Post on 13-Jan-2016
National Compensation Trends
William WiatrowskiAssociate Commissioner
Compensation and Working Conditions
COPAFSSeptember 24, 2010
Why the Interest in Wage and Benefit
Data?
Benefits make up one-third of private sector compensation costs
Employer costs for benefits typically rise faster than wages
The landscape is changing Health reform Changes to retirement plans Other benefit issues
2
Today’s Road Map
Highlights Survey background Cost of compensation Changing landscape of benefits What local data are available?
3
HIGHLIGHTS
4
Highlight – Change in Wage and Benefit Costs
5
Highlight – Componentsof Compensation
Wages71%Supplemental
pay3%
Paid leave7%
Insurance8%
Retirement and savings
3%
Legally required benefits
8%
March 2010
6
Highlight – Changes in Retirement Coverage
0
10
20
30
40
50
60
1989-90 1993-94 1996-97 2003 2009
Defined benefit Defined contribution
7Full-time workers, private industry
Highlight – Employees are paying more for health care
$0
$100
$200
$300
$400
$500
$600
1985 1989 1995 2000 2005 2008
Average individual deductible per year
8
Highlight – Wages by Selected
Characteristics
$19.90
$22.71
$11.70
$21.61
$20.18
$0.00 $5.00 $10.00 $15.00 $20.00 $25.00
Nonunion
Union
Part-time
Full-time
All workers
Mean hourly earnings, private industry, United States, July 2009
9
SURVEY DESIGN
10
BLS National Compensation Survey
BLS – source of key economic indicators
National Compensation Survey (NCS) Wage data by occupation and worker
characteristics Employer costs for benefits Details about benefits
– Who has access?– Who is covered?– What do you get from the benefit?
11
NCS Design
Establishment survey Sample of geographic areas
– Includes New York metropolitan area
Sample of establishments– Covers all private industries; all sizes– Also covers State and local governments
Within each establishment, sample of occupations
12
Detailed Characteristics
About the company Industry classification Number of workers Location
About the workers Occupation classification Full-time/part-time Union/non-union Work level
13
Data Elements
Work schedule Wages, including incentives
Commissioners Piece rates Production bonuses
Other cash payments Premium pay for overtime Shift differential Non-production bonuses
14
Data Elements
Benefits Paid and unpaid leave Insurances, including health Retirement and savings Legally required
15
Capturing Benefits Data
For each benefit – Identify each plan
– Is it offered to a specific occupation?• How many workers take advantage/use the
benefit?
– What is the cost to the employer?• What if there is no employer cost?
– What must the worker do to get the benefit?• Eligibility
• Required contribution
– How does the plan work?
16
Survey Timing
Private industry establishments are in the survey for 5 years One-fifth rotate in/out each year
All wage and benefit data captured at start of survey Wages and employer costs updated each
quarter Benefit data updated once a year
Written plan descriptions collected at start of survey
17
SURVEY RESULTS –EMPLOYER COMPENSATION COSTS
18
Change in Wage and Benefit Costs
19
Changes inHealth Care Costs
20
-3
0
3
6
9
12
15
18
21
24
82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
12-12-month percent change in employer costs for
health insurance and all benefits, private industry
Health insurance
All benefits
Variations by Industry
21
012345678
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Employment Cost Index: 12-month percent change in wages and salaries, selected private industries
Manufacturing Financial activities
Variations by Occupation
22
0123456
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Employment Cost Index: 12-month percent change in wages and salaries, selected occupational groups, private industry
Management/business/finance workers
Professional and related workers
Office and administrative support workers
Variations by Union Status
23
0
1
2
3
4
5
6
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Employment Cost Index: 12-month percent change in wages and salaries, private industry by union status
Union Nonunion
A Closer Look at Incentive-Paid Workers
24
All Sales Workers, Regardless of Industry
25
Retail Trade Industry
26
Financial Activities Industry
27
Employer Costs for Employee
Compensation
Wages71%Supplemental
pay3%
Paid leave7%
Insurance8%
Retirement and savings
3%
Legally required benefits
8%
March 2010
28
Movement Away from Cash Compensation
0102030405060708090
100
1966 1977 1986 1990 1995 2000 2005 2010
Wages Supplemental pay Paid leave
29
Greater Share of Compensation Dollar Going
to Health Benefits
0
2
4
6
8
10
2000 2002 2004 2006 2008 2010
Health costs as percent of compensation costs
Health insurance Medicare
30
Retirement Costs are Dominated by Social Security
Taxes
0
2
4
6
8
10
2000 2002 2004 2006 2008 2010
Retirement plan costs as percent of compensation costs
Defined benefit Defined contribution Social Security
31
Employer CompensationCosts Vary
$22.90
$19.21
$16.82
$22.74
$14.26
$7.46
$6.02
$10.59
$0.00 $10.00 $20.00 $30.00 $40.00
Union
Nonunion
1-99 employees
100 employees or more
March 2010
Wages Benefits
32
Employer Compensation Costs Vary, as do
Proportions
61.6%
72.0%
73.6%
68.2%
38.4%
28.0%
26.4%
31.8%
0% 20% 40% 60% 80% 100%
Union
Nonunion
1-99 employees
100 employees or more
March 2010
Wages Benefits
33
BENEFITS – THE LANDSCAPE IS CHANGING
Benefits – Yesterday and Today
Benefits – 1980 Basic plus Major
Medical health plan Defined benefit
retirement plan Vacation, sick leave
Specific plans for specific purposes
Little or no employee cost or decision
Benefits – 2010 Health plan types;
choices; accounts Defined
contribution plans Paid time off
Plans serve multiple purposes
Employee must pay and decide
35
Who has Health Benefits?
