Economic Snapshot | Unions and Labor Standards

Employee Fringe Benefits

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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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