June 30, 2005 (The Editor’s Desk is updated each business day.)

Comparing growth rates of benefits and wages in private industry

Except for two relatively brief periods in the 1980s and 1990s, the 12-month percent change in the cost of benefits—as measured by the BLS Employment Cost Index (ECI)—has generally exceeded that of wages and salaries in private industry.

[Chart data—TXT]

From early 1985 to late 1987, the 12-month percent changes in the cost of benefits and in wages and salaries were about even, with the costs of benefits increasing by 3.5 percent, on average, and wages and salaries increasing by 3.6 percent.

In the middle-to-late 1990s, the 12-month percent change in wages and salaries (3.4 percent, on average) outpaced that of benefits (2.3 percent). This was the only sustained period in which wages and salaries grew more rapidly than the cost of benefits. Part of the reason for slower growth in the cost of benefits during this period was the relatively slow growth in health insurance costs from 1995 to 1998.

These data are from the BLS Compensation Cost Trends program. For more information, see "Percent Changes in the Employment Cost Index for Wages and Salaries and for Benefits, Private Industry, First Quarter 1981-First Quarter 2005," in the June 2005 issue of Compensation and Working Conditions Online.