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1 P r o b le m s in M e a s u r e m e n t o f E x p e n d it u r e s o n S e le c t e d Ite m s o f S u p p le m e n t a r y E m p lo y e e R e m u n e r a t io n BUREAU OF LABOR STATISTICS Ewan Clague, Commissioner

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3 Problems in Measurement of Expenditures on Selected Items of Supplementary Employee Remuneration Manufacturing Establishments Bulletin No UNITED STATES DEPARTMENT O F LABOR James P. Mitchell, Secretary BUREAU OF LABOR STATISTICS Ewan Clague, Commissioner J a n u a r y For sale by the Superintendent of Documents, U. S. Government Printing Office, Washington 25, D. C. Price 50

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5 Foreword In u n d e r t a k in g a n e x p l o r a t o r y s tu d y o f th e p r o b l e m s i n v o l v e d in m e a s u r in g e x p e n d i t u r e s o n s u p p l e m e n t a r y e m p l o y e e r e m u n e r a t i o n in m a n u f a c t u r in g i n d u s t r i e s, th e U. S. D e p a r t m e n t o f L a b o r * s B u r e a u o f L a b o r S t a t i s t i c s h a s v e n t u r e d in t o a n o t h e r n e w a n d c o m p l e x a r e a o f s t a t i s t i c a l r e s e a r c h. D u r in g r e c e n t y e a r s, r e p r e s e n t a t i v e s o f o t h e r G o v e r n m e n t a g e n c i e s a n d th e p u b l i c h a v e u r g e d th e B u r e a u t o c o l l e c t d a ta o n s u p p l e m e n t a r y r e m u n e r a t i o n t o r o u n d o u t i t s s t a t i s t i c s o f a v e r a g e e a r n i n g s, w a g e r a t e s, a n d r e l a t e d w a g e p r a c t i c e s. K n o w le d g e in t h is f i e l d i s n e e d e d a l s o f o r i n t e r n a t io n a l s t u d ie s ; th e I n t e r n a t io n a l L a b o r O r g a n i z a t i o n, f o r e x a m p l e, h a s e v i d e n c e d m a r k e d i n t e r e s t in th e d e v e l o p m e n t o f d a ta o n th e m a g n i tu d e o f w a g e s u p p l e m e n t s in t h i s a n d o t h e r c o u n t r i e s. A s th e p r i n c i p a l a g e n c y o f th e F e d e r a l g o v e r n m e n t f o r th e d e v e l o p m e n t o f l a b o r s t a t i s t i c s, th e B u r e a u c o u l d n o t r e m a i n i n d i f f e r e n t t o th e q u e s t i o n s r a i s e d w it h r e s p e c t t o th e m a g n it u d e o f t h e s e e x p e n d i t u r e s. B e f o r e a n y c o m p r e h e n s i v e s t u d y c o u l d b e m a d e, h o w e v e r, it w a s n e c e s s a r y t o e x p l o r e th e a v a i l a b i l i t y o f r e c o r d s, th e w i l l i n g n e s s a n d a b i l i t y o f in d u s t r y t o p r o v i d e d a t a, th e q u a lit y o f e x p e n d it u r e d a t a, a n d o t h e r m a t t e r s o f m e t h o d o l o g y a n d d e f i n i t i o n. T h is p i l o t s t u d y w a s u n d e r t a k e n w it h f i n a n c i a l a s s i s t a n c e f r o m th e N a t io n a l B u r e a u o f E c o n o m i c R e s e a r c h, I n c., a n d w a s c o n f i n e d t o m a n u f a c t u r in g e s t a b l i s h m e n t s. D e s p i t e i t s s h o r t c o m i n g s, w h i c h a r e u n d e r s c o r e d t h r o u g h o u t t h is r e p o r t, th e s t u d y h a s b e e n r e w a r d i n g to th e s t a f f o f th e B u r e a u o f L a b o r S t a t i s t i c s a s I h o p e it w i l l b e t o th e r e a d e r s o f t h is a n a l y s i s o f th e r e s u l t s. F u r t h e r w o r k b y th e B u r e a u o f L a b o r S t a t i s t i c s in m e a s u r i n g e x p e n d i t u r e s o n s u p p l e m e n t a r y r e m u n e r a t i o n u n d o u b t e d ly w i l l b e s h a p e d b y th e e x p e r i e n c e g a in e d in t h i s s u r v e y. A lt h o u g h t h e d e v e l o p m e n t o f s p e c i f i c s u r v e y t e c h n iq u e s w i l l d e p e n d o n a m o r e i n t e n s i v e a n a l y s i s o f th e d a ta in t h is r e p o r t, a n d p e r h a p s o n a d d it io n a l e x p l o r a t o r y i n v e s t i g a t i o n s, th e B u r e a u i s n o w a s s u r e d th a t s u r v e y s o f e x p e n d i t u r e s o n s u p p l e m e n t a r y e m p l o y e e r e m u n e r a t i o n, c a r e f u l l y l i m i t e d in s c o p e, a r e t e c h n i c a l l y f e a s i b l e. It i s e x p e c t e d th a t th e a b i l i t y o f e m p l o y e r s t o s u p p ly th e n e c e s s a r y d a ta f r o m a v a i l a b l e r e c o r d s w i l l g r o w o v e r t i m e u n d e r th e s t im u lu s o f a n i n c r e a s i n g r e a l i z a t i o n th a t s u c h r e c o r d k e e p i n g i s u s e f u l f o r b u s i n e s s p u r p o s e s a n d w i d e s p r e a d p u b l i c i n t e r e s t in e x p e n d i t u r e d a t a. A c a u t io n a r y n o t e m a y b e in o r d e r : A s th e r e p o r t i t s e l f m a k e s a b u n d a n t ly c l e a r, th e e x p e n d i t u r e d a ta s u m m a r i z e d in th e f o l l o w i n g p a g e s r e l a t e o n ly t o t h o s e e s t a b l i s h m e n t s r e p o r t i n g th e e x i s t e n c e o f, a n d d a ta f o r, th e p a r t i c u l a r p r a c t i c e in q u e s t io n. T h e y d o n o t i n c l u d e f i r m s i n c u r r i n g n o e x p e n d i t u r e s f o r a p a r t i c u l a r i t e m a n d t h o s e u n a b le o r u n w illin g t o r e p o r t e x p e n d i t u r e s. H e n c e, th e d a ta o n a v e r a g e e x p e n d i t u r e s f o r a n y p a r t i c u l a r i t e m a r e n o t a p p l i c a b l e t o m a n u f a c t u r in g a s a w h o l e. T h e y a r e p r e s e n t e d b e c a u s e t h e y h a v e a b e a r i n g o n q u e s t i o n s o f m e t h o d o l o g y w h ic h w e r e o f p r i m a r y i m p o r t a n c e in t h is s u r v e y. E w a n C l a g u e C o m m i s s i o n e r o f L a b o r S t a t i s t i c s - i i i -

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7 Preface O v e r the past 15 years supplementary w a g e benefits, c o m m o n l y referred to as fringe benefits, have g r o w n steadily as expenditure items for employers as sources of income, leisure security for workers. Although the B u r e a u of L a b o r Statistics other organizations have attempted to keep abreast of this m o v e m e n t through studies of the types q practices in effect a n d their p r e v a lence, comparatively little has been done in m e a s u r i n g the supplem e n t to w a g e s that these benefits represent or the employer expenditures that they entail. A n u m b e r of private organizations have m a d e studies of "fringe-benefit" expenditures for the use of their m e m b e r s h i p or for general distribution. Probably the m o s t widely circulated reports are those issued by the C h a m b e r of C o m m e r c e of the United States for the years 1947, 1949, 1951, a n d 1953.* T w o m a j o r questions m u s t be a n s w e r e d before effective w o r k can be done on m e a s u r i n g expenditures for all supplementary benefits. T h e first involves the conceptual difficulties created by the absence of a c o m m o n l y accepted definition of "fringe" or supplementary benefits. W h i c h practices types of expenditures do these t e r m s cover? Opinions within between labor m a n a g e m e n t circles differ widely. T h e second p r o b l e m relates to whether useful reliable data on expenditures can be obtained f r o m c o m p a n y records for all benefits in effect, or for a fixed package, or for specific items. This exploratory study, confined to manufacturing establishments, deals with the p r o b l e m s of m e a s u r i n g expenditures, not with defining "fringe benefits." Largely because of the conceptual difficulties noted above, the study bears the c u m b e r s o m e title of " P r o b l e m s in M e a s u r e m e n t of Expenditures on Selected Items of S u p p l e m e n tary E m p l o y e e Remuneration." In other words, this is essentially a study of the methodological p r o b l e m s encountered in surveying c o m pany expenditures on a predetermined list of items which, although not necessarily classifiable as fringe benefits, are nonetheless significant f o r m s of e m p l o y e r expenditures for labor. T h e items to be studied w e r e selected by the B u r e a u of Labor Statistics. It is important to e m p hasize that the t e r m "expenditures" is not intended as a m e a s u r e of actual costs to the e m p l o y e r nor of the value of the benefits to the workers. T h e m e a s u r e m e n t of the real * See, for example, Fringe Benefits, 1953, C h a m b e r of C o m m e r c e of the United States, Washington, D. C., v -

8 Preface - Continued costs connected with a p a rticu la r p ra ctice m ust take into account o ffsetting savings of variou s types (which, as in the ca se of som e p r e m ium pay item s, m ay equal or exceed expenditures), p ossib ly, additional related expen ses not included in the expenditure total. F or exam ple, a paid vacation p o licy obviou sly in volves an expenditure of m oney by the em p loyer. T otal nexpen ditures" rep resen t the sum of the vacation paym ents to individual w o rk e rs. H ow ever, this d oes not r e fle ct the net cost of a vacation p o licy. T h ere are offsettin g savings, which m ay include the amount of " c o v e r -u p " or nm a d e-u p n w ork, the resultant in cre a se in p rodu ctivity during the rem ain d er of the y ea r, a reduction in a b sen teeism, a reduction in la b or tu rn over. On the other h, additional expen ses m ay a ris e through the substitution, training, tra n sfer of w ork ers during the vacation season, the hiring of le s s efficien t rep la cem en ts, the lo s s of produ ction during the vacation season, the legally required paym ents such as the socia l secu rity tax w hich apply to vacation pay as w ell as to regu lar w ages, the adm in istrative co sts in volved. A vacation shutdown, how ever, m ay elim inate training rep lacem en t c o s ts, p erm it uninterrupted m aintenance rep a ir w ork,, if coin cid in g with a slack p e riod o r seasonal lull, favorably a ffect the e m p lo y e r1s experien ce rating State unem ploym ent com pensation law s. The d eterm in a tion of the net cost of a vacation p o licy is m anifestly a com p lica ted accounting p ro b le m. This study deals with the p ro b le m s involved in m easurin g em p loyer expenditure s fo r paid vacations other item s, without attem pting to evaluate co sts to the em p loyer or the benefits d erived by the em p loyee. Although the B ureau has long been in terested in this field of inquiry, as early as 1951 took a study of selected supplem entary expenditures in the b a sic steel industry, this pilot study was initiated at the requ est of, with the coop era tion of, the National B ureau of E con om ic R e sea rch, I n c., as part of that o rg a n iz a tio n s lon g -ra n g e study of the m ovem ent of wage rates earnings in the United States. In com m on with other u se r s of wage sta tistics, the National B ureau of E con om ic R e sea rch wanted to know m ore about the size significance of the supplem entary wage benefits which have com e into gen eral use in recen t y e a rs, requested the Bureau of L abor S tatistics to take what is essen tially a grou n d-breakin g su rvey. The coop era tion of the National B ureau of E con om ic R e sea rch is gratefu lly acknow ledged. The study was conducted by the B ureau of L abor S ta tistics1 D ivision of W ages Industrial R elation s. T echniques fo r the s e le c tion of the sam ple the tabulation of the data w ere d evised su p ervised by Samuel E. C ohen. Joseph W. B loch d ire cte d the study, with the a ssista n ce of Don Q. C row th er, p rep a red the rep o rt. v i

9 Contents Page F o r e w o r d iii P r e f a c e v S u m m a r y 1 P u rp o se, m ethod, scop e o f su rvey M ethod 10 The sam ple d e s ig n : C h a ra cteristics o f the r e s p o n s e Rate of r e s p o n s e 17 M ultiplant r e p o r tin g Other ch a ra cte ristics of the r e s p o n s e 20 The final s a m p le 21 The n on resp on se 23 E stablishm ent r e c o r d s rep ortin g p r a c t ic e s 27 Expenditure re co rd s 27 T im e re co r d s 28 A ctual estim ated expenditures 32 F a cto rs affecting expenditure levels 41 E stablishm ent expenditure levels 41 A verage expenditure ratios 45 A ctual estim ated rep ortin g 46 E xpenditures p er adjusted p a y roll h o u r 48 V ariations by size of establishm ent 51 V ariations by industry g r o u p 57 V ariations by co lle c tiv e bargaining status 58 V ariation s by type of p ra ctice earnings l e v e l s 64 V ariations in legally required paym ents am ong regions 68 T a b le s : 1. Rate of return of usable questionnaires by industry group Rate of return o f usable qu estionnaires by r e g io n Rate of return o f usable questionnaires by size of unit c o v e r e d K eeping of expenditure re co rd s for p rodu ction related w ork ers by item E stablishm ent p ra ctice in su m m arizin g expenditure re co r d s fo r p roduction related w ork ers by item K eeping of tim e re co r d s fo r p rodu ction related w ork ers by sele cte d item s E stablishm ent p ra ctice in su m m arizin g tim e re co r d s fo r p roduction related w ork ers by sele cte d item s 31 - v i i -

10 Contents - Continued T ables: - Continued Page 8. Nature of expenditure figu res rep orted by it e m Nature of expenditure figu res rep orted fo r item groups by union status Nature o f expenditure figures rep orted fo r item groups by siz e of e s ta b lis h m e n t R easons o ffe re d fo r failu re to rep ort expenditures by item M ethods of estim ating expenditures by i t e m A verage expenditures p er p ayroll hour fo r rep ortin g establishm ents only by item nature of r e p o r t A verage expenditures as p ercen t of p a y roll fo r rep ortin g establishm ents only by item nature of r e p o r t A verage expenditures p er year p er em ployee fo r rep ortin g establishm ents only by item nature of rep ort D ifferen ce betw een average expenditures p er p ayroll hour average expenditures p er adjusted p a y roll hou r, fo r rep ortin g establishm ents only by i t e m E xpenditures per p a y roll hour fo r rep ortin g establishm ents only by item size o f e s ta b lis h m e n t E xpenditures as p ercen t of p ayroll fo r rep ortin g establishm ents only by item size of e s ta b lis h m e n t A verage expenditures p er adjusted p ayroll hour fo r rep ortin g establishm ents only by item industry group A verage expenditures as p ercen t of p a y roll fo r rep ortin g establishm ents only by item industry group E xpenditures p er year per em ployee fo r reportin g establishm ents only by item industry group E xpenditures p er p a y roll hour fo r rep ortin g establishm ents only by item union status E xpenditures as p ercen t of p ayroll fo r rep ortin g establishm ents only by item union status E xpenditures p er p a y roll hour fo r paid holidays for reportin g establishm ents only by establishm ent earnings level num ber o f holidays p rovid ed E xpenditures p er p ay roll hour fo r paid vacations fo r reportin g establishm ents only by establishm ent earnings level average length o f v a c a tio n E xpenditures p er p a y roll hour fo r shift p rem iu m s fo r reporting establishm ents only by volum e o f shift w o r k v i i i -

11 Contents Continued T ables: - Continued Page 27. E xpenditures p er p a y roll hour fo r sick leave fo r reportin g establishm ents only by type o f plan E xpenditures p er p a y roll hour fo r p en sion plans fo r reporting establishm ents only by type of plan E xpenditures p er adjusted p a y roll hour fo r legally req u ired paym ents fo r rep ortin g establishm ents only by region type o f p aym en t E xpenditures fo r le g a lly req u ired paym ents as p ercen t of p a y roll fo r rep ortin g establishm ents only by region type of p a y m e n t 70 Appendix: Q uestionnaire 71 Instructions fo r q u e stio n n a ire 79 I X

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13 Problems in Measurement of Expenditures on Selected Items of Supplementary Employee Remuneration Sum m ary No single study, h ow ever exten sive, can provide definitive answ ers to all su rvey p rob lem s in a com p lex field of sta tistica l in vestigation* A ll su rvey w ork in the s o cia l s c ie n c e s, indeed, req u ires a constant p r o c e s s of adaptation to change in the field o f inquiry in su rvey techniques. The p resen t su rvey was lim ited in term s o f industrial co v e ra g e, o b je c tiv e s, m ethod. It was hoped, h ow ever, that the study would advance appreciably the knowledge of the p r o b lem s conditions to be taken into account in su rveys o f expen d i tures on certa in selected item s o f supplem entary em ployee rem u n era tion, This m od est expectation, in the judgm ent o f the B ureau, was re a liz e d. This section attem pts b r ie fly to su m m arize the detailed analysis o f the nature findings of this explo ra to ry study. T hose re a d ers with m ore than a casual in terest in the m eth od ological p r o b lem s to which the rep ort is d irected are urged to exam ine the body o f the re p o rt. The su rvey was designed b a s ica lly to throw light on a v a riety o f m eth od ological p ro b le m s, such as the nature o f re co r d s on se le cte d expenditure item s m aintained by e m p lo y e rs, com pany p ra ctice with re sp e ct to the su m m arization of these re co r d s the calcu lation o f expenditures in the absence o f s p e cific expenditure r e c o r d s, the w illin gness o f em p loyers to supply actual o r calcu lated data in r e sponse to a m a il inquiry, related qu estion s. Light was also sought on the question of fa cto rs m aking fo r variation s in expenditures among em p loyers fo r p articu la r ite m s, on the m ost useful ways of p r e senting expen ditu re data. It was not intended that the su rvey should develop definitive estim ates of actual expenditures fo r the u n iverse o f establishm ents (m anufacturing as a whole) to which the su rvey rela ted. The body of the rep ort contains m any cautionary notes to this e ffe c t. On the other h, it was essen tial that a system atic su rvey be taken; that is, it was n e ce s s a ry fo r the p ilot su rvey to approxim ate, within lim its, the p ro ce d u re s conditions o f a su rvey design ed to p roduce those e stim a te s. The p rin cip a l departure fro m stard m ail su rvey p r o c e dures in the p ilot study was the absence o f p ro v isio n fo r fie ld follow up o f n on responden ts, fo r a lim ited field ch eck on those who did rep o rt. Such follow up c le a r ly would have to be taken in a s u r v ey designed to develop expenditure estim ates applicable to a defined u n iverse o f fir m s. The nature of the non response to the p ilot survey w as, h ow ever, su sceptible of som e a n a ly sis, as the body of the re p o rt 1

14 2 shows. Had la rger resou rces been available for the pilot study, additional in quiries could have been d irected to the resp on d en ts, p a r t ic ularly with regard to variations in accounting p roced u res. As suggested e a rlie r, how ever, no single survey can probe into all aspects o f a field of statistical m easurem ent, the pilot survey in the form in which it developed was unusually deming upon respondents the Bureau. Scope M ethod o f Survey Any su rvey requ ires that b a sic d ecision s be taken with r e spect to its scop e. The pilot study was lim ited to m anufacturing, the sam ple was so drawn as to rep resen t all size groups (a m in im um size lim it of 20 em ployees was set fo r the survey), all g e o graphic regions, all manufacturing industries. In p rin ciple, the size o f the sam ple was such that com p lete resp on se would have p e r m itted the presentation o f data reasonably represen tative o f m anufacturing as a whole; even with com plete response, the size of the sample would not have perm itted the showing of separate data for particular in dustries. Complete response, of cou rse, was not expected. It was hoped that the resp on se would be su fficien tly great to p erm it exam in a tion of the problem s to which the survey was directed. The sample was selected on an establishm ent b a sis, but m ultiplant com panies w ere given an option o f reportin g fo r all plants c o m bin ed. In term s of em ployee coverage the study was designed to cover production related w orkers. w ere: The item s of supplem entary rem uneration se le cte d fo r study Paid vacations Paid holidays P aid sick leave Prem ium pay for overtim e daily, weekly, o r fo r work on sp ecific days as such Prem ium pay for work on holidays Shift prem ium pay P en sion plans Insuran ce, health, w elfare plans L ega lly requ ired paym ents----- Old Age S u rvivors Insurance, unem ploym ent c o m pensation, w orkm en 's com pensation, State tem porary disability insurance. These item s of supplementary rem uneration are among the m ost com m on; they account for a large part of total expenditures, how ever such expenditures are defined; except for those required by law, they are su bject to co lle c tiv e bargain ing. T hey rep resen t im portant types of company expenditures going to w orkers, or paid on their beh alf, not accounted fo r in straigh t-tim e wage r a te s.

15 3 A number of payroll m an-hour aggregates were requested to p erm it the com putation o f variou s expenditure r a tio s. The su rvey was not lim ited to the reportin g o f actual expen diture data. E m ployers w ere requested, where p o ssib le, to estim ate o r calculate expenditures in the absence of actual expenditure reco rd s, to indicate how the estim ates w ere m ade. The survey proper was conducted essentially by m a il. However, the questionnaire was pretested by personal visits to a sm all number of firm s. In the actual survey, an initial v isit to a group of key com panies was made by Bureau representatives to review the fo r m in structions with com pany rep resen ta tives who w ere r e sponsible for supplying the data. Questionnaires w ere m ailed in A pril 1954, data w ere requested for the calendar year One follow up letter was sent to all nonrespondents. Editing o f the returns resu lted in a com p a ra tively la rge num ber of requests by the Bureau for clarifica tion of data o r fo r om itted data. The response to these requests was satisfa ctory in term s o f the num ber o f re p lie s the additional o r cla rify in g data subm itted. Survey R esults R esponse to the Q uestionnaire. As m easured in term s o f usable questionnaires, a response rate of 50 percent (550 returns out of 1,105 solicited) was obtained. E specially in view of the length com plexity of the questionnaire, this response rate to a m ail inquiry is encouraging evidence o f interest among respondents in the content of the survey o f their ability to provide all or part o f the basic data required. The response rate was relatively low fo r industry groups in which sm all establishm ents predom inate, fo r low -w age industry groups, for establishm ents located in the South. S ize, wage level, location obviously are not com pletely independent va ria b les. F or exam ple, the low est rate of response was fo r the apparel industry group. Apparel is characterized by sm all establishm ents, com p aratively low wages in som e branches of the industry, the location o f im portant segm ents o f the industry in the Southern re g io n. A r e l atively low rate of response was obtained also from com panies with plants in m o re than one reg ion. The resp on se to the su rvey was analyzed in term s o f a num ber of im portant ch aracteristics o f manufacturing as a w hole. Thus, about 75 percent o f the establishm ents responding reported collective bargaining con tra cts cov erin g a m a jo rity o f their produ ction r e lated w ork ers. On the basis of other Bureau inform ation on contract covera ge, this proportion appears to be slightly above the level fo r all m anufacturing. S im ilarly, the response from high-wage as c o m pa red with low -w a ge establish m en ts, fr o m establishm ents which

16 4 tend to have many rather than few supplementary p ra ctice s, appears to have been somewhat greater, on the average, than the actual p r o portions in m anufacturing. The d ifferen ces, how ever, were com parativ ely sm a ll, the upward bias was not judged to be sign ifica n t. The net im pression is that the problem of a representative sam ple o f establishm ents in manufacturing would not be esp ecially form idable. The pilot survey indicated clearly the m ajor directions in which supplementation of the returns to a m ail inquiry would have to be m ade, this inform ation is of great use in survey planning. A survey by m ail designed to develop expenditure data representative o f manufacturing would, of co u rse, require the use of personal visits to nonrespondents spot checks of the returns of respondents. If data were to be published separately by industry group, the sample would have to be considerably la rger than that em ployed in this pilot study. The costs of such a study would be substantially greater than those in cu rred in the p resen t e ffo rt. R ecord s Reporting P r a c tic e s. A m ajor purpose of the study was to learn the prevalence among manufacturing establishm ents of the maintenance of expenditure /or time record s for the selected item s of em ployee rem uneration, of the ability to supply actual or estim ated data from these re co rd s. R ecordkeeping. By la rge, the record k eep ing p ractices were encouraging for those with an in terest in developing system atic data on supplem entary rem uneration. There w as, of cou rse, con siderable variation in p ra ctice. R ecords were m ost com m only maintained, as was anticipated, for legally requ ired paym ents. T here was a tendency in r e c ordkeeping to com bine prem ium pay for overtim e with prem ium pay for holiday w ork. With resp ect to pensions, payments made for past serv ice lia bility frequently were com bined with payments fo r current serv ice. F or insurance w elfare item s, record s w ere often maintained for a com bination of item s (the "w elfare package", which might consist o f hospitalization, surgical, other benefits) rather than for each item separately. In the case of shift prem ium pay, the proportion of establishm ents not keeping record s was exceptionally high, suggesting that many com panies view shift prem ium s as part of basic wages for payroll accounting pu rp oses. About half o f the respondents indicated that separate e x penditure record s for each of the selected item s in effect in the establishm ent w ere kept. Excluding prem iu m pay, the p rop ortion was in cre a se d to approxim ately 70 percent.

17 5 Sum marization of R e cord s. The vast m ajority o f establishm ents keeping expenditure record s sum m arized the individual record s fo r their own or other u ses. This was true also with resp ect to time r e c ords for the prem ium pay other payroll item s, such as overtim e or paid holidays. Where time r e c ords are available, a basis is provided fo r estimating expenditures in the absence of actual expenditure re co r d s. P rov ision of Data from R e c o r d s. While in fo r m ation on recordkeeping p ra ctices as such is im portant, the cru cial question, in term s of expenditure studies, is the willingness ability o f respondents to provide the requested data from their re co rd s. F o r exam ple, record s may exist on shift w ork, but the sum m arization of these record s (on either a time o r expenditure basis) fo r a period o f a year m ay be excessiv ely time consum ing. A clo sely related con sideration is the quality of the inform ation provided. A ctually, about 75 percent o r m ore of the e s tablishments keeping expenditure record s provided actual expenditures fo r paid vacations, paid holidays, the legally required item s. M ost companies could not provide actual figures on the insurance com ponents. About 30 percent of the respondents provided actual expenditure figures for all selected item s listed in effect. Another 46 percent p r o vided som e actual som e estim ated figures o r, in a few ca ses, made estim ates for every item. In the remaining 24 percent of the rep orts, data w ere absent for one or m ore of the item s in effect. The corresponding proportions for the category nall s e lected item s except prem ium pay w ere 45 percent, 42 percen t, 13 percent. Where estim ates were provided, the methods m ost com m on ly used w ere (l) calculating expen ditures on the basis of related data; e. g., applying an average wage rate to available data on m an-hours; or (2) prorating expenditures as between production related w ork ers all em ployees o r the p a r ticular grouping of em ployees covered by the r e c ords of the establishm ent. In general, the methods of estim ation or calculation appeared reasonable. The differences between actual estim ated or calculated expenditure ratios, as presented in the aggregate for all reporting establishm ents, were slight.

