Compensation costs for private sector workers rose 0.6 percent from December 2006 to March 2007 (seasonally adjusted), compared to 0.8 percent for the prior quarter, according to the U.S. Department of Labor's Bureau of Labor Statistics.
Wages and salaries increased 1.1 percent from December 2006 to March 2007, up from 0.8 percent in the previous quarter.
Benefit costs declined 0.3 percent in the quarter ended in March 2007, compared to a 0.9 percent increase the previous quarter. This decline was due primarily to lower employer contributions to defined benefit retirement plans, which was seen across industries and occupational groups.
Lower contributions may be due to several factors. For example, over the last couple of years, many employers have had to make additional payments to defined benefit funds to make up for lower than expected earnings from investments during the early part of the decade; if these payments are no longer required, current contributions would be lessened. Also, the recent improved performance of the stock market may have also been a factor, requiring employers to contribute less to retirement plans.
This data is from the BLS Compensation Cost Trends program. Compensation costs (also known as employment costs) include wages, salaries and employer costs for employee benefits. Data is subject to revision. Learn more in "Employment Cost Index—March 2007," news release USDL 07-0605.
