Employment & Benefits Costs

Chart of the Week for July 30-August 5, 2004

The Employment Cost Index (ECI) released this week showed a 0.9% increase in total compensation costs for the second quarter 2004. More than half of that increase came from the rising cost of benefits. The wage component of the index grew only 0.6% for the quarter. This is the slowest wage growth on record. The year-over-year change in wages is 3.9%, as shown in the chart above. However, the cost of benefits have increased almost twice that rate, 7.2%, during the same time. This is the fastest growth rate since 1990. Healthcare and pension costs continue to be one of the biggest drains on employers’ costs for compensation packages.

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