Benefits Now 27% of Compensation Dollar: BLS

July 3, 2001 (PLANSPONSOR.com) - Average total compensation paid by private industry employers to their employees continues to increase, while benefit costs represented a growing share of compensation expense.

In March, average total compensation increased by 4.8% to $20.81 per hour over the last twelve months, according to figures released by the Bureau of Labor Statistics (BLS). At the same time, the data also shows that increases in benefit costs have outpaced wage increases and now average $5.63 per hour – 27.1% of total compensation costs.

When compensation figures for State and local government workers are added, the figure increases to $22.15 per hour, with wages and salaries accounting for 73% of these costs, and benefits making up the remainder.

Health and Retirement Benefits

Average health benefits costs in private industry were found to be $1.16 per hour, or 5.6% of total compensation, varying across region, where these costs ranged from $1.05 per hour in the South, to $1.37 in the Northeast, and occupation, where health benefits accounted for 6.9% of total compensation for blue collar workers versus 5.1% for white collar workers, among other factors.

The BLS also released data on retirement costs, which showed that the average cost for retirement and savings benefits in private industry was 62 cents per hour, or 3% of total compensation.

In March 2001, retirement and savings costs:

  • in goods-producing industries were 83 cents per hour, or 3.4% of total compensation, while in
  • service-producing industries, they were 55 cents per hour, or 2.8%.

Collar Color

The average cost per hour worked for retirement and savings was:

  • 75 cents for white-collar occupations
  • 66 cents for blue-collar occupations, and
  • 15 cents for service occupations.

The percentage of total compensation accounted for by retirement and savings benefits was:

  • 3.4% among blue-collar occupations,
  • 3.0% for white collar occupations and
  • 1.5% for service occupations.

And across the regions, retirement and savings costs were as follows:

  • 74 cents in the Northeast
  • 63 cents per hour in the Midwest,
  • 51 cents per hour in the South
  • 66 cents in the West

Occupation and Industry

Compensation costs varied across industry and occupational group, with Professional specialty occupations earning the most. They earned $37.62 per hour in total average compensation, while handlers, equipment cleaners, helpers and laborers at the other end of the pay scale with a total hourly average compensation of $13.83.

Within goods producing industries, average total employer compensation costs were $24.40 per hour. Breaking the numbers down further, the data shows that the average employer compensation costs in:

  • Construction was $24.08 per hour
  • Manufacturing was $24.30 per hour

While in the service industry, the average total employer compensation cost was $19.74 per hour, with:

  • the transportation and public utilities industry paying $27.70 per hour,
  • the wholesale trade sector paying $22.83,
  • retail trade paying $11.49 per hour, and
  • finance, insurance and real estate providing $27.29 per hour.

Regional Differences

The BLS also provided compensation data by region, with figures showing that total average compensation was:

  • $23.91 per hour in the Northeast, which paid 28% in benefits
  • compared to $18.59 in the South, 26.3% of which was benefits
  • $20.47 in the Midwest, with benefits accounting for 28.2%, and
  • $21.86 in the West, with 25.9% paid in benefits

The figures are derived from BLS’s employment cost index data series, and are updated in March of each year.

– Camilla Klein  editors@plansponsor.com
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