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Techniques of Preparing
Major BLS Statistical Series

[From the Monthly Labor Review of
the Bureau of Labor Statistics, Sep­
tember, October, and November 1949,
and January, February, March, and
April 1950 issues]

Bulletin No. 993
Maurice J. Tobin,


Ewan Clague, C om m ission er

For sale by the Superintendent of Documents, U. S. Government Printing Office, Washington 25, D. C,

Price 40 cents


Letter of Transmittal
U nited States D epartment op L abor,
B ureau of L abor Statistics,

Washington, D. C., June 21, 1950.
The Secretary of L abor:
I have the honor to transmit herewith technical descriptions of the methods
used by the Bureau of Labor Statistics in the preparation of its major statistical
series. In all, 13 technical notes are included, each of which indicates the
sources of information, the method of collection, the limitations of the series,
and the statistical procedures utilized in the computation of the periodic
economic measures.
These technical notes are the work of members of the staffs of the appropriate
Bureau divisions. Bruce M. Fowler of the Construction Division of the Office
of Domestic Commerce, U. S. Department of Commerce, is co-author of note
No. X .
E wan C lague, Commissioner.
Hon. M aurice J. T obin,
Secretary of Labor.


The Bureau of Labor Statistics considers that it has an obligation to inform users of its statistics
concerning methods used in the preparation of individual series. Therefore, a number of technical
notes covering the major statistical series make up this volume. They have already appeared in various
issues of the Monthly Labor Review and are collected here for the convenience of the users of BLS data.
Professor Simon Kuznets, a recent president of the American Statistical Association, speaking before
the members of that Association, made the following statement on the explanation of techniques:
“ Indeed, as a rule, collectors and publishers of primary data do not deem it their obligation to
accompany a series by a detailed description of how it was obtained; and users also, for the most part,
tend to accept a series, particularly one issued by a governmental agency, at its face value without
inquiring into its reliability. If this impression is correct, there is surely room for much additional work.
It may legitimately be urged that compilers and publishers of series give full details on methods of collec­
tion, compilation, classification, and adjustment; that various compendia of basic series supply descrip­
tions of their origin as an indispensable part of the information; that users exercise their right to be in­
formed about the derivation of the series offered them; and that authors of textbooks on statistics become
cognizant of the problem and cease confining their attention to tools of analysis while forgetting the
elementary question of the character of the primary and derived data.”
In an attempt to fulfill such requirements, this bulletin deals separately with (a) the scope of the
respective surveys, (b) definitions and concepts used in the collection of these statistical data, (c) the
sources of these data and their limitations, and (d) the methods used in the calculations of the various
measures, such as indexes, averages, rates, etc. These discussions should enable persons employing the
statistics to make more effective use of them, and to limit their use to the situations where applicable.
These technical notes are written primarily from the point of view of the consumer and not the pro­
ducer of the data. Whenever possible, therefore, the notes have been written in narrative form. The
occasional algebraic formulas merely supplement the text, which is complete and understandable in itself.
Although written primarily for the consumer, these notes should prove of inestimable aid to both
students and university instructors, particularly in courses in the field of labor economics and statistics.
They also should furnish to the student, to the instructor, and to the writer of textbooks an appreciation
of the problems faced by the producer of these data.
As indicated by Professor Kuznets, present-day textbooks do not always give a balanced view of the
statistician’s problems in conducting specific surveys. The major cost of conducting a survey, mainly
that of collection in its broader sense, is ignored by present-day authors. It is hoped that these notes
may furnish to the writers of statistical textbooks material which will result in more adequate coverage
than heretofore of the problems of collection encountered in the statistics.




I. Construction of consumers’ price index____________________________________________________
Limitations of the C PI__________________________________________________________________
Methods of pricing______________________________________________________________________
Sources of price quotations______________________________________________________________
Calculation procedures__________________________________________________________________
Relative importance of items____________________________________________________________
II. Collection and compilation of work stoppage statistics___________________________________
Limitations of the series________________________________________________________________
Survey methods and sources_____________________________________________________________
Calculation procedures__________________________________________________________________
III. Estimating national housing volume_____________________________________________________
Limitations of the series_________________________________________________________________
Methods and sources of survey__________________________________________________________
Calculation procedures__________________________________________________________________
Tests of reliability______________________________________________________________________
IV. Measurement of labor turn-over_________________________________________________________
Limitations of the series_________________________________________________________________
Survey methods and sources_____________________________________________________________
Calculation of turn-over rates___________________________________________________________
V. Compiling monthly and weekly wholesale price indexes____________________________________
Comprehensive monthly index__________________________________________________________
Weekly index___________________________________________________________________________
VI. Preparation of union scales of wages and hours series____________________________________
Limitations of the series_________________________________________________________________
Study methods and sources______________________________________________________________
Computation procedures________________________________________________________________
VII. Measurement of industrial employment_________________________________________________
Limitations of the data__________________________________________________________________
Survey sources and methods____________________________________________________________
Calculation procedures__________________________________________________________________
VIII. Calculating hours and earnings of workers in industry--------------------------------------------------Survey sources and methods____________________________________________________________
Calculation procedures__________________________________________________________________
Interpretation and limitations___________________________________________________________
IX . Measurement of unit man-hour requirements___________________________________________
Limitations of productivity measures------------------------------------------------------------------------------Industry indexes: secondary source data________________________________________________
Industry reports: field-collected data------------------------------------------------------------------------------X . Estimating expenditures for new construction-------------------------------------------------------------------Limitations of the series_________________________________________________________________
Sources and general estimating methods--------------------------------------------------------------------------Adjustment procedures__________________________________________________________________
X I. Compilation of industrial-injury statistics-----------------------------------------------------------------------Limitations of the series_________________________________________________________________
Sources and methods of surveys-------------------------------------------------------------------------------------Computation procedures------------------------------------------------------------------------------------------------X II. Occupational wages: establishment sampling-----------------------------------------------------------------Collection of information________________________________________________________________
General sampling procedures____________________________________________________________
Limitations of sampling theory---------------------------------------------------------------------------------------X III. Occupational wages: conduct of surveys----------------------------------------------------------------------Limitations of surveys---------------------------------------------------------------------------------------------------Study methods and sources______________________________________________________________
Compilation procedures--------------------------------------------------------------------------------------------------



Techniques of Preparing Major BLS Statistical Series

I. Construction of
Consumers’ Price Index
Changes in prices paid for goods and services
usually bought by moderate-income families in
large urban centers are reflected by the Consum­
ers’ Price Index,1 which the U. S. Labor Depart­
ment’s Bureau of Labor Statistics issues from
month to month. Such changes are measured by
the rate of price movement of a representative list
of items of specified quality. The components of
the index and the weights assigned to each of
them remain constant for considerable periods.
The rate of price change is one of the most impor­
tant factors affecting the cost of living, and over
short spans of time, the Bureau’s index gives an
acceptable approximation of changes in the cost
of living for urban workers.
The index was initiated during World War I,
when prices rose rapidly, for use in wage negotia­
tions, particularly in shipbuilding centers. Cover­
age was gradually extended to include industrial
cities throughout the country, and estimates of
Nation-wide changes in living costs were published
at intervals, beginning in October 1919. Begular
publication was established in February 1921.
Weights used in these early indexes were based on
surveys of family expenditures conducted during
i The title, Consumers’ Price Index for Moderate Income Families in
Large Cities, was adopted in 1945. Previously this index had been precisely
designated, Changes in the Cost of Goods and Services Purchased by Wage
Earners and Lower-Salaried Clerical Workers in 1934-36. In popular usage,
this title was later shortened to Cost-of-Living Index. The latter designation
gave rise to some misunderstanding of the scope of the series, and therefore
the current term, Consumers’ Price Index, was introduced.
884616—50----- 2

1917-19. In the fall of 1935, the Bureau in­
troduced improved methods of calculating the
index and in 1940 completed revision of the
weights to correspond with 1934-36 family ex­
penditure patterns, as determined by another
extensive study of family consumption.
In addition to its long-term use as a basis for
wage adjustments, the index is used as a measure
of changes in the purchasing power of the dollar,
and as a guide to broad economic policy.

Limitations of the CPI
Amounts that urban families spend for living
are not shown in the index. To develop such
measures, information reflecting changes in in­
come and in the manner of living would be re­
quired, as well as statistics of price changes for
consumer goods and services.
The index does not represent price changes
affecting other population groups such as single
individuals, families living in rural areas, families
of business and professional men, and families
deriving a major portion of their income from
sources other than their earnings, whose buying
habits may differ radically from those of moder­
ate income urban families. Nor does it take into
account changes brought about by migration of
families to large cities from rural communities or
from other cities.
Individual city indexes may not be used to
compare living costs between cities. A higher
index for one city than for another is no indication
that prices are higher in that city than in the other.



It means only that prices have advanced more
rapidly in one city than in the other subsequent to
the base period. For example, assume that the
dollar cost of a specific list of goods was $1,100 in
City A and $750 in City B during the base period.
Since these costs are taken as 100 for each city,
an increase to $1,250 in City A would result in an
index of 113.6, but an increase to $1,000 in City B
would produce an index of 133.3. Thus, even
though City B has a higher index, the level of prices
is still lower than in City A.
Basis jor Selection of Items. A study made by
the Bureau in 1934-36 is the basis of the selection
of items and determination of weights for the
index. This survey covered the incomes and
expenditures of about 14,500 families of wage
earners and lower-salaried clerical workers whose
average income was $1,524 a year at that time.
Expenditures for food, apparel, rent, fuel, utilities,
housefurnishings, and miscellaneous goods and
services purchased were ascertained in detail.
The items selected to represent all goods and
services purchased, on the basis of the 1934-36
study, were those which were relatively important
in family spending, which had distinctive price
movements, and which were highly representative
of larger groups of related items. Specifications
of items to be priced were written to describe
qualities, the retail-store prices of which would
correspond with prices paid by families included
in the survey. The sample of items priced con­
sists of 49 foods, 58 articles of clothing, 10 fuels,
23 housefurnishings, 49 miscellaneous goods and
services, and rent.
In order that the items selected for pricing
would represent all goods and services bought by
moderate-income families, expenditures for the
items not priced were combined with those for
the selected items. The weight for a priced item
includes weights for similar items known to have
the same price movement and a proportionate
share of the weights for other items in the same
consumption group for which price movements
cannot be imputed directly to a specific article.

Methods of Pricing
Since all of the more than 1,400 different articles
and services bought by wage-earners’ families need
not be priced to determine changes in average

prices paid, the Bureau prices about 190 of them.
(For a listing of these items, see table 1, p. 6.)
Two or more qualities of many of the 190 articles
are covered and consequently the aggregate num­
ber of articles and services included is 270.
Specifications of Goods To Be Priced. The Bureau
attempts to price goods of constant quality from
period to period, so that the index will reflect price
changes only. To accomplish this, rents are
compared on identical units from period to period;
for other groups, detailed specifications have been
written for the items for which prices are obtained.
Each specification is for an article that experts in
industry and trade judge to be most frequently
purchased in the price lines in which wage earners
and clerical workers concentrated their purchases
in 1934-36.
The specification for a man’s work shirt is
Shirt, work, cotton chambray:
3.90 yards per pound before sanforizing, about 3.60
yards per pound after sanforizing, based on 36-inch
fabric, sanforized shrunk;
Full cut, clean workmanship, good quality buttons,
collar interlined with chambray or equal grade of
fabric, continuous nonrip sleeve facing, double- or
triple-stitched seam, 2 plain pockets with or without
flap, 30 to 31 yards per dozen based on 36-inch fabric
and neckband size scale 14 to 17 inches. (Specify
whether double- or triple-stitched).

In addition to the detailed specifications, records
of brands, lot number or grade (where available),
and other identifying information are also supplied
to the Bureau’s representatives who collect the
Prices are obtained for identical articles as long
as they are available in retail stores. When the
Bureau’s representatives can no longer obtain
prices for a given article, they must substitute
Substitutions are of two types: (1) Substitu­
tion of another article which is adequately de­
scribed by the same specification, and (2) substi­
tution of an article serving the same purpose, but
not of the same quality, and described by a new
In the first type, any difference in price between
the old and new article is shown as a price change
in the index calculation. For example, if one
brand of men’s shirts is no longer available and
another brand of substantially the same quality


is substituted, the difference in price is allowed to
affect the level of the index. In the second type
of substitution, the level of the index is not affected,
for the new article is introduced by a linking proc­
ess. An example of this type of substitution is the
replacement of silk hose by rayon hose during
World War II. Substitute specifications are al­
ways made to adhere as closely as possible to
those supplanted, i. e., with respect to utility of
goods, materials, designs, and price movements.
Methods and Cycle of Pricing.— Prices for the Bu­
reau’s index are those actually charged customers
in retail stores. Part-time Bureau agents (usually
housewives, school teachers, and ex-Government
employees) collect food prices monthly in their
communities, according to the written specifica­
tions. In food stores, prices are posted in full
view of the customer and can be written down by
these agents. The prices are checked if necessary
with the proprietors or managers.
Most of the price collection for other groups is
done by full-time Bureau representatives who are
specially trained and who are guided by the speci­
fications described. These agents obtain the price
quotations for most apparel, housefurnishings, and
miscellaneous items, in personal interviews with
store managers and buyers. They collect rent
information, by personal visit once a year, directly
from a sample of renting families in each city.
For subsequent quarters the rent collection is done
by mail. A few prices, such as for fuel, are ob­
tained directly from dealers, by questionnaire.
Electric-power rates are obtained from the Federal
Power Commission.
Food prices are collected monthly in 56 cities 2
during the first 3 days of the week containing the
15th of the month; prices of fuels in effect on the
15th of the month are obtained in 34 cities
monthly; apparel, housefurnishings, and miscel­
laneous items are priced over a longer period
(carried on as near the 15th of the month as pos­
sible), in 10 key cities monthly and in the remain­
ing 24 cities according to a rotating quarterly cycle,
with 8 cities surveyed each month in addition to
the 10 key cities. This cycle was carefully deter­
mined on the basis of historical price movements
* These 56 cities account for about 60 percent of the total population in cities
over 50,000 population in the United States.

p r ic e


in d e x

for individual cities, in order to approximate the
national trend as closely as possible, and was
coordinated with the rent cycle.
Every month
Los Angeles
New York
January, April, Julyt and
Kansas City
Portland (Oreg.)

February, M ay, August,
New Orleans
March, Junet September,
Portland (Maine)
St. Louis
San Francisco

The quarterly cycle for pricing rents3 was
developed from 3 groups of cities, each of which
represents a good cross-section of the 34 large
cities included in the index. Rents are obtained
for each of these city groups quarterly as follows:
J anuary, Aprils February, M ayf
Julyt and Oc­
August, and
Kansas City
Los Angeles
New York
New Orleans
Portland (Oreg.)

March, June, Se
St. Louis
San Francisco

Sources of Price Quotations
Quotations are obtained from retail stores and
service establishments that wage earners and
lower-salaried workers patronize widely. Insofar
as possible, scientific sampling procedures are em­
ployed in selecting retail outlets from which prices
* For methods used in estimating the national rent index, see The Rent
Index: Part 2, Methodology of Measurement, Monthly Labor Review,
January 1949 (reprinted as Serial No. R. 1947).



are to be obtained; if necessary, local authorities
are consulted.
For food price collection, independent outlets
are chosen by random sampling within geographic
areas of the city. Representation of the indi­
vidual types of stores is based on the relation of
their sales to the total food store sales in the city.
All important grocery chains within the city’s
corporate limits are included.4 In all, 1,129 inde­
pendent grocery stores and markets, 208 chain
organizations (having 8,640 stores), 152 dairies,
and 340 bakeries are covered.
For the pricing of other items included in the
CPI,5 outlets were selected by the Bureau on the
basis of size, type of operation, quality of com­
modities sold or services rendered, location, and
clientele. Representation is given to department
and specialty stores, to national, sectional, and
local chains, and to independent stores. Cashand-carry outlets and those granting regular credit
and delivery service or installment credit are
covered. In cities having stores operated by
mail-order houses, such outlets are represented.
Laundry and dry-cleaning establishments, beauty
and barber shops, automobile-repair shops, ap­
pliance stores, doctors, dentists, etc., are also in­
cluded. Apparel, housefurnishings, and miscel­
laneous goods and services prices are obtained
from 3,500 stores and service establishments.
Fuel prices are reported by 300 fuel dealers and
utility companies.
A comprehensive housing survey in each city
is the basis for the master dwelling sample from
which rents are collected. All city blocks are
stratified by size, in such a survey. Rents are
collected quarterly from subsamples of rental
dwellings selected at random from the master
sample. Both the master sample and the sub­
samples of rental dwellings cover suburban areas
which are an integral part of the city’s housing
market. Rents are supplied by 600 to 3,000
tenants in a city, depending upon population of
the city surveyed.
4 The number of food quotations obtained in a city may vary considerably.
Fewer quotations are necessary for staples, such as sugar and bread, the prices
of which differ little from store to store and from time to time than for perish­
ables, such as lettuce and round steak, which may vary considerably in a
few days and from store to store at a given time.
8 For groups other than food, prices for each item are obtained from at least
5 stores or service establishments in New York City and at least 4 stores in
the other cities surveyed. Few stores can supply prices for all of the articles
in a commodity grouping. It is usually necessary to visit at least 10 stores
in order to obtain a minimum of 4 quotations for each article priced in the
clothing group.

Calculation Procedures
The current base period, 1935-39, was adopted
in 1940 on the recommendation of the Division of
Statistical Standards and indexes previously
published on a 1913 = 100 base were linked to the
new series.
Formula for Index. The index is based on the
formula of Laspeyres:
p _ Z)goP i

" < -S Z 2 o
< o>
where the (q0 are the average quantities of each
item used by families in the wage earner and
clerical groups in the base period, the (Po/s are
the prices for these items in the base period, and
the (Pf)’s the prices in a current period. In this
form, the formula is used only in calculating the
food index.
For groups other than food, the Bureau calcu­
lates the index on a variation of this formula, as
a weighted average of price relatives (ratio of
the price in one period to that in the preceding
period) for each item.

where the (q0 i-i ) ’s are the “ cost weights” in the pre­
vious period and the

are the price relatives

for each item, and Bi-\ is the index for the
previous period. The two formula forms yield
identical results.
Steps in Calculation of Different Indexes. Average
prices of foods in the 56 cities surveyed each
month are calculated separately for chain and
independent stores and combined according to
relative sales volume of the two types of stores.
Prices are then multiplied by fixed quantity weights
to give current value factors. For each city, the
food index is calculated as a fixed-base weighted
aggregative index.
For those 11 or 12 cities in which rents are sur­
veyed in a given month, the rents in the current
period are compared with those of identical units
in the previous quarter, after adjustments have
been made for any changes in the facilities in­

consum ers’

eluded in the rentals. The relative change is
based on the sum of the rental rates, and this
relative is applied to the previous index to obtain
the index for the current date. Thus the resultant
figure is a simple link-relative index. Weighting
is implicit in the sample selection.
For the remaining four groups of commodities
and services, the indexes are calculated as weighted
averages of price relatives, as indicated above.
Prices used in the index for. a given specification
are simple averages of the quotations in identical
outlets from period to period. In each group,
the sum of the value factors or “ cost weights”
(price times weight) is related to the sum of the
value factors for the previous period and this
weighted relative is multiplied by the index for
the previous period to obtain the index for the
current period.
The individual city indexes for all items are
then computed on the basis of group totals. This
entails adding the value factors for the six major
groups of goods and services and relating them
to the aggregate value factors for the same city
in the previous period and calculating the current
index by the same method described above for
the group indexes other than food. For those
cities in which rents are not priced but other
groups are, the procedure is to hold the value
factors for rents constant between pricing dates.
Then the “ all-items” index is computed in the
same way as for cities in which all groups of items
are priced.
National indexes are calculated each month for
all items and the six major groups on the basis of
the cities surveyed, with estimates for unpriced
cities. Each month the coverage is complete for
the food group for which 56 cities are included in
the national average and for the fuel, electricity,
and refrigeration group which covers 34 cities.
In the calculation of the group indexes for all
cities combined, cost weights for individual cities
are weighted by population, 56 cities for food, and
34 cities for other groups. The basis is the popu­
lation of the metropolitan area of the particular
city and of other cities in the same region and size
For those cities in which group aggregates for
rent, apparel, housefurnishings, and miscellaneous
goods have not been calculated in a given month,
the total value factors for these groups are esti­
mated for purposes of the national index on the

p r ic e

in d e x


basis of the price trend in a city which has demon­
strated similar price movements in earlier periods.
Special Adjustments. During World War II, it
was necessary to make some temporary adjust­
ments in the weights of items affected by rationing
and shortages. Weights for items which were not
available for civilian consumption, and for which
no substitute could be readily priced, were taken
out of the group indexes, and assigned to a group
of unpriced items. Prices of these items were
assumed to have the same movement as the aver­
age of all priced items. When these goods were
again available their weights were reintroduced
into the group indexes with an adjustment for the
difference between the actual and estimated price
movement while the goods were off the market.
Adjustments of this type were made for automo­
biles, tires, tubes, refrigerators, and other con­
sumer durable goods. To reflect the effect of
gasoline rationing, part of the weight for gasoline
was assigned temporarily to public transportation
and automobile repairs.

Relative Importance of Items 8
To meet public demand, the Bureau once a year
calculates the relative importance of the individual
items included in the index. These relative im­
portance figures should not be confused with the
quantity weights, which for the most part have
been held constant since the base period. The
relative importance figures are percentage dis­
tributions of the value factors which result in the
index calculation when 1934-36 average family
expenditures for groups of items are multiplied by
price relatives that measure average price changes
of the items in the group. It should be recognized
that these percentage distributions change from
period to period, according to the relative price
changes for the individual items. All of the items
priced for the CPI as of December 1948 and their
relative importance within their respective groups
and in the total are listed in the accompanying
The emphasis placed on each price for each city
depends on the importance of that particular
article in the actual spending of moderate-income
families in that locality (as shown in the 1934-36*
* For a more detailed discussion of relative importance, see “ Consumers’
Price Index: Relative Importance of Components,” Monthly Labor Review,
August 1948 (reprinted as Serial No. R. 1933).



survey). A comprehensive revision of the index
within the next few years is contemplated by the
T able

Bureau. It is to include establishment of new
weights based on current expenditure data.

1.— C PI items and their relative importance in the major groups and in the total index, December 1948
Percentage distribu­
tion of index value
factors in December



Cereals and bakery products.
Flour, w heat.............
Com flakes................
Com meal.................
R ice............................
Rolled oats................
Bakery products:
Bread, w hite............ .
Vanilla cookies..........

All items





5 pounds. .
.11 ounces..
— pound— ounces..



----- do —




M eats, poultry, and fish...................................................
Round steak.............................................. pound—
R ib roast....................................
Chuck roast....................................................do__
Veal, cutlets....................................................... do—
Bacon, sliced............................................ -do____
Ham, whole....................................................do__
Salt pork.........................................................do__
Lamb, leg....................................................
Poultry, roasting chickens..................................do__
Fish (fresh frozen)................................
Salmon, pink.................................16 ounce can..
Dairy products............................. .................................... .
Butter...................................... -.....................pound..
Cheese.............................................. .............. —do___
M ilk, fresh (delivered)......................................quart.
M ilk, fresh (grocery)............................................do__
M ilk, evaporated............................. 14J4 ounce can—




Percentage distribu­
tion of index value
factors in December

All items

Apparel............................. ...... ..........................................
Men’s: Overcoats............................. ...................
Sweaters................................................. .
Women’s: Coats, heavy, fur-trim.......................
Coats, heavy, plain............. ..............
Coats, light, plain...............................
Girls’ : Coats.........................................................
Boys’ : Overcoats..................................................
Slacks.................................... ...................
Men’s: Suits.........................................................
Shirts, w ork............................................
Shirts, business......................................
Shorts.............................................. ........
Undershirts................... ......................
Socks............................... ...... ................
Women’s: Dresses, street........................... .........
Dresses, house___ ______ __________
Girls’ : Dresses.................................... .................
Slips................................................... ......
Panties.............................. .......................
Anklets....................................... ..............
Boys’ : Shirts, polo......... .....................................
Shirts, convertible collar. .............. .........
Shorts. ---------- ---------------------------------Yard goods............................................... .............
Diapers-.................... .............. ...........................





Eggs, fresh.................................................................dozen .



Fruits and vegetables.................................
Fresh fruits and vegetables........................
Fresh fruits:
Apples............................................. _ pound..
Oranges........... .... ......................... --- dozen..
Fresh vegetables:
Beans, green.................................. — pound..
Cabbage........................................ ----- do---Carrots..................—..................... ___bunch..
Lettuce........................................... ____ head—
Onions........................................... ___pou ndPotatoes.......................................... 1 5 pounds. _
Spinach.......................................... — pound..
Sweetpotatoes............................... fruits and vegetables....................
Canned fruits:
Peaches......................................... No. 2 H can—
Canned vegetables:
Com............................................... ..N o . 2 can..
Peas............................................... .............d o—
Tomatoes....................................... .............do___
Dried fruits and vegetables:
Dried fruits, prunes...................... ......... pound..
Dried vegetables, navy beans___ .............do___











Silk, rayon, and nylon....... ............... ...................... .
Men’s: Socks...... ..................... .................... ......
Women’s: Dresses.................................... ...........
Slips................................................. .
Panties---------------------------------------Nightgowns...................... ..................
Hose..................................... ..............
Yard goods................................. ........................
Footwear....................... ....................................... ......
Men’s: Shoes, street........................... .................
Shoes, work........................ ....................
Rubbers................................................. .
Women’s: Shoes, street________ ____ _________
Children’s: Shoes, street, boys’ ........................ .
Shoes, street, girls’ ...........................
Other garments........................................................ .
Men’s: Jackets, leather..................................... .
Hats, felt....... ..........................................
Women’s: Coats, fur................ ........... .............. .
Gloves, leather.............. ....................
Services............................ ........... ..............................
Men’s: Dry cleaning............ .................... .........
Shoe repairs............. ............ ............ .
Women’s: Shoe repairs...................... .................
Other apparel.............................................. ..............

Beverages, coffee....................................................... do—





Fats and oils.........................................................................
Lard..................................... -.........................pound—
Shortening, hydrogenated................................ do___
Salad dressing..................................................... pint—
Oleomargarine................................................. pound-.



Sugar and sweets, sugar.



Fuel, electricity, and refrigeration.................................. .
Electricity...................................................... ............
Gas..................... .................................. .....................
Ice................................................. ..................... ........
Kerosene....................................... ................... ......... .
Fuel oil.......................... ..............................................
Anthracite coal, Pennsylvania..................................

15.3 i

* 0.05 percent or less




consum ers’

T able

p r ic e


in d e x

1.— C PI items and their relative importance in the major groups and in the total index, December 1948— Continued


Percentage distribu­
tion of index value
factors in December

Fuel, electricity, and refrigeration—Continued
B ituminous coal................... .......... ......... ................
W ood.................................................... .....................
Housefumishings___ ________ _______________________

Blankets.................................................. ...................

Living rnnm set, inexpensive
"Dining room set, medium
Bedroom set, medium
"Redrnnm set. inaypensive
Sofa beds
Bad in-phnnngrapbs
Sewing machines, electric
Washing machines, electric_____________ _________
Vacuum cleaners, electric
"Refrigerators, electric
Stoves, cook
Dinnerware, plate
_ _______
__________ _
Other housefumishings
Miscellaneous.......................................... .............. ...........
Automobiles _ _ _
Motor oil___ ________
Auto repairs........................................ ..................
_ _ .
Automobile insurance
Streetcar fares.......................................................
Bus fares
Railroad fares
Medical care

__ ___ _____
Office visit
House visit................................... - ................
Obstetrical care...............................................
10.05 percent or less.



All items



u 4.7





Percentage distribu­
tion of index value
factors in December

Medical care—Continued
Surgeons: Appendectomy.... ............................. .
Specialist: Tonsillectomy.................... ...............
Filling............................................................Extraction....................... ..............................
Men’s pay ward.............................................
Room................................................ .............
Optometrist: Glasses.................................... ......
Medicines and drugs:
Prescriptions..................................... ..........
Aspirin___________________ _______ ______
Quinine...............................................- .........
Antiseptic, iodine............. .............................
Milk of magnesia...........................................
Accident and health insurance............................
Household operation____________ ________ _______
Laundry services........................... ......................
Telephone services........................ ................. .
Domestic services.............................. ................
Postal services.......... ................................ ..........
Water rent_________________ _____ ___________
Laundry soap:
Toilet tissue.........................................................
Other household supplies____________________
Recreation......................................... ..........................
Newspapers_______ ______________ _____ _____
Motion pictures: Adults----------- -------- --------Tobacco:
Cigars.................................. .........................
Cigarettes............................ ......... ......... ......
Pipe tobacco...... ................................... ........
Personal care...................... ..................................... .
Barber service: Haircuts, men.......... .................
Beauty shop service:
Wave set....... .................................................
Permanent wave.... .............................. ........
Toilet articles:
Toilet soap....... .............................................
Face powder. .................................................
Sanitary napkins............................................
Razor blades..................................................
Gifts, contributions, and other unallocated items......

