industry or survey—
Establishment name
Area-------------------L

Payroll period

G e n e r a l W a g e R a te C h a n g e s S in c e -—
(a ls o in clu d in g c o s t-o f-liv in g a n d a n n u a l im p ro v e m e n t a d ju s tm e n ts )

A d ju stm e n ts
D a te
D ecided

F ies t
Pat
P e rio d
W ith
C hange

A p p r o x im a t e N u m b e r

R e tr o a ctive
D ate

(if any)

of

Fcrcont

hour

Produ ction

(plant)

Office

A.

XXX




W AGE CH AN GES G RA N TED

B.
XXX

C l as se s o f W o r k e r s
A f fected b y
W a g e C hange

W o r k e r s A f fected

Cents
per

W A G E C H A N G E S P E N D IN G
*

104

S P E C IM E N

B. T . S. 1475A .
OWR-2— Continued

CONFIDENTIAL

j

O F SC H ED U LE

(Rev. 1 5 )
93

I

I

I

I__________I

(Schedule No.)

(Page No.)

Establishment name
VI. Occupational Rates

OCCUPATION AND GRADE

Payroll period
OCCUPATIONAL
CODE
(2)
IND.

(1)




Occtjp.

Gb .

*
SE X

M.
W.
P.

N U M BER
OF
W ORKERS

HOURS

EARNINGS

(3)

(4)

(5)

(6)

(7)

RA TE OR
STRAIG H TT IM E
HOURLY
EARNINGS
(8)

O FFIC E
USE
ONLY
(9)

S T U D IE S

OF

O C C U P A T IO N A L

W AGES

AND

SU PPLEM EN TA R Y

B E N E F IT S

BIBLIOGRAPHY

Occupational Wages: Establishment Sampling.
April 1950, pp. 412-417.
Statistics.

Monthly Labor Review,
U. S. Department of Labor, Bureau of Labor

Statistics for Wage Stabilization.

Journal of American Statistical Association,
December 1943, Vol. 38, pp. 425-437.

Wartime

Wage Movements and Urban Wage-Rate Changes.

Labor Review, October 1944, pp. 684-704.
Labor, Bureau of Labor Statistics.

Monthly
U. S. Department of

Occupational Wages— Conduct of Surveys.
1950, pp. 418-^20.
Statistics.

Monthly Labor Review, April
U. S. Department of Labor, Bureau of Labor

Preparation of Union Scales of Wages and Hours Series.
Review, November 1949, pp. 545-548.
Bureau of Labor Statistics.

Monthly Labor
U. S. Department of Labor,

Farm Employment and Farm Wage Rates Methodology.
Review, November 1949, pp. 548-552.
Bureau of Labor Statistics.

Monthly Labor
U. S. Department of Labor,

Sources of Wage Information: Employer Associations.

By N. Arnold Tolies
and Robert L. Raimon. Cornell Studies in Industrial and Labor Rela­
tions, Vol. I ll, Cornell University.

Community Approach to Wage Studies.
1949, pp. 365-370.
Statistics.

Monthly Labor Review, October
U. S. Department of Labor, Bureau of Labor

Conceptual Problems in the Development of an Adequate Program of Occupational
Statistics. By H. M . Douty. Proceedings of the Third Annual Meeting,
Industrial Relations Research Association.




105

C h a p te r 1 2 .

C o lle c t io n a n d

C o m p ila t io n o f W o r k

B ack g ro u n d

Strike statistics are a broad indicator of indus­
trial unrest. They provide a quantitative meas­
ure of the extent to which labor-management
disputes result in stoppages of work. Estimates
showing the number of stoppages, workers in­
volved, and man-days idle in the United States
are issued monthly by the United States Depart­
ment of Labor’s Bureau of Labor Statistics.
Totals are compiled annually and the statistics
are also presented by such classifications as indus­
try, State, city, major issue, and duration.
The Bureau of the Census in 1880 made the
first attempt to secure statistics on strikes and
lockouts. In that year, schedules were sent to
employers and workers in all disputes about
which notices appeared in the public press. In­
formation was received on 762 situations. Some
data were obtained on causes of strikes and their
results, as well as their State distribution. No
information was secured on number of workers or
man-days of idleness.
Subsequently, the method of collecting the in­
formation varied, and the statistical series on
work stoppages thus automatically fall into sev­
eral historical groupings. For the year 1880, data
on strikes and lockouts were gathered at the time
the Tenth Census was taken. For the period
1881-1905, the United States Bureau of Labor
collected data on stoppages, excluding those that
involved fewer than 6 workers or that lasted less
than 1 day— a practice that the Bureau follows
currently. In this period, data were published
on the number of strikes and workers involved,
with breakdowns by industry and State, number
of establishments involved, and the percentage of
strikes involving labor organizations.
No Federal agency collected national informa­
tion on stoppages from 1906 to 1913. The Bureau
of Labor compiled data only on the number of
stoppages during 1914-15. Information on the
number of workers involved was subsequently
•Prepared by L ily M ary D avid and Ann J . H erlihy of the Bu reau’ s
Division of Wages and Industrial Relations.
106




S to p p a g e S t a t i s t i c s *

added for approximately two-thirds of the known
stoppages in the 1916-26 period. Data available
for all of these years are included in BLS Bulletin
No. 651, “ Strikes in the United States, 1880-1936.”
Since 1927, a fairly uniform procedure has been
followed in obtaining detailed information from
the parties involved in work stoppages. Figures
have been prepared on the amount of idleness
during work stoppages each month as well as on
the number of stoppages and number of workers
involved.
C o n c e p ts a n d

Scop e

Coverage of the present series extends to all
known strikes and lockouts within the continental
United States that involve six or more workers
and last a full day or shift. Stoppages of Ameri­
can seamen or other workers in foreign ports are
not included, nor are strikes of foreign crews on
foreign ships in American ports. All employees
made idle in the establishment are counted as
“involved,” even though they may not be active
participants or supporters of the controversy. All
days on which work was scheduled are included in
calculating man-days of idleness. In industries,
such as basic steel and rubber, where there are
continuous operations, appropriate adjustments
are made for the fact that substantial proportions
of workers are employed on Saturday and Sunday.
The worker figure is a “ peak”— that is, the num­
ber idle on the day of maximum idleness. How­
ever, computations of idleness take account of
variations in the number of workers idle from
period to period during the strike.
The Bureau defines a strike as a temporary
stoppage of work by a group of employees to
express a grievance or enforce a demand. Usually
the issue in dispute is directly between the
employer(s) and the striking employees, but
there are significant exceptions. For example, in
jurisdictional, as well as in rival union or repre­
sentation strikes, the motivating factors may
largely involve two or more unions rather than
the employer directly. In a sympathy strike, no

C O L L E C T IO N

AND

C O M P IL A T IO N

dispute usually exists between the striking workers
and their immediate employer. The purpose of
such strikes is to give union support or broaden
group pressure for the benefit of another group of
workers. Some protest strikes are intended to
register the dissatisfaction of workers with action
(or lack of action) by local, State, or Federal
Government agencies on matters affecting their
interests.
A lockout is defined as a temporary withholding
of work by an employer (or a group of employers)
to enforce terms of employment upon a group of
employees. No attempt is made to distinguish
statistically between strikes and lockouts because
of the difficulty of determining the facts. Stop­
pages are included in the series regardless of who
may be deemed “responsible,” or which party
takes the initiative, and the terms “strike” and
“work stoppage” are used interchangeably.
So-called slowdowns, where employees con­
tinue at work but at reduced production speed,
are not included, nor are those instances in which
workers report an hour or two late each day as a
protest gesture or quit work several hours before
closing time to attend rallies or mass meetings.
Su rv ey

M e th o d s a n d

S o u rces

The Bureau seeks to obtain complete coverage
of all stoppages of six or more workers, lasting at
least a full shift. It does not base the strike series
upon a sample, but includes all stoppages of the
specified size and duration for which verified
information is obtained.
Information on the existence of a stoppage is
currently obtained from various sources, includ­
ing: (1) clippings on labor disputes from daily
and weekly newspapers throughout the country;
(2) notices received directly from the Federal
Mediation and Conciliation Service; (3) a periodic
compilation by the local offices of State employ­
ment security agencies provided through the
Bureau of Employment Security of the U. S.
Department of Labor; (4) information received
from other State agencies (such as State medi­
ation boards and State labor departments);
(5) various employers, and employer associations;
(6) international unions and their publications;
and (7) construction firms doing work for the
Atomic Energy Commission.



