Economic Snapshot | Wages, Incomes, and Wealth

Declining employer contributions to benefits

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Snapshot for October 18, 2000

Declining employer contributions to benefits
Although wage growth has been much faster in the 1995-99 period relative to the minimal increases of the 1970s, 1980s, and early 1990s (see the previous Snapshot, Wage, benefit, and compensation growth), the same cannot be said of “fringe benefits” (or non-wage compensation). Whereas benefits grew 1.1% annually in the 1980s and 0.4% annually in the early 1990s, they actually fell 2.1% each year in the 1995-99 period.

Decline in employer health and benefits costs, 1979-99

This fall in benefits has taken place among both of the two major categories – health insurance and pensions. Employer health insurance costs have not kept up with medical inflation in the late 1990s, with employer inflation-adjusted costs dropping from $1.39 and hour in 1995 to $1.27 in 1999. Pension costs also have been declining since 1979, with a large drop from $0.95 an hour in 1995 to just $0.74 in 1999.

From The State of Working America 2000-01.

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