DOL Reports Slowdown In Benefit Cost Increases

The rising cost of employer-provided benefits slowed between June 2004 and June 2005, while growth in wages and salaries remained relatively stable over the same period, according to statistics published in the U.S. Department of Labor's "Employment Cost Index."

Overall compensation costs for civilian and private industry workers rose 3.2% from June 2004-June 2005, compared with gains of 3.9% and 4%, respectively, for June 2003-June 2004. Wages and salaries for civilian workers rose 2.4% in 2004-2005 (virtually unchanged from the 2.5% gain of the previous year) and 3.9% for private industry workers, down from 4.4% in 2003-2004.

At the same time, benefit cost increases for civilian workers slowed considerably, to 5.1% for 2004-2005, from 7.2% for 2003-2004. For private industry workers, benefit cost increases declined even more sharply to 4.9% in 2005, from 7.3% the previous year. For union members, benefit cost gains decelerated dramatically to 4.1% in 2004-2005, from 11.3% in 2003-2004. By contrast, benefit cost increases for nonunion workers declined more modestly to 5.1% in 2004-2005, from 6.3% the previous year.