OF

W ORK

STO PPA G E

S T A T IS T IC S

107

These sources were developed over a period of
years. Thus in 1943, a cooperative arrangement
was set up with the Solid Fuels Administration
which resulted in additional strike leads. When
this agency went out of existence at the end of
World War II, cooperative arrangements were
made with local associations of coal companies.
Requests are sent also to several hundred indi­
vidual coal companies, not members of associa­
tions. Before 1943, undoubtedly many of the
small, short local strikes in coal mining were
missed.
Cooperation of State agencies was developed
gradually, mostly in the period after World War
II. By 1950, about half the States were providing
information and in mid-1950 arrangements for
obtaining information from the others were com­
pleted.
It is estimated that these changes have added
10 percent or more to the number of strikes
reported. Since most of the added stoppages are
small, the numbers of workers involved and of
man-days of idleness have been very little affected.
Questionnaires are mailed to all parties to any
work stoppages reported by one of the previously
mentioned sources. This procedure is designed to
secure first-hand knowledge of the number of
workers involved, the dates and duration of the
stoppage, major issues involved, method of settle­
ment, and related information. In some instances,
field representatives of the Bureau secure the
necessary data; in others, representatives of
cooperating States may contact the parties.
Strikes, by their very nature, are usually a
matter of public knowledge and of reporting by
newspapers and other publications. However, the
Bureau holds confidential the individual reports
submitted by employers and unions, as well as
supplementary data collected through State or
Federal agencies.
C a lc u la tio n

P ro ced u res

The Bureau’s preliminary monthly strike series
is based in part on estimates, although these totals
seldom vary significantly from the later final
reports prepared from the parties’ replies. This is
mainly due to the availability of reasonably
accurate data on the larger stoppages when pre­
liminary estimates are made. The final strike

108

T E C H N I Q U E S

O F

P R E P A R I N G

M A J O R

statistics compiled annually are the result of com­
pilation of actual data received on the schedule
form from the parties involved in the stoppages.
These final statistics are published each year in
the May issue of the Monthly Labor Review.
More detailed data are included in an annual
bulletin.
Estimates are prepared and published monthly
on the three measures of work stoppages: (1)
number of stoppages; (2) number of workers in­
volved; and (3) man-days of idleness. Such esti­
mates are compiled about 4 weeks after the end
of the month of reference from the most accurate
information available on all stoppages known to
the Bureau. As there is a lag between the occur­
rence and reporting of a number of relatively small
strikes, allowance is made (depending upon several
variables) for these smaller stoppages in preparing
the estimates of the number of disputes occurring
within the month. In estimating the number of
workers involved and total idleness, efforts are
made to obtain as much preliminary information
as possible on the size and duration of individual
large stoppages (those of at least 500 workers or
5,000 man-days of idleness); estimates of workers
and man-days idle in smaller stoppages are based
largely on previous experience as to average size
and duration of such stoppages.
The total man-days of idleness during the month
because of strikes is published as a percentage of
estimated working time of all workers. “ Esti­
mated working time” is computed for purposes of
this table by multiplying the average number of
employed workers by the number of days worked
by most employees. This number excludes
Saturdays when customarily not worked, Sundays,
and established holidays.
“ Total employed workers” used in making these
computations before 1951 refers to all workers
except those in occupations and professions in
which there is little if any union organization or
in which strikes rarely occur. Beginning in 1951,
the concept of “ total employed workers” was
changed to coincide with the Bureau's figures of
nonagricultural employment, excluding Govern­
ment but not excluding workers in other occupa­
tional groups. Tests show that the percentage of
total man-days of idleness computed on the basis
of the new and the old figures usually differs by
less than one-tenth of a point.



BLS

STATISTICAL

SERIES

The annual series includes total number of
stoppages, workers involved, and man-days of
idleness. Compilation of such statistics is essen­
tially a process of assembling the necessary in­
formation on individual cases, followed by anal­
ysis, evaluation, and classification into groups.
Application of technical statistical formulas is
not involved.
The statistical unit is the individual strike or
lockout, irrespective of size. If groups of em­
ployees (regardless of their number or geographic
distribution) join in a work stoppage for a common
objective, their action is classed as a single strike.
The figure for the number of workers involved in
a strike or lockout is the maximum number
actually made idle in the establishment directly
involved. As already indicated, no distinction
is made between the actual participants in a strike
and those respecting, or kept idle by, picket lines
or those sent home by the employer when a stop­
page in one department closes the plant. In
such instances all employees of the employer are
included in the count of workers affected by the
dispute.
Man-days of idleness, like the number of
workers involved, are based on the idleness at
the establishments directly involved. Workers
involved multiplied by days of idleness equal
total man-days idle. When the number of work­
ers idle varies significantly during the period of
the stoppage, adjustment is made accordingly in
the calculation of man-days of idleness. In this
calculation, holidays and days not normally
worked are omitted from the count of days of
idleness.
The annual statistics are classified according
to a number of significant factors, briefly described
here:
(1) An industrial classification is made of each
strike in accordance with the Standard Industrial
Classification Manual published by the United
States Bureau of the Budget. A few stoppages
directly affect workers in more than one industry.
Small stoppages falling in this category are classi­
fied in the industry having the majority of workers
involved; in large interindustry stoppages, there
is proportionate allocation.
(2) The duration of each stoppage is computed
on the basis of calendar, rather than working

C O L L E C T I O N

A N D

C O MPILATION

days, i. e., the number of calendar days from the
beginning until the end of the stoppage. For
stoppages which begin at a definite time and are
terminated by a formal agreement at a definite
time, no problem arises in determining duration.
Some strikes, however, are never formally settled,
although the workers may gradually go back to
their jobs or find other employment; employers
may be able to resume production with new
employees or may close their plants permanently.
In such cases, the stoppages are terminated, for
statistical purposes, when a majority of the
vacancies are filled. On occasion, if actual settle­
ment is reached later, the statistical record of the
stoppage k adjusted correspondingly.
(3) Number of establishments involved. The
standard definition of establishment is used (chap.
1). It is a single workplace, for example, a
factory, mine, or store. In a widespread strike of
intercity bus drivers, truckdrivers, or railroad
workers, the establishment is regarded as the
terminal out of which the employees work; in a
strike of seamen, the ship is the establishment;
and in a strike of dockworkers, the individual
dock or loading place is regarded as the place of
work.
(4) Geographical classification of stoppages fol­
lowed State and city boundary lines through 1951.
Data were compiled each year for 150 separate
cities (excluding suburban areas outside the
corporate limits). Beginning in 1952, the com­
pilation of data by standard metropolitan, or
industrial, areas superseded city boundary lines.
Information is now compiled for approximately
180 such areas. In interstate stoppages, the
workers involved and man-days idle are allocated
to their respective States.
(5) The causes of most strikes are multiple and
varied, and do not always lend themselves readily
to immediate and exact classification. After eval­
uation of the information available, the stoppages
are classified by issues into four broad categories :
(1) wages and/or hours and/or fringe benefits; (2)
union organization matters (representation, union
security, and the like); (3) other working condi­
tions, such as job security, physical working condi­
tions, administrative policies, and workload; or (4)
interunion or intraunion matters. Within these
groups there are further subdivisions into more
specific categories.



O F

W O R K

S T O P P A G E

STATISTICS

109

(6) Union involved is another major classifica­
tion. For this purpose the union is the organiza­
tion whose contract was involved or which has
taken active leadership in the stoppage. Disputes
involving more than one union are classified as
jurisdictional or rival union disputes or as involving
cooperating unions. If unorganized workers strike
independently, a separate classification is used.
For publication purposes, the union information is
presented by major affiliation of the unions, i. e.,
American Federation of Labor, or Congress of In­
dustrial Organizations, or nonaffiliation such as
“Independent,” “single firm,” or “no union.”
(7) Method of termination of stoppages invol ves
classification into the following categories: (1) dis­
putes in which the parties agree directly to termi­
nate the stoppage without any third-party assist­
ance; (2) those terminated with the assistance of
Government agencies; (3) those terminated with
the assistance of private or non-Government medi­
ators, (4) those ending without formal settlements;
and (5) those in which the employers discontinued
business.
(8) Disposition of issues presents information re­
garding the settlement of the issues in the stoppage.
In most strikes the issues are usually settled or
disposed of before the return to work is effected,
but provision is made for the cases in which adjust­
ment of issues occurs after resumption of work by:
(1) direct negotiations between the employers and
the union (or workers); (2) negotiations with the
aid of Government agencies; (3) arbitration; and
(4) other means (cases referred to NLRB, union
boards, tribunals, and other agencies where method
is other than by negotiation).
The questionnaire on page 111 isused in collecting
detailed information from both employers and
unions.
Limitations
It is not known to what extent the methods used
to locate and obtain information on work stoppages
result in a complete count of the number of work
stoppages. However, they provide a virtually
complete record of all large work stoppages so that
the statistics on numbers of workers and of mandays lost are believed to be essentially complete.
As indicated earlier, the addition of new sources of
strike information from time to time probably has

110

T E C H N I Q U E S

O F

P R E P A R I N G

not seriously affected the continuity of the series
on workers and man-days idle. The new sources of
information, however, have resulted in some lack
of strict comparability in the number of strikes re­
ported from period to period.
Some of the classifications requiring more detail
may be relatively less complete than the overall
statistics. Thus, while the figures by individual
States are reasonably complete, in isolated cases
the figures for a specific tabulation by State and
industry group may be appreciably affected by lack
of information about one strike.
Within the limits that the Bureau places on the
series, work stoppages involving few workers or
lasting short periods (i. e., fewer than six workers
or lasting less than a full shift) are omitted from the
count. Such disputes usually would be of little
importance in the overall count, and frequently
cause no significant idleness or interruption to pro­
duction.
This series is not intended to measure the cost
of strikes in terms of the amount of production and
wages lost. The calculation of such items involves




M A J O R

BLS

STATISTICAL

SERIES

many complex and interrelated factors for which
information is not available, including for exam­
ple, production schedules before and after the stop­
page, diversion of output or services to other plants
or employers, flow of raw materials, and the
amount of overtime worked by employees before
or after the dispute.
Secondary idleness is not measured; that is, the
figures do not cover those employees made idle in
other establishments or industries as a result of
material or service shortages resulting from a
work stoppage. At times, the idleness of employ­
ees directly involved (at the site) in a strike may be
considerably less than the idleness of other workers
brought about indirectly. No satisfactory meas­
urement, however, has been evolved to measure
or estimate such indirect effects adequately. The
Bureau’s work stoppage series is limited to the
establishments in which the actual strike idleness
occurs, except in the case of workers who refuse
to cross picket lines set up by a striking union at
other establishments.

