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. 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.
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). 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.
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.
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).
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.
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.
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).
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.