18 6 Quality of the R esp on se. The accu racy r e liability of the individual responses w ere difficult fa ctors to a ssess in the absence of on -th e-sp ot ch eck s. Matching company p ractices against expenditures provided a rough m easure of reliability. A number of overstatem ents, statem ents, om issio n s w ere brought to the attention o f resp on d ents w ere corrected by this method. F or exam ple, data reported on m an-hours o f vacation taken paid fo r, in conjunction with average hourly earnings derived from the aggregate payroll m an-hour data also reported, provided a check on reported vacation expenditures; sim ilar cro s s -ch e ck s could be made on som e of the other item s. It m ay b e, how ever, that many e rro rs in reporting were not d etected, p a rticu la rly where re p orted expenditures fell within the range of possible expenditures fo r the p ra ctices in effect. What effect such reporting e r r o r s as were made might have on aggregate data can only be surm ised. It is obvious that it would take a substantial number of e r ro r s in the same direction to affect significantly the type of expenditure ratios computed in this study. An analysis of the expenditure ratios for the item s which could be matched with p ra ctices failed to d is clo se any concentration of e r r o r s, upwards o r downwards. H ow ever, no evaluation of the p recision of the aggregate responses for these item s was p ossib le, m ainly because of the variety of factors affecting expenditure levels in individual establishm ents. F or som e item s, particularly pensions health insurance plans, the data collected in this survey provided no basis for judgment regarding the r e lia bility of the response. R ecord s Survey Planning. O bviously, the m ass of inform ation accumulated on the recordkeeping p ra ctices, on the willingness ability of em ployers to provide actual o r estim ated expenditure data are basic fo r survey planning. In another study, fo r instance, it might be n ecessary to request a total expenditure figure fo r insurance, rather than a b rea k - down by com ponent, such as hospitalization, su rgical, the lik e. It should be recogn ized, at the same tim e, that recordkeeping p ra ctices are not static. This pilot study revealed that em ployers do, in fa ct, widely maintain the types of record s required by the su r vey, a reflection of the increasing im portance of

19 7 supplementary expenditures of em ployers* need fo r knowledge of their magnitude. It is reasonable to expect that such interest w ill result in further refinem ents of recordkeeping. F actors Affecting Expenditure L e v e ls. The final portion deals with som e o f the fa cto rs accounting fo r variations among e sta b lish m ents groups o f establishm ents in expenditure le v e ls fo r the s e lected item s. This type of analysis could be presented in meaningful fo r m only by the use o f ratios com m on ly em ployed to com pare e x penditures among establish m en ts. As em phasized repeatedly, la ter, expenditure ratios in this study are not applicable to manufacturing as a whole. The response was not com pletely representative of manufacturing; m oreover, the averages shown for individual item s relate only to establishm ents reporting expenditures fo r such ite m s. H ow ever, the sizable body of expenditure inform ation which was gathered can be validly used to throw light on a variety o f q u e s tions important for survey planning. F or exam ple, the dispersion that can be expected in a value or series of values (like expenditures fo r paid vacations) has practiced im plication s fo r sam ple design. S pecifically, 524 establishm ents reported expenditures for paid vacations. How do these expenditures (in term s, for exam ple, of per payroll hour) vary by such factors as size of establishment, wage level, or collective bargaining status? The analysis of the data p rov id es ex trem ely su ggestive, even though tentative, answ ers to questions of this type. It seem s clear that the results of the analysis of expenditure variations from this particular study show at least the minimum range within which variation in expenditure ratios will occu r in m anufacturing. A distribution of expenditure ratios for a particular item among a thous establishm ents might reveal a greater range than that shown by the present study; obviously the range would not be s m a lle r. Significant inform ation on factors making fo r variations in expenditures among firm s on the range of expenditures that can be anticipated in this type of survey is developed in the final section of the report. Some b rief general findings on expenditure variation follow : 1. The su rvey found con sid erab le variation among e sta b lish ments in expenditure levels for the same item, whether expressed in per hour, percent of p a yroll, or dollars per year per em ployee. 2. Som e o f the fa cto rs accounting fo r variations among e s tablishments in expenditure ratios for a particular item are type of p ra ctice, eligibility requirem ents, wage level, m an-hours of em ployment, gross p a y rolls.

20 8 3. Many of the fa ctors influencing g ross expenditures levels the computed expenditure ratios among establishm ents also account for changes in the same establishm ent from one year to another. Changes in the volume o f overtim e w ork, fo r exam ple, not only make fo r changes in expenditures for prem ium pay but also affect the p ercen t-of-p a y roll ratios for other item s. The m ost unstable expenditures are likely to be for prem ium pay for overtim e shift w ork, since expenditures depend on the volum e o f such w ork, expenditures for pensions are also likely to exhibit y e a r-to -y e a r variations which are not cau sed by changes in the type o f plan in e ffe c t. 4. The data lent them selves to analysis of variations in expenditures by size of establishm ent, industry group (cla ssified by wage le v e l), collective bargaining status, region, type of p ra ctice, earnings le v e l. H ow ever, the tentative relationships derived from this analysis are much too com plex fo r any generalized sum m ary.

21 9 P u rp o se, M ethod, Scope o f Survey The techniques o f wage rate surveys have been developed refin ed over a long p eriod of tim e. In con tra st, the technique o f surveying em p loyer expenditures on supplem entary or nonwage rem uneration, such as paid vacation s pen sion s, is still in a rudim entary stage. This study was taken to explore the p ro b lem s involved in surveying such expen ditu res. Since efficien t su rvey techniques re st on a foundation of knowledge about the subject studied, this exploration n e c e s s a r ily deals with the m agnitude range o f expenditures fo r selected item s am ong a substantial num ber o f establish m en ts, the variation s in e x penditure le v e ls am ong m anufacturing industry grou p s, la rg e sm all fir m s, establishm ents with sim ila r p r a c tic e s, etc. It was not expected, h ow ever, that this survey would y ield expenditure data su fficien tly relia b le or p re cis e to rep resen t all m anufacturing esta b lish m en ts fro m w hich the sam ple was drawn or to be used fo r p u r p oses other than the lim ited ones fo r w hich the study was planned. On the p u rely m eth od ological p ro b le m s, the B ureau o f L abor Statistics wanted to find out, within the lim itation s o f a single survey n e ce s s a rily restra in ed in its dem s upon em p loyer coop era tion the B u r e a u s r e s o u r c e s : 1. W hether expenditure re c o r d s are m aintained; 2. W hether tim e r e c o r d s for certain item s are m ain tained; 3. How frequently these expenditure tim e re c o r d s are aggregated or su m m arized by the com pany; 4. The w illin gn ess o f em p loyers to resp on d to an in quiry con cern in g r e c o r d s expen ditures; 5. How em p loyer s calcu late or estim ate expenditures in the absen ce of actual expenditure r e c o r d s ; 6. W hether em p loyers could would supply actual or estim ated annual expenditure totals fo r s e le cte d item s; 7. W hether calcu lated o r estim ated fig u res are r e lia b le in the aggregate; 8 0 How these p ra ctice s d iffer am ong in d u stries, la rge sm all com p an ies, union nonunion com panie s, etc ;

22 1 0 9 Which ways of presenting expenditure data are feasible, 10, If expenditure surveys are fea sib le, can they be conducted, in whole o r in part, by m eans of m ail su rveys. M ethod B asic to the B u rea u ^ approach w ere severa l con sid eration s o f sp e cia l im portance to the B ureau, but perhaps not o f equal im portance to other organ ization s having an in terest in expenditure data. The B ureau is p rim a rily con cern ed with the developm ent of statistics on expen ditures in a fo rm con sisten t with its data on occu pational wage ra tes average h ou rly w eekly earn in gs. This m eant, am ong other things, that ( l ) the study would deal with produ ction r e lated w o rk e rs only rather than with all em p loyees; (2) the ob ject o f ultim ate expenditure su rveys would be to estim ate expenditures in term s o f per hour, p ercen t o f p a y roll, sim ilar averaging ra tios rather than in aggregate dollar volu m e; (3) it would be su fficient to con cen trate on expenditures fo r sp e cific types or com binations o f supplem entary rem uneration rather than on ta llt supplem entary expen ditu res, a con cept w hich, at the p resen t tim e, d efies d efin i tion; (4) the survey approach would be p rin cip a lly on an establishm ent rather than on a com pany b a sis; (5) the study w ould be lim ited to m anufacturing in d u stries, thus avoiding the additional com p lexities expected fro m cov era g e o f nonm anufacturing in d u stries. It w as, how ev e r, also im portant to reco g n ize that the r e s o u r c e s available for the study w ere rela tiv ely sm all; that the survey would have to be co n ducted by m ail rather than by field v isit; that the amount o f in form a tion sought would have to be lim ited in short, that the survey m ight not yield con clu sive data on the p rob lem s studied nor w holly relia b le data on m any a sp ects o f these p ro b le m s. The o b je ctiv e s m ech anics o f the study m any o f its lim itation s are im p licit in the questionnaire d evised by the Bureau, which is rep rod u ced, with accom panying in stru ction s, in the a p p en d ix,1 The definitions o f the con cepts term s used are contained in the in stru ction s; these should be con su lted fre e ly in reading this rep ort in te rp re tin g the data. It m ay be helpful at this point to explain som e o f the re a son ing d ecision s that went into the design scope o f the qu estion n a ire. A m a jor p re m ise, o f co u rse, was that the lon ger m ore d ifficu lt a m ail questionnaire w as, the p o o re r would be the r e s p o n s e,2 1 The Bureau r e ce iv e d a ssista n ce fro m som e m anagem ent union rep resen ta tiv es in drafting the questionnaire the in stru ction s. By Bureau m ail questionnaire stards, the questionnaire u sed w as both long d iffic u lt.

23 P rod u ction R elated W o r k e r s. The definition is identica l with that used by the B ureau for its regu lar m onthly annual p rod u ction -w ork er em ploym ent se rie s fo r m anufacturing industries by other G overnm ent a g e n cie s. Although data coverin g all e m p loyees (including o ffic e, su p erv isory, execu tive p erson n el) m ay be ea sie r to obtain, p a rticu la rly for such item s as pension in surance expen ditu res, other p rob lem s would be ra ised. Expenditure ratios applying to all em p loyees would have doubtful sign ificance in the context o f the B ureau, s w ork in wage rates earnings the uses to w hich these data are put. Some respondents o ffe re d other suggestions on covera g e, such as hourly rated w o rk e rs, w ork ers co v e re d by c o lle c tiv e bargaining agreem en ts, or all em p loyees co v e re d by the F air L abor Stards A ct. 2. G ross P a y ro ll (II-A ). A s defined, g r o s s p a y roll includes the ex p en d itu res'for all item s of supplem entary rem uneration for which data are requested, with the excep tion of pension, insu rance, legally req u ired paym ents0 Since it is excep tion ally d ifficu lt to define such con cepts as,!straight-tim e payroll*1 or "p a y ro ll for hours w ork ed 1* in such a way as to exclude all p ossib le types o f supplem entary r e m uneration, the B ureau con sid ered it m ore fea sib le to ask for g ro s s p a y ro lls. If req u ired, expenditures fo r the p ayroll item s co v e re d in the questionnaire could be deducted fro m g ro s s p ayrolls to obtain a uniform nadjusted payroll** fig u re. 3. Total M an-h ours (II-B ). A s with g r o s s p a y roll, total m a n -h ou rs include the hours fo r w hich expenditures such as vacation pay, holiday pay, sick leave pay w ere in cu rred. Although the term **hours actually worked** has been used in som e private expen diture su rveys, the sam e d ifficu lties would a rise in defining this term as in defining stra igh t-tim e p a y roll. M ore u n iform resu lts could be obtained by requestin g inform ation on total vacation m a n -h ou rs paid for taken ( i l l - A - 2 )? total holiday m an-h ou rs paid for but not w orked (H I-B -2 ), total s ick -le a v e hours paid for (lii-c -2 ); the sum o f these hours could be deducted fro m total m an -h ou rs to a rriv e at an adjusted m an -h ou rs figure w hich, although not to be defined as "h ou rs actually worked,** p rovid es a b a sis for calculating a ce n tsp er-h ou r ratio with s p e cific m eaning in expenditure a n a ly sis. 4. Plant P r a c tic e s ( ill). This section of the questionnaire was included for two re a son s: ( l ) To provide a b a sis fo r detecting o m issio n s or g r o s s e r r o r s in the expenditure data supplied by the respondents, (2) to p rovide a b a sis fo r explaining som e of the variation s among com p an ies in expenditures fo r a sp e cific item, o r, as in the ca se o f insurance pension plans, for variation in record k eep in g p r a c tic e s. Inform ation was requested on actual p r a c tice s in 1953 rather than on p o licy. Knowing that com pany p olicy on paid vacation s, fo r exam ple, was to provide 1 week for 1 year o f s e rv ic e, 2 w eeks fo r 5 y e a rs, 3 w eeks for 15 y e a rs, throw s con sid era b ly le s s light on actual expenditures than knowing how many w o rk e rs re ce iv e d 1 w eek, 2 w eek s, 3 w eek s.

24 1 2 The amount o f in form ation requ ested in this section, how e v er, is substantially le s s than is needed to detect all e r r o r s in reportin g, e sp e cia lly, to explain fully the variation s in expen diture le v e ls am ong establishm ents,. At best, only certa in v a ria b les can be accounted fo r, p a rticu la rly in insurance pension expen ditu re s. The amount o f inform ation req u ired to explain with rea son able adequacy the variation s among com pan ies in these expenditures is p ro b a b ly beyond the bounds o f any sin gle survey,, 5. S elected Item s of Supplem entary R em uneration (lv )o Th item s of supplem entary rem uneration selected for study w ere: P aid vacation s P aid holidays P aid sick leave P rem iu m pay for o v ertim e daily, w eekly, or for w ork on sp e cific days as such3 P rem iu m pay for w ork on holidays Shift prem ium pay P en sion plans Insurance, health, w elfa re plans L egally req u ired paym ents Old A ge S u rvivors Insurance, unem ploym ent c o m pensation, w ork m en ^ com pensation, State tem p ora ry d isability in su ra n ce. 3 The paym ent o f tim e on e -h a lf for w ork in e x ce s s of 40 hours in the w orkw eek is req u ired by the F air L abor Stards A ct for w ork ers engaged in interstate com m e rce or in the produ ction o f goods for interstate c o m m e r c e. The P u b lic C ontracts A ct, w hich applies to w ork on G overnm ent con tra cts in e x ce s s o f $ 10,000, a lso ca lls for tim e on e -h a lf for hours in e x ce s s o f 8 per day. Thus, w eekly ov ertim e pay, w here applica b le, daily ov ertim e pay, m ay w arrant con sid eration as nlegally req u ired p a y m e n ts. 1 H ow ever, c o l le ctiv e bargaining agreem en ts com pany p erson n el p ra ctice have m od ified the definition o f 40 hours o f w ork as e x p ressed in FLSA by substantially lib e ra lizin g the definition of!,hours w ork ed for p u rp oses o f qualifying for overtim e paym ents. F or exam ple, holidays e x cused leave are w idely counted as tim e w orked fo r ov ertim e pay p u r p o s e s. M o re o v e r, the p ra ctice o f paying prem ium rates for all hours w orked on Saturdays Sundays, regard le ss o f the num ber w orked during the w eek, is becom in g m ore p revalen t. A ssum ing that it is d esira b le to account for the lflegally re q u ir e d 11 p ortion of ov ertim e pay, it would be n e ce s s a ry, but virtu ally im p o ssib le in a survey o f this nature, to separate fro m the variety of ov ertim e pay p ra ctice s in A m erica n industry that portion w hich is based strictly on G o v e r n ment regu lation s.

25 1 3 O bviou sly, this is a re s tric te d lis t. Under the assum ption that the selection of item s w ould have to be lim ited so as not to o v e r burden the em p loyer resp on d en ts, these item s w ere se le cte d becau se they are am ong the m ost com m on supplem entary rem u n eration item s; they account for a la rg e part of total supplem entary expen ditu res, how ever such a total is defined;, with the excep tion of leg a lly req u ired paym ents, they are subject to co lle c tiv e bargain in g. The B u reau^ wage industrial relation s studies have fo r som e tim e co v e re d these item s in term s of com pany union p o lic ie s ; h en ce, it seem ed lo g ica l to venture into the fie ld of expenditure study in term s o f these p r a c tic e s. Som e private surveys have u tilized a lon ger lis t o r have re lie d upon the em p loyer to account for all supplem entary expen ditu re s, as he w ould define them ; som e, including the su rveys of the C ham ber of C om m erce of the United States, either have om itted p rem iu m pay of all types fro m the scop e of the p ra ctice s studied, or have p resen ted p rem iu m pay expenditures apart from other expen ditu re s. Since the term nfrin ge b e n e fits" has been used in other s u r veys m ight be applied to this study because of the conven ience o f that e x p r e ssio n, it is im portant to em ph asize that in the s e le c tion o f these item s the B ureau did not intend to im ply that they should be co n sid e red as "frin g e b e n e fits" or even as "b e n e fits" to w o rk e rs. 4 F or this study, the item s selected rep resen t types of com pany expen ditures going to w o r k e rs, or paid on their b eh a lf, which w ould not be accou n ted fo r in stra igh t-tim e wage ra tes. The sele cte d item s p resen ted no unusual p rob lem s of d e finition, excep t fo r the overlap betw een holiday pay p rem iu m pay fo r holiday w ork. Since it was n e ce s s a ry to separate expenditures in cu rred through the recogn ition of paid holidays those resu lting from w ork on paid h olid a ys, it was a lso n e ce s s a ry to define holiday prem iu m pay expenditures as the amount paid in e x ce s s of double tim e (see in stru ction s). F o r in su rance, health, w elfa re p la n s, rather than g ro s s expenditures w ere requ ested (see in stru ction s). F o r this ca te g o ry fo r p en sion s, costs in cu rre d by the e sta b lish m ent in the adm in istration of these plans w ere exclu d ed, p artly b e cause o f the d ifficu lty o f obtaining in form ation (this adm in istrative w ork is frequently tied in with other p erson n el functions) p a rtly b eca u se other p ra c tic e s studied a lso entail adm in istrative costs w hich are not accounted fo r in the expenditure figu res requested. A num ber of m in or cla ssifica tio n p rob le m s a risin g from the em ph asis on expenditures fo r selected item s rath er than fo r all supp lem en ts com bin ed w ere ign ored in a ch oice betw een attaining a higher d egree of p r e c is io n in definition further com p lica tion of the q u estion n aire. This was the ca se in such instances o f overlapping 4 It should be noted that the term s "fr in g e " "b e n e fits" do not appear in the questionnaire in stru ction s.

26 1 4 expenditure cla ssifica tio n s as shift p rem iu m s in vacation holidaypay overtim e on h olid a y s, in p rob lem s p ecu lia r to esta b lish m en ts on continuous op eration s. 6. M ea su res to be C om puted. F o r each o f the item s o supplem entary rem uneration c o v e re d, the follow ing com putations w ere planned fo r each establishm ent: P ercen t of p a y roll C en ts-p er-p a y roll hour Item expenditure Gr o s s p a y ro ll Item expenditure T otal m an-hours ^ ^qq C en ts-p er-adju sted -p ayroll hour D olla rs p e r y ea r p er em ployee Item expen d itu re T otal m an-hours (le ss vacation, h oliday, sick leave h ou rs) Item expenditure A verage num ber o f p rodu ction related w o rk e rs fo r the year F o r p u rp oses of a n a ly sis, certa in additional com putations, based on the p a y roll plant p ra ctice data req u ested, w ere planned. T hese included: A vera g e vacation p er e m p loyee, average vacation p e r em ployee receivin g paid vacation, shift p rem iu m hours as a p ercen t o f total p a y ro ll h ou rs, g r o s s average hou rly earn in gs. 7. E stim ating E xp en d itu res. In a departure fro m usual B ureau p r a c tic e, the resp on d en ts, in the absen ce of actual r e c o r d s, w ere req u ested to estim ate or calcu late expenditures fo r produ ction rela ted w o rk e rs to indicate the b a sis upon w hich these e s tim ates w ere m ade. This w as done fo r two rea son s: (1) T o find out how com pan ies estim ated expenditures in the absen ce of expenditure r e c o r d s, (2) to be able to identify to evaluate the data which w ere estim ated. Undoubtedly, this d evice in cre a se d the resp on se to the su rvey; m any com p an ies, h ow ever, rem ain ed reluctant to attem pt such estim ation. The Sam ple D esign The d e cisio n to lim it the study to m anufacturing in d u stries, to c o v e r all m anufacturing in d u stries (rath er than on e), was m ade to obtain the m axim um in form ation con cern in g m eth od ologica l p rob lem s fo r the m inim um investm ent o f r e s o u r c e s. The in clu sion of nonmanufacturin g in d u stries w ould have sp read the su rvey too thinly w ould have m ade it n e ce s s a ry to con sid er a m ultitude o f p ro b le m s p ecu lia r to such in d u stries as reta il trade con stru ction. On the other

27 1 5 h, lim iting the su rvey to one m anufacturing industry, or to a segm ent o f an in d u stry, w hile p o s s ib ly produ cing m o re con clu siv e data, w ould leave too la rg e an u n explored a re a. The sam ple o f establishm ents to w hich the questionnaire was sent w as se le c te d to rep resen t all size groups above the m inim um size lim it o f 20 em p loyees set fo r the su rvey, a ll geographic re g io n s, all m anufacturing in d u stries. Starting with a lis t o f establishm ents fo r each state, the m ethod follow ed w as to s e le c t, on a system atic b a s is, the num ber of establishm ents req u ired so that each size group w as rep resen ted in p rop ortion to its relative im portance in term s o f em ploym ent, as follow s: Size of establishm ent Sam pling rate or m o re em p loyees - 2,500-9,999 em p loyees ,499 e m p lo y e e s e m p lo y e e s e m p lo y e e s e m p lo y e e s e m p lo y e e s Under 20 e m p lo y e e s A ll E very 2d establishm ent E very 8th establishm ent E very 15th establishm ent E very 36th establishm ent E very 90th establishm ent E very 360th establishm ent Not co v e re d The size o f the sam ple resulting from this design (a p p roxim a tely 1, 100 establish m en ts) w as such that the rate of re sp o n se, a key p rob lem to be studied, could be a scerta in ed fo r the variou s c o m ponent g rou p s. In p rin cip le, if all establishm ents w ere to return usable relia b le question n aires, estim ates of p ra ctice s expenditure le v e ls, reason ably rep resen tative of m anufacturing as a w hole, cou ld be d eriv ed. H ow ever, separate estim ates fo r each p a rticu la r industry w ould not be p ra ctica b le with a sam ple of this s iz e. Such a re sp o n se, o f c o u r s e, was not expected. 5 What was hoped fo r was a return o f about 500 usable question n aires, b roadly rep resen tative of the sa m p le, w hich would p rovid e an adequate b a sis fo r exam ining the p rob lem s to w hich the study was d irected. The con clu sion s a rriv e d at m ight be tentative but they would rep resen t an advance over p resen t know ledge. This rate of resp o n se, it was b e lie v e d, w ould be su f ficien t to r e fle ct rela tiv ely uncom m on situations. The nature ch a r a c te r is tic s o f the resp on se n on respon se are exam ined la te r. The m ethod of selection yield ed a num ber o f establishm ents o f the sam e m ultiplant com pany or a single establishm ent o f a m u ltiplant com pan y. P re su rv e y d iscu ssion s with a num ber o f m anagem ent 5 The techniques n orm a lly used in the B u rea u s industry wage su rveys conducted by m eans o f m ail q u estion n aires, in w hich nonresponding establishm ents are co v e re d by actual plant v is its, w ere not applied to this study b eca u se of the co sts.in v o lv e d ahd the lim ited objectiv es of the study.

28 1 6 representatives had pointed to the probability that many multiplant com panies would have exceptional difficulty in providing this type of inform ation, particularly on insurance pension expenditures, for a single plant or an arbitrary combination of plants. Allowing such com panies the option of providing inform ation for all plants com bined, it was believed, would facilitate response. In the instance of a s e lection o f a 8ingle plant, this was a ccom p lish ed by the follow ing in stru ction in the b ox heading of the questionnaire: In the case of multiplant com panies, a report covering the plant identified on the accompanying letter would be p referred. H ow ever, multiplant com panies m ay report for all plants if record s are m aintained on that b a s is. W hichever alternative is s e lected, it is essential that all of the inform ation supplied relate to the sam e unit. When m ore than one plant of a company was selected, a flyer was attached to the questionnaire with the follow ing instruction: A separate report for each plant is p referred. Ifyour supplementary rem uneration program s p ra ctice s, as w ella s the types of record s kept, are the same in each plant, if you feel that a single report for one plant would be representative of your com pany, then such a rep ort fo r one plant m ay be furnished. If expenditure record s on supplementary em ployee rem um eration item s are kept on a companywide basis, if you p refer to make one report covering all plants of the com pany, such a report w ill be acceptable. The questionnaires w ere m ailed in A pril 1954, which allowed ample time for com panies to have com pleted their norm al sum m arization or review of expenditures fo r the calendar yea r In a ccord a n ce with usual Bureau p ra ctice in m ail wage su r v e y s, a selected group o f key com panies w ere visited by Bureau r e p resentatives for the purpose of putting the questionnaire in the hs of the appropriate officia l, explaining the background purpose of the study, working out arrangem ents fo r sin gle-plan t or m u ltiplant reportin g. One followup letter was sent to all nonrespondents. P r e lim inary editing of the returns necessitated a number of requests for clarification of data or for omitted data. Unfortunately, due to time staff lim itation s, this could not be done in all instances of o m is sions or of apparent d iscrep an cies, as the following analysis w ill show. The findings of the survey are discussed in this report three main headings: C haracteristics of the Response; Establishment R ecords Reporting P ra ctices; F actors Affecting Expenditure L evels.

