The average cost of labor in private industry in June was $30.11 per employee, down slightly from $31.93 in March, the U.S. Department of Labor's Bureau of Labor Statistics reported. Of that, nearly 70 percent was attributed to wages and salaries. Average cost of benefits per hour was just over $9, or 30 percent of the total cost of compensation, down from March's 31.2 percent. The BLS reported that the comparable cost among state and local government employees was $43.
Average retirement and savings benefits in June were $1.23 an hour, or 4.1 percent of the total cost of compensation for private industry employees. Defined benefits plans cost an average of 58 cents, or 1.9 percent of total compensation. Defined contribution plans cost employers an average of 65 cents an hour per employee. That was 2.2 percent of total compensation.
The BLS said retirement and savings costs "varied widely by major occupational group."
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For instance, these benefits cost more for management, professional and related workers was $2.61 per hour worked, but represented a smaller percentage (4.9 percent) of total compensation, than in for those in natural resources, construction and maintenance workers, where the cost per hour was $2 but that $2 represented 6 percent of total compensation.
Employer costs for employee compensation, June 2014:
"Retirement and savings costs were higher both in amount and as a proportion of total compensation for union workers ($4.02 and 9.1 percent of total compensation) than for nonunion workers (95 cents and 3.3 percent of total compensation)," the BLS said in a release. "Defined benefit plan costs were significantly higher for union workers ($2.97 and 6.7 percent of total compensation) than for nonunion workers (34 cents and 1.2 percent of total compensation)."
Goods-producing industries reported a higher per-hour retirement and savings costs ($1.88 and 5.2 percent of total compensation) than did service-providing industries ($1.09 and 3.8 percent of total compensation). While the amount and percent of these elements was fairly consistent across goods-producing industries, it varied wildly within the services industries – ranging from 18 cents in leisure and hospitality to $4.35 in the information industry.
The BLS also noted significant differences by company size. "Establishments with fewer than 100 workers averaged 72 cents (2.9 percent of total compensation), significantly less than establishments with 500 workers or more, averaging $2.60 (5.9 percent)," it reported.
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
