Employment Cost Index Comparator
Compare pay growth with a compensation benchmark.
Employment Cost Index Comparator: Scenario Inputs
Annual percentage rate or benchmark index change.
Inflation & Purchasing Power Analysis
Over 3 years at 3.5% inflation, a $75,000 salary requires $83,154 to retain equal purchasing power. Without matching raises, your real compensation experiences an effective reduction of $7,355 (-9.81%).
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How Employment Cost Index Comparator Works?
The Employment Cost Index Comparator works by compounding quarterly ECI changes and comparing the total with your raises over the same quarters.
Pick the ECI series
Choose total compensation, or wages and salaries, for all workers or a sector.
Enter your raise dates
Type your salary and the quarters your raises took effect.
Compound the quarters
The comparator multiplies quarterly ECI factors over your period.
Read the gap
The output compares your growth with ECI growth and shows the ECI-matched salary.
Employment Cost Index Comparator Formula
The Employment Cost Index Comparator formula compounds quarterly ECI changes and compares the result with your pay growth.
ECI Growth = Π (1 + eq) − 1
Annual = (1 + ECI Growth)4/n − 1
Variables
- eq
- ECI change in quarter q
- n
- Number of quarters
Worked example
Eight quarterly ECI changes between 0.8% and 1.2% compound to 8.18% over 2 years, an annual rate of 4.01%. Two yearly raises of 3.5% give 7.12%.
Employment Cost Index Comparator Conversion Table
This table compounds 8 example quarterly ECI changes and compares them with 3.5% yearly raises.
| Quarter | ECI change | ECI cumulative | Your cumulative (3.5% each 4 quarters) |
|---|---|---|---|
| Q1, year 1 | 1.1% | 1.10% | 0.00% |
| Q2, year 1 | 0.9% | 2.01% | 0.00% |
| Q3, year 1 | 1.2% | 3.23% | 0.00% |
| Q4, year 1 | 1.0% | 4.27% | 3.50% |
| Q1, year 2 | 0.9% | 5.20% | 3.50% |
| Q2, year 2 | 0.8% | 6.05% | 3.50% |
| Q3, year 2 | 1.1% | 7.21% | 3.50% |
| Q4, year 2 | 0.9% | 8.18% | 7.12% |
Quarterly ECI changes are illustrative examples.
What is Employment Cost Index Comparator?
The Employment Cost Index Comparator is a tool that compares your pay growth with the Employment Cost Index (ECI), a quarterly measure of labor-cost growth published by the U.S. Bureau of Labor Statistics (BLS). The ECI tracks wages and benefits for a fixed mix of jobs.
The ECI holds the job mix constant, so the index measures pay changes for the same work, not shifts in who is employed.
What are the uses of Employment Cost Index Comparator?
There are 4 main uses of the Employment Cost Index Comparator.
Benchmark raises
Compare raises with economy-wide labor-cost growth.
Set contract escalators
Use ECI growth in government and service contracts.
Plan compensation budgets
Set merit budgets near ECI wage growth.
Track sector trends
Compare ECI growth for different industries and job groups.
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