Internet: www.bls.gov/ro2 For Release: Tuesday, March 17, 2009 Media Contact: Michael L. Dolfman (212) 337-2500 Information: Martin Kohli, (646) 264-3620
EMPLOYER COSTS FOR EMPLOYEE COMPENSATION
FOR THE REGIONS: DECEMBER 2008
Employer costs for employee compensation in private industry
among the four geographic regions of the country ranged from $24.23
per hour in the South to $31.77 in the Northeast in December 2008,
according to the U.S. Department of Labor's Bureau of Labor
Statistics. Regional Commissioner Michael L. Dolfman noted that
employer costs for employee compensation in the other two regions
were $26.48 in the Midwest and $29.23 in the West. (See chart A.)
In addition to regional estimates, employer costs for nine geographic
divisions are also available. Within divisions, total compensation
costs ranged from $20.79 in the East South Central division to $32.28
in the New England division. Employer Costs for Employee
Compensation are based on the National Compensation Survey, which
measures employer costs for wages, salaries, and employee benefits.
(See table 1. Geographic definitions of the regions and divisions
are contained in the Technical Note.)
In the Northeast, wages and salaries, at $22.15, made up 69.7
percent of total compensation costs. Benefits costs, at $9.62,
accounted for the remaining 30.3 percent. Legally required benefits,
which includes Social Security, workers' compensation, and
unemployment insurance, averaged $2.58 per hour worked in the
Northeast and represented 8.1 percent of total compensation costs.
Paid leave including vacation, holiday, sick, and personal leave,
averaged $2.40 per hour worked and accounted for 7.6 percent of total
compensation costs, while insurance costs, which includes life,
health, short- and long-term disability, were $2.39 per hour worked
and represented 7.5 percent of all compensation costs.
Wages and salaries averaged $20.79 in the West and accounted for
71.1 percent of all compensation costs. Costs for benefits averaged
$8.44, representing 28.9 percent of total compensation. Legally
required benefits averaged $2.55 per hour worked, accounting for 8.7
percent of total compensation costs in the West. The cost of
insurance benefits averaged $2.12 per hour worked and represented 7.2
percent of total compensation, while paid leave was $1.93 per hour or
6.6 percent of all costs.
Wages and salaries in the Midwest, which averaged $18.57,
represented 70.1 percent of all compensation costs. Benefits,
averaging $7.91 per hour, accounted for 29.9 percent of total
compensation. Insurance cost employers $2.23 per hour and
represented 8.4 percent of total compensation. Legally required
benefits cost $2.18 per hour worked or 8.2 percent of total
compensation costs. The cost of paid leave in the Midwest averaged
$1.74 per hour, accounting for 6.6 percent of total compensation.
In the South, wages and salaries, at $17.44, made up 72.0
percent of total compensation, and benefits, at $6.79, accounted for
the remaining 28.0 percent. Among the largest benefit categories
were legally required benefits averaging $1.95 per hour worked and
representing 8.1 percent of total compensation costs. Insurance
costs averaged $1.79 per hour worked and accounted for 7.4 percent of
total compensation, while paid leave averaged $1.56 per hour and
represented 6.5 percent of all costs.
Overall, compensation costs among private industry employers in the
United States averaged $27.35 per hour worked in December 2008.
Wages and salaries, at $19.37, accounted for 70.8 percent of these
costs, while benefits, at $7.98, made up the remaining 29.2 percent.
TECHNICAL NOTE
Employer Costs for Employee Compensation (ECEC) measures the
average cost to employers for wages and salaries and benefits per
employee hour worked.
Wages and salaries are defined as the hourly straight-time wage
rate or, for workers not paid on an hourly basis, straight-time
earnings divided by the corresponding hours. Straight-time wage and
salary rates are total earnings before payroll deductions and include
production bonuses, incentive earnings, commission payments, and cost-
of-living adjustments. Not included in straight-time earnings are
nonproduction bonuses such as end-of-year payments, shift
differentials, and premium pay for overtime and for work on weekends
and holidays; these payments are included in the benefits component.
Benefits include: Paid leave-vacations, holidays, sick leave,
and personal leave; supplemental pay-premium pay for work in addition
to the regular work schedule (such as overtime, weekends and
holidays), shift differentials, and nonproduction bonuses (such as
referral bonuses and attendance bonuses); insurance benefits-life,
health, short-term disability, and long-term disability; retirement
and savings benefits-defined benefit and defined contribution plans;
and legally required benefits-Social Security, Medicare, federal and
state unemployment insurance, and workers' compensation.
