Consumer Price Index For Urban Wage Earners And Clerical Workers (CPI-W)

What Is Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)?

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) is a variation of the consumer price index, as ordered by the Bureau of Labor Statistics (BLS) in the United States, that measures the changes in consumer prices to which certain workers are uncovered. The index is principally used on an annual basis, to reflect changes in the costs of benefits paid to Social Security beneficiaries.

The Consumer Price Index for Urban Wage Earners and Clerical Workers is updated month to month, usually with a one-month lag.

Understanding the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)

The CPI-W is calculated using similar data collected by the Bureau of Labor Statistics, but includes data from just certain demographics: those households with something like half of the household income coming from clerical or wage paying position, and somewhere around one of the household's earners must have been employed for no less than 37 weeks of the year.

The CPI-W is used as a benchmark for the vast majority benefit plans to reflect changes in the cost of benefits, but it can likewise be used in calculating future contract obligations.

History of the Consumer Price Index for Urban Wage Earners and Clerical Workers

In 1974, the BLS considered forsaking the CPI-W for the more extensive CPI-U population. However, labor union leaders, individuals from Congress, and individuals from different organizations who were CPI data users protested — they didn't go against the new index, but they generally disliked supplanting the CPI-W. They worried that the more extensive index would never again be "immovably grounded in the experience of low-and middle-income workers." Instead, they advanced the creation of a separate index covering the extra workers.

As a result, when BLS introduced the CPI-U in 1978, it continued calculating the CPI-W. Of course, the CPI-W was not discontinued following three years all things considered — but the funds for conducting an independent survey of prices for both official populations were. As a result of these budget cuts and because little difference was seen between the CPI-U and CPI-W measures during this period, BLS discontinued the separate but overlapping samples of individual things and outlets kept up with from 1978-1980 for the CPI-U and CPI-W.

BLS financial experts now track spending and prices by using the CPI-U sample of geographic areas, outlets, things and prices. The CPI-W is then derived by adjusting the weights for various spending categories, mirroring that the spending propensities for the wage earner population vary somewhat from the all urban consumer population.