All items


















II. Collection and Compilation of
Work Stoppage S tatistics7
Estimates showing the number of stoppages,
workers involved, and man-days idle in the
United States are issued monthly by the U. S.
Department of Labor’s Bureau of Labor Statistics.
Annually, totals are compiled and the statistics are
also classified by industry, State, city, major issue,
duration, etc. Strike statistics are a broad indica­
tor of industrial unrest. In this series an attempt
is made to measure quantitatively the extent to
which labor-management disputes result in stop­
pages of work.
In 1880, the United States Bureau of the Census
made the first exhaustive survey of labor disputes
and published detailed information on 762 work
stoppages. Subsequently the method of collect­
ing the information varied, and the statistical
series on work stoppages automatically thus fall
into several historical groupings. During 18811905, the Bureau of Labor (then in the Depart­
ment of the Interior) collected data on stoppages
excluding those that involved fewer than six work­
ers or lasting less than 1 day— a practice that the
Bureau follows currently. No Federal agency
collected national information on stoppages in
1906-13. The Bureau compiled data on the num­
ber of stoppages only, during 1914-15. Infor­
mation on the number of workers involved was
subsequently added for approximately two-thirds
of the known stoppages in the 1916-26 period.
Beginning with 1927, a fairly uniform procedure
has been followed in obtaining detailed informa­
tion from the parties involved in work stoppages.
Series have been computed on the amount of idle­
ness during work stoppages each month as well as
on the number of stoppages and number of workers
Coverage of the series extends to all known
strikes and lock-outs within the continental United
States which involve 6 or more workers and last a
full day or shift. Stoppages of American seamen
7 Prepared by Don Q. Crowther and Ann J. Herlihy of the Bureau’s Divi­
sion of Industrial Relations.


or other workers in foreign ports are not included,
nor are strikes of foreign crews on foreign ships
occurring in American ports. All employees made
idle in the establishment are counted as “ in­
volved,” even though they may not be active
participants or supporters of the controversy. All
man-days in which work was scheduled are in­
cluded in the calculation.
The Bureau defines a strike as a temporary
stoppage of work by a group of employees to
express a grievance or enforce a demand. Usu­
ally the issue in dispute is directly between the
employer (s) and the striking employees, but there
are significant exceptions. For example, in juris­
dictional, as well as in rival union or representa­
tion strikes, the major elements of dispute may
be between two unions rather than directly with
the employer. In a sympathy strike, usually no
dispute exists between the striking workers and
their immediate employer but the purpose 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 dissat­
isfaction of workers with action (or the lack of
action) by local, State, or Federal Government
agencies on matters affecting their interests.
So-called slow-downs, where employees continue
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.

Limitations of the Series
This series cannot be used as an accurate basis
for the measurement of the cost of strikes, in terms
of the amount of production and wages lost. The
calculation of such items involves many factors
for which information is not available, including,
for example, production schedules before and after
the stoppage, flow of raw materials, amount of
overtime worked by employees, etc.
Within the limits that the Bureau places on the
series, a number of work stoppages involving few
workers, or lasting short periods (i. e., less than
six workers or lasting less than a full shift) are


omitted from the count. Such disputes usually
are of little importance in the over-all count, and
frequently cause no significant idleness or inter­
ruption to production.
Indirect or secondary effects of stoppages are
not measured. The figures do not cover those
employees made idle in other establishments or
industries as a result of material or service short­
ages, resulting from a work stoppage. For ex­
ample, a prolonged coal strike may cause wide­
spread closing of industrial plants and a crippled
transportation system, as fuel supplies are ex­
At times, the idleness of employees directly in­
volved in a strike may be considerably less than
the idleness of other workers brought about in­
directly. No satisfactory measurement, however,
has been evolved to gage or even reasonably to
estimate such indirect effects of work stoppages.
Therefore, the Bureau's work stoppage series is
limited to the establishments directly involved.
No attempt is made to distinguish between
strikes and lock-outs because of the difficulty of
determining the true facts. Stoppages are in­
cluded in the series regardless of who may be
deemed “ responsible,” or which party takes the

Survey Methods and Sources
The Bureau seeks to obtain complete coverage.
It does not base the series upon a sample but
covers all stoppages of the specified size and dura­
tion for which information is obtained from any
trustworthy source.
Information on the existence of a stoppage is
currently obtained from various sources, including
(1) press clippings on labor disputes from daily
and weekly newspapers throughout the country;
(2) notices received directly from the Federal
Mediation and Conciliation Service as well as
from agencies concerned with labor-management
disputes in over 30 States (such as, State media­
tion boards, research divisions of State Labor
Departments, State Employment Service Offices,
and Unemployment Compensation Offices); (3)
various employer associations and some corpora­
tions; and (4) international unions. The im­
portance of the different sources has changed from
time to time.
If the Bureau has any indication that a work
stoppage exists, questionnaires are sent by mail

884616— 50-------3


to both parties stated to be involved in order to
secure first-hand knowledge as to the number of
workers involved, the dates and duration of the
stoppage, major issues involved, method of settle­
ment, etc. In some instances, field agents of the
Bureau secure the necessary data.
Strikes, by their very nature, are a matter of
public knowledge and newspaper reporting. In­
formation as to the existence of a stoppage, its
size, and major issues, therefore, is sometimes
summarized on a case-by-case basis. The Bureau,
of course, holds confidential the individual reports
submitted by employers and unions, as well as
supplementary data collected through State or
Federal agencies.

Calculation Procedures
The Bureau's monthly strike series are based on
estimates in large part. Those compiled annually
are the result of an actual compilation of the
figures from individual reports of work stoppages.
Work stoppage series are always subject to some
interpretation and rationalization.
Monthly Estimates. Estimates are prepared and
published monthly on the three specified measures
of work stoppages: (1) number of stoppages, (2)
number of workers involved, (3) man-days of idle­
ness. Such estimates are compiled, about 4 weeks
after the end of the month of reference, from the
most accurate information on all stoppages which
have come to the attention of the Bureau. As the
Bureau's experience shows a lag between the
occurrence 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 disputes occurring
within the month. Estimates of the number of
workers involved and total idleness are based up­
on known information on stoppages of 500 or more
workers and/or 5,000 or more man-days of idle­
ness; allowance is made, based on the Bureau's
existing information and past experience, for the
smaller stoppages.
The total working time lost during the month
is compared with the estimated working time and
published as a percentage. “ Total employed
workers,” as used in making these computa­
tions, 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. In most industries it includes all



wage and salary workers except those in executive,
managerial, or high supervisory positions or those
performing professional work the nature of which
makes union organization or group action im­
practicable. It excludes all self-employed, domes­
tic workers, agricultural wage workers on farms
employing less than six, all Federal and State
government employees, and officials (both elected
and appointed) in local governments. Estimated
working time is computed by multiplying the
average number of employed workers in the
month by the number of days worked per em­
ployee in the period.
Annual Statistics. The annual series are totals
of the number of stoppages, workers involved,
and man-days of idleness. Compilation of such
statistics is essentially a process of assembling
the necessary information on individual cases,
followed by analysis, evaluation, and classification
into groups. Application of technical statistical
formulae is not involved.
The statistical unit is the individual strike or
lock-out, irrespective of size. If groups of em­
ployees (regardless of their number or how widely
scattered) join in a work stoppage for a common
objective their action is classed as a single strike.
The count of workers involved in a strike or lock­
out is the number actually made idle in the
establishment directly involved. As already indi­
cated, 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 stoppage in one department
closes the plant.
Man-days of idleness, like the number of
workers involved, are based on the idleness at the
establishments directly involved. Workers in­
volved multiplied by days of idleness equals total
man-days idle. In this calculation, holidays and
days not normally worked are omitted from the
count of days of idleness.
In addition, the annual statistics are classified
according to a number of significant factors which
are here described briefly.
An industrial classification is made of each strike
in accordance with the Standard Industrial Classi­
fication Manual published by the United States
Bureau of the Budget. In a few stoppages,
workers in more than one industry are directly

affected. Small stoppages which fall in this
category are classified in the industry having the
majority of workers involved; in large interindus­
try stoppages, an allocation is made.
The duration (length) of each stoppage is com­
puted on the basis of calendar days, rather than
working days, i. e., the lapse of time in terms 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 agree­
ment at a definite time, no problem arises in
determining the duration. However, some strikes
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 recruits or may close their
plants permanently. In such cases, the stop­
pages are terminated, for statistical purposes,
when a majority of the vacancies are filled and
production begins to approach normal. On oc­
casion, an actual settlement is later reached and
the statistical record of the stoppage is then
reopened, and the figures are adjusted correspondingly.
Establishment involved is actually a single work­
place, e. g., a factory, mine, or store. In a wide­
spread strike of intercity bus drivers, truck drivers,
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 dock workers the individual dock
or loading place is regarded as the establishment
or place of work.
Geographical classification of stoppages follows
State and city lines. In interstate stoppages, the
workers involved and man-days idle are allocated
to their respective States. Data are also com­
piled each year for 150 separate cities (excluding
suburban areas outside the corporate limits). In
general, all cities having a population of 100,000
or more in 1940 are covered.
The causes of most strikes are multiple and
varied, and do not always lend themselves readily
to immediate and exact classification. After
evaluation of the information available, the stop­
pages are classified by issues into four broad cate­
gories: (1) wages and/or hours; (2) union organi­
zation matters (representation, union security,
etc.); (3) other working conditions, such as job
security, physical working conditions, administra-



tive policies, work load, etc.; or (4) inter- or intra­
union matters. Within these groups they are
further subdivided into more specific categories.
Union involved is another major classification of
the series. For this purpose the union involved
is the union which has taken active leadership in
the stoppage. In disputes involving more than
one union (jurisdictional or rival union disputes as
well as those of cooperating unions) classification
is made accordingly. If unorganized workers
strike independently, a separate classification is
Method of termination of stoppages is the classi­
fication according to the means of termination.
For example: (1) disputes in which the parties
agree directly to terminate the stoppage without
any third-party assistance; (2) those terminated
with the assistance of private or nongovernment
mediators; (3) those terminated with the assistance

of government agencies; (4) those ending without
formal settlements; and (5) those in which the
employers discontinued business.
Disposition of issues is the classification in
which information regarding the settlement or
disposition of issues is presented. In most strikes
the issues are usually settled or disposed of before
the return to work is effected, but provision is
made to present data for the cases in which ad­
justment of issues after resumption of work is
effected (1) by direct negotiations between the
employers and the union (or workers); (2) by
negotiation with the aid of Government agencies;
(3) by arbitration; and (4) by other means (cases
referred to NLRB union boards, tribunals, etc.,
where method is other than negotiation).
The following questionnaire is used in collecting
detailed information from both employers and
B. L. S. 817—(Rev. 1-1-48)
Budget Bureau No. 44-R210.8.
Approval expires 3-31-50.


F ile



Washington 25, D. C.
CONFIDENTIAL—Not for public

D ear S i r : The Bureau of Labor Statistics has received information

Kindly furnish for official statistical purposes the information indicated below in connection with this work stoppage.
Please return the report within 2 days, if possible, in the enclosed envelope which requires no postage. If you do not have
the information, kindly forward the blank to the proper official or give us his name and address. Your cooperation will
be greatly appreciated.
Very truly yours, E w a n C la g u e , Commissioner of Labor Statistics.
1. Name of company____________________________________________________________________________
2. Address of central office_______________________________________________________________________
3. Principal products or services of plant (s) involved in work stoppage (list in order of importance)
4. Number of establishments (or work places) involved
5. Union(s) involved___________________________________________________________(C h e ck )iciO .

[ I n d_

Local N o____________________ Address___________________________________________________
6. Dates and number of workers idle. (Please show separate data for each establishment if available; if not, give estimate
for entire stoppage and show the total number of establishments involved.)
Establishment involved
and location
(City and State)

First day of stoppage


Workers idle*

Date greatest number
of workers were idle

Workers idle*

Last day of stoppage

Workers idle*

Number of
on payroll
(before stoppage)

(Use additional sheets if more space is needed)

Digitized for ♦Show the total number of workers idle in each plant or establishment reported—those concerned directly and those made idle because of dispute,



7. If stoppage lasted only 1 or 2 days, how many workers were idle at least one full shift?___
8. Number of days worked per week by most employees before stoppage--------------------------------9. Causes of dispute. (Specify, in order of importance, the issues involved or demands made.)

10. How long before stoppage were principal issues listed in item 9 a matter of dispute? Number of days.
11. Relation of stoppage to union-management contract:
Was contract in effect when stoppage occurred? Y e s ______ N o ______
Dispute was due primarily to:
(а) Attempt to obtain union recognition ( ) or establish first contract_________________________
(б) Grievances________________________________________________________________________________
(c) Failure to agree on renewal of contract____________________________________________________
(Date old contract expired or was scheduled to expire)_____________________________________
(d) Attempt to alter contract terms during life of the agreement_______________________________
(e) Matters not involving the question of a contract___________________________________________
12. Did a Federal, State, or local government agency participate in negotiations before the stoppage began?
N o __________
If “ yes” give name of a g e n cy ________________________________
Y e s __________
13. Method of terminating stoppage:
Agreement or understanding for return to work was reached:
(а) By employer (s) and union directly_________________________________________________________
(б) With assistance of government agency:
Federal (Name__________________________________________________________________ ) ______
State (Name____________________________________________________________________ ) ______
Local (Name____________________________________________________________________ ) ______
(c) By other means (explain)__________________________________________________________________
C Workers returned without formal arrangement or settlement_________________________________
14. Date settlement was reached___________________________________ Date most employees resumed work
15. Were all issues completely settled at termination of stoppage? Y e s ______ N o ______
If not, please indicate how the remaining issues were to be finally adjusted:
(a) By direct negotiations between employer (s) and union_______________________________________
(b) By negotiations with the aid of a government agency. N a m e______________________________
(c) By arbitration (Name of arbitrator)________________________________________________________
(d) By other means (indicate)__________________________________________________________________




16. I f no agreement to terminate stoppage has been reached, have the majority of the vacancies been filled either by old or
new employees? Y e s ______ N o ______ If “ yes” give date by which majority of vacancies were filled_______

17. Was there any violence in connection with the stoppage? Y e s ______ N o ______ Were there any deaths?
Y e s ______ N o ______ N u m ber_____________________
Any injuries (necessitating medical attention)? Y e s ______ N o ______ N um ber____________________________
E xplain ______________________________________________________________________________________________________ 1
18. R emarks:

(Signature of person making report)
(Company or organization)

(Position or office)



III. Estimating
National Housing Volume8
The housing statistics series, prepared by the
U. S. Department of Labor's Bureau of Labor
Statistics, measures the number of new nonfarm
dwelling units started nationally each month. It
is used generally as an indicator of building activity
and related economic trends and by housing agen­
cies as a guide in national housing policy and State
and local administrative decisions. The statistics
are available on a monthly basis beginning in 1939
and on an annual basis from 1910.
Over the years, the chief source of information
about home-building activity has been the building
permit. The Bureau began collecting buildingpermit information in 1920, with reports from 207
large cities. Coverage has expanded annually,
but the most important strides were taken between
1933 and 1940.
The dwelling unit, the unit of measurement of
the volume of housing construction, is defined by
the Bureau of Labor Statistics 9 as a permanent
dwelling place containing permanent cooking facil­
ities, i. e., the minimum built-in facilities essential
to housekeeping. The dwelling-unit count repre­
sents the number of families planned for in the
construction of new permanent-type houskeeping
dwellings and reflects the extent of new housing
activity. Prefabricated houses are included, if
permanent and made of new materials.
Temporary units and units without housekeep­
ing facilities and such dwellings as trailers, house­
boats, sheds, and shacks, are not included.
Excluded also are the temporary dwellings built
8 Prepared by Dorothy K. Newman in the Bureau’s Division of Construc­
tion Statistics.
9 See Census of Housing, 1940, Part I, United States Summary (p. 2) for
Census definition of a dwelling unit. See also Housing and the Increase in
Population, Bureau of Labor Statistics Serial No. R. 1421 (pp. 14-16) for
differences between Bureau of Labor Statistics and Census definitions.
The Bureau of the Census studies families as a unit of population and
measures the number and kind of family accommodations, new and old,
regardless of structural permanency or the significance of the housing in the
volume of residential construction. The Bureau of Labor Statistics prepares
current housing statistics and, from the results of building-permit reports,
interviews with builders, and the like, measures the number of new perma­
nent dwelling units started in structures designed and built for residential

during the period of defense and World War II,
and the Federal temporary re-use units erected
during the Veterans' Emergency Housing Program
of 1946-47.
Accommodations in transient hotels, dormito­
ries, and clubhouses are not counted in the dwellingunit figures. These are usually nonhousekeeping
quarters and the buildings containing them are
defined as “ nonhouskeeping residential."
Farm dwellings are likewise excluded from
Restriction of coverage to new units automati­
cally excludes units provided by the remodeling of
existing residential structures or the conversion of
nonresidential buildings into housing. And since
the Bureau's housing statistics are designed to
reflect the extent of new house-building activity,
and not necessarily all additions to the housing
inventory, living quarters provided for superin­
tendents in public buildings, warehouses, and
factories are excluded also. Construction of the
residence in these cases is quite incidental to the
nonresidential building. On the other hand, the
Bureau's totals do include housekeeping dwelling
units in buddings that also contain stores. In such
cases the housing accommodations are at least
as important as the stores and usually account
for a major part of both the physical volume and
value of the construction job.
The new permanent nonfarm dwelling units
included in the Bureau of Labor Statistics series
are classified as urban or rural nonfarm; private or
public; in one-family, two-family, and multifamily
Urban units are those in urban areas, which,
according to Census definition, are all incorpo­
rated places which had 2,500 population or over
at the time of the latest census and, by special
rule, a small number of unincorporated civil divi­
sions essentially urban in character. Rural non­
farm units are defined as those in incorporated
places with less than 2,500 population, and all
units in unincorporated areas that are not among
those just mentioned nor are they farm homes.
Thus, urban housing is related to definite geo­
graphic areas, while rural nonfarm housing is



defined largely according to the intended use of
the dwelling units.
Dwelling units financed by Federal, State, or
local government funds are public units; all others
are private. The fact that private units are
financed by mortgages insured by the Federal
Housing Administration or the Veterans Admin­
istration does not mean that they are publicly
A one-family structure may be detached, semi­
detached, or one of a solid row. A semidetached
one-family structure has a common wall with
another structure containing 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.
Two-family structures are those which are built
so that one unit is above the other or two units
on the same floor have a common entrance.
In the multifamily structure, heating facilities
and utilities are usually centrally controlled, and
a single entrance leads to the various apartments.
In apartments with individual entrances, the units
are defined as being in multifamily structures
because the heating, the plumbing, and, in some
cases, other facilities, such as electricity and gas,
may be controlled at a central location.

Limitations of the Series
Statistics on the number of dwelling units started
do not measure the number completed in any
given month. Construction on units started
usually continues for several months before the
dwellings are ready for occupancy.
Furthermore, the Bureau's totals of starts can­
not be added to the number of units standing as
shown in the Census of Housing (allowing for
demolitions and the number of units destroyed by
natural or other causes) to form an all-inclusive
housing inventory. The reasons are the limita­
tions placed upon coverage of the series, already
partially explained.

Methods and Sources of Survey
A questionnaire form (BLS 404) is mailed by
the Bureau 1 each month to the building-permit0
w With the exception that the Department of Labor or like acency in 8
States (Illinois, Massachusetts, Michigan, New York, New Jersey, North
Carolina, Pennsylvania, Texas) send questionnaire forms directly to build­
ing inspectors in their State and then assemble and publish the State data.
Copies of the permit reports are sent to the Bureau of Labor Statistics in
Washington for use in preparing summaries and national estimates.

issuing officers in about 2,500 urban and 2,600
rural places throughout the country, including
over 500 counties and townships. Forms are sent
to practically all localities having building-permit
systems, and returns are received monthly from
about 9 in 10 of them.
Information is requested on this questionnaire
as to the number and value of the new dwelling
units for which permits were issued, as well as
certain details about nonresidential building.
The portion of BLS 404 relating to housing is re­
produced on p. 19.
Forms are mailed on the
twenty-fourth of every month. Returns are suffi­
cient for estimating purposes by the fifteenth of
the following month. But editing and tabulating
of the data delay the actual preparation of the
estimate by about 2 weeks.
To obtain an early preliminary estimate, brief
telegraphic forms are mailed on the same day as
the questionnaire to a sample of the buildingpermit officials (about 550) who also report on the
longer form. On the telegraphic forms, they are
asked only the number of new family dwelling
units for which permits were issued during the
month. Returns, made by wire, are usually com­
plete by the eighth of the month following the
month of reference, and the preliminary estimate
is published about the fifteenth.
Field surveys conducted to supplement the
mailed questionnaire are limited to the nonpermit­
issuing parts of a sample of 96 rural counties.
Each of the 96 counties is visited once each quarter,
but at each visit the number of dwelling units
started in each of the 3 previous months is obtained.
The 96-county sample, thus, is divided into 3
groups of 32 counties each. One group is visited
in January, April, July, and October; another in
February, May, August, and November; and the
last, in March, June, September, and December.
Field investigators obtain leads to new homebuilding from local builders, utility companies,
building-supply companies, real-estate agents,
and a variety of other sources. The next step is
to secure information directly from builder or
owner as to the date construction was begun and
the number of units in the project. In addition,
each Bureau investigator inspects his territory in
order to complete the canvass of all new homebuilding begun in the three previous months.
The work of Bureau field agents is carefully
reviewed in the Bureau's five regional offices, and


an on-the-spot check is made of the completeness
and accuracy of field investigations on the average
of once every 6 months.


between the previous and the current month for
identical cities is applied in each estimating cell
(i. e., in this particular instance, data reported for
places of given size and given locations) to the
Calculation Procedures
previous month’s estimate for all the cities repre­
Two separate calculations are made covering
sented by that cell. By this procedure a prelim­
inary estimate is obtained of the total number of
housing volume each month.
These result in
dwelling units for which building permits were
the preliminary and revised figures issued by the
Bureau. Both estimates are based upon samples,
issued or work was about to begin in urban areas.
and, as explained below, the sample utilized in the
It is not an estimate of the amount of housing
revised estimate is considerably broader than that
actually started. An adjustment is then made to
translate building-permit volume into dwelling
for the preliminary estimate.
units started.
The Preliminary Estimate. In the preparation of
Factors for this adjustment are based on
the preliminary estimate, the telegraphic replies
periodic field studies in sample localities in which
used cover the number of new nonfarm dwelling
the Bureau investigates the elapsed time between
units started (1) in all of the 199 cities with 50,000
issuance of a building permit and the start of
population or more in 1940; (2) in 45 rural non­
construction, and the extent to which permits are
farm localities known to be active in homenot used. Compared with 1945, studies show
building; and (3) in a sample of 256 cities of less
that in 1948 the rate of lapsed permits has de­
clined from over 7 percent to only 1 percent of
than 50,000 population chosen and stratified
the dwelling units reported on permits. It is
according to geographic division, location within
estimated that in urban areas nearly 60 percent
or outside of a metropolitan area, and size.
Data are also included for a selection of 230 cities
of the units are started in the month of permit
issuance; and 94 percent by the end of the second
which consistently submit their mail question­
month afterward. Adjustments are made each
naires to the Bureau before the eighth of the
month for such delays and lapses: an addition is
month. The entire urban segment of reporting
made for units left over from the estimated permit
places which supply information in time for the
preliminary estimate usually provides complete
volume for the previous month; subtractions are
made for the proportion to be started in later
coverage for the 412 cities of 25,000 population or
months, and for those abandoned, or, as in a few
more, as well as for a representative sample of
cases, started before the permit was issued.
smaller urban places.
To the telegraphic replies for 45 rural-nonfarm
The estimating method for the rural non­
localities are added all the questionnaire returns
farm permit-issuing group resembles that for
from rural nonfarm places which have been
urban places. However, the reported permit
received in time for the compilation of the pre­
data are stratified at this stage only by permit­
issuing jurisdiction, i. e., for incorporated places,
liminary housing estimate. The total usually
represents about 80 percent of the housing volume
townships, and counties. For each classification,
in rural places issuing permits, but only about 50
a total is made of all of the dwelling units for
which building-permit reports have been received,
percent of the places.
and the percent of change between the previous
Utilizing the foregoing basic figures, the pri­
and current month’s reports for identical localities
vately financed segment of the estimate is made
is applied to the previous month’s estimate.
in three parts— (1) for urban places, (2) for rural
Separate treatment is given areas of significant
nonfarm places issuing building permits, and (3)
housing volume that show trends widely variant
for rural nonfarm places without permit systems.
To obtain the urban estimate, permit data from the general trend. The sum of the data for
incorporated places, townships, and counties
for the current month are grouped according to the
yields the estimated total number of dwelling
geographic division of the places reporting, the
units for which permits were issued in rurallocation of reporting places within or outside a
nonfarm permit-issuing places in the month. This
metropolitan area, and their size. The percent
Digitized of change in the number of dwelling units reported
aggregate is then adjusted to reflect the number



of dwelling units started, in accordance with the
information for rural areas revealed in the Bu­
reau’s building-permit surveys. On the whole,
these surveys show somewhat less lag in rural
than in urban places between permit issuance
and the start of construction.
The preliminary estimate covering the num­
ber of new nonfarm dwelling units started in ruralnonfarm places that do not issue permits is
derived at this point by projecting the previous
month’s figure, using the trend shown for the
rural-nonfarm permit-issuing places.
To the figure thus obtained for privately
financed housing the Bureau adds the number of
publicly financed units started. Information on
public housing is received directly from the
sponsoring Federal, State, and local agencies.
The resultant total (public plus private) yields
the preliminary estimate of the number of new
nonfarm dwelling units started nationally for the
The Revised Estimate. Revision of the preliminary
monthly estimate is usually made at the end of
every quarter after results are available from the
Bureau’s field surveys in the nonpermit-issuing
segments of 96 rural counties.
In selecting the sample of 96 counties for survey,
the Bureau in 1947 eliminated 86 counties of the
country’s total of 3,103 from the list either because
they were completely urban or were served entirely
by building-permit systems. The nonpermit­
issuing rural nonfarm universe was determined
according to the number of rural nonfarm dwelling
units standing in 1940 in that part of each of the
remaining counties where building permits are not
The universe was stratified according to whether
the counties were metropolitan or nonmetropoli­
tan,* and whether more urban or more rural in
character, as defined by the percentage of urban
to total dwelling units standing in 1940. Thus
classified, the metropolitan counties had 1.6
million or 40 percent of all rural nonfarm dwelling
units standing in 1940 in nonpermit-issuing areas;
the nonmetropolitan counties had 4.8 million or
60 percent of such units. A further division into
4 temperature zones was made on the basis
1 For this purpose a county was metropolitan if any part was located within
a metropolitan area as defined by the 1940 Census.

of winter temperature.1 These classifications re­
sulted altogether in 15 cells.
In order to avoid selecting a sparsely populated
county to represent an estimating cell having a
large number of dwelling units, an array was made
for each cell according to 1940 housing inventory.
The counties at the lowest end of the array,
representing 10 percent of the 1940 inventory,
were set aside.1 These small counties are, how­
ever, included in the cell totals in determining the
estimating weights.
Further classification of the universe was then
made according to the extent of housing activity,
as measured by the number of priority author­
izations to secure building materials for housing
that were issued in each county in April 1946
under the Veterans’ Emergency Housing Program.
In the southern temperature zone, this step in
stratification followed classification by race (white,
nonwhite) in the largely rural counties, but
classification was made by race and not according
to housing activity in the more urbanized counties.
By this stage, the universe had been classified
into 32 cells. Each of the 32 cells was further
divided into 3 subcells, in such a manner that each
subcell would represent as nearly as possible the
same number of 1940 dwelling units. Within
each cell, the counties were arrayed according to
the number of dwelling units standing in 1940.
The ftth county in each cell was selected by using
a table of random numbers.
The revised estimate, like the preliminary, is
prepared in three parts—for urban, rural nonfarm
permit-issuing, and rural nonfarm nonpermit­
issuing places.
The estimating procedure for the rural nonfarm
nonpermit-issuing places is to apply the weight
for each county to the reported number of dwelling
units for the month, and to total the weighted
figures. The weight for each county is the
relationship of the number of dwelling units
standing in 1940 in the rural nonfarm nonpermit­
issuing parts of the county, to the number of 1940
1 The 48 States were classified into 4 zones based on the number of “ degree
days’ ' (i. e., days with temperature below 65 degrees), in November, De­
cember, January, and February, as reported by the U. S. Weather Bureau.
Some States, such as New York, Pennsylvania, Oregon, Washington, and
Illinois were divided into 2 parts because of the wide range of winter tem­
1 Studies of variance in nonfarm units started in rural and small urban
counties covered by area housing surveys in 1946 and 1947 indicated that bias
resulting from the elimination of small counties in selecting the sample would
be much less important than the error that might result from inclusion of
one of the small counties.


rural nonfarm dwelling units in the entire cell
represented by the county.
The urban and rural nonfarm permit-issuing
segments of the revised estimate are prepared
from virtually complete building permit returns.
In estimating for urban areas, stratification of
the expanded data is quite detailed, in comparison
with that done in the preliminary estimate.
The data for the revised estimate are classified
according to type of structure (i. e., in one-family,
two-family, or multifamily structures), and accord­
ing to the location of the places reporting, i. e.,
by geographic division, State, metropolitan or
nonmetropolitan district, and city size. This
classification process may yield as many as 11
cells in a State.
The volume of homebuilding during the month
is tabulated for each class of place, by type of
structure. The estimate by type of structure for
all urban areas is prepared by applying to the
volume of housing reported for each type of place,
the ratio between the total number of such places
in the cell and the number reporting that month.
The ratio of reporting to the actual number of
places is usually 1 for cities of 25,000 population
or over, because reports are received monthly from
virtually all of these. For places of 5,000 to 25,000
population the multiplying figure is seldom over 3,
and for places of 2,500 to 5,000 population, it is
seldom over 5.
Totals by type of structure are added to equal
the urban total for the country, unadjusted for
lag between building-permit issuance and the
start of construction, and for building permits
allowed to lapse. The urban total is adjusted as
described on page 15 to yield the estimate of
housing actually started.
In preparing the revised estimate for rural non­
farm permit-issuing places, returns from the
1,800 places usually reporting building-permit
volume are classified according to the kind of
reporting locality (city, township, or county) and
by location in or outside a metropolitan district,
by geographic division, and by size of place.
A total of 54 estimating cells results. For each
cell, the estimate is derived by multiplying the
number of dwelling units reported in the month,
by the ratio between the total number of rural non­
farm dwelling units standing in 1940 in all places
in the cell and the number of 1940 dwelling units
in the reporting places. Adjustment is, of course,


made to convert building-permit volume into
housing started.
After adding publicly financed units, the total
for the three parts of the estimate just described
yields the revised estimate of new permanent
nonfarm dwelling units started nationally for the

Tests of Reliability
The sampling error in the revised estimate of
private nonfarm dwelling units started (the
public segment is based on actual enumerations)
amounts to 2 percent, using December 1948 data.
Thus, if the estimate were 50,000, the chances
are about 19 out of 20 that an actual enumeration
would produce a figure between 48,000 and 52,000.
Owing to the degree of completeness of the
information reported, the percent of error is least
for the urban segment of the estimate (1.0 per­
cent), slightly greater for the estimate covering
permit-issuing rural nonfarm places (1.58 percent),
and greatest for the estimate representing rural
nonfarm nonpermit-issuing places (9.47 percent).
Study of the revisions that were required in
the preliminary estimate for months prior to
March 1949 shows that adjustments have seldom
reached 10 percent, and for most months they have
been less than 4 percent. The revisions have
usually been upward. Recent substantial addi­
tions to the number of permit reports available for
the preliminary estimate will probably reduce
somewhat the difference between the preliminary
and revised figure, insofar as differences relate to
the permit-issuing segments of the estimate.
The magnitude of the revisions, however, re­
sults chiefly from the difference between the esti­
mate for rural nonfarm non-permit-issuing places
based on field survey data and the projected figure
used for the preliminary estimate.
As previously stated, in the preliminary figure,
housing activity in rural nonfarm places which do
not issue permits is carried forward on the basis of
the trend shown by activity in the permit-issuing
rural nonfarm places. A figure prepared in this
way is reliable, of course, only because an estimate
based on field surveys is always within a span of 3
months, and provides a sound base for projection.
Even so, experience shows that although the trend
for rural nonfarm nonpermit-issuing places cor­
responds well with the trend in rural nonfarm
permit-issuing places during the spring, summer,



and early fall, these two trends are less alike in the
winter. The reason for this phenomenon is that
the non-permit-issuing group appears to be more
sensitive to seasonal influence, with home-building
activity falling off faster in the winter and picking
up more quickly in the spring.
Experience has been insufficient to adjust for

this condition because the estimating technique
described here has been in operation through only
two winters. However, after studying data cover­
ing the third winter, in 1949-50, satisfactory sea­
sonal adjustment factors undoubtedly can be pre­
pared and applied to the nonpermit rural nonfarm
segment for use in the preliminary estimates.



