Benefits gains outpacing wages for workers

Workers gripe about not getting raises.

Employers gripe about their rising employee costs.

Who’s right?

Both, it seems.

An analysis of government data by USA Today shows that while wages rose only $777 per full time worker from 2007 to 2011, an increase of just 1.4 percent, benefits per full time worker increased $1,302, or 10.8 percent.

In effect, employers are making up for what they are not giving in wages by paying more  for benefits including health insurance.

Here’s another indicator of the trend: Employer-paid benefits, which accounted for less than 10 percent of worker compensation back in the 1960s, now account for 19.7 percent  of compensation_ a record. It was just 16.6 percent in 2000.

The trend kicked in to overdrive during the recession.

One reason cited for the shift to benefits from wages is taxes. Wages are heavily taxed for employers and employees, but benefits aren’t.

As for all that griping, there’s a reason why workers may not be satisfied, experts say. They don’t see the real cost to employers of the benefits they receive, unlike wages. When benefit costs go up, employers typically cover the bulk of increase, but it’s not obvious to employees.

One comment Add your comment

Double Standard

October 19th, 2012
12:33 pm

What is if for federal workers like postal workers and civil service ?