S P E C IM E N

111

O F SC H ED U LE
B. L. S. 817* (Rev. 1-4-54)
Budget Bureau No. 44R-210.il.
Approval expires March 31, 1965.

U. S . D EPA RTM E N T O F LA BO R

D U P L IC A T E
To be retained
by respondent

BUREAU O F LABOR STATISTICS
W ashington 25, D. C.

C O N F ID E N T IA L

F i l e ..

T h e B u rea u o f L a b o r S ta tistics has re ce iv e d in fo r m a tio n

T h e B u rea u is resp o n sib le for. th e co lle ctio n o f sta tistics o n w o rk stop p ages. T o in su re a c c u r a c y o f o u r
figu res, w e t r y t o o b ta in reports' fr o m th e p a rtie s in volved . W e shall a p p re cia te y o u r fu r n is h in g th e in fo r ­
m a tion requested as soon as p ossible. T h e en velope en closed f o r y o u r r e p ly requ ires n o postage. T h a n k yo u
v e r y m u ch f o r y o u r co o p e ra tio n .
V e r y tr u ly yo u rs,

C o m m is s io n e r o f L a b o r S ta tis tic s .

1. E m p lo y e r .................................................................................. ...........................................................................................................
A d d r e s s ................................................... ................................. ............................................................................................................
2. P r in c ip a l p ro d u cts o r se rvice s o f establish m en t ( s ) in volved in sto p p a g e (in o r d e r o f im p o r t a n c e ) :

3. N u m b er o f establish m en ts in v o lv e d .................. L o c a t io n ..................................................................................................
(If more than one establishment, please use reverse side of sheet)
>A F L
4. U n ion s in v o lv e d : ( a ) N a m e ...................................................................................................................................... ] C I O ..........
I In d ............
( 6 ) L oca l N o ..................... ( c ) A d d r e s s ..................................... , ................................................................................................
5. D ates o f s t o p p a g e : ( a ) D a te sto p p a ge b e g a n ....................................................................
r e a c h e d ............ ..................................................

( c ) D a te w o rk w as r e s u m e d ................................................................ —

6. T o ta l w o rk e rs id le one fu ll s h ift o r m o r e .......................
Y e s ..................

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

( b ) D ate settlem ent w as

(D id the n u m b e r idle c h a n g e d u r in g th e s to p p a g e ?

I f i t c h a n g e d , p le a s e r e p o r t o n r e v e r s e s id e .)

7. N u m b er o f d ays w o rk e d p e r w eek b y m o s t em ployees b e fo r e s t o p p a g e ......................................................................
8.

9.

10.

M a jo r

issu es in d is p u t e ......................................................................................................................................................................

P r in c ip a l

te rm s o f settlem ent

D id a n y m a jo r issu es re m a in unsettled a t end o f s t o p p a g e ? ..............
I f " y e s ,” in d ica te r e m a in in g issu es and h o w th e y a r e t o b e ad ju sted

11.

D id a F ed era l, State, o r loca l go v e rn m e n t a g e n cy assist in a r r a n g in g f o r re tu rn t o w o r k ?
N o ..................




Y es

I f so, p lease id e n tify a g e n c y ...........................................................................................................

(Signature and title of person making report)

I —0 7 8 1
S 96-

(Date)

(Company or organization)

112

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O F

P R E P A R I N G

M A J O R

BLS

STATISTICAL

SERIES

BIBLIOGRAPHY

Strikes. By John I. Griffin. New York, Columbia University Press, 1939.
Methods Used in Strike Statistics. Journal of the American Statistical Asso­
ciation, Vol. 32, No. 197, 1937.
Strikes in the United States 1880-1986. Washington, U. S. Department of
Labor, Bureau of Labor Statistics, 1938. (Bull. 651.)
Review of Strikes in the United States. Monthly Labor Review, May 1938, pp.
1047-1067; reprinted as Serial No. R. 770.
Handbook of Labor Statistics. Washington, U. S. Department of Labor,
Bureau of Labor Statistics, 1941, pp. 317-344. (Bull. 694, Yol. 1.)
U. S . Industrial Commission.
1901.




Reports, Vol. 17, pp. 631-644, Washington,

Chapter 13. The Collection and Analysis o f Collective Bargaining Agreem ents*
Background and Uses
Collective bargaining agreements and related
documents setting forth the provisions of health,
insurance, and pension plans provide a valuable
source of information on industry wage practices,
supplementary benefits, job and union security,
the timing of wage negotiations, the nature of
plant operations and working conditions, occu­
pational wage levels, and many of the da}^-to-day
aspects of employer-employee and union-manage­
ment relationships.
The Bureau of Labor Statistics has utilized these
basic industrial relations materials for public and
Government informational purposes in three major
ways, by: (1) maintaining a file of current agree­
ments and employee-benefit plans open to public
inspection and inquiry, (2) preparing reports
which reproduce representative agreement pro­
visions or the variety of provisions relating to
similar problems, or digests of selected identified
agreements or benefit plans, and (3) by preparing
studies measuring the prevalence and character­
istics of specific types of agreement and benefit
plan provisions or of other aspects of collective bar­
gaining such as multiemployer bargaining.
The studies of agreement provisions, and health,
insurance, and pension plans are of practical use to
companies and unions engaged in collective bar­
gaining, to arbitrators and fact-finding boards, to
administrators of company wage and industrial
relations programs, and to legislators and Govern­
ment officials. Persons not directly involved in
collective bargaining or in related administrative
functions (e. g., teachers and students of labor
problems, writers for newspapers and trade and
technical journals, and foreign observers) find
value in the broader aspects of employer-employee
relationships revealed in these studies.
The development of industrial relations practices
that are now so widely prevalent is reflected in the
Bureau’s studies over the years. The Bureau’s
interest in the collection and analysis of union
♦Prepared b y Joseph W . B lo c h of the D iv isio n o f W ages and Industrial
R elations.




agreements dates back over 50 years.1 Systematic
efforts to collect agreements began in 1912. The
first of a number of BLS bulletins devoted entirely
to the subject of collective bargaining agreements
appeared in 1925. A large number of reports and
bulletins, on a wide variety of industrial relations
subjects, have since been published.2
The Bureau’s responsibility in the field of agree­
ment collection and analysis received additional
sanction and guidance in the Labor-Management
Relations Act of 1947, Section 211, which reads
as follows:
Sec. 211. (a) For the guidance and information of
interested representatives of employers, employees, and
the general public, the Bureau of Labor Statistics of the
Department of Labor shall maintain a file of copies of all
available collective bargaining agreements and other avail­
able agreements and actions thereunder settling or adjust­
ing labor disputes. Such file shall be open to inspection
under appropriate conditions prescribed by the Secretary
of Labor, except that no specific information submitted in
confidence shall be disclosed.
(b) The Bureau of Labor Statistics in the Department
of Labor is authorized to furnish upon request of the
[Federal Mediation and Conciliation] Service, or employ­
ers, employees, or their representatives, all available data
and factual information which may aid in the settlement of
any labor dispute, except that no specific information sub­
mitted in confidence shall be disclosed.

Concepts and Scope

Collective Bargaining Agreements. Although the
substance of collective bargaining rests partly upon
a foundation of unwritten industry, company, and
union practices, and upon various legal require­
ments, the basic unit in agreement collection and
analysis is, of necessity, the written agreement
itself. The agreement may cover a single plant, a
number of plants of a multiplant company, or a
1 A bu lletin o f the B u reau o f L a b o r (n o w the B u reau o f L a bor Statistics),
N u m b e r 42, Septem ber 1902, in clu d e d this n ote: ‘ ‘ It is the purpose o f this
[Bureau] to pu b lish from tim e to tim e im p ortan t agreem ents betw een large
bodies o f em ployees an d em ployers w ith regard to w ages, hours o f labor,
etc. T h e [Bureau] w o u ld be pleased to receive copies o f such agreem ents
w herever m a d e .”
2 M a n y o f these studies appear first in the M o n t h ly L a b o r R e v ie w an d are
later brou gh t together in bulletins. See, for exam ple, L a bor-M an a gem en t
C on tract P rovision s, 1953, B u reau o f L a b o r Statistics (B u ll. 1166.)