?■ *•10-1-48)i
s- 4 v


Budget Bureau No. 44-R049.9.
Approval expires Sept. 30, 1949








Mach. Hand

Report permits issued
during month of—

(If above mailing address is incorrect or zone number omitted, please indicate change)
D e a r S i r : Please fill out this form and return it to the Commissioner of Labor Statistics, Washington 25, D . C., in
the enclosed envelope which requires no postage.
It will be observed that the number of buildings covered by permits is requested, but not the number of permits.
We shall appreciate your courtesy if you will give this matter your immediate attention.
Very truly yours,
E w a n C l a g u e , Commissioner of Labor Statistics.
(1) Privately owned

of build­

(omit cents)

of dwell­
ing units

(2) Publicly owned
of build­

(omit cents)

of dwell­
ing units



Single-family structures. (M ay be detached,
semidetached, or one of a solid row. A semi­
detached single-family structure has a common
wall with another structure containing a single
dwelling unit. Each unit is counted as a sepa­
rate structure because each unit has a separate
entrance.) _ _ ___________ _______________ _____
2. Two-family structures. (May have one unit over
the other or two units on the same floor with a
common entrance.) _____________________________
2a. Single-family and two-family structures with a
store or shop therewith. (These should not be
included in the lines above.)___ ________ ______
3. Three- and four-family structures having common
facilities such a common entrance, heating, etc__
3a. Three- and four-family structures having stores
and shops therewith. (These should not be in­
cluded in line 3 above.)_______ ___________
4. Five or more family structures having common
facilities such as common entrance, heating, etc_
4a. Five or more family structures having stores or
shops therewith. (These should not be in­
cluded in line 4 above.)






IV. Measurement of
Labor Turn-Over*
A measure of the gross movement of workers
into and out of employment status with individual
firms is provided in the U. S. Labor Department’s
Bureau of Labor Statistics monthly series on labor
turn-over. Transfers within the employment of
the same firm, as from one department or plant
to another, are not considered labor turn-over.
For analysis, personnel actions covered by this
series are broadly divided into accessions, or addi­
tions to employment, and separations, or termi­
nations of employment. Separations are further
classified according to type: Quits (or voluntary
separations); and discharges, lay-offs, and mis­
cellaneous separations (collectively called involun­
tary separations).
Accessions are all additions to the work force
whether of new employees or of former employees
after seven or more consecutive calendar days’
absence. Such absence may be either authorized
(such as after a lay-off) or unauthorized.
Quits are terminations initiated by employees
because of acceptance of jobs elsewhere, dissatis­
faction, return to school, marriage, maternity, ill
health, or voluntary retirement where no pensions
are provided by the different companies. Unau­
thorized absences of seven or more consecutive
calendar days also are considered quits.
Discharges are terminations of employment
initiated by management for such reasons as
employees’ incompetence, violation of rules, dis­
honesty, insubordination, laziness, habitual absen­
teeism, or inability to meet the organization’s
physical standards.
Lay-offs are terminations of employment lasting
seven or more calendar days which are initiated
by management without prejudice to the workers,
because of lack of orders, shortage of materials,
conversion of plant to new product, or introduc­
tion of improved machinery or processes. Suspen­
sions of employment for less than 7 days and
suspensions for inventory or vacation periods are
not considered lay-offs.
Miscellaneous separations are terminations for
1 Prepared by Lucile C. Ursell of the Bureau’s Division of Employment


other reasons, including permanent disability,
death, retirement on company pension, or en­
trance into the armed forces. Prior to September
1940, miscellaneous separations were included with
Personnel actions during a calendar month are
converted to a rate per 100 employees. Separate
rates are computed for total accessions, total sepa­
rations, and for each of the component separation
items— quits, discharges, lay-offs, and miscella­
neous separations. A single labor turn-over rate
is not provided.1
The number of personnel actions and of persons
employed used in preparing labor turn-over rates
cover all employees— administrative, office, and
supervisory, as well as production workers— and
permanent and temporary,1 full- and part-time
employees on any type of pay roll (daily, weekly,
monthly, or other). The employment count refers
to the number of such persons who were on the
pay roll in the pay period ending nearest the 15th
of the month.
In 1949, the Bureau prepared labor turn-over
rates for 64 manufacturing industries, 19 major
manufacturing industry groups, the durable and
nondurable goods divisions, and for all manufac­
turing industries combined. In addition, rates
were prepared for 7 selected nonmanufacturing
industries, mainly in the mining and public utili­
ties groups. These together with the earliest date
for which the series are available, are shown in
table 2. Because of lack of facilities, publica­
tion of the data for men and women has not
been made since July 1947, but will be resumed in
January 1950.
Labor turn-over rates first were obtained in
response to a demand from large manufacturers
who were experiencing difficulty in maintaining a
stable work force after World War I. Conse­
quently, the subject was first studied in connec­
tion with the recruiting and handling of employees,
and the net or replacement rate 1*was emphasized
1 Although the “ replacement rate’’ or “ net turn-over rate” was frequently
referred to in the early years when the Bureau issued the labor turn-over
series, it has not been published separately since November 1934. It is either
the total accession or total separation rate, whichever is lower, and therefore
is available from the published data for those who wish to follow it.
1 Since January 1946, employment on force-account construction has been
included for all industries except telegraph.
1 The net or replacement rate is either the total accession rate or total
separation rate, whichever is lower.



as an index of management efficiency. Wide­
spread use of improved personnel methods, includ­
ing scientific aptitude and intelligence tests for
prospective employees, exit interviews, pension
plans, and employment guarantees under specified
conditions in collective-bargaining agreements,
have reduced turn-over rates in recent years to
relatively low levels. Nevertheless, individual
employers still use the rates for their particular
industries as a yardstick of individual plant per­
formance. By this means, they determine when
a particular establishment’s rates are excessive
and therefore require special analysis and remedial
Annual labor turn-over rates, which are some­
times computed by totaling the 12 monthly rates
or by computing an equivalent annual rate from a
single month’s rate after making proper allowance
for the length of the month,1 are valuable in calcu­
lating the cost of labor turn-over. But annual
quit or separation rates computed in these ways
are extremely difficult to interpret. For example,
they often amount to over 50 percent and seem to
indicate that over half the work force changed jobs
during the course of the year; actually job chang­
ing probably is confined to a relatively small
segment of employees. For certain purposes a
more meaningful annual rate is the average of the
12 monthly rates.
Increasingly, labor turn-over rates are being
used in over-all economic analyses to indicate the
gross worker movements which underlie the net
changes reflected in the employment series. As
the two series are currently prepared, however
(with different-sized samples, different industry
coverage, definitions, etc.), the labor turn-over
rates indicate the nature of employment changes
only very roughly. In fact, a relatively high
proportion of large firms in the turn-over sample
may make the rates somewhat lower and more
stable than they would be if smaller firms had
greater representation. The reason is that large
firms tend to be more affected by employmentstabilizing influences— union agreements, facilities
for screening applicants more scientifically, widely
marketed products, and so on— than small enter­
prises. For this same reason, caution should be
used in applying the manufacturing turn-over
rates to interpret employment changes in the non-

manufacturing industries. In contrast to the man­
ufacturing division, many major nonmanufacturing
groups (e. g., trade and service industries) have
a large proportion of relatively small establish­
ments and experience marked seasonal fluc­

In addition to the monthly rates, equivalent annual rates were published
from July 1929 through August 1931.

1 See note VI.
p. 29.

Limitations of the Series
As indicated above, changes in the Bureau’s
employment series cannot be measured precisely
by the labor turn-over data. The two series are
not geared into the same period; the samples are
not completely representative; the employment
and industry coverage are not the same; and
industry classifications are not identical.1
The turn-over sample covers far fewer establish­
ments than the employment sample. Therefore,
data are available for fewer individual industries
in the labor turn-over series than in the employ­
ment series. Moreover, the latter covers the
highly seasonal industries, as well as printing and
publishing, and reflects the influence of work
stoppages, which are eliminated entirely from
the former.
Before the Standard Industrial Classification
was adopted for both series, definitions of indi­
vidual manufacturing industries showed little com­
parability. Up to that time, the employment
series was based on the Census of Manufactures
industrial classification system and fixed product
classification of firms, whereas the labor turn-over
series used this system only until 1943. There­
after, the Social Security Administration’s indus­
trial classification system and current product
classification of firms were used for labor turn-over.
Since January 1943, as already stated, the labor
turn-over data have covered all employees.
Although total employment has been available
from the employment series for all manufacturing
and major industry groups since 1939, it became
available for individual industries only after the
adoption of the Standard Industrial Classification.
In both series, employment is for the week
ending nearest the 15th of the month, but the labor
turn-over items refer to the calendar month.
Consequently, labor turn-over measures changes
during a calendar month; the employment series
reflects those from mid-month to mid-month.
Preparation of Union Scales of Wages and Honrs Series



Survey Methods and Sources
Information is collected each month on a mail
questionnaire which is sent to individual establish­
ments. The questionnaire provides for reporting
the total number of employees and the number of
personnel actions occurring during the month,
classified by type. In order to complete the count
of employees entering and leaving the employment
of the establishment, the number of transfers to
and from other plants of the same firm is also re­
corded but they are not included in the tabulations.
Separate data for women are obtained for total
employment, total accessions, total separations,
and quits.
Bureau turn-over rates are based upon experi­
ence in a sample group of establishments. For the
most part, the sample of respondents represents
the largest establishments in each industry plus a
distribution of medium- and small-sized establish­
ments. The approximate coverage of the sample
for major groups is as follows:
Number of
ments in

All manufacturing_______ __
Durable goods______
Nondurable goods_ . . .
Metal mining____________
Coal mining
Anthracite_____ ____
Telephone__________ . . .
Telegraph__________ . . .

In reporting
of uni­


4, 500, 000
2, 900, 000
1, 600, 000
59, 000



38, 000
130, 000


516, 000
41, 000



1Data not available.

To prevent fluctuations of employment in highly
seasonal industries from obscuring the turn-over
characteristics of other industries, such lines of
activity as fertilizer manufacturing in the chemical
group and canning and preserving in the food
group are excluded from the sample. Currently,
printing and publishing are also excluded. Other­
wise, all other manufacturing industries are
represented, although samples are too small to
permit separate publication of each.

Calculation of Turn-Over Rates
Monthly labor turn-over rates are computed for
individual industries by dividing the total number
of personnel actions of each kind (accessions,
quits, lay-offs, etc.) reported by the respondents in
the sample by the total employment reported by
these firms and multiplying the result by 100.

For example, in the sample for industry A, the
total number of employees who worked during or
received pay for the week of June 12-18 was re­
ported as 25,498. During the period June 1-30,
in all the reporting firms in industry A, a total of
284 employees quit. From these figures, the quit
rate of 1.1 per 100 employees is computed as
_____ X100 —1 1
25, 498X U
Through 1949, the industry classification system
developed in 1942 by the Social Security Adminis­
tration continued in use. By January 1950, how­
ever, the Standard Industrial Classification being
adopted by Federal statistical agencies is to be
substituted in the labor turn-over series. Regard­
less of classification system, allocation of reporting
establishments to the various industries is based
upon major product or activity, as measured by
sales value in the preceding calendar year.
In computing labor turn-over rates for industry
groups after the change to the Standard Industrial
Classification in January 1950, the rates for indi­
vidual industries are to be weighted by total
employment in each industry. Under existing
procedures (1949), the labor turn-over rates for
industry groups are not weighted by employment
except when unusual circumstances (such as a
fire causing a complete shut-down) affect only one
or a few plants in an industry. Under both new
and existing classification systems, the rates for
all manufacturing and durable and nondurable
goods are obtained similarly, by weighting the
industry group rates by employment.
To avoid distortion of the rates, the figures for
individual plants are excluded from the computa­
tions for a given period if they are directly affected
by a work stoppage at any time during the period.
If a work stoppage is widespread and affects a
substantial number of the reporting firms in an
industry, rates for that industry are omitted.
General comparability of the sample is insured
from month to month by telegraphic follow-up of
any delinquent firms (particularly large ones which
would have considerable influence on the rates).
The publication of revised rates for the month
preceding the current month also assures com­
parability of the sample, as most delinquent reports
are received in time for inclusion in the revised



T able 2.— Earliest date for which labor turn-over rates were published for industry groups and industries
Industry group and industry1

Earliest date

January 1930.3
January 1943.*

Durable goods
Iron and steel and their products...................... - ......... ........
Blast furnaces, steel works, and rolling mills 8
Gray-iron castings................ .........................................
Malleable-iron castings................................ .................
Steel castings...... ........ - ........- ........................................
Cast-iron pipe and fittings------ ------ ------------ ------ ----Tin cans and other tinware............................................
Wire products.................. ............................................. Cutlery and edge tools---------- ---------- ---------------------Tools (except edge tools, machine tools, files, and saws).
Hardware.......... ...... .............. .............. ........................
Stoves, oil burners, and heating equipment............... .
Steam and hot-water heating apparatus and steam
Stamped and enameled ware and galvanizing...............
Fabricated structural-metal products............................
Bolts, nuts, washers, and rivets.............. ......................
Forgings, iron and steel..................................................
Electrical machinery........................................................... .
Electrical equipment for industrial use....... ..................
Radios, radio equipment, and phonographs..................
Communication equipment, except radios....................
Machinery, except electrical..................................................
Engines and turbines.....................................................
Agricultural machinery and tractors..............................
Machine tools 8......... .....................................................
Machine tool accessories8..............................................
Metalworking machinery and equipment, not else­
where classified.
General industrial machinery, except pumps................
Pumps and pumping equipment....... ..........................
Transportation equipment, except automobiles..................
Aircraft................. .............. ............................................
Aircraft parts, including engines....................................
Shipbuilding and repairs................................................
Automobiles......... ................................................................
Motor vehicles, bodies, and trailers...............................
Motor-vehicle parts and accessories...............................
Nonferrous metals and their products..................................
Primary smelting and refining, except aluminum and
Rolling and drawing of copper and copper alloys.........
Lighting equipment........ ...............................................
Nonferrous metal foundries, except aluminum and
Lumber and timber basic products................................... .
Sawmills............... ...... ....................................................
Planing and plywood mills.............................................
Furniture and finished lumber products..............................
Furniture, including mattresses and bedsprings...........

January 1930.a
January 1943.
January 1939.
January 1943.
September 1940.
January 1932.
September 1941.
October 1937.
September 1941.
September 1939.
January 1943.
July 1937.
January 1943.
January 1943.
January 1943.
January 1943.
January 1930.
January 1943.
September 1941.
January 1943.
January 1930.*
September 1939.
January 1943.
April 1930.*

1 For a comparison of the industry titles used before and starting January
1943, see June 1943 Monthly Labor Review, p. 1210.
2 Dates refer to month of reference of the data. In most cases, the series
was first published in the monthly Labor Turn-over Report and the Monthly
Labor Review in which data for the specified month were published. In
cases where the series was prepared retroactively, a footnote indicates the
earliest published source.
* Rates for 1930, revised to use arithmetic mean instead of median, were
first published in the July 1937 issue of the Monthly Labor Review, reprinted
as Serial No. R. 608.
4 Published currently starting September 1946. Mimeographed summary
sheets show data monthly from January 1943.

Earliest date

M A N U F A C T U R IN G —Continued

All manufacturing industries.
Durable goods--------------Nondurable goods............

Industry group and industry1

Durable goods—Continued
Stone, clay, and glass products...........................................
Glass and glass products..------ ------------- ---------------Cement.......... ................. ........................... .................
Brick, tile, and terra cotta._______ _________________
Pottery and related products.......................................
Nondurable goods
Textile-mill products......................... ...................................
Cotton.__________________ _______ ______ ________
Silk and rayon goods___________ _____________ ____ _
Woolen and worsted, except dyeing and finishing.......
Hosiery, full-fashioned......... .............. ...................... .
Hosiery, seamless................. ........................................ .
Knitted underwear......................................................
Dyeing and finishing textiles, including woolen and
Apparel and other finished textile products....................... .
Men’s and boys’ suits, coats, and overcoats.... ............
Men’s and boys’ furnishings, work clothing, and allied
Leather and leather products...............................................
Leather_____________ _______ ____________ ________
Boots and shoes..... ......... .......... ............ ...................
Food and kindred products....................... ........... ............
Meat products.............................. ......... .......................
Grain-mill products............ ..........................................
Bakery products..................................... ............ ..........
Tobacco manufactures.............. ............................................
Paper and allied products......... ............................................
Paper and pulp....................................... ......................
Paper boxes....... ............................ .......... ....................
Chemicals and allied products.____ _______ _______ _____
Paints, varnishes, and colors......... .......... ....................
Rayon and allied products-------------------- ----------------Industrial chemicals, except explosives____ _________
Products of petroleum and coal..........................................
Petroleum refining.............. ................................... ......
Rubber products___________________ ____ _____________
Rubber tires and inner tubes.......................................
Rubber footwear and related products...... ...................
Miscellaneous rubber industries...................................
Miscellaneous industries......................................................
Metal mining.............
Copper-ore.......... .
Lead- and zinc-ore.
Coal mining:
Bituminous-....... .

January 1943.
December 1937.
April 1937.
April 1931.
January 1943.
January 1943.
January 1930.*
May 1938.
October 19.36.
January 1943.
May 1939.
January 1943.
September 1941.
January 1930.*
January 1943.
January 1930.*
September 1941.
January 1949.
January 1943.
July 1938.
January 1941.
January 1943.
May 1938.
August 1936.
January 1943.
May 1931.
January 1943.
January 1931.
December 1937.
January 1943.
March 1943.
April 1943.
March 1943.
February 1943.
January 1943.
June 1943.
May 1943.

8 Called iron and steel prior to May 1942.
8 Prior to January 1943 “ machine-tool accessories” were included with
“ machine tools.”
7 Annual rates from specified year through 1941 were published in May
1942 Monthly Labor Review, reprinted as Serial No. R. 1463. Monthly
rates were published currently starting December 1937 for machine tools,
from January 1939 for aircraft and shipbuilding, and from September 1940
for industrial chemicals, except explosives. Rates for industrial chemicals,
except explosives are available in mimeographed form from January 1939,



Besides the regular series shown in table 2,
others were prepared from time to time, particu­
larly during World War II and the immediate
postwar period, in order to (a) highlight the labor
changes in war industries; (b) compare the rates
for men and women; (c) to measure military

separations during the war; and (d) to measure
the rate of absorption of veterans into manufac­
turing and mining employment after the war.


list of these series and the periods for which they
are available are shown in table 3:

T able 3.— Special industries and groups for which labor turn-over rates were published during and immediately following
World War I I


Publication *

All employees:
Selected war industries
_ _ _ _ _ _ __
N onmunitions_________________ ______ __
Munitions ___ ______ ____ ________-_
Nonmunitions_____________ ____________
Men and women:
Manufacturing_________ ___ ___________
Do ................................................ .
Selected war production industries_______
D o .................................................... ......

Total_____________________________________ _
Selected individual industries_________________
Total.... ......... ......... .............................................
____ do........ .............................................................
____ do.......... ........... ...............................................
....... do......................................... ...........................

Durable and nondurable-goods divisions_______
Industry groups............. ........................ ..............
Selected industry groups_______ ______ _______
Selected individual industries_________________
Total___________ __________________________
____ d o ______________________________________
Munitions. ____________________________ ____do............... .....................................................
Non munitions
_______________________ ____ do.......................................................... .........
Manufacturing _ ___ _____________
Do................... ................. ................... - Durable and nondurable-goods divisions_______
D o__________ __________ ____________ Industry groups.................................... ...............
N onmanufacturing______________________ Anthracite and bituminous-coal mining.............
Manufacturing__________________________ Total...... ...............................................................
D o ........................................................... Durable and nondurable-goods divisions_______
Do......................................................... . Industry groups______ ______________________
D o................... ........................................ Individual industries_________________________

i Dates refer to month of reference of the data.
* M LR = Monthly Labor Review; LTOR = Monthly Labor Turn-Over
* Published in a special article, Labor Turn-Over in Munitions and Non­
munitions Industries, 1943 and 1944, in July 1945 issue of the Monthly Labor
Review; also reprinted as Serial No. R. 1757.
* Data for November 1945 through November 1946 also were published in a
special article, Postwar Labor Turn-Over Among Women Factory Workers,


October 1944___
January 1942___
January 1943___
January 1945___
....... do....... .........

December 1944__
June 1943 __ _
December 1944_.
....... do. —
December 1945__
....... do.................

March 1944 _
October 1945___
August 1945____
June 1943____ _
____ do_________
January 1944___
____ d o ______ _
August 1945____
____ do................
December 1945
....... do................
____ do................
____ do................
____ d o...... .........
....... do.................
....... d o ................
July 1946............

July 1947

_ _

___ d o ____ _ _
August 1945- _ _
____do....... ..........
December 1944__
do ..
December 1945__

M LR .i
M LR .6
M L R *; LTOR.

June 1948 _____
....... do....... .........

Special release.
July 1946_______ MLR.®
M L R .6
____ d o _______ _ MLR.«
____ do_________ M L R .6

in March 1947 issue of the Monthly Labor Review; also reprinted as Serial
No. R. 1880.
s Total accession rates were not published. Separation rates were shown
as a total, and by quits and involuntary separations. Employment and
accessions of veterans were shown as percentages of the respective totals.
• Published in a special article, Veterans Return to the Nation’s Factories,
in December 1946 issue of the Monthly Labor Review.

V. Compiling Monthly and
Weekly Wholesale Price Indexes
Both a monthly comprehensive wholesale price
index and a weekly index are computed by the
United States Labor Department’s Bureau of
Labor Statistics. These indexes are described
separately in the discussion which follows.

programs. The indexes are widely used as a base
for adjusting prices in contracts extending over a
period of time— “ contract escalation.” 2 Other
uses are for forecasts of future pricing, marketing,
and sales policies based on historical price develop­
ments; for analysis of the price structure of the
economy and changing interrelationships among
individual commodities; and in combination with
other data, for formulation of long-range economic
and other programs by Government officials.

Comprehensive Monthly Index
Since 1902, the official monthly wholesale price
index has been prepared as an indicator of general
price trends and average changes in commodity
prices at primary market levels. The official
series has been carried back to 1890; separate
monthly indexes are available for major groups of
commodities from January 1890, and for sub­
groups of commodities beginning with 1913. The
composite index has been estimated, jointly by the
Bureau and by non-Governmental agencies and
individuals, on an annual basis back to 1749.
Currently the index contains prices of nearly
900 commodities classified into 10 major groups
and 49 subgroups. The commodities are also
classified into 5 special economic groupings. In
general, the prices covered are those quoted by
manufacturers or producers or those prevailing on
commodity exchanges and in organized markets.
The index gives an approximation of changes in
the general price levels of commercial commodity
transactions. “ Wholesale” refers to large-scale
or wholesale quantities and terms in contrast to
“ retail.”
The major uses of the index, its components, or
the individual price series are numerous. They
provide one tool in the analysis of general business
conditions and of the business cycle. In con­
junction with other data, they indicate the state
of balance between aggregate supply and demand
at the primary market level. Individual concerns
utilize the indexes in planning plant construction
and production schedules, in purchasing raw
materials, in evaluating inventories, in determin­
ing production costs and in general investment
884616— 50------- 5

Index Limitations. The index measures completely
the price changes of only the 900 commodities
(and others that are closely related) which are
specifically defined for pricing both physically and
in terms of market structure. It is not an over-all
measure of the “ general price level” or of “ the
purchasing power of the dollar” — it does not in­
clude all classes of commodities (real estate,
securities, services, etc.) which are factors in the
“ general price level.” Finally, it does not cover
transactions at all levels of marketing— retail,
jobbing, speculative trading, export, etc. It is not
a measure of prices charged by wholesalers (i. e.,
jobbers or distributors) and cannot be used to
measure the margins between cost and selling
All price quotations used in the index have been
selected to be representative of the direction and
degree of price change. They do not necessarily
measure the average dollars-and-cents levels of
prices of individual commodities. Except for a
few commodities, the prices used in the compilation
represent those prevailing in national markets and
not those effective in any specific locality. Only
a few commodities, such as butter, brick, and some
2 The indexes for any given month are published four times: (1) in mimeo­
graphed form about 25 days after the close of the month to which the index
refers and in the Monthly Labor Review dated 2 months later than the
month to which the index relates, (2) a month after the first printing, cor­
rected for late reports and revised prices, (3) 2 months after the first printing
with further corrections for late reports and revised prices, and (4) the middle
of the calendar year following the month of reference, including all corrections
and price changes which are reported up to May 31 of the year in which the
final printing is made. The Bureau suggests that if any one of the indexes
is used in contract escalation, after proper consideration of the relevance of
the index (or the group index) to the costs being adjusted, the figure supplied
in the third printing should be used in most cases.




agricultural products, are priced locally in various
Method of Collection. A single quotation is used for
the majority of the slightly less than 900 commodi­
ties which are priced for the monthly comprehen­
sive index. This is practicable because for many
articles, the price movements of various sellers are
closely related. However, quotations from 2 to
50 sellers are averaged for about 150 commodities.
In all, a total of 1,600-2,000 quotations go into
the index each period.2
The Bureau attempts to price goods of constant
quality from period to period so that the index will
measure only the effect of price changes. To ac­
complish this, detailed specifications have been
written for the items priced. Each specification
has been prepared, in cooperation with experts
from industry and trade, to be as typical as possible
of the price movements of all specifications for the
commodity. Two examples of specifications are:
Sheets, steel. Box annealed, #27, U. S. Standard, hotrolled, per pound, bulk, carlots, f. o. b. mill; market
price, weekly (Tuesday); prior to June 30, 1931,
one pass, cold-rolled.
Shirts, men’s dress. White broadcloth, 136 x 60 count,
with or without collar, fine combed yarn, full
shrunk, cellophane wrapped. Per dozen, pack­
aged, no quantity specified, f. o. b. New York;
manufacturer to jobber; transaction price subject
to current cash discount, weekly (Tuesday); prior
to 1932, 128 x 68 count.

