Annual Comp Cost Hikes Up Slightly in 2006

January 31, 2007 ( - Government data shows that annual compensation costs for civilian workers jumped 3.3% for the year ended December 2006, up from 3.1% for the prior year.

A Department of Labor (DoL) news release said data from the Bureau of Labor Statistics (BLS) Employment Price Index showed that private industry c ompensation costs rose 3.2% for the 12 months ending December 2006, up from the 2.9% hike the year before. Meanwhile, compensation costs increased 4.1% for the year ended December 2006 for state and local government, the same as the prior 12-month period.

The data are from the BLS Employment Cost Index.

The components of compensation differed in their rates of change during the year. While hikes in wages and salaries became greater, the sharp increases in benefit costs seen for civilian and private industry workers over the past several years slowed to a more moderate pace.

For civilian workers, wages and salaries rose 3.2% in the year ended December 2006, greater than the 2.6% gains in December 2005 and the 2.5% hike in December 2004. Benefit costs gained 3.6% for civilian workers for the year ended December 2006, slowing significantly from increases of 4.5% for the year ended December 2005 and 6.7% for the year ended December 2004.

For the September to December quarter, total compensation costs for civilian workers increased 0.8% moderating from the 1% increase for the prior quarter (See Compensation Costs Little Changed from Prior Quarter ).

Fourth quarter wages and salaries were up 0.8% between September and December, compared with the 0.9% hike in the third quarter. Benefit costs during the quarter rose 1.1%, unchanged from the earlier quarter.

According to the BLS, benefit cost increases accounted for one-third of the fourth-quarter rise in compensation costs for civilian workers. Among private industry workers, benefit costs made up about three-tenths of the compensation gains during the quarter.

Among state and local government workers, benefit costs comprised approximately two-fifths of the compensation cost gains during the September to December quarter. Health insurance costs and defined benefit contributions represented nearly three-tenths of the fourth quarter gain in compensation costs for state and local government workers.

The BLS news release is here .