113

114

T E C H N I Q U E S

O F

P R E P A R I N G

M A J O R

number of companies, in some cases over a
thousand, bound together formally or informally
in an association for collective bargaining pur­
poses. It may express conditions of employment
in simple terms, leaving much of the administra­
tive details and other matters to the day-to-day
relationships between the parties, or it may
attempt to cover all details and, thus, leave as
little as possible to later bargaining or haggling.
Agreements vary in size from a single sheet to over
a hundred pages of a pocket-sized booklet, re­
flecting the diversity of employment conditions
among industries and companies and of the scope
of the issues over which bargaining takes place, as
well as differences in the degree of precision
sought and the language used.
Estimates of the number of agreements currently
in effect range upwards of 100,000. The number
of workers covered by agreements is estimated to
exceed 16 million. The Bureau presently main­
tains a file of approximately 5,000 current agree­
ments covering about 8.5 million workers.3 All
industries are represented in the file with the
exception of railroads and airlines. Since rail­
roads and airlines are required to submit copies of
agreements to the National Mediation Board, the
Bureau does not attempt to collect these agree­
ments.
The Bureau's quantitative analysis of selected
agreement provisions can be grouped into five
major categories: (1) wage practices and supple­
mentary benefits such as paid holidays, paid
vacations, shift differentials, premium pay of
various types, etc., (2) plant administration
practices such as layoff and recall procedures,
technological change provisions, safety, etc., (3)
agreement administration procedures including
grievance machinery and arbitration provisions
and no-strike clauses, (4) types of union security
(union shop, etc.) and checkoff systems, and (5)
other characteristics of collective bargaining re­
vealed in the agreements, such as the scope of the
bargaining units, the term of agreements, etc.
The basic assumption underlying quantitative
agreement analysis is that the variety of subjects
in each of these categories can be defined, classi­
fied, and counted.
3
D u rin g m u ch o f the p ostw a r p eriod, the n u m b er o f agreem ents on file
exceeded 12,000. In the m ost recent red u ction in the size o f the file, agree­
m ents coverin g few er than 100 w orkers w ere elim inated.




BLS

STATISTICAL

SERIES

In its general analysis of agreements, as distinct
from special industry studies, the Bureau is con­
cerned with these major objectives: (1) the
presentation of data by industry group and for
manufacturing and nonmanufacturing as a whole,
(2) the presentation of data by region or union
affiliation if the subject requires it, (3) a realistic
measure of representativeness in the agreements
studied, and (4) the study of practices which are
(as yet) relatively uncommon in collective bargain­
ing agreements.
Since it would be prohibitively expensive for the
Bureau to base its provision studies on all agree­
ments in its file (assuming that the file was a
representative sample), a selection of agreements
for analysis is required. In the absence of uni­
verse data indicating the extent of collective bar­
gaining by industry and region, precise sampling
procedures and the use of weighting comparable
to those used in the Bureau's occupational wage
surveys are not feasible. During the past few
years, the Bureau has attempted to achieve its
objectives in agreement studies by means of a
large selective sample of from 2,000 to 3,000
agreements. Modifications in this approach, now
being made, provide for a study base comprising
all agreements (approximately 1,600) covering
1,000 or more workers.4

Health, Insurance, and Pension Plans. Health,
insurance, and pension plans have developed into
issues of major significance in collective bargain­
ing during the past decade. Generally, these
plans are either negotiated in detail in a supple­
mentary agreement or reference is made to their
establishment in the basic contract. In the latter
case, the details and documents necessary to their
implementation, including trust agreements, in­
surance contracts, rules and regulations, and de­
scriptive booklets for distribution to employees,
are subsequently developed.
It is estimated that over 11 million workers
are covered by health, insurance, and pension plans
under collective bargaining. In line with its
general responsibility in the field of industrial
relations and in keeping with the provision of the
Labor Management Relations Act of 1947 cited
4 T h e n u m b e r o f establishm ents covered is alw ays con siderably greater
th an the n u m b e r o f agreem ents because o f the inclu sion o f m a n y m u ltic o m ­
p a n y or association agreem ents.

C O LLE C T I O N

A N D

ANALYSIS

O F

COLLECTIVE

above, the Bureau maintains a file of such plans
and conducts studies dealing with their extent,
scope and characteristics. At the present time,
the Bureau’s plan file includes approximately
1,000 health and insurance plans and 500 pension
plans, selected largely to provide broad industry,
union, and regional representation.
During the past 10 years, the Bureau has con­
ducted several studies based upon its file of benefitplans. This has become a part of the Bureau’s
continuing program. However, different types
of studies are undertaken each year. These
studies have included digests of selected plans,
the analysis of plans in specific industries, and,
more recently, the analysis of a selection of plans
considered representative of the entire field (e. g.,
pension plans). At this stage of the development
of collective bargaining practices and general
knowledge, the Bureau’s emphasis is placed on
describing the terms of these relatively new ele­
ments in industrial relations rather than on meas­
uring the prevalence of particular provisions.
Methods of Collection and Analysis
Each of the four parts of this program—the
maintenance of a current file of collective bargain­
ing agreements, the maintenance of a file of em­
ployee benefit plans under collective bargaining,
the analysis of agreements, and the analysis of
employee benefit plans—presents different and
substantially independent methodological prob­
lems.

Collection of Agreements. The selection of agree­
ments for the file is currently based on two guides:
to maximize the opportunities for public and gov­
ernmental use of the file5and to provide a diversi­
fied collection of agreements for special reports,
which the Bureau is occasionally called upon to
prepare. The extent to which these objectives are
fulfilled is obviously affected by the size of the file.
A third guide—that of constructing a file which
truly represents all agreements and thus provides a
firmer basis for sound generalizations on all agree­
ments—has long been a goal of the Bureau;
s T h e agreem ents file is loca ted in the W a sh in gton O ffice o f the B u rea u ’ s
D iv is io n o f W ages an d In du strial R elation s. A greem ents su b m itte d to the
B u reau w ith a stip u la ted lim ita tio n o n p u b lic use are n o t available for
inspection . R eq u ests for in form ation con cern in g specific agreem ents or
agreem ent clauses are a ccom od a ted , d e p e n d in g u p o n the nature o f the re­
quest, w ith in the lim its o f staff resources.




B A R G A I N I N G

A G R E E M E N T S

115

completion of this program, however, must await
more precise information on the extent of collective
bargaining, by industry, by region, and by size of
establishment.
The maintenance of a current file of agreements
is a continuous undertaking because of two factors:
(1) The typical agreement has a duration of one
year, after which it is no longer considered current
(unless notice of renewal without change has been
received), and (2) submission of agreements to
the Bureau is voluntary on the part of employers
or unions. To allow for the ratification and the
printing of new agreements, requests for copies are
mailed about 2 or 3 months after the expiration
date indicated in the previous agreement or upon
other notice of contract change. As in other
phases of the Bureau’s work, the voluntary cooper­
ation of employers and unions is of utmost im­
portance. Any restrictions imposed by respond­
ents on the public use of agreements are
scrupulously observed by the Bureau.
To facilitate the use of the file in accordance
with the types of requests customarily made, each
agreement received is coded for a series of identify­
ing features, which include: the name of the
company or association and union, location,
number of workers covered, industry, and effective
and expiration dates.

Agreement Analysis. The Bureau’s utilization of
the agreements it collects has moved through
different stages over the years, in pace with, or
controlled by, the increasing prevalence and
maturity of collective bargaining. During the
early years, significant agreements w
ere repro­
duced in their entirety. With the spread of
collective bargaining, and the increase in the size
and representative character of the Bureau’s file,
attention was directed towards reproducing and
analyzing the variety of agreement clauses relating
to similar subjects, culled from a large number of
agreements. The Bureau’s widely used Bulletin
Series 908 (1-19), issued during 1947, 1948, and
1949, represents the Bureau’s most comprehensive
efforts along these lines to date. While illustra­
tive clauses continue to be utilized in most of the
Bureau’s agreement studies, major emphasis
during recent years has been devoted to measuring
the prevalence and characteristics of particular
provisions and of types and levels of benefits. It