71
90
6959
84 86
240
20
40
60
80
100
Private industry
Union Nonunion 1-99 employees
100 or more
employees
Full-time Part-time
Access to health insurance, March 2009
36
Who has Retirement Benefits?
67
87
6553
83 76
39
0
20
40
60
80
100
Private industry
Union Nonunion 1-99 employees
100 or more
employees
Full-time Part-time
Access to retirement benefits, March 2009
37
Wage Level Affects Benefits
0
20
40
60
80
100
Private industry
Bottom wage quartile
Second wage quartile
Third wage quartile
Top wage quartile
Defined contribution plans offered and taken, March 2009
Benefit offered Benefit taken
38
How Does your Health Plan Stack Up?
Plan types are changing Hybrids Accounts
Employees must assume more responsibility Contributions Choice of provider effects costs
Increase in out-of-pocket costs
39
How are HealthBenefits Provided?
0%
20%
40%
60%
80%
100%
1985 1989 1995 2000 2005 2008
Fee-for-service HMO PPO Other
40
Who Pays for Health Benefits?
0
20
40
60
80
100
1985 1989 2000 2005 2009
Required employee contribution for single coverage
Required employee contribution for family coverage
41
How Does your Health Plan Stack Up?
42
Retirement Plans are Changing
Defined benefit plans
Enrollment was automatic
Managed investments
Annuity gave employee “paycheck for life”
Future of defined contribution plans?
Automatic enrollment features
Lifecycle investment funds
Provide/encourage payout in the form of an annuity
43
Movement Toward Defined Contribution
Plans
0
10
20
30
40
50
60
1989-90 1993-94 1996-97 2003 2009
Defined benefit Defined contribution
44Full-time workers, private industry
More Automatic Enrollment
45
More Choice in Retirement Plans
0
10
20
30
40
50
60
70
80
1985 1989 1993 2000 2005
Employee can choose how to invest matching funds
Investment choices include employer stock
46
Benefits – More to Come
Health reform Who’s covered? What benefits are provided? Employer costs/limits?
Retirement – topics of discussion Investment options Investment advise Annuities Frozen defined benefit plans
47
Other Benefit Topics
Paid leave issues Care of family members Pandemic flu
Coverage of domestic partners
48
More Topics for the Future
Health reform Essential health benefits Coverage and limits
Who has leave benefits What will it cost to expand paid leave
Making retirement coverage automatic Payroll deduction IRAs
States and localities out front on benefit issues – testing grounds
49
WHAT DATA ARE AVAILABLE FOR MY LOCAL AREA?
Data by locality
Wages by occupation Employment Cost Index
15 major metropolitan areas Newly-released Employer Costs for
Employee Compensation 15 major metropolitan areas
Experimental benefits data
Wages in New York met area
52
Variation in New York area Wages by Characteristics
$26.66
$22.48
$25.99
$28.00
$14.35
$28.19
$26.56
$0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $30.00
100 employes or more
1-99 employees
Nonunion
Union
Part-time
Full-time
All workers
Mean hourly earnings, New York metropolitan area, May 2009
53
Employment Cost Index – wages and salaries
54
00.5
11.5
22.5
33.5
4
2007 2008 2009 2010
Employment Cost Index: 12-month percent change in wages and salaries, private industry
All US New York
Change in wage and salary costs across
areas
55
0
1
2
3
4
5
2007 2008 2009 2010
Employment Cost Index: 12-month percent change in wages and salaries, private industry
New York Boston Washington, DC
Employment Cost Index – total compensation
56
00.5
11.5
22.5
33.5
4
2007 2008 2009 2010
Employment Cost Index: 12-month percent change in total compensation, private industry
All US New York
First-ever Data on Employer Costs by Location
Metropolitan area
Total compensation
Wages and salaries
Benefits
Boston $38.62 $26.26 $12.36
San Francisco $38.52 $27.10 $11.42
New York $35.18 $24.18 $11.00
United States $27.73 $19.58 $8.15
Miami $24.00 $17.61 $6.39
Employer costs per hour worked for wages and benefits, March 2010
57
First-ever Data on Employer Costs by
Location
58
New York met area Benefits
59
Only a Few Statistically Significant Differences
0
20
40
60
80
100
Health insurance, US versus Seattle
Retirement benefits, US versus Detroit
Life insurance, US versus Los Angeles
Percent of employees offered benefit, December 2008
US Metropolitan area
60
QUESTIONS?
Contact Information
William WiatrowskiCompensation and Working Conditions
202-691-6301wiatrowski.william@bls.gov