29 17 C h a ra cte ristics of the R esp on se The fe a sib ility o f a m ail questionnaire su rvey o f this type should be evaluated with re s p e ct to: (l) Rate o f re sp o n se, o r the p rop ortion of the com pan ies so licite d fo r coop era tion w hich returned usable qu estion n aires; (2) balan ce, o r the stru ctu re o f the resp on se as com p ared with the stru ctu re o f the orig in a l sam p le, (3) the relia b ility of the data as to the m anner in which questions w ere in terp reted, the a bility o f the respondents to p rovid e the type o f in fo r m ation requested, the ca re e x e r c is e d in com puting o r com p ilin g the data. B ecau se no fixed stards exist against which these fa c tors can be m ea su red in a study of this type, evaluations m ust n e c e s s a r ily be tentative. Rate o f R espon se The su rvey yielded a resp on se rate o f 50 p e rce n t, o r 550 returns out of 1, 105 solici/ted. The rate o f resp on se h ere is m e a s ured by the usable questionnaires r e ce iv e d. A usable questionnaire was not n e c e s s a r ily a com p lete on e. The letter accom pan ying the question n aire, the box heading on the questionnaire its e lf, urged com pan ies to answ er as m any questions as p o ssib le to indicate the reason s fo r their inability to answ er other q u estion s. M any c o m panies thus returned p a rtia lly com p leted q u estion n aires. T h ese r e turns w ere c la s s ifie d as usable if the b a sic data on p a y ro lls, m anh ou rs, em ploym ent w ere supplied if S ection IV, dealing with re co r d s expenditures fo r sele cte d ite m s, was an sw ered at lea st in p art. A num ber o f questionnaires w ere elim inated because of m ultiple d iscre p a n cie s o r o m ission s in the data requested, which in dicated in ability on the part of the respondent to supply relia b le in form ation. The rate o f return by industry group (table l) rev ea led r e la tiv ely low resp on se le v e ls fo r som e grou p s, notably those in which sm all establishm ents p redom in ate, e.g., apparel m an u factu rers (21 p ercen t) lum ber w ood p rodu cts com p an ies (29 p e rce n t). V a r iations am ong s p e cific in dustries within industry groups w ere of co u rse m uch w ider than these data show. H ow ever, the sign ifica n ce o f the d ifferen ces in resp on se rates am ong in d u stries, in sofar as an all-m anufactu rin g su rvey is con cern ed, is cen tered in the totals fo r 6 To fa cilita te the an alysis o f resp on se rates the substantive data rep orted, the m anufacturing in d u stries co v e re d w ere d iv id ed into three grou p s, in a ccord a n ce with industry g ro ss average h ou rly earnings data com p iled by the B ureau fo r the year The groupings w ere establish ed, a rb itra rily, as fo llo w s: G roup I le s s than $ an hour; Group II $ to $ ; G roup III $ o v e r. F o r con ven ien ce in d iscu ssio n, the term s "low w a g e,1* " m e dium w a g e," "high w age" groups w ill be u sed.

30 1 8 the three wage groupings into w hich the in d u stries w ere c la s s ifie d.6 The average rate of return fo r the low -w a ge group am ounted to 42 p ercen t as against p e rce n t, r e s p e ctiv e ly, fo r the m ed iu m - high-w age grou p s. The question o f whether this d ifferen tia l r e turn has an a p p reciable e ffe c t on a vera ge expenditure le v e ls.w ill be exam ined la te r. On a region al b a s is, return s lo w e r than the average w ere re ce iv e d fr o m com pan ies in the South, co m p risin g the South A tlan tic, E ast South C entral, W est South C entral States (table 2 ). On the w h ole, variation s in resp on se am ong region s w ere not la r g e. H ow e v e r, a rela tiv e ly low rate o f resp on se fro m com pan ies with plants in m ore than one region was encou ntered. T his appeared to be due to the d ifficu lties of rep ortin g in m ultiplant situations (perhaps a related fa ctor) to the unw illingness o f se v e ra l la rge m ultiplant c o m panies to p articip ate in the su rvey. Although the low resp on se rate (25 percen t) fo r e sta b lish m ents em ploying few er than 100 produ ction w o r k e rs, as shown m table 3, m ay r e fle ct the inability of sm all com p an ies to re p o rt in fo r m ation o f the type requested, it co n fo rm s to the usual experien ce of agen cies conducting m ail questionnaire su rv e y s. S ign ificantly, h ow e v e r, the resp on se fro m plants em ploying betw een w o rk e rs (50 percen t) was clo s e to the average fo r the la rg e r esta b lish m en ts. M ultiplant R eporting M ultiplant com pan ies responding to the questionnaire had the option o f p rovidin g inform ation fo r a single plant (sep arate rep orts if m ore than one plant was selected in the sam ple) o r o f p rovidin g data fo r a com bination of plants o r fo r a ll plants. Although it was not p o ssib le to identify all o f the establishm ents in the sam ple w hich w ere part o f a m ultiplant organization, it would appear fro m the r e turns that m ultiplant com pan ies p r e fe r r e d com bination rep ortin g to providin g data fo r se le cte d individual plants. Of the 550 usable q u e s tion n a ires, 96 co v e re d m ore than 1 plant 3 7 covere d 2 plants, 38 co v e re d fro m 3 to 10 plants, 9 co v e re d m ore than 10 plants, 12 cov e re d an unreported quantity. Only 16 m ultiunit com pan ies fu r nished separate plant re p o rts 13 p rovid ed 2 r e p o rts, 3 p r o v id ed 3 r e p o r t s.7 7 A s a con sequ en ce of m ultiplant or com panyw ide rep ortin g in a substantial num ber of c a s e s, the covera g e of the su rvey can be d e scrib e d p r e c is e ly neither in term s of establishm ents nor of c o m p an ies. S trictly speaking, the 550 sch edu les rep resen t 550 r e p o r t ing units (whether com pany or establish m en t). H ow ever, sin ce the bulk of the returns rep resen t esta b lish m en ts, that term is used in this re p o rt fo r sake of con ven ien ce.

31 T A B L E R a te o f r e t u r n o f u s a b le q u e s t io n n a ir e s b y in d u s t r y g r o u p 19 N u m b e r s o l ic i t e d N u m b e r U s a b le r e t u r n s P e r c e n t A ll in du stries 1, G r o u p I _ F o o d an d k in d r e d p r o d u c t s T o b a c c o T e x t ile s A p p a r e l L u m b e r an d w o o d p r o d u c t s F u r n it u r e a n d f i x t u r e s _ L e a th e r a n d le a t h e r p r o d u c t s _ M is c e lla n e o u s m a n u f a c t u r in g G r o u p I I P a p e r an d a l li e d p r o d u c t s C h e m ic a ls an d a llie d p r o d u c t s S to n e, c la y, g la s s p r o d u c t s F a b r ic a t e d m e t a l p r o d u c t s E l e c t r i c a l e q u i p m e n t _ P r o f e s s io n a l a n d s c ie n t i f ic e q u i p m e n t G r o u p III O r d n a n c e an d a c c e s s o r i e s P r in t in g a n d p u b lis h in g P e t r o le u m an d c o a l p r o d u c t s R u b b e r p r o d u c t s _ P r i m a r y m e t a l i n d u s t r i e s M a c h in e r y ( e x c e p t e l e c t r i c a l ) T r a n s p o r t a t io n e q u ip m e n t F o r in d u s t r y g r o u p in g s, s e e fo o tn o te 6, p a g e 17. T A B L E 2. R a te o f r e t u r n o f u s a b le q u e s t io n n a ir e s b y r e g io n R e g io n N u m b e r s o l ic i t e d N u m b e r U s a b le :r e tu r n s P e r c e n t A ll r e g i o n s , I n t e r r e g io n a l _ N ew E n g la n d M id d le A t l a n t i c E a s t N o r th C e n tr a l W e s t N o r th C e n tr a l S ou th A t l a n t i c E a s t S ou th C e n t r a l W e s t S ou th C e n tr a l _ M o u n ta in P a c i f i c T A B L E R a te o f r e t u r n o f u s a b le q u e s t io n n a ir e s b y s i z e o f u n it c o v e r e d Size of unit cov e re d N u m b e r so licite d N u m b e r U s a b le r e tu r n s P e r c e n t A ll u n its to 99 e m p lo y e e s to 499 e m p lo y e e s to 999 e m p lo y e e s ,0 0 0 to 4, 999 e m p lo y e e s ,0 0 0 e m p lo y e e s o v e r ,

32 2 0 M ultiplant rep ortin g was e s p e cia lly predom inant in the ch e m ica ls p rim a ry m etals in d u stries. In num ber of w ork ers c o v e re d, the m ultiplant rep orts accounted fo r a d isp rop ortion ate share o f the total re sp o n se. T his fa cto r am ong others p reclu d ed the presen tation o f data in term s of num ber o f w o rk e rs. Other C h a ra cteristics of the R espon se R equesting data fo r the calendar year appeared to p resen t re la tiv e ly m in or d iffic u lt ie s.8 Only seven rep orts co v e re d a fis c a l p eriod d ifferin g fro m the calendar y ea r. A few rep orts co v e re d a group of w ork ers other than p r o duction related w o r k e rs. Of these, the m ost com m on deviation was the covera g e of all em p lo y e e s, follow ed by hou rly e m p lo y e e s 11 on ly. T hese question n aires, h ow ever, appeared to be in tern ally c o n sisten t with re sp e ct to the in form ation rep orted w ere th erefore included am ong the usable q u estion n aires. The a ccu r a c y relia b ility of the in form ation supplied are d ifficu lt fa cto rs to a s s e s s, as w ill be s tre ssed at variou s points in this re p o rt. This was undoubtedly a com p lex questionnaire to many com p an ies; p robably a la rg e part o f the sam ple had n ever b e fo re r e sponded to such an inquiry con cern in g expenditures fo r supplem entary rem uneration. M any resp on ses appeared to indicate that the c o o p erating com pany n orm a lly did not com p ile p r e c is e expenditure data fo r its own p u rp o ses. In a large sen se, th e re fo re, the su rvey was an experim en tal one, both to the B ureau to the resp on d en ts, m ust be evaluated in that lig h t.9 The questionnaires w ere exam ined fo r inadvertent o m issio n s fo r obvious d iscrep a n cies 0 O m ission o f expenditure data fo r legally req u ired paym ents w as, of c o u r s e, rea d ily detected; in a d v ertent o m issio n of other expenditure data beca m e obvious when the p ra ctice was rep orted to be in e ffe ct. D iscrep a n cies in p a y roll, m a n -h ou r, em ploym ent data, in p ra ctice s expenditure le v e ls, w ere le s s apparent could be reco g n ized only when the e r r o r appeared to be la rg e. In gen eral, overstatem en t was m ore 8 The questionnaire requested data fo r the calendar year H ow ever, if data had to be com puted on another b a s is, respondents w ere asked to w rite in the p e rio d covere d by the re p o rt. R eferen ce to certain p rob lem s in calendar year rep ortin g w ill be m ade later in this rep ort in con n ection with legally required paym ents. 9 In letters accom pan ying qu estion n aires, som e com pan ies e x p r e s s e d con cern about their own lack of exact data. One large m u l tiplant com pany requested a num ber of blank fo rm s in o rd e r to conduct its own su rvey am ong its m any plants. Other com pan ies e x p ressed an in terest in approp riate accounting p ro c e d u r e s.

33 2 1 easily d etected than statem ent. About 115 lette rs 10 seeking cla rifica tio n o f data or requesting om itted fig u res w ere sent to r e spondents; all but a few w ere answ ered sa tisfa cto rily. P robably b e cause o m issio n s or d iscre p a n cie s in legally required benefits w ere m ost readily detected, these w ere m ost frequently m entioned in the supplem entary le tte rs of inquiry, m ost of which co v e re d m ore than one item. Other leading su bjects of inquiry w ere (in ord er of f r e quency) insurance expenditures, shift p rem iu m s, pension expenditures, holiday pay expen ditures. A few cle a rly questionable en tries on p rem iu m overtim e expenditures w ere la ter excluded fro m the tabula ted data. 11 The F inal Sam ple The 550 usable question n aires, d iscu ssed above with r e spect to industry, region, size of establishm ent, m ultiplant c o v era g e, constituted the sam ple upon which analysis was based. It is im portant to exam ine the rep resen ta tiven ess of this sam ple in re la tion to a question pertinent to all expenditure su rveys: W ere establish m en ts with higher w ages, m ore supplem entary p r a ctice s, m ore lib e ra l p r a c tic e s, th erefore la rg e r expenditures on supplem entary rem uneration m ore lik ely than other establishm ents to respond to this que stion n aire? T here are two ways of approaching this issu e: ( l ) By v is iting the nonresponding com pan ies to obtain sufficient inform ation to determ in e whether the resp on se is biased in what m anner; or (2) to com p are the ch a ra cte ris tics of the final sam ple with what is known about m anufacturing as a w hole. Since the re s o u r c e s a v a ila ble fo r this p ilot study w ere lim ited, the secon d alternative was used. If the existen ce of colle ctiv e bargaining, in its e lf, is an in d ication o f the types le v e ls of expenditures, the sam ple appears to be adequate in this regard. A pproxim ately 75 p ercen t of the 550 establishm ents co v e re d rep orted co lle ctiv e bargaining agreem en ts in effect for a m a jority of produ ction related w o rk e rs. A c o r r e sponding p roportion coverin g m anufacturing establishm ents in 17 m a jor la b or m arket a rea s recen tly surveyed by the B ureau was 74 p ercen t One of the m a jor reason s fo r sending these le tte rs was to find out if the com pan ies could supply the m issin g data or could e x plain the d is cre p a n cie s. This p ra ctice n e ce s s a rily had to be r e s t r ic ted to obvious e r r o r s by no m eans assu m ed relia b ility of data in other q u estion n aires. 11 D espite in stru ction s to the con tra ry, a few reporting c o m panies apparently included all paym ents for overtim e h ou rs instead of only the p rem iu m part of such paym ents. 12 See Extent of C o lle ctiv e A greem en ts in 17 L abor M arkets, , Monthly L abor R eview, January 1955.

34 2 2 The m ost recen t Bureau estim ate o f the p rop ortion of m anufacturing plant em ploym ent covere d by co lle c tiv e bargaining a g reem en ts, based on 1946 data, was approxim ately 70 p e r c e n t.1* Although these 3 ratios are not d ire ctly com parable fo r a num ber of rea son s, it would appear that the p rop ortion of organized establishm ents rep resen ted in this sam ple does not deviate appreciably fro m the l,tru en p r o p ortion ; at the m ost it would appear that unionized firm s are slightly o v e rre p re sen te d. As to the p revalen ce of individual b en efits, no significant bias is revea led in the final sam ple. A ll establish m en ts, of co u r s e, w ere obligated to make the le g a lly required paym ents. A ll esta b lish m en ts, p resu m ably, w ere co v e re d by the F a ir L abor Stards A ct p ro v isio n s on the paym ent o f p rem iu m overtim e ra te s. A substantial p rop ortion of the establishm ents rep orted overtim e hours w orked during the cou rse of the y e a r. An analysis of the p revalen ce of v o l untary o r negotiated p ra ctice s (paid vaca tion s, h olidays, sick lea v e, shift p re m iu m s, in su rance, pension plans), based on the 550 q u estion n aires, indicated that, on the w hole, establishm ents in the low -w a ge group establishm ents in the South tended to have few er such p ra ctice s in effe ct. The p revalen ce of these p ra ctice s was also g rea ter in the la rg e r e sta b lish m e n ts.14 Thus, to the extent that lo w - wage establish m en ts, sm all establish m en ts, establishm ents in the South are u n derrepresen ted in the sam ple (tables 1, Z, 3), there is a presum ption of an upward b ia s. H ow ever, the slight effect of a bias o f this type can be d em onstrated by con sid eration o f an extrem e ca se----the effect u n d errep resentation o f sm all establishm ents has on the o v e ra ll p revalen ce o f pension plans. Only 17 p ercen t of the establishm ents with few er than 100 w ork ers rep orted a pension plan in e ffe ct, as com p ared with 84 p ercen t of the establishm ents with 5,000 or m ore w ork ers; for all establishm ents com bin ed, the p ercentage am ounted to A p plying a weight of 2 to the sm all establishm ents (or assum ing a resp on se tw ice as large as actual) would reduce the p rop ortion of establishm ents with pension plans to p erce n t, a drop o f a p p roxim ately 3 percen tage p o in ts.15 If the purpose of the su rvey w ere to com pute average ce n ts -p e r-h o u r expenditures coverin g a ll esta b lish m ents in the sam p le, the d ifferen ce betw een the actual returns returns adjusted inx this m anner to account fo r the u n d errep resen ta tion of sm all establishm ents would be in the neighborhood of on e- fifth of a cen t, assum ing equivalent levels of pension expenditures fo r sm all la rge establish m en ts. 13 See Extent of C ollective B argaining Union R ecognition, 1946, BLS B u ll Industry, region, size of establishm ent, unionization a re, o f c o u r s e, in terrelated fa c to r s. 15 On the oth er h, the adoption o f a cu to ff point fo r the s u r v ey of 100 w ork ers would in cre a se the p rop ortion to p ercen t.

35 23 F o r the resp on se as a w hole, establishm ents in the follow in g p rop ortion s rep orted supplem entary p ra ctice s in effect: P aid v a c a tions 99 p ercen t; paid holidays 90 p ercen t; sick leave 19 p ercen t; pension plans 56 p ercen t; som e type of insurance 93 p ercen t. These fig u res o ffe r no evidence of significant \kpward bias on the basis of such inform ation as is available con cern in g the p revalen ce o f these p ra ctice s in m anufacturing in d u s trie s.16 This is not to say that these p rop ortion s are truly re fle ctiv e of the u n iverse o f m anufacturing establishm ents em ploying 20 or m ore w o rk e rs; the question con sid ered h ere, as p reviou sly noted, is sim p ly whether the r e sponse is sign ifican tly overw eigh ted by establishm ents with extensive supplem entary b en efits. The n e c e s s a r ily qualified answ er is that if there is an upward bias in p r a c tic e s, it is not su fficien tly large to have an appreciable e ffe ct on the type of aggregate data p resen ted in this re p o rt. Since the le v e l o f wages is a fa ctor affecting expenditure lev els fo r som e item s, an overstatem en t of expenditures in p er hour m ight be in fe rre d if the resp on se w ere w eighted overw h elm ingly by the high-w age establishm ents in each industry. By c o m puting g ro ss average hourly earnings fo r each questionnaire (g ro ss p a y rolls divided by total m an-h ou rs) by averaging these figu res fo r each industry fo r all question n aires, a com bined average of $ was obtained. The B u re a u 's s e rie s on g ro ss average hourly earnings show ed an average of $ fo r all m anufacturing in 1953, o r a d ifferen ce o f approxim ately 3 p ercen t. The sam ple averages exceed ed the B u re a u 's b a sic figu res fo r 11 industry groups w ere low er fo r 5. T hese averages are com puted in d ifferen t w ays; a s sum ing, h ow ever, that the averages are com p a ra b le, an o v e r r e p r e sentation o f high-w age establishm ents would be indicated. H ere, again, the d ifferen ce is sm all; as it b e com es further diluted in the expenditure ratios com puted, it m ay w ell be co n sid e red n eglig ib le. Although the above analysis indicates that this su rvey r e sponse is not sign ificantly biased in the d irection o f high-w age firm s firm s with exception al benefit p ro g ra m s, such a p robability should not be discounted fo r other sam ples or fo r subgroupings am ong the 550 questionnaires cov e re d in this re p o rt. The d esira b ility o f e x cluding establishm ents with few er than 100 em ployees fro m expen diture su rveys is im m ediately presen ted as a p ra ctice m eritin g seriou s con sid eration. The N onrespon se As m entioned p re v io u sly, the n on resp on se was not su rveyed, hence its ch a ra cte ris tics cannot be d e fin ite ly determ in ed. B y in fe r ence by assum ing that the origin al sam ple was truly re p re se n ta tive of all m anufacturing, the non response could be p resu m ed to have 16 C hiefly, the B u recom a u 's m unity wage su rveys studies of union agreem en t p ro v isio n s.

36 2 4 ch a ra cte ristics which are the in v erse of those noted above fo r the r e sponse that is, a higher p rop ortion of sm all establish m en ts, perhaps som ew hat le s s unionization, perhaps few er b en efits, perhaps a low er average wage level (all of which are related fa c to r s ). The n o n resp on se, h ow ever, is co m p rised o f two parts (l) the establishm ents which fa iled to respond at a ll to the B u rea u 1s requests, (2) the establishm ents which subm itted unusable questionnaires o r letters e x plaining why they could not or would not p articipate in the su rvey. O ver 170 re p lie s of the latter type w ere re ce iv e d ; an an alysis of these re p lie s should shed som e light on the m atter of n on re sp o n se. 17 C lea rly, an im portant cause o f n on resp on se or inadequate resp on se was the lack o f com pany re co r d s o r the amount of tim e r e quired to su m m arize available r e c o r d s. A s one p erson n el d ire cto r w rote: The am ount of tim e involved that would be r e qu ired to give you su fficien t in form ation... would be extrem ely deming upon u s. Our re co r d s are not kept in a m anner so that the b a sic inform ation that you are requesting would be im m ediately a v a ila b le.... In o rd e r to gather this in form ation fo r you would in volve, in addition to m y own tim e m em b ers of m y departm ent, som e tim e spent by the ch ief accountant, ch ief p a y roll c le r k, ch ief tim e k eep er m em b ers of their d epartm en ts. An o ffic ia l of a la rge m ultiplant com pany stated: Our m ain p rob lem stem s fro m the lack o f sum m a ries o r breakdow ns on the sp e cific item s on which inform ation is d esired. In m ost in sta n ces, it would m ean culling the r e co r d s fo r 1953 to develop the data, which would be a long tedious task. In other in sta n ces, no attempt is made to keep a separate r e c o r d o f the expenditure in question. The q u estions on pension insurance plans cannot be answ ered becau se we have national covera g e in v olv ing all types cla ssifica tio n s o f em p loyees with no attem pt m ade to break down expenditures by in dividu al un its. In p art, d ifficu lties a ro se in m eeting the requirem en ts o f the qu estion n aire, p a rticu la rly with re sp e ct to its lim itation to p ro d u c tion related w o rk e rs. F o r exam ple: 1 7 As was to be expected, a num ber o f establishm ents in the orig in a l sam ple w ere out o f b u sin ess, em ployed few er than 20 w ork ers at the tim e o f the su rvey, o r could not be loca ted (cla s s ifie d as n o n re sp o n se).

37 2 5 W hile uenefits paid to or on behalf o f in d ivid uals can be tra ced to b a sic r e c o r d s such as clo c k c a r d s, earnings r e c o r d s, insurance p rem iu m listin g statem en ts, we do not have gen eral led g er su m m aries of am ounts paid to 1 p rodu ction r e lated w o r k e r s.11 In m any in sta n ces, the su pplem en tal paym ents are ch arged to the sam e accou n ts as regular earn in gs.... P rem iu m paym ents a re not segregated fro m regu lar earnings in our accou n tin g. A nother o ffic ia l w rote: The in form ation req u ested in this su rvey could be obtained, if n e c e s s a r y, but it would take co n s id erable tim e effort to segregate a ccu m u late the data fo r p rodu ction related w o r k e rs. M any o f the unusable qu estion n aires re ce iv e d re fle cte d the d ifficu lties indicated above plus a relu ctan ce to estim ate expenditure le v e ls in the absen ce of p r e c is e r e c o r d s. R efu sal to respon d at all is, of co u r s e, a fa cto r in all v o l untary su rveys. In this c a s e, se v e ra l com pan ies e x p ressed to B u reau rep resen ta tiv es a lack of in terest or usefu ln ess in the su b ject studied; som e thought that the a vailability of this type of in form ation could be used to their disadvantage in c o lle c tiv e bargain in g. Such nonrespondents who o b jected in p rin cip le to this su rvey are b elieved to be a sm all m in ority.

38

39 2 7 Establishment.R ecords Reporting P ra ctices A m ajor purpose of this pilot study was to determ ine the prevailing practice among manufacturing establishm ents with resp ect to (l) keeping separate record s of their expenditures on the selected items of em ployee rem uneration, (2) frequency with which record s w ere sum m arized or aggregated fo r the establish m en ts' own p u r p oses, (3) ability to provide data on actual expenditures from these record s in the form requested, (4) methods used in estimating expenditures in the absence of p recise record s the general re lia bility of such estim ates. The reason s fo r investigating these p ra ctice s can be sum m arized briefly. If a substantial proportion of establishm ents do not keep separate r e co r d s but, perhaps, account fo r a ll expenditures c o m bined such broad categories as "d irect la b or" or "overhead, " then voluntary expenditure surveys would obviously be im practical. If establishm ents do not follow the p ra ctice o f aggregating b a sic r e c ords such as.tim ecards payroll columns for their own purposes, expenditure surveys requesting annual data would im pose an especially heavy burden upon respondents. If establishm ents cannot supply the type of data requested in this su rvey, despite the indication that r e c ords of som e type w ere kept sum m arized, perhaps a different approach might be required. These considerations led to another pertinent question: A re establishm ent approxim ations adequate fo r som e purposes? Is it reasonable to assum e, for example, that the vast m ajority of establishm ents, particularly those which engage in c o lle c tiv e bargaining, have a fa ir ly good notion o f the amount o f e x penditures connected with any p r a c tic e? Such estim ates can be d e rived, in the ab sence of actual expenditure r e c o r d s, from related in form ation. F or exam ple, annual expenditures fo r 6 paid holidays equal 8 hours a day, tim es the avera ge hou rly rate, tim es the a v e r age number of em ployees eligible fo r paid h olidays, tim es 6. Expenditure R ecord s The establishm ents surveyed w ere asked the follow in g q u e s tions: ( l) Do you keep separate expenditure r e co r d s fo r each o f the selected items covering production related w ork ers? (2) If you keep such re cord s, how often do you sum m arize the entries? A "y e s " or "no" answer was requested fo r the first; the period fo r which sum m aries w ere made ( e. g., monthly, quarterly, e t c.) fo r the second. Obviously, descriptions of accounting procedures definitions w ere not sought. 18 A " y e s " answer to the fir s t question was interpreted 18 This is not to m inim ize the need fo r the development of m ore uniform accounting p ro ce d u re s am ong establishm ents if a higher degree of p recision in m easuring or com paring expenditure levels is ever to be attained. In the co u rse o f this su rvey, many esta b lishments expressed to the Bureau an interest in the development of stard procedures for maintaining expenditure reco rd s.

