Thursday, March 15, 2012


Private industry employers spent an average of $28.57 per hour worked for total employee compensation in December 2011, the U.S. Bureau of Labor Statistics reported today.

Wages and salaries averaged $20.14 per hour worked and accounted for 70.5 percent of these costs, while benefits averaged $8.43 and accounted for the remaining 29.5 percent.

Total compensation costs for state and local government workers averaged $40.90 per hour worked in December 2011. Total employer compensation costs for civilian workers, which include private industry and state and local government workers, averaged $30.45 per hour worked in December 2011.

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Legally required benefits costs in private industry

The average cost for legally required benefits was $2.33 per hour worked in private industry (8.1 percent of total compensation) in December 2011.

Social Security comprises the largest legally required benefit cost component at $1.34 per hour or 4.7 percent of total compensation. Legally required benefits such as Social Security and Medicare are often directly linked to wages; therefore, higher paid occupations or industries will typically show higher cost estimates for this compensation component. (See table 5.)

Costs for other legally required benefits include workers’ compensation, which averaged 41 cents per hour worked (1.4 percent of total compensation); Medicare, which averaged 33 cents (1.2 percent); state unemployment insurance, which averaged 21 cents per hour worked (0.8 percent); and federal unemployment insurance, which averaged just 2 cents per hour worked (0.1 percent). (See table 5.)

Employer costs for legally required benefits varied by occupation and industry. The average cost per hour worked for legally required benefits ranged from $3.46 for management, professional, and related occupations to $1.43 per hour for service occupations. (See chart 1.) Workers’ compensation employer costs for construction industry workers were significantly higher than other major industry groups, averaging $1.16 per hour worked in December 2011. (See tables 5 and 6.)

Legally required benefit costs also varied by establishment size in private industry. Legally required costs for establishments with fewer than 100 workers were $2.10 per hour worked versus $2.34 for establishments with 100 to 499 employees and $2.96 with 500 employees or more. (See chart 2 and table 8.)


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Original content Bob DeMarco, All American Investor