1 1 6

T E C H N IQ U E S

OF

P R E P A R IN G

is in this kind of analysis that problems relating to
sampling and techniques of coding and analysis
come to the fore.
The number of agreements studied and the
method of analysis bear directly upon each other;
together, they control the nature of the Bureau’s
studies in this field. In a small sample study
(e. g., 300-400 agreements) there are virtually no
inherent limitations on the intensity and the
scope of the analysis. Many shadings of terms
can be conveniently handled. A large sample
(e. g., 1,500-2,000 agreements) requires machine
tabulation techniques if the cost of analysis is not
to be prohibitive. However, machine tabulation
for agreement analysis has its limitations. Thus,
if the size of the sample is such as to make machine
tabulation an advantage or a necessity, some of
the flexibility and thoroughness possible under
so-called “ hand” analysis must be sacrificed.
In 1948 and 1949, when the Bureau’s file con­
sisted of more than 12,000 agreements and the
potentialities of machine tabulation techniques
for agreement analysis were first explored, it was
decided that a sample of 3,000 agreements would
be feasible. The selection of specific agreements
was based on a number of factors, including in­
dustry, agreement coverage, location, union rep­
resentation, and bargaining practices. Limited
data upon which to base a representative selection
of agreements was compensated for, at least in
part, by extensive experience with collective
bargaining practices on the part of the sample
selectors.
During subsequent years, however, available
staff resources were not sufficient to deal with a
sample of this size. The feasibility of reconsti­
tuting a sample of 1,500 to 2,000 agreements,
which had become the maximum work load, and of
assuring appropriate safeguards against deteriora­
tion, were rejected as being beyond the resources
of the staff and the available data. The most
advantageous alternative, considering all things,
was to base the agreement studies on
agree­
ments above a predetermined size of worker
coverage and, thus, to avoid sampling. It is
estimated that agreements covering 1,000 or more
workers number approximately 1,600. The Bu­
reau’s file already contains almost all of these; the
Bureau’s Monthly Report on Current Wage D e­
velopments is a ready source of information on
those that are not included. The total number



all

M AJOR

BLS

S T A T IS T IC A L

S E R IE S

of workers covered by these 1,600 agreements is
in excess of 7,500,000, representing a very sub­
stantial worker coverage in agreement studies.
The number of establishments covered is not
known.6
A key analysis list containing all agreements
covering 1,000 or more workers, while not the
ideal coverage, has definite advantages: (1) it
achieves maximum worker coverage in the studies
for a given investment of staff resources, (2) it
provides a simple, objective measure of the
coverage of the studies, (3) it permits the presen­
tation of various combinations and breakdowns
of the data without the necessity of complicated
weighting schemes and without the bias resulting
from the lack of proper weighting, (4) it is safe­
guarded against obsolescence since the Bureau is
best able to keep abreast of changes in agreements
of this size, and (5) it has a significant meaning
to users of these studies. Further experience will
presumably reveal any shortcomings in this
approach.7
The use of machine tabulation techniques in
large-scale statistical work is so commonplace in
Government and private industry that it ordi­
narily merits little comment in describing a
Bureau program. However, the use of machine
tabulation techniques for the type of research
exemplified by agreement analysis is believed to
be quite uncommon. The distinguishing feature
of agreement analysis is that it deals mainly with
legalistic language, which requires interpretation,
rather than with numbers or other universal,
sharply defined attributes. The process of anal­
ysis with the use of machine tabulation consists of
interpreting provisions, reducing them to numbers
(codes), aggregating the numbers, and converting
the aggregates back to types of provisions and
prevalence. Data are presented in terms of
number of agreements and number of workers
covered. Since agreement provisions on the whole
are notable more for their variety of expression
and details than for their uniformity, the process
of analysis, particularly when done by machine,
6The d s i c i n between s z o agreement (employees covered) and s z
itnto
ie f
ie
o establishment i an important o e A substantial proportion o the e
f
s
n.
f s
agreements are a s c a
s o i tion-negotiated and cover a l r e number o small
ag
f
establishments. Two agreements, f r example, involving the United Mine
o
Workers ( n . cover most o the anthracite and bituminous-coal mines i
Id)
f
n
the country. Some a s c a i n agreements in New York State cover more
soito
than a thousand f r s
im.
7The t a s t o from a representative s l c i n t the universe o alagree­
rniin
eeto o
fl
ments covering 1 0 0 or more workers was i p o
,0
n r cess a the time o t i
t
f hs
wiig
rtn.

C O L L E C T IO N A N D A N A L Y S I S O F C O L L E C T IV E B A R G A IN I N G A G R E E M E N T S

becomes a simplification process by which some
of the original content and variety is lost. Under
such circumstances, the preplanning of studies
acquires a special importance if significant differ­
ences are not to be buried.
The keystone of agreement analysis study is
obviously the interpretation of the agreement and
the assignment of the predetermined code number.
For some subjects, an agreement must be read
in its entirety; for others, only a portion. Long
and legalistic provisions must be reduced to their
essentials. Since the interpretation of agreement
provisions is often a troublesome matter for the
parties themselves (as reflected in the widespread
adoption of provisions for arbitration), misinter­
pretations undoubtedly occur. These are kept
to a minimum by a staff experienced in agreement
analysis and by continuous efforts to assure con­
sistency of interpretations.
Under present conditions, approximately 5 or 6
agreement provision studies are planned per year.
Over a period of 4 or 5 years most of the significant
provisions are covered. As agreements are re­
ceived, they are coded for each item being studied;
hence each agreement is generally handled only
once. Coding over a period of a year accounts
for the bulk of the current agreements (those with
a 1-year term ); thus it generally takes a minimum
of a year from the start of a survey to the end of
coding (long-term agreements are covered during
the course of the year). Preparing tabulations
and analyzing the results follow. As one study
nears conclusion, another is readied to take its
place.

Collection and Analysis oj Employee-Benefit Plans.
Different techniques of collection and analysis are
used for health, insurance, and pension plans.
This is due, in large part, to the relatively recent
spread of employee-benefit plans and to the Bu­
reau’s allocation of resources as between agreement
and plan files and studies. There are, however,
other factors which tend to complicate the collec­
tion of employee-benefit plans. In the first place,
these plans, as negotiated, frequently have no ex­
piration dates or precise reopening dates as do
agreements. Employee-benefit plans are generally
established as long range undertakings, although
they are, perhaps, dependent upon the continu­
ance of collective bargaining relationships. Sec­




117

ondly, employee-benefit plans, particularly health
and insurance plans, are subject to more frequent
modification than are basic agreements. These
changes may come about through such factors as:
adjustments to changing costs or premium rates,
recognition of the inadequacy or superfluity of
particular benefits, substitution of benefits, and
changing legal requirements and benefits. Revi­
sions may be made through action of the trustees
or through mutual understanding or negotiations
between the parties. Since many changes can be
made within the cost limitations agreed to in col­
lective bargaining, the process tends to be far less
formal than negotiating changes in the basic
agreement, which are usually permitted only at
specified times.
Because of the frequency of change, it is difficult
to maintain the employee-benefit plan file on a
current basis. The Bureau’s present practice is
to request copies of changed or new plans once a
year or upon learning of a change through various
informational sources such as the Bureau’s
Monthly Report on Current Wage Developments
and the commercial services in this field. When
a sample of plans is selected for an analytical study,
each plan is checked for currency before analysis
is begun.
The Bureau’s study of pension plans under col­
lective bargaining, published in 1953 (Bull. 1147),
represents its most comprehensive analysis of such
plans to date. The study was based on a selec­
tion of 300 current plans from the Bureau’s file,
chosen to represent various industries, unions, and
types of plans, and covered such provisions as
vesting, compulsory retirement, and types and
levels of benefits. An analysis of health and in­
surance plans now in process is based on a similar
selection. Machine tabulation techniques have
not been applied in these studies, mainly because
the small size of the samples and the complexity
and variety of the plans studied are more adapt­
able to so-called “hand” tabulation and a flexible
approach.
The Bureau’s work in employee-benefit plan
analysis has yet to exploit fully the potentialities
of analysis applicable to this area of study. How­
ever, as in the case of agreement analysis, the con­
trolling factors are the nature of the public de­
mand for information, as gaged by the Bureau,
and the limitations of staff resources.

118

T E C H N IQ U E S

OF

P R E P A R IN G

M AJOR

Limitations
The limitations of these studies of agreement
provisions and employee-benefit plans are deter­
mined, in large part, by their application. For
studies of paid holiday provisions or other supple­
mentary benefits, the fact that these studies cover
only the area of collective bargaining may con­
stitutes limitation on generalizations applying to
all workers but not necessarily on their uses in
collective bargaining or in wage and employee
administration. On the other hand, these studies
do not show locality practice, which may reduce
their usefulness for some collective bargaining
purposes but not for broad generalizations relating
to workers under collective bargaining.
Additional limitations of agreement provision
studies are inherent in the selection of agreements

BLS

S T A T IS T IC A L

S E R IE S

for study— the exclusion of railroads and airlines
agreements and, under the revised approach, of
agreements covering fewer than 1,000 workers—
and in the technique of analysis, as indicated
previously. There are also limitations connected
with the particular subjects studied, which are
pointed out in each study. A fundamental limita­
tion which must be borne in mind in connection
with certain studies (e. g., grievance procedure) is
that they relate to written policy rather than
actual practice. Practices which are not provided
for in the agreements but are, instead, matters of
company policy going beyond the agreement,
traditional industry policy, informal acceptance
by management and unions, or arbitrators’ deci­
sions, can be neither detected nor measured in
agreement analysis.

B IB L IO G R A P H Y

Characteristics oj 12,000 Labor-Management Contracts.
Review, July 1951, p. 31.
Statistics.

Monthly Labor
U. S. Department of Labor, Bureau of Labor

Collective Bargaining Structures: The Employer Bargaining Unit.
Report 1.)

(BLS

U. S. Department of Labor, Bureau of Labor Statistics.

Collective Bargaining Agreements: Expiration, Reopening, and Wage Adjust­
ment Provisions oj Major Agreements, June 1953. (BLS Report 17.)
U. S. Department of Labor, Bureau of Labor Statistics.

Collective Bargaining Provision Series.
various titles.)

