Employee Compensation Costs Rise

The Bureau of Labor Statistics reports that the costs of compensation to non-military employees increased by 0.4 percent during the period between September and December 2011. Compensation costs primarily consist of wages and salaries (70 percent of costs) and benefits (30 percent of costs). During the three-month period ending in December, wages and salaries rose about 0.4 percent while benefits increased by 0.6 percent.

Over 2011, compensation costs for civilian employers rose by 2 percent, mirroring the increase experienced in 2010. Civilian wages and salaries jumped 1.4 percent and benefits costs rose by 3.2 percent over the year. Private industry workers experienced similar increases over 2011, registering an overall increase of 2.1 percent for the year. Private industry wages and salaries increased by 1.6 percent while the costs of benefits rose 3.6 percent over the year. For employers, health benefits costs grew by 3.5 percent in 2011, decelerating from 2010 5 percent rate.

Service occupations in private industries reported the lowest compensation cost increases for the year rising 1.7 percent compared to the largest rate increase of 2.4 percent found in production, transportation, and material moving occupations. The leisure and hospitality supersector experienced an industry-low 1 percent growth in compensation costs while manufacturing sector costs grew the quickest at 2.8 percent over the year. State-level and local government employees registered a compensation costs increase of 1.3 percent; a slowdown from 2010’s rate of 1.8 percent. Wages and salaries rose by 1 percent in 2011 while the cost of benefits increased by 2.1 percent in December 2011.