40 2 8 sim p ly to m ean that r e co r d s of expenditures fo r the item w ere a v a ila b le, in w hatever form the establishm ent ch ose to keep them. A nn om answ er can be in terpreted in two w ays, that (l) separate e x penditure r e c o r d s w ere not kept, or (2) no sep aration was m ade betw een p roduction related w ork ers other e m p loyees. The in form a tion fo r na ll se le cte d ite m s 1' fo r "a il sele cte d item s e x clu d ing prem ium p a y " shown in the accom pan ying tables rep resen t a com p osite of the individual entries on the qu estion n aire. The resp on se revealed con sid era b le variation in re co r d k e e p ing p ra ctice s am ong the item s studied, with the best show ing, as m ight be expected, fo r the leg a lly req u ired paym ents (table 4). The tendency to com bin e prem iu m pay fo r overtim e with prem ium pay fo r holiday w ork, past with cu rren t pension c re d its, p a rticu la rly the variou s insu rance w elfa re item s, was notable. P o s s ib ly no sep aration was p ra ctica b le in these in stances. The excep tion ally high "not kept" rate shown fo r shift prem ium pay, the supplem entary b en e fit m ost lik ely to be re s tric te d to p rodu ction related w o r k e r s, m ay be accounted fo r, in p art, by the p ra ctice of including shift p r e m ium pay d ire ctly in basis w ages fo r shift w ork ers fo r p a y ro ll a c counting p u rp oses. About half of the establishm ents su rveyed in d i cated that separate re co r d s w ere kept fo r each of the selected item s in e ffe ct in the establish m en ts. E xcluding prem ium pay, the p r o p ortion was in crea sed to approxim ately 70 p ercen t. The vast m a jority of the establishm ents w hich kept expenditure re co r d s su m m arized the individual entries fo r their own or other u ses (table 5). C on siderin g su rveys of expenditures fo r a full y ea r, w hich appears thus far to be the m o st p ra ctica l p eriod of c o v era g e, it would seem that the m ost trou b lesom e p rob lem lies in a c cum ulating such p a y roll item s as prem ium pay fo r o v ertim e, shift prem ium pay, vacation holiday paym ents. On the other h, co v era g e of a sin gle m onth or a quarter m ay depend upon whether an appropriate m ethod of apportioning certa in item s like pension expenditures could be w orked out. T im e R ecord s In the absen ce of expenditure r e c o r d s, it w as assu m ed that tim e r e co r d s cou ld be u tilized as a b a sis fo r com puting expenditure tota ls. A s table 6 in d ica tes, this p o ssib ility appears m ost fruitful fo r the prem iu m pay ite m s, fo r w hich tim e r e c o r d s w ere kept by higher p rop ortion s of establishm ents than was the ca se with expenditure r e c o r d s. Although a som ewhat higher p orp ortion of e sta b lish m ents su m m arized expenditure r e c o r d s, the gen eral p ra ctice with tim e re co r d s (table 7) did not d iffer m ark ed ly from that fo r expenditure r e c o r d s (table 5). A related m atter was the resp on se to the questions on v a cation, h oliday, sick le a v e, shift prem iu m p ra ctice s in part III o f the question n aire. On the w h ole, the resp on se appeared to be

41 29 T A B L E K eeping of expenditure re c o rd s fo r p rodu ction rela ted w ork ers by item, 1953 Item N u m b e r o f e s t a b - l is h - m e n ts w ith p r a c t ic e s in e f fe c t K ep t N u m b e r o f e s t a b lis h m e n t s in w h ic h expenditure re co rd s w ere N ot k e p t K e p t f o r ite m in c o m b in a tio n w ith oth ers K e p t f o r s o m e ite m s 1 N ot rep orted V a c a t io n s, h o lid a y s, an d s i c k le a v e P a id v a c a t io n s P a id h o lid a y s P a id s i c k l e a v e P r e m iu m p a y P r e m iu m p a y f o r o v e r t im e P r e m iu m p a y f o r w o r k on h o lid a y s S h ift p r e m iu m p a y T o t a l e x p e n d it u r e s f o r p e n s io n s P a s t s e r v i c e c r e d it s C u r r e n t s e r v i c e c r e d it s I n s u r a n c e, h e a lth, an d w e lf a r e F ix e d c o n t r ib u t i o n s L ife in s u r a n c e A c c id e n t a l d ea th an d d i s m e m b e r m e n t A c c id e n t a n d s ic k n e s s b e n e f it s H o s p it a liz a t io n S u r g i c a l M e d ic a l (o th e r than s u r g i c a l) O the r L e g a lly r e q u ir e d p a y m e n ts O ld A g e an d S u r v iv o r s In s u r a n c e U n e m p lo y m e n t c o m p e n s a t io n W o r k m e n 's c o m p e n s a t io n S ta te t e m p o r a r y d is a b ilit y in s u r a n c e A l l s e l e c t e d it e m s A ll s e l e c t e d ite m s e x c lu d in g p r e m iu m p a y _ « _ _ A p p lies only to totals o f item s in each ca teg ory. B a s e d o n r e s p o n s e t o q u e s t io n s o n r e c o r d s a n d e x p e n d it u r e s, a n d d o e s n o t n e c e s s a r i l y r e f l e c t p r e v a le n c e o f p r a c t ic e in F ed era l State.

42 30 T A B L E 5. E s ta b lis h m e n t p r a c t ic e in s u m m a r iz in g e x p e n d it u r e r e c o r d s f o r p r o d u c t io n r e la t e d w o r k e r s b y it e m, 1953 Item 'rft m W r" of e sta b lis h m ents keeping record s Each pay period Numb v_ M onthly of e sta b lish m e n ts in w hich expenditure records w ere sum m arized Q u a r te r ly S e m i annually A nnually Not su m m a rized Som e su m m a r ized ; other s n o t 1 Not rep orted V a catio n s, h olid ays, sic k leave P aid vacatio ns _... _ P aid holidays P aid sick le ave P r e m iu m p a y _ P r e m iu m pay for o v e rtim e P r e m iu m pay for w ork on h olidays Shift p rem iu m pay T otal expenditu res for p ensions P a st s e r v ic e c r e d its C urrent s e r v ic e c red its " 12 In su ran ce, health, w elfa re _ 29 F ix e d contribution L ife in su ran ce Accidental death dism em berm ent A ccid en t sic k n e ss b en efits H osp ita liza tio n S urgical M e d ic a l (other than su rg ica l) O ther _ * L e g a lly req u ired paym ents 2 _ _ O ld A ge S u rv iv o rs Insurance. _ U nem ploym ent com p en sation W o rk m e n s com p en sation State tem porary disability insurance... _ A ll sele c te d ite m s 2... _ A ll selected item s excluding prem ium pay A p p lies only to totals o f item s in each ca teg ory. W here establish m en t p ra ctice d iffered am ong the item s com p risin g the tota ls, the lon gest p eriod w as selected for tabulation. T A B L E 6 K e e p in g o f t im e r e c o r d s f o r p r o d u c t io n an d r e la t e d w o r k e r s b y s e l e c t e d it e m s, 1953 Item N u m b e r o f e s t a b l is h m e n ts w ith p r a c t ic e s in e f f e c t K ep t N u m b e r o f e s t a b lis h m e n t s in w h ic h t im e r e c o r d s w e r e N ot k ep t K e p t f o r it e m in c o m b in a tio n w ith oth ers K ep t f o r s o m e ite m s 1 N ot r e p o r t e d V a c a t io n s, h o lid a y s, an d sick lea ve _ 35 1 P a id v a c a t io n s P a id h o lid a y s _ 1 P a id s i c k le a v e P r e m iu m p a y P r e m iu m p a y f o r o v e r t i m e _ 7 P r e m iu m p a y f o r w o r k o n h olid ays _ 11 Shift p rem iu m pay A p p lie s o n ly to t o t a ls o f ite m s in e a c h c a t e g o r y. B a s e d o n r e s p o n s e to q u e s t io n s o n r e c o r d s an d e x p e n d it u r e s, a n d d o e s n o t n e c e s s a r i l y r e f l e c t p r e v a len ce o f p ra ctice in 1953.

43 3 1 T A B L E 7. E s ta b lis h m e n t p r a c t ic e in s u m m a r iz in g t im e r e c o r d s f o r p r o d u c t io n a n d r e la t e d w o r k e r s b y s e l e c t e d it e m s, 1953 Ite m N u m b e r o f e s t a b l i s h m e n ts k e e p in g r e c o r d s N u m b e r o f e s t a b lis h m e n t s in w h ic h t im e r e c o r d s w e r e s u m m a r iz e d E a c h p ay p e r io d M o n th ly Q u a r t e r ly S e m i a n n u a lly N ot A n n u a lly s u m m a - r iz e d S o m e s u m m a r iz e d ; o t h e r s n o t 2 N ot r e p o r t e d V a c a t io n s, h o lid a y s, an d s i c k le a v e P a id v a c a t io n s P a id h o lid a y s P a id s i c k l e a v e P r e m iu m p a y P r e m iu m p a y f o r o v e r t im e P r e m iu m p a y f o r w o r k o n h o l i d a y s v S h ift p r e m iu m p a y " Where establishm ent practice differed among the items com prising the totals, the longest period was selected for tabulation. 2 Applies only to totals of item s in each category. TAB LE 8. Nature of expenditure figures reported by item, 1953 Item N um ber of e s ta b lis h m ents with p ra ctice s in e ffe ct A ctu al expenditure figu re Number of establishm ents reporting E s tim ated ex penditure figure Som e actual; som e e s t i mated 1 No expenditu res in cu rred No in fo r m ation V a c a tio n s, h o lid a y s, sic k leave P a id v a catio n s _ 20 P a id holidays _ - _ P aid sick le a v e _ P r e m iu m pay Prem ium pay for overtim e P r e m iu m pay for w ork on holiday. _ Shift p rem iu m pay Total ex penditures for p ensions P a st se r v ic e c red its C urrent s e r v ic e c red its In suran ce, health, w elfa re F ixed contribution L ife in suran ce _ Accidental death dism em berm ent A ccid en t sic k n e ss b en efits H o sp italization _ Surgical _... _ M e d ical (other than su rg ica l) Other L e g a lly req u ired paym ents O ld A g e S u rv iv o rs Insurance 5 5 0' _ 34 U nem ploym ent com p en sation W o rk m e n 's com p en sation _._ State tem porary disability insurance A ll sele c te d ite m s _ A ll sele c te d ite m s excluding p rem iu m pay _ Applies only to totals of item s in each category. B a sed on r e sp o n se to question s on r e c o r d s ex penditu res, does not n e c e s s a r ily re fle c t p revale n ce o f p ra ctice F e d e ra l State. in

44 3 2 s a t i s f a c t o r y. F o r e x a m p l e, i t w a s p o s s i b l e t o c o m p u t e t h e a v e r a g e l e n g t h o f v a c a t i o n f o r 9 7 p e r c e n t o f t h e e s t a b l i s h m e n t s w i t h a v a c a t i o n p o l i c y i n e f f e c t. I t w a s p o s s i b l e t o c o m p u t e t h e r e l a t i o n s h i p b e t w e e n s h i f t p r e m i u m h o u r s a n d t o t a l p a y r o l l h o u r s f o r 9 5 p e r c e n t o f t h e e s t a b l i s h m e n t s r e p o r t i n g s h i f t p r e m i u m e x p e n d i t u r e s. I n a l l c a s e s, a d j u s t e d p a y r o l l h o u r s ( t o t a l p a y r o l l h o u r s l e s s v a c a t i o n, h o l i d a y, a n d s i c k l e a v e h o u r s ) w e r e c o m p u t e d, a l t h o u g h i n a n u m b e r o f q u e s t i o n n a i r e s e s t i m a t e s o f h o u r s w e r e p r o v i d e d b y t h e r e s p o n d e n t s o r e s t i m a t e s w e r e c o m p u t e d b y t h e B u r e a u ( b y d i v i d i n g t h e e x p e n d i t u r e s f o r t h e i t e m b y t h e e s t a b l i s h m e n t s g r o s s a v e r a g e h o u r l y e a r n i n g s ). 19 O n t h e w h o l e, t h e r e c o r d k e e p i n g p r a c t i c e s o f m a n u f a c t u r i n g e s t a b l i s h m e n t s, a s r e f l e c t e d i n t h e s e d a t a, s h o u l d b e e n c o u r a g i n g t o t h o s e w i t h a l o n g - r a n g e i n t e r e s t i n s u r v e y i n g e x p e n d i t u r e s f o r s u p p l e m e n t a r y e m p l o y e e r e m u n e r a t i o n. S e v e r a l e s t a b l i s h m e n t s i n d i c a t e d t h a t a p p r o p r i a t e r e c o r d s w o u l d b e k e p t i f t h e B u r e a u p l a n n e d r e g u l a r s u r v e y s ; i t i s p r o b a b l e, m o r e o v e r, t h a t t h e c u r r e n t w i d e s p r e a d d i s c u s s i o n o f s u p p l e m e n t a r y e x p e n d i t u r e s w i l l s t i m u l a t e m a n a g e m e n t t o p l a n f o r f i n e r b r e a k d o w n s o f c o m p a n y e x p e n d i t u r e s. A c t u a l a n d E s t i m a t e d E x p e n d i t u r e s T h e r e a l m e a s u r e o f t h e f e a s i b i l i t y o f c o l l e c t i n g e x p e n d i t u r e d a t a, a t l e a s t b y m e a n s o f m a i l q u e s t i o n n a i r e, i s n o t r e c o r d k e e p i n g p r a c t i c e a s s u c h b u t t h e a b i l i t y o f t h e r e s p o n d e n t t o p r o v i d e t h e s p e c i f i c t y p e o f d a t a r e q u e s t e d f r o m h i s r e c o r d s. T h i s a b i l i t y i s d e t e r m i n e d b y a n u m b e r o f f a c t o r s i n c l u d i n g, c h i e f l y, t h e f o r m i n w h i c h t h e e s t a b l i s h m e n t s r e c o r d s a r e k e p t a n d t h e r e s p o n d e n t! s w i l l i n g n e s s t o t a k e t h e t r o u b l e t o m a k e t h e n e c e s s a r y s u m m a r i e s f r o m b a s i c r e c o r d s. A s o n e r e s p o n d e n t w r o t e, i n e x p l a i n i n g t h e o m i s s i o n o f s h i f t p r e m i u m e x p e n d i t u r e s : " I t w o u l d n e c e s s i t a t e a d d i n g a l l o f o u r e m p l o y e e c l o c k c a r d s f o r t h e y e a r t o g e t t h a t i n f o r m a t i o n. " M a n y e s t a b l i s h m e n t s w h i c h r e p o r t e d t h e k e e p i n g o f r e c o r d s a n d t h e i r r e g u l a r s u m m a r i z a t i o n n o n e t h e l e s s p r o v i d e d e s t i m a t e d r a t h e r t h a n a c t u a l e x p e n d i t u r e f i g u r e s, p r e s u m a b l y b e c a u s e o f v a r i o u s p r o b l e m s i n h e r e n t i n t h e i r r e c o r d s o r i n t h e t y p e o f d a t a r e q u e s t e d. T h e h i g h e s t r a t e o f r e s p o n s e w i t h a c t u a l e x p e n d i t u r e f i g u r e s d e r i v e d f r o m c o m p a n y r e c o r d s w a s f o u n d f o r p a i d v a c a t i o n s, p a i d 19 S u c h e s t i m a t i n g w a s c o n s i d e r e d a d e q u a t e f o r t h e p u r p o s e s i n c e i t w o u l d t a k e a s u b s t a n t i a l n u m b e r o f l a r g e e r r o r s i n t h e s a m e d i r e c t i o n t o h a v e a s i g n i f i c a n t e f f e c t o n t h e a g g r e g a t e.

45 3 3 h o l i d a y s, a n d t h e l e g a l l y r e q u i r e d p a y m e n t s. 20 F o r t h e s e i t e m s, a b o u t 7 5 p e r c e n t o r m o r e o f t h e e s t a b l i s h m e n t s k e e p i n g r e c o r d s p r o v i d e d a c t u a l e x p e n d i t u r e f i g u r e s ( t a b l e 8 ). A s e x p e c t e d, m o s t e s t a b l i s h m e n t s c o u l d n o t p r o v i d e a c t u a l f i g u r e s o n t h e i n s u r a n c e c o m p o n e n t s, i n c l u d i n g m a n y w h i c h h a d i n d i c a t e d t h a t s e p a r a t e r e c o r d s w e r e k e p t. A p p a r e n t l y i t w a s a l s o d i f f i c u l t t o e s t i m a t e t h e s e p a r a t e e x p e n d i t u r e s. T h e r e s p o n s e o n t o t a l p e n s i o n e x p e n d i t u r e s w a s s u b s t a n t i a l l y b e t t e r t h a n o n p a s t a n d c u r r e n t s e r v i c e c r e d i t s s e p a r a t e l y. T h e v e r y l o w r a t e o f a c t u a l f i g u r e s f o r p r e m i u m p a y f o r w o r k o n h o l i d a y s, a n d t h e c o r r e s p o n d i n g l y h i g h p r o p o r t i o n o f c a s e s w h e r e n o e x p e n d i t u r e s w e r e i n c u r r e d d u r i n g t h e y e a r o r e x p e n d i t u r e s w e r e n o t r e p o r t e d, a r e a t t r i b u t a b l e l a r g e l y t o t h e r e s t r i c t e d d e f i n i t i o n o f p r e m i u m p a y f o r h o l i d a y w o r k u s e d i n t h i s s u r v e y, a s p r e v i o u s l y e x p l a i n e d. I t i s a l s o l i k e l y t h a t s o m e o f t h e e s t a b l i s h m e n t s n o t p r o v i d i n g d a t a o n o v e r t i m e e x p e n d i t u r e s i n c u r r e d n o e x p e n d i t u r e s d u r i n g t h e y e a r b u t f a i l e d t o i n d i c a t e t h i s o n t h e q u e s t i o n n a i r e. O n l y a b o u t 3 0 p e r c e n t o f t h e e s t a b l i s h m e n t s c o v e r e d i n t h e s u r v e y p r o v i d e d a c t u a l e x p e n d i t u r e f i g u r e s f o r a l l i t e m s l i s t e d a n d i n e f f e c t. A n o t h e r 4 6 p e r c e n t p r o v i d e d s o m e a c t u a l a n d s o m e e s t i m a t e d f i g u r e s o n t h e q u e s t i o n n a i r e o r, i n a f e w c a s e s, m a d e e s t i m a t e s f o r e v e r y i t e m. I n t h e b a l a n c e o f t h e r e p o r t s ( 2 4 p e r c e n t ), t o t a l e x p e n d i t u r e s c o u l d n o t b e c o m p u t e d b e c a u s e o f t h e a b s e n c e o f d a t a f o r o n e o r m o r e o f t h e i t e m s i n e f f e c t. T h e c o r r e s p o n d i n g p r o p o r t i o n s f o r t h e c a t e g o r y n a l i s e l e c t e d i t e m s e x c l u d i n g p r e m i u m p a y " w e r e 4 5 p e r c e n t, 4 2 p e r c e n t, a n d 1 3 p e r c e n t. S l i g h t l y m o r e t h a n 6 0 p e r c e n t o f t h e e s t a b l i s h m e n t s w h i c h h a d i n d i c a t e d t h a t r e c o r d s w e r e k e p t f o r e a c h t y p e o f e x p e n d i t u r e w e r e a b l e t o p r o v i d e a c t u a l d a t a o n e x p e n d i t u r e f o r e a c h i t e m. A c c e p t i n g t h e t y p e o f e x p e n d i t u r e f i g u r e s r e p o r t e d a s a m e a s u r e o f a n e s t a b l i s h m e n t s a b i l i t y t o p r o v i d e s u c h d a t a, r a t h e r t h a n i t s r e c o r d k e e p i n g p r a c t i c e s a l o n e, v a r i a t i o n s a m o n g d i f f e r e n t e s t a b l i s h m e n t g r o u p s c a n b e r o u g h l y a p p r a i s e d. F o r e x a m p l e, d o e s t a b l i s h m e n t s w i t h a m a j o r i t y o f w o r k e r s c o v e r e d b y c o l l e c t i v e b a r g a i n i n g a g r e e m e n t s k e e p b e t t e r r e c o r d s a n d a r e t h e y b e t t e r a b l e t o p r o v i d e a c t u a l d a t a t h a n n o n u n i o n e s t a b l i s h m e n t s, p o s s i b l y a s a c o n s e q u e n c e o f t h e i r n e e d s i n n e g o t i a t i n g o n t h e s e p r a c t i c e s? 20 O n e o f t h e a c c o u n t i n g p r o b l e m s n o t a n t i c i p a t e d i n t h e f o r m u l a t i o n o f t h e q u e s t i o n n a i r e w a s t h e d i f f e r e n c e b e t w e e n l e g a l l y r e q u i r e d p a y m e n t s m a d e d u r i n g a n d t h e l i a b i l i t y i n c u r r e d f o r t h a t y e a r. F o r e x a m p l e, w h e r e q u a r t e r l y p a y m e n t t o t h e G o v e r n m e n t i s t h e r u l e, t h e e x p e n d i t u r e s m a d e d u r i n g m a y a c t u a l l y c o v e r t h e f o u r t h q u a r t e r o f a n d t h e f i r s t t h r e e q u a r t e r s o f T h u s, i f e m p l o y m e n t i n t h e f o u r t h q u a r t e r o f d i f f e r s m a r k e d l y f r o m t h e c o r r e s p o n d i n g p e r i o d o f , s o m e d i s t o r t i o n i n e x p e n d i t u r e r a t i o s s u c h a s " p e r c e n t o f p a y r o l l 11 i s c r e a t e d.

46 3 4 T h e c o m p a r i s o n b e t w e e n u n i o n a n d n o n u n i o n e s t a b l i s h m e n t s w a s m o s t c o n v e n i e n t l y m a d e i n t e r m s o f t h e r e p o r t i n g o n i t e m g r o u p t o t a l s ( t a b l e 9 ). A h i g h e r p r o p o r t i o n o f u n i o n i z e d e s t a b l i s h m e n t s r e p o r t e d a c t u a l e x p e n d i t u r e s f o r a i l i t e m t o t a l s e x c e p t p r e m i u m p a y ; h o w e v e r, t h e d i f f e r e n c e s w e r e m u c h t o o n a r r o w t o b e c o n c l u s i v e. I n d e e d, t h e m o s t s t r i k i n g a s p e c t o f t h i s c o m p a r i s o n w a s t h e s i m i l a r i t y r a t h e r t h a n t h e d i f f e r e n c e s i n t h e s e p e r c e n t a g e s ; t h i s s i m i l a r i t y w a s a i l t h e m o r e r e m a r k a b l e i n t h e l i g h t o f t h e s m a l l s a m p l e u s e d. C o n s i d e r a b l y m o r e v a r i a t i o n w a s s h o w n a m o n g e s t a b l i s h m e n t s i n t h e d i f f e r e n t s i z e g r o u p s s t u d i e d ( t a b l e 1 0 ). C e r t a i n t e n d e n c i e s w e r e n o t a b l e ; f o r e x a m p l e, s m a l l e r e s t a b l i s h m e n t s s h o w e d a h i g h e r p r o p o r t i o n o f a c t u a l r e p o r t s o n i n s u r a n c e, p e n s i o n s, a n d l e g a l l y r e q u i r e d e x p e n d i t u r e s, w h e r e a s t h e r e v e r s e s e e m e d t o b e t h e c a s e, o r d i f f e r e n c e s w e r e n o t c l e a r, f o r t h e p a y r o l l i t e m g r o u p s p r e m i u m p a y a n d v a c a t i o n s, h o l i d a y s, a n d s i c k l e a v e. F o r " a l l s e l e c t e d i t e m s e x c l u d i n g p r e m i u m p a y, " t h e p e r c e n t a g e o f a c t u a l f i g u r e s d i m i n i s h e d a s t h e s i z e g r o u p b e c a m e l a r g e r, w h i c h w a s, p e r h a p s, a r e f l e c t i o n o f t h e d i f f e r e n c e s i n t h e n u m b e r o f i t e m s i n e f f e c t a m o n g t h e s i z e g r o u p s. A n a n a l y s i s o f t h e t y p e o f r e s p o n s e o n i n s u r a n c e a n d p e n s i o n e x p e n d i t u r e s b y t h e f i n a n c i n g a r r a n g e m e n t s i n e f f e c t r e v e a l e d t h a t f o r b o t h i t e m s a c t u a l e x p e n d i t u r e s w e r e r e p o r t e d f o r a s l i g h t l y h i g h e r p r o p o r t i o n o f e s t a b l i s h m e n t s w i t h n o n c o n t r i b u t o r y p l a n s t h a n b y t h o s e w i t h c o n t r i b u t o r y p l a n s. A s u b s t a n t i a l ' p r o p o r t i o n o f t h e r e s p o n d e n t s o f f e r e d r e a s o n s f o r f a i l i n g t o p r o v i d e e i t h e r a n a c t u a l o r a n e s t i m a t e d e x p e n d i t u r e f i g u r e f o r a n i t e m i n e f f e c t ( t a b l e 1 1 ). T h e c h i e f r e a s o n, u n d e r s c o r i n g t h e r e s p o n s e o n t h e k e e p i n g o f e x p e n d i t u r e r e c o r d s ( t a b l e 4 ), w a s t h a t e x p e n d i t u r e s f o r t h e g i v e n i t e m w e r e c o m b i n e d w i t h e x p e n d i t u r e s f o r a n o t h e r i t e m o r o t h e r i t e m s i n t h e c o m p a n y s r e c o r d s a n d o n t h i s q u e s t i o n n a i r e. F o r i t e m g r o u p s a n d f o r a i l i t e m s c o m b i n e d, t h e l a c k o f s o m e d a t a p r e v e n t e d a n u m b e r o f e s t a b l i s h m e n t s f r o m p r o v i d i n g a n e x p e n d i t u r e f i g u r e o r a n e s t i m a t e. T h e i n a b i l i t y o r u n w i l l i n g n e s s t o p r o r a t e e x p e n d i t u r e s t o w o r k e r s i n a p a r t i c u l a r p l a n t o r t o p r o d u c t i o n a n d r e l a t e d w o r k e r s a c c o u n t e d f o r o t h e r o m i s s i o n s. R e s p o n d e n t s p r o v i d i n g e s t i m a t e d f i g u r e s w e r e r e q u e s t e d t o d e s c r i b e b r i e f l y t h e m e t h o d o r b a s i s o f t h e i r c a l c u l a t i o n s a n d m o s t o f t h e s e r e s p o n d e n t s c o m p l i e d w i t h t h i s r e q u e s t ( t a b l e 1 2 ). M o s t p r e v a l e n t a m o n g t h e m e t h o d s u s e d w e r e ( l ) c a l c u l a t i n g e x p e n d i t u r e s o n t h e b a s i s o f r e l a t e d d a t a, i. e., a p p l y i n g a n a v e r a g e r a t e o r a p r e d e t e r m i n e d c o s t t o a v a i l a b l e d a t a o n t h e n u m b e r o f h o u r s, d a y s, w e e k s, m o n t h s, o r w o r k e r s i n v o l v e d, a n d ( 2 ) p r o r a t i n g e x p e n d i t u r e s a s b e t w e e n p r o d u c t i o n a n d r e l a t e d w o r k e r s a n d a l l e m p l o y e e s o r t h e p a r t i c u l a r g r o u p i n g o f e m p l o y e e s c o v e r e d b y t h e r e c o r d s o f t h e e s t a b l i s h m e n t. E x p e r i e n c e i n p r e v i o u s y e a r s w a s a g u i d e i n s o m e c a s e s.