Prices are collected on each specification by mail
on schedules from individual reporters or obtained
directly from trade journals or organized markets
each week or month. All reports are made volun­
tarily upon the request of the Bureau; field agents
only visit new reporters or revisit current reporters
to clarify questions on the schedules. When a
new specification or reporter is introduced, the
commodity price information sheet shown below
is filled out by the field agent. This sheet contains
all pertinent information regarding the product
and the reporter, in order to insure comparability
over a period of time. After the initial personal
collection (including, when applicable, prices for
previous dates), all collection is made by mail on a
2 In the event that a price for a specific commodity is not available for a
given month at the time an index is computed, an estimated price is used.
The estimated price is based upon the best available information. If an
actual price becomes available at a later date, the indexes are revised to take
account of any difference between the estimated price and the actual

simple schedule form which has space for the
reporter to enter his current price, any changes in
the selling structure including changes in discounts,
and an historical record of his previous reports.
Depending upon the individual commodity, these
schedules are sent out weekly, or monthly, but
provision is always made for taking account of
multiple price changes within the month.
Sources of Data. Manufacturers (or producers or
their agents), commodity exchanges or organized
markets, Government agencies, and authoritative
trade journals are the sources of the basic price
quotations used in the index. Trade journal
quotations are used only when competent authori­
ties recognize the individual journal as a reliable
price reporter or source. As of May 1949, the
approximate distribution of commodity reports
by source was :
Percent of total



Manufacturers or sales agents___________
Trade journals__________________________
Boards of trade, commodity markets, etc_
Federal or State agencies________________


Calculation Procedures. The wholesale price index
is calculated as a fixed-base weighted aggregate,
using prices in 1926 as 100. Quantity weighting
factors are based on market sales during the years
1929 and 1931, except for agricultural commodi­
ties. For agricultural commodities, average mar­
ket sales in the years 1929, 1930, and 1931 are
used. Each price used in the index applies to 1
day each week, although the day varies by com­
modity. The monthly price is an average of the
four or five 1-day-a-week prices which fall within
the calendar month.
Indexes are computed by subgroups before
the comprehensive index is compiled. The first
step is to compute a monthly average price for
each commodity (including average prices from
more than one reporter for an individual com­
modity). This average price is then multiplied
by its appropriate quantity weighting factor to
give a value aggregate for the commodity for the
pricing period. All of the value aggregates in a
subgroup are then totaled and divided by the sum
of the value aggregates at 1926 prices. The
result of this division (multiplied by 100) yields
a subgroup index on a 1926 base. Similarly, the
subgroup aggregates are totaled to obtain a group



Bureau of Labor Statistics

B. L. S. 1810
(Rev. 1-1-49)

Budget Bureau No. 44-R602.1
Approval expires 12-31-50

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

Code No ...
Commodity Price I nformation Sheet
2. a. Mfr. □

1. a. Firm name.

b. Other

b. Address

(Postal zone)





(City and State)


c. Information authorized by
d. Information furnished by_
e. Schedule to be mailed to _ _

(Postal zone)


(City and State)

3. Description of commodity: Mfr’s a. Style N o_______________ ___________ b. Lot N o_______________
d. Grade_________ _________ e. Brand name____________
c. Model N o____________________ ______
No. □
f. Additional___________________ ---------------------------------- g. Check sheet attached: Yes □
4. a. Price quoted is from____________________________________________ t o -------------------------------------------------------------------(Class of seller)

(Class of purchaser)

b. Type of quotation: (1) List price___________________ __
(2) Actual transaction price-------------------------------------(3) Exchange price_________________
(4) Other (specify)______________________________________________________
c. Unit quoted____________________________________________________________________________________________________
d. Minimum and maximum size of sale to which price applies---------------------------------------------------------------------------------e. Customary delivery period______________________________________________________________________________________
5. Discounts applicable to prices for the commodity described above when sold to the class of purchaser listed in question
4a. (Circle any of these discounts which have been deducted in arriving at the prices listed in question IS.)
a. Trade__________ % : b. Quantity__________ % on purchases o f_________________________________________________
c. (1) Cash discount terms__________________________________________ (2) Extent of use_______________________ %
d. Other discounts, allowances or free deals (explain in detail)______________________________________________________
6. Duties or taxes applicable to prices listed under No. 15 which have:
(a) been included (specify)________________________________________________________________________________________
(b) not been included (specify)____________________________________________________________________________________
7. Usual method of effecting price changes:
(a) Change in list price___________________________________
(b) Change in discounts--------------------------------------------(c) Other (explain)________________________________________________________________________________________________
8. a. Delivery terms (f. o. b., freight equalized, etc.)__________________________________________________________________
b. Usual means of delivery (carrier)_______________________________________________________________________________
9. Customary type of packaging used. a. Crate----------------------- b. carton----------------------- c. bag---------------------------d. other (specify)__________________________________________________________________________ _______________________
10. a. Does price in No. 15 include charge or deposit for packaging? (explain)--------------------------------------------------------------_____________________________________________________________ b. Is any part of such charge or deposit refundable?
11. Channels of distribution, percentage of sales made, discounts and other allowances by type of distribution for com
modity described in No. 3 above.
Sales and discounts

Other Mfr.







a. Sales (percent)________________
b. Cash discount______________
c. Trade discount_______________
d . O n an t i t v d iscou n t,

12. Market area served
13. Method of selling (i. e., salesman, catalog, etc.)----------------------------------------------------------------------------------------------------14. Major products manufactured or distributed by this firm and relative dollar volume importance expressed in percent­
age of total sales.
a . -------------------------- - - - %
b . _____________________ %
15. Prices for commodity described in 3, 4 and 5.

16. BLS Agent.









aggregate and index, and the group aggregates
are totaled to obtain the all-commodities index.
The individual commodity aggregates are retotaled
to obtain the five economic group indexes.
Major changes in specifications of commodities,
shifts in the relative importance of sales to differ­
ent types of purchasers or by different types of sell­
ers, alterations in the distribution pattern of the
industry, or changes in commodities with economic
conditions are handled in each instance by “ link­
ing” so as to prevent movement in the index for
the period in which the change is made. First,
a “ link date” is selected; this is the month chosen
as being the most logical in which to make the
shift, taking into account the market conditions
for the individual commodities. Then, in the
link-month, the quantity weighing factor is
adjusted so that the product of the price of the
new specification times the adjusted weighting
factor is the same as the product of the price of
the former commodity priced times the unad­
justed weighting factor. Because of the many
links for individual commodities made after the
adoption of the 1929-31 weights, the original
quantity weighting factors are no longer mean­
ingful as quantities and are currently called
“ multipliers.”

Weekly Index
From 1932 to November 18, 1948, the coverage
of the weekly wholesale price index was the same
as for the monthly index; in November 1948, it
was replaced by a new weekly series which includes
only 115 commodities or a sample of about an
eighth of the commodities in the monthly index.
The current series was designed as a counterpart
of the monthly index;2 specifically,it is intended
to show week to week changes in commodity
prices, for interpolating between successive
monthly indexes, and to provide an estimate of
the level of the comprehensive index 2 to 3 weeks
in advance of its publication.2
Regular publication of this weekly index was
begun on November 19, 1948, and indexes begin­
ning with January 1947 were published at that
time. Indexes are published each Friday for the
week ending the previous Tuesday for all com­
2 But it should not be used for escalation since it is only an estimate of the
comprehensive index.
2 A detailed description of the current weekly index and its advantages
over the comprehensive weekly index was presented in the Monthly Labor
Review for September 1948 (p. 290).

modities; all commodities except farm products
and foods; and for six of the major groups in­
cluded in the monthly series. The four major
groups of the comprehensive index not published
separately are combined to form an “ all other”
index. In addition, special subgroup indexes, in­
cluding the entire comprehensive sample, are
published weekly for grains, livestock, meats, and
hides and skins. In October 1949, the full sample
for these latter four subgroups was included in
the weekly index and other changes were made
in the sample in order to obtain a closer approxi­
mation of the monthly index or because of demand
for certain subgroup or group indexes. As a result,
about 300 commodities are currently included.
For the first time, a weekly index for chemicals
and allied products is currently published as a
major group and the “ all other” group index
has been discontinued. Additional changes in
the sample will be made when revised subgroups
are introduced into the monthly index.
Method of Collection and Sources.— Inasmuch as
the weekly index is based upon a sample of the
commodities and reporters used in the compre­
hensive index, the sources and methods of collec­
tion of the data are identical to those used in the
comprehensive index (see p. 26).
Calculation Procedures. The weekly wholesale
price index is calculated as a fixed-base weighted
aggregate with 1926 prices as 100. The constant
weights or “ multipliers” for individual commodi­
ties are derived from value aggregates of the
comprehensive monthly index for the year 1947.
All 900 commodities of the comprehensive index
are represented in the sample either directly or
indirectly. Thus, each commodity in the sample
is assigned its 1947 value aggregate, plus those of
non-sample commodities, which have similar
price trends. To obtain the “ multiplier,” the
total aggregate assigued to each sample commodity
is divided by the 1947 average price for the priced
commodity. These multipliers are applied to the
weekly prices of the sample commodities and their
products are totaled for each group.
Major changes in specifications for commodities
are treated in the same manner as in the compre­
hensive monthly index (see above). However, in
the weekly index, the “ link” is made on the basis
of a week instead of a month so as not to distort
the percentage change from week to week.

VI. Preparation of Union Scales of
Wages and Hours Series 2
Annual studies of union scales are conducted by
the United States Department of Labor’s Bureau
of Labor Statistics in five industries: baking, build­
ing construction, local transit, local trucking, and
printing.2 Union scales are defined as minimum
wage rates or maximum schedules of hours agreed
upon through collective bargaining between em­
ployers and trade-unions. Rates in excess of the
agreed minimum, which may be paid because of
long service, for special qualifications, or for other
reasons, are excluded from the studies.
The use of union agreements or other union
records in studies of occupational wages is practic­
able in industries that are widely organized and in
which (1) defined craft groupings persist, as in
building construction or printing, or (2) key occu­
pations can be clearly delineated, as in local
The Bureau’s annual union wage studies began
in 1907. Originally information was obtained for
39 cities but the number has been gradually
expanded until in 1949, 77 cities are being covered,
ranging in population from 40,000 to over 1
million. The scope of the information for individ­
ual industries has also been expanded. For
example, all branches of baking are covered
currently in place of the bread-baking branch only,
and 11 book and job and 8 newspaper occupations
in printing replace 7 book and job and 4 newspaper
occupations formerly surveyed.
The Bureau’s union-wage series measure inter­
city wage differences for comparable work, and the
relationships between rates applicable to workers
in occupations requiring varying degrees of skill.
The data are used widely in wage negotiations by
both management and labor. The scales of
building-trades workers are especially important
34 Prepared by Charles Kubenstein in the Bureau's Division of Wage
2 Prior to 1936, the coverage at various periods also included barbers, line­
men, longshoremen, and workers engaged in breweries, laundries, metal
trades, millwork, restaurants, soft-drink production, and theaters.

in estimating construction costs, because labor
expenditures constitute an important element in
the total cost of building construction. The index
series derived from these studies provide barom­
eters of year-to-year changes in scales of wages
and hours in the industries covered.
The indexes of union-wage scales and weekly
hours have a base period of June 1939, a year
which was not marked by any unusual fluctuations.
The index series for the building trades and print­
ing go back to 1907, for local transit to 1929, for
local trucking to 1936, and for baking to 1939.
Although data for the latter three industries were
collected for years prior to the dates of the index
series, indexes were not constructed because of
inadequacies in the available data.
The study of union scales in the baking industry
includes all occupations in the industry, except
delivery drivers and plant maintenance workers.
With the exception of the indexes which relate to the
industry as a whole, data are presented by industry
branch or type of baking, e. g., bread and cake
hand shops, bread and cake machine shops, pie
and pastry shops, cracker and cooky shops,
Hebrew baking, and other nationality baking such
as Bohemian, French, Italian, and Polish.
In the building trades, virtually all journeyman
and helper and laborer classifications are covered.
Indexes and other data are shown for each im­
portant trade as well as for all trades combined.
T able 4 . — Recent

coverage of union wage studies in 77 cities

Build­ Local
trades transit


Number of local unions..............
Number of scale quotations........ 3,700
Number of workers..................... 70,000 760,000 100,000 270,000
Percent of entire industry1


1 Entire industry includes both union and nonunion workers.
2 Data not available.

The trucking study embraces motortruck drivers
and helpers engaged in local trucking. Over-theroad drivers and local city drivers paid on a mileage
or commission basis are excluded. All data,
including indexes, are presented for the two
classifications indicated.



Union scales in the local-transit industry are
limited to operating employees of busses, surface
cars, and elevated and subway lines. Data, with
the exception of indexes, are shown separately for
operators of 1-man cars and busses, motormen and
conductors of 2-man cars, and elevated and sub­
way lines.
In the printing industry, besides 11 book and
job trades and 8 newspaper trades, the data for
newspaper trades are further broken down for day
and night work. Indexes and other data are
presented separately for each trade and for all
trades combined.
Total union and worker coverage of the series is
given in table 4.

Limitations of the Series
The union wage series are generally designed to
provide indexes of union hourly wage scales and
weekly hours of work at straight-time pay, and
of scale levels by trade, city, and region. The
indexes measure the trend of union scales but do
not portray the movement of earnings or takehome pay and actual hours of work. Because of
irregularities in the work schedules of operating
employees in many of the covered cities, an index
of weekly hours has not been maintained for the
local transit industry. In the baking industry,
the occupational structure varies between cities,
especially in mechanized plants which operate on
a mass-production basis. Consequently, scale
levels are presented by industry branch, irrespec­
tive of occupation or sex of workers. Scales for
apprentices are not included in any of the union
wage studies.
Scale levels are average union rates which pro­
vide comparisons of wage rates between industries,
trades, and cities at a given time. They are not
an accurate measurement of year-to-year changes
because of fluctuations in membership and other
factors. Membership figures for the various
trades or classifications do not remain constant
and any changes have a marked effect on scale
levels. For example, if organizational drives in
cities having relatively lower scales of wages result
in sharp increases in membership, the movement
of the scale levels for the affected trades as a whole
is naturally retarded. Conversely, increases in
membership in cities having high wage scales
accelerate the upward movement of scale levels.
A similar effect can be caused by decreases in union

membership. The absence of effective wage scales
for local unions, because of protracted work stop­
pages, may have the same influence on scale levels
as fluctuations in membership.
In addition, the union rates are not necessarily
the actual rates paid to all workers, nor are the
union hours the hours actually worked. The
union scale usually fixes the minimum rate of pay
and the maximum hours of work at straight-time
pay. Workers with above average experience and
skill may be employed at rates above the union
scale, especially during prosperous times when a
tight labor market creates competitive bidding for
the better workmen. During periods of depressed
business activity, actual hours worked are often
less than those specified in the union agreement.

Study Methods and Sources
The mail questionnaire technique is used and
information is collected from central sources, such
as international u-nions and regional union organi­
zations. Personal visits are then made to local
unions which do not respond to the mail question­
naire or for which data are not available from
central sources. Prior to 1947, all data relative
to union wage studies were collected directly from
local union officials (generally the secretary or
business agent) by Bureau representatives and
entered on schedule forms designed specifically for
this purpose.
Information is requested for a specific date,
namely July 1, for all industries except local
transit, which is surveyed as of October 1. These
dates were adopted after numerous changes, be­
cause the large bulk of new agreements involved
have been negotiated by that time each year. In
order to maintain year-to-year comparability,
scale and membership data for the previous year
are transcribed onto the schedules before they are
sent out. Union officials are requested to check
the previous year’s data and revise any figures
which may have been incorrectly reported, before
they insert current data. Copies of union agree­
ments are also requested from union officials for
the purpose of (1) checking the data entered on
the schedules with the terms of the agreements
and (2) building up the files of union agreements
maintained by the Bureau of Labor Statistics.
The schedule used for the building trades is here


B. L. S. 1150.1
(Rev. April 1949)

Budget Bureau No. 44-R-738.1
Approval expires 6-30-1950
SCHEDULE No....................

U. S. D epartment of Labor



U nion Scales of W ages and H ours
in the B uilding T rades
(annual survey)



Please enter in:
Column 10— Number of union members working or
Column 4— Wage rate for each trade listed.
immediately available for work at each
Column 7— Weekly hours to be worked before overrate.
time rate becomes effective.
Column 11— Number of Apprentices in each trade.
Membership information will be kept confidential and used only to compute average wage rates.


Trade or occupation




Scale of wage rates in effect on






Weekly hours before overtime
rate is effective






Number of
Number of active union apprentices
in each
members at each rate




Please attach a copy of your agreement in effect on July 1, 1949 and answer the following questions:
1. How many hours must be worked each day before
overtime rate is effective?_________________________
2. When did your agreement go into e ffect?_____________
When may it be reop en ed ?______ When does it
e x p ir e ? ________
Do you desire agreement to be
kept confidential? Y e s ____ N o ____
3. What is the total membership of your u n ion ?________
How many are apprentices?________________
Please sign your name here

4. D o apprentices receive classroom or equivalent instruc­
tion in subjects related to their trade? Yes __ No __
5. Between July 1, 1948 and July 1, 1949 how many
apprentices completed their apprenticeship?________
6. Between July 1, 1948 and July 1, 1949 how many
journeymen became unavailable for work because of
death, permanent disability, or retirem ent?________
D a t e __________ , 1949

A ddress____________________________________________
(Street and No.)

The union wage studies are designed to include
all local unions in the covered industries in the
selected cities. Periodic checks are made with
central labor unions, district councils, and other
authoritative bodies to obtain new local unions
which should be included in the studies.

Computation Procedures
Chain indexes are calculated for each of the five
industries to portray the trend of union rates and
weekly hours at straight-time pay. In calculating
these indexes, the percentage change or ratio from
year to year is based on aggregates computed from
quotations for all identical classifications in each
industry for two successive years. To obtain
the aggregates, the rates and hours for both the
previous and current years are weighted by the

(City and State)

(BLS 49-4056)

membership in the particular classification for the
current year. The index for the current year is
computed by multiplying the index for the pre­
ceding year by the ratio of the aggregates. For
example, in the 1948 study of building trades, the
rate aggregate for all quotations amounted to
current year and
1,465,426.274 for the previous year. The ratio
of these aggregates is 110.57 and was obtained
by dividing the figure for the current year by the
one for the previous year. The July 1, 1948,
index of union hourly wage rates for all building
trades (163.5) is the result of multiplying the
July 1, 1947, index (147.9) by the ratio of the
aggregates (110.57). This method of index cal­
culation eliminates the influence of year-to-year
changes in membership.



Indexes of union hourly wage rates and weekly
hours are computed for each classification as well
as for all classifications combined in the building
construction, printing, and trucking industries.
In the baking and local transit industries, indexes
are provided only for all classifications combined.
Irregular hours of work for operating employees
in many of the covered cities prevent the compu­
tation of an index for union weekly hours in the
local transit industry.
Average union rates are calculated by weighting
each quotation for the current year by the reported
membership. These averages are levels designed
to provide comparisons between trades and cities
at a given time. They do not measure the trend
of union rates, the function served by the index

An over-all average hourly rate is computed for
each of the industries included in the union wage
studies. In addition, averages are presented by
industry branch and city in baking; by trade, city,
and region in building construction and printing;
for three broad occupational groupings by city in
local transit; and by classification and city in
Union scales of wages and hours in effect on
the date of the survey, as reported by union
officials, for both the previous and current years
are published for each classification by city.
This furnishes a direct comparison of union scales
between the two years for each of the industries
studied. The scales of wages are indicated as
hourly rates and the scales of hours as the weekly
hours of work before overtime rates are applicable.

VH. Measurement of
Industrial Employment2
For many years, the U. S. Labor Department's
Bureau of Labor Statistics has collected and pub­
lished monthly statistics relating to industrial
employment, wages, and hours of work as an
integral part of its employment-statistics program.
In the present article, the collection and compila­
tion of the employment statistics is described;
in the article on the calculation of the average
wages and hours is explained. These series provide
a detailed and comprehensive body of information
on industrial activity for the country as a whole
and, on a more limited basis, for States and im­
portant localities.
Continuous national series are published each
month on the number of wage and salary workers
employed in all nonagricultural establishments
and in the 8 major industry divisions: Manufac­
turing, mining, contract construction, transporta­
tion and public utilities, trade, finance, service,
and government. Both all-employee and produc­
tion-worker employment series are also presented
for 21 major manufacturing groups and 104 sepa­
rate manufacturing industries. Within nonmanu­
facturing, total employment information is pub­
lished for 23 major groups and 13 component
Production-worker employment is
also shown for the mining division as a whole and
for the industry components.
Series covering employment in manufacturing
industries are also currently published for all
States; employment in all nonagricultural estab­
lishments and in each of the major industry divi­
sions is available for about 30 States. Expansion
of the program, now underway, is designed to
produce similar series for all States and for about
100 major metropolitan areas.
For private nonagricultural industries, the
employment information covers all full- and parttime employees who were on the pay roll, i. e.,
who worked during, or received pay for, the pay
8 Prepared by Sydney S. Netreba of the Bureau's Division of Employment

period ending nearest the fifteenth of the month.
For Federal establishments, the employment
period relates to the pay period ending prior to the
first of the month; for State and local governments,
during the pay period on or just before the last
of the month. Proprietors, self-employed persons,
domestic servants, and unpaid family workers
are excluded.

Limitations of the Data
Essentially, the Bureau of Labor Statistics
measure of employment represents a count of
persons on the pay rolls of nonfarm establishments
during one pay period. For most establishment
reports, the pay-roll period covers 1 week in each
month, generally the week ending nearest the
fifteenth of the month. Such a pay-roll count
includes persons who worked during, or received
pay for, any part of the reporting period. The
employment series, therefore, reflect turn-over of
personnel: The same person may appear on two
separate establishment pay rolls in the same
period. Thus, the employment information is not
a measure of the number of full-time jobs that
were available, nor is it an unduplicated count of
paid workers. Owing to the restrictions with
respect to the reporting period, the data do not
refer to employment throughout the month, nor
to employment at one point of time in the month.
Since the guiding principle of the Bureau's
employment concept is that of work during, or
receipt of payment for, a given period, distinctions
must be made with respect to persons who may
have jobs but who are not at work for various
reasons. Thus, persons on paid vacations or paid
sick leave are included in the employment count,
but those on leave without pay during the report­
ing period are not considered as employed. Work
stoppages in effect throughout the reporting
period result in the exclusion from employment
of those so engaged; however, the employment
level is not affected if persons involved in work
stoppages worked or received pay in any part of
the pay period covered. Similarly, persons who
are laid off or who leave temporarily are excluded
from the employment count if such personnel ac33



tions cover the entire reporting period and no
payment is made.
The problems of classification and the limita­
tions of the classification structure also affect the
employment data. Thus, in most instances it is
not possible to provide detailed employment
information for specific products. The require­
ment that establishments shall be classified accord­
ing to major product or activity (as discussed in
the following section) may result in the “ conceal­
ment” or understatement of employment in other
important activities, and in a simultaneous over­
statement of employment in the major activity.

Survey Sources and Methods
Approximately 120,000 cooperating establish­
ments furnish monthly employment and pay-roll
schedules, by mail. The number of establish­
ments reporting employment data and the num­
ber of employees covered, for each industry
division, are shown in table 5.
T able 5.— Approximate coverage of employment and pay
roll sample

Division or industry

Number of
Number in Percent
of total

Mining____________ ____ _______ _
Contract construction.........................
Transportation and public utilities:
Interstate railroads (IC C )___ _
Rest of division (BLS) _______ _
Trade________________________ __
Finance_____ ______ ______ _________
Hotels..... ................ . ___............
Laundries and cleaning and dye­
ing plants___________________
Federal (Civil Service Commis­
sion)___________ _____________
State and local (Bureau of Cen- |
sus. nnart.ftrlv')

2, 700



46, 300

1, 359,000
1, 056, 000
1,379, 000



115, 000





1, 885, 000


2, 400,000


With respect to employment, the following in­
formation is obtained:
For manufacturing, mining, laundries, clean­
ing, and dyeing: (a) all employees or the total
number of wage and salary workers, i.e. all fulland part-time employees in the respective estab­
lishments who worked during or received pay for
any part of the period reported; salaried officers of
corporations are included, proprietors or firm
members are excluded; (b) the number of all
full- and part-time production and related workers
on the pay roll who worked during or received
pay for any part of the pay period reported;

persons on paid sick leave, paid holidays, and paid
vacations are, therefore, also included.
For other nonmanufacturing industries, i.e.
wholesale and retail trade, public utilities, finance,
hotels, and miscellaneous: (a) the total number of
full- and part-time wage and salary workers as
indicated above; (b) the number of full- and parttime nonsupervisory employees and working
supervisors; similarly persons on paid sick leave,
paid holidays, and paid vacations are included.
Cooperating State Agencies. The current employ­
ment statistics program is an integrated FederalState project which provides industrial employ­
ment information on a national, State, and area
basis. In accordance with authority granted in a
Congressional Act of 1930 (Public Laws, Chapter
873, Yol. 46, Part I) and in order to minimize the
reporting requirements for cooperating establish­
ments, the Bureau of Labor Statistics has entered
into agreements with various State agencies.
Basic uniformity in the collection of BureauState employment statistics is obtained by the use
of Bureau-designed schedules for monthly report­
ing. The “ contract” State agencies edit these
reports according to standards defined in editing
instructions issued by the Bureau, and make these
data available for inclusion in the national esti­
mates. The cooperating agencies are responsible
for the preparation of State and area employ­
ment statistics. To maintain comparable data
from State to State, statistical standards are set
forth in a BLS-State procedures manual and in
related instructional memoranda. A list of the
cooperating State agencies, currently covering all
States and the District of Columbia, is presented
in the monthly mimeographed Employment and
Pay Rolls Detailed Report and in a footnote to
table A-10 of the Monthly Labor Review begin­
ning with the October 1949 issue.

Calculation Procedures
In the employment series (as well as those on
hours and earnings), reporting establishments
are classified into significant economic groups on
the basis of major postwar product or activity as
determined from annual sales data. The industry
classification structure currently used in the em­
ployment statistics program is defined in the
folio wing documents: (1) For manufacturing indus­
tries— Standard Industrial Classification Manual,


volume I, Manufacturing Industries, Bureau of ^he
Budget, November 1945; (2) for nonmanufacturing
ndustries— Industrial Classification Code, Federal
Security Agency, Social Security Board, 1942.
Estimation Procedures. Current employment data
ire estimates based upon reports from a sample
*roup of establishments, since in many industries
Pull coverage would be prohibitively costly and
time-consuming. To obtain the estimates the
following four steps are necessary:
(1) A total employment figure (bench mark) for
an industry, as of a specified period, is obtained
from sources which, singly or in combination,
insure either a complete count of employment for
the industry or an estimate of reasonable accuracy.
(2) Employment data for a sample group of
reporting establishments are compiled for the
bench-mark month and subsequent months.
(3) The ratio of employment in one month to
that in the preceding month (i. e. the link relative)
for identical establishments in each industry, is
computed for each consecutive pair of months.
(4) The link relative for the month following
the bench-mark month is applied to the bench
mark for the industry to derive the level of em­
ployment in that month. The resulting figure,
in turn, becomes the base for obtaining the next
month’s level. In succeeding months the same
procedure is followed until new bench-mark data
become available. At that time, an adjustment
is made, if necessary, to eliminate possible dif­
ferences between series based on the old and new
bench marks.
An illustration of the estimation procedure
used in those industries for which both all-em­
ployee and production-worker employment infor­
mation is published follows: The latest produc­
tion-worker employment bench mark for a given
industry was 50,000 in September. According
to the reporting sample, 60 establishments in that
industry employed 25,000 workers in September
and 26,000 in October, a 4-percent increase.
To derive the October figure of 52,000, the change
for identical establishments reported in the September-October sample is applied to the bench

50' 000X 2

0 (° r 1-04)=52>

To determine the estimated all-employee level of
65,000 for October, that month’s sample ratio of


production workers to total employment is used
( 528d5" ^°r mu^ P ^ ed by 1.25)=65,000^. Sim­
ilarly, the employment level for the next month
would be prepared by the use of reports for
October-November and the previously deter­
mined October employment. Thus, the industry
employment trends reflect the fluctuations shown
by establishments reporting to the Bureau of
Labor Statistics; the level of employment is
determined by the bench mark.
Sources oj Bench-Mark Data. Complete counts or
bench marks are required periodically in order to
adjust for errors resulting from the use of a
month-to-month sample, and further, to provide
base levels of employment for subsequent pro­
jections during inter-bench-mark periods. For
example, a source of possible error is the difficulty
of introducing new firms into the sample at the
time they begin operations which results in a
downward bias.
Since 1939, the primary source for bench-mark
materials has been the employment covered under
the social-security program: (1) employment in
firms liable to contributions to the State unem­
ployment compensation funds; (2) data from the
Bureau of Old-Age and Survivors Insurance on
employment in firms exempt from State unemploy­
ment insurance laws because of their small size.
Information from these two sources covers a
substantial number of the persons engaged in
nonfarm employment in each State. Special
bench marks are used for industries not covered
by the social-security program. Services for Fed­
eral, State, and local governments, and services
performed for religious, educational, and charitable
organizations are among the more important ex­
clusions from the social-security program. State
and local government bench marks are based on
data compiled by the Bureau of the Census, and
most of the data on Federal Government employ­
ment are made available by the United States
Civil Service Commission. The Interstate Com­
merce Commission is the source for railroads.
Production-worker employment information is
not available from the social-security reports and,
therefore, a production-worker bench mark must
be derived for each industry for which such
employment information is made available. This
is done by applying to the all-employee bench



in detailed industry reports for the current an<
the immediately preceding month are subject t<
further revision. These revisions represent th<
first type mentioned above.
Revisions of Series. Owing to the sampling and
Appropriate revisions, based on new bencl
estimating procedures used, varying degrees of
marks, are introduced into the employment ser
error develop in the current monthly employment
ies annually or less frequently, as required. Thes<
levels. These errors are corrected by subsequent
adjustments are necessary primarily becaus<
revision of previously published data. In this
reports are not immediately available from nev
connection, two types of revisions periodically
firms; frequently such reports are not includec
incorporated into the employment series should
in the particular industry sample until after th(
be distinguished: (1) revisions of current monthly
establishments have been in operation for som<
data following the preliminary release of the
time. Experience with the employment-statistics
information; (2) annual revisions on a more
program has shown that, without bench-mart
extensive basis after more current bench-mark
adjustments, the employment data tend to develop
reports become available.
a marked understatement which becomes largei
The Bureau of Labor Statistics makes avail­ from year to year. For manufacturing and man}
able, about a month after the month of reference,
nonmanufacturing industries, the data used in
preliminary information relating to wage and
preparing the new bench marks are available
salary employment in nonfarm establishments,
about 7 to 10 months after the last month of the
including major industry divisions and a number
bench-mark period. In general, the bench-mark
of manufacturing and nonmanufacturing indus­
period relates to the first quarter of the year. The
try groups. Such information is based upon
monthly employment levels which had been made
preliminary tabulations of data from those
available previously for that quarter are com­
sample establishments that have been received
pared with the new bench-mark data. The need
in time for the preliminary release. Subsequently,
for adjustment of the published employment
revised data are made available on the basis of
information is determined from this comparison.
all reports in the sample. Thus, data presented
mark the ratio of production-worker employment
to total employment in the comparable period, as
determined from the Bureau’s industry sample.

