Wages, salaries and other benefits paid to American workers rose 5.2 percent in the 12 months ending in September, the government reported today. The Labor Department said its Employment Cost Index, considered one of the best gauges of inflationary wage pressures, was pushed ahead to a large degree by a sharp 6.8 percent rise in benefit costs for private industry workers. The government blamed much of the past year's steep increase on the rising cost of health insurance. Non-production bonuses, workers' compensation insurance and a rise this year in the Social Security tax rate also contributed to the rapid spurt in benefit costs, the Labor Department said. A year ago, benefit costs had jumped 6.0 percent for the 12-month period ending in September 1989. Wages and salaries for private industry workers climbed 4.2 percent, the report said, just under the 4.3 percent increase recorded a year ago. The 5.2 percent increase in all compensation costs for both private sector and government workers was just above the 5.1 percent gain of a year ago, the government said. Today's report was sure to add to analysts concerns over the inflation threat facing the nation and its impact on America's already struggling economy. Last week, the government reported that consumer prices surged 0.8 percent in September, the second steep inflation rise brought on by soaring energy prices that followed Iraq's invasion of Kuwait. That inflation report showed that for the first nine months of the year, consumer prices have advanced at an annual rate of 6.6 percent, well above the increase for all of 1989 of 4.6 percent. Eventually, analysts expect the inflation brought on by higher oil prices to start showing up in wages and salaries as well, because workers will start demanding more compensation to make up for the drain on their wallets. Today's report showed that over-the-year pay gains were about the same in the service-producing industries, where wages rose 4.2 percent, as in the goods-producing industries, where wages rose 4.1 percent. Within the service-producing industries, wage and salary increases ranged from 2.6 percent in wholesale trade to 6.2 percent in hospitals and the insurance industry. Pay gains among the goods-producing industries ranged from 2.4 percent in construction to 4.6 percent in durable-goods manufacturing. Non-union workers received better wage gains than their union counterparts, continuing a trend that's been ongoing since 1983-84, the government said. Non-union workers' pay rose 4.4 percent while union workers saw gains of 3.6 percent. For state and local government workers, the 5.3 percent pay gains for the year ending in September 1990 were lower than the 5.5 percent increases of a year ago. This pattern of lower rates of pay increases compared to last year also was found in hospitals and schools, today's report said. The 5.2 percent increase in the employment cost index for all workers, including those in the government, over the 12 months ending in September was under the 5.4 percent rise in the 12 months ending in June.