In June 2008, the former other leave benefit was changed to
include only paid personal leave. Paid personal leave accounts for
the majority of the cost of the prior other leave benefit category.
The National Compensation Survey will no longer collect costs for
paid military leave, paid funeral leave, paid jury leave, and paid
family leave (access data will still be available on these benefits).
Employer Costs for Employee Compensation data in this release
cover private industry. Excluded from private industry are the self-
employed and farm and private household workers.
The cost levels for this quarter were collected from a
probability sample of approximately 64,700 occupations selected from
a sample of about 13,600 establishments in private industry. The
private industry sample is rotated over approximately 5 years, which
makes the sample more representative of the economy and reduces
respondent burden. Data are collected for the pay period including
the 12th day of the survey months of March, June, September, and
December. The sample is replaced on a cross-area, cross-industry
basis.
When respondents do not provide all the data needed, a procedure
for assigning missing values is used. This imputation procedure is
comparable to that used for the Employment Cost Index (ECI). For a
description, see "Accounting for missing data in the Employment Cost
Index," in the April 2006 issue of the Monthly Labor Review at
www.bls.gov/opub/mlr/2006/04/art4abs.htm.
The ECEC percent of total compensation estimates are calculated
from cost aggregates and then rounded to the published level of
precision. This method provides the most precise estimates of the
percent of total compensation; however, estimates of the percentage
of total compensation calculated from the published cost estimates
may differ slightly from those calculated from the unpublished cost
aggregates.
Sample establishments are classified by the industry categories
based on the 2007 North American Industry Classification System
(NAICS). Prior to December 2007, the 2002 NAICS classification
system was used. Differences between the two NAICS systems did not
affect any of the published series. Within a sample establishment,
specific job categories are selected and classified into about 800
occupational classifications according to the 2000 Standard
Occupational Classification (SOC) system. Individual occupations are
combined to represent one of ten intermediate aggregations, such as
professional and related occupations, or one of five higher-level
aggregations such as management, professional, and related
occupations. Both the NAICS and the SOC classification systems are
defined by the U.S. Office of Management and Budget (OMB). For more
detailed information on NAICS and SOC, including background
definitions, see the BLS Web sites: www.bls.gov/bls/naics.htm and
www.bls.gov/soc/home.htm.
To be included in the ECEC, employees in occupations must
receive cash payments from the establishment for services performed
and the establishment must pay the employer's portion of Medicare
taxes on that individual's wages. Major exclusions from the survey
are the self-employed, individuals who set their own pay (for
example, proprietors, owners, major stockholders, and partners in
unincorporated firms), volunteers, unpaid workers, family members
being paid token wages, individuals receiving long-term disability
compensation, and U.S. citizens working overseas.
Current employment weights are used to calculate cost levels.
These weights are derived from two BLS programs: the Quarterly
Census of Employment and Wages (QCEW) and the Current Employment
Statistics (CES). Combined, these programs provide the appropriate
industry coverage and currency of data needed to match the ECEC. For
more information on these changes, see "Changes in Calculations for
the BLS Employer Costs for Employee Compensation Data, March 2007,"
at www.bls.gov/ncs/ect/sp/ececcalc.pdf. In most instances, private
industry employment weights used in the ECEC were total employment
estimates for 2-digit industry groups, such as utilities (NAICS 22)
or wholesale trade (NAICS 42). In a few cases, more detailed private
industry employment weights were used. These include 4-digit
educational establishments-elementary and secondary schools (6111),
junior colleges (6112), and colleges and universities (6113)-as well
as the 6-digit aircraft manufacturing industry (336411). For private
establishments, the employment data were apportioned based on the
sampling weights assigned to the Employment Cost Index (ECI) sample.
The ECI, which measures the change in employer costs for
employee compensation, is calculated with fixed 2002 employment
counts to prevent employment shifts among occupations and industries
from influencing the changes. Therefore, changes over time in the
Employer Costs for Employee Compensation survey will differ from
those in the ECI.
Historical ECEC data are available in three listings, all
available at: www.bls.gov/ect/#tables. The first historical listing
covers data for the March references periods from 1986 to 2001.
These data use the Standard Industrial Classification (SIC) and
Census of Population classification systems. The second listing
contains data for the March, June, September, and December reference
periods from March 2002 to December 2003. These data also are based
on the SIC and Census of Population classification systems. The
final listing includes data for March 2004 to the current reference
period. These are based on the NAICS and SOC classification systems.
Also, data and related articles are included in the bulletin,
Employer Costs for Employee Compensation, 1986-99 (Bulletin 2526),
available upon request by calling (202) 691-6199 or by email to:
NCSinfo@bls.gov.