VIII. Calculating Hours and Earnings
of Workers in Industry2
The Bureau of Labor Statistics makes available
monthly series relating to wages and hours of
work in connection with its general program of
industrial employment statistics. Currently, such
data are issued in comprehensive and detailed
form for the manufacturing industries on a
national basis, and for a selected group of non­
manufacturing activities. The program is de­
signed, however, to produce similar data for all
important segments of the nonfarm economy.
Some progress has been made, in cooperation
with State agencies, in the development of such
series for States and important industrial areas.
Each month, the Bureau publishes average
weekly hours, average hourly earnings, and aver­
age weekly earnings relating to production or
nonsupervisory workers in total manufacturing,
the durable and nondurable goods industry sub­
divisions, 21 major groups of manufacturing
industries, and 178 separate manufacturing indus­
tries. Within nonmanufacturing, 40 series are
published on hours and earnings. Similar aver­
ages for class I railroads are also presented, based
on data supplied by the Interstate Commerce
Hours and earnings in manufacturing industries
are also shown monthly for 26 States and 42 areas
at the present time. Expansion of this program,
currently under way, is expected to result in the
regular publication of similar data for all States
and for about 100 metropolitan areas.

Survey Sources and Methods
An integral part of the Bureau’s current em­
ployment statistics program, the hours and
earnings data are based upon monthly mail re­
ports provided by approximately 100,000 co­
operating establishments.
(See description in
preceding article.)
2 Prepared by Sydney S. Netreba of tbe Bureau’s Division of Employment

The number of cooperating establishments
reporting the above pay-roll and man-hour data
is shown in table 6.
T able 6.— Approximate coverage of hours and earnings

Division or industry

Mining.......... ...... .................................
Contract construction.............. ..........
Manufacturing........................... .........
Transportation and public utilities:
Class I railroads (IC C ).................
Local railways and bus lines 1
Gas and electric utilities...............
Trade................... ................................
H otels...........................................
Laundries and cleaning and dye­
ing plants....................................

Number of
Number in Percent of

460, 000


46, 300

360, 000








1 Refers to privately operated companies. The hours and earnings data
include reports for an additional 30,000 employees in Government operated

In general, the establishment reports contain the
following information necessary for the computa­
tion of the hours and earnings averages:
(1) The number of all full- and part-time pro­
duction workers or nonsupervisory employees who
worked during or received pay for any part of the
period reported. For manufacturing, mining,
power laundries, and cleaning and dyeing indus­
tries, the data cover production and related
workers only. Production and related workers in­
clude working foremen and all nonsupervisory
workers (including lead men and trainees) engaged
in fabricating, processing, assembling, inspection,
receiving, storing, handling, packing, warehousing,
shipping, maintenance, repair, janitorial, watch­
man services, products development, auxiliary
production for plant’s own use (e. g., power plant),
and record-keeping and other services closely
associated with the production operations. Data
for the telephone industry through May 1949
reflect mainly the hours and earnings of employees
subject to the Fair Labor Standards Act. Begin­
ning with June 1949, the telephone averages relate
to the hours and earnings of nonsupervisory em37



ployees. For the remaining industries, unless
otherwise noted, the data refer to all nonsupervisory employees and working supervisors.
(2) Total gross pay rolls for such workers before
deductions for old-age and unemployment insur­
ance, withholding tax, bonds, union dues, and
special clothing allowances. The pay-roll figures
also include: Pay for sick leave, holidays, and
vacations taken. They exclude: Cash payments
for vacations not taken, retroactive pay not
earned during period reported, value of payments
in kind, contributions to welfare funds and in­
surance or pension plans, and bonuses, unless
earned and paid regularly each pay period.
(3) Total man-hours actually worked or paid for
by full- and part-time production or nonsupervisory workers including hours paid for holidays,
sick leave, and vacations taken; if employees elect
to work during a vacation period, only actual
hours worked by such employees are included.
The period reported generally represents a pay
period of one week ending nearest the fifteenth of
the month. For those establishments which use
a 2-week or longer pay period, the schedules are
edited to reduce the pay-roll and man-hour aggre­
gates to their proper equivalents for a single week.
Cooperating State Agencies. The current employ­
ment statistics program, and hence the hours and
earnings information, is an integrated FederalState project, under which the preparation of
data on National, State, and area levels is facili­
tated. In accordance with authority granted in
a Congressional Act of 1930 (Public Laws,
Chapter 873, Vol. 46, Part I) and in order to
minimize the reporting burdens placed upon
cooperating establishments, the Bureau of Labor
Statistics has entered into agreements with
various State agencies, whereby basic uniformity
in the collection of Bureau-State employment and
hours and earnings statistics is obtained by the
use of Bureau-designed schedules for monthly
reporting. The “ contract” States edit these
reports according to standards defined in editing
instructions issued by the Bureau, and make these
data available for inclusion in the National esti­
mates. The cooperating agencies are responsible
for the preparation of State and area statistics.
To maintain comparable data from State to State,
statistical standards are set forth in a BLS-State
procedures manual and in related instructional

memoranda. A list of the cooperating State
agencies is presented in the monthly mimeo­
graphed Hours and Earnings Industry Report
and in a footnote to table A-10 of the Monthly
Labor Review beginning with the October 1949

Calculation Procedures
The industry classification structure currently
used in the hours and earnings series under the
general employment statistics program follows the
standards established in the documents here listed:
(1) For manufacturing industries— Standard In­
dustrial Classification Manual, volume I, Manu­
facturing Industries, Bureau of the Budget, N ov­
ember 1945; (2) for nonmanufacturing industries—
Industrial Classification Code, Federal Security
Agency, Social Security Board, 1942.
Average Hours and Earnings. In the hours and
earnings series, it is necessary to distinguish be­
tween computations respecting groups of indus­
tries from those for individual industries. To ob­
tain average weekly hours for an individual in­
dustry— e. g. blast furnaces, steel works, and
rolling mills— the sum of the man-hour totals re­
ported by the plants classified in the given cate­
gory is divided by the number of production or
nonsup ervisory workers reported for the same
For example:
112,000 (weeklyman-hours) A A , . „
2,775 (production workers) =‘ 40-4
weekly hours
Weekly hours for combinations of industries—
all manufacturing, major manufacturing and non­
manufacturing groups— are weighted averages.
The workweek average for each individual com­
ponent industry is weighted by employment in
order to reflect the relative importance, and com­
bined with others in the group to derive the group
For individual manufacturing and nonmanufac­
turing industries, average hourly earnings result
from the division of the reported pay-roll totals by
the aggregate man-hours furnished by the same

Thus, 112,000 (weekly man-hours) - t l .30
y ,rOU)'
Average hourly earnings for industry groupings
are also weighted. For this purpose, however,


aggregate man-hours (employment multiplied by
weekly hours) are used, because the level of pay
rolls depends, in part, on both employment and
hours of work. The aggregate man-hour weights
required for the group averages of hourly earnings
are a byproduct of the procedures utilized to obtain
average weekly hours for industrial groups.
For both individual components and the major
industry categories, the averages of weekly earn­
ings are computed by multiplying the respective
averages of hourly earnings and weekly hours.
Hours and earnings data are based solely upon
the sample aggregates. Thus, only those totals
for employment, man-hours, and pay rolls as
reported by the establishments in the given indus­
try samples are used for the computations of the
averages. Both the levels and the monthly
movements shown in the Bureau hours and earn­
ings information are, therefore, entirely dependent
upon the data reported by such establishments.
In the Bureau’s employment series, owing to the
availability of complete counts or bench marks,
adjustments of the sample data are possible but
this cannot be done for the hours and earnings

Earnings Exclusive oj Overtim Premium Payment.
The pay-roll and man-hour totals on the reports from
respondent employers combine both straight-time
and overtime. To obtain straight-time earnings,
approximations for all manufacturing and the
durable and nondurable goods subdivisions have
been derived from the gross average hourly earn­
ings provided by these totals. Such data are
computed by the application of adjustment fac­
tors, as indicated in the Monthly Labor Review
for November 1942 (pp. 1053-6) and in Serial
No. R. 1496. The adjustment factors are based
on a special study of the relationship between
average weekly hours and the average number of
weekly overtime hours in the same period. Use
of these factors makes possible an approximate
deduction of overtime premium payments at the
rate of time and a half for hours in excess of 40
a week. The technique used in obtaining these
series of average hourly earnings exclusive of over­
time premium payment is to apply the factors (as
indicated above) separately to the gross average
hourly earnings for each of the major manufac­
turing industry groups. The resulting adjusted
average for each major industry group is then


weighted by the respective man-hour aggregate,
as currently reported, in order to give more ade­
quate representation to each of the component
groups in computing the averages for all manufac­
turing and the durable and nondurable goods in­
dustries. Results obtained, therefore, by direct
application of the adjustment factors to published
averages of gross hourly earnings for all manufac­
turing and the durable and nondurable goods
industries differ somewhat from the figures derived
by the use of the man-hour weights.

Net Spendable Average Weekly Earnings. Appli­
cation of the term “ take-home pay” to the
Bureau’s gross average weekly earnings series has
never been completely accurate because of varying
deductions for taxes, group insurance, occupa­
tional tools and supplies, and union dues. These
deductions were generally not large prior to the
extension of personal income taxes to the lower
income brackets, and therefore average gross
weekly earnings were satisfactory as a measure of
the trends of weekly earnings available for spend­
ing purposes. Before that extension of income
taxes, the only uniform Nation-wide deduction
from gross weekly pay was the social-security tax,
which became effective on January 1, 1937.
After income taxes became a factor affecting the
spendable earnings of workers, a method was de­
veloped for deriving so-called “ net spendable earn­
ings” from the gross average weekly earnings
series for production workers in manufacturing
industries. Net spendable average weekly earn­
ings are obtained by deducting from gross weekly
earnings, social-security and income taxes for
which the specified type of worker is liable. The
amount of income tax liability depends, of course,
on the number of dependents supported by the
worker as well as on the level of his gross income.
Net spendable earnings have, therefore, been com­
puted for two types of income-receivers: (1) A
worker with no dependents; and (2) a worker with
three dependents.

Adjustment for Changes in Purchasing Power.

provide an indication of the changes in the pur­
chasing power of money earnings resulting from
changes in the prices of consumer goods and serv­
ices since 1939, gross weekly earnings in both cur­
rent and 1939 dollars are published for selected in­
dustries. All manufacturing net spendable weekly



earnings are also shown in 1939 dollars. The ad­
justment for changes in purchasing power is made
by deflating weekly earnings by the Bureau's con­
sumers' price index, using the year 1939 for the
base period.
Thus, to express gross average weekly earnings
in all manufacturing industries for August 1947 in
1939 dollars the following steps are necessary:
1. Gross average weekly earnings, all
manufacturing, August 1947_____ $50. 07
2. Consumers’ price index, August 1947
(1935-39= 100)__________________ 160.3
3. Rebasing of the August 1947 con­
sumers’ price index from 1935-39=
100 to 1939=100; 160.3 divided by
the 1939 index of 99.4 equals 1.613-—
the ratio between the consumers’
price index in August 1947 and
year 1939— or an index for August
1947 of 161.3 (1939=100)________
1. 613
4. Deflation of average weekly earnings
in current dollars to obtain the
August 1947 average in 1939 dol­
Thus $50.07 divided by 1.613 equals $31.04.

Interpretation and Limitations
Average Hourly Earnings, Weekly Hours} and
Weekly Earnings. The average hourly earnings
series for full- and part-time production or nonsupervisory workers in manufacturing and non­
manufacturing industries are on a “ gross” basis,
that is, they reflect not only changes in basic
hourly and incentive wage rates, but also such
variable factors as premium pay for overtime and
late-shift work and changes in the output of
workers paid on an incentive basis. Industry
averages of hourly earnings are further affected
by changes in the relative importance of individual
companies or establishments as well as changes
in the composition of the labor force and shifts in
the relative importance of individual regions or
localities. In addition, averages for major groups
and divisions reflect changes in the relative
importance of individual industries.
Gross hourly earnings refer to the actual return
to the worker for a stated period of time. They
differ from wage rates, which represent the rates
stipulated for a given unit of work or time.
Owing to the exclusion of irregular bonuses,

retroactive items, payments of various welfare
benefits, and of earnings for those employees not
covered under the production-worker or nonsupervisory-employee definitions, the average-earnings
series should not be interpreted as representing
total labor costs on the part of the employer.
Gross average weekly earnings are also affected
by changes in the length of the workweek, parttime work, stoppages for varying causes, labor
turn-over, and absenteeism. The weekly earn­
ings, although sometimes incorrectly termed
“ take-home pay,” are not the same as the amount
that is actually available to workers for spending,
since no deduction has been made for income and
social-security taxes, group insurance, occupational
supplies, and union dues.
The workweek information published each
month relates to average hours worked or paid for
and is somewhat different from standard or
scheduled hours. Thus, average weekly hours for
manufacturing and nonmanufacturing industries
are less than the hours of workers who are on the
pay roll during the whole of the workweek because
of the influence of such factors as absenteeism,
labor turn-over, part-time work, and stoppages.
Group averages further reflect changes in the
importance of component industries.

Hourly Earnings, Exclusive oj Overtim Premium
Payment. The method used in approximating
straight-time earnings provides only for the
elimination of overtime work paid for at one and
a half times the straight-time rates after 40 hours
a week. Thus, no adjustment is made for other
premium payment provisions, for example, holiday
work, late shift work, and penalty overtime rates
other than time and a half. The adjusted hourly
earnings differ in only one respect from the gross
average hourly earnings series; thus, except for
overtime premiums the previously mentioned in­
fluences also apply to the estimated straight-time
earnings information. Average hourly earnings,
exclusive of overtime premium payment, are made
available only for manufacturing as a whole and
the durable and nondurable goods industry sub­
divisions. The set of adjustment factors, however,
can be used to eliminate overtime premium pay­
ments from gross average hourly earnings in those
manufacturing industries in which overtime for


individual workers typically consists of hours in
excess of 40 per week paid at the rate of time and
a half. As these factors yield results which are
only approximate, they may not be appropriate
when exact data are required.
Net Spendable Weekly Earnings. Net spendable
weekly earnings differ from gross weekly earnings
only because of adjustment for Federal income and
social-security taxes. Consequently, those factors
which are reflected in the gross earnings data are
also reflected in the spendable earnings series.
It is necessary to note that the computations of
net spendable earnings for both the factory worker
with no dependents and the factory worker with
three dependents are based upon the gross average
weekly earnings for all production and related
workers in manufacturing industries without
direct regard to marital status and family com­
position. The gross and spendable earnings data
do not reflect, therefore, actual differences in levels
of earnings for workers of varying age, occupation,
skill, and family composition. Thus, the primary
value of the spendable series is that of measuring


relative changes in disposable earnings for two
types of income receivers.
Earnings Expressed in 1989 Dollars. The “ real
earnings” data resulting from the adjustment of
the selected gross and net spendable weekly earn­
ings averages by the Bureau’s consumers’ price
index present merely a rough indication of the
changes in the purchasing power of money earn­
ings— or earnings in current dollars—flowing from
changes in living costs. The deflated series should
not be considered, therefore, as representative of
changes in living standards as a whole since a
number of important characteristics are omitted,
such as the total income of the family or spending
unit, the extension and incidence of various social
services and benefits, the availability of leisure
time, and the duration and extent of employment
and unemployment.
The year 1939 is the base selected for compari­
son; it is, of course, possible to select other periods.
Other bases may yield different results owing to
differences in the levels of both earnings and prices
at various times.

IX. Measurement of
Unit Man-Hour Requirements2
The relationship between production and man­
hours worked in manufacture has long been recog­
nized as one of the most significant indicators of
economic well-being in the United States. “ Pro­
ductivity,” as this relationship is called, has been
of growing interest owing to the general realiza­
tion that in the long run, a nation’s standard of
living and competitive advantage in world trade
depend upon continual improvement in produc­
tivity levels. The indexes of man-hours expended
per unit (or the reciprocal— output per man-hour)
published by the U. S. Department of Labor’s
Bureau of Labor Statistics, measure this relation­
During the nineteenth and twentieth centuries,
especially, there has been a rapid and steady
growth in production per man-hour in the United
States. This has resulted in part from continued
acquisition of technical knowledge and its appli­
cation to the jobs to be done. Of equal impor­
tance, continual and conscious effort has been
devoted to the study of ways and means of in­
creasing industrial efficiency, with the expenditure
of fewer man-hours. The result has been a rising
material standard of living and increased leisure
time to enjoy it.
Productivity is also one of the major deter­
minants of the amount of employment that
accompanies a given volume of production. In
the long run, man-hour output is a major link
between wage movements and price levels. An
increase in output per man-hour or a decrease in
man-hours per unit implies a reduction in costs;
the savings may appear in the form of higher
wages, higher profits, lower prices, or a combina­
tion of these changes. There may be little im­
mediate connection between wage rates and man­
hour output in any particular industry, but in the
long run for the economy as a whole there is a
connection, because consumption is limited by
production. To the individual firm, continued
1 Prepared by George E. Sadler and Allan D. Searle in the Bureau’s Branch
of Productivity and Technological Development.


improvement in output per man-hour may mean
survival. .
The Bureau of Labor Statistics has compiled
nonrecurrent reports on productivity from time to
time since 1895, providing data on productivity
trends for many industries. These early studies
generally included detailed analyses by process,
department, or operation, and dealt with the
technological changes made during the years
covered. In 1940, the Bureau was given respon­
sibility for extending and maintaining an earlier
program of the National Research Project o f
the Work Projects Administration, which involved
the preparation of industry-wide measures o f
output per man-hour on an annual basis from
readily available statistics on production, em­
ployment, and man-hours. In 1945, a new pro­
gram was begun, namely, the preparation of de­
tailed industry reports presenting annual data
based on statistics of unit man-hour requirementscollected directly from industry.
The Bureau’s current productivity program
falls into two main categories— the preparation of
industry-wide measures of output per man-hour
from readily available secondary-source material,*^
and the compilation of detailed reports on trends
in man-hour requirements based on company
reports for specified products which are selected
in an effort to represent the production of given
industries. Data in both sets of reports are pre­
sented in the form of indexes, with 1939 as the
base year or 100. The detailed studies also pre­
sent product man-hour averages for specified
2 Industry-wide indexes of output per man-hour are currently (December
1949), prepared for 19 manufacturing industries, 5 mining industries, 3 public
utilities, and agriculture. Before World War II, a number of additional in­
dexes were prepared and an index to represent manufacturing in general was
compiled. During the war, the absence of suitable data necessitated a re­
duction in the number of industries for which indexes could be computed.
Industry coverage is currently being expanded, however, to include a
number of basic industries not represented since 1939.
3 Late in 1949, detailed statistics were available for 16 industries, and series
for additional segments were being added. These reports show data in terms
of factory direct and indirect labor. The initial reports generally cover a
number of years, beginning with 1939; data are kept current through annual
supplements. Indexes are published for the industry as a whole; for specified
products, processes, or departments; and for groups of plants classified
according to size, method of production, price line, geographic area, degree
of product-diversification, or extent of improvements in factory equipment
and methods. These reports contain analyses of the various conditions
which have favorably or unfavorably influenced unit man-hours over the


Limitations of Productivity Measures
Labor is only one of the factors entering into
production, and, therefore, the indexes are not in
themselves complete measures of “ industrial ef­
ficiency/J Changes in the quantities of material
consumed per unit of production or in the amount
of capital consumed per unit, for example, are
not measured by the indexes.
The indexes do not measure “ worker efficiency”
and cannot be used to determine what changes
have occurred in average skill and effort of the
work force per se. The physical quantity of pro­
duction attained by a given number of man-hours
worked (or conversely, the number of man-hours
required per unit of physical output) depends on
a large number of separate, though interrelated,
influences. The type of production methods in
use, the age and condition of machinery, changes
in product design, changes in work methods, and
the relative degree of capacity utilization, all
affect efficiency. In addition, the availability of
parts and components, the efficiency of the man­
agerial and labor forces, and industrial relations
directly affect output per man-hour. It is usually
impossible to isolate and measure the effect of any
one of these without a detailed and costly engi­
neering study. In some of the Bureau’s industry
reports, an attempt is made to measure separately
the effects on labor requirements of changes in
capacity utilization and in volume of output.
Since the indexes are intended to represent the
experience of entire industries, it cannot be as­
sumed either that the trend of man-hours per unit
for any one plant will conform with the industry­
wide trend or that the individual industry or
product indexes necessarily portray the trend of
output per man-hour or of unit man-hour require­
ments in the economy as a whole. The Bureau
has refrained from averaging its series on manu­
facturing to obtain an “ all manufacturing” series.
An all manufacturing series must await the addi­
tion of a considerable number of industries to the
Bureau’s program of productivity measurement.
In both the industry-wide indexes of output per
man-hour developed from secondary source sta­
tistics and in the detailed indexes of unit labor
requirements derived by the field collection tech­
nique, output is related primarily to the man-hours
of wage earners or “ production workers” as de­
fined by the Bureau’s Division of Employment


Statistics.3 Other groups of employees are ex­
cluded. Furthermore, no distinction is made as
to level of skill, either in regard to workers or
hours worked.

Industry Indexes: Secondary Source Data
Methods and Sources. Indexes of output per
worker are obtained by dividing an index of pro­
duction covering the output of an industry by
an index of production worker employment;
indexes of output per man-hour are obtained by
dividing the production index by an index of
production worker man-hours.3 These indexes are
based on statistics for production and employ­
ment collected by many different agencies and the
scope of industrial activity covered by each index
is dictated by the nature of the data available.
In general, the indexes refer to the activities of
industries as defined either in the Census of
Manufactures, 1939, or as reclassified in 1947.3
Many different agencies compile the production
data used in the construction of the production
indexes. The Bureau of the Census of the U. S.
Department of Commerce is the most important
source of quantity statistics for the manufacturing
industries. The Bureau of Mines compiles most
of the production data used in the series for min­
ing, as well as those for cement, coke, and nonferrous metals. Other important sources include
the U. S. Department of Agriculture for a number
of food processing industries, the Fish and Wild­
life Service of the U. S. Department of Interior,
the Interstate Commerce Commission, U. S.
Tariff Commission, Federal Power Commission,
Federal Communication Commission, and the
Bureau of Internal Revenue. Trade associations
which are important sources of 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.
The production-worker employment series is
3 These include working foremen and all nonsupervisory workers associated
with production operations, e. g., fabricating, processing, inspection, assem­
bling, repair, janitorial and watchman services, product development.
3 Beginning with the 1948 extensions, indexes for the manufacturing series
will be in terms of man-hours per unit, the reciprocal of output per man-hour.
3 The indexes are being adjusted to levels indicated by the Census of Manu­
factures for 1947. Changes in industry definition resulting from the adoption
of the Standard Industrial Classification of the Bureau of the Budget are to
be taken into account.



based on the published indexes (or on unpublished
tabulations) of the Bureau of Labor Statistics in
most instances.
The indexes of man-hours are
constructed from the employment series and
Bureau data on average weekly hours.3
Mere availability of production data and of
employment and man-hours statistics does not
assure the construction of an accurate measure of
output per man-hour. The Bureau of Labor
Statistics carefully evaluates these data to assure
the comparability between the production and
labor figures (which are collected by different
agencies) and to correct for any accumulated
In many cases, it is neither necessary nor pos­
sible to include quantity statistics for all of the
items produced in an industry in order to repre­
sent production trends in that industry. The
Bureau’s indexes of production are constructed
from data on physical output of items constituting
a high percentage of the total value of the products
of the industry. Coverage varies between 60 and
100 percent depending on the industry; it exceeds
80 percent for three-fourths of the currently pub­
lished series and those proposed for compilation
in the near future. Each year, before bringing
these statistics up to date, the Bureau attempts to
determine what new products should be added
and to ascertain whether the products included
continue to represent production trends in the
In computing the indexes, it has not generally
been possible to adjust for quality changes, but
they have been taken into account occasionally
by assignment of separate weights to the products
affected. For example, in the footwear index,
men’s military work shoes and civilian work shoes
were placed in separate product classes during
wartime and were weighted separately (giving a
higher weight to the military shoes).
In some industries, changes in the nature of the
product during the war period made accurate
measurement of production extremely difficult.
For industries which changed the nature of output
completely—for example, automobiles and, in
large part, agricultural machinery—no indexes
were prepared for the war period. Current plans
u The man-hours figures represent total production worker man-hours paid
for including vacation hours, waiting time, call-in time, and other hours paid
for but not actually worked

call for the eventual construction of indexes for a
number of these industries for 1939 and 1947.
Whenever problems of measurement are known
to exist, changes in the nature of output are dis­
cussed with qualified persons in the industry
affected. If possible, product classes are broken
down into relatively homogeneous categories, and
an appropriate weight is assigned to each. Even
when a rough production indicator exists, the
Bureau does not prepare an index of output per
man-hour unless some assurance is given that the
production statistics adequately reflect the changes
in the production composite. For instance, data
are available on the number of board feet of lum­
ber produced each year. However, an index of
production and of output per man-hour based
simply on the number of board feet of lumber
sawed may be influenced by a shift in manu­
facture from hardwood to softwood or from small
dimensional lumber to large timbers, or vice
versa. More man-hours per board foot are re­
quired for smaller-dimension lumber than for
large timbers, and a rough production indicator
in terms of board feet alone is insufficient for
computation of a productivity index. Pending
development of more suitable statistics than those
currently available, the Bureau has discontinued
the publication of indexes for this industry. The
same action has been taken for other industries
that are characterized by such production shifts.
Production and labor data also must be compar­
able and must assure a reliable indicator of general
productivity trends. Labor and production data
may not be strictly comparable for two reasons:
(1) The production data may not include the
entire output of the industry; and (2) the pro­
duction figures include some quantities made as
secondary products by establishments classified
in other industries.3
Many of the industries for which indexes are
presented are well defined and comparability
presents no problem—bituminous-coal mining and
beet sugar, for example. In others, quantity
statistics for some items are unavailable (minor
products or items normally produced by estab­
lishments in other industries) and a part of their
w Labor data, reported by establishment, include total production-worker
employment and man-hours of establishments in which the major activity
falls within the industry definition. The production statistics, on the other
hand, are on a commodity basis and usually include the entire output of the
items reported.



reported output is made in industries other than
those for which the particular indexes are pre­
pared. The resulting output per man-hour index
implies the assumption, then, that (1) the propor­
tion of secondary products has remained un­
changed, and (2) the proportion of the items in­
cluded in the index but made outside the industry
has remained unchanged, or that (3) any changes
made in (1) and (2) offset each other. Such as­
sumptions are never accepted by the Bureau un­
checked; an attempt is always made to obtain
either statistics or at least descriptive information
to check the assumptions. Both the Census of
Manufactures for 1939 and 1947 provide valuable
data for evaluating the assumptions and for mak­
ing necessary adjustments in the manufacturing
series. When the problem of comparability can­
not be solved within reasonable limits, no index is

man-hour requirements; the answer to the second
question cannot.
The indexes of unit man-hour requirements for
individual industries are based on the formula:
in which & represents the production of

Calculation Procedures. In order to establish the
relation between production and man-hours ex­
pended, it might seem to be simply a matter of
choice whether a production index is divided by
a man-hours index to obtain an index of output
per man-hour, or whether the man-hours series is
divided by the production measure to obtain man­
hours per unit. Either result has practical value
as a measure, one being the reciprocal of the other.
In a strict sense, however, it is necessary to es­
tablish an index of unit man-hour requirements.
For example, in 1939 the cigar and cigarette in­
dustries produced 5.3 billion cigars and 181 billion
cigarettes with the expenditure of 133 million
man-hours of labor. Suppose the question is
asked: How many man-hours would have been
required in 1945 to produce the same number of
cigars and cigarettes? Computation shows that
the total is in the neighborhood of 104 million
man-hours. Dividing 104 by 133 results in an
index of unit man-hour requirements of 78 in
1945 (1939 = 100). The corresponding index of
output per man-hour is 128. Suppose the ques­
tion is rephrased: How many cigars and cigarettes
could have been produced in 1945 with an ex­
penditure of 133 million man-hours (the number
actually worked in 1939)? No single figure an­
swers this question, for a combination of varying
numbers of cigars and cigarettes would fulfill the
requirements. The answer to the first question
can be expressed as an index number of unit

L = ^ g A ==^g ^< . Sr0g«

each item in the given year and r0 and rj represent
the number of man-hours required for these items
in the base year and given year, respectively.
The numerator shows the number of man-hours
actually worked in year “ i” for all the items con­
sidered. The denominator shows the number of
man-hours which would have been required in
the base year for the identical production.
The index of unit man-hour requirements can
also be expressed as the quotient of an index of
man-hours and an index of production, and it is
in this manner that the series are actually con­
structed. Thus:



2 r0q0

The first term on the right-hand side of the equa­
tion is an index of total man-hotirs. The second
term is a production index in which the quantities
of the separate products are weighted by man­
hours per unit in the base year.
For many industries, no information is avail­
able on man-hours per unit for the separate
products for any period of time. In such cases,
weights other than man-hours per unit are em­
ployed in constructing the output series, and
the Bureau attempts to test whether the alter­
native weights are proportional to unit labor
requirements. In the absence of data on unit
man-hour requirements in the base year, labor
costs per unit provide fairly good approximations.
Value added per unit—i. e., the value per unit
less the cost of materials per unit— usually has a
rather high labor content and hence has a relation­
ship to man-hours per unit. Unit value weights
are used when data on labor cost or value added
are not available.3 In practice, similar results are
generally obtained with any of these weighting
Indexes of unit man-hour requirements prepared by use of a production
index constructed with base-year 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. They reflect the effect of any shifts from products with high
man-hours per dollar of total value, or vice versa, including the effect of
shifts from products with high materials costs per man-hour to those with
low material costs per man-hour or vice versa.