(BLS Bulletins 908-1 to 908-19,
U. S. Department of Labor, Bureau of Labor Statistics.

Pension Plans Under Collective Bargaining.

(Bull. 1147.)

U. S. Department

of Labor, Bureau of Labor Statistics.

Agreement Analysis Card oj the International Association oj Machinists.
Monthly Labor Review, July 1947, p. 75.
Bureau of Labor Statistics.

U. S. Department of Labor,

Research on Extent and Scope oj Collective Bargaining.

By Kirk R. Petshek.
Proceedings of Fifth Annual Meeting of the Industrial Relations Re­
search Association, 1952.

Basic Patterns in Union Contracts.

Third edition.
Affairs, Inc., Washington, D . C., 1954.

Written Trade Agreements in Collective Bargaining.
Board, November 1939.



(Bull. 4.)

Bureau of National

National Labor Relations

C h a p te r 1 4 . T h e M e a su re m e n t o f T re n d s in O u tp u t p e r M a n -h o u r*
Background and Uses
The development of indexes of output per man­
hour for American industry is a long-established
program of the Bureau of Labor Statistics. One
of the early research studies undertaken in this
field was Commissioner Carroll D . Wright’s study
of
in 1898. This monu­
mental collection of statistics on labor time and
labor costs for manufacturing various commodities
revealed striking examples of industrial progress
between the 1840’s and the 1890’s.
Industrial developments after World War I
aroused widespread interest in productivity trends.
The Bureau undertook the publication of annual
indexes of output per man-hour for individual
manufacturing industries on the basis of readily
available production data from the censuses of
manufactures and employment statistics col­
lected by the Bureau of Labor Statistics.
In 1940, the Congress authorized the Bureau of
Labor Statistics to undertake continuing studies
of productivity and technological changes in
American industries. The Bureau revised and
extended earlier indexes of output per man-hour
and published selected measures in its publication,
Productivity and Unit Labor Costs in Selected
Manufacturing Industries, 1919-1940 (February
1942). This work was reduced in volume during
World War II, however, owing to the lack of
meaningful production and man-hour data for
many manufacturing industries affected by con­
version and other factors. It was resumed after
the war, and beginning in 1946 was supplemented
by studies of trends based on data collected
directly from plants. This direct reports program
has been in abeyance since 1952; more recently
the Bureau has devoted considerable attention to
the development of indexes of output per man-hour
for manufacturing as a whole, on the basis of
published data from industrial censuses and
surveys and other secondary sources.
Measures of productivity for broad sectors of

Hand and Machine Labor

*
Prepared intheDivisiono Productivityand TechnologicalDevelopments.
f




the economy are of interest because of the neces­
sarily close relationship of rising productivity with
growth in the real standard of living and the
strength of the American economy. They are of
special importance in studying probable future
demands for manpower, in both normal times and
periods of national stress. Productivity develop­
ments are also of interest in studying the progress
of individual industries, and conversely, develop­
ments in particular industries may have signifi­
cance for the economy as a whole.
Measures of productivity covering a span of
some years generally reflect the influence primarily
of changing technology and methods of produc­
tion. Over short periods, e. g., from year to year,
the effect of other and perhaps temporary factors
such as changes in the volume of production may
dominate. The interpretation of productivity
indexes and their application to specific problems
requires particularly careful understanding of the
definitions, concepts, sources of data, weighting
procedures, limitations, and statistical techniques
used in preparing the series.
Some General Concepts

Definition.

(1)
The term “ output per man­
hour” refers to the ratio of the volume of goods
produced to the input of one factor of productionlabor time. The Bureau’s indexes of output per
man-hour measure the relative change from year
to year in this ratio for a specific industry or
group of industries.
Changes in the ratio show the joint effect of a
large number of separate, though interrelated,
influences such as technical improvements, rate of
operations, flow of materials and components, as
well as skill and effort of the work force, efficiency
of management, and status of labor relations.
It is obvious, therefore, that output per man-hour
does not measure the specific contribution of labor
to production.
(2)
Indexes are computed in terms of both

Unit man-hour requirements and output per
man-hour.
119

120

T E C H N IQ U E S

OF

P R E P A R IN G

M AJOR

BLS

ST A T IS T IC A L

S E R IE S

unit man-horn* requirements and output per man­
hour. When an industry produces more than one
product the latter index (based on output divided
by man-hours) is computed as the reciprocal of the
former (man-hours divided by output). This is
conceptually necessary because the former implies
comparison of the relative amounts of labor re­
quired in different periods to reproduce a specified
production composite, which is feasible; the latter
implies comparison of the differing amounts of
production which might be achieved in different
periods with the same expenditure of labor, which
has no unique answer.
(3)
The Bureau has em­
ployed two separate approaches in measuring out­
put per man-hour and unit man-hour trends
in individual industries. First, annual indexes
are computed from data on aggregate production,
employment, and hours of work, collected through
industrial censuses and surveys. Since a com­
prehensive body of data is available from these
sources, indexes can be constructed for a fairly
wide range of industries over a number of years.
The second approach, in abeyance since 1952,
involves developing industry indexes of unit man­
hour requirements on the basis of data for specific
products collected through field surveys of plants.
This method has the advantage not only of supple­
menting the data which can be secured from
secondary sources, but also makes it possible to
obtain information on industry developments and
factors influencing observed trends.

1947-49 = 100. The base for the previously pub­
lished studies was 1939 = 100. The definitions of
industries are generally those presented in the
Bureau of the Budget’s Standard Industrial Classi­
fication Manual.

Descriptions of Industry
Secondary Source Data

The Bureau’s series on unit man-hour require­
ments relate to the man-hours required for the
industry’s output, expressed in physical terms.
Output per man-hour is the reciprocal of this
ratio. For an industry producing a single uniform
product, an index of unit man-hour requirements
for a particular period is simply the ratio of man­
hours per unit of the specific item produced to unit
man-hours in the base period. To derive an index
for an industry producing a number of different
products— the more typical case— it is necessary to
specify a particular composite of products.
The industry indexes of unit man-hour require­
ments computed from secondary source data are
based on the formula for a changing composite of
products. Expressed as a relative of two weighted

Sources for indexes.

Indexes

Based

on

The Bureau has published indexes of unit man­
hour requirements and output per man-hour and
per production worker, for selected industries in
the manufacturing, mining, and public utilities
divisions. Table I presents a list of industries and
the years for which indexes are available in 1954.
The descriptions which follow deal specifically
with these industries. In addition, indexes for
industry groups— mining, agriculture, railroads,
and electric light and power— are available for
varying time periods. Along with output per
man-hour indexes, the Bureau publishes indexes
of production, man-hours, and production worker
employment from which the series are derived.
The base for these series is being revised to



I d s r e f r w i h teBureau o L b r Saitc h s pub­
nutis o h c h
f a o ttsis a
l s e o t u p r man-hour sre from s c n a y s u c
ihd u p t e
eis
e o d r ore
dt
aa
Period covered

Industry

M
anufacturing

Beet sugar._ __________________ _ . _ _
Bread and other bakery products__ ___ ____ _
Cane sugar r f
e ining
____________ . .
.
_______
Canning and preserving.... .... _ _____ . . _ .
.
Cement____ __________ __ ____ . . _____
.
Clay construction products___ _______ .
.
__ _
Coke products.__ ___ ___________ ____ ____
Condensed and evaporated milk__ . . . ...___ _____
.
Confectionery________ ___ _____ ________ __
F r i i e __________ _______ _____ _______
etlzr
Flour and other g a n m l products . . ___ ________
ri-il
.
.
Footwear (ex e t rubber)_______ .. __ . _____
cp
Glass containers____ ___ _ _ _ ___ . . . ____
. __
Hosiery___ _ _ .
.
.
...
I e cream....
c
_
Leather___________
_____ __ _ . _ _ .
_
.
Malt liquors____ _______ ______________ _
.
Primary smelting and r f n n o copper, l a ,and zinc__
eiig f
ed
Rayon and other synthetic products_______________
.
. .
.
Tobacco products_____________ . ___

Mining

Anthracite__ _______________ . . ___ ____
.
Bituminous coal________ . ________ ___ _____
Copper_______ _________ ___ ____ _________
Iron_________ ___ _____ ...___...........
Lead and zinc_ _____ _____________ ___ _ . . .
_
.
Trends i output per man-hour in mining __________
n

13-0
995
13-7
994
13-7
994
13-0
995
13-0
995
193 - 0
95
13-0
995
13-0
995
13-1
995
13-7
994
13-1
995
193 - 7
94
13-1
995
13-0
995
13-1
995
994
13-7
13-0
995
13-0
995
13-0
995
13-0
995
13-0
955
13-1
955
13-0
955
13-8
954
13-0
955
13-9
954

Public utilities
E e t i l g tand power industry__ . _______ _
lcrc ih
.
Railroad transportation_ _ __________ _______
_
Telephone and telegraphindustries_____________ .

