Wage Growth Outpaces Benefits, Reversing Trend

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By Ben Penn

March 10 — Increases in wages and salaries outpaced growth in employer-provided benefits over the 12 months ended in the fourth quarter of 2015, the first time benefits trailed pay since 2012, a report from the Labor Department showed Dec. 9.

Average hourly benefits costs for full-time workers inched up 0.4 percent from a year earlier to $11.85 per hour, while pay climbed 2.1 percent to $25.44 per hour. Total compensation costs reached $37.28 in the fourth quarter, up 1.6 percent from a year earlier.

Prior to this report, benefits growth had outpaced the rate of wage hikes every quarter since the second quarter of 2012, Bloomberg BNA's analysis of the data showed.

The share of total compensation going to benefits fell to 31.8 percent, from 32.1 percent in the same period the prior year, while the share going to wages and salaries rose to 68.2 percent, from 67.9 percent. Benefits include health insurance, retirement plans and government-required contributions to social insurance.

Union, Nonunion Costs Move in Opposite Directions

Among all workers, including those employed part-time, total compensation increased 1.8 percent for nonunion workers over the 12 months ended in the fourth quarter while falling 2.6 percent for union employees.

Still, the average cost per hour of union workers was significantly greater than the cost for nonunion employees ($45.28 versus $30.38).

The disparity may reflect differences in the industry and occupational make-ups of the union and nonunion workforces, as well as the high proportion of nonunionized part-time workers, who are less likely than full-time employees to have employer-provided benefits.

Over the year ended in the fourth quarter, the cost of nonunion workers' benefits rose 0.3 percent, while their union counterparts' benefits cost fell 3.6 percent. Pay grew 2.4 percent for nonunion employees, while falling 2.0 percent for union-represented workers.

For More Information

For more information, see Compensation and Benefits Library’s Bloomberg BNA's Wage Trend Indicator chapter.

To contact the reporter on this story: Ben Penn in Washington at bpenn@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com

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