Benefit Cost Increases Outpaced Wage Inflation In Second Quarter

Total compensation costs for U.S. civilian workers rose 0.9% between March and June 2007, with benefit costs climbing 1.3% and wages and salaries increasing 0.8%, according to the most recent Employment Cost Index report released by the U.S. Department of Labor (DOL).

Researchers noted that this rise in labor costs is only slightly higher than the growth that occurred during the December 2006 to March 2007 period, when overall compensation costs rose 0.8%. The analysis showed, however, that benefit costs increased just 0.1% during the previous quarter, while wages and salaries grew 1.1%.

For private industry, total compensation costs rose 0.9%, benefit costs climbed 1.1%, and wages and salaries increased 0.8% between March and June 2007. Among state and local government employees, overall compensation costs rose 1.1%, benefit costs grew 1.7%, and wages and salaries increased 0.8% during the quarter.

DOL researchers also reported that, for the year ended June 2007, annual compensation costs for civilian workers increased 3.3%, with benefit costs in the state and local government sectors advancing at a much faster pace (+6.6%) than among private employers (+2.6%). Broken down by sector, the figures for the year ended June 2007 showed that compensation costs rose 2.8% for financial activities, 2.6% for goods-producing industries, and 1.9% among manufacturing industries. Stronger gains for the year ended June 2007 were seen among the service-providing industries (+3.3%) and the leisure and hospitality industries (+4.6%).