47 35 T A B L E 9. N ature o f expenditure fig u res rep orted fo r item g rou p s by union status, 1953 Item group union status Number of establishments with practices in effect1 Actual expenditure figure Percent 2 of establishments reporting Estimated expenditure figure Some actual; some estimated No expenditure figure 3 Vacations, holidays, sick leave: Union establishments Nonunion establishments Premium pay4: Union establishments Nonunion establishments Total expenditures for pensions: Union establishments Nonunion establishments Insurance, health welfare: Union establishments Nonunion establishments Legally required payments: Union establishments Nonunion establishments All selected items: Union establishments Nonunion establishments All selected items excluding premium pay: Union establishments Nonunion establishments _ Excludes 5 establishments for which union status was not reported. 2 Percentages not rounded to add to Includes some cases of "no expenditures incurred." See table 8. 4 Based on response to questions on records expenditures, does not necessarily reflect prevalence of practice in

48 3 6 T A B L E N atu re o f e x p e n d it u r e f i g u r e s r e p o r t e d f o r it e m g r o u p s b y s i z e o f e s t a b lis h m e n t, 1953 Item group size of establishment Percent1 of establishments reporting Some actual; estimated Number of establishments with practices in effect Actual expenditure figure E stimated expenditure figure No expendi ture figure 2 Vacations, holidays, sick leave: Under 100 employees employees _ employees ,999 employees ,000 over _ Premium pay3 : Under 100 employees employees employees ,000-4,999 employees over Total expenditures for pensions: Under 100 employees emplovees employees employees _ over _ 15 Insurance, health, welfare: Under 100 employees _ employees employees , employees over Legally required payments: Under 100 employees _ employees employees _ ,999 employees over _ All selected items: Under 100 employees _ employees employees , employees ,000 over _... _ All selected items excluding premium pay: Under 100 employees _ employees employees , employees ,000 over _ Percentages not rounded to add to Includes some cases of "no expenditures incurred. " See table 8. 3 Based on response to questions on records expenditure s, does not necessarily reflect prevalence of practice in $

49 37 T A B L E 11. R ea son s o ffe re d fo r fa ilu re to rep ort expen d itu res by item, 1953 Item Number of establishm ents not reporting because Number of e stabli sh- Data for ments Data for Data for R ecords production Some not plant item not w orkers data Other not not summarized reasons reporting not lacking4 available 1 available 3 available 2 Reason not reported Vacations, holidays, sick le a v e 16 _ Paid vacations _ Paid holidays _ Paid sick leave ~ - 8 Prem ium p a y _ Premium pay for overtime Premium pay for work on holidays Shift prem ium p a y Total expenditures for p en sion s Past service credits Current service cr e d its " 12 Insurance, health, w e lfa r e Fixed con tribution Life insurance Accidental death dismemberment Accident sickness b en efits H ospitalization Surgical M edical (other than su rg ica l) Othe r ~ 1 Legally required paym ents Old Age Survivors Insurance Unemployment com pensation Workmen* s com p en sation State temporary disability insurance A ll selected item s 131 ~ All selected items excluding premium pay Company could not segregate establishment data from companywide data. 2 Establishment could not segregate data for production related workers from data for all employees. 3 Figure was combined reported with other expenditure items. 4 Applies only to totals of items in each category. 5 4 *

50 38 T A B L E 1 2. M e th o d s o f e s t im a t in g e x p e n d it u r e s b y i t e m, 1953 Item Number of establishments providing estimated figures Number of establishments in which estimates were arrived at by Calculating on basis of related data1 Prorating among em ployees2 Prorating among plants Past experience Other methods Methods varied among items 3 Method not reported Vacations, holidays, sick leave Paid vacations _ 1 11 _ 5 Paid holidays Paid sick leave Prem ium pay _ Prem ium pay for overtim e _ 1 8 _ 18 Premium pay for work on holidays Shift prem ium p a y Total expenditures for pensions Past service credits _ 5 _ 2 Current service credits Insurance, health, welfare Fixed con tribu tion _ 2 Life insurance _ 8 Accidental death dismemberment _ _ 7 Accident sickness benefits _ 7 Hospitalization Surgical M edical (other than su rg ica l) _ 1 Othe r * 2 Legally required paym en ts * Old Age Survivors Insurance _ 15 Unemployment compensation W orkm en's com p en sation _ 22 State tem porary disability insurance A ll selected item s A ll selected items excluding prem ium pay... _ Estimate was arrived at by applying an average rate or predeterm ined cost to appropriate number of hours, days, weeks^ months, w orkers, etc. A rrived at by using ratio of production related w orkers to total em ployees. Applies only to totals of items in each category.

51 3 9 Although these m e t h o d s of estimation appear to be quite r e a sonable, they have shortcomings in precision, at least in principle. Using an average hourly or weekly w a g e the average n u m b e r of w o r k e r s in computing holiday vacation expenditures, for example, m a y fail to take account of absenteeism, ineligibility, or other factors affecting such expenditures. Prorating expenditures m a y result in a disproportionate share being attributed to one group because of differences in earnings levels, programs,, etc. Other possibilities, including simple arithmetical errors, m a y also influence these e s timates. However, recognizing the possibilities of overstatement, statement or error, the question insofar as expenditure surveys are concerned remains: A r e estimates so unreliable as to introduce an appreciable overall bias into aggregate expenditure data, if so, in what direction? This question will be examined, along with other factors affecting expenditure levels, in the following section.

52

53 41 Factors Affecting Expenditure Levels Expenditure levels for selected items of supplementary r e muneration ratios of expenditures to payrolls, man-hours, e m p l o y m e n t vary widely a m o n g manufacturing e stablishments. The remainder of this report is devoted to an examination of the factors m a k i n g for these differences a m o n g individual establishments in levels of expenditures variations a m o n g establishment groups classified by industry, size, unionization, type of practice, earnings levels. T h e question of actual as against estimated or calculated expenditure reporting, raised in the previous section, will be e x a m i n e d in c o n nection with aggregate data. It is important to emphasize that the p r i m a r y purpose of this analysis is to provide guides for the development of survey technique so The data s h o w n in the a c companying tables referred to in the text are not presented as m e a s u r e s of expenditure levels applicable to manufacturing as a whole. A m o n g responding establishments, those incurring no expenditures for the particular items studied those unable to provide expenditure data w e r e omitted f r o m these tabulations. N o attempt w a s m a d e to correct for the varying response rates a m o n g industries a m o n g establishments of different sizes, as discussed earlier in this report. A cautionary note is appended to each table in order to discourage or prevent the use of these data outside of their relationship to this exploratory study. However, the large body of expenditure information developed in the survey can be validly used to throw light on a variety of q u e s tions important for survey planning. F o r e x a m p l e, the dispersion that can be expected in a value or series of values (e. g., expenditures for paid vacations) to be derived f r o m a survey has practical implications for sam p l e design. T h e analysis of expenditure variations in this particular study shows at least the m i n i m u m range within which variation in expenditure ratios are likely to occur in m a n u f a c turing. A distribution of expenditure ratios a m o n g a larger group of establishments might reveal a greater range; obviously the range would not be smaller. Establishment Expenditure Levels A s the tables accompanying this report show, there is a wide range a m o n g establishments in expenditure levels for the s a m e item as expressed in per hour, percent of payroll, dollars per year per employee. T o account for this range, it is necessary to consider, first, the factors m a k i n g for variations a m o n g establishments in the dollar v o l u m e of expenditures, second, the effect on relative expenditure levels of the conversion to the ratios c o m m o n l y used to c o m p a r e expenditures a m o n g establishments.

54 42 The type of practice the length of time the practice w a s in effect (the full year or less) are but two of m a n y factors determining an establishment1s annual expenditure for the item. The n u m b e r of w o r k e r s e m p l o y e d is obviously a p r i m a r y determinant,, H owever, a s s u m i n g the s a m e e m p l o y m e n t level a m o n g establishments, a variety of other factors appear to account for the differences in expenditures a m o n g establishments with the s a m e paid holiday or paid vacation practice or identical insurance welfare p r o g r a m s for the entire year. Listed below are s o m e of these factors, other than size of the labor force.21 S o m e Factors Accounting for Variations A m o n g Establishments in Expenditures for Selected Items of Supplementary E m p l o y e e R e m u n e r a t i o n (Other T h a n Size of L a b o r Force) Paid vacations T y p e of vacation policy El ig ibil ity r e quir e m e nt s Length-of-service distribution of labor force N u m b e r of hours paid for in vacation w e e k W a g e level M e t h o d of vacation p a y m e n t (e.g., regular weekly pay, percent of annual earnings, etc.) Turnover of labor Paid holidays N u m b e r of paid holidays Practice regarding p a y m e n t for holidays falling on nonscheduled w o r k d a y Eligibility requirements W a g e level M e t h o d of computing dayfs pay incentive w a g e systems Turnover seasonal fluctuations in e m p l o y m e n t A b s e n t e e i s m in holiday w e e k P r e m i u m pay for overtime (including p r e m i u m pay for w e e k e n d work) V o l u m e of overtime w o r k Practice regarding daily overtime w o r k on Saturday Sunday as such P r e m i u m rate paid W a g e level Differences in accounting procedures, which m a y apply to all of the items, although perhaps in varying degrees, a d d another c o m plication to any precise explanation of differences in expenditure levels.

55 43 Shift p r e m i u m pay V o l u m e of shift w o r k Shift p r e m i u m s paid W a g e level (where p r e m i u m s are expressed as as percent of hourly rate) P e n s i o n plans (excluding administrative costs) Type of p r o g r a m (provisions for vesting, disability early retirement, n o r m a l retirement age, etc.) Level of benefits M e t h o d o f funding (pay-as-you-go, profit-sharing, etc.) A m o u n t of e m p l o y e e contributions, if any Rate a m o u n t of funding of past service liability self-insured funded plans Service, sex, age composition of covered employees Eligibility requirements Rate of retirement; rate of mortality; return on investments, etc. Insurance, health, welfare plans (net expenditures, excluding administrative costs) T y p e of benefits provided (life insurance, h o s p i talization, etc.) Level duration of benefits C o v e r a g e of dependents retired w o r k e r s A m o u n t of employee contributions, if any A g e sex composition of covered e m p loyees nature of w o r k Eligibility requirements C l a i m experience W a g e level Contingency reserves; varying p r e m i u m charges, etc. Legally required p a y ments Rate (where experience rating or individual State requirements are factors) Earnings level Location (re State t e m p o r a r y disability laws) C o m p a n y practice (when payments are m a d e p r e payment, delinquency fines, etc.) All other things being equal i.e., type of practice, eligibility requirements, w a g e levels, etc. the conversion of equivalent dollar expenditures into per hour, percent of payroll, dollars per year per employee introduces the largely unrelated influence of differences in annual m a n - h o u r s gross payrolls

56 4 4 in the nature of e m p lo y m e n t.22 The effe ct of d iffe re n ce s in m anhour s is illu strated by a sim ple hypothetical exam ple o f two esta b lish m en ts with the sam e paid holiday p ra ctice, em ploym ent, a v e r age hourly earnings le v e l, expen ditures, but with a differen t volum e o f hours paid for during the y ea r, as follow s: A verage em ploym ent..... A verage hou rly earnings E xpenditures for 6 paid h o lidays (6 X 8 X $2 X 500)... A verage m a n -h ou rs per y e a r G ross p ayroll E xpenditures per p ayroll hour: (Expenditure s ) (T otal m a n -h ou rs) P e rce n t o f p ayroll: ( E xpenditures ) ( Gr o s s p a y ro ll) ~ ~ E stablish ment A 500 $ $48,0 00 2, 100 $2, 1 0 0, % E sta b lish m ent B 500 $2 o 00 $ 4 8,0 00 2,0 0 0 $ 2, 0 0 0, % If we w ere to a ssu m e, fu rth e r, that E stablishm ent A averaged 100 hours o f overtim e w ork per em ployee (included in the 2, 100 h ou rs), paid fo r at tim e one - h a lf, the d ifferen ce betw een the two establishm ents in p ercen t o f p ayroll would be w idened, as follow s: E stablish - E sta b lish ment A m ent B G ross p ayroll P erce n t o f p ayroll $2, 150, % $ 2, 0 0 0, % In the above exam p le, expenditures for paid holidays per em ployee would be identical for the two establishm ents ($ 9 6 ). Howev e r, em ploym ent p ra ctice s vary so w idely betw een esta b lish m en ts, owing to tu rn o v e r, absen teeism, season ality, e t c., that it is unr e a lis tic to assum e either a rea l equality in average em ploym ent le v e ls or equivalent annual expenditures fo r a given average em p loym ent lev e l. In other w ord s, there is usually an appreciable d ifferen ce betw een dividing expenditures by average em ploym ent dividing e x penditure s by the num ber o f w ork ers actually sharing in the expen ditu re. T h u s, expenditure s per year per em ployee are a lso subject to a d istortion arisin g fro m the con v e rsio n. Using the above exam p le, this d istortion can be illu strated sim ply by assum ing that out o f the 22 F or an extended d iscu ssion o f these p rob lem s, see Com puting the C osts o f F rin ge B en efits, National Industrial C on feren ce B oard, Studies in P erson n el P o lic y, N o. 128, 1952.

57 4 5 average of 500 em p loyees fo r E stablishm ent B an average o f 50 e m p loyees did not r e c e iv e 6 paid h olidays, by rea son o f sh o r t-te rm em ploym ent, a b sen teeism, e tc. Thus: E stablish ment A E stablish m ent B A verage em ploym ent _ A verage num ber receivin g holiday pay _ E xpenditures for 6 paid holidays A verage per em ployee ( Expenditur e s ) ( ) $ 4 8,0 00 $ 4 3,2 0 0 $ $ Many o f the fa cto rs influencing g r o s s expenditure levels the com puted expenditure ra tios am ong establishm ents also account for changes in the sam e establishm ent fro m one year to another. Changes in the volum e o f overtim e w ork, for exam ple, not only m ake for changes in expenditures for prem iu m pay but a lso affect the p e r c e n t-o f-p a y r o ll ra tios for other item s. Even with the sam e p ra ctice s in e ffe ct, it is apparent that establishm ent expenditures for a given item in per hour w ould fluctuate fro m year to year, p ossib ly sim ply as a con sequ en ce of a r is e or fall in total m a n -h ou rs. The m ost unstable expenditures are lik ely to be for p rem ium pay for overtim e shift w ork, sin ce expenditures depend la rg e ly on the volum e o f such w ork; expenditures for p en sion s, p articu la rly for funding o f past se rv ic e lia b ility for p ro fit- sharing trust funds, which m ay be determ in ed in large m easu re by the p rofit p osition of the establishm ent by changes in tax la w s. A verage E xpenditure R atios With the wide range o f expenditure ra tios am ong esta b lish m ents, an arith m etic average o f the establishm ent ratios p rovid es the m ost convenient d evice fo r determ ining whether there are sig n ificant d iffe re n ce s in expenditures betw een e stablishm ents grouped a ccord in g to a com m on c h a ra cte ris tic. A s p reviou sly explained, this survey was not designed to p erm it the calcu lation of any average e x penditure le v e l applicable to all m anufacturing or to the separate industry grou p s. H ow ever, to m easu re the d iffe re n ce s in expen ditu res am ong establish m en ts a ccord in g to the ch a r a c te r is tic s usually con sid ered im portant in sam pling tech n iqu es, such as size, or in connection with a p articu lar p r a c tic e, the com putation of a single figure rep resen ta tive o f the a rra y was n e ce s s a ry. A ch oice betw een two types o f a vera ges was p resen ted. One was to com pute, if p o ssib le, a vera ges applying to all establishm ents in the survey, including establishm ents with z e ro expenditures ( i. e., no p ra ctice in effe ct or no expenditures in cu rred ), by som e m ethod

58 4 6 o f in feren ce, the establishm ents which cou ld not rep o rt expenditures fo r particu lar item s * The alternative m ethod, w hich was adopted in this su rvey, was to commute a vera ges coverin g only establishm ents reportin g an expen ditu re«3 The ch ie f advantage o f an average o f expenditure ra tio s, aside fro m its greater flexib ility in use, lay in perm itting the exam ination o f expenditure variation s apart fro m variation s in the p revalen ce o f the individual p r a c t ic e s. C om p arison s among establishm ent groups in pension expen ditures, for exam ple, would thus be lim ited to esta b lish m ents having a pension plan in e ffe ct ( able to rep ort expenditures for the y e a r). The sp ecia l ch a ra cter o f such a vera ges their lim itation s should be borne in m ind; ob viou sly the data d iscu ssed in the follow in g pages should not be im puted to any la rg e r sam ple or group o f establishm ents w hich would include establishm ents without the p articu lar p ra ctice in e ffe ct. A ctual E stim ated R ep ortin g. In the p reviou s section o f this re p o rt, the question was ra ised as to whether the rep ortin g o f estim ated o r calcu lated fig u res in p lace o f actual fig u res introduced an a p p reciable bias into aggregate data. C om p arison s o f average expenditure ra tios betw een establishm ents providing actual figures those providing estim ated figu res showed rela tiv ely slight in con sisten t d iffe re n ce s fo r the item s studied. V irtu ally no sig n ificant d ifferen ce was re fle cte d by the a vera ges for actual fig u res for all rep ortin g establishm ents com bined; that is, the in clu sion of estim ated fig u res had only a n egligible effect on ov e ra ll data. In c e n t s -p e r -p a y r o ll hour, the la rg e st d iffe re n ce s betw een the a v era ges for actual fig u res fo r all rep orts am ong the in dividual item s (excluding f,all selected ite m s 1* f,all selected item s excluding prem iu m pay**) am ounted to 0.2 fo r total p rem ium pay (table 13). F or all other item s, the avera ges w ere identical or d iffered by 0.1 cent. In average percen t o f p a y roll, no d ifferen ce 2 3 The form u la s for com puting the ra tios used cent 9-pen-payr o ll hojir^ c e n ts -p e r -a d ju s te d -p a y r o ll hour, p ercen t o f p a y roll, expenditures per em p loyee per y e a r w ere d e scrib e d in the fir s t s e c tion o f this re p o rt. The average ratio is a sim ple arith m etic average o f the establishm ent ra tio s, which was the averaging d evice con tem plated in the sam ple design. This form o f average is influenced by the size (em ploym ent) o f the establishm ents in the sam ple becau se o f the varying p rop ortion s o f establishm ents in each size cla ss that w ere included. F or exam ple, an establishm ent em ploying 100 w ork ers had an equivalent weight in the tabulations to one o f 1,000 w o r k e rs. H ow ever, the sm all establishm ent had only about one-tenth the chance o f in clu sion o f the la rg e r establish m en t. Thus, each b lock o f 1,000 w o r k e rs e. g., those in 10 establishm ents o f 100 w ork ers each or in 1 establishm ent o f 1,000 w o rk e rs had approxim ately equal influence on the a v e ra g e s.

59 4 7 T A B L E 1 3. A v e r a g e e x p e n d i t u r e s p e r p a y r o l l h o u r f o r r e p o r t i n g e s t a b l i s h m e n t s o n l y * b y i t e m a n d n a t u r e o f r e p o r t, Item A il reports Actual figures Estim ated figures N um ber o f e s ta b lishm ents reportin g expen d i tures A v e ra g e p e r p a y roll hour (cen ts) Num be r of e sta b lishm ents rep o rtin g ex p en d i tures A v e ra g e p e r p a y r o ll hour (cen ts) N um ber o f e sta b lishm ents re p o rtin g expen d i tures A v e ra g e p e r p a y r o ll hour (cen ts) Som e actual; som e estim ated1 N um ber of A v e ra g e e sta b p e r lishm ents p a y r o ll re p o rtin g hour expen d i (cen ts) tures V a ca tion, h o lid a y s, s ic k leave P a id v a c a t i o n s P a id h o l id a y s P a id s ic k l e a v e P rem iu m pay P rem iu m pay fo r o v e r t i m e P rem iu m pay fo r w o rk on h o l i d a y s Shift p rem iu m p a y T otal expenditures fo r p e n s io n s (2 ) P a st s e r v ic e cre d its C u rren t s e r v ic e c r e d i t s In su ra n ce, health, w e lfa re F ix ed c o n t r ib u t io n (2 ) - (*) - L ife in s u r a n c e A ccid e n ta l death d is m e m b e rm e n t l A ccid e n t s ick n e s s b e n e f i t s H o s p it a liz a t io n S u r g i c a l M e d ica l (oth er than s u r g i c a l ) {a! (?) O ther (*>. 13 <2 ) - - L e g a lly r e q u ired p a y m e n t s Old A g e S u rv iv o rs I n s u r a n c e U nem ploym en t c o m p e n s a t io n W o rk m e n 's c o m p e n s a t io n State te m p o r a r y d is a b ility i n s u r a n c e C2 ) - A ll s e le cte d i t e m s (2 ) A ll selected item s excluding prem ium pay (2 ) Applies only to totals of item s in each category, 2 Number of establishm ents too sm all to justify com putation of an average. * The a v e ra g e s in this table a r e not a p p lica b le to m anufacturin g as a w h ole. E sta b lish m en ts in cu rrin g no expenditures fo r the p a r ticu la r item s studied w e re exclu d ed in the com putation o f th ese a v e r a g e s, as w e re e sta b lish m en ts unable to p ro v id e expenditure data.

60 4 8 grea ter than 0. 1 percen t appeared; m ost o f the a vera ges w ere identical (table 14). The stability o f the a verages for all re p orts com bined is further illu strated by the data on expenditures per em ployee per year (table 15) w hich revea led a m axim um d ifferen ce (for total prem iu m pay) o f $4 a year per em ployee as m ea su red against an average expenditure le v e l o f c lo s e to $200. The a vera ges for actual estim ated re p o rts, as shown in these three ta bles, w ere rem ark ably c lo s e, con sid erin g the sm all num ber o f observation s upon w hich they w ere b a sed. D ifferen ces of these sm all m agnitudes can be caused by a num ber o f fa cto rs other than estim ating e r r o r s. In short, no evidence o f a con sisten t b ia s, upwards or dow nw ards, was p resen ted by these co m p a riso n s. On the other h, the a verages fo r vacation s, holiday, sick leave expenditures com bined, for total p rem iu m pay, for,!all sele cte d item s,,! fo r "a ll selected item s excluding p rem iu m pay pay, " w hich w ere based on figu res in part actual in part estim ated, w ere con sisten tly higher than the a vera ges based upon all rep orts (tables 13, 14, 15). This m ay have been, in part, the con sequ en ce of rep ortin g e r r o r s, although it is im p ossib le to determ ine to what extent the e r r o r s lay in the estim ated portion o f these fig u re s. An overla p o f the e sta b lish m e n ts actual figu res its estim ates m ay have been resp on sib le for an overstatem en t in these tota ls. It is a lso p ossib le that the establishm ents rep ortin g on this b a sis had m ore individual item s in e ffect than the establishm ents providing actual fig u re s. At any rate, the im pact o f these figu res on the a vera ges for all rep orts was slight or n e g lig ib le.24. Without d ism issin g as inconsequential the p rob lem attached to obtaining estim ated expenditures the need for m ore exhaustive scrutiny o f establishm ent rep ortin g of expenditures based in part on estim a tes, there appears to be no p ressin g need to p resen t actual estim ated data separately in the tabulations accom panying this re p o rt. In the accom panying d iscu ssion, the con clu sion s drawn fro m the com bined data would not be significantly differen t if they w ere to be based solely on actual fig u re s. E xpenditures per A djusted P a y ro ll Hour As p reviou sly noted, establishm ent expenditures can be related, with m eaning, either to total m an-h ou rs paid for (c e n ts -p e r -p a y r o ll hour) or to an adjusted hours total om itting the vacation, holiday, sick leave hours paid for taken (ce n ts-p e r-a d ju ste d -p a y roll h ou r). In the accom panying ta bles, one or the other c e n ts -p e r-h o u r ratio was used, but not 24 It is notew orthy that in the ca se of total prem iu m pay the avera ges for the estim ated the p artially estim ated fig u res d iffered in opposite d irection s fro m the average o f actual fig u re s.

61 4 9 T A B L E 1 4. A v e r a g e e x p e n d i t u r e s a s p e r c e n t o f p a y r o l l f o r r e p o r t i n g e s t a b l i s h m e n t s o n l y * b y i t e m a n d n a t u r e o f r e p o r t, Item A ll reports Actual figures Estim ated figures N um ber of e sta b lishm ents re p o rtin g expen d i tures A v e ra g e p erce n t of p a y ro ll N um ber of esta b lishm ents rep ortin g expen d i tures A v e ra g e p e rce n t of p a y r o ll N um ber o f e s ta b lishm ents re p o rtin g ex p en d i tu res A v e ra g e p e rcen t of p a y ro ll Som e actual; som e estim ated1 N um ber of A v e ra g e e s ta b p e rce n t lishm ents o f re p o rtin g p a y r o ll expen d i tures V a ca tio n s, h o lid a y s, s ick l e a v e P a id vaca tion s * _ P a id h o l id a y s > P a id s ic k leave P rem iu m pay P re m iu m pay fo r o v e rtim e ,8 P rem iu m pay fo r w o rk on h o l i d a y s _ Shift p rem iu m pay * - T otal expenditures fo r p e n s i o n s (2 ) P a st s e r v ic e cre d its _ C u rren t s e r v ic e cre d its In su ra n ce, health, w e lfa r e , 7 18 (2 ) F ix ed con trib u tion (2 ) _ L ife in su ra n ce A ccidental death dism em berm ent (3) 36 (3 ) 28 (3 ) A ccid e n t s ick n e s s ben efits H o sp ita liza tion S u rg ica l M e d ica l (oth er than s u r g i c a l ) (2 ) 15 (2 ) O th e r (2 ) 13 (2 ) - - L e g a lly re q u ire d paym ents Old A g e S u rv iv ors Insurance U nem ploym en t c o m p e n s a tio n W o rk m e n s c o m p e n s a t io n State te m p o r a r y d isa b ility in su ra n ce (2 ) - - A ll s e le cte d item s (2 ) A ll selected item s excluding prem ium p a y (2 ) Applies only to totals of item s in each category. 2 Number of establishm ents too sm all to justify com putation of an average. 3 L e s s than p e r c e n t. * The a v e ra g e s in this table a r e not a p p lica b le to m a nufacturin g as a w h ole. E sta b lish m en ts in cu rrin g no expenditures fo r the p a r ticu la r item s studied w e re exclu d ed in the com putation o f th ese a v e r a g e s, as w e re esta b lish m en ts unable to p ro v id e expenditure data. 5 4%

62 5 0 T A B L E 1 5, A v e r a g e e x p e n d i t u r e p e r y e a r p e r e m p l o y e e f o r r e p o r t i n g e s t a b l i s h m e n t o n l y * b y i t e m a n d n a t u r e o f r e p o r t, Item A ll reports Actual figures Estim ated figures N um ber o f e sta b lishm ents re p o rtin g expen d i tures A v e ra g e p e r y e a r p e r em ployee N um ber o f e sta b lishm ents re p o rtin g expen d i tures A v e ra g e p e r y ear p e r em ployee N um ber o f e sta b lishm ents re p o rtin g expen d i- tures A v e ra g e p e r y e a r p e r em ployee Som e actual; som e estim ated1 N um ber o f A v e ra g e e sta b p e r lishm ents y ear rep ortin g p er expen d i em ployee tures V a ca tio n s, h o lid a y s, s ic k l e a v e $ $ $ $210 P a id va ca tion s * P a id h o l id a y s P a id s ic k l e a v e P re m iu m p a y P re m iu m pay fo r o v e rtim e P re m iu m pay fo r w o rk on holid a ys Shift p rem iu m p ay T ota l expen d itu res fo r p e n s i o n s (2 ) P a st s e r v ic e c r e d i t s C u rren t s e r v ic e c r e d its In su ra n ce, health, w e lfa re (2 ) F ix ed con trib u tion (2 ) - L ife in su ra n ce , _ A ccid e n ta l death d is m e m b e r m e n t _ A ccid e n t s ick n e s s b e n e f i t s H o s p it a liz a t io n S u r g i c a l M e d ica l (oth er than s u r g i c a l ) <*> - O th e r (2 ) 13 (2 ) - L e g a lly re q u ire d p a y m e n t s Old A g e S u rv iv o rs I n s u r a n c e U nem ploym en t com p e n sa tio n W o rk m e n 's c o m p e n s a t i o n State te m p o r a r y d is a b ility in s u r a n c e (2 ) - - A ll s e le cte d i t e m s (2 ) A ll selected item s excluding prem ium p a y (2 ) Applies only to totals of item s in each category. 2 Number of establishm ents too sm all to justify com putation of an average. * The a v e ra g e s in this table a r e not a p p lica b le to m anufacturin g as a w h ole. E sta b lish m en ts in cu rrin g no expenditures fo r the p a rticu la r item s studied w e re exclu d ed in the com p utation o f these a v e r a g e s, as w e re esta b lish m en ts unable to p r o v id e expenditure data.

