State and local government employers spent an average of $26.25 per hour worked for employee wages and salaries in September 2010, the U.S. Department of Labor’s Bureau of Labor Statistics reported on December 8. Wages and salaries accounted for 65.5 percent of compensation costs while benefits averaged $13.85 per hour worked and accounted for the remaining 34.5 percent. Wages and salaries for management, professional and related occupations, which represent approximately half of all state and local government employment, averaged $33.17 per hour worked.
Employer Costs for Employee Compensation (ECEC), a product of the National Compensation Survey, measures employer costs for wages, salaries and employee benefits for non-farm private and state and local government workers.
Health benefit employer costs in September 2010 were $4.65 per hour worked for state and local government and $2.10 in private industry. Defined benefit retirement plan costs for state and local government employers were $2.94 per hour worked, significantly higher than 44 cents for private industry employers. Defined contribution retirement costs were 32 cents per hour worked for state and local government and 55 cents for private industry.
Civilian employer costs averaged $2.63 per hour worked for insurance benefits (life, health and disability insurance) or 8.8 percent of total compensation. In addition to insurance, the other benefit categories were: paid leave (vacation, holiday, sick leave and personal leave), which averaged $2.05 (6.9 percent of total compensation); supplemental pay (overtime and premium, shift differentials and non-production bonuses), which averaged 71 cents per hour worked (2.4 percent); retirement and savings (defined benefit and defined contribution), which averaged $1.34 per hour (4.5 percent of total compensation); and legally required benefits (Social Security, Medicare, unemployment insurance and workers’ compensation), which averaged $2.32 per hour worked (7.8 percent).
Private industry employer compensation costs averaged $27.88 per hour worked. Private industry employer wages and salaries averaged $19.68 per hour (70.6 percent of total compensation), while benefits averaged $8.20 (29.4 percent). Employer costs for paid leave averaged $1.88 per hour worked (6.7 percent), supplemental pay averaged 78 cents (2.8 percent), insurance benefits averaged $2.24 (8.0 percent), retirement and savings averaged 99 cents (3.6 percent) and legally required benefits averaged $2.31 (8.3 percent) per hour worked.
Compensation costs in state and local government
State and local government compensation costs averaged $40.10 per hour worked. Wages and salaries averaged $26.25 per hour (65.5 percent of total compensation), while benefits averaged $13.85 (34.5 percent). Among state and local government employees, average hourly compensation costs were higher for management, professional and related occupations ($48.73) than for service occupations ($30.17) and sales and office occupations ($27.87).
For state and local government employees, employer costs for insurance benefits were $4.80 per hour, or 12.0 percent of total compensation. The largest component of insurance costs was health insurance, which averaged $4.65, or 11.6 percent of total compensation.
In September 2010, the average cost for retirement and savings benefits was $3.26 per hour worked in state and local government (8.1 percent of total compensation). Included in this amount were employer costs for defined benefit plans, which averaged $2.94 per hour (7.3 percent) and defined contribution plans, which averaged 32 cents (0.8 percent). Defined benefit plans specify a formula for determining future benefits, while defined contribution plans specify employer contributions but do not guarantee the amount of future benefits.
Two major components of benefit costs are paid leave and legally required benefits. Paid leave benefit costs include vacation, holiday, sick leave and personal leave. The average cost for paid leave was $3.03 per hour worked for state and local government employees. Costs for legally required benefits, including Social Security, Medicare, unemployment insurance (both state and federal) and workers’ compensation, averaged $2.42 per hour worked.