Beginning with the March 2004 quarter, historical data are
available based on the North American Industry Classification System
and the 2000 Standard Occupational Classification. The new
historical tables are available on the Internet site
www.bls.gov/ncs/ect/home.htm or upon request. Information on how
costs are calculated appears in "Measuring Trends in the Structure
and Levels of Employer Costs for Employee Compensation," Compensation
and Working Conditions, Summer 1997, at
www.bls.gov/opub/cwc/archive/summer1997art1.pdf. An article on
changes in employer compensation costs, "Tracking Changes in Benefit
Costs," appears in Compensation and Working Conditions, Spring 1999,
at www.bls.gov/opub/cwc/archive/spring1999brief3.pdf.
Relative Standard Errors
Because the ECEC is a sample survey, it is subject to sampling
errors. Sampling errors are differences that occur between the
results computed from a sample of observations and those computed
from all observations in the population. The estimates derived from
different samples selected using the same sample design may differ
from one another. A measure of the variation among these differing
estimates is the standard error. It can be used to measure the
precision with which an estimate from a particular sample
approximates the expected result of all possible samples. For more
information on the calculation procedure, see "Changes in Variance
Estimation Calculations for the BLS Employer Costs for Employee
Compensation Data, March 2007," at
www.bls.gov/ncs/ect/sp/ececvmet.pdf. The chances are about 68 out of
100 that an estimate from the survey differs from a complete
population figure by less than the standard error. The chances are
about 90 out of 100 that this difference would be less than 1.6 times
the standard error. All the statements of comparisons appearing in
this publication are significant at a 1.6 standard error level or
better, unless otherwise indicated. This means that for differences
cited, the estimated difference is greater than 1.6 times the
standard error of the difference. The relative standard errors (RSE)
for all estimates are available shortly after the release is issued
at www.bls.gov/ncs/ect/#tables.
For a more detailed explanation of relative standard errors, see
"Measuring Trends in the Structure and Levels of Employer Costs for
Employee Compensation," Compensation and Working Conditions, Summer
1997, at www.bls.gov/opub/cwc/archive/summer1997art1.pdf. For a
detailed explanation of how to use standard error data to analyze
differences in changes over time, see "Analyzing Year-to-Year Changes
in Employer Costs for Employee Compensation," Compensation and
Working Conditions, Spring 1998, at
www.bls.gov/opub/cwc/archive/spring1998art3.pdf. This article
supplements an article from the Summer 1997 issue of Compensation and
Working Conditions, "Explaining the Differential Growth Rates of the
ECI and ECEC," available at
www.bls.gov/opub/cwc/archive/summer1997art2.pdf which examined how
differences in the construction of these measures contribute to
differing trends.
Standard errors relate to differences that occur from sampling
errors, but not from nonsampling errors. Nonsampling errors are not
measured and include survey nonresponse and data collection and
processing errors. Survey nonresponse occurs when sample members are
unwilling or unable to participate in the survey. Data collection
errors include inaccurate data by respondents and definitional
difficulties. Processing errors include errors in recording, coding,
and entering data. Although nonsampling errors are not measured, BLS
quality assurance programs include procedures for reducing such
errors. These procedures include data collection reinterviews,
observed interviews, computer data edits, and systematic review of
reports on which data are recorded. Extensive field economist
training also is conducted to maintain high data collection
standards.
Regional definitions
Northeast region
● New England division: Connecticut, Maine, Massachusetts,
New Hampshire, Rhode Island, Vermont
● Middle Atlantic division: New Jersey, New York, Pennsylvania
Midwest region
● East North Central division: Illinois, Indiana, Michigan,
Ohio, Wisconsin
● West North Central division: Iowa, Kansas, Minnesota,
Missouri, Nebraska, North Dakota, South Dakota
South region
● South Atlantic division: Delaware, District of Columbia,
Florida, Georgia, Maryland, North Carolina, South Carolina,
Virginia, West Virginia
● East South Central division: Alabama, Kentucky, Mississippi,
Tennessee
● West South Central division: Arkansas, Louisiana, Oklahoma,
Texas
West region
● Mountain division: Arizona, Colorado, Idaho, Montana, Nevada,
New Mexico, Utah, Wyoming
● Pacific division: Alaska, California, Hawaii, Oregon,
Washington
Obtaining information
We encourage users interested in learning more about changes to
the Employer Costs for Employee Compensation to contact the Bureau of
Labor Statistics. Information on the ECEC and other surveys are
available on our Web site at www.bls.gov. Current and historical BLS
data are also posted on our Web site at www.bls.gov/ect. If you have
additional questions, you can contact an Information Specialist in
the New York BLS information office at (646) 264-3600, menu option 0.