Agriculture

Agriculture_______________________________

974
11-8
13-1
955
13-7
954
190 - 0
95

CO NCEPTS

aggregates, the formula is

It

where
L L 0Q i

q is the

M E A S U R E M E N T O F T R E N D S IN

l

quantity of a given product of the industry; is
man-hours required to produce one unit of product;
t refers to current year; and o, to base year.
The
index measures the change in total man-hours
required to produce the current year composite of
goods compared with the man-hours that would
have been required in the base year to produce the
current output composite.
Because it is frequently difficult to obtain
secondary data on annual changes in man-hour
requirements for individual products of a multi­
product industry, it is necessary to derive the unit
man-hour indexes by relating production indexes
to man-hour indexes for the industry. The
aggregative type index— with changing quantity
weights— is equivalent to the ratio of an index of
actual man-hours to an index of physical output,
with base year unit man-hour requirements as
product weights:

2l0 gt Xl0 go '

h

Since the index is intended to measure changes in
unit labor requirements, in terms of physical units
of output, unit man-hours are used as weights to
combine product quantities. The industry index
is an average of the indexes for individual products
and lies within the range of unit man-hour require­
ment indexes for individual products.
Indexes based on aggregate production and man­
hour data from secondary sources are affected by
changes among tUe establishments comprising the
industry. That is, the indexes are affected by
shifts in volume of production from less efficient to
more efficient plants— or vice versa— even though
unit man-hour requirements in the individual
plants may show no change.
SO U RCES A N D M E T H O D S OF
C A L C U L A T IO N
Because the available data on output and man­
hours are collected for general purposes, rather
than for specific use in productivity measurement,
it is frequently necessary to make certain adjust­
ments and adopt approximations. In the follow­
ing paragraphs, methods used in measuring trends
in output are described first; the measurement of
man-hour change is discussed beginning on page
123.
304523— 5!

-9




O U T P U T P E R M A N -H O U R

121

P H Y S IC A L P R O D U C T IO N
M EASUREM ENT

Unit of output

(1)
Data on quantities of indi­
vidual products are used wherever possible in
measuring physical output. The Bureau tries
to obtain measures of output in physical units
which are related to man-hour requirements.
These vary according to industry. In the rayon
industry, production is measured in terms of
weight rather than in length of various types and
deniers produced. In copper mining, the measure
is both in terms of tons of raw ore and of recover­
able ore mined. The output of the electric light
and power industry is defined as kilowatt-hour
sales by private utilities. The volume of freight
and passenger revenue traffic and freight and
passenger car miles are used in line haul operating
railroads. For the telephone industry, the meas­
ure is the number of local and toll calls.
Output may also be estimated on the basis of
the physical volume of materials consumed. Con­
sumption provides a satisfactory indicator of
production trends in industries where no significant
change has occurred in the amount of material
consumed per unit of final output.

Source of data

(2)
. Production data used in
measuring output are published by various public
and private agencies. The production classes
and definitions employed by these agencies are
necessarily the basis of the indexes. The Bureau
of the Census of the U. S. Department of Com­
merce is the most important source of product
statistics for the manufacturing industries. The
Bureau of Mines compiles most of the production
data used in the series for mining, as well as those
for cement, coke, and nonferrous metals indus­
tries. Other important Government sources in­
clude Department of Agriculture, Department of
Interior, Interstate Commerce Commission, Tariff
Commission, and Bureau of Internal Revenue.
Trade associations providing data include the
Tanners Council, Textile Economics Bureau,
National Association of Hosiery Manufacturers,
National Canners Association, Millers National
Federation, National Fertilizer Association, and
the American Iron and Steel Institute.

Weights.

(3)
For most industries, output is
measured by combining product quantities by base
year weights. The output index is constructed

122

T E C H N IQ U E S O F P R E P A R IN G M AJO R B L S

by relating the weighted aggregate in the given
year to the base year aggregate. In a few indus­
tries where one product is predominant, the meas­
ure of output is the unweighted aggregate of the
physical volume produced.
Unit man-hour weights for combining product
quantities will be preferred on theoretical grounds
for constructing indexes of man-hour requirements.
Unit man-hours for individual products are avail­
able for a few large industries. Lacking these
data, the Bureau uses as product weights, in de­
creasing order of preference, data on unit labor
costs, unit value added (value per unit less unit
cost of materials, supplies, etc.), and unit value.
In selecting an alternative weighting system, the
Bureau attempts to ascertain whether the substi­
tute reflects approximately the relative differences
in unit man-hour requirements among products.
Data on unit labor cost and unit value added are
available for a few industries. Where unit values
are used as substitutes for unit man-hour weights,
the data are generally derived from information
on quantity and value published in industrial
censuses and surveys. As indicated earlier, the
weights refer to the base rather than to the current
year.
Indexes of unit man-hour requirements con­
structed with unit value weights show the change
in man-hours per unit per dollar of total value,
in terms of base year value per unit for each item.
Changes in these indexes may reflect shifts from
products with high man-hour per dollar of total
value, and vice versa, without any change in the
unit man-hour requirements for any particular
product of the industry. The index for the indus­
try may, therefore, fall outside the range of changes
in unit labor requirements for individual products.
Measures to determine the extent of error or bias
which value weights may introduce are too frag­
mentary to be reliable. An index weighted with
unit values is equivalent to one weighted with unit
man-hours if (1) unit man-hours and unit values
are proportional or, (2) if the weighted correlation
coefficient between the relative change in quantity
and value per man-hour is zero.1 There is some
reason to believe that unit values are fairly reliable
approximations of unit man-hours requirements
for individual products in industries where wages
1 Siegel, I. H .f F u rth erjN otes on th e D ifferences B etw een In d e x -N u m b e r
F orm ulas, Journal o f the A m e r ic a n Statistical A ssociation X X X V I (D e c e m ­
ber, 1941) (p p . 519-524). '




S T A T IS T IC A L S E R IE S

constitute a large proportion of total value of
output.
(4)
. The Bureau’s
measures of production are constructed from data
on physical output of items comprising a high
percentage of the total value of an industry’s out­
put. Coverage varies between 60 and 100 percent.
Complete coverage is generally obtained in mining
and other well defined industries with a relatively
homogeneous output.
Indexes for manufacturing industries are gener­
ally based on quantity data for a portion of total
output. Quantity data relate to primary products
of an industry— the set of products accounting for
the principal portion of its total shipments.
Information on secondary or relatively less im­
portant products and on custom, contract, and
repair work are reported in terms of dollar value,
rather than physical quantity. Although the
proportion of an industry’s output covered by
quantity data is generally substantial, this ratio
may vary from year to year.
Another important aspect of the quantity data
used is that the data relate to products primary to
an industry wherever made. The data, therefore,
include quantities produced by establishments in
other industries where these products are secondary
to their primary items of production. If the pro­
portion of an industry’s secondary production and
the proportion of products covered by the index
but made outside an industry remain unchanged
or if changes in one offset changes in the other, no
adjustment is necessary.

Coverage of output measures

The Bureau attempts to make some adjustment
for changes in these proportions. For the years
1939 and 1947, coverage adjustment factors for
selected industries are computed from the Census
of Manufactures. For other years, data are
seldom available. This adjustment is based on
the ratio of the value of items in the index to
total value of an industry’s products and assumes
uniformity of price movements of products nor­
mally classified in the industry, irrespective of
whether made in the industry or elsewhere. This
assumption is not made with respect to secondary
products, whose prices may move in accordance
with those in the industry which would normally
produce them. The decision as to whether or
not to make a coverage adjustment is based on
which factor contributes principally to the cover­
age change— change in production of primary

M E A S U R E M E N T O F T R E N D S IN O U T P U T P E R M A N -H O U R

products outside the industry, or change in sec­
ondary product manufacture within the industry.
The method followed in making coverage adjust­
ments is the same type as that used by the
Bureau of the Census, the Federal Reserve Board
and the National Bureau of Economic Research.2
Closely related to the problem of the changing
proportion of primary and secondary products is
the problem of industry classification of individual
plants. Plant man-hours are classified by Census
and BLS in appropriate industries on the basis of
the group of products accounting for the principal
portion of the total value of shipments by the
establishment.
Plants in which manufacture of secondary
products is a high proportion of total output may
sometimes increase the proportion of products
secondary to the industry to exceed that of the
primary products. Theoretically, such a plant
should be reclassified to the industry indicated by
the new production pattern. In practice, the
Bureau of the Census and other collecting agencies
do not automatically reclassify establishments
following shifts in production pattern. Where the
change is significant plants are shifted from one
industry to another.
Where sizable proportions of products normally
made in a particular industry are made in another
industry or where secondary output is important,
the problem can sometimes be solved by grouping
industries. For example, separate indexes for
butter, cheese and ice cream would be affected
by the fact that these industries make each other's
products. The index for dairy products as a
group, however, is not subject to this overlapping
since very little of these products is made outside
the dairy industry.
(5)
Changes in product speci­
fication and the introduction of new products
occur in many industries. The Bureau uses as
much product detail as is available and also
attempts to group product data into relatively
homogeneous categories and to weight each
category appropriately in order to minimize the
effect of changes in specification on the indexes.
In a large number of cases information is not
available for specifically measuring such changes.

Product detail.

