BLS DAILY REPORT, THURSDAY, JULY 27, 2000
TODAY'S RELEASE: The Employment Cost Index (not seasonally adjusted) for
June 2000 was 148.0 (June 1989=100), an increase of 4.4 percent from June
1999. The Employment Cost Index (ECI) measures changes in compensation
costs, which include wages, salaries, and employer costs for employee
benefits. ... On a seasonally adjusted basis, the 3-month increase in
compensation costs for civilian workers (nonfarm private industry plus state
and local government) was 1.0 percent during the March-June 2000 period,
following a gain of 1.4 percent in December 1999-March 2000. Wages and
salaries increased 1.0 percent during the March-June 2000 period, following
a 1.1 percent increase in the previous 3-month period. Benefit costs rose
1.1 percent during the June 2000 quarter, falling from the 2.0 percent
increase in the March 2000 quarter. ...
Most unemployed workers who choose not to file claims for unemployment
insurance benefits say they believe that they are not eligible for the
payments or they expect to find a new job, according to a study published by
the Bureau of Labor Statistics. More than half of those officially counted
as unemployed do not file UI claims. "Nonfiling weakens both the
macroeconomic and microeconomic functions of the UI benefits system,"
conclude economist Stephen Wandner and analyst Andrew Stettner in their
study published in the June issue of the Monthly Labor Review. Finding that
the long-term decline in UI recipiency rates has continued, the analysts say
it is important for policymakers to look at reasons that jobless workers
give for not taking advantage of the UI system. ... (Daily Labor Report,
page A-6; text of article, page E-1).
Conferees working on the Labor Department's fiscal year 2001 spending bill
are leaning toward the higher levels of funding set in the Senate version of
the bill, particularly in the area of worker training, according to a
tentative agreement reached by Republican conferees. ... The proposed
budget of almost $447 million for the Bureau of Labor Statistics also
adheres to the Senate version of the spending bill, compared with $440
million in the House bill and almost $454 million requested by the
Administration. Of this, some $135 million would be dedicated to the area
of employment statistics, $133 million to prices and cost of living, $71
million to compensation and working conditions, $8 million to productivity
and technology, and $5.3 million to economic growth and employment
projections (Deborah Billings in Daily Labor Report, page A10).
A smaller proportion of contingent workers receive health care benefits from
their employers than the overall labor force, and they are excluded from
some labor law protections, according to a General Accounting Office report.
Requested by Sens. Kennedy (D-Mass.) and Torricelli (D-NJ), the report
"Contingent Workers; Income and Benefits Lag Behind Those of Rest of
Workforce," concludes that the disparity in benefits and coverage would be
difficult to alleviate. In response to the study, Kennedy and Torricelli
announce they will introduce legislation to ensure these employees receive
the benefits they deserve. GAO reiterated what other such studies have
found: An estimate of the number of contingent workers is difficult because
of widespread disagreement concerning who should be counted. "Labor experts
and others in general agree workers who lack job security and have
unpredictable work schedules, such as temporary and on-call workers, should
be included in the definition of the contingent workforce," the GAO report
says. However, there is less agreement on whether workers such as
independent contractors, self-employed workers, and part-time wage and
salary workers should be included. Estimates of the number of contingent
workers range from 5 percent of the total U.S. workforce when only temporary
and on-call employees are included in the count, to nearly 30 percent when
other types of workers are added, the report found. ... (Daniel J. Roy in
Daily Labor Report, page A-2).
Data compiled by the Bureau of National Affairs in the first 30 weeks of
2000 show that the weighted average first-year wage increase in newly
negotiated contracts was 3.9 percent, compared with 2.9 percent in the first
30 weeks of 1999. Manufacturing contracts provided a weighted average gain
of 3.5 percent, compared with 3.1 percent a year ago. The nonmanufacturing
(excluding construction) weighted average increase was 4.1 percent, compared
with 2.6 percent in 1999, and the median gain was 3.4 percent, compared with
3 percent in 1999 (Daily Labor Report, page D-1).
Companies find a host of subtle ways to pare retirement payouts, says The
Wall Street Journal (page A1). ... "They can alter each element of the
benefit formula in hard to spot moves," says Ellen E. Schultz in the
article. ... The article lists eight common ways to cut pensions: l. Cut
pension multiplier from, say, 1.5 percent to 1.0 percent; 2. Change the
definition of compensation to exclude bonuses or make the pay more variable
so less might qualify for a pension; 3. Calculate the final average pay
using the past 10 years or 5 years of compensation, instead of the final 3
years. Or use the average of all years -- a "career average" formula; 4.
Cap the number of years of service counted, at 25, for instance; 5. Freeze
the plan, so future years of service and compensation increases won't boost
the pension; 6. Convert to a cash-balance or pension equity formula, which
produce more of a career-average compensation effect and eliminate the
early-retirement subsidy; 6. Implement a change at midyear or before a prior
change has been fully phased in. This can reduce the value of a transition
benefit; and 7. Offer lump-sum payouts that exclude an early retirement
subsidy.
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