Information from the Employer Costs for Employee Compensation program
is available to sensory impaired individuals upon request. Voice
phone: (202) 691-5200, Federal Relay Services: 1-800-877-8339.
NYLS - 7368 Labor - New York
03/16/09
Table 1. Employer costs per hour worked for employee compensation and costs as a percent of total compensation: Private industry workers, by census region and division, December 2008
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Census region and division(1)
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Northeast divisions South divisions Midwest divisions West divisions
Compensation component Northeast ------------------------------------ South --------------------------------------------------------- Midwest -------------------------------------- West ------------------------------------
New England Middle Atlantic South Atlantic East South Central West South Central East North Central West North Central Mountain Pacific
---------------- ---------------- ---------------- ---------------- ---------------- ------------------ ------------------ ---------------- ------------------ ------------------ ---------------- ------ ------- ------ -------
Cost Percent Cost Percent Cost Percent Cost Percent Cost Percent Cost Percent Cost Percent Cost Percent Cost Percent Cost Percent Cost Percent Cost Percent Cost Percent
----------------------------------------------- ------ ------- ------ ------- ------ ------- ------ ------- ------ ------- ------ ------- ------ ------- ------ ------- ------ ------- ------ ------- ------ ------- ------ ------- ------ -------
Total compensation............................. $31.77 100.0 $32.28 100.0 $31.57 100.0 $24.23 100.0 $25.24 100.0 $20.79 100.0 $24.38 100.0 $26.48 100.0 $27.04 100.0 $25.26 100.0 $29.23 100.0 $26.06 100.0 $30.59 100.0
Wages and salaries........................... 22.15 69.7 22.87 70.8 21.87 69.3 17.44 72.0 18.16 72.0 14.87 71.6 17.61 72.2 18.57 70.1 18.86 69.8 17.93 71.0 20.79 71.1 18.89 72.5 21.61 70.6
Total benefits............................... 9.62 30.3 9.41 29.2 9.70 30.7 6.79 28.0 7.08 28.0 5.91 28.4 6.77 27.8 7.91 29.9 8.18 30.2 7.33 29.0 8.44 28.9 7.18 27.5 8.98 29.4
Paid leave................................. 2.40 7.6 2.47 7.7 2.38 7.5 1.56 6.5 1.66 6.6 1.26 6.1 1.57 6.4 1.74 6.6 1.79 6.6 1.65 6.5 1.93 6.6 1.59 6.1 2.07 6.8
Vacation................................. 1.20 3.8 1.26 3.9 1.18 3.7 .81 3.3 .85 3.4 .68 3.3 .80 3.3 .92 3.5 .93 3.4 .92 3.6 .99 3.4 .83 3.2 1.06 3.5
Holiday.................................. .77 2.4 .82 2.5 .75 2.4 .51 2.1 .54 2.1 .40 1.9 .52 2.1 .57 2.1 .59 2.2 .51 2.0 .63 2.2 .53 2.0 .67 2.2
Sick..................................... .32 1.0 .28 .9 .33 1.1 .19 .8 .21 .8 .13 .6 .19 .8 .19 .7 .19 .7 .18 .7 .26 .9 .19 .7 .28 .9
Personal................................. .11 .4 .11 .3 .11 .4 .05 .2 .06 .2 .05 .2 .05 .2 .06 .2 .07 .3 .04 .2 .05 .2 .04 .2 .05 .2
Supplemental pay........................... 1.05 3.3 .89 2.8 1.11 3.5 .68 2.8 .67 2.6 .52 2.5 .78 3.2 .79 3.0 .84 3.1 .68 2.7 .84 2.9 .77 3.0 .87 2.9
Overtime and premium(2).................. .29 .9 .28 .9 .29 .9 .26 1.1 .25 1.0 .23 1.1 .28 1.1 .29 1.1 .30 1.1 .27 1.0 .28 1.0 .22 .9 .30 1.0
Shift differentials...................... .07 .2 .06 .2 .07 .2 .06 .3 .07 .3 .07 .4 .05 .2 .08 .3 .09 .3 .07 .3 .05 .2 .05 .2 .06 .2
