National Compensation Trends

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

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

4. highlights

5. Highlight – Change in Wage and Benefit Costs

6. Highlight – Componentsof Compensation

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

8. Highlight – Employees are paying more for health care

9. Highlight – Wages by Selected Characteristics

10. Survey design

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?

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

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

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

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

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?

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

18. Survey results –Employer Compensation Costs

19. Change in Wage and Benefit Costs

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

21. Variations by Industry

22. Variations by Occupation

23. Variations by Union Status

24. A Closer Look at Incentive-Paid Workers

25. All Sales Workers, Regardless of Industry

26. Retail Trade Industry

27. Financial Activities Industry

28. Employer Costs for Employee Compensation

29. Movement Away from Cash Compensation

30. Greater Share of Compensation Dollar Going to Health Benefits

31. Retirement Costs are Dominated by Social Security Taxes

32. Employer CompensationCosts Vary

33. Employer Compensation Costs Vary, as do Proportions

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

36. Who has Health Benefits?

37. Who has Retirement Benefits?

38. Wage Level Affects Benefits

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

40. How are HealthBenefits Provided?

41. Who Pays for Health Benefits?

42. How Does your Health Plan Stack Up?

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

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

45. More Automatic Enrollment

46. More Choice in Retirement Plans

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

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

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

50. What DATA ARE AVAILABLE FOR MY LOCAL AREA?