63 5 1 both,25 The general relationship between the averages c o m p u t e d on the basis of total m a n - h o u r s of adjusted m a n - h o u r s is s hown in table 16. O n the whole ( considering the possible effects of r o u n d ing), the averages based on adjusted m a n - h o u r s w e r e about 5 percent higher than those b a s e d on total payroll hours. Variations by Size of Establishment. Although expenditures varied widely a m o n g establishments in each of the five size classifications used, on the average large establishments had higher expenditure ratios than small establishments on the s u m of all the items of supplem e n t a r y e m p loyee remuneration studied on m o s t of the individual voluntary practices. T h e reverse order, however, held for specific items such as p r e m i u m pay for overtime legally required p a y ments. T h e s e relationships are set forth in t e r m s of - per- payroll hour (table 17) percent of payroll (table 18). F o r paid vacations, paid holidays, paid sick leave, the total for this group, -per-hour percent~of payroll averages increased progressively with the increase in the size classification. F o r example, average expenditures per payroll hour for paid vacations ranged f r o m 4 for establishments with fewer than 100 w o r k e r s to about 7 for establishments with m o r e than 5,000 workers. In percent of payroll, the corresponding range w a s f r o m 2.4 percent to 3.5 percent. Although the size variations in per hour w e r e undoubtedly influenced by differences in earnings levels, the variation in percent of payroll for these items indicates that, on the average, practices a m o n g the size classes differed in their liberality or in their effect. Expenditures for overtime p r e m i u m pay reflected a contrary tendency; that is, in per hour percent of payroll the averages decreased s o m e w h a t as the size category increased, with but one e x ception. H o w ever, average expenditures for shift p r e m i u m pay w e r e m a r k e d l y higher for the larger establishments, as w a s average total p r e m i u m pay. Pension expenditures per hour as a percent of payroll w e r e not notably different a m o n g the size classes; for insurance b e n e fits, -per-hour expenditures w e r e higher for the larger establishments, but percent-of-payroll averages w e r e at approximately the s a m e level. Legally required payments represented a progressively smaller percent of payroll, on the average, as the establishment-size g r o u p ings increased. The s a m e situation w a s reflected in t e r m s of 25 Similarly, expenditures per e m p l o y e e per year are not shown for all breakdowns.

64 52 TABLE 16. D ifference between average expenditures per payroll hour average expenditures per adjusted payroll hour, 1 for reporting establishm ents only * by item, 1953 Item A v era g e per p a y roll hour (cen ts) A v era g e p e r adjusted p a y roll hour 1 (cen ts) D iffe re n ce Cents P e r c e n t 2 V a ca tion s, h o lid a y s, s ick leave P a id vacations P aid h o l id a y s P aid s ick leave P rem iu m pay I P rem iu m pay fo r o v e r t i m e , ,4 P rem iu m pay fo r w o rk on h olid ays Shift p rem iu m pay T otal expen d itu res fo r p en sion s P a st s e r v ic e cre d its C u rren t s e r v ic e cre d its , 3 In su ra n ce, health, w e lfa re F ix ed con trib u tion L ife in su ra n ce Accidental death dism em berm ent A ccid e n t sick n e s s b e n e f i t s H osp ita liza tion S u r g i c a l , 1 M e d ica l (other than s u r g ica l) O ther L e g a lly re q u ire d p a y m e n t s Old A ge S u rv iv ors I n s u r a n c e U nem ploym ent com p en sa tion , W o rk m e n 's c o m p e n s a t io n State te m p o ra ry d isa b ility in su ra n ce A ll se le cte d i t e m s All selected item s excluding prem ium p a y A d justed p a y roll hours = total p a y r o ll hours le ss v a ca tion, holid a y, s ick leave hours paid fo r taken. 2 Computed only for totals of item s in each category. * The a v e ra g e s in this table a re not a p p lica b le to m anufacturin g as a w h ole. E stab lish m en ts in cu rrin g no expenditures fo r the p a rticu la r item s studied w e re excluded in the com putation o f these a v e r a g e s, as w e re esta b lish m en ts unable to p ro v id e expenditure data %

65 T A B L E 17.- Expenditures per payroll hour for reporting establishments only* by item size of establishment, Item size of establishm ent o f e s ta b lis h m ents reportin g ex p en d i tu res A v e ra g e p e r p a y r o ll hour (cen ts) U nder 2 Num ber of establishm ents reporting expenditures of cen ts M o v e r V acations, holidays, sick leave U nder 100 e m p lo y e e s e m p lo y e e s * e m p lo y e e s , ,9 9 9 e m p l o y e e s ,0 0 0 o v e r P a id v a ca tion s _ U nder 100 e m p lo y e e s _ e m p lo y e e s... _ e m p lo y e e s ,000-4,999 em p loyees ,0 0 0 o v e r P a id h olid a ys _ 1 _ _ U nder 100 e m p lo y e e s e m p lo y e e s e m p lo y e e s , ,9 9 9 e m p lo y e e s ,0 0 0 o v e r P a id s ick leave _ U nder 100 e m p lo y e e s 5 0 ) e m p lo y e e s e m p lo y e e s (M , ,9 9 9 e m p lo y e e s _ 5,0 0 0 o v e r P re m iu m p a y U nder 100 e m p lo y e e s e m p lo y e e s e m p l o y e e s , ,9 9 9 e m p l o y e e s ,0 0 0 o v e r _ O v ertim e p rem iu m p a y U nder 100 e m p lo y e e s e m p lo y e e s e m p lo y e e s , ,9 9 9 e m p l o y e e s ,0 0 0 o v e r P rem iu m pay fo r w o rk on h olid a y s _ _ - U nder 100 e m p lo y e e s 3...~ V T _ _ e m p l o y e e s _ e m p lo y e e s _ 1, ,9 9 9 e m p l o y e e s ,0 0 0 o v e r 12 ( l ) Shift p rem iu m pay _. _ ~ _ e m p l o y e e s U nder 100 e m p lo y e e s _ 7 P T _ e m p lo y e e s _ _ 1, ,9 9 9 e m p l o y e e s ,0 0 0 o v e r P en sio n s ( t o t a l ) U nder 100 e m p lo y e e s 5 (M _ e m p l o y e e s _ em ployees _ 1 1 1, ,9 9 9 e m p l o y e e s ,0 0 0 o v e r Insurance (total) _ U nder 100 e m p lo y e e s e m p l o y e e s e m p lo y e e s _ - «. _ 1, ,9 9 9 e m p l o y e e s ,0 0 0 o v e r " See footnote at end of table. 54<8

66 54 TABLE 17. Expenditures per payroll hour for reporting establishments only* by item size of establishment, Continued Item size of establishm ent N um ber o f e s ta b lis h m ents reportin g ex p en d i tu res A v era g e p e r p a y roll hour (cen ts) Under Number of establishm ents reporting expenditure s of unde r 12 cen ts o v e r L e g a lly re q u ire d p a y m e n t s _ U nder 100 e m p lo y e e s _ < e m p l o y e e s e m p lo y e e s c> ,000-4,999 em p loyees ,0 0 0 o v e r Old Age Survivors Insu ran ce U nder 100 e m p lo y e e s _ e m p lo y e e s e m p l o y e e s ,000-4,999 em ployees ,0 0 0 o v e r U nem ployment com pensation U nder 100 e m p l o y e e s e m p lo y e e s e m p l o y e e s , ,9 9 9 e m p lo y e e s ,0 0 0 o v e r W orkm en 's com pen sation t> 2 i _ U nder 100 e m p l o y e e s e m p l o y e e s * e m p l o y e e s , ,9 9 9 e m p l o y e e s ,0 0 0 o v e r State te m p o r a r y d isa b ility in s u r a n c e _ _ - - _. _ U nder 100 e m p lo y e e s. 7 (M _ e m p lo y e e s _ 11 ( > e m p lo y e e s ( ) , ,9 9 9 e m p lo y e e s 12 < ) ,0 0 0 o v e r 4 (M 4 " ~ - * - " N um ber Numbe:r of establishm ents reporting expenditures of o f A v e ra g e e s ta b lis h p e r m ents payroll Under re p o rtin g hour 10 expen d i (cen ts) tu res cen ts 50 ana A ll s e le cte d i t e m s U nder 100 e m p l o y e e s _ e m p lo y e e s e m p lo y e e s , ,9 9 9 e m p lo y e e s ,0 0 0 o v e r A ll selected item s excluding prem ium pay U nder 100 e m p l o y e e s e m p l o y e e s e m p l o y e e s _ 1 1,000-4,999 em p loyees ,0 0 0 o v e r i 1 Number of establishments too small to justify computation of an average. * The averages in this table are not applicable to manufacturing as a whole. Establishments incurring no expenditures for the particular item s studied were excluded in the computation of these averages, as w ere establishments unable to provide expenditure data.

67 TABLE 18. Expenditures as percent of payroll for reporting establishments only* by item size of establishment, It e m a n d s i z e o f e s t a b li s h m e n t N u m b e r o f e s t a b l i s h m e n t s r e p o r t i n g e x p e n d i t u r e s A v e r a g e p e r c e n t of p a y r o l l U n d e r 1 p e r c e n t N u m b e r o f e s t a b l i s h m e n t s r e p o r t i n g e x p e n d i t u r e s o f 1 a n d u n d e r 2 p e r c e n t 2 an d u n d e r 3 p e r c e n t 3 a n d u n d e r 4 p e r c e n t 4 a n d u n d e r 5 p e r c e n t 5 a n d u n d e r 6 p e r c e n t 6 a n d u n d e r 7 p e r c e n t 7 an d u n d e r 8 p e r c e n t 8 a n d u n d e r 9 p e r c e n t 9 a n d u n d e r 10 p e r c e n t 10 p e r c e n t an d o v e r V a c a t i o n, h o li d a y s, a n d s i c k U n d e r 100 e m p l o y e e s e m p l o y e e s e m p l o y e e s ,000-4, e m p l o y e e s , a n d o v e r " P a i d v a c a t i o n s U n d e r 100 e m p l o y e e s e m p l o y e e s e m p l o y e e s ,000-4, e m p l o y e e s , a n d o v e r P a i d h o li d a y s U n d e r 100 e m p l o y e e s e m p l o y e e s e m p l o y e e s ,000-4, e m p l o y e e s , a n d o v e r P a i d s i c k l e a v e _ 1 U n d e r 100 e m p l o y e e s _ e m p l o y e e s e m p l o y e e s 11 ( 1 ) ,000-4, e m p l o y e e s , a n d o v e r _T " - - P r e m i u m p a y U n d e r 100 e m p l o y e e s _ e m p l o y e e s e m p l o y e e s ,000-4, e m p l o y e e s , a n d o v e r O v e r t i m e p r e m i u m p a y U n d e r 100 e m p l o y e e s e m p l o y e e s e m p l o y e e s ,000-4, 9 99 e m p l o y e e s , a n d o v e r P r e m i u m p a y f o r w o r k on h o li d a y s U n d e r 100 e m p l o y e e s 3 ( M e m p l o y e e s 20. i e m p l o y e e s ,000-4, e m p l o y e e s _ , a n d o v e r 12 ( M " - - " - - S h ift p r e m i u m p a y _ U n d e r 100 e m p l o y e e s 7 ( M _ - _ e m p l o y e e s _ e m p l o y e e s ,000-4, e m p l o y e e s _ - - 5, a n d o v e r P e n s i o n s ( t o t a l ) U n d e r 100 e m p l o y e e s 5 ( M e m p l o y e e s e m p l o y e e s ,000-4, e m p l o y e e s , a n d o v e r I n s u r a n c e (to tal) U n d e r 100 e m p l o y e e s _ e m p l o y e e s _ e m p l o y e e s _ ,000-4, e m p l o y e e s , a n d o v e r " See footnote at end o f table,

68 56 TABLE 18. Expenditures as percent of payroll for reporting establishments only* by item size of establishment, Continued It e m a n d s i z e o f e s t a b li s h m e n t JN u m b e r o f e s t a b l i s h m e n t s r e p o r t i n g e x p e n d i t u r e s A v e r a g e p e r c e n t o f p a y r o l l U n d e r 1 p e r c e n t 1 a n d u n d e r 2 p e r c en t Number of establishm ents Reporting expenditures of L e g a l l y r e q u i r e d p a y m e n t s _ _ U n d e r 100 e m p l o y e e s e m p l o y e e s e m p l o y e e s ,000-4, e m p l o y e e s , a n d o v e r " a n d u n d e r 3 p e r c e n t 3 a n d u n d e r 4 p e r c e n t 4 a n d u n d e r 5 p e r c e n t 5 an d u n d e r 6 p e r c e n t 6 an d u n d e r 7 p e r c e n t 7 an d u n d e r 8 p e r c e n t 8 a n d u n d e r 9 p e r c e n t 9 a n d u n d e r 10 p e r c e n t O ld A g e a n d S u r v i v o r s I n s u r a n c e _ U n d e r 100 e m p l o y e e s e m p l o y e e s e m p l o y e e s ,000-4, e m p l o y e e s , a n d o v e r U n e m p lo y m e n t c o m p e n s a t i o n _ U n d e r 100 e m p l o y e e s e m p l o y e e s e m p l o y e e s ,000-4, e m p l o y e e s _ - 5, a n d o v e r " W o r k m e n 's c o m p e n s a t i o n U n d e r 100 e m p l o y e e s _ 1 - _ e m p l o y e e s _ e m p l o y e e s _ 1,000-4, e m p l o y e e s _ 2 5, a n d o v e r S t a t e t e m p o r a r y d i s a b i l i t y i n s u r a n c e U n d e r 100 e m p l o y e e s 7 (M _ e m p l o y e e s 11 (M e m p l o y e e s 4 (M _ 1,000-4, e m p l o y e e s 12 (M ,0 0 0 a n d o v e r 4 (M 4 - " " - 10 p e r c e n t a n d o v e r in u m dc r o f e s ta b lis h m ents rep ortin g ex p en d i tu res A v era g e p ercen t o f p a y roll U nder 6 p e r cent 6 u n d e r 8 p e r cent Number of establishm ents reporting expenditures of 8 10 p e r cent p e r cent p e r cent p e r cent p e r cent p e r cent p e r cent p e r cent 3 0 p e r cent o v e r A ll se le cte d item s Under e m p lo y e e s e m p lo y e e s e m p lo y e e s , e m p l o y e e s o v e r A ll s e le cte d item s excluding prem ium pay U nder 100 em p lo y e e s e m p l o y e e s e m p l o y e e s ,9 9 9 e m p l o y e e s o v e r _ ' _ _ _ _ Number of establishm ents too sm all to justify com putation of an average. * The a v e ra g e s in this table a re not app lica b le to m anufacturin g as a w h ole. E sta b lish m en ts in cu rrin g no expen d itu res fo r the p a rticu la r item s studied w e re ex clu d ed in the com putation o f th ese a v e r a g e s, as w e re esta b lish m en ts unable to p ro v id e expenditure data.

69 5 7 per hour, with the exception of Old A g e Survivors Insurance p a y m e n t s 26 for which a slightly higher average w a s reported by the larger e stablishments These data illustrate the importance of a proper sampling balance of establishments of different size in expenditure surveys. T h e significance of appropriate representation of the various e s t a b lishment sizes in a sample is scored by the differentials a m o n g size classes for,!all selected i t e m s 11!,all selected items e x cluding p r e m i u m p a y c,f F o r these totals, for such voluntary expenditure items as vacations, holidays, sick leave, shift p r e m i u m s, pensions, insurance, it is, m oreover, important to emphasize that if relative prevalence of practices w e r e taken into account (by computing average expenditures covering all establishments, including those with no expenditures) the differentials between small lar^e establishments wo u l d be substantially wider than these data show. 7 Variations by Industry G r o u p. The classification of m a n u facturing industries into three groups, conveniently if arbitrarily identified as lflow w a g e " (group i), " m e d i u m w a g e " (group II), "high w a g e " (group III), permitted a cursory examination of broad industry differences bearing upon sampling problems. Admittedly, this w a s a substitute for m o r e precise data on specific industries which a larger sample a better rate of response would have yielded. 2 (\ In 1953, employers w e r e required to pay 1.5 percent of e m p l o y e e earnings up to $3,600 a year for Old A g e Survivors Insurance. If a substantial n u m b e r of w o r k e r s earned m o r e than $3,600, an establishments annual contributions would a m o u n t to less than 1.5 percent of total payroll. W h y the ratio exceeded 1.5 p e r cent in a n u m b e r of establishments w a s not ascertained in this study. S o m e of the possible reasons are: P a y m e n t of penalties for late filing; p a y m e n t of interest on unpaid tax; the reporting of payments for four quarters w h i c h did not correspond to the calendar year 1953, r e porting errors. It is also possible that a small n u m b e r of establishm e n t s reporting expenditures in excess of 2 percent of payroll w e r e a s s u m i n g part or all of the w o r k e r s 1 liability; such payments, strictly speaking, should not be classified as legally required payments. 2 ' The representation in this response of establishments employing fewer than 100 workers, as described in a previous section of this report, would have its m o s t profound effect on an average covering all establishments. A s far as the averages for reporting establishments only w e r e concerned, the effect can be illustrated simply: It would require a weighting of five applied to the average expenditure of 4 an hour for paid vacations shown for the smallest size group to reduce the overall average of 5.8 by as m u c h as 0.5 cent. 28 See footnote 6, p. 17.

70 5 8 T h e a v e r a g e e x p e n d i t u r e s p e r a d j u s t e d p a y r o l l h o u r ( t a b l e 1 9 ), t h e a v e r a g e e x p e n d i t u r e s a s a p e r c e n t o f p a y r o l l ( t a b l e 2 0 ), a n d t h e d i s t r i b u t i o n s a n d a v e r a g e s o f e s t a b l i s h m e n t e x p e n d i t u r e s p e r e m p l o y e e p e r y e a r ( t a b l e 2 1 ) l a r g e l y r e f l e c t t h e s a m e i n d u s t r y - g r o u p r e l a t i o n s h i p s. W i t h c e r t a i n e x c e p t i o n s, e s t a b l i s h m e n t s i n t h e l o w - w a g e g r o u p, o n t h e a v e r a g e, e x p e n d e d l e s s o n t h e s e i t e m s o f s u p p l e m e n t a r y r e m u n e r a t i o n t h a n t h e m e d i u m - a n d h i g h - w a g e g r o u p s. H o w e v e r, t h e r e a p p e a r e d t o b e n o c o n s i s t e n t o r s i g n i f i c a n t d i f f e r e n t i a l, f o r t h e m o s t p a r t, b e t w e e n t h e l a t t e r g r o u p s. P e r h a p s t h e m o s t n o t e w o r t h y e x c e p t i o n s t o t h e g e n e r a l i z a t i o n s t h a t e x p e n d i t u r e r a t i o s w e r e l o w e s t i n g r o u p I w e r e f o u n d i n l e g a l l y r e q u i r e d p a y m e n t s. B y a l l t h r e e m e a s u r e s, g r o u p I p a i d a h i g h e r a m o u n t f o r u n e m p l o y m e n t c o m p e n s a t i o n t h a n g r o u p s II a n d I I I. O l d A g e a n d S u r v i v o r s I n s u r a n c e a n d t o t a l l e g a l l y r e q u i r e d p a y m e n t s c o s t m o r e, p e r c e n t a g e w i s e, t o t h e,rl o w - w a g e n g r o u p b u t l e s s i n c e n t s - p e r - h o u r a n d d o l l a r s - p e r - y e a r t e r m s. W o r k m e n s c o m p e n s a t i o n a v e r a g e d t h e s a m e p e r c e n t o f p a y r o l l i n t h e t h r e e i n d u s t r y g r o u p s. I n a l l l i k e l i h o o d, t h e d i f f e r e n c e s b e t w e e n t h e l o w - w a g e g r o u p a n d t h e h i g h e r - w a g e g r o u p s i n e x p e n d i t u r e s f o r t h e v o l u n t a r y o r n e g o t i a t e d i t e m s s t u d i e d w o u l d b e g r e a t e r i f t h e p r e v a l e n c e o f t h e s e s e l e c t e d p r a c t i c e s w e r e t a k e n i n t o a c c o u n t. T h e s o m e w h a t p o o r e r r e s p o n s e f r o m t h e l o w - w a g e g r o u p, a s i n d i c a t e d i n t a b l e 1, h a d a n e g l i g i b l e e f f e c t o n t h e a v e r a g e e x p e n d i t u r e s f o r a l l r e p o r t i n g e s t a b l i s h m e n t s i n t h i s s u r v e y. H o w e v e r, t h e u n d e r r e p r e s e n t a t i o n o f e s t a b l i s h m e n t s i n t h i s g r o u p w o u l d c a r r y g r e a t e r w e i g h t i n a v e r a g e s c o v e r i n g a l l e s t a b l i s h m e n t s, i n c l u d i n g t h o s e w i t h n o e x p e n d i t u r e s. V a r i a t i o n s b y C o l l e c t i v e B a r g a i n i n g S t a t u s. T h e c o m p a r i s o n b e t w e e n a v e r a g e r a t i o s f o r u n i o n a n d n o n u n i o n e s t a b l i s h m e n t s, i n t e r m s o f c e n t s - p e r - p a y r o l l h o u r ( t a b l e 2 2 ) a n d p e r c e n t o f p a y r o l l ( t a b l e 2 3 ), p r e s e n t e d a m i x e d p i c t u r e. E a r n i n g s l e v e l s a p p e a r e d t o b e h i g h e r i n t h e u n i o n e s t a b l i s h m e n t s c o v e r e d, a s i s e v i d e n c e d b y t h e r e l a t i o n s h i p o f p e r c e n t - o f - p a y r o l l r a t i o s t o c e n t s - p e r - h o u r r a t i o s f o r i t e m s s u c h a s O l d A g e a n d S u r v i v o r s I n s u r a n c e. B o t h m e a s u r e s w e r e h i g h e r i n u n i o n e s t a b l i s h m e n t s, a s a g r o u p, f o r p a i d v a c a t i o n s, p a i d h o l i d a y s, p a i d s i c k l e a v e, s h i f t p r e m i u m p a y, i n s u r a n c e a n d h e a l t h p r o g r a m s, 29 a n d t h e c o m b i n e d n a l l s e l e c t e d i t e m s. * 1 T h e c o n t r a r y h e l d f o r p e n s i o n e x p e n d i t u r e s. T h e d i f f e r e n c e s b e t w e e n u n i o n a n d n o n u n i o n e s t a b l i s h m e n t s f o r o t h e r i t e m s s h o w e d n o d i s c e r n i b l e p a t t e r n. 29 A c t u a l f i g u r e s, t a k e n s e p a r a t e l y, s h o w e d a s o m e w h a t l a r g e r d i f f e r e n c e i n p e r c e n t o f p a y r o l l t h a n w a s s h o w n i n t a b l e 2 3.

71 5 9 TA R IFF: 19. A verage expenditures per adjusted payroll hour1 for reporting establishments only* by item industry group, A ll in du stries Group I Group II Group III Item N um ber of e s ta b lis h m ents reporting ex penditures A v e ra g e per a d justed p a y ro ll hour () N um ber of e s ta b lis h m ents reporting ex penditures A v e ra g e p er a d ju sted p a y ro ll hour () N u m ber of e s ta b lis h m ents reporting ex penditures A v e ra g e p er a d justed p a y ro ll hour () N u m ber of e s ta b lis h m ents reporting ex penditures A v e ra g e p er a d ju sted p a y ro ll hour () Vacations, holidays, sick leave P aid vacations P aid holidays P aid sick l e a v e P r e m iu m pay P r e m iu m pay for o v e rtim e P r e m iu m pay for w ork on h o lid a y s Shift p re m iu m p a y P en sio n s (to ta l) Insurance, health, welfare (total) L e g a lly req u ired paym ents O ld A ge S u rv iv o rs Insurance U n em plo ym en t c o m p e n s a tio n ~ W o r k m e n 's c o m p e n s a tio n State tem porary disability insurance ( 3 ) 15 ( 3 ) 10 ( 3) A ll sele c te d ite m s A ll sele c te d ite m s excluding p rem iu m p a y A d ju sted p a y ro ll hours = total p a y ro ll hours le s s vacatio n, holid ay, sick le a v e hours paid for taken. 2 F o r in dustry g ro u p in g s, see footnote 6, p. 17. See table 1 for in du stry id en tificatio n. 3 Number of establishm ents too sm all to justify computation of an average. * The a v e ra g e s in this table a re not ap plicab le to m anufacturing as a w hole. E sta b lish m e n ts in cu rrin g no expenditures for the particular item s studied were excluded in the computation of these averages, as were establishm ents unable to provide expenditure data. T A B L E A v e ra g e expenditures a s p ercen t of p a y ro ll for rep orting e sta b lish m e n ts o n ly * by ite m in dustry g r o u p, A ll in d u strie s Group I G roup II Group III Item N u m ber of e s ta b lis h m ents reporting ex penditures A v e ra g e p ercen t of p a y ro ll N um ber of e s ta b lis h m ents reporting expenditures A v e ra g e p ercen t of p a y ro ll N u m ber of e s ta b lis h m ents reporting ex penditures A v e ra g e p ercen t of p a y ro ll N u m ber of e s ta b lis h m ents reporting ex penditu res A v e ra g e p ercen t of p a y ro ll V a c a tio n s, h o lid a y s, sick leave P a id v acatio n s P aid h olidays P a id sick l e a v e P r e m iu m pay P r e m iu m pay fo r o v e rtim e _ P r e m iu m pay fo r w ork on h o li d a y s Shift p rem iu m p a y ' P e n sio n s (to ta l) ~ Insurance, health, welfare (total) L e g a lly req u ired paym ents O ld A g e S u rv iv o rs In suran ce U n em ploym en t c o m p e n s a tio n W o rk m a n 's com p en sation State tem porary disability insurance ( 2 ) 15 (2 ) 10 (2 ) A ll se le c te d ite m s A ll selected item s excluding p rem iu m pay _ F o r in du stry g rou pin gs, see footnote 6, p. 17. See table 1 for industry id en tificatio n. Number of establishm ents too sm all to justify computation of an average. * The a v e ra g e s in this table a re not ap plicable to m anufacturing as a w h o le. E s ta b lish m e n ts in cu rrin g no ex penditures for the particular item s studied were excluded in the computation of these averages, as w ere establishm ents unable to provide expenditure data.

