Author: Tim Aylor
Statistical agencies publish a lot of information on workers’ wages — how high or low they are, which occupations pay more, trends and forecasts — but less on workers’ total compensation. Recently released BLS data that measures employer costs for wages, salaries, and employee benefits sheds light on the total compensation packages that American workers receive.
Total compensation (wages, salaries and benefits) paid by the South’s* private sector employers rose less than one percent from December 2014 through the first quarter of 2015, according to recently released data from the Bureau of Labor Statistics. However, compensation cost increases appear more significant when compared to the prior year. In March, Southern private sector wages and benefits rose 7.0 percent from a year earlier. Average costs per hour worked were $29.04, versus $27.14 in March 2014. This pace was faster than U.S. compensation growth and matched the previous quarter’s over-the-year growth. Wages and salaries climbed 6.5 percent to $20.57, while benefits rose 8.2 percent to $8.47. Nationwide, wages and salaries grew 4.7 percent to $21.94, while benefits rose 7.5 percent to $9.71 during that period.
Even with compensation growth speeding up over the winter, the South region’s private sector wages and benefits remained the lowest — only a few pennies less than in the Midwest, but nearly $10 less per hour than in the Northeast. Overall, compensation costs are lower in the South, but vary widely within the region. Costs were $40.72 per hour worked in the Washington-Baltimore-Northern Virginia Combined Statistical Area, while they totaled $26.29 per hour worked in the Miami-Fort Lauderdale-Pompano Beach Metropolitan Statistical Area, for example.
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Wages and salaries accounted for only 70 percent of all employee compensation costs to employers in the South. The rest of the costs were paid out in the form of benefits. Supplemental pay averaged $.89 (3.1 percent) compared to $1.12 (3.6 percent) nationwide; insurance benefits, $2.20 (7.6 percent) and $2.58 (8.2 percent) nationwide; retirement and savings, $1.18 (4.1 percent) compared to $1.31 (4.1 percent) nationwide; and legally required benefits, $2.23 (7.7 percent) compared to $2.51 (7.9 percent) nationwide. Private industry employer costs for paid leave averaged $1.97 per hour worked (6.8 percent of total compensation). Nationwide, they averaged $2.18 per hour worked (6.9 percent of total compensation).
Health insurance, an important worker benefit, was up 3.5 percent in the South over the year. Comparing the four regions, costs for health insurance benefits ranged from $2.06 per hour worked (7.1 percent of total compensation) in the South to $2.98 (7.7 percent) in the Northeast. Health insurance costs were $2.48 (8.5 percent) in the Midwest and $2.47 (7.7 percent) in the West. It was $2.43 per hour nationwide (7.7 percent of total compensation).
Among occupational groups nationwide, total compensation ranged from $14.48 per hour worked for service workers to $55.82 for management, professional, and related occupations. Among other occupational categories, compensation averaged $24.01 for sales and office occupations — lower than $34.05 for natural resources, construction, and maintenance occupations, and $27.06 for production, transportation, and material moving occupations. Total private sector compensation costs were significantly higher for union workers, averaging $46.62 per hour worked, than for nonunion workers, averaging $30.18.
While wage growth has been stubbornly slow in many parts of the South, benefit costs are comprising a larger part of the compensation paid to workers. Together, wages and benefits paid by Southern private sector employers in March rose faster over the year than the U.S. rate, and could be an indication of tightening labor market conditions in the region.
*The Census South region is made up of three divisions.
South Atlantic: Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, and West Virginia
East South Central: Alabama, Kentucky, Mississippi, and Tennessee
West South Central: Arkansas, Louisiana, Oklahoma, and Texas