1. National Compensation Trends William Wiatrowski Associate Commissioner Compensation and Working Conditions COPAFS September 24, 2010

2. Why the Interest in Wage and Benefit Data? Benefits make up one-third of private sector compensation costs Employer costs for benefits typically rise faster than wages The landscape is changing  Health reform  Changes to retirement plans  Other benefit issues 2

3. Today’s Road Map Highlights Survey background Cost of compensation Changing landscape of benefits What local data are available? 3

4. HIGHLIGHTS 4

5. Highlight – Change in Wage and Benefit Costs 5

6. Highlight – Components of Compensation 6

7. Highlight – Changes in Retirement Coverage 7 Full-time workers, private industry

8. Highlight – Employees are paying more for health care 8

9. Highlight – Wages by Selected Characteristics 9

10. SURVEY DESIGN 10

11. BLS National Compensation Survey BLS – source of key economic indicators National Compensation Survey (NCS)  Wage data by occupation and worker characteristics  Employer costs for benefits  Details about benefits – Who has access? – Who is covered? – What do you get from the benefit? 11

12. NCS Design Establishment survey  Sample of geographic areas – Includes New York metropolitan area  Sample of establishments – Covers all private industries; all sizes – Also covers State and local governments  Within each establishment, sample of occupations 12

13. Detailed Characteristics About the company  Industry classification  Number of workers  Location About the workers  Occupation classification  Full-time/part-time  Union/non-union  Work level 13

14. Data Elements Work schedule Wages, including incentives  Commissioners  Piece rates  Production bonuses Other cash payments  Premium pay for overtime  Shift differential  Non-production bonuses 14

15. Data Elements Benefits  Paid and unpaid leave  Insurances, including health  Retirement and savings  Legally required 15

16. Capturing Benefits Data For each benefit –  Identify each plan – Is it offered to a specific occupation? How many workers take advantage/use the benefit? – What is the cost to the employer? What if there is no employer cost? – What must the worker do to get the benefit? Eligibility Required contribution – How does the plan work? 16

17. Survey Timing Private industry establishments are in the survey for 5 years  One-fifth rotate in/out each year All wage and benefit data captured at start of survey  Wages and employer costs updated each quarter  Benefit data updated once a year Written plan descriptions collected at start of survey 17

18. SURVEY RESULTS – EMPLOYER COMPENSATION COSTS 18

19. Change in Wage and Benefit Costs 19

20. Changes in Health Care Costs 20 12- 12-month percent change in employer costs for health insurance and all benefits, private industry Health insurance All benefits

21. Variations by Industry 21

22. Variations by Occupation 22

23. Variations by Union Status 23

24. A Closer Look at Incentive-Paid Workers 24

25. All Sales Workers, Regardless of Industry 25

26. Retail Trade Industry 26

27. Financial Activities Industry 27

28. Employer Costs for Employee Compensation 28

29. Movement Away from Cash Compensation 29

30. Greater Share of Compensation Dollar Going to Health Benefits 30

31. Retirement Costs are Dominated by Social Security Taxes 31

32. Employer Compensation Costs Vary 32

33. Employer Compensation Costs Vary, as do Proportions 33

34. BENEFITS – THE LANDSCAPE IS CHANGING

35. Benefits – Yesterday and Today Benefits – 1980  Basic plus Major Medical health plan  Defined benefit retirement plan  Vacation, sick leave  Specific plans for specific purposes  Little or no employee cost or decision Benefits – 2010  Health plan types; choices; accounts  Defined contribution plans  Paid time off  Plans serve multiple purposes  Employee must pay and decide 35

36. Who has Health Benefits? 36

37. Who has Retirement Benefits? 37

38. Wage Level Affects Benefits 38

39. How Does your Health Plan Stack Up? Plan types are changing  Hybrids  Accounts Employees must assume more responsibility  Contributions  Choice of provider effects costs Increase in out-of-pocket costs 39

40. How are Health Benefits Provided? 40

41. Who Pays for Health Benefits? 41

42. How Does your Health Plan Stack Up? 42

43. Retirement Plans are Changing Defined benefit plans  Enrollment was automatic  Managed investments  Annuity gave employee “paycheck for life” Future of defined contribution plans?  Automatic enrollment features  Lifecycle investment funds  Provide/encourage payout in the form of an annuity 43

44. Movement Toward Defined Contribution Plans 44 Full-time workers, private industry

45. More Automatic Enrollment 45

46. More Choice in Retirement Plans 46

47. Benefits – More to Come Health reform  Who’s covered?  What benefits are provided?  Employer costs/limits? Retirement – topics of discussion  Investment options  Investment advise  Annuities  Frozen defined benefit plans 47

48. Other Benefit Topics Paid leave issues  Care of family members  Pandemic flu Coverage of domestic partners 48

49. More Topics for the Future Health reform  Essential health benefits  Coverage and limits Who has leave benefits  What will it cost to expand paid leave Making retirement coverage automatic  Payroll deduction IRAs States and localities out front on benefit issues – testing grounds 49

50. WHAT DATA ARE AVAILABLE FOR MY LOCAL AREA?

51. Data by locality Wages by occupation Employment Cost Index  15 major metropolitan areas Newly-released Employer Costs for Employee Compensation  15 major metropolitan areas Experimental benefits data

52. Wages in New York met area 52

53. Variation in New York area Wages by Characteristics 53

54. Employment Cost Index – wages and salaries 54

55. Change in wage and salary costs across areas 55

56. Employment Cost Index – total compensation 56

57. First-ever Data on Employer Costs by Location Metropolitan area Total compensation Wages and salaries Benefits Boston$38.62$26.26$12.36 San Francisco$38.52$27.10$11.42 New York$35.18$24.18$11.00 United States$27.73$19.58$8.15 Miami$24.00$17.61$6.39 Employer costs per hour worked for wages and benefits, March 2010 57

58. First-ever Data on Employer Costs by Location 58

59. New York met area Benefits 59

60. Only a Few Statistically Significant Differences 60

61. QUESTIONS?

62. Contact Information William Wiatrowski Compensation and Working Conditions 202-691-6301 wiatrowski.william@bls.gov