Cost of Benefits Outpaces Compensation Growth
BY Matt Quinn
June 30, 2004 -- Total employee compensation is increasingly being made up of benefits like health insurance, according to a new report put out by the Department of Labor.
Private industry employee compensation averaged $23.29 per hour worked in March 2004. Of this, wages and salaries made up 71.5 percent, or $16.64. The remaining $6.65 consisted of benefits like paid leave, insurance, retirement savings and various legally required benefits.
Benefits' 28.5 percent share of total compensation was the highest level it's been for private industry workers since 1994, when benefits made up just under 29 percent of compensation.
Health benefits were predictably costly, making up 6.6 percent of total compensation. That marked their highest level since 1994 as well.
Wages and salaries have been on a continuous decline as a percentage of total compensation over the last five years, after peaking at 73 percent in 2000 during the economic boom in the United States.
MATT QUINN contributes to the Wall Street Journal's corporate finance blog. He has also written extensively about banking and corporate finance for publications including Inc., American Banker, and Financial Week. He lives in Brooklyn, New York.