Economic snapshot | Unions and Labor Standards

Employee Fringe Benefits

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A weekly presentation of downloadable charts and short analyses designed to graphically illustrate important economic issues. Updated every Wednesday.

Snapshot for June 6, 1999


Employee Fringe Benefits

Employee fringe benefits (including employer-paid payroll taxes, health insurance, pension, and other non-wage compensation) constitute a relatively small share of total compensation and have not kept pace with the growth of hourly wages in the 1990s.

Over the 1989-96 period (the most current available data), the growth of benefits slowed to 0.2% per year. In contrast, the annual growth in average hourly wages for this period maintained a rate of 0.5%. Consequently, as highlighted in the first figure, the benefits share of total compensation fell from 18.2% to 17.9%.

After rising steadily since 1959, the growth of total hourly compensation has slowed to 0.5% per year, matching the growth of wages, over the 1979-96 cycle. According to the figure below, the slowdown of compensation as a whole was driven by an unprecedented reduction in benefits over the 1992-96 period.

Source: The State of Working America 1998-99.

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