* Census o f M anufactures: 1947 Indexes o f P ro d u ctio n , Joint P u b lica tio n
o f U . S. B ureau o f Census an d B oa rd o f G overn ors o f the Federal R eserve
S ystem . W ash in gton : 1952, A p p e n d ix D . S. F a bricant, O u tpu t o f M a n u ­
factu ring Industries, 1899-1937. N e w Y o r k : 1940 (p p . 366-369).




123

The individual industry indexes published by
the Bureau are those for which there is generally
evidence that the product changes are appropri­
ately reflected in the industry composite for
purposes of measuring output per man-hour.
Thus, the Bureau has refrained from publishing
an index for the sawmills and planing mills indus­
try, in which the available data relate to the
number of board feet of lumber produced each
year. However, an index of production and of
output per man-hour based on the number of
board feet of lumber sawed may be influenced by
such factors as a shift in manufacture from small
dimensional lumber to large timbers, or vice versa.
More man-hours per board foot are required for
smaller dimension lumber than for large timbers,
and a production indicator in terms of board feet
alone may be insufficient for computing a pro­
ductivity index.
The various adjustments described in the previ­
ous sections are based on available secondary
source data and therefore do not always solve
completely the problems set forth. As part of
its evaluation of industry indexes which are pub­
lished separately, the Bureau reviews the methods,
data and adjustments employed with manage­
ment and labor officials of the industry. Addi­
tional industry data, not otherwise available, are
frequently obtained through these consultations^
and utilized in constructing the index.
M A N -H O U R M E A S U R E M E N T
The principal sources of man-hour series are
the Bureau of Labor Statistics and the Bureau of
the Census. Indexes based on BLS data are
computed from aggregate man-hours derived by
multiplying the annual average number of pro­
duction workers employed by annual average
weekly hours worked in the industry. The
Bureau of the Census publishes estimates of
aggregate production worker man-hours worked
in individual industries. For mining and other
nonmanufacturing industries, BLS data on pro­
duction and nonsupervisory workers are used.
Information from the Bureau of Mines and
the Bureau of Agricultural Economics supplement
these sources.
Indexes of man-hours measure the relative
change from the base year of the unweighted

124

T E C H N IQ U E S O F

P R E P A R IN G M A JO R B L S

aggregate volume of labor time. Labor time or
man-hours are considered a homogeneous total,
each unit interchangeable with another. Data
on changes in qualitative aspects of man-hour
input, such as the skill, efficiency, health, ex­
perience, age, and k
sex of the persons composing
the aggregate are generally not available. Thus,
a shift from skilled to unskilled labor, without any
change in total man-hours, is not reflected by
man-hour indexes.
The man-hour data utilized relate to the time
expended in establishments classified in the in­
dustry; they cover not only employment on
primary activities of establishments but also on
the manufacture of secondary products and on
nonmanufacturing auxiliary activities such as
power production. However, the definition of
man-hour input excludes indirectly required la­
bor— labor required beyond the manufacturing
plant stage for transportation or marketing. Also
excluded is “ embodied labor” — labor applied to
the making of machines, tools, fuel, etc., consumed
in the industry’s manufacturing process.
The standard definition of “ production and
related workers” is used (chap. 1, p. 6). The
BLS definition of average weekly hours covers all
hours paid for, including some hours not worked,
such as standby or reporting time, rest periods,
portal to portal time, military and paid sick leave,
paid holidays, and paid vacations. The term
refers to time expended, not scheduled or standard
hours. “ Man-hours paid for” is a measure of the
amount of labor time used for production within
a framework of existing industrial and legal insti­
tutions and practices. The Bureau of Census
man-hour statistics also refer to production worker
plant man-hours, worked or paid for, but exclude
hours on paid vacations, paid holidays, and paid
sick leave.

Although less inclusive than the BLS

definition, Census man-hours data also cover hours




S T A T IS T IC A L

S E R IE S

for standby, and similar types of man-hours paid
for but not worked.
L IM IT A T IO N S
The basic objective of the BLS industry in­
dexes is to provide a measure of change in average
man-hour requirements for a unit of physical out­
put. This type of index serves a wide variety of
purposes and is extensively used in business
research and general economic analysis. Certain
characteristics of the indexes, however, should be
kept in mind in applying them to particular
problems.
First, indexes of unit labor requirements or
output per man-hour measure productivity change
in terms of labor input only. This type of index
is especially relevant in estimating labor require­
ments and analyzing employment fluctuations.
This does not mean, however, that labor is the
sole or principal factor responsible for gains in
output per man-hour. Also, it is evident that an
index of unit fuel, energy, capital, or total factor
requirements would not necessarily follow the
trend of man-hour requirements.
Second, the indexes do not generally reflect
changes in the quality of an industry’s output.
Adequate data are not generally available for
quantifying changes in the specifications or service­
ability of various commodities.
Third, the industry indexes reflect changes not
only within plants but also the effects of shifts of
production among establishments at different
levels of efficiency. The series do not represent
the trend for any individual firm.
Finally, a small difference between two annual
indexes subject to varying margins of error should
not be interpreted as a significant change. BLS
indexes of output per man-hour over the years,
though approximate, provide useful indicators of
the growth characteristics of American industries

M EASUREM ENT

O F T R E N D S IN

OUTPUT

PER

125

M A N -H O U R

B IB L IO G R A P H Y

The Productivity Measurement Program of the Bureau of Labor S a i t c .
ttsis
Washington, U . S. Department of Labor, Bureau of Labor Statistics,
July 1952.

Selected Statements Interpreting the Productivity Measurement Program of th
e
Bureau of Labor S a i t c . Washington, U. S. Department of Labor,
ttsis
Bureau of Labor Statistics, August 1950.

Summary of Proceedings of Conference on Productivity, October 28-29, 1946.
Washington, U. S. Department of Labor, Bureau of Labor Statistics,
1947. (Bull. 913.)

Indexes of Labor Productivity as a Partial Measure of Technological Change.
B y W . D . Evans. (Paper presented to the Conference on Quantitative
Description of Technological Change, April 1951.) Washington, 1951.

The New B L S Indexes of Productivity in Manufacturing. B y L. Greenberg
and A. D . Searle. (Paper presented to the Annual Meeting of the
American Statistical Association, Washington, December 1953.)

Relationships Between Productivity Measures. Monthly Labor Review, M ay
1954, pp. 552-557.

Concepts and Measurement of Production and Productivity. B y I. H . Siegel.
(Reproduced as a working paper of the National Conference on Pro­
ductivity.) Washington, March 1952.

Progress and Status of Productivity Measurement in the United S a e . B y
tts
S. Weiss. (Paper presented to the 28th Session, International Statistical
Institute, Rome, Italy.) Washington, September 1953.

Productivity and Wages. B y W . D . Evans.

In Employment and Wages in
the United States, Ed. by W . S. Woytinsky, Twentieth Century Fund,
New York, 1953.

The Transportation Industries, 1889-1946. B y H . Barger.

National Bureau

of Economic Research, New York, 1951.

American Agriculture, 1899-1989. B y H. Barger and H . Landsberg. National
Bureau of Economic Research, New York, 1951.

The Mining Industries, 1899-1989. B y H . Barger and S. Schurr. National
Bureau of Economic Research, New York, 1944.

Employment in Manufacturing, 1899-1989. B y S. Fabricant.

National

Bureau of Economic Research, New York, 1942.

Output and Productivity in the Electric and Gas U i i i s 1899-194®.
tlte,
J. M . Gould.




By
National Bureau of Economic Research, New York, 1942.

126

T E C H N IQ U E S

OF

P R E P A R IN G

M A JO R

BLS

S T A T IS T IC A L

S E R IE S

B IB L IO G R A P H Y — Continued

Mechanization in Industry. B y H . Jerome.

National Bureau of Economic

Research, New York, 1934.

Productivity and Economic Progress. B y F. C. Mills.
Economic Research, New York, 1953.

National Bureau of
(Occasional Paper 38.)

Recent Productivity Trends and their Implications. B y W . D . Evans.

Journal
of the American Statistical Association, X L I I (June 1947) pp. 211-223.

The Meaning of Productivity Indexes. B y W . D . Evans, and I. H . Siegel
Journal of the American Statistical Association, X X X V I I I (March 1942),
pp. 103-111.

Of Productivity S a i t c : An Admonition. B y S. Fabricant.
ttsis

The Review
of Economics and Statistics, X X X I (November 1949) pp. 309-311.

Methods of Labour Productivity S a i t c . Studies and Reports, New Series,
ttsis
No. 18.

Geneva, International Labor Office, 1951.

National Productivity and It Long Term Projection. B y J. W . Kendrick.
s
In Long Range Economic Projection, National Bureau of Economic R e­
search, Princeton University Press, Princeton, 1954.

Measurement of Productivity: Methods Used by the Bureau of Labour S a i t c
ttsis
in the U. S. A. Report by a Group of European Experts. Paris,
Organization for European Economic Cooperation, October 1952.

Production, Employment, and Productivity in 59 Manufacturing Industries
1919-1936. B y H. Magdoff, I. H . Siegel, and M . B. Davis. Report
N o. S - l . 3 Vols., Works Progress Administration, National Research
Project, Philadelphia, 1939.




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