72 60 TABLE 2 1. Expenditures per year per employee for reporting establishments only* by item industry group, Item industry group N um ber of e s ta b lis h m ents reporting ex penditures A v e r a g e ex penditure per em ployee p er year Under $ 5 0 Number of iestablishm ents reporting expenditures of- 1 $ $ $ $ $ $ $ $ $ $ over V a c a tio n s, h o lid a y s, sick le a v e 528 $ G roup I G roup I I G roup III P a id v a catio n s G roup I _ - _ G roup I I _ - _ G roup III P aid h olidays =. G roup I G roup I I G roup III P aid sic k l e a v e _ 1 G roup I G roup II G roup III " P r e m iu m pay G roup I G roup I I G roup III Overtim e prem ium pay G roup I G roup II G roup III _ Prem ium pay for holiday w o r k _ G roup I G roup I I _ G roup III _ Shift p rem iu m p a y G roup I _ G roup I I G roup III P e n sio n s (total) G roup I _ 1 1 Group I I _ G roup III ! In suran ce (total) G roup I _ _ Group II _ - - _ G roup III L e g a lly req u ired p aym ents _. Group I _ G roup I I _ 1 G roup III O ld A g e S u rv iv o rs In s u r a n c e G roup I T o 6 65 _ G roup I I _ Group III U n em plo ym en t com p en sation G roup I G roup I I _ G roup III W o r k m e n 1s c o m p e n s a tio n _ G roup I G roup I I _ 1 _ G roup III See fo otn otes at end o f table

73 61 TABLE 2 1. Expenditures per year per employee for reporting establishm ents only* by item industry group, Continued Item in dustry group N um ber of e s ta b lis h m ents reporting ex penditu res A v era g e expenditure per em ployee p er ye ar Under $ 5 0 Number of establishm ents reporting expenditures of $ 5 0 $100 $ $200 $ $ $ $ $ $ over L e g a lly req u ired p aym e n ts: - Continued State tem porary disability in s u r a n c e G roup I G roup I I G roup III $ 1 5 ~ r n (*) ( 2) N u m ber of e s ta b lis h m ents reporting ex penditu res A v e ra g e expenditure per em ployee per year Under $ 100 Number of establishm ents reporting expenditures o f $100 $200 $ $ $ $ $ $ $900 1,000 $1,000 o v e r A ll selected item s G roup. I G roup I I G roup III $ A ll sele c te d ite m s excluding prem ium pay. G roup I G roup I I G roup III T5T _ F o r in d u stry g rou pin gs, see footnote 6, p. 17. See table 1 fo r in du stry id en tificatio n. N u m ber of e sta b lish m e n ts too s m a ll to ju stify com putation of an a v e ra g e. * The a v e ra g e s in this table are not applicable to m anufacturing as a w h o le. E sta b lish m e n ts in cu rrin g no ex penditu res for the particular item s studied were excluded in the computation of these averages, as were establishm ents unable to p rovide expenditure d ata.

74 62 TABLE 2 2. Expenditures per payroll hour for reporting establishments only* by item union status, 1953 N um ber Number of establishm ents reporting expenditures of of A v era g e e s ta b lis h - p er Item union status 1 m ents p a y ro ll Under reporting hour 2 ex pendi- () cen ts over tures V a c a tio n s, h o lid a y s, sick le a v e Union e s t a b lis h m e n ts Nonunion e s ta b lis h m e n ts P aid vacations _ Union e s t a b lis h m e n ts _ - Nonunion e s ta b lis h m e n ts P aid holidays _ _ Union e s t a b lis h m e n ts Nonunion e s ta b lis h m e n ts P aid sick l e a v e ? 1 Union e s t a b lis h m e n ts () Nonunion e s ta b lis h m e n ts P r e m iu m pay Union e s ta b lis h m e n ts Nonunion e s ta b lis h m e n ts O v e rtim e p re m iu m p a y Union establishm ents Nonunion e s ta b lis h m e n ts P rem iu m pay fo r h oliday work Union e s t a b lis h m e n ts Nonunion e s ta b lis h m e n ts Shift p rem iu m p a y _ Union p stahli sh m snts Nonunion e s ta b lis h m e n ts P en sio n s (to ta l) Union estab lish m en ts Nonunion e s ta b lis h m e n ts c) Insurance (total) _ Union fist.ahlishmp.nts Nonunion e s ta b lis h m e n ts L e g a lly requ ired paym ents _ _ Union e s t a b lis h m e n ts _ _ Nonunion e s ta b lis h m e n ts O ld A ge S urvivors In su r a n c e _ - _. - _ Union e s t a b lis h m e n ts Nonunion e s ta b lis h m e n ts U nem ploym ent c o m p e n s a tio n _ Union esta b lish m en ts _ Nonunion e s ta b lis h m e n ts W o r k m e n 's c o m p e n s a tio n Union establi shmpnts Nonunion e s ta b lis h m e n ts State tem p o ra ry d isa b ility in s u r a n c e Union establishm ents Nonunion e s ta b lis h m e n ts 11 ( 2) N um ber of A v era g e Number of establishm ents reporting expenditures of e sta b lish - per m ents p ayroll Under reporting hour 10 ex pendi () tures cen ts A ll se le c te d i t e m s Union establishm ents Nonunion e s ta b lis h m e n ts A ll sele c te d ite m s excluding p rem iu m pay Union establishm ents Q 9 3 Nonunion e s ta b lis h m e n ts over 1 Union status not available for 4 establishm ents. Number of establishm ents too sm all to justify computation of an average. * The a v e ra g e s in this table a re not applicable to m anufacturing as a w hole. E sta b lish m e n ts in cu rrin g no expenditures for the particular item s studied were excluded in the computation of these averages, as were establishm ents unable to provide expenditure data.

75 63 TABLE 2 3. Expenditures as percent of payroll for reporting establishm ents on ly * by item union status, 1953 N um ber Number of establishm ents reporting expenditures of of A v e ra g e e s ta b lis h - p ercen t Under Item union status 12 1 reporting payroll o er expenditu res cent p e r p e r p e r p e r p e r p e r p e r p e r p e r cent cent cent cent cent cent cent cent cent V a c a tio n s, h o lid a y s, sick 1 VP Union e sta b lish m e n ts Nonunion estab lish m en ts P aid v acatio ns Union e sta b lish m e n ts Nonunion e s t a b lis h m e n ts P aid h olidays _ Union e sta b lish m en ts Nonunion e s t a b lis h m e n ts P aid sick le ave _ 1 Union esta b lish m e n ts Nonunion e s t a b lis h m e n ts P rem iu m p a y ' Nonunion estab lish m en ts O v e rtim e p rem iu m p a y Nonunion estab lish m en ts P rem iu m pay for holiday w ork _ Nonunion e s t a b lis h m e n ts Nonunion e s t a b lis h m e n ts P en sio n s (total) Union estahli sbmont.s Nonunion estab lish m en ts In surance ( t o t a l) Union esta b lish m e n ts Nonunion estab lish m en ts L e g a lly req u ired paym ents _ _ Union establishm ents _ - Nonunion establishm ents _ _ Old A g e S u rvivors Insurance _ Union esta b lish m e n ts _ Nonunion e s t a b lis h m e n ts Unemployment com p en sation Union esta b lish m e n ts _ Nonunion e s t a b lis h m e n ts W o rk m e n 's c o m p e n s a tio n Union e sta b lish m e n ts _ Nonunion estab lish m en ts State tem porary disability in suran ce _ Union e sta b lish m e n ts 26 i _ - _ N o n u n i o n e s t a b l i s h m e n t s 11 (*) 11 _ p e r cent over N um ber N um ber of eista blish m e n ts rep orting ex penditures of ox A v e ra g e e s ta b lis h 30 p ercent Under m ents of 6 per - rep orting cent p a y ro ll p e r ex penditure s over cent p e r p e r p e r p e r p e r p e r p e r p e r p e r cent cent cent cent cent cent cent cent cent A ll se le c te d ite m s Union e s ta b lis h m e n ts 316 TFTS T~ J T ~ Nonunion estab lish m en ts A ll sele c te d ite m s excluding prem ium pay Union e s ta b lis h m e n ts ~ w t T~ ~JB Nonunion estab lish m en ts C ollective bargaining status not available for 4 establishm ents. 2 Number of establishm ents too sm all to justify com putation of an average. * The a v e r a g e s in this ta b le a re not a p p lica b le to m anufacturin g as a w h o le. E sta b lish m en ts in cu rrin g no expen d itu res fo r the p a rticu la r ite m s studied w e re e x clu d ed in the com putation o f these a v e r a g e s, as w e re e sta b lish m en ts unable to p rovid e expenditure data.

76 6 4 T h e a b s e n c e o f a n y n o t i c e a b l e c o n c e n t r a t i o n o f e x p e n d i t u r e r a t i o s f o r i n d i v i d u a l i t e m s a m o n g e s t a b l i s h m e n t s u n d e r c o l l e c t i v e b a r g a i n i n g a g r e e m e n t s e m p h a s i z e s t h e i n t e r r e l a t i o n s h i p a m o n g s u c h f a c t o r s a s s i z e o f e s t a b l i s h m e n t, i n d u s t r y, a n d c o l l e c t i v e b a r g a i n i n g s t a t u s. I t i n d i c a t e s t h a t e x p e n d i t u r e s u r v e y s l i m i t e d t o m a n u f a c t u r i n g e s t a b l i s h m e n t s u n d e r c o l l e c t i v e b a r g a i n i n g a g r e e m e n t s w o u l d f a c e t h e s a m e t y p e s o f s a m p l i n g p r o b l e m s a s s u r v e y s c o v e r i n g a l l m a n u f a c t u r i n g e s t a b l i s h m e n t s. V a r i a t i o n s b y T y p e o f P r a c t i c e a n d E a r n i n g s L e v e l s. O n e o f t h e c h i e f a d v a n t a g e s o f o b t a i n i n g s e p a r a t e e x p e n d i t u r e f i g u r e s f o r t h e i t e m s s t u d i e d a n d s o m e i n f o r m a t i o n o n t h e p r a c t i c e s c a u s i n g t h e e x p e n d i t u r e s i s i l l u s t r a t e d i n t a b l e s 2 4 t h r o u g h 2 8. I n t h e s e t a b u l a t i o n s, o n e o r m o r e o f t h e f a c t o r s a c c o u n t i n g f o r t h e v a r i a t i o n a m o n g e s t a b l i s h m e n t s i n e x p e n d i t u r e r a t i o s f o r t h e s a m e i t e m i s i s o l a t e d. A s p o i n t e d o u t p r e v i o u s l y, t h e a m o u n t o f i n f o r m a t i o n o n p r a c t i c e s t h a t w a s r e q u e s t e d w a s n o t s u f f i c i e n t t o e x p l a i n a l l o f t h e v a r i a t i o n. E s t a b l i s h m e n t e x p e n d i t u r e s f o r p a i d h o l i d a y s w e r e o b v i o u s l y i n f l u e n c e d b y t h e n u m b e r o f p a i d h o l i d a y s p r o v i d e d a n d t h e e s t a b l i s h m e n t s e a r n i n g s l e v e l ( t a b l e 2 4 ). E s t a b l i s h m e n t s p r o v i d i n g 4 p a i d h o l i d a y s r e p o r t e d a v e r a g e e x p e n d i t u r e s p e r p a y r o l l h o u r a m o u n t i n g t o 2. 4 c e n t s ; f o r 8 p a i d h o l i d a y s, t h e a v e r a g e w a s a p p r o x i m a t e l y t w i c e a s l a r g e ( 4. 9 c e n t s ). T h e a v e r a g e f o r 6 p a i d h o l i d a y s w a s 3. 6 c e n t s. W i t h i n t h e g r o u p o f e s t a b l i s h m e n t s p r o v i d i n g 6 p a i d h o l i d a y s, t h e a v e r a g e e x p e n d i t u r e i n c r e a s e d f r o m 3. 2 c e n t s f o r e s t a b l i s h m e n t s w i t h g r o s s a v e r a g e h o u r l y e a r n i n g s b e t w e e n $ a n d $ t o 3. 8 c e n t s f o r e s t a b l i s h m e n t s p a y i n g b e t w e e n $ a n d $ a n h o u r o n t h e a v e r a g e. O n l y a s m a l l p a r t o f t h e d i s p e r s i o n o f e x p e n d i t u r e r a t i o s s h o w n i n t a b l e 2 4 w a s e x p l a i n e d b y t h e n u m b e r o f p a i d h o l i d a y s p r o v i d e d a n d t h e e s t a b l i s h m e n t ^ e a r n i n g s l e v e l. F o r e x a m p l e, e x p e n d i t u r e s f o r 6 p a i d h o l i d a y s r a n g e d f r o m l e s s t h a n 1 c e n t a n h o u r t o b e t w e e n 5 a n d 6 c e n t s a n h o u r i n t h e g r o u p o f e s t a b l i s h m e n t s w i t h g r o s s a v e r a g e h o u r l y e a r n i n g l e v e l s o f $ 2 t o $ A s s u m i n g t h a t a l l e m p l o y e e s r e c e i v e d 6 p a i d h o l i d a y s a n d t h a t e a c h e m p l o y e e w o r k e d 2, h o u r s d u r i n g t h e y e a r, h o l i d a y e x p e n d i t u r e s a t t h e r a t e o f $ 2 a n h o u r w o u l d a m o u n t t o 4. 6 c e n t s a s a g a i n s t 5. 1 c e n t s a t t h e r a t e o f $ a n h o u r. H o w e v e r, a t l e a s t t h r e e - f i f t h s o f t h e e s t a b l i s h m e n t s i n t h i s c a t e g o r y r e p o r t e d e x p e n d i t u r e s o f l e s s t h a n 4. 6 c e n t s a n h o u r. S o m e o f t h e f a c t o r s p o s s i b l y a c c o u n t i n g f o r t h i s u n e x p l a i n e d d i s p e r s i o n w e r e l i s t e d e a r l i e r i n t h i s s e c t i o n ; t h e p o s s i b i l i t y o f e r r o r s i n e s t i m a t i o n c a n b e d i s p o s e d o f r e a d i l y, s i n c e o n l y 4 o f t h e 5 2 e s t a b l i s h m e n t s i n t h i s g r o u p p r o v i d e d e s t i m a t e d f i g u r e s. W i t h r e s p e c t t o p a i d v a c a t i o n s ( t a b l e 2 5 ), a v a r i a b l e n o t a c c o u n t e d f o r i n t h e p a i d h o l i d a y t a b u l a t i o n w a s t a k e n i n t o c o n s i d e r a t i o n b y c o m p u t i n g t h e a v e r a g e l e n g t h o f t h e v a c a t i o n p e r i o d f o r e a c h

77 6 5 T A B L E 2 4. E x penditu res p e r p a y ro ll hour fo r paid holid ays fo r rep o rtin g e sta b lish m en ts o n ly * by esta b lish m en t earnings level num ber of holidays provided, 1953 G ross average hourly earnings number of paid holidays 1 Number of establishments reporting expenditures Average per payroll hour () Under 1 cent Number of establishments reporting expenditures of over A ll establishments Establishments with gross average hourly earnings of: $1.20 $ $ 1.40 $ $1.60 $ $ 1.80 $ $2. 00 $ $2.20 $ $2.40 $ Establishments providing: 4 paid holidays paid holidays paid holidays $ 1.40 $ $ 1.60 $ $ 1.80 $ $2.00 $ $2.20 $ paid holidays paid holidays Selected intervals provision s. * The a v e ra g e s in this table a re not a p p lica b le to m anufacturin g as a w h ole. E sta b lish m en ts in cu rrin g no expenditures fo r the p a r ticu la r item s studied w e re exclu d ed in the com putation o f these a v e r a g e s, as w e re esta b lish m en ts unable to p ro v id e expenditure data. T A B L E 2 5. E x penditu res p e r p a y r o ll hour fo r paid va ca tion s fo r rep o rtin g esta b lish m en ts o n ly * by esta b lish m en t earnings le v e l a v era g e length o f v a ca tion, 1953 G ro s s a v e ra g e h o u rly earnings a v e ra g e length o f v a c a tio n 1 N um ber of e s ta b lishm ents re p o rtin g expen d i tures A v e ra g e p e r p a y r o ll hour (cen ts) U nder 1 cent Number of establishm ents reporting expenditures of 1 tinder tinder tinder 9 9 tinder o v e r A ll e s t a b lis h m e n t s Establishm ents with gross a v e r a g e earnings of: $ 1.00 $ $ 1.20 $ $ $ $ tinder $ $ $ $ $ $ $ $ $ Establishm ents providing a v e ra g e v a ca tion s of: L e s s than 1 w e e k w e e k s w e e k s $ $ $ 1.60 $ $ 1.80 $ $ tinder $ $ 2.20 $ _ weeks Selected intervals provision s. * The a v e ra g e s in this table a re not a p p lica b le to m a nufacturin g as a w h o le. E sta b lish m en ts in cu rrin g no expenditures fo r the p a r ticu la r item s studied w e re ex clu d ed in the com p u tation o f these a v e r a g e s, as w e re e sta b lish m en ts unable to p ro v id e expenditure data.

78 6 6 establishment, 30 A s expected, average expenditures for paid vacations, in -per-payroll hour, increased consistently with establishment earnings levels with the size of the average vacation period. A m o n g establishments providing an average of between 1V2 2 w e e k s of vacations, with gross average hourly earnings between $2 $2.20, expenditures per hour ranged f r o m less than 4 to m o r e than 9. A s s u m i n g hours to be the equivalent of 1 llz 2 weeks, that each e mployee w o r k e d 2,080 hours during the year, the Explained 1 variation ranged between 5. 8 (60 hours at $2 an hour) 8.5 (80 hours at $2.20 an hour).31 Thus, the,!unexplained'1 variation in this case w a s relatively small. Only 6 of the 36 establishments provided estimated figures; one a m o u n t e d to m o r e than 9 an hour, one to b etween 5 6. T h e influence of the a m o u n t of shift w o r k on shift p r e m i u m expenditures is d e m o n strated in table 26. T h e dispersion of establishment expenditures within the categories determined by the ratio of shift p r e m i u m hours to total payroll hours signifies the operation of factors other than the a m o u n t of shift work. Included a m o n g these factors, of course, are the size of the shift differential an d the p r e v a lence of third-shift w o r k which typically carries a higher p r e m i u m rate than w o r k on the second shift. A distribution of expenditures on paid sick leave by the type of plan in effect (table 27) revealed that expenditures on informal or discretionary leave plans w e r e substantially lower, on the average, than expenditures connected with formal plans. This undoubtedly w a s due largely to differences between discretionary formal plans in the proportions of employees sharing this benefit. Little could be done with the a m o u n t of information requested in isolating s o m e of the factors accountable for variations in pension expenditures. H owever, a separation between contributory n o n contributory plans disclosed slightly higher average expenditures for the contributory plans in per hour32 (table 28) percent of payroll (3.7 percent as against 3.5 percent table not shown). This finding is significant chiefly because it appears to run counter to a popular conception that, in general, noncontributory plans require greater e m p l o y e r expenditures than contributory plans. O n the basis 30 F o r each establishment, the n u m b e r of employee-vacation w e e k s w e r e aggregated divided by the average n u m b e r of production related w o r k e r s (including employees w h o did not receive a paid vacation) to arrive at the average vacation period per employee. For all establishments with vacation practices, the average thus c o m p u t e d w a s 1.7 weeks. The average vacation per vacationer a m o u n t e d to 1.8 weeks. 31 The vacation earnings intervals could be m a d e n a r r o w e r with a larger n u m b e r of establishments reporting. 32 T h e actual figures reported s h o w e d a difference of 0.5 cent.

79 6 7 T A B L E 2 6. E x p e n d i t u r e s p e r p a y r o l l h o u r f o r s h i f t p r e m i u m s f o r r e p o r t i n g e s t a b l i s h m e n t s o n l y * b y v o l u m e o f s h i f t w o r k, Volume of shift work Number of Average establishments per payroll reporting hour expenditures () Under 1 cent Number o'f establishments reporting eixpenditures of A ll establishments _ Ratio of shift prem ium hours to total payroll hours: Less than 5 p e r c e n t p e r c e n t percen t p e rce n t percen t p ercen t percen t p ercen t percen t p ercen t percent m ore Number of shift hours not available for 19 establishm ents. * The a v e ra g e s in this table a re not a p p lica b le to m anufacturing as a w h ole. E sta b lish m en ts in cu rrin g no expen d itu res fo r the p a rticu la r item s studied w e re exclu d ed in the com putation o f these a v e r a g e s, as w e re esta b lish m en ts unable to p rovid e expenditure data. 7 over TABLE 2 7. Expenditures per payroll hour for sick leave for reporting establishm ents o n ly * by type o f plan, 1953 E x penditu res p er p a y ro ll hour (in cen ts) A ll sick leave plans F orm a l plans Inform al or d is c re tio n a r y plans E sta b lish m en ts rep ortin g expenditures A v e ra g e expenditure in p e r p a y ro ll h o u r Establishm ents reporting expenditures of: Under 1 c e n t c e n t s o v e r Type o f plan not r e p o rte d in 4 c a s e s. * The averages in this table are not applicable to m anufacturing as a whole. Establishm ents incu rrin g no expen d itu res fo r the p a rticu la r item s studied w e re exclu d ed in the com putation o f these averages, as w ere establishm ents unable to provide expenditure data. 1 TABLE 2 8. Expenditures per payroll hour for pension plans for reporting establishm ents o n ly * by type o f p la n, 1953 E x penditu res p er p a y roll hour (in cen ts) A ll p ension plans C on trib u tory plans N oncon trib u to ry plans E sta b lish m en ts rep ortin g e x p e n d itu r e s ~ r^ti A v e ra g e expen d itu res in p e r p a y ro ll h o u r Establishm ents reporting expenditures of: U nder c e n t s _ _ 2 18 cen ts o v e r Seven establishm ents did not identify type of plan. * The averages in this table are not applicable to m anufacturing as a w hole. Establishm ents incu rrin g no expen d itu res fo r the p a rticu la r item s studied w ere exclu d e d in the com putation o f these averages, as w ere establishm ents unable to provide expenditure data.

80 6 8 of these data, this w a s not the case a m o n g the establishments covered by this study in The inability to account for variations a m o n g establishments in expenditure ratios, which differs in degree a m o n g the selected items studied, would s e e m to be m o r e of a limitation on the types of uses of expenditure data than on the scope techniques of expenditure surveys. However, intensive studies directed toward this p r o b l e m could substantially n a r r o w the area of unexplained variation, over time, facilitate those uses of expenditure data which depend m o r e on specific establishment co m p a r i s o n s than on aggregate data. Variations in Legally Required P a y m e n t s A m o n g R egions. With the exception ot Old A g e Survivors Insurance, rates practices regarding legally required p a y m e n t s vary by states. T h u s geographic balance in expenditure survey samples a s s u m e s specific importance. In u n e m p l o y m e n t compensation taxes, for example, about 98 percent of all rated employers in Colorado w e r e assigned a zero rate in 1953; Massachusetts R h o d e Isl, on the other h, collected 2.7 percent of taxable w a g e s f r o m all e m p l o y e r s. 33 Regional differences in the levels of legally required payments, in t e r m s of -per-adjusted-payroll hour (table 29) percent of payroll (table 30), w e r e caused in part by variations in state requirements a m o n g the establishments covered in this survey. A v e r a g e expenditures for Federal State u n e m p l o y m e n t compensation taxes in -per-adjusted-payroll hour ranged f r o m 102 in W e s t North Central States to 3.7 in N e w Engl. The corresponding range in percent of payroll w a s 0 o7 to 2.1. W o r k m e n ^ c o m p e n s a tion p r e m i u m s, or the equivalent in self-insured costs, ranged f r o m 0.9 cent an hour (or 0.6 percent of payroll) in the South Atlantic region to 2.5 (1.3 percent of payroll) in the Pacific Coast States. Total legally required payments w e r e highest, in per hour, in the Pacific (8.7 ), N e w Engl (8.2 ) Middle Atlantic regions (8.0 ). Percentagewise, the highest expenditures w e r e reported by establishments in the N e w Engl (4.6 percent) Pacific regions (4.3 percent). 33 R e v i e w of Experience Rating, 1953 in L a b o r M a r k e t E m ployment Security, U. S. D epartment of Labor, B u r e a u of E m p l o y m e n t Security, S e p tember 1954, p. 23.

81 6 9 TABLE 2 9. Expenditures per adjusted payroll hour1 for legally required payments for reporting establishm ents only * b y re g io n type o f paym ent, 1953 Item re g io n N um ber o f e s ta b lis h m ents rep ortin g e x p en d i tures A v era g e p er a d ju sted p a y roll h ou r1 (cen ts) Number of establishm ents reporting expenditures of U nder cen ts o v e r A ll legally required paym ents: A ll r e g io n s N ew E n g la n d M id dle A tlantic E a st N orth C en tral W est N orth C en tral South A tlantic E a st South C e n tr a l W est South C en tral M ountain ( 2) 2 _ 1 _ - P a c ific _ In terreg ion a l Old Age Survivors Insurance; A ll region s New E n g la n d M id dle A tlantic E a st N orth C en tral W est N orth C en tral South A tlantic E a st South C e n tr a l * _ W est South C entral _ - M ountain 3 ( 2) P a c ific In terreg ion a l Unem ployment com pensation (Federal State): A ll re g io n s _ - New E n g la n d M id dle A t la n t ic E a st N orth C en tral _ - W est N orth C en tral _ - - South A tlantic _ E a st South C e n tr a l _ - - W est South C en tral _ - M ountain 3 ( 2) P a c ific In terreg ion a l W orkm en 's com pensation : A ll r e g io n s N ew E n g la n d M id dle A t la n t ic E a st N orth C en tral W est N orth C en tra l South A tlantic _ E a st South C e n tr a l 21 ' _ - W est South C en tral 14 ( 2) _ 1 M ountain 3 ( 2) 3 P a c ific _ 1 _ In te rre g io n a l State te m p o ra ry d is a b ility in su ra n ce: A ll r e g io n s _ M id d le A t la n t ic A d ju sted p a y r o ll h ou rs = total p a y r o ll h ou rs le s s v a ca tion, h olid a y, s ick lea v e h ou rs paid fo r taken. 2 Number of establishm ents too sm all to justify com putation of an average. * The a v e ra g e s in this table a re not a p p lica b le to m anufacturing as a w h ole. E sta b lish m en ts in cu rrin g no expen d itu res for the particular item s studied w ere excluded in the com putation of these averages, as w ere establishm ents unable to p ro vide expenditure data.

