A few days ago Jared Bernstein alerted me to something new: total employment cost figures broken down by income level. Are you excited yet? Read on and you will be.
The Bureau of Labor Statistics has long provided something called the Employer Cost Index. The idea behind this number is that it includes the total cost of employing someone: wages, of course, but also health care, retirement benefits, paid leave, etc. This is useful because it tells us how much employers really have to spend to hire an extra person. Here’s the answer for the past decade:
Why is this interesting? Sometimes you’ll hear people suggest that, sure, wage growth has been slow, but that’s because employers are pouring a lot more money into health care premiums. And generally speaking, that’s true: health care costs have gone up a lot.
But as this chart shows, for the median worker the total cost of compensation has gone up only 2.6 percent over the past decade. That includes everything that employers have to pay for. In other words, the idea that wage growth is slow because the money is going somewhere else simply doesn’t hold water—and that’s true for workers at all income levels. Even the highest-paid workers, who have seen the best wage growth and who get the best benefits, have seen their total compensation go up by less than 1 percent per year.
And since I know you’re just bursting with curiosity about how well our corporate community has been doing during this same period, here you go: