The Employment Cost Index
From the perspective of U.S. firms, the cost of employing workers goes far beyond wages and salaries. Firms’ total employment costs, as measured by the Employment Cost Index (ECI), continued to grow only moderately. In September 2003, overall employment costs for private-sector workers rose 4% from the same month last year, but this figure included a 6.5% increase in benefits costs. From the workers’ perspective, 2002 and 2003 have been good years for real wage growth because the ECI exceeded inflation. For 2002, inflation was only 1.6%, compared to wage and salary growth of 2.8% or compensation growth of 3.4%.
Suggested citation: "The Employment Cost Index," Federal Reserve Bank of Cleveland, Economic Trends, no. 03-12, pp. 13, 12.01.2003.