Compensation costs in State and local governments
In September 2004, employer costs in State and local governments averaged $34.72 per hour worked. Wages and salaries, which accounted for 68.6 percent of the total, averaged $23.83, while benefits, which accounted for the remaining 31.4 percent, averaged $10.89. Benefit costs increased from 30.3 percent of total compensation and $10.20 for State and local government workers in September 2003.Among State and local government employees, average hourly compensation costs were higher for management, professional, and related occupations ($42.30), than for service occupations ($26.37) and sales and office occupations ($23.91). Wages and salaries averaged $30.31 per hour worked for management, professional, and related occupations, $16.52 for service occupations, and $15.20 for sales and office occupations. Wages and salaries accounted for about the same proportion of total compensation for service employees (62.6 percent) and sales and office employees (63.6 percent for management, professional, and related employees, wages and salaries represented a significantly higher proportion of total compensation (71.7 percent).[p] Employer costs for insurance benefits ranged from $2.96 per hour, or 11.2 percent of total compensation, for service occupations, to $3.96 per hour worked, or 9.4 percent of total compensation, for management, professional, and related occupations for State and local government employees. For sales and office occupations, employer insurance costs averaged $3.33, or 13.9 percent of compensation. The largest component of insurance costs was health insurance, which averaged $3.49, or 10.0 percent of total compensation for State and local government employees. Health insurance costs were higher in September 2004, rising from $3.19 and 9.5 percent of total compensation in September 2003.[p] In September 2004, the average cost for retirement and savings benefits was $2.23 per hour worked in State and local governments (6.4 percent of total compensation). Included in this amount were employer costs for defined benefit plans, which averaged $1.97 per hour (5.7 percent), and defined contribution plans, which averaged 25 cents (0.7 percent). Defined benefit costs have risen in the past year, increasing from $1.75 per hour and 5.2 percent of total compensation in September 2003. Defined benefit plans specify a formula for determining future benefits, while defined contribution plans specify employer contributions, but do not guarantee future benefits.[p] A major component of benefit costs is paid leave, including vacations, holidays, sick leave, and other leave such as personal leave, military leave, and funeral leave. The average cost for paid leave was $2.64 per hour worked for State and local government employees. Among occupational groups, the average cost for management, professional, and related workers was $2.85; significantly higher than the costs for sales and office workers which averaged $2.27 and for service workers which averaged $2.39.[p] Costs for legally required benefits, including Social Security, Medicare, [link url=http://economics.about.com/od/unemployment/]unemployment[/link] insurance (both State and Federal), and workers' compensation, averaged $2.04 per hour worked for State and local government employees. The average cost for management, professional, and related workers was $2.35 per hour worked (5.5 percent of total compensation), sales and office workers averaged $1.51 (6.3 percent), and service workers averaged $1.68 (6.4 percent).[p] ---[p] If you would like to contact the Economics Guide you can do so by using the [link url=http://economics.about.com/library/blfeedback.htm]Feedback Form[/link]._z_economics_z_);
