Manufacturing Compensation Up 1.8 Percent over the Past 12 Months

By November 19, 2013Economy

The Bureau of Labor Statistics released the latest employment cost index data for the third quarter of 2013. In the manufacturing sector, total compensation increased 0.4 percent between the second and third quarters of this year. Wages and salaries as well as benefits were all up 0.4 percent for the quarter. On an annual basis, total compensation increased 1.8 percent year-over-year, with wages and salaries rising 2.0 percent.

Total benefits have risen a more modest 1.5 percent over the past 12 months, decelerating from the 2.3 percent and 1.8 percent annualized paces seen in the first and second quarters. Looking at a longer-time horizon, the cost of manufacturing benefits has jumped 12.6 percent since the third quarter of 2009, or since the end of the recession. In comparison, wages and salaries increased 7.6 percent over that time frame.

Unfortunately, BLS does not break out health care expenses in this report, but one could assume that rising insurance costs were the largest factor in this increase. The most recent Kaiser Family Foundation report on health insurance coverage says that the average annual cost for family plan in the manufacturing sector in 2013 was $15,082. That figure is 18.4 percent higher than the $12,740 annual premium reported in a similar 2009 study.

For the larger economy, the employment cost index also rose 0.4 percent, with wages and salaries up 0.3 percent and benefits increasing 0.7 percent. On a year-over-year basis, wages and salaries have risen 1.6 percent, and benefits have grown 2.3 percent. Since the end of the recession, benefit costs have soared 11.0 percent versus a 7.9 percent increase for wages and salaries.

Chad Moutray is the chief economist, National Association of Manufacturers.

Chad Moutray

Chad Moutray

Chad Moutray is chief economist for the National Association of Manufacturers (NAM), where he serves as the NAM’s economic forecaster and spokesperson on economic issues. He frequently comments on current economic conditions for manufacturers through professional presentations and media interviews. He has appeared on Bloomberg, CNBC, C-SPAN, Fox Business and Fox News, among other news outlets.
Chad Moutray

Leave a Reply