Employer Costs For Employee Compensation-september 2007
EMPLOYER COSTS FOR EMPLOYEE COMPENSATION-SEPTEMBER 2007
Employer costs for employee compensation for civilian workers averaged $28.03 per hour
worked in September 2007, the U.S. Department of Labor¿s Bureau of Labor Statistics reported
today. Wages and salaries, which averaged $19.56, accounted for 69.8 percent of these
costs, while benefits, which averaged $8.47, accounted for the remaining 30.2 percent. Employers
averaged $2.35 for life, health, and disability insurance or 8.4 percent of total compensation.
In addition to insurance, the other benefit categories were: legally required benefits, including
Social Security, Medicare, unemployment insurance, and workers¿ compensation, which averaged
$2.22 (7.9 percent of total compensation); paid leave benefits (vacations, holidays, sick
leave, and other leave), which averaged $1.95 (7.0 percent); retirement and savings, which
averaged $1.22 per hour (4.4 percent of total compensation); and supplemental pay (overtime and
premium, shift differentials, and nonproduction bonuses), which averaged 72 cents per hour
worked. (See table 1.) The Employer Costs for Employee Compensation program is a product of
the National Compensation Survey, which measures employer costs for wages, salaries, and
employee benefits for nonfarm private and state and local government workers. (See table 1.)
State and local government employers spent an average of $13.24 for benefits for every
hour worked in September 2007. This accounted for 33.5 percent of total compensation. Private
industry employers averaged $7.66 for benefits or 29.4 percent of total compensation. State
and local government employer costs for health benefits were higher ($4.35) than private industry
($1.85). Retirement and savings costs, which includes both defined benefit and defined
contribution plans, were also higher for state and government employers ($3.04) than private
employers ($0.92). (See tables 3 and 5.)
Private industry
In September 2007, private industry employer compensation costs averaged $26.09 per hour
worked. Private industry employer wages and salaries averaged $18.42 per hour (70.6 percent),
while benefits averaged $7.66 (29.4 percent). In September 2007, private industry employer
costs for paid leave averaged $1.76 per hour worked (6.8 percent), supplemental pay averaged
78 cents (3.0 percent), insurance benefits averaged $1.99 (7.6 percent), retirement and savings
averaged 92 cents (3.5 percent), and legally required benefits averaged $2.21 (8.5 percent) per
hour worked. (See table 5.)
Compensation costs in state and local governments
In September 2007, employer costs in state and local governments averaged $39.50 per hour
worked. State and local governments wages and salaries, averaged $26.26 per hour (66.5 percent),
while benefits, averaged $13.24 (33.5 percent). Among state and local government employees,
average hourly compensation costs were higher for management, professional, and related
occupations ($48.35) than for service occupations ($30.74) and sales and office occupations
($27.00). Wages and salaries averaged $33.74 per hour worked for management, professional, and
related occupations; $18.45 for service occupations; and $16.64 for sales and office occupations.
Wages and salaries accounted for 60.0 percent of total compensation for service employees and
61.6 percent for sales and office employees; management, professional, and related employees,
wages and salaries represented a significantly higher proportion of total compensation (69.8
percent). (See table 3.)
For state and local government employees, employer costs for insurance benefits ranged
from $3.68 per hour, or 12.0 percent of total compensation for service occupations, to $4.96 per
hour worked, or 10.3 percent of total compensation for management, professional, and related
occupations. For sales and office occupations, employer insurance costs averaged $4.23, or
15.7 percent of compensation. The largest component of insurance costs was health insurance,
which averaged $4.35, or 11.0 percent of total compensation for state and local government
employees.
In September 2007, the average cost for retirement and savings benefits was $3.04 per hour
worked in state and local governments (7.7 percent of total compensation). Included in this
amount were employer costs for defined benefit plans, which averaged $2.73 per hour (6.9 percent),
and defined contribution plans, which averaged 31 cents (0.8 percent). Defined benefit plans
specify a formula for determining future benefits, while defined contribution plans specify
employer contributions but do not guarantee future benefits.
A major component of benefit costs is paid leave, including vacations, holidays, sick
leave, and other leave. The average cost for paid leave was $3.07 per hour worked for state
and local government employees. Among occupational groups, the average cost for management,
professional, and related workers was $3.36, significantly higher than the costs for sales and
office workers, which averaged $2.54, and for service workers, which averaged $2.78.
Costs for legally required benefits, including Social Security, Medicare, unemployment
insurance (both state and federal), and workers¿ compensation, averaged $2.29 per hour worked
for state and local government employees. The average cost for management, professional, and
related workers was $2.65 per hour worked (5.5 percent of total compensation); greater than the
costs for sales and office workers which averaged $1.65 (6.1 percent), and service workers which
averaged $1.90 (6.2 percent)
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NOTE:
The Employer Costs for Employee Compensation for December 2007 is scheduled to be
released Wednesday, March 12, 2008, at 10:00 AM EDT.
New employer cost series for private industry workers by industry were introduced with
the release of December 2006 estimates. Aircraft manufacturing has been added to table 10
and nursing care facilities to table 14. The construction and extraction series in
table 9 has been modified to include farming, fishing, and forestry occupations.
Historical data are available at [url]http://www.bls.gov/ect[/url]. In addition, 14 supplemental
tables with additional occupational, establishment size, and bargaining status series for
detailed industries are available at [url]http://www.bls.gov/ncs/ect/sp/ecsuptc4.pdf[/url] and
[url]http://www.bls.gov/ncs/ect/sp/ecsuptc4.txt[/url]. Finally, new procedures for variance
calculation and for benchmarking occupational weights are in place. See the technical
note for more details.
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