The manufacturing industries included in the
Bureau’s existing program and those being
initiated in late 1949 were being adjusted to
bench marks recently made available by the
Census of Manufactures, 1947. The method of
adjustment follows:
(1) A production index based on Census data is
prepared for the year 1947 (1939 = 100) in the
same manner that the previously published unad­
justed production index was prepared.
(2) An employment index for 1947 is prepared
from Census production worker totals in 1939 and
(3) The production and employment series pre­
viously published are adjusted by spreading the
percentage of the 1947 adjusted to unadjusted
series over the years 1939-47.
(4) The Bureau’s series of average weekly hours
is used in conjunction with the adjusted employ­
ment index to obtain the index of man-hours.
Such adjustments do much to eliminate any
problems of comparability which might arise as
a result of deriving the production and employ­
ment data from separate sources.
The Bureau plans to add a number of manu­
facturing industries to its program during 1950.
Special attention is to be given to increasing the
representation of industry groups for which cover­
age is relatively low.

Industry Reports: Field-Collected Data
Survey Methods and Sources. Field-collected data
are necessary to prepare comprehensive industry
reports for industries of primary importance in the
manufacturing economy, and for those for which
no unit man-hour measures can be prepared from
published data. Extensive developmental re­
search is necessary for each proposed study to
arrive at the appropriate basis for man-hour
reporting (by product, process, or department).
When possible, the industry’s total output is
covered. If this is too costly, a sample of products
is selected to provide a typical cross section of the
industry’s output; all of the hundreds of products
in an industry need not be covered to provide
satisfactory measures of unit man-hour trends.
Physical specifications are then developed to limit
product man-hour reporting to generally com­
parable models, which experts in the industry
judge to be largest in volume and most represen­

tative of the entire output.3 In addition to the
detailed product specifications applied, reported
items are further identified in exact terms.
Bureau representatives who arrange for man-hour
reporting obtain copies of company catalogs or
other literature describing in detail the physical
and operating specifications of reported product
Man-hour and production data are obtained
annually for identical models as long as they are
produced in volume. WTien a given product
model is discontinued, the Bureau’s representa­
tives must arrange for substitution of another
product made in volume.
Substitutions are of two types: (1) Substitution
of another model which is essentially similar in
characteristics, and is adequately described by
the same specification; and (2) substitution of an
article serving the same purpose, but not of the
same quality or design, and described by a new
In the first type, any difference in man-hours
per unit (almost invariably negligible) between
the old and the substituted model is shown as a
unit man-hour change in the index calculation.
For example, if one model of a roller bearing,
identified by a given catalog number, is no longer
available, and another model, differing only in
minute detail, is substituted, any difference in
man-hours is allowed to affect the level of the
index. In the second type of substitution, the
level of the index is not affected, for the new model
is introduced by linking. Any increase or decrease
in man-hours for the new product in the year of
substitution is therefore not reflected in the annual
percent of change on which the index is based.
An example of this type of substitution is the
replacement of a turret lathe with manual con­
trols, adapted only for high-speed steel cutting
tools, by a turret lathe of similar type and capacity
with automatic controls, and adapted for the use
of carbide-tipped cutters. Substitute specifica­
tions are always made to adhere as closely as
3 Typical specifications for three items follow:
(a) Refrigerator, Electric, Domestic— Exterior finish, lacquer (not porce­
lain); interior, porcelain; storage capacity, 6-7.2 cu. ft.; shelf area, 11-15 sq.
ft.; 3-5 ice trays, 6-12.6 lbs. of ice; compressor, hermetically sealed.
(b) Ball Bearing—Single-row ball bearing, industrial type, SAE #208.
(c) Turret Lathe—For bar stock, arranged for motor drive; 2W' round
stock capacity; 34"-42" turning length; 12" scroll stock capacity; 9-12 spindle
speeds, 6-18 cross feeds, ranging .002— to .003-103 ; 6-18 longitudinal feeds
ranging .002-.103 to ,004-49; 5-10 h. p.; 1070-1800 rpm motor recommended;
4,500-6,750 lbs. net weight.


possible to those supplanted, i. e., with respect to
end-use applications of the products, materials,
design, and unit man-hour standards.
In some cases, changes take place in the scope
of operations performed in a given establishment.
Either (1) the man-hour data are adjusted to
correct for these changes, or (2) the company
statistics are not used for the affected years unless
information is available as a basis for appropriate
Keports of production and man-hours are ob­
tained directly from manufacturing firms. An
establishment list is developed with the advice of
experts in the industry. In a few industries, if
the producer universe is large and a few firms do
not dominate output, scientific sampling pro­
cedures are employed. In most industries, how­
ever, the Bureau attempts to establish reporting
from all of the major firms in the industry, and
from a balanced sample of the medium-sized and
small firms. Consideration is given to quality of
product, production methods, and geographic
Survey Procedures. Field representatives of the
Bureau visit each of the firms in the sample to
arrange for reporting of company unit man-hour
requirements.3 At each plant, the representative
explains the program and discusses the company’s
cost-accounting system. He agrees with the
company accounting officials upon the method to
be used in deriving unit man-hour data from the
company records. At the plant, the agent lists
detailed information on the company’s classifica­
tion of labor accounts, scope of operations, parts
purchased, and ratio of the various indirect labor
accounts to total direct man-hours. He also ob­
tains information on the extent and type of hours
paid for but not worked;3 and the basis for re­
porting of capacity data.
The Bureau schedule (here reproduced) em­
bodying the company’s statements of production
and man-hour figures are forwarded to the Bureau
of Labor Statistics in Washington, where the data
3 After reporting is firmly established in each industry, annual unit man­
hour data for succeeding years in most industries are reported by the partic
ipating firms on schedules mailed to them by the Bureau. This eliminates
the necessity for an additional visit by Bureau field representatives.
3 The basic instructions are to exclude such time from the man-hour
reports. If the company cannot exclude such time, the agent obtains esti­
mates as to the relative amount of time included on the report.


are processed.4 In turn, a copy of the schedule
is forwarded to the agent, together with any
comments or questions from the Washington
analyst regarding the reported data.
Bureau field agents then revisit the reporting
firms and discuss the data with the accounting,
production, engineering, and design experts of the
companies. In this way, they obtain information
on all of the factors which have affected each
company’s man-hour requirements— the effect of
changes in factory equipment and work methods,
changes in the labor force, the relative availability
of materials and parts, production and employ­
ment trends, the utilization of plant capacity,
and similar factors. Through discussions with
company design engineers, the Bureau represent­
atives analyze in specific detail the relationship
between the reported man-hours for each firm and
the specifications of the products. When possible,
relative standard performance records are obtained
in instances where design has changed.
Production and man-hour data from schedules
prepared by the reporting companies are utilized
in preparing summary statistics for the industry.
The information embodied in the agent’s prelimi­
nary and final reports provides a basis for
classifying company data and for the interpretative
and analytical text which accompanies the statis­
tical analysis for each industry.
Calculation Procedures. Preparation of the unit
man-hour indexes involves the following general
(1) Computation of product unit man-hour re­
quirements from company schedules, for each year
(2) Multiplication of unit man-hours for each
year by a base-period weight reflecting each com­
pany’s relative output; this yields annual unit
man-hour aggregates.
(3) Summation of unit man-hour aggregates,
all company reports for each product available
for consecutive years of comparison.
(4) Computation of year-to-year percent of
change in average man-hours per unit, each
4 In a limited number of industries (for example, men's dress shirts) and
n a few plants in almost all industries, Bureau representatives compile the
^an-hour data from company production and cost, pay-roll, or time records.
4 If reporting is on a process or department basis, process or departments
man-hours are substituted for produ ct man-hours in computations described



(5) Computation of annual indexes by applying
percent of change to previous year’s index (starting
with base year as 100).
(6) Computation of industry indexes (all prod­
ucts combined) by deriving weighted average of
the individual product indexes. Product weights
reflect the relative importance of each product in
the industry’s output pattern.
(7) Indexes of trends in unit man-hours for
groups of firms classified according to size, produc­
tion method, or other characteristics (without
regard to product) are computed by averaging
the indexes of trends derived from individual
company product reports for all firms within each
Two basic techniques are used in computing th
product indexes— either the “ link-relative” or th
“ base-year relative” method. If continuous data
are available for all entries in the index, the two
methods yield identical results. In some in­
stances, however, breaks in sample may cause the
results of the two methods to differ markedly.
Characteristics of the particular product sample
determine the method to be used in the calculation
of unit man-hour indexes for individual products.
The results are checked against those for the years
of references in which data are available for all
reporting companies (the strongest years).
The link-relative method is most generally used.
For each comparison, data are used which cover all
firms reporting for the previous and current year.
The basic formula for this method follows:

sq* rn .
2q» T n - l ln_1

where the qx’s are the production weights assigned
to each company’s product report,4 the r’s are
the reported unit man-hour requirements in the
year of reference and in the preceding year, and
in_j is the product index for the preceding year.
The formula for the base-year relative method,
used less frequently, is essentially that of Laspeyres. It is expressed as
. = 2qxrn
. Sq*r°
where the qx’s are again the production weights
for each firm’s product report and the r’s are unit

man-hour requirements in the year of reference
and in the base year. Data for a given year, of
course, are totaled only for those firms which are
also covered in the base year.
In computing the indexes for groups of products
or for all products combined, the weight assigned
to each product is an expression of its relative
importance in the period for which most recent
production statistics are available. The weighting
period may be 1 year, or an average of 2 or more
years. In most industries, it relates to postwar
years (e. g., 1945-47; 1946-48; or 1947, the Census
year). In each instance, the weight assigned is
that which yields the most accurate approximation
of total factory man-hours expended during the
weighting period in the production of all models
of each product. In some industries, actual man­
hours weights are used. In others, the best
available weights are value added by manufacture
or value of product.
The formula covering the procedure for com­
puting the all-products (industry) index is similar
to that shown for the base-year relative method
of product index computation. It is
-r _ _ S W q iq



where w0 is equivalent to Sq^o, the man-hours ex­
pended by the industry in the manufacture of a
particular product, or the nearest approximation
thereto; and in’s are the product indexes in the
current year.
Annual average man-hour requirements for each
product are computed by adding all units pro­
duced and by combining all man-hours expended
for such production. The sum of the man-hours
is then divided by the sum of the production.
The formula for this computation is
where qx is the number of units produced by each
company in the given year, and rx is the unit man­
hour requirement.4
In all reports in this series, the Bureau provides
statistical analyses other than the indexes of unit

4 Note that if the q’s for all firms are assigned a weight of “ 1,” the result is
In most instances, they consist of average annual production for 6 to 10 the so-called unweighted average. Such averages have been published in
some reports (for example, Men’s Dress Shirts), when series were presented
years. Average production is preferable to the volume in any 1 year, be­
for firms classified according to plant size, price line, production method, etc.
cause any one firm’s output may be either unusually high or unusually low
In such cases, an average not affected by production volume was desired.
in any 1 year selected as a base.



man-hour trends and the unit man-hour averages.
Variations are shown in the man-hour trends from
year to year for the individual reporting firms.
The average ratio of factory indirect (overhead)
labor to total factory labor is also computed for
each industry, on the basis of the ratios reported
by the individual respondents.
Whenever possible, the Bureau analyzes the
quantitative relationship between man-hours per

unit and factors such as plant size, production
volume, price line, quality of product, or utiliza­
tion of plant capacity. These comparisons are in
some instances developed as rank correlations.
However, scattergrams are usually prepared, and
curves, least squares regression lines, or parabola
are computed and fitted to the scattergrams to
indicate the relationship.

B. L. S. 1792-4B
In Ref. No. 304

Budget Bureau No. 44-R580.
Approval expires 1-31-50

B u r e a u o f L a b o r S t a t is t ic s





Strictly Confidential
1. Name of C om pany_______________________________________________________________________________________________
A d d ress__________________________________________________________________________________________________________
Plant N a m e______________________________________________________________________________________________________
Plant Address____________________________________________________________________________________________________
2. Specifications for product to be rep orted :_________________________________________________________________________
(Items 3 to 7 to be completed by Company. See instructions.)
3. List firm catalog model numbers or describe product item(s) which meet the above specifications and are covered by
this re p o rt:_______________________________________________________________________________________________________







No. of units manufactured during calendar year
Direct man-hours*
Indirect man-hours*
♦For 5 above, indicate basis of calculation below:

(Check one)
(Check one)
Man-hours per unit........................ □
Man-hours are shown for full year's production.......................................... □
Aggregate m an-hours.................... □
Man-hours are shown for representative production p e r io d ......................□
(a) If man-hours are shown for representative production runs or a portion of the production of each year, indicate
the number of units manufactured during the production periods selected:
1939 ______ 1940 ______ 1941______ 1945 ______ 1946 ______ 1947 ______ 1948 ______
6. Give the number of units constituting practical plant capacity for either:
(a) models reported above or (b) all related models7







Units constituting capacity
No. of units of related models manufactured

7. Name of O fficial_________________________________________________________________________________________________
T it l e ___________________________________________________________________________ D a t e ____________________________
The data submitted on this schedule will be seen only by sworn employees of the Bureau of Labor Statistics, and will not be available to anyone else with
out your written permission. The data will not be. released in any form which permits identification with any specific company.
When this report is completed, please submit it, together with catalog literature identifying models reported, to Commissioner of Labor Statistics, Washing­
ton 25, D. C.
(BLS 49-2378

X. Estimating Expenditures for
New Construction4
The estimates of expenditures for new construc­
tion prepared jointly by the Bureau of Labor
Statistics and the Office of Domestic Commerce
are widely used by private business analysts and
government economists as measures of construc­
tion activity. These estimates represent the
monetary value of the construction work per­
formed within the continental United States dur­
ing the stated periods of time. This monetary
value is equivalent to the cost of the materials
put in place or otherwise consumed, the wages of
workers who placed the materials, and appropriate
charges to the work for overhead and profit.
Annual estimates are available beginning with
1915, and monthly figures from January 1939.
This series is an extension of yearly estimates
developed in the late 1930's in the Bureau of
Foreign and Domestic Commerce and presented
in Construction Activity in the United States,
1915-37 (out of print). For some years after
the publication of the original series, several
agencies prepared a number of independent, and
often conflicting, estimates projecting it. In
1945, the Bureau of the Budget, through its Divi­
sion of Statistical Standards, assigned the prepara­
tion of an official Government estimate to the
Bureau of Labor Statistics and the Bureau of
Foreign and Domestic Commerce jointly, and
delineated the responsibilities of each agency in
the preparation of the figures.
Primary responsibility for estimating private
residential construction and all public construc­
tion was given to the Bureau of Labor Statistics,
and for estimating private nonresidential build­
ing, farm construction, and privately owned publicutilities construction to the Bureau of Foreign
and Domestic Commerce. Individual responsi­
bilities are for the work directly involved in de­
veloping sources and processing the data. The
two agencies take joint responsibility for the over­
all validity of the estimates, and the work of either
agency in preparing the series is at all times sub­
ject to the review of the other.

In these estimates, “ new construction” in­
cludes the production of all fixed works and struc­
tures, whether by contract or force-account.4
Major additions and alterations are included,
except for residential building,4 but maintenance
and minor repair work and, insofar as possible,
work relief projects are excluded.4 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 sepa­
rable equipment, such as production machinery,
power-generating equipment, and furnishings.
Excluded also are the value of raw land and of
such preconstruction costs as architectural and
engineering fees and some types of land improve­
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 which is an
integral part of farm operations, such as terracing
and individual irrigation ditches.
A few types of work properly classifiable as
construction under the general definition are also
omitted. These may be grouped into two classes,
according to the reason for their exclusion:
(1) those for which sufficient information has not
yet been developed, i. e., tourist courts and cabins,
dormitories (except dormitories financed with
Federal funds), major additions to and alterations
of private residential buildings, privately owned
water and sewer systems, and some public and

4 Force-account work is done, not through a contractor, but directly by a
business or government agency using a separate work force to perform non­
maintenance construction on the agency’s own properties.
4 It was planned to include major additions and alterations on residential
building in the expenditures estimates upon revision of the series in the spring
of 1950.
4 The Office of Domestic Commerce prepares annual estimates of total
construction activity by combining the new construction activity estimates
with separate estimates of (1) work relief and (2) maintenance and repair.
This series is available by years from 1915. The same office also maintains a
monthly series, beginning with January 1939, showing seasonally adjusted
new construction activity, and a series beginning with 1939 of new construc­
N ote : Information on subsequent changes in this series is available on
request to the BLS.
tion activity by States. (See also footnote 49.)
4 It was planned to include architectural and engineering fees and all land
By Roland V. Murray in the Bureau’s Division of Construction Statistics
improvement costs in the expenditures estimates upon revision of the series
and by Bruce M. Fowler in the Construction Division of the Office of
in the spring of 1950.
Domestic Commerce, U. S. Department of Commerce.




privately owned toll roads and bridges; and
(2) those activities which for security reasons
have not been included in the estimates, chiefly
the classified projects of the Department of De­
fense and all construction by the Atomic Energy
Commission. Data for types of work in the first
group are to be introduced into the series as
rapidly as sources of expenditures data are de­
veloped, but these must provide both current and
historical information in order to insure year-toyear comparability of the series. Data for the
second group are to be introduced only as projects
are declassified and information is made available.
Outlays for construction by the Atomic Energy
Commission were scheduled for inclusion in the
estimates by the spring of 1950.
In addition, two items, known to be relatively
unimportant, (1) public park and playground con­
struction and (2) non-Federal conservation and
development work, are not represented in the
figures before 1946. They have been included
under “ All other public” beginning with January
The tabulation shown 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 of construction

Period, for which available
Annually Monthly

Total new construction______________



Private construction_________________
Residential building (nonfarm)_
Nonresidential building (nonfarm)
Warehouse, office, and
loft buildings________
Stores, restaurants, and
Other nonresidential building
Social and recreational. _
Hospital and institutional
Remaining types_______
Farm construction_______________
Public utilities__________________







Type of construction

Period for which available
Annually Monthly

Private construction— Continued
Public utilities— Continued
Telephone and telegraph____
Other public utilities____________
Local transit___________
Petroleum pipe line_____
Electric light and power.
Public construction______________________
Residential building_________________
Nonresidential building______________
Hospital and institutional_
All other nonresidential_____
Public administration_
Social and recreational. _
Military and naval facilities_____
Sewer and water____________________
Sewage disposal_____________
Water supply_______________
Miscellaneous public service enter­
Conservation and development_
Bureau of Reclamation_____
Army Engineers____________
Tennessee Valley Authority. _
All other public_____________________






Limitations of the Series
As the following sections show, the methods by
which these estimates are compiled result in meas­
ures in terms of dollars of a purchasing power
current during the period of reference. The fig­
ures therefore cannot be used as indicators of the
physical volume of construction placed without
extensive adjustments for differences in price
levels and wage rates, technological changes, and
other relevant factors.4
The expenditures estimates are distinct from
contract-award or building-permit data. The
latter indicate the value of construction sched­
4 The Office of Domestic Commerce estimates changes in the physical voP
ume of construction placed by expressing current estimates in 1939 prices.
This is done by deflating the estimate for each class of construction by an
appropriate construction cost index. This series is available by years from
1915 and by months from January 1939



uled for early start, and are therefore useful in
forecasting construction activity. The expendi­
tures estimates, on the other hand, indicate cur­
rent activity and are therefore particularly suit­
able for use in making comparison with related
concurrent data, such as those for employment
and delivery of material.
The degree of error in the estimates of expen­
ditures cannot be measured statistically and,
because of the varied basic sources and the dif­
ferent characteristics of the types of construction
represented, 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. In gen­
eral, the larger the coverage of the expenditures
the more reliable are the figures. For instance,
annual estimates are better than monthly, and
the total for any period is 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 (see p. 53).
The year-to-year changes in the estimates for
total and major types of construction are correct
as to direction and are substantially correct in
The figures by type of construction are not
adapted for use in making exceedingly fine com­
parisons, primarily because of some unavoidable
inconsistencies in classification. For example, re­
gardless of type of work (whether building con­
struction, road work, etc.), all construction by
privately owned public utilities is included under
“ Public utilities,” all construction for the military
by the Department of Defense is represented in
“ Military and naval facilities,” and all construc­
tion by the civil units of the Army Engineers, the
Bureau of Reclamation, and other Federal con­
servation agencies is included in “ Conservation
and development.”

Sources and General Estimating Methods
Ideally, construction expenditures information
would be based upon monthly reports from each
construction project supplying a cost accounting
figure which combines the wages of the workers on
the project, the cost of the materials which they
placed, and appropriate charges for overhead and

profit. If this were feasible, the collection cost
would greatly exceed the Federal resources cur­
rently made available for these estimates. There­
fore, the estimates are made up of data from a
wide variety of secondary sources as well as from
primary source material originally devised to
serve other purposes.
Few of these sources are static. In fact, the out­
standing characteristic of the list of such sources
is its constant change in content. This results
from: the continual search for more complete, ac­
curate, and timely information than previously
available; the undertaking and completion of pub­
lic works programs; and the changes in operating
and reporting requirements of Federal construc­
tion and regulatory agencies.
Three general methods are used in constructing
the estimates from the various source materials.
In the order of preferred methodology, they con­
sist of (1) summarizing physical observations of
work underway, (2) summarizing financial data
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 proj­
ects are based primarily on the operating reports
of the Federal agencies supervising the construc­
tion of public works, such as veterans’ hospitals,
flood-control dams, irrigation canals, 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 expenditures data.
Many non-Federal public construction agencies
make similar reports, but the systematic collec­
tion and use of them is not considered feasible by
the Bureau. This type of report is therefore,
with the exception of the New York City Housing
Authority, used only with respect to Federal
construction for which it is a readily available
and accurate source of information. It usually
reflects the observation, or in some cases the actual
measurement by a Federal engineer of the status
of a construction job at uniform intervals (pri­
marily 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 given program are made either
by the construction agency or by the Bureau of
Labor Statistics.
(2) The summaries of financial 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
prepared from detailed records. These are made
by the trade association involved or by the two
Government agencies responsible for the statistics.
Generally, however, suitable basic data are in
published form. For example, some are sum­
marized by trade associations for presentation in
yearbooks or other periodical reports to the public
and certain figures are summarized by Govern­
ment regulatory agencies for publication in their
annual reports.
A special case is the table on appropriations and

expenditures for civil public works in the annual
Budget of the United States, made available at the
time of the President’s annual budget message to
Congress. It consists of a tabulation of checks
issued against construction appropriations. After
adjustment to eliminate survey and planning proj­
ects, operation, maintenance, and other non­
construction items, these data form the basis of
the estimates for construction by a few Federal
agencies from which monthly data are not obtained
for various reasons.
Conversion of work started to estimates of
work put in place is the most important of the
three methods of deriving construction expendi­
tures estimates, from the standpoint of the dollar
volume of the expenditures categories for which
it is used. The value of work started each month
is spread over a period of time according to a
predetermined pattern. This pattern is the prob­
able percentage of the total cost of construction

T able 7.— Sources used in estimating expenditures for new construction, by ownership, type of construction, and source of
public funds
Ownership and type of construction

Source of public funds

Source of basic data

P rivate

Residential building (nonfarm)____________
Nonresidential building (nonfarm): all types.
Farm construction: all types______________
Public utilities:

BLS building permit reports and field studies.
F. W. Dodge contract award figures.
Bureau of Agricultural Economics.
Interstate Commerce Commission.1
Association of American Railroads.
American Telephone and Telegraph Co.8
Western Union Telegraph Co.

Telephone and telegraph______________
Other public utilities:
Local transit ______________ ______
Petroleum pipe line___ ____________
Electric light and power___________
Qas---------- -----------------------------------

American Transit Association.
Interstate Commerce Commission.
Federal Power Commission.
American Gas Association.

P ublic

Residential building.
Nonresidential building:
Educational_____ _____ _
Hospital and institutional.

All other nonresidential.

Military and naval facilities__________
Highways............................... ......... ......
Sewer and water________________ ____
Miscellaneous public service enterprises.
Conservation and development_______

All other public.


Public Housing Administration.8
Local housing authorities.
----- do--------___ do______
___ do........ .
___ do_____
----- do........ .
..— do..........
___ do______
___ do.......... .
___ do______
___ do______
___ do______
___ do______
___ do______
----- do..........

General Services Administration.4
Office of Chief of Engineers.
Public Health Service.5
Veterans Administration.
General Services Administration.4
Public Health Service.5
Federal agency supervising construction.®
Federal agency awarding contract.7
Budget of United States.
General Services Administration.4
Office of Chief of Engineers.
Bureau of Yards and Docks.
Bureau of Public Roads.
General Services Administration.4
D o.4
Bureau of Reclamation.
Office of Chief of Engineers.
Tennessee Valley Authority.
Budget of the United States.
Civil Aeronautics Administration.
Budget of the United States.
General Services Administration.4

1 Publishes data on class I railroads on Form IBS. monthly.
8 Summarizes reports from member companies of the Bell System and
adjusts the results to cover independent companies.
* No Federal funds were being* expended at* time of writing.
4 Office of Economic Research of G3A, using as source, F. W. Dodge and
other contract awards

1Hospital Facilities Division.
4 Covers projects of the Public Buildings Administration, certain other
Federal agencies, and United Nations Headquarters in New York City.
r For projects such as those by National Advisory Committee for Aero­



which will be performed in each month of the
known or estimated duration of the job. On a
given type of construction, therefore, the esti­
mated expenditures for any month are the sum
of the estimated expenditures during that month
on all projects estimated as under way, according
to the length of the expenditures pattern.
Obviously the use of these three different
methods of estimating expenditures raises prob­
lems of comparability, both as to timing and
content. Timing is a problem only in month-tomonth comparisons. Over longer periods, the
three methods should give similar results. Com­
parability in coverage is a more serious problem.
Therefore, all source material is carefully examined
and adjustments are made in it, or in the expendi­
tures estimated from it, to insure that the results
conform with the general concepts previously
The first and third of these three general esti­
mating methods yield monthly results directly.
The second, financial data, are usually available
only on an annual basis. Therefore, the monthly
figures are obtained by projecting the levels estab­
lished for the previous year, month by month, on
the basis of the known movements of a related
series. At the year’s end, an adjustment is made
to the new bench mark. At the same time, all
components of the estimates are reexamined for
necessary adjustment, such as to include the yearend revisions of housing data. These adjust­
ments may include the addition of entire series, to
reduce the noncovered field previously mentioned.
The preceding tabulation shows, for each type
of construction, the basic source of data. These
basic series are adjusted in varying degrees by the
agencies responsible for the construction expendi­
tures series.

