
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, July 27, 1994                   TAG: 9408180019
SECTION: BUSINESS                    PAGE: B7   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                 LENGTH: Medium

WORKER COSTS NOT RISING MUCH

Compensation received by American workers continued to grow at a historically slow pace in the year ended June 30, the government said Tuesday. The report provides further evidence that inflationary pressures remain in check.

The Labor Department's Employment Cost Index showed that worker compensation rose at an annual rate of 3.2 percent, the same as in the 12 months ended March 30. The March increase was the smallest on record.

The index, which measures changes in wages, salaries and employer costs for employee benefits such as health insurance, vacations and sick leave, is considered the best gauge of wage inflation.

The index showed that wages and salaries - 72 percent of total compensation - edged up 3 percent. Benefit costs were up 3.8 percent.

The Labor Department said the moderate rise in benefit costs was helped by a continuing slowdown in costs for health insurance, workers' compensation and state unemployment insurance. Health insurance and workers' compensation costs are the most rapidly rising expenses for businesses.

Slower increases in employee compensation allow businesses to offer their goods at the lowest possible prices. Worker salaries and benefits represent about two-thirds of the cost of a product.

The Labor Department said workers' compensation costs rose a seasonally adjusted 0.7 percent for the second quarter of 1994, equal to the previous quarterly increase and less than the 0.8 percent increase in the fourth quarter of 1993.

Wages and salaries rose 0.8 percent in the second quarter, up from 0.7 percent in the first three months of the year, while benefit costs increased to 1 percent from 0.9 percent.

by CNB