ECONOMIC

A broader measure of labor costs, compensation per hour of work in theprivate nonfarm business economy, covers all employees and includes supplementsto wages and salaries. It represents the sum of labor costs toemployers. Compensation per hour increased faster than average hourlyearnings in the first quarter of 1976, partly because of the January increasein the base earnings subject to social security taxes. The rate of increase incompensation per hour was lower in the following quarters, and it was lowerin 1976 than in 1975.While only 11 percent of the employed are covered by major collectivebargaining settlements (those which cover 1,000 or more workers),these settlements may have a disproportionate impact on wage settlementsthroughout the economy as the result of a demonstration effect. The rate ofwage increases negotiated in such contracts declined in 1976 (Table 12).The first-year annual wage increases averaged 10.2 percent for contractsnegotiated in 1975, covering 3 million workers, and 8.9 percent during thefirst 3 quarters of 1976, covering 2.7 million workers. (Approximately 4*/imillion workers were under major contracts scheduled to expire during thefull year). The effective wage rate change under collective bargainingagreements is the actual wage change going into effect in a quarter becauseof settlements negotiated in that year, deferred increases agreed to in thepast, and escalator or cost-of-living adjustments (COLA). The effectiveTABLE 12.—Changes in major collective bargaining settlements, 1974-76[Percent]197519761Type of change and industry group 1974 1975II III IVIIIIIWage settlements:First-year wage change (annual rate)_9.810.212.19.09.78.210.1Percent of workers covered in current quartersettlements 25029137Effective wage rate change: 3Total effective changes.9.41.72.13.31.51.22.62.0Adjustment resulting from:Current settlementPrior settlementEscalator provisionManufacturingNonmanufacturing, excluding contract constructionConstructionTransportation and public utilitiesWholesale and retail tradeServices4.82.61.910.38.39.17.610.37.02.83.72.28.59.38.19.79.26.4.6.6.41.81.9.81.72.52.0.71.1.32.11.24.5.82.1.81.51.02.84.32.25.33.02.2.6.5.41.61.8.61.81.51.4.3.6.41.41.3.7.91.82.21.21.2.22.12.64.02.72.81.6.61.0.32.21.91.51.92.5.51 Preliminary.2 Percent of estimated number of workers under major collective bargaining settlements. Individual quarterly datafor 1976 are based on preliminary estimates that do not add to the current total for the year.3 Effective wage rate changes are wage rate changes actually going into effect per worker under major contracts in therespective quarters resulting from major collective bargaining settlements made that calendar year, plus deferred increasesin accordance with prior-year contracts plus escalator adjustments.Note.—Data relate to settlements covering 1,000 or more workers in private nonfarm industries. Effective wage rateadjustment for the year is the total of the four quarterly changes, except as noted.Detail may not add to totals because of rounding.Source: Department of Labor, Bureau of Labor Statistics.67