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EMPLOYER COSTS FOR EMPLOYEE COMPENSATION-JUNE 2008
Employers spent an average of $1.25 for employee retirement and savings plans for
every hour worked in June 2008, the U.S. Department of Labor’s Bureau of Labor Statistics
reported today. This accounted for 4.4 percent of total compensation. Retirement and
savings, which includes both defined benefit and defined contribution plans, is only one
of several benefits included in the Employer Costs for Employee Compensation survey, along
with wages and salaries. Total compensation (wages and salaries and benefits) for civilian
workers averaged $28.48 per hour worked in June 2008. Wages and salaries, which averaged
$19.85, accounted for 69.7 percent of these costs, while benefits, which averaged $8.64,
accounted for the remaining 30.3 percent. (See table 1.) The Employer Costs for Employee
Compensation program, a product of the National Compensation Survey, measures employer
costs for wages, salaries, and employee benefits for nonfarm private and state and local
government workers.
In addition to retirement and savings the other benefit categories were: life, health,
and disability insurance benefits, which averaged $2.39 (8.4 percent of total compensation);
legally required benefits, including Social Security, Medicare, unemployment insurance, and
workers’ compensation, which averaged $2.25 per hour (7.9 percent); paid leave benefits
(vacations, holidays, sick leave, and personal leave), which averaged $1.99 (7.0 percent);
and supplemental pay which averaged 76 cents (2.7 percent).
Private industry
In June 2008, private industry employer compensation costs averaged $26.78 per hour
worked. Wages and salaries averaged $18.92 per hour (70.6 percent), while benefits averaged
$7.86 (29.4 percent). Employer costs for paid leave averaged $1.78 per hour worked
(6.7 percent), supplemental pay averaged 83 cents (3.1 percent), insurance benefits averaged
$2.05 (7.7 percent), retirement and savings averaged 95 cents (3.6 percent), and legally
required benefits averaged $2.24 (8.4 percent) per hour worked. (See table 5.)
Retirement and savings benefit costs in private industry
In June 2008, average costs in private industry for retirement and savings benefits were
95 cents per hour worked, or 3.6 percent of total compensation. The average cost per hour
worked for defined benefit plans--retirement plans that typically specify a benefit based on
age, years of service, and earnings--was 42 cents (1.6 percent of total compensation). The
average cost for defined contribution plans--retirement plans usually based on employer
contributions to individual employee accounts--was 53 cents (2.0 percent of total compensation).
(See table 5.) Employer costs for retirement and savings plans are affected by several
factors, including the percentage of employees that have access to and participate in the plans
offered by their employer. (The National Compensation Survey produces comprehensive data on
the percentage of workers with access to and participation in retirement plans. Data for
March 2008 were recently released and are available at http://www.bls.gov/news.release/pdf/ebs2.pdf).
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NOTE
Effective with the December 2008 release, series for metropolitan and nonmetropolitan
areas in table 7 will be discontinued.
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Among occupational groups, retirement and savings costs ranged from 22 cents per hour worked
for service occupations to $1.94 for management, professional, and related occupations. Sales
and office occupations averaged 61 cents; production, transportation, and material moving
occupations, 87 cents; and natural resources, construction, and maintenance occupations, $1.42
per hour. The proportion of total compensation represented by retirement and savings ranged from
1.6 percent for service workers to 4.7 percent for natural resources, construction, and maintenance
workers. (See table 5.)
Retirement and savings costs were higher, both in amount and as a proportion of total
compensation, for union workers ($2.44 and 6.7 percent of total compensation) than for nonunion
workers (78 cents and 3.0 percent of total compensation). Defined benefit plan costs were
significantly higher for union workers ($1.73 and 4.8 percent of compensation) than for nonunion
workers (27 cents and 1.0 percent of compensation). (See table 5.)
Retirement and savings costs were higher per hour worked in goods-producing industries ($1.45
and 4.6 percent of total compensation) than in service-providing industries (83 cents and 3.2
percent of total compensation). Retirement costs within goods-producing industries averaged
$1.54 per hour in construction and $1.31 per hour in manufacturing. Costs in service-providing
industries varied widely, ranging from 13 cents in leisure and hospitality to $1.49 in information
and $1.51 in the financial activities industry. (See table 6.)
Among the four census regions, retirement and savings costs ranged from 84 cents per hour
in the South to $1.14 in the Northeast. Retirement and savings costs were 97 cents in the West
and 95 cents in the Midwest. Within the nine census divisions, retirement and savings costs
ranged from 53 cents in the East South Central division to $1.19 in the Middle Atlantic division.
(See table 7.)
Retirement and savings costs increased, both in cost per hour worked and proportion of total
compensation, with establishment size. Establishments with fewer than 50 workers averaged 50 cents
(2.3 percent), significantly less than establishments with 500 workers or more, averaging
$1.89 (5.0 percent). (See table 8.)
Since June 2003, private industry retirement and savings costs have changed in terms of total
compensation percentage from 3.0 to 3.6 percent. Defined benefit cost percentages in June 2003
were 1.1 percent of total compensation compared with 1.6 percent currently while defined
contribution percentages were similar at 1.9 percent versus 2.0 percent.
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NOTE
The Employer Costs for Employee Compensation news release for September 2008 is scheduled
for Wednesday, December 10, 2008, at 10:00 AM (EST).
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Table of Contents:
Table 1. Civilian workers, by major occupational and industry group 5
Table 2. Civilian workers, by occupational and industry group 7
Table 3. State and local government workers, by major occupational
and industry group 8
Table 4. State and local government workers, by occupational and
industry group 9
Table 5. Private industry workers, by major occupational group and
bargaining unit status 10
Table 6. Private industry workers, by major industry group 12
Table 7. Private industry workers, by census region and division,
and area 14
Table 8. Private industry workers, by establishment employment size 17
Table 9. Private industry workers, goods-producing and
service-providing industries, by occupational group 18
Table 10. Private industry workers, by industry group 19
Table 11. Private industry workers, by occupational group and
full-time and part-time status 20
Table 12. Private industry workers, by industry group and full-time
and part-time status 21
Table 13. Private industry workers, by major industry group and
establishment employment size and bargaining unit status 22
Table 14. Private industry health care and social assistance workers,
by industry and occupational group 23
Technical Note 24
Note: Supplemental tables with occupational, establishment size, and bargaining status
series for detailed industries are available at http://www.bls.gov/ncs/ect/sp/ecsuptc7.pdf and
http://www.bls.gov/ncs/ect/sp/ecsuptc7.txt.
Bureau of Labor Statistics
