YOUR MONEY : Workers’ Pay Rises at Historically Low Rate : Labor: Economists say the government figures on compensation show inflation remains in check.

Compensation for American workers grew at a historically slow pace in the second quarter of the year, the government said Tuesday.

The Labor Department’s employment cost index provides the latest evidence that inflation remains in check, economists said. It shows that worker compensation rose at an annual rate of 3.2%, the same as in the 12 months ended March 30, which was the smallest increase on record.

The report shows there is “no convincing sign” of inflation in the economy, said Robert G. Dederick, chief economist with Northern Trust Co. in Chicago.

The index, created in 1982, measures changes in wages, salaries and employer costs for employee benefits such as health insurance, vacations and sick leave. It is considered one of the best gauges of wage inflation.

Wages and salaries, which constitute 72% of total worker compensation, edged up 3%, the Labor Department said. Benefit costs were up 3.8%.

Inflation “remains contained on the labor level,” said economist Robert Barr of the U.S. Chamber of Commerce. “You would expect that if the strong economy was indeed going to push us into a much higher level of inflation, there would be higher numbers at this point.”

A continuing slowdown in the cost of health insurance, workers’ compensation and state unemployment insurance helped moderate the increase in benefit costs. Health insurance and workers’ comp costs are the most rapidly rising expenses for businesses.

Worker salaries and benefits represent about two-thirds of the cost of a product, and holding the line on increases in compensation allows businesses to offer goods at the lowest possible prices.

Wages and salaries rose 0.8% in the second quarter after a 0.7% increase in the first three months of the year. Benefit costs increased to 1%, after a 0.9% gain in the previous quarter.

Economists pay more attention to the annual rates because they smooth out fluctuations seen in the more volatile quarterly figures.

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The Labor Department reported separately that contracts negotiated by unions for their members in the second quarter of this year provided annual wage increases that were smaller than those called for in the agreements they replaced.

Agreements reached during the period had wage increases averaging 2.3% in the first year and 2.4% over the life of the contracts. The agreements they replaced had increases averaging 2.9% in the first year and 3% over the life of the contracts.