82 7 0 TABLE 3 0. Expenditures fo r legally required paym ents as percent of payroll for reporting establishm ents on ly * by region type of paym ent, 1953 Item re g io n of establishments reporting expenditures Average percent of payroll Under 1 percent Num ber of establishm ents reporting expenditures of 1 2 percent 2 3 percent 3 4 percent 4 5 percent 5 6 percent 6 7 percent 7 percent over A ll le g a lly r e q u ired p a ym en ts: A ll re g io n s New E n g la n d M id d le A tla n tic East North Central W est North Central South A t la n t ic E a st South C en tra l - W est South Central - M o u n ta in P a c i f i c Interregional - Old A g e S u rv iv o rs In su ra n ce: A ll r e g i o n s New E n g la n d M id d le A t la n t ic E a st N orth C en tra l - W est North Central South A t la n t ic E a st South C en tra l - W est South Central M o u n ta in P a c ific In te rre g io n a l U nem ploym en t co m p e n sa tio n (F e d e ra l State): A ll r e g i o n s N ew Engl M id d le A t la n t ic E a st N orth C en tral W est North Central South A tlan tic E a st South C en tra l ~ W est South Central M o u n ta in P a c i f i c In te rre g io n a l W o rk m e n 's com p en sa tion : A ll r e g io n s New Engl - M id d le A t l a n t i c E a st N orth C en tra l W est North Central South A t l a n t i c E a st South C en tra l - W est South Central - M o u n ta in P a c i f i c In te rre g io n a l State te m p o r a r y d is a b ility in su ra n ce: A ll regio n s M iddle Atlantic * _ (M _ P ) * ~ P> _ _ 1 _ (l ) (M "" 1 ~ ~ Number of establishm ents too sm all to justify com putation of an average. * The a v e ra g e s in this ta b le a r e not a p p lica b le to m a nufacturin g as a w h ole. E sta b lish m en ts in cu rrin g no expen d itu res fo r the p a r ticu la r ite m s studied w e r e exclu d ed in the com putation o f th ese a v e r a g e s, a s w e re e sta b lish m en ts unable to p rovid e expenditure data.

83 B L i S U. S. D E P A R T M E N T O F L A B O R B U R E A U O F L A B O R S T A T IS T IC S W a s h i n g t o n 2 5, D. C. Budget Bureau No Approval expiree Dec. 81, 1864 C O N F I D E N T I A L T h e M e a s u r e m e n t of Expenditures on Selected Items of Supplementary E m p l o y e e Remuneration, 1953 This survey is designed primarily to provide i n f o r m a tion on h o w expenditures on selected items of supplementary remuneration for production related w o r k e r s can be m e a s u r e d or estimated. If y o u cannot supply s o m e of the information requested below, please indicate w h y. R e a s o n s for your inability to furnish such data are important parts of this survey. T h e period to be covered is the calendar year If a reply to any question m u s t be c o m p u t e d on another basis, please write in the period covered next to yo ur answer. In the case of multiplant companies, a report covering the plant identified on the a c c o m p a n y i n g letter would be preferred. H o w e v e r, multiplant c o m p a n i e s m a y report for all plants if records are maintained on that basis. W h i c h e v e r alternative is selected, it is essential that all of the information supplied relate to the s a m e unit. E S T A B L I S H M E N T (S) C O V E R E D N a m e of c o m p a n y Plant(s) covered by report City a n d state Authorizing official Title Mailing address D o e s a collective bargaining agree m e nt cover a majority of production r e lated w o r k e r s? Y e s 1 N o 1 [ H. P A Y R O L L. A N D E M P L O Y M E N T I N F O R M A T I O N (Please see instructions H - A, II-B a n d H d. ) This basic information will be~needed to relate the expenditures reported in Section IV to annual payrolls, hours, e m p l o y m e n t. A. G r o s s payroll for production related w o r k e r s : $ B. Total m a n - h o u r s for production related w o r k e r s (hours paid for ): C. A v e r a g e n u m b e r of e m p l o y e e s during 1953: Total Production related w o r k e r s 7 1

84 72 HI. PLAN T PRACTICES FOR PRODUCTION AND R E LA TE D W ORKERS. These questions are designed to obtain inform ation on the extent nature of com pany p ra ctice s with re sp e ct to the item s listed. The answ ers are needed to st the expenditure fig u res rep orted in Section IV. A. Paid vacations in 1953 (see in stru ction III-A -1, A - 2. ) 1. A pproxim ate num ber of p r o duction related w o rk e rs re ce iv in g paid vacations w ork ers w ork ers w ork ers w ork ers N um ber of weeks* pay (or equivalent) week weeks weeks w eeks 2. Total vacation m an-hours paid for taken: hours B. Paid holidays (see instruction III-B -1, B -2.) 1. N um ber of holidays paid fo r during 1953: days 2. Total holiday m an -h ou rs paid fo r but not w orked: hours C. Paid sick leave (Report insured sickness accident benefits F. ) 1. P le a se indicate whether you have (1) a form a l definite plan for granting paid sick leave to a m ajority of em ployees ~, (2) an in form al or d iscre tio n a ry plan, or (3) no plan j 2. Total sick leave hours paid for in 1953: h ours. (See in stru c tion I I I -C -2.) D. Shift d ifferen tials 1. Amount of shift d ifferen tials Cents P ercen t per or o f or Other Shift hour earnings (sp ecify) Evening (2 d ) Night (3 d ) Other (e.g. 4th, re lie f, etc. ) S p e c ify Indicate the approxim ate total num ber of m an-hours paid fo r in 1953 fo r w ork on all shifts fo r which a d ifferen tia l was paid: hours

85 73 m. PLAN T PRACTICES FOR PRODUCTION AND RELATED WORKERS - Continued E. P ension or retirem en t plan 1. D oes the establishm ent have a pension or r e tir e m ent plan c o v ering a m a jority of em p loyees? Y es No 2. If so, do em p loy ees contribute to it? Y es N o O 3. If pensions are p rovided, indicate m ethod of funding: On p a y -a s -y o u -g o b a sis. Through p rofit-sh a rin g fund. Through insurance com pany. Through s e lf-in s u r e d trust 1 Other (sp ecify) fund. F. 4. Was a part of p a s t-s e r v ic e liability funded during 1953? Y es or No In su ra nce, health, w elfa re plan 1. D oes the establishm ent have such a plan cov erin g a m a jority of e m p lo y e e s? Y es No [ If so, do em p loy ees contribute to it? Y es No 2. M ethod of com pany financing: P lea se indicate how the plan was financed in 1953: Com pany made a fixed contribution fo r each w orker cov ered. The com pany con tribu tion was (indicate amount): d olla rs per month per em ployee, or per hour, or percen t of p a y roll, or other (sp ecify) Com pany did not make a fix ed contribution but p rov id ed ben efits or covera ge. A ll or m ost of the ben efits w ere p rov id ed through: P urchase of insurance to co v e r benefits [ S elf-in su red plan [ Com bination of above m ethods (sp ecify) 3. B enefits provided fo r em ployees by plan.life insurance (death b e n e fits ) A ccid en tal death dism em berm ent W eekly sick n ess acciden t (nonoccupational), H ospitalization S u rg ica l M edical (other than s u r g ica l) Other (sp ecify)

86 74 IV. COMPANY EXPENDITURES ON SELECTED ITEMS OF SUPPLEM ENTARY REMUNERATION FO R PRODUCTION AND R E LA TE D WORKERS The im portant types of in form ation to be obtained fr o m this section are: 1. Do you keep separate tim e expenditure re c o r d s fo r the item s listed*? (C ols. 1 2) 2. If you keep such re c o r d s, how often do you sum m arize the en tries? (C ols. 3 4) 3. What w ere the actual expenditures fo r each item in 1953? (C ol. 5) 4. If you do not keep r e co rd s for each item, or if separate re c o r d s are not m aintained fo r the unit cov ered by this rep ort, what w ould be your best app roxim ation o f expenditures? (C ol. 6) 5. If you p rovided an approxim ation of expenditures rather than actual fig u res, b rie fly how did you d erive the estim ate (e. g. "total expenditu res p rora ted on the basis of p a y r o lls "; "num ber of days or m an-hour involved m ultiplied by average earnings, " e t c.)? (C ol. 7) E ach o f these o b je c tiv e s, together or sep arately, is im portant fo r this study. BEFO RE FILLIN G OUT THE FOLLOW ING SECTION, PLEASE READ THE INSTRUCTIONS Item Records for proc luctlon related hoi *kers Are expenditure records kept? Yes or No Time Are time records kept? Yes or No _.(n (2) Frequency with which records are summarized ^ - <3) Expenditures (*) Expend litures for production rclated work* srs in 1953 If approximated, Approxi- Indicate briefly for Actual c >r mate each item the method amount or basis of your calculation (use separate sheet If _ 15) (6) necessary) (7) A. V acation s, holidayy s, silck lea^r e Paid vacations $ $ Paid holidays Paid sick leave (exclude Insured plans).. Total. Throughout Section IV use "p" for payroll period, "M" for monthly, nqn for quarterly, "SA" for semiannually, "A" for annually, "None" i f records are not summarized.

87 75 IV. COMPANY EXPENDITURES ON SELECTED ITEMS OF SUPPLEM ENTARY REMUNERATION FOR PRODUCTION AND RELATED WORKERS - Continued Item Records for production related workers Expenditures for production related workers in 1953 Are time Are expenditure Frequency with which records If approximated, 1 Approxi- indicate briefly for records records are summarized * Actual or mate each item the method kept? kept? Expenditures calculation (use amount or basis of your Yes or No Yes or No Time separate sheet if u ) (2) (3) w (5) (6) necessary) (7) B. O vertim e p rem iu m pay (include extra or p rem iu m payment only) Premium pay for overtime daily, weekly, or for work on specific days as such $ $ Premium pay for work on holidays (see instruction IV-A) Shift premium pay- Total Throughout Section IV use np for payroll period, nm" for monthly, "Q" for quarterly, nsan for semiannually, "A0 for annually, "None i f records are not summarized.

88 76 IV. COMPANY EXPENDITURES ON SELECTED ITEMS OF SUPPLEM ENTARY REMUNERATION FOR PRODUCTION AND RELATED WORKERS - Continued Item Records for production related workers Are expenditure Frequency with which records records kept? are Yes or No summarized* (2) (4) Expenditures for production related workers in 1953 Actual (5) Approxio r mate amount (6) If approximated, Indicate briefly for each item the method or basis of your calculation (use separate sheet if necessary) (7) C. P en sion o r retirem en t plans (Exclude adm inistrative c o s ts) 2. Expenditures on individual benefits. (Bracket or combine items if separate figures are not available.) Life insurance (death benefits) Accidental death dismemberment Weekly accident sickness benefits ( insured) 1 1 Throughout Section IV use "p" for payroll period, "M" for monthly, mq" for quarterly, "SA" for semiannually, "A for annually, "None if records are not summarized.

89 IV. COMPANY EXPENDITURES ON SELECTED ITEMS OF SUPPLEM ENTARY REMUNERATION FOR PRODUCTION AND RELATED WORKERS - Continued 77 Item Records for production related workers Are expenditure Frequency with which records records kept? are Yes or No summarized1 (2) (*0 Actual (5) Expenditures for production related workers in 1953 o r Approximate amount (6) If approximated, indicate briefly for each item the method or basis of your calculation (use separate sheet if necessary) (7) D. Insurance, health, welfcire plans - - net exp«m ditu res - Continued Hospitalization. $ $ Surgical Medical (other than surgical) Other (specify) Total E. L eg a lly requ ired ppayments -- em ploye r*s share only Old Age Survivors 1Insurance Unemployment compensation: Federal State (net)---- Throughout Section IV use "P for payroll period, "m" for monthly, nqw for quarterly. "SAn for semiannually, "A for annually, "None i f records are not summarized.

90 78 IV. COMPANY EXPENDITURES ON SELECTED ITEMS OF SUPPLEM ENTARY REMUNERATION FOR PRODUCTION AND RELA TE D WORKERS - Continued Item Records for production related workers Are expenditure Frequency with which records records kept? are Yes or No summarized* (2) (<0 Actual (5) Expenditures for production related workers in 1953 I o ir Approximate amount (6) If approximated, indicate briefly for each item the method or basis of your calculation (use separate sheet if necessary) (7) E. L egally requ ired paym ents - - e m p lo y e r's share only - Continued Workmen*s compensation---- $ $ State temporary disability insurance Other ( specify) Total legally required payments Throughout Section IV use "p" for payroll period, "m" for monthly, V for quarterly, "SA for semiannually, "A" for annually, "Hone" if records are not summarized. V. ARE THERE MAJOR ITEMS OF SUPPLEM ENTARY EM PLOYEE REMUNERATION IN E F F E C T IN ESTABLISHMENTS WHICH ARE NOT LISTED ABOVE? GENERAL REMARKS:

91 Instruction s for Q uestionnaire 79 ITEM I. ITEM II. SE LF E X PLAN A TO R Y P A Y R O L L AND EM PLOYM EN T INFORMATION A. G ross P a y r o ll. R ep ort the. total earnings o f p ro d u c tion rela ted w ork ers on the p a y ro ll o f establish m en t(s) co v e re d by this rep o rt fo r 1953 including d is m is s a l pay, all b on u ses, v a c a tion sic k -le a v e pay (including sick n ess accid en t b en efits, unle s s insured) com pen sation in kind, p r io r to such deductions as e m p lo y e e s ' s o cia l secu rity con tribu tion s, withholding taxes, group in su ra n ce, union d u es, savings bon d s. E xclude le g a lly req u ired paym ents m ade by em p loyers such as Old A ge S u rvivors In su r a n ce, unem ploym ent com p en sation, w o rk m e n 's com p en sation, e t c., p rem iu m s o r other paym ents m ade in con n ection with health, in su ra n ce, pension p la n s. E xclu d e paym ents to m em b ers o f A rm ed F o r c e s p en sion ers c a r r ie d on your active p a y ro ll. (You m ay f o l low the definition of w ages sa la ries that is used fo r calculating the withholding ta x.) B. T otal M a n -h o u rs. In addition to m an-h ou rs actually w orked (not sch edu led hou rs) b y the p rodu ction related w ork ers rep orted in II-C, a lso include h ou rs paid fo r fo r stby o r r e p o r t ing tim e, sick leave (including a bsen ces co v e re d by sick n ess a c cident b en efits, unless in su red ), h olid a ys, vacation s taken d u r ing the y e a r. If em p loyees e le cte d to w ork during vacation p e rio d, re p o rt only actual hours w orked by such em p lo y e e s. Do not con v ert o v ertim e hours to stra igh t-tim e equivalent h ou rs. C. A verage Num ber o f E m p loyees fo r Y e a r. A dd the total num ber of em p loyees attached to the m anufacturing e sta b lish m e n ts ) co v e re d by this rep ort who w orked or re ce iv e d p ay fo r any p art of the pay p e rio d (p re fe ra b ly 1 week) ended n ea rest the 15th o f each of 12 m onths covere d by this re p o rt, divide by 12 to get the average num ber o f em p loyees fo r the y e a r. Include a ll p erson s on paid sick le a v e, paid h olid a ys, paid vacation during these pay p e rio d s; exclude m em b ers of A rm ed F o r c e s p en sion ers c a r r ie d on your active r o lls. If a y e a rly average cannot be rea d ily com puted, p lea se p rovid e b est estim ate identify as an estim a te. P rod u ction R elated W o r k e r s. -Includes w orking fo re m e n all n on su p erv isory w ork ers (including leadm en tra in ees) engaged in fa b rica tin g, p r o c e s s in g, a ssem b lin g, in sp ection, r e ceiv in g, stora g e, hling, packing, w areh ousin g, shipping, m a in tenance, r e p a ir, ja n itoria l, watchm an s e r v ic e s, p rodu cts d evelopm ent, a u xilia ry produ ction fo r p la n t's own use ( e. g., p ow erp lant), r e c ordkeeping oth er s e r v ic e s c lo s e ly a ssocia ted with the above p r o duction op era tion s. E xcludes m em b ers o f the A rm ed F o r c e s ; fo r c e account con stru ction w ork ers h ired te m p o ra rily fo r plant con stru ction, rep a irs o r a ltera tion s; p e n sio n e rs. NOTE: This is the sam e definition used b y the B ureau o f L a b or S tatistics fo r its regu lar m onthly annual p rod u ction - w ork er em ploym ent s e r ie s by oth er governm ent a g e n cie s.

92 8 0 ITEM III. PLA N T PR ACTICES FO R PRODUCTION AND R E LA TE D WORKERS A. P aid V acations 1. R ep ort the num ber o f produ ction rela e rs w ho, during 1953, re c e iv e d a paid vacation of 1 w eek, the num b e r who re c e iv e d 2 w eek s, e tc. If the vacation plan p rovid ed fo r a s p e cific num ber of days (rath er than w eeks) o r if vacation ben efits w ere d eterm in ed as a p ercen tage o f the e m p lo y e e s' annual earn in gs, p lea se co n v e rt to equivalent w eek s, o r fra ctio n s o f w eek s, r e p ort the num ber o f w ork ers re ce iv in g the re sp e ctiv e "equ ivalen t w eek s" ben efits in F o r exam p le, 2 p ercen t o r sligh tly m ore ( e. g., 2 lu p ercen t) is to be con sid e red equivalent to 1 w e e k 's v a cation ; 4 p ercen t or sligh tly m ore ( e. g., 4 1/* p ercen t) to 2 w e e k s ' vaca tion, e tc. If the vacation plan p rovid es 1 d a y 's vacation p er m onth of s e r v ic e, con sid er 5 o r 6 days as equivalent to 1 w e e k 's v a ca tion. 2. The fig u re to be rep orted h ere is the num ber o f vacation m a n -h ou rs paid fo r taken by em p lo y e e s. If an em ployee e le cte d to w ork during his vacation p e rio d, was given his v a c a tion pay without actually taking any tim e o ff, no hours should be in clu ded fo r h im. If all em p loyees r e ce iv e d a u n iform vacation o f 1 w eek, but re ce iv e d varying amounts of vacation pay (som e 1 w e e k 's pay, oth ers 2 o r 3 w eek s' p ay, depending on length o f s e r v ic e ), r e p ort only the num ber of hours paid fo r taken, i. e., only the 1 w eek in this exam p le. B. P aid H olidays 1. P le a se rep o rt h ere the num ber o f paid holidays w hich the m a jo rity of em p loyees re ce iv e d in Do not include any unw orked holidays w hich fe ll on Saturday fo r w hich e m p lo y ees w ere not paid. 2. H olidays fallin g within e m p lo y e e s ' vacation p e rio d, w hich w ere paid fo r in addition to vacation pay, should be counted as h oliday hours paid fo r but not w ork ed. C. P a id S ick L eave 1. S elf explan atory. 2. In com puting total sick leave h ou rs paid fo r, in clude actual num ber o f hours paid fo r ir r e s p e c tiv e o f the rate of p ay. W here nonoccupational sick n ess accid en t ben efits are paid d ire ctly b y the com pany (not in su red ), include corresp on d in g hours paid fo r. D, E, F. S elf explan atory.

93 81 ITEM IV. COMPANY EXPENDITURES ON SE LE CTE D ITEMS OF SU PPLEM E N TA R Y REM UNERATION FO R PRODUCTION AND R E LATED WORKERS G e n e ra l. P lea se p rovid e data fo r each item sep arately, if p o s s ib le. If n e ce s s a ry, h ow ever, item s within a group can be b ra ck eted a com bin ed figu re given. If a p articu la r item listed does not apply to your plant w o rk e rs, p lease draw a line through the item. If no expenditures w ere in volved in connection with a p a r tic ular item in e ffe ct, in sert z e ro (0) in appropriate colu m n. R eco rd s fo r P rod u ction R elated W o r k e r s. T hese questions relate to the availability of plant or o ffice re co rd s which cou ld be u tilized to p rovid e accu rate data. T im e re co r d s r e fe r to c lo c k card s o r other re co rd s showing the num ber o f hours o r days spent by individual w ork ers o r groups of w ork ers in connection with the item listed. Expenditure re co r d s r e fe r to p a y rolls o r o th e iy r e c - ord s showing the wages o r other rem uneration paid to w orkers in c o n nection with the item listed. F req u en cy with which re co rd s are su m m a rized o r totalled re fe rs to the company* s p ra ctice o f aggregating o r totalling the individual tim e o r expenditure re co r d s over a given p e rio d o f tim e to obtain figures fo r the plant as a whole or fo r its d epartm en ts. U se the follow ing sym bols in colum ns 3 4 to indicate the p eriod or p eriod s typically used to su m m arize tim e expen diture r e c o r d s : P a y ro ll p eriod M onthly Q u arterly Sem iannu ally Annually No su m m arization - p - M - Q - SA - A - None A. V acation s, H olidays, Sick Leave P aid V a ca tion s. A ll vacation pay, whether pay fo r vacation s actually taken o r extra pay in lieu of a vacation, should be rep orted h ere. This item should be lim ited to outlays actually m ade during the year should exclude the amount due em ployees fo r leave c a r r ie d over into later y e a rs. It should include paym ents fo r unused vacation leave to em ployees who leave the com pany. P aid H olidays P rem iu m P a y fo r W ork on H olidays. F o r p u rp oses o f this study, it is n e ce s s a ry to separate ex> penditures in cu rred through the recognition o f paid holidays those resu lting fro m w ork on paid o r unpaid h olid ays. The follow ing in stru ction was designed so le ly fo r this p u rp ose.

94 8 2 P aid H o lid a y s. Include Item 1V -A expenditures fo r pay fo r the num ber of holidays (o r holiday hours) rep orted in III-B above, even if w ork was p e rfo rm e d on one o r m o re o f these h olid ays. That is, if the com pany ob serv e d the p ra ctice o f granting 6 paid h olid ays, the expenditures to be rep orted h ere should r e fle c t the expenditures connected with this p r a c tic e. The additional pay going to em ployees who w orked on paid holidays should be excluded. P rem iu m P ay fo r W ork on H o lid a y s. T otal expen ditures (wages plus) fo r holidays w hich w ere w orked should be refin ed fo r the p u rpose o f rep ortin g p rem iu m pay expenditures as follow s: a. E xclude regu lar stra ight-tim e pay fo r w ork p e r form e d. b. E xclude the equivalent o f the holiday pay the w ork er would have re ce iv e d if he did not w ork. c. The balance should be rep orted Item IV -B as p rem iu m pay fo r w ork on h olidays. E xam ple: E m ployee was paid a total o f d ou ble-tim e fo r w ork on what would have been a paid holiday. In this ca s e, no p rem iu m e x penditure would be rep orted. E xam ple: E m ployee was paid d ou b le-tim e o n e - half fo r w ork on what would have been a paid holiday. In this c a s e, the expen ditures on the on e -h a lf tim e should be r e p orted. E xam ple: E xam ple: E m ployee was paid trip le -tim e fo r w ork on what would have been a paid holiday. In this c a s e, on e-th ird (his n orm al pay) should be rep orted as holiday pay IV -A ; on e-th ird should be regard ed as stra ig h t-tim e pay fo r the tim e actually w orked; the rem aining on e-th ird should be rep orted as p rem iu m pay Item IV -B. E m ployee was paid tim e on e-h a lf fo r w ork on an unpaid holiday (that is, he would have re ce iv e d no pay if he had not w ork ed ). In this c a s e, the expenditures on the on e -h a lf tim e should be rep orted. P aid Sick L e a v e. Include all paym ents m ade by the com pan y d ire ctly (not insured) to em ployees fo r tim e lo st b eca u se o f illn e ss o r nonoccupational a ccid e n ts, w hether it was at the w o r k e r s

95 8 3 regu lar rate or at a d ifferen t rate. E xclude paym ents fo r m ed ical c a r e, fo r benefits p rovid ed a State tem p ora ry d isability law (co v e re d in IV -E ), paym ents by the com pany fo r accid en t sick n ess insurance (co v e re d in IV -D ). This item should be lim ited to outlays actually m ade during the year should not include the amount due em ployees fo r leave c a r r ie d over into later y e a rs. It should include cash paym ents fo r unused lea v e. B. O vertim e P rem iu m P ay D aily W eekly O vertim e: P rem iu m P ay fo r W ork on Saturday Sunday. Include only pay above regu lar hourly ra te s. P a y at the regu lar rate fo r hours w orked should be excluded. T hus, if an em ployee re ce iv e s $ an hour fo r stra ig h t-tim e, $ additional as a p rem iu m fo r each ov ertim e hour w orked, the o v e r tim e expenditures rep orted h ere m ust include only the $ o v e r tim e p rem iu m. Include p rem iu m pay fo r Saturday Sunday as such o r fo r 6th 7th days. I V - A.) P rem iu m Pay fo r W ork on H o lid a y s. (See in stru ction Shift P rem iu m P a y. Include only shift prem iu m pay above regu lar h ou rly ra tes. This should include not only d ifferen tials paid in the fo rm o f a higher hou rly rate but sp e cia l paym ents to late shift w ork ers fo r m eal p eriod s fo r any other hours not w orked by them but paid fo r (e.g., 8 hours* pay fo r l l!z hours* w ork by the night shift, com p ared with 8 hours* w ork fo r the day sh ift). C. P en sion o r R etirem en t Plans P e n s io n s. W here the com pany pays into an outside in su rance fund, the total prem iu m s paid by the com pany, le ss any d ividen ds, should be rep orted. W here the com pany pays into an i r revoca b le tru st, its paym ents into this fund should be rep orted. (This r e fe r s, in either ca s e, to paym ents fo r past s e r v ic e cred its as w ell as paym ents fo r cu rren t s e r v ic e c r e d it s.) If a pension plan is financed through a p ro fit-sh a rin g plan past cu rren t s e r v ic e cre d its are not accounted fo r, p rovid e total con tribu tion s. O th erw ise actual com pan y paym ents to p en sion ers should be rep orted. In the latter c a s e, if the em ployees contribute to p en sion s, all em ployee contribu tion s during the year should be deducted fro m the amount paid out. P en sion expenditures rep orted h ere should be r e s t r ic ted to those fo r produ ction related (plant) w ork ers in the esta b lis h m e n ts ) co v e re d by this re p o rt. If the pension plan applies to m o re than one plant o f a m ultiplant com pany w hereas this rep ort cov e rs only one establish m en t, o r if the plan applies to all em p loyees, in cluding o ffic e, su p e rv isory, tech n ica l, etc., no separate re co r d s