Wage, Benefits Costs Rise in Q4

Compensation costs for private industry rose 0.5% from September to December 2008, down from the prior quarter’s increase of 0.6%. For the fourth quarter, state and local government compensation increased 0.5%, half the prior quarter’s increase of 0.9% (see Total Comp Costs Stay Level for Three Quarters .

Additionally, total compensation costs for civilian workers increased 0.5% from September to

December 2008, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported. That follows three consecutive quarterly increases of 0.7%.

Wages and salaries for private industry workers increased 0.6% in Q4, matching the prior quarter’s pace. In state and local government, wages and salaries increase was 0.4%, half the 1.0% increase in the prior quarter. Benefit costs for private industry rose 0.4%, compared to 0.6% in the previous quarter. For state and local government, benefit costs increased 0.8%, compared to 0.7% in Q3.

Year-to-year Comparison

Compensation costs for civilian workers increased 2.6% for the year ended December 2008, less than the 3.3% increase for the year ended December 2007. In private industry, compensation costs rose 2.4% last year, down from a 3.0% increase the prior year. For state and local government, the increase for the 12-month period ended December 2008 was 3.0%, less than the December 2007 increase of 4.1%. Wages and salaries for civilian workers increased 2.7% during the year, compared with a 3.4% increase for 2007.

State and local government wages and salaries increased 3.1% for the year ended December 2008, while the increase for the 12-month period ending December 2007 was 3.5%. Benefits increased 2.2% for civilian workers. In private industry, benefit costs increased 2.0%, less than the 2.9% increase for state and local government for the 12-month period ended December 2008.

For the year ended December 2008, private industry compensation costs increased 2.4% for

goods-producing industries, the same as the increase in December 2007. Compensation costs for manufacturing increased 2.0% for the year ended December 2008, also the same as for the year ended December 2007.

In the construction industry, compensation costs rose 3.1%, compared to 3.9% for the 12-month period ending December 2007. The over-the-year increase for December 2008 in compensation costs for service-providing industries slowed to 2.5%. According to the report, the December 2007 increase was 3.2%. Among the major service-providing industries, changes in compensation costs ranged from 1.2% in information to 3.8% in professional and business services, according to the report.

Among private industry occupational groups, over-the-year compensation gains ranged from 1.7% for sales and office occupations, to 2.9% for management, professional, and related occupations.

Compensation costs for union workers advanced 2.8% in the year ended December 2008, while compensation costs for nonunion workers increased 2.4%. Wages and salaries for union workers increased 3.2% in the 12-month period ended December 2008. Nonunion workers saw a smaller increase of 2.5%. Benefit costs rose 1.9% in the 12-month period for both union and nonunion workers.

The Employment Cost Index, a product of the National Compensation Survey, measures quarterly changes in compensation costs for civilian workers (nonfarm private industry and state and local government workers). More information is available at http://www.bls.gov/news.release/eci.nr0.htm