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Tuesday, April 30, 2019

Employment Costs Rise 0.7 Percent in the First Quarter: Spotlight on Health Care

Employment costs continue to rise at a steady pace, up 0.7 Percent in the fourth and first quarters.
The BLS Employment Cost Index rose 0.7% in the first quarter, the same as the fourth.
Compensation costs for civilian workers increased 0.7 percent, seasonally adjusted, for the 3-month period ending in March 2019, the U.S. Bureau of Labor Statistics reported today. Wages and salaries (which make up about 70 percent of compensation costs) increased 0.7 percent and benefit costs (which make up the remaining 30 percent of compensation) also increased 0.7 percent from March 2018.
Civilian Workers
Compensation costs for civilian workers increased 2.8 percent for the 12-month period ending in March 2019 compared with a compensation costs increase of 2.7 percent in March 2018. Wages and salaries increased 2.9 percent for the 12-month period ending in March 2019 and increased 2.7 percent for the 12-month period ending in March 2018. Benefit costs increased 2.6 percent for the 12-month period ending in March 2019. In March 2018, the increase was also 2.6 percent.
Private Industry Workers
Compensation costs for private industry workers increased 2.8 percent over the year, the same increase as in March 2018. Wages and salaries increased 3.0 percent for the 12-month period ending in March 2019 and increased 2.9 percent in March 2018. The cost of benefits rose 2.4 percent for the 12-month period ending in March 2019 and increased 2.5 percent in March 2018.
Year-Over-Year Civilian Workers
Year-Over-Year Private Workers
Year-Over-Year Health Care Costs
The health care chart seems nearly unbelievable. Those buying their own insurance have seen their costs rise much greater than 1.9% over the past year.
Of course, quality of the employer care might be (and probably is) falling with higher deductibles and weaker plans. If so, such events are not properly reflected in the costs.
And part-time employees may not receive coverage at all. In that case, zero is still zero.

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