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August 08, 2002
Benefits Cost Increases Surpass Wage Hikes
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The index reveals that benefit costs for private industry workers increased 5 percent for the year that ended June 30, 2002. According to the BLS, the increases were due largely in part to the increasing employer costs of health insurance.
Seasonally adjusted, benefits costs increased more rapidly than the three-month compensation increase of 1 percent, with a three-month rise in benefits costs of 1.3 percent during the June quarter. The increase was only 1 percent during the March quarter.
The benefits covered by the Employment Cost Index are the following:
- paid leave (vacations, holidays, sick leave, and other leave)
- supplemental pay (premium pay for work in addition to the regular work schedule such as overtime, weekends, and holidays), shift differentials, and nonproduction bonuses (such as referral bonuses and lump sum payments provided in lieu of wage increases)
- insurance benefits (life, health, short term disability, and long term disability)
- retirement and savings benefits (defined benefit and defined contribution plans)
- legally required benefits (Social Security, federal and state unemployment insurance, and workers' compensation)
- other benefits such as severance pay and supplemental unemployment plans
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