Benefit Gains Exceed Wage Growth, New Labor Data Shows

Americans’ compensation is growing, but workers might not notice it in their regular pay.

The value of benefits — including bonuses and vacation time — grew at a faster rate in the 12 months ended in June than wages and salaries, according to data the Labor Department released Tuesday. That extended a long-running but slow shift in compensation toward benefits and away from wages.

The cost of benefits for private-sector employers rose 3% in June from a year earlier, while the cost of wages and salaries advanced 2.7%.

The benefit gain was driven by a nearly 12% increase in bonuses and other forms of supplemental pay. That likely in part reflects bonuses that many large companies, including AT&T Inc. and Comcast Corp., gave to employees after Congress approved a package of tax cuts.

Increased bonus payments could also indicate firms are using one-time payments to recruit or retain workers, rather than raising their base salaries.

While bonus payments were well up from a year earlier, they were unchanged from March, the last time the data was collected. The data aren’t seasonally adjusted, making monthly comparisons potentially misleading, but the lack of movement could suggest that at least some of those payments may not be repeated.

Paid leave, including vacation time, rose 4% in June from a year earlier. The cost of health-care coverage and other insurance rose 2.3% from a year earlier.

Benefits growth outstripping wage gains is consistent with a recent paper from President Trump’s economic advisers that found broader compensation growth was stronger than the gain in average hourly earnings reported in the monthly jobs report.

Most forms of benefits have been growing at a better rate than wages and salaries since the recession ended in mid-2009.

https://www.marketscreener.com/news/Benefit-Gains-Exceed-Wage-Growth-New-Labor-Data-Shows–27279172/