Adjustment Procedures
Private Construction.

The adjustment procedures
for the private construction segment are as follows.
For residential building, the monthly reports to
the Bureau of Labor Statistics on the value of
residential building authorized by local building
permits are adjusted to reflect the construction
cost of new permanent nonfarm dwelling units
started6 in all urban places and in rural permit­
issuing places. Separate inflating factors are1
1 See also Estimating National Housing Volume, p. 13.

applied to the urban and rural segments to com­
pensate for the understatement of cost inherent
in permit valuation. These are revised periodi­
cally on the basis of information obtained from
field surveys in which the permit valuation and
the construction cost reported by builders and
contractors are compared for a large sample of
Construction cost of units started in rural nonpermit-issuing places is based on monthly field
studies. Estimated construction costs are secured
from builders and contractors for a large number
of dwelling units in sample counties throughout
the country. From these an average construction
cost for all units started in non-permit-issuing
rural areas is derived.
The urban and rural segments are then com­
bined to give a total estimated construction cost
of the dwelling units started in the given period.
An expenditure pattern is then applied to this
construction 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 expenditure 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.
Nonresidential buildings are covered in separate
estimates made for each of the following types
of new private nonresidential buildings: (1) in­
dustrial; (2) warehouse, office, and loft buildings;
(3) stores, restaurants, and garages; (4) religious;
(5) educational; (6) social and recreational;
(7) hospital and institutional; (8) hotels; and
(9) miscellaneous.
Estimates of construction activity are derived
by the following six adjustments of the figures
reported monthly by the F. W. Dodge Corp.5
Cancellations: A project reported by Dodge
may be canceled later or indefinitely postponed.
8 Dodge figures apply only to the 37 States east of the Eoeky Mountains
and to the District of Columbia. They are prepared monthly by the firm’s
Statistical and Research Division, as a byproduct of its daily news reporting
service. Reports are obtained by a staff of individuals who interview owners,
architects, engineers, contractors, financial institutions, real estate brokers,
and others able to supply reliable information on the awarding of construction


In such a contingency, the Dodge reports include
the correction in the month in which the cancella­
tion is ascertained. Thus, the contract series may
be overstated in one month and understated in a
subsequent month. Therefore, the Office of
Domestic Commerce applies the adjustment to
the figure for the month in which the original
entry appeared.
(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 work done by a firm’s
own force. The degree of adjustment has varied
both over time and between the various types
of construction.
(3) Allowance for 11 Western States: Since the
Dodge reports cover only the 37 Eastern States,
they are adjusted to reflect contract awards in
the entire continental United States by applying
the ratio of the valuation of urban building
authorized by permits in the 11 Western States
to the total valuation of urban building authorized
in the United States as a whole for each type of
construction. This adjustment varies from month
to month and from one type of construction
to another.
(4) Translation of contract awards to work
started: The Dodge reports represent contracts
awarded during the month and due to be started
soon. The assumption is made that construction
on contracts awarded during a given month is
started during the following month.
(5) Activity timing: To convert the total value
of work started each month into estimates of the
value of work put in place, several activity
patterns have been developed for each type of
building, taking into account the average size
of project and the season in which work is begun.
These patterns applied to the work started series
yield the estimated value of work put in place
each month.
(6) Duplication of public utility buildings:
Offices, warehouses, and other structures built by
public utilities are included in the total value of
construction reported by the various utilities and
are also included in the Dodge reports for nonresidential buildings. To eliminate this duplica­
tion, estimates for buildings constructed by public
utilities are subtracted from the expenditures
estimates for warehouse, office, and loft buildings.
For jarm construction, estimates are currently


made by the Bureau of Agricultural Economics
annually.5 They are prepared separately for
“ operators’ dwellings” and “ service buildings”
which, in the expenditures estimates, are desig­
nated as “ residential” and “ nonresidential” farm
buildings. Both new construction and mainte­
nance are included. Figures for new construction
alone are derived on the basis of separate estimates
by the Forest Service of farm consumption of
lumber for new construction and for maintenance.
The lumber consumption estimates are pre­
pared quarterly and are, therefore, used to project
the estimates of farm construction expenditures
beyond the latest direct estimates of the Bureau
of Agricultural Economics.
In the public utilities group, adjustments are
made for each of five types of public utilities:
(1) Railroads: An annual adjustment to a bench
mark is required with respect to the ICC monthly
data on class I railroads, because coverage for
class I railroads is not complete. The bench
mark is obtained from the annual report, A Re­
view of Railway Operations in 19-, of the Bureau
of Railway Economics of the Association of
American Railroads, which includes information
on construction expenditures of all class I rail­
roads.5 Construction expenditures by class I
railroads are adjusted upward to include outlays
for all railroad construction on the basis of the
relatively stable ratio of class I investment in
road and structures to such investment by all
(2) Local transit: The figures on construction
expenditures are included in the American Transit
Association’s annual publication, Transit Fact
Book, and cover the operations of all transit
companies in the United States. Unpublished
data, also obtained from the American Transit
Association, indicate the amount of expenditures
made annually by municipally owned transit
companies. This figure is subtracted from the
total published figure to obtain the amount spent
annually by privately owned companies.5 *
The monthly trend is based on the trend shown
by other public utilities.
s2 Farm construction expenditures were first published in the Department of
Agriculture study, Income Parity for Agriculture, Part II, Section 5 (March
1941). Data for subsequent years and revisions of the published estimates
back to 1934 have been obtained from the BAE in unpublished form.
s3 Similar data compiled by the ICC are available some time subsequent to
the BRE report and may be substituted.
5 Construction expenditures by municipally owned companies are included
in data for the public category, “ Miscellaneous public service enterprises."



(3) Petroleum pipe lines: Expenditures from the
reports filed with the Interstate Commerce Com­
mission are adjusted to eliminate the purchase of
existing lines and to allow for companies not
required to file information with it. To obtain
monthly data, estimates are made on the basis of
the trend shown by Dodge contract award data
that have been distributed by activity patterns,
and Securities and Exchange Commission quarter­
ly data on capital expenditures of utility companies.
(4) Electric light and power: Annual reports to
the Federal Power Commission by class A and B
electric utilities give the total value of all new
facilities completed during the current year and
the value of uncompleted work in progress at the
end of the year. They are transcribed and sum­
marized, and the results adjusted by the Office of
Domestic Commerce to exclude the value of work
done in earlier years and the value of property
acquired through purchase, and to include data
for small companies. Monthly figures are esti­
mated the same way as for petroleum pipe lines.
(5) Gas: The annual construction expenditures
figures for both manufactured and natural gas
utility industries, published by the American Gas
Association, are adjusted to eliminate equipment
purchases. Monthly data are estimated in the
same way as for the petroleum pipe line and
electric light and power groups.
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).5 This is done
because monthly information currently available
on Federal construction is generally more satis­
factory than information on State and local public5
5 The main division in construction expenditures is between private and
public projects. It is based on the ownership of the facilities under construc­
tion. Within the public category, however, two types of division between
Federal and other public construction is possible, because of the grants of
funds under Federal-aid programs. One is on the basis of ownership. The
other, which is the one used in estimating expenditures for public construc­
tion, is based on the source of the construction funds. To illustrate, the
Federal-Aid Highway Program provides Federal funds for State highway
construction. Therefore, expenditures for State highway construction
presented under an ownership classification exceed those for the same con­
struction under a source-of-funds classification by the amount of the Federal
The foregoing applies only to Federal grants. Federal loans for construc­
tion, such as those by the Rural Electrification Administration for the ex­
tension of power facilities, are considered to be the funds of the agency
receiving them (i.e., the owner of the facilities) and therefore do not give
rise to different results under the two classification systems.

construction, and also because the Bureau of
Labor Statistics is required to present a separate
report of monthly Federal expenditures. The
following section describes for each category of
public construction the methods of estimating first
the Federal, and then the non-Federal component.
Residential building by the Federal Government
has been confined to military installations, atomic
energy facilities, and to such other Federal prop­
erty as dam construction and control areas, since
completion in 1948 of the veterans’ temporary
re-use housing program under title V of the Lanham Act. Expenditures for such construction are
included in the “ Military and naval facilities” and
“ Conservation and development” categories listed
on page 51.
All data currently reported in the
public residential classification, therefore, represent
outlays by non-Federal public agencies.
By far the most important of these local agencies
has been the New York City Housing Authority
from which expenditures data are collected month­
ly. These data are a reconciliation of estimates
by the contractor and by N YCHA 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 dura­
tion of the projects.
Federal nonresidential building data are derived
for each type of construction as follows:
(1) Educational: Since completion of the Veter­
ans’ Educational Facilities Program in 1948, there
has been little expenditure of Federal funds for
construction of educational institutions. The
relatively small amount of construction of schools
on Federal properties (such as at remote Army
bases or sites of large conservation projects) is
included in other construction categories.
(2) Hospital and institutional: The two major
Federal programs of hospital construction— the
Veterans Administration Program and the Na­
tional Hospital Program 5 —make up the Federal
component of this category. The Office of the
Chief of Engineers and the Veterans Administra­
tion, which supervise the veterans hospital
program, obtain monthly progress reports from8
8 The construction program authorized by the Hospital Survey and
Construction Act of 1946, Public Law 725, 79th Congress.


the field and make these reports available to the
Bureau of Labor Statistics for transcription and
The National Hospital Program is, however, a
Federal-aid program, and as such presents special
estimating problems. Construction expenditures
for the program as a whole are summarized
by the Bureau of Labor Statistics from individual
project progress reports collected by the State
agencies administering the program and submitted
to the Hospital Facilities Division of the Public
Health Service. Of these total expenditures, the
portion which represents Federal funds is then
added to the veterans hospital expenditures to
obtain the Federal component of the total public
hospital category.
All other nonresidential: Separate expendi­
tures estimates are prepared for each type of build­
ing in this category. The Federal expenditures
for these types of construction are relatively small,
and are frequently included in other major
categories (recreational buildings for military
personnel, for example, are reported under “ Mili­
tary and naval facilities” )- The Federal expendi­
tures represented in this group are made by (1)
the Public Buildings Administration on such
structures as the General Accounting Office in
Washington; (2) other Federal agencies, such as
the National Advisory Committee for Aeronautics;
and (3) by the United Nations for its headquarters
in New York City, which is included here for
want of a supranational classification. For the
first and third, monthly progress reports are
obtained from the agency supervising construc­
tion ; for the second, estimates are based on annual
data from the Budget of the United States, and
on Federal contract award information reported
by the agency to the Bureau of Labor Statistics.
Non-Federal nonresidential building estimates
are derived, in general, by distributing the dollar
value of contracts awarded over a number of
months according to a typical pattern developed
from experience records for actual construction
projects. The contract award series used is that
compiled by the Office of Economic Research in
the General Services Administration for State and
local public construction, using information col­
lected by the F. W. Dodge Corp. in the 37 Eastern
States.6 To obtain data for the noncovered West­
ern States and to supplement Dodge coverage in5
5 See footnote 5


other areas, the Office of Economic Research rou­
tinely searches some 20 to 25 construction period­
icals and a number of other sources of construction
information. The Bureau of Labor Statistics
inflates OER award figures to compensate for
For hospital construction, a modification is made
in the general method of estimating non-Federal
expenditures for public nonresidential buildings.
Non-Federal expenditures (as well as Federal) in
the grant-in-aid National Hospital Program are
obtained from the Federal Security Agency, which
administers it. The OER series is therefore used
to estimate only the expenditures on public hos­
pital construction in which the Federal Govern­
ment does not participate. These expenditures
are added to the non-Federal contributions to the
National Hospital Program to obtain the nonFederal public component of the total public
hospital category.
For military and navalfacilities, the expenditures
reported represent the volume of all construction,
regardless of type, at Federal military installations.
The relatively small amount of military construc­
tion by the States (armories, rifle ranges, and the
like) are included with other public construction
categories according to type of construction.
The data for both construction agencies of the
Department of Defense— the Office of the Chief
of Engineers and the Bureau of Yards and Docks—
are based on monthly progress reports for all
construction projects at the facilities of the armed
services. These reports reflect the observation
or the actual measurement by service engineers
of the volume of work accomplished during the
month. Army Engineers data are summarized
by the agency and published monthly for limited
distribution. Data for construction by the Bureau
of Yards and Docks, on the other hand, are sum­
marized by the Bureau of Labor Statistics from
the basic field reports.
Highway construction expenditures estimates
are the sum of five components— expenditures on
the Federal-Aid Highway Program,5 on State
highways independent of the program, on county
roads, municipal streets, and on roads on Federal
lands. For the Federal-Aid Program, which
accounts for roughly half of total highway ex­
penditures, monthly data on work actually placed
fi8The construction program undertaken under the terms of the FederalAid Highway Acts of 1944 and 1948, which provide Federal funds to assist
the States in road construction.



are available, which are based on observations by
engineers of the Bureau of Public Roads, United
States Department of Commerce. The Bureau of
Public Roads tabulates these data for internal use,
and supplies pertinent aggregates for the expendi­
tures estimates, showing Federal grants separately.
Annual data on highways built on Federal lands
are reported by the Bureau of Public Roads and
monthly estimates are derived using trends on
the Federal-Aid Program. To arrive at the total
for Federal expenditures on highways, the amounts
of Federal grants for highways and all expendi­
tures for highway construction on Federal lands
are added.
Annual expenditures figures (by government
jurisdiction) for all roads and streets, prepared by
the Bureau of Public Roads from special financial
reports submitted by State highway departments,
establish the general level of expenditures for
highway construction outside the Federal-Aid
Program. The month-to-month trend is based
on reported data for the Federal-Aid Program as
just described.
The cumulative accuracy of these estimates is
checked roughly, using highway contract award
statistics prepared by the Bureau of Public Roads
and the Office of Economic Research in the
General Services Administration.

For sewer and water and miscellaneous 'public
service enterprises, the small amount of Federal
construction is confined to Federal property, and
is included with other major types of construction.
The expenditures estimate covering sewer and
water facilities and miscellaneous public service
enterprises, therefore, represents State and local
projects only. It is derived from a distribution of
contract award data compiled by the Office of
Economic Research, General Services Administra­
tion, and inflated for undercoverage. The esti­
mating procedure is the same as that described for
the non-Federal component of public nonresidential building (see p. 57).
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 water resources.
Expenditures by non-Federal public agencies for
construction for these purposes are represented
in other categories, chiefly in “ All other public,”
according to type.

The Bureau of Reclamation and the Civil
Works Division of the Office of the Chief of Engi­
neers are responsible for most Federal conservation
construction. The comparatively small remain­
ing amount is supervised by some dozen other
agencies, such as the Tennessee Valley Authority
and the International Boundary and Water Com­
mission, United States and Mexico.
For the two major construction agencies, ex­
penditures data are based on progress reports on
work placed during the month as estimated by
Government engineers. In both cases, tabula­
tion is by the Bureau of Labor Statistics from the
individual project reports. With the exception
of the Tennessee Valley Authority, which pre­
pares for the expenditures series a monthly sum­
mary of actual costs, monthly expenditures data
are not available for the minor agencies. Annual
figures for these agencies are obtained from the
Budget of the United States, and are projected
month by month on the basis of the trends re­
ported by the two major agencies.
All other public construction not elsewhere
classified covers such projects as airports, parks,
athletic fields, memorials, navigational aids, and
the like. Airfields have lately accounted for
nearly half the total activity in this category,
and the expenditures are therefore separately
estimated. Most such construction is under­
taken with Federal financial aid (under the
provisions of the Federal Airport Act of 1946).
Progress of construction under each grant is
reported monthly by regional offices to the central
office of the Civil Aeronautics Administration,
which administers the program. These data are
tabulated by the Bureau of Labor Statistics, and
the totals thus derived are divided to represent
Federal and other contributions to the program.
The other contributions are added to the relatively
small expenditures for airport construction fi­
nanced without Federal assistance, as obtained
from OER contract award data, to obtain nonFederal public expenditures for airports.
For types of construction other than airfields
in the “ All other” category, the small amount of
Federal outlay is estimated monthly from the
annual figures presented in the Budget of the
United States. Non-Federal expenditures are
obtained by a distribution of OER contract-award

XI. Compilation of
Industrial-Injury Statistics8
Work-injury statistics are regularly compiled
by the U. S. Labor Department’s Bureau of Labor
Statistics in the following categories: (1) Annual
estimates of the total volume of work injuries in
each major industrial activity classification; (2)
current quarterly injury-frequency rates for the
primary manufacturing industry classifications;
(3) annual injury-frequency rates and injuryseverity measures for manufacturing and non­
manufacturing industry classifications; and (4)
accident-cause statistics and detailed injury-rate
break-downs for selected industries. Of these
series, the estimates of injury volume are con­
tinuous from 1936 and the annual frequency rates
from 1926. The quarterly series was started in
Efforts to standardize the methods of compiling
work-injury statistics were initiated by the Bureau
of Labor Statistics in 1911. In 1914, the Bureau
called a formal conference of labor and workmen’s
compensation officials and 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 first standardized procedures in 1920.5 In
1926, a sectional committee of the American
Engineering Standards Committee, later the
American Standards Association, undertook a re­
vision of these procedures. This work led to the
publication in 1937 of the first American Standard
Method of Compiling Industrial Injury Rates.
This standard was subsequently revised in 1945
and is continuously under review by a sectional
committee of the American Standards Associa­
tion. A second standard, the American Recom­
mended Practice for Compiling Industrial Acci­
dent Causes, developed under the American
Standards Association procedures, was published
in 1941. These two standards constitute the
5 By Frank S. McElroy of the Bureau's Industrial Hazards Branch.
6 Standardization of Industrial Accident Statistics, Bulletin No. 276 of the
U. S. Department of Labor, Bureau of Labor Statistics, 1920.

basis for all subsequent injury and accident
statistics compiled by the Bureau of Labor
Injury-frequency rates are the primary meas­
ures of the incidence of work injuries. They
indicate the relative level of hazard prevailing in
different plants or industries during a specified
period of time, or in the same plant or industry
during different periods. The lack of compara­
bility inherent in simple injury totals, arising
from variations in employment and operating
time, is overcome by expressing the injuries in
terms of a standard unit of exposure. By defini­
tion, the standard comparison injury-frequency
rate is the average number of disabling work
injuries for each million employee-hours worked.
A disabling work injury is defined as any injury
incurred in the course of and arising out of em­
ployment, which ( 1) results in death or any degree
of permanent physical impairment, or (2 ) renders
the injured person unable to work at any regu­
larly established job, which is open and available
to him, throughout the hours of his regular shift
on any day after the day of injury, including Sun­
days, holidays, and days on which the plant is
shut down. Under this definition, the reporta­
bility of an injury for injury-statistics purposes is
in no way related to the eligibility of the injured
person for workmen’s compensation payments.
In case of doubt as to whether or not an injured
person is able to work, the attending physician’s
decision is final.
The severity of temporary injury is measured
by the number of days during which the injured
person was unable to work. For death and per­
manent 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 result of specified im­
pairments, expressed in terms of unproductive
days. Death, for example, representing the com­
plete loss of all future production by the injured
person, is assigned a time charge of 6,000 mandays (i. e., 20 years of 300 days each). The loss



or loss of use of a single finger is estimated as
resulting in an average reduction of 5 percent in
working efficiency. By applying this percentage
to the 20 -year life expectancy, the time charge for
this type of injury is established as 300 man-days.
The standard injury-severity rate, commonly
used to compare the general level of injury severity
in one plant or industry with that of another,
weights each disabling injury with its established
time charge and expresses the aggregate in terms
of the average number of days lost for each 1,000
employee-hours worked.

Limitations of the Series
Estimates of Injury Volume.

Comprehensive and
continuing injury surveys by the Bureau of Labor
Statistics, the Bureau of Mines, and the Interstate
Commerce Commission provide accurate data for
the estimates of injuries in manufacturing, mining,
railway transportation, and public utility opera­
Estimates for construction, trade, and miscel­
laneous transportation are based upon small
sample studies augmented by reports of injuries
filed with State workmen’s compensation agencies.
Differences in the coverage of the State compensa­
tion acts and variations in the reporting require­
ments limit the usefulness of the basic data and
introduce the possibility of considerable error in
the final estimates, particularly in respect to nonfatal injuries.
Data relating to agricultural injuries are ex­
tremely limited and in many respects are contra­
dictory. In large measure, the lack of basic
figures results from the exclusion of agricultural
operations from workmen’s compensation cover­
age in most States. Confusion in the figures which
are available results from the difficulty of separat­
ing work-produced injuries from those which
should be ascribed to home, traffic, or public
accidents. The estimates for this segment of
industry, therefore, are subject to substantial

Injury Severity Bates. Some question has been
raised in recent years regarding the significance
of the severity rate as a true measure of injury
severity. Objections are directed primarily to
the use of employee-hours worked as the basis for

comparison. Critics of the standard severity
rate have pointed out that, for any specified
number of employee-hours worked, six injuries
each resulting in 1 day of lost time will produce the
same severity rate as one injury which causes 6
days of lost time. The contention is that although
hours worked are directly related to the occur­
rence of injuries, they have no bearing upon the
severity of the injuries. It has been proposed that
a more realistic measure of injury severity would
be obtained by relating the aggregate time charges
directly to the injuries which produced them—
that the comparative measure of injury severity
should be the average time charge per case.
The average time charge has not yet been made
a part of the standard. It is, however, computed
and presented along with the standard severity
rate in the Bureau’s annual and special industry

Sources and Methods of Surveys
Annual Estimates.

Injury statistics for particular
segments of the economy are regularly compiled
by a number of Federal agencies, such as the
Bureau of Labor Statistics, the Bureau of Mines,
the Bureau of Agricultural Economics, the Bureau
of Employee’s Compensation, and the Interstate
Commerce Commission. Most of the State work­
men’s compensation agencies prepare summaries
of the cases reported to them and several private
agencies, such as the National Safety Council, the
Portland Cement Association, and the American
Petroleum Institute, also compile current injury
data. Summaries of the data compiled by these
agencies constitute the base for the annual esti­
mates of the total volume of work injuries in the
United States.

Quarterly Injury Surveys. At the end of each
quarter, questionnaires are sent to approximately
14,000 manufacturing establishments. The coop­
erating plants are requested to supply the following
information for each month of the quarter ( 1)
the number of workers employed; (2 ) the number
of employee-hours worked; and (3 ) the number of
disabling work injuries experienced by their em­
ployees with a break-down indicating the resulting
type of disability as known at the time of prepar­
ing the report. Generally, about 11,000 reports
are received in time for the quarterly tabulations.


Budget Bureau No. 44-R002.5.
Approval expires N ov . 30,1950.

B. Ii. S . 141
(Rev. 8-26-4





(D o n ot list any injury more th an once.
on other side.)
T y p e o f d isability

C ode

1. Fatal._____________________


3. Both legs..................................


4. Both hands..............................


5. Both feet..................................


6. Both eyes (sight)...................

rv n n ciT T n n n A r r .


7. Other (describe over)............
See request and instructions on other side.

N u m b er o f cases


Permanent total
2. Both arms...............................

See instructions



Sum of items 2 to 7 ........


Permanent partial
(I n c lu d e lo s s or lo s s of u s e )

(Please com
plete this section even though there w no
injuries to be reported)

9. 1 arm........................................


Average number of employees, January 1-December 3 1 ,1 9 4 9 :

10. 1 hand......................................


Include all w ho w orked in any capacity—production and
related workers; force-account construction workers; ad­
m inistrative, supervisory, sales, technical, teaching, serv­
ice, and office personnel; and all others....................................

11. 1 leg..........................................
12. 1 foot.......................................


13. 1 thumb...................................



14. 1 finger...................................
T o ta l num ber of em ployee-hours w orked by all
em ployees during 1 9 4 9 - ----------------------------------------


15. 2 fingers (same hand)............


16. 3 fingers (same hand)


W as th is establishm ent in operation throughout 1 9 4 9? --------

17. 4 fingers (same hand)............


If not, please indicate th e num ber of days on which it operated

18. Thumb and 1 finger (same
19. Thumb and 2 fingers (same



20. Thumb and 3 fingers (same


21. Thumb and 4 fingers (same



T he principal ty p e of a ctiv ity of th is establishm ent is (i. e., m anufac­
turing, w holesale, retail, construction, public u tility , e t c .) :

answ er




W hat products were m ost of your em ployees m aking during 1949?
(L ist first th e product on w hich th e greatest num ber of em ployees
worked, then others in descending order of em ployees involved.
P lease be specific. A void generalities such a s “Ordnance” or “ M a­
(R product*listed first’ accounts for less than half the employees, show the approximate
percentage of employees involved)


W hat general ty p es of operations w ere performed by m ost of your
em ployees in th e m anufacture of th ese products (e. g., foundry

22. 1 great toe...............................


23. 2 great toes..............................


24. Toe (not great toe)................


25. 1 eye (loss of sight)...............


26. 1 ear Goss of hearing)...........


27. Both ears (loss of hearing)...

I f m a n u fa ctu rin g ,


28. Other (describe over)............





operations, stam ping, w eaving, assem bly, etc.) ?.

Sum of items 9 to 29

N u m b er o f
ca ses

Temporary total

T o ta l days o f
d isa bility

(O m it all Injuries res u ltin g in d isa bility
o f les s th a n 1 d a y )

I f n o n m a n u f a c t u r i n g , answer d .
d. W hat were th e principal services furnished by th is establishm ent
during 1 9 4 9 and w hat w ere th e m aterials handled? (L ist first the
service engaging th e largest num ber of em ployees, e. g., warehousing
of clothing)........................................................... .............................. .........

31. Cases of known duration:
(a) Number causing disa­
bilities of 1, 2, or 3
(6) Number causing disa­
bilities of 4 or more


32. Cases of unknown duration-

Filled out by

Total of (a) and (6)..



Sum of items 31 and 32...
Grand total—A l l




in ju rie s reporte d

N u m b e r o f ca se s

Sum of items 1, 8, 30, andL33_.
W --3 0 7 ia -«



A cooperative program under which the Mich­
igan Department of Labor and the Bureau of
Labor Statistics jointly are to collect the quarterly
injury data from Michigan establishments is to
be inaugurated in 1950.

Annual Surveys.

At the end of each year, annual
summary reports are requested from an additional
mailing list of about 50,000 employers. Some
25.000 manufacturing establishments and about
15.000 nonmanufacturing establishments usually
report in this survey.
A joint program for the collection of annual
injury data is already in effect in Pennsylvania.
Under this cooperative arrangement, all annual
reports from Pennsylvania establishments are
collected by the Pennsylvania Department of
Labor and Industry. The State prepares its own
tabulations from these reports and transmits a
copy of each report to the Bureau of Labor Statis­
tics for inclusion in the national totals.
The report form used in the annual surveys
(reproduced here) is somewhat more detailed than
that used in the quarterly surveys. In addition
to the summary figures necessary for the computa­
tion of injury-frequency rates, it includes a break­
down of the permanent impairment cases to show
the number resulting in each of several specific
types of impairment, as well as a summary of
the time lost by employees because of temporary
injuries. These additional data are used in the
computation of injury-severity rates and severity

Special Industry Surveys. Special surveys are
made within selected industries to obtain greater
coverage and greater detail than is possible in
the regular surveys, and to determine the prevail­
ing causes of the accidents which produce work
injuries. In these surveys an attempt is made to
obtain a mail report from every employer in the
industry. The questionnaires cover the same
items included in the annual survey form, but in
Frequency rate— um^er

Computation Procedures
Annual Estimates.

All available material accumu­
lated in the injury surveys of the Bureau and of
the other agencies previously mentioned are
utilized in preparing the national estimates of
injury volume. The tabulated injury totals pre­
pared by these agencies are related to the appro­
priate segments of the national employment and
the estimates are computed by direct expansion
to represent the probable volume of injuries in
the total working population.

Quarterly Injury Survey. Each report received
is assigned an industry classification based upon
the principal product or operation of the reporting
plant, and totals of the reported figures are pre­
pared for each industry classification. From these
totals, average injury-frequency rates for each
month, for each quarter, and for the year to date
are computed for each industry classification. In
these computations, which conform to the pro­
visions of the American Standard Method of
Compiling Industrial Injury Rates, the following
formula is applied:

disabling injuries multiplied by 1,000,000
Number of employee-hours worked

No severity rates are computed, inasmuch as
the final outcome of many of the injuries is not
known at the time the reports are submitted.

addition ask for the figures in a break-down of the
operating divisions of the reporting plants. From
these reports, frequency and severity rates are
computed for each type of operation commonly
found in the industry, for plants of various size
groups, and for plants in various geographic areas.
In addition, representatives of the Bureau visit
a number of establishments in the selected industry
and ask permission to review their original accident
records. If permission is given, the Bureau rep­
resentative examines the records and for each
recorded accident prepares a transcript indicating:
( 1) how, when, and where the accident occurred;
(2 ) what unsafe conditions and/or unsafe acts
contributed to the accident; and (3) what type
of injury resulted.

