Health costs eating into salary budgets
June 4, 2008 by Bill MeltzerPosted in: Cutting costs, In this week's e-newsletter, Latest News & Views
Even in the era of consumer-driven healthcare, many employees fail to see the relationship between their health costs and salaries.
But employers know there’s a cause-and-effect relationship between the two. Over the last year, health costs have grown to 7.1% of employers’ total benefit and compensation expenses, according to the Bureau of Labor Statistics.
Last year at this time, it accounted for 6.9% of employers’ costs. Meanwhile, the proportion of total compensation taken up by salaries has gone down. In the last 12 months, salaries and wages have dropped to 70.6% of employer costs.
And don’t forget: The federal minimum wage was raised. The real-dollar cost of salaries and wages is now $18.42 per employer per hour, up from $18.04 last year.
One factor that has raised the total cost of employee compensation: increased use of paid leave. It’s up for the fifth straight year, to $1.76 per employee per hour.