Nonproduction bonuses.................... .69 2.2 .55 1.7 .74 2.4 .36 1.5 .35 1.4 .22 1.1 .45 1.8 .41 1.6 .44 1.6 .35 1.4 .51 1.8 .51 1.9 .51 1.7
Insurance.................................. 2.39 7.5 2.36 7.3 2.41 7.6 1.79 7.4 1.85 7.3 1.79 8.6 1.71 7.0 2.23 8.4 2.32 8.6 2.04 8.1 2.12 7.2 1.83 7.0 2.24 7.3
Life..................................... .05 .1 .05 .2 .05 .1 .05 .2 .05 .2 .05 .2 .05 .2 .05 .2 .05 .2 .04 .2 .04 .1 .04 .2 .04 .1
Health................................... 2.23 7.0 2.21 6.8 2.24 7.1 1.66 6.9 1.71 6.8 1.66 8.0 1.58 6.5 2.08 7.9 2.17 8.0 1.91 7.6 2.00 6.8 1.71 6.6 2.12 6.9
Short-term disability.................... .08 .2 .06 .2 .08 .3 .05 .2 .05 .2 .05 .2 .04 .2 .06 .2 .07 .2 .04 .2 .04 .1 .03 .1 .04 .1
Long-term disability..................... .04 .1 .04 .1 .04 .1 .04 .2 .04 .2 .03 .2 .04 .2 .04 .2 .04 .2 .05 .2 .04 .1 .04 .2 .04 .1
Retirement and savings..................... 1.20 3.8 1.12 3.5 1.23 3.9 .80 3.3 .86 3.4 .56 2.7 .81 3.3 .97 3.7 1.00 3.7 .90 3.6 1.00 3.4 .82 3.2 1.08 3.5
Defined benefit.......................... .53 1.7 .46 1.4 .56 1.8 .31 1.3 .33 1.3 .20 1.0 .34 1.4 .44 1.6 .48 1.8 .34 1.4 .45 1.5 .27 1.0 .52 1.7
Defined contribution..................... .67 2.1 .66 2.1 .67 2.1 .48 2.0 .53 2.1 .36 1.7 .47 1.9 .54 2.0 .52 1.9 .56 2.2 .55 1.9 .55 2.1 .55 1.8
Legally required benefits.................. 2.58 8.1 2.57 8.0 2.58 8.2 1.95 8.1 2.04 8.1 1.78 8.5 1.91 7.8 2.18 8.2 2.23 8.2 2.06 8.1 2.55 8.7 2.16 8.3 2.71 8.9
Social Security and Medicare............. 1.85 5.8 1.91 5.9 1.83 5.8 1.46 6.0 1.52 6.0 1.31 6.3 1.45 5.9 1.56 5.9 1.59 5.9 1.49 5.9 1.73 5.9 1.56 6.0 1.80 5.9
Social Security(3)..................... 1.48 4.7 1.53 4.7 1.46 4.6 1.18 4.9 1.22 4.8 1.06 5.1 1.16 4.8 1.25 4.7 1.28 4.7 1.19 4.7 1.39 4.7 1.26 4.8 1.44 4.7
Medicare............................... .37 1.2 .38 1.2 .37 1.2 .29 1.2 .30 1.2 .25 1.2 .29 1.2 .31 1.2 .31 1.2 .29 1.2 .34 1.2 .31 1.2 .36 1.2
Federal unemployment insurance........... .03 .1 .03 .1 .03 .1 .03 .1 .03 .1 .03 .2 .03 .1 .03 .1 .03 .1 .03 .1 .03 .1 .03 .1 .03 .1
State unemployment insurance............. .22 .7 .23 .7 .22 .7 .09 .4 .09 .4 .08 .4 .08 .3 .16 .6 .17 .6 .14 .6 .17 .6 .12 .5 .20 .6
Workers' compensation.................... .47 1.5 .40 1.2 .50 1.6 .37 1.5 .40 1.6 .35 1.7 .34 1.4 .43 1.6 .44 1.6 .40 1.6 .61 2.1 .45 1.7 .68 2.2
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(1) The States that comprise the census divisions are: New England: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont; Middle Atlantic: New Jersey, New York, and Pennsylvania; South Atlantic: Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina,
Virginia, and West Virginia; East South Central: Alabama, Kentucky, Mississippi, and Tennessee; West South Central: Arkansas, Louisiana, Oklahoma, and Texas; East North Central: Illinois, Indiana, Michigan, Ohio, and Wisconsin; West North Central: Iowa, Kansas, Minnesota, Missouri, Nebraska,
North Dakota, and South Dakota; Mountain: Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, and Wyoming; and Pacific: Alaska, California, Hawaii, Oregon, and Washington.
(2) Includes premium pay for work in addition to the regular work schedule (such as overtime, weekends, and holidays).
(3) Comprises the Old-Age, Survivors, and Disability Insurance (OASDI) program.
Last Modified Date: March 17, 2009