Through direct comparison between the employment in the reporting group and the total
estimated employment in manufacturing, esti-


mates of the total volume of fatal and nonfatal
work injuries in manufacturing are prepared for
each period.
Annual Surveys. Data used in the computation
of annual injury rates consist of ( 1) information
reported on the annual injury summary form,
and (2 ) the accumulated totals of the information
reported during the year in the quarterly surveys.
All reports are classified according to the prin­
cipal product or operation of the reporting establistment and totals of the reported data are pre­
pared for each industry classification. These
totals are used in the computation of injuryfrequency and severity rates following, with one
exception, the procedures specified in the American
Standard Method of Compiling Industrial Injury
Severity rate


Rates. The one exception is in the use of full­
time charges for each permanent-partial disa­
bility rather than the percentage charges per­
mitted under the standard. The computed rates
for the various industry classifications are then
weighted according to the total estimated em­
ployment in the classification and are combined
in the computation of weighted rates for the
major industry groups.
Average time charges per case, as described
previously, are also computed in this survey to
supplement the standard severity rate.
The frequency-rate formula used in the com­
putations for this survey is the same as that shown
in the discussion of the quarterly survey proce­
dures. The severity rate and the average time
charge are computed by the following formulas:

Total days lost or charged multiplied by 1,000
Number of employee-hours worked

Total days lost or charged
Average time charge= ------------- -— ;-----------:-----—
Number of disabling injuries
Special Industry Studies. The computation of
injury-frequency rates and severity measures from
data collected in special industry surveys follows
the same procedures described in the discussion
of the quarterly and annual surveys. The acci­
dent-cause data collected by the field staff are
analyzed on an individual case basis, according

to the provisions of the American Recommended
Practice for Compiling Industrial Accident Causes.
The accident factors indicated by this analysis
are tabulated in various break-downs, such as by
department, occupation, operation or process,
agency involved, and accident type.

XII. Occupational Wages:
Establishment Sampling6
Sampling is n e c e s s a r y in making occupational
wage surveys because of the large number of
establishments in many industries. This need
exists even when a narrow industrial classification
is studied. For instance, approximately 2,000
firms, employing 8 or more workers producing
women’s and misses’ dresses, are located in the
New York City area alone. Obviously they must
be surveyed on a sample basis, if personal visits
are involved. Otherwise an unduly large pro­
portion of the limited funds available to the
Bureau of Labor Statistics for such work would
be expended on a single industry-area group.
Other reasons for sampling are to insure that a
survey yields something more than an informed
guess, and that reliable results are obtained at
minimum cost.
It is possible to reduce sources of error other
than those ascribed to sampling by devoting a
larger proportion of time to proper occupational
classification, careful editing for accuracy of data
and the like, than would be possible without the
use of sampling. Otherwise errors, largely un­
predictable in their effects, might be more serious
than sampling error. Hence, sampling some­
times leads to increased accuracy, not less, as is
often assumed. It also reduces the time necessary
to collect and process data; even with unlimited
resources, the smaller the sample the earlier the
publication of results.

Collection of Information
The choice among various methods of collecting
wage information depends on the type of industry
surveyed, and the nature of the data sought.
Each method has its appropriate sampling pro­
cedure, and considerations important in one case
may be trivial in another.
Thus, mail questionnaire surveys are suitable if
detailed occupational data are not desired and if*
61 B y Samuel E. Cohen of the Bureau’s Division of Wage Statistics.


incentive methods of pay are uncommon. In
dealing with a complex occupational structure—
in which strict definitions of occupations are
essential and information on practices such as
vacations and sick leave is sought— personal visit
surveys have been found desirable. In both
cases, the sampling unit is the establishment,
rather than the individual. Most industries do
not have central sources showing individuals’
names and, if they did, the volume of collection
work would make surveys on such a basis im­
possible in most cases. Surveys limited to a
single occupational group, such as engineers, are
an exception. For this profession, lists of names
can be assembled and the individuals can be
approached directly, by mail questionnaire. The
sampling problems involved differ greatly in each
particular survey, and are not discussed here.
In establishment sampling for wage studies,
no particular problem of conserving resources is
encountered in most mail questionnaire surveys.
The number of firms in a given industry and area
is generally not so great that sizable economy in
time or money can be effected by use of a refined
sampling technique. Such surveys are often
employed in those industries the extent of which
is not fully determined. In these instances, the
mail questionnaire is a useful device for gaining
information as to the actual number of firms.
The principal sampling difficulty is created by
the nonrespondents. Failure to investigate the
nature of the nonrespondents may introduce
biases into a mail survey, since in a good many
cases, they may not have answered owing to
factors allied to wages. The direction and size
of such bias cannot be predicted, and hence some
personal visits are generally required in mail
questionnaire surveys.
In personal visit surveys, careful design is
necessary in establishment sampling since the
cost per schedule obtained is rather high. The
object of any sampling procedure employed is to
secure the desired accuracy with a minimum
expenditure. Field representative visits to un­
wisely selected establishments adversely affect the
accuracy of a survey relative to its cost.


General Sampling Procedures
Some general rules apply to the sampling and
collection of wage data, by field agent visit, as
done by the Bureau of Labor Statistics.
( 1) All visits are made according to some fixed
rule. If the plant is assigned, it must be visited,
and a disposition made; a schedule must be ob­
tained unless the firm is outside the scope of the
survey, or out of business. An agent is given no
discretionary powers as to which particular firms
are to be visited. Ease of obtaining a schedule
does not influence the choice of individual firms
for study. Every reasonable effort is made to
get a schedule, once a firm is assigned. All firms
within the scope of the particular survey are in­
cluded in the industry population from which the
sample is drawn.
(2 ) Personal judgment as to what constitutes
representative firms is not relied upon. The sys­
tem of sampling employed is unbiased, i. e., there
is no reason to expect that any characteristic of a
given sample would be more likely to be greater
than to be less than the results from a complete
census. The procedure, if repeated over all pos­
sible samples of the same size, would give the
same results as a census. In addition, the pro­
cedure is such that if successive samples were
taken, all possible samples would occur with
approximately equal frequency.
(3) The system employed makes possible some
appraisal of the sampling error of the results.
Only then can it be determined objectively whether
the sample should be increased in the interest of
accuracy or decreased in the interest of economy.

Determination of Industry Population.

In general,
the industry population is completely determined
before sampling is begun. That is, a list of firms
is assembled in some form, and, insofar as possible,
grouped according to such pertinent character­
istics as are known, i. e., product, location, etc.
Sources used for this purpose include listings
provided by the various State departments of labor
or unemployment compensation bureaus, trade
directories, lists provided by trade associations,
unions, or regulatory government agencies. If
these lists are used in combination, care is taken
to eliminate duplication.
The size of the industry population may be ad­
justed as the result of the field work, if it is found


that a certain proportion of the firms assigned
should not be covered, i. e., are out of business or
engaged in a type of business not covered in the
survey. The estimated total population is ad­
justed in accordance with the findings in the
sample study.
In some cases a preliminary sample study, or
even a census, may be made of an industry in order
to obtain essential data on various characteristics
of establishments for use in the classification of the
population. No wage data are obtained in such
a preliminary survey.

Size Limits.

A restriction is usually placed upon
the minimum size of firms to be studied. De­
pending on the industry and the distribution of
total employment by size of plant, lower limits
range from 5 employees in auto repair shops to 250
in airframe manufacturing. Otherwise, it would
be necessary to expand greatly both the list of
firms from which the sample is drawn and the
sample studied. In addition, the sampling error
of the results would be greater than that which is
found when the minimum size of firm studied is
limited. Another reason for such limitations is
that the surveys deal primarily with occupational
wages, and the smaller firms frequently do not
provide the occupational specialization of duties
that is necessary to define an occupation clearly.
Exclusion of the smallest size firms is not likely to
have a very great net effect on the average wage
levels. The differences in over-all averages caused
by such exclusions have, in every case investigated,
been less than the sampling error normally
After establishing the minimum size for survey,
every effort is made to insure that the results
represent an unbiased estimate of the segment of
an industry actually studied. Thus, firms of all
sizes studied have a chance of being included in
the survey. They are not necessarily all repre­
sented in the same proportion, but the dispro­
portion is adjusted by the assignment of proper
weights (see p. 68 ).

Approximate Sample Size Needed.

No advance
judgment is possible to determine a sample size
uniformly sufficient for all purposes. For in­
stance, if the workers in one of the occupations
studied, such as maintenance electricians, were
paid almost uniform rates throughout a city, a



sample of very few establishments would suffice.
But the same size sample would be clearly de­
ficient for any occupation in which rates varied
considerably from plant to plant. A small sample
might be sufficient for determining the average
rate for jobs that are found in every establishment,
but inadequate for an uncommon job. There­
fore, some occupation or characteristic must be
selected that can be measured with the desired
degree of accuracy, and about which the sample
size can be developed. Some items will be meas­
ured more and others less accurately. The par­
ticular research worker’s knowledge of what is
important in the given industry is indispensable,
and there is no purely statistical substitute for it.
If break-downs of the data by some character­
istic are sought, sufficiently large samples must be
provided for each subgroup. For instance, in the
women’s dress industry, data are customarily
shown for the so-called contract shops and inside
shops separately. These are considered separately
and the appropriate sample size is chosen for each.
In such cases, the accuracy of the data for the
combined group is greater than it would be if the
total sample were planned to show the combined
group as a unit.
After selection of the items used as the standard
of accuracy, a determination is made of the ap­
proximate sample size needed to yield estimates
of such items, within the specified degree of ac­
curacy. The following information is employed
for this purpose.
( 1) Number of establishments in the particular
(2 ) An estimate of the coefficient of variation
of the item being measured.62 Here, the results of
any previous surveys of the same industry are
most helpful. If such information is lacking, the
coefficient must be estimated from other surveys
of a similar nature, or (lacking such data) from
experience in a related field.
Knowing these two quantities, it is possible to
arrive at the approximate sample size by the
usual formula for the sampling error of the means
of a finite population.
62 The coefficient of variation as used here is the ratio of the standard devia­
tion of establishment averages to the average of all establishment averages.
Although wage levels themselves were increased, the relative dispersion of
wages from plant to plant appears to remain relatively stationary for short
periods. In recent years, the practice of granting general wage increases in
cents-per-hour has caused slight shrinkage of the relative variation between
establishments so that some slight overestimate of the coefficient of variation
results from use of previous data.

The usual formula for the sampling error of the
(1) S


where S (M ) is the sampling (standard) error of
the mean, M, S (X ) is the standard deviation of
the population averages (estimated from the
sample, as a rule, though not necessarily), and ft
is the sample size in terms of establishments—
should be modified in this case to allow for the
fact that in occupational wage surveys the samp­
ling is done without replacements from moderately
small populations. Instead of ( 1) write

/N—n S (X)

s m ~ylN=i
where S (M ), S (X), and ft are the same as above
and N is the size of the finite population (in terms
of establishments).
Since the distribution of plant averages is ap­
proximately normal, it may be assumed with
safety that two-thirds of all averages, based on
samples of size ft, will lie within the range M ± S
(M ), or that 95 percent will lie within the range
M ± 2 S (M ). Therefore, it is necessary to solve
the equation

where K is a factor depending on the degree of
confidence with which it is expected that the
sample mean falls in the allowed range.
Since it is sought to obtain the relative error
and not the absolute error, division by the mean
Mj yields
Percent of error= K +
- 7=
\ N —l i n


where is the coefficient of variation.
Solving for ft, the sample size, yields

P E —is the permitted percentage of error
N —number of establishments in the population
—coefficient of variation of item studied



K —number of standard errors on either side of
mean needed to determine the desired confidence
(2 if the sample mean should differ
from population mean by no more than the per­
mitted error in fewer than 5 cases out of a hundred,
1.645 if sample mean should differ from popula­
tion mean by no more than the permitted error
in no more than 10 cases out of a hundred.) The
appropriate value of K can be found in the tables
of the normal curve for other situations.
Tables corresponding to the various values of
population sizes and coefficients of variation can
be computed in advance.

Stratification Procedures. The preceding discus­
sion on sample sizes is based on the assumption
that the data presented are the sample average of
establishment averages. However, in actual prac­
tice it is more usual to publish, not the average of
plant averages, but the average for the individual
workers in the occupation, i. e., the average pub­
lished is the weighted average of the individual
earnings, not simply an average of the individual
establishment averages. For instance, if the
averages for tool and die makers in three of the
sampled establishments are as follows:
Number of
tool and die

Establishment 1______ ______
Establishment 2_____ _____
Establishment 3_____ _____




$1. 50
1. 80
1. 20

The weighted average hourly earnings derived
from this sample is:
(4 X 1.50) + (5 X 1.80) + (1X 1.20)_^n
4+5 + 1
The relatively large variation from plant to
plant in the number of workers in an occupation
means that the sampling problem is complicated
by two quantities, each of which is subject to
sampling error— the plant averages themselves
and the number of workers involved. In order
to reduce the effect of the latter element on the
sampling error of the weighted mean, the sampling
must be done, not at random from the whole
population but from a series of subdivisions, or
strata, in which plants of approximately the same
size classifications are grouped.
After deciding on sample size, allocation of the
sample to the various size strata follows. This
allocation should be as efficient as possible, i. e.,


it should yield a smaller sampling error than any
other allocations of a sample of the same size.6
The way to achieve the most efficient distribu­
tion, or optimum allocation, of the sample to the
various size strata has been determined to be by
the assignment of schedules in proportion to the
total employment in the strata. For example, if a
size stratum has 20 percent of the employment of
the industry, 20 percent of the sample should be
taken from that stratum. Strictly, the number
taken should be jointly proportional to the total
employment and the standard deviation of aver­
age earnings within each size stratum. However,
little evidence exists to show that these standard
deviations differ sufficiently from size group to size
group to merit the additional labor of considering
them as other than equal.
It may appear that the preliminary sample size
could be computed by solving the equation for the
sampling error of the mean of a stratified sample
selected according to the principle of optimum al­
location. Actually, this is scarcely ever possible
in occupational wage surveys because the distribu­
tion of plants by size is such that the number of
largest plants demanded under this theory is gen­
erally larger than the number that actually exist
in the entire population.
In order to compute the sampling error of the
estimated mean, the actual number of schedules
selected in the formula may be substituted for the
error of the mean of a stratified sample. If the
plant distribution by size is such that the error
appears considerably smaller than desirable, the
sample size may then be reduced. In general no
modification is necessary except in those cases
where several comparatively large firms account
for a high proportion of the total employment in
the area. Often, some slight enlargement of sam­
ple size is made to compensate for the irregular
frequency of occurrence of fairly important occu­
Peculiar problems of occupational structure oc­
cur in some industries. For instance, in the cotton
textile industry, the industry is quite generally
divided into integrated mills (those spinning yarn
and weaving) and yarn mills (those spinning
m N o reference to the relative cost of the collection of large schedules and o
small or medium-sized schedules has been made up to this point. Consider,
ing the large proportion of overhead (travel time, and time necessary to see
the official giving the information), the method outlined herein has also been
f ound the most efficient from the standpoint of total cost. Only in the largest
firms has it been found worthwhile to resort to intraplant sampling.



alone) in some areas. The spinning mills con­
tribute no information regarding the wages of
weavers, and, therefore, the two groups must be
considered as separate populations in selecting
In a good many cases, it is possible to perform
further stratification of establishments if informa­
tion is available regarding such characteristics as
unionization, type of products, etc. In cases of
this kind, it is often possible to classify the estab­
lishments by such characteristics within each size
group and to set up small cells and to select one
or more sample members from these cells. Cur­
rently, little is known as to the reduction of sam­
pling error by such procedures. Very often such
information is not available, and no further strati­
fication is possible, and attempts to use fragmen­
tary information may result in an unknown bias.
Regardless of stratification methods, once the
cells have been established, the selection of the
plants actually studied is purely random. This is
true even though personal judgment is used in
determining the make-up of the cells themselves.
Estimation From the Sample. When the method of
optimum allocation is used, the sample generally
consists of all very large firms, a large proportion of
the next size group, a smaller proportion of the
next, and so on. Obviously, straight addition of
the data for all of these establishments would
yield a bias toward the large firms. Therefore,
smaller firms are assigned weights that are the
inverse of the sampling ratio for the stratum from
which they are chosen, e. g., if a third of the plants
are selected from a cell, they are all given a weight
of 3. By use of punch-card methods, the compu­
tation of individual strata averages is avoided, and
the estimated total workers and aggregate earnings
for all strata combined are computed simultane­
To illustrate the use of weights, suppose that
establishment 1 was drawn from a cell in which
half the plants were used in a sample. It is
therefore given a weight of 2 . Establishment 2 , on
the other hand, was taken with certainty, i. e., it
stood in a class by itself, and is given a weight of 1 .
Establishment 3 was taken from a cell where a
fourth of all plants were used in the sample, and
hence is given a weight of 4. The calculations
are, therefore:

T ota l w eighted
ea rn in g s

Establishment 1_______ 2 X 4 X 1 . 50
Establishment 2_______ 1 X 5 X 1 . 80
Establishment 3_______ 4 X 1 X 1 . 20
Estimated universe____

25. 80

T o ta l w eighted
w ork ers

1X 5

The estimated average hourly earnings in this
case is —y f— =$1-52.

Limitations of Sampling Theory
Difficulties are encountered in attempting to
calculate rigorously the sampling error of weighted
averages of the type published by the Bureau of
Labor Statistics in its occupational wage studies.
These averages are strictly the ratio of two random
and highly correlated variables, the total earnings
and number of workers, information on whose
exact distribution is not available in its entirety.
Under favorable conditions, the sampling error of
such ratios can be approximated but this cannot be
done too well if the relative variation of the
denominators (number of workers) is large, as is
often the case. The necessary computations are
also quite expensive.
Experimental work indicates that the relative
sampling error of the average of plant averages
(within any size group) is not materially different
from that of the weighted average. By insuring
inclusion of all large plants, the sampling error of
the over-all average of any given item is likely to be
reasonable, especially for specialized occupations
likely to be found in large establishments.
The assumption that the optimum sample de­
sign for one item is also optimum for others may
not be strictly sound. But it is necessary to work
with only one sample for all purposes. In any
event, wages and wage practices are highly corre­
lated, and departures from optimum design can­
not be too great in most cases (i. e., number of
workers receiving specified types of vacation priv­
ileges). Samples of the design used are also
reasonably efficient for estimating the total em­
ployment in the industry being studied, as well
as the total number of workers in specific occupa­
Illustrative Example. An illustration is the selec­
tion of a sample for the power laundry industry


in a large city, where there were 150 establish­
ments of more than 20 workers. According to a
previous survey, the average coefficient of varia­
tion for this industry in this city was approxi­
mately 1 to 5, corresponding to a sample size of
about 30. In the total population, the employ­
ment and firms were distributed as follows:
N u m b e r e m p lo y e d

251 and over_____________________
T otal_____________________ 150

P la n te

W ork ers

4, 600
1, 400

Hence, the final sample would be distributed as


13660 X 30 = 1.6 from the largest size group
13666 X B O " 14-5 from the second group
f^666X3Q= lQ-6 from the third group
1^666X 30 = 3 .2 from the fourth group
In actual practice, since a whole number of
firms must be taken, the final sample consisted of
2 of the largest with a weight of 1; 14 of the next
group with a weight of 3; 11 of the next group
with a weight of 6 ; and 4 of the smallest firms
with a weight of 1 1 ; a total of 31 schedules. The
departure from the numbers shown previously
was made in order to simplify the weighting pro­

XIII. Occupational Wages:
Conduct of Surveys6
The methods of making occupational wage sur­
veys 65 have evolved from long years of experience
by the Bureau of Labor Statistics in the collec­
tion and analysis of facts relating to the country’s
wage structure. These surveys are designed to
provide the public with wage and related infor­
mation in a form that emphasizes the major
factors that make for differences in wage levels.
Typically, wage levels in the United States vary
by occupation and industry, and within industry
by geographic location, size of establishment, size
of community, extent of unionization, and method
of wage payment. Much of the planning, the
sampling procedures, methods of collection, and
tabulation are influenced by these factors of vari­
Four types of wage surveys are currently con­
ducted by the Bureau; each is distinguished by
the population unit that is considered in sampling.
First, there is the Nation-wide industry survey,
in which samples are selected with reference to
the industry as a whole. However, these samples
are so stratified that regional and locality data
are also provided. The second type is the industry-by-area survey. In these studies samples are
selected with reference to a particular industry in
an area. The third type is the cross-industry
study, in which samples are selected with refer­
ence to all industries in an area. This type of
study is mainly practical in occupations, such as
office occupations, that are found in most indus­
tries within an area. Fourth, in surveys of pro­
fessional workers, sampling is carried out with
reference to all workers in a profession rather
than in any establishments with which they may
be associated. Each type of survey yields some­
what different results from the others, but essen­
tially the methods of making the studies, except
for the sampling, have certain elements in common.
The comparatively high cost of occupational
wage studies makes it impracticable to study all
industries annually. In all instances, it is the*
84 B y Kermit B. M ohn of the Bureau’s Division of Wage Statistics.
68 This article relates to studies in which data are derived from employer
pay-roll records or from individual workers. For a description of surveys
based on union records, see note VI in this series, Preparation of Union
Scales of Wages and Hours (p. 29).


Bureau’s objective to provide occupational wage
data for the leading industries at least every 2 or
3 years, however. Beginning in 1947, annual
studies have been made of a group of some 20
industries on an industry-by-area basis for the
twofold purpose of providing information more
frequently than is usual and for establishing a
wage series to portray the movement of wages in
these industries. In selecting industries for study
in any year, the Bureau is guided by the interest
of the public in information as well as by its
anticipation of important developments in par­
ticular industries.
The wage data considered of primary impor­
tance and adopted for occupational studies are
straight-time rates, excluding overtime and shift
premiums.66 Rates as such can be obtained, how­
ever, only for workers paid on a time rate basis.
For those workers covered by piece work or other
incentive systems of wage payment, a rate of
earnings is obtained by dividing earnings, ex­
clusive of overtime and shift premiums, by the
total time worked during a pay-roll period.
For plant, or production, workers rates are usually
obtained on an hourly basis; weekly rates are
obtained for office workers; and annual or month­
ly rates are most frequently measured for pro­
fessional workers. In general, the surveys at­
tempt to use the measure of wages that is typical
in the industry and occupations being studied.
In conjunction with the wage rates, the number
and sex of the workers is obtained for use in
tabulations based on this characteristic.
Supplementing the wage data, information on
various related practices is also studied. Among
these items are shift premiums, paid holidays, paid
vacations, and insurance and pension plans.
The findings of these studies are used extensively
in collective bargaining, as well as in private wage
determinations. They are also used in making
interregional and intercity comparisons of wage
rates, in order to facilitate decisions with respect
to plant location. In addition, they provide nec­
essary information for the formulation of public
policy on wages, as in minimum wage legislation,
and for the analysis of trends in economic develop­
MStraight-time rates more accurately reflect a worker’s payment for a
uniform unit of work as compared with gross earnings which are affected
by the length of time worked.


Limitations of Surveys
The value of successive Bureau occupational
wage studies of a particular industry for measuring
changes occurring between the survey periods
usually has certain limitations, even though the
intervals between surveys may be as short as a
year. These limitations arise from the fact that,
while individual studies are made under the same
general procedures, they are designed to meet
specific industry and labor needs of the moment
in terms of occupational classifications, job descrip­
tions, types of data, and other factors. For exam­
ple, surveys have been made annually for a number
of industries. Consultations with management
and labor are held before each study, however,
and necessary changes are adopted. For that
reason alone, the consecutive studies are not
strictly comparable. Although this may be dis
advantageous in some respects, the primary pur­
pose of the studies is to indicate wage levels as of
a particular time rather than to attempt to portray
the movement from one survey period to another.

Study Methods and Sources
In developing plans for the surveys, Bureau
consultations are held with industry and labor
representatives, through its Business and Labor
Advisory Kesearch Committees and directly with
management and labor representatives in each
industry. Subjects dealt with generally relate to
technical matters regarding time of studies, selec­
tion of jobs for study, preparation of job descrip­
tions, and kinds of special data needed by those
directly interested in the study.
Planning of Surveys. Industry scope in the wage
surveys is practically always expressed in terms of
the classification system of the Standard Industrial
Classification Manual issued by the Bureau of the
Budget. Varying according to the particular
study, the scope may range from a part of a 4-digit
category to a combination of several 3-digit clas­
sifications; the basic criterion is that the industry
being studied should represent a fairly homogene­
ous unit insofar as wages and occupations are con­
cerned. In order to increase efficiency in the col­
lection of data, the scope of the industry is usually
modified to exclude all establishments with fewer
than a specified number of workers. This mini­
mum size limitation is established after a study of


the possible effects this limitation would have on
the results. Another practical reason for the
adoption of size limitations is the difficulty en­
countered in classifying workers in the very small
establishments where the same degree of specializa­
tion found in large plants does not exist.
It is not essential to provide data for all occupa­
tions in an industry in order to describe an indus­
try’s wage structure. In addition to the increased
cost of obtaining occupational data for all occupa­
tions in an industry, the usefulness of such data
is seriously limited because of the wide differences
in occupational structure from plant to plant.
In recent years, therefore, a list of key jobs has
been selected which represents the total occu­
pational structure ranging from the least- to the
highest-skilled workers. In the selection of such
jobs, the following criteria have been useful:
(1) numerical importance of job, measured by
workers in the job; (2) definiteness of occupation;
(3) stability of occupation from period to period;
(4) prevalence of occupation among establish­
ments; and (5) historical importance of job in
establishing wage rates. In addition to these
five criteria for selecting individual jobs, the
entire list is selected in order to represent the
complete range of rates in the wage structure
from high to low, since it is assumed that the rates
of pay for the key jobs can be used as bench marks
for measuring rates of the nonselected jobs by
relating the one group to the other.
Each key occupation is carefully defined in
order to obtain maximum comparability of jobs
from plant to plant. In preparing such defini­
tions, the suggestions of industry and labor repre­
sentatives are of great value. A job description
that is to be used in a survey involving many
establishments includes the major determining
characteristics of the job. It is flexible enough,
however, with respect to minor variations to
permit interplant comparisons based primarily
on the major elements. Above all, classification
of workers is based on job descriptions and not
on titles of jobs used in various plants.
Collection of Data. The results obtained from
a complete coverage of all establishments in an
industry, as compared with those obtained from
a carefully selected sample, would not warrant
the generally large expenditure involved even
if the funds were available. For this reason,



the Bureau's surveys are practically always made
on a sample basis.6
Data for most of the occupational wage surveys
are obtained by personal field visit to each
establishment in the sample on forms of the type
here reproduced. Experience with these surveys
has proved personal visits are necessary in most
industries to obtain a high degree of uniformity in
the data, especially in the classification of workers
by occupation. The field work is administered
through the Bureau's five regional offices. Sur­
veys of professional workers require direct report­
ing from the workers themselves. These, as
well as a limited number of industries which have
highly standardized occupations, are surveyed
by mail questionnaire.
The basic source of information, when estab­
lishments are visited, is the pay roll or other com­
pany records. In order to classify workers by
occupation, discussions are held with company
personnel acquainted with job content. In addi­
tion, the Bureau representative usually observes
the workers on duty. Information on practices
related to wages is obtained from the authorized
company official.

Compilation Procedures
Individual company reports are forwarded to
the respective regional offices of the Bureau which
have the primary responsibility for reviewing,
editing, and preparing the schedules for tabulation.
The schedules are reviewed for reasonableness and
w The sampling procedure is described in the preceding note (p. 64).

completeness. Various codes and weights are
assigned to each schedule as a preliminary step to
the preparation of punch cards. Next the sched­
ules are forwarded to Washington where the
information is punched on cards and listings of
the punched cards are made. The schedules and
listings are returned to the regional office where
they are again checked. The initial tabulations
prepared by the regional offices, consisting of
data for a wage area (usually a central city and
such surrounding territory as constitutes a rela­
tively homogeneous area with respect to wage
structure), are made directly from the listings
which are set up for the facilitation of these
tabulations. In Nation-wide studies, additional
tabulations are prepared to reflect the differences
in wage levels resulting from the various factors
previously mentioned. All final summary tables,
except the area reports, are prepared in Washing­
ton. Airea reports are issued on standardized
forms. Nation-wide and regional summaries are
published in bulletins, press releases, and articles
in the Monthly Labor Review.
Two methods of weighting are used in comput­
ing the various averages. In computing the aver­
age for any occupation, all rates are first multiplied
by the number of workers receiving those rates
and then dividing by the total number of workers
so that the rate for each worker will have its
proportionate influence on the over-all average.
The other weighting factor is one assigned to each
establishment so as to adjust the data to reflect
the proportionate influence of the establishment
in the entire population rather than in the sample.
(See preceding article.)


B. L s 1476
(Rev. 49)

Page-------------Schedule number

Page number

Establishment n a m e _________________________ _________________________

Occupational Rates—

Pay-roll period fr o m ___________________ t o ____________________ , 19____



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