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Earnings and Benefits - Firms Providing Benefits

retirement workers characteristics private

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For more than fifty years, the U.S. Chamber of Commerce has surveyed a cross section of businesses in regard to the benefits offered. The average benefit payment expended by the 609 firms that replied to the survey in 2003 amounted to 37.6% of their total payroll, down from 39% in 2001. In 2005, according to Employee Benefits in Private Industry in the United States, 90% of organizations that employed 100 workers or more offered some type of retirement plan for their employees, as did 49% of smaller firms; 96% of large firms offered a health insurance plan, compared with 61% of companies that employed between one and ninety-nine workers. Goods-producing and services-producing employer firms were just as likely to offer retirement plans (51%) and health plans (63%).

Benefits as a Percentage of Total Payroll

In its 2003 study, the Chamber of Commerce reported that, on average, $0.63 of every payroll dollar is paid out directly in wages. Of the remaining $0.37, 8.3 cents covers legally required taxes, compensatory fees, and insurance; 11.4 cents goes to medical benefits; 9.9 cents covers paid time off (including vacation or sick days); and 6.7 cents covers retirement and savings benefits for employees.

According to the U.S. Chamber of Commerce, average annual benefits per employee in 2003 amounted to $18,541, which is an increase of 1.5% from the average of $18,254 reported in 2001. Companies report that since 1975 (when benefits accounted for 30% of payroll) benefits costs as a percentage of payroll dollars have risen due to TABLE 6.4 Percent of workers participating in retirement and healthcare benefits by selected characteristics, private industry, March 2005 "Table 2. Percent of Workers Participating in Retirement and Healthcare Benefits, by Selected Characteristics, Private Industry, National Compensation Survey, March 2005," in National Compensation Survey: Employee Benefits in Private Industry in the United States, March 2005, U.S. Department of Labor, Bureau of Labor Statistics, August 2005, http://www.bls.gov/ncs/ebs/sp/ebsm0003.pdf (accessed January 8, 2006)both rising health insurance costs and the growth of legally mandated benefits, such as Social Security payments.

TABLE 6.4
Percent of workers participating in retirement and healthcare benefits by selected characteristics, private industry, March 2005
Characteristics Retirement benefits Healthcare benefits
All Plans* Defined benefit Defined contribution Medical care Dental care Vision care Outpatient Prescription drug coverage
*Includes defined benefit pension plans and defined contribution retirement plans. The total is less than the sum of the individual items because many employees participated in both types of plans.
Note: Because of rounding, sums of individual items may not equal totals
SOURCE: "Table 2. Percent of Workers Participating in Retirement and Healthcare Benefits, by Selected Characteristics, Private Industry, National Compensation Survey, March 2005," in National Compensation Survey: Employee Benefits in Private Industry in the United States, March 2005, U.S. Department of Labor, Bureau of Labor Statistics, August 2005, http://www.bls.gov/ncs/ebs/sp/ebsm0003.pdf (accessed January 8, 2006)
All workers 50 21 42 53 36 22 48
Worker characteristics
White-collar occupations 61 24 53 58 42 24 52
Blue-collar occupations 51 26 38 61 39 25 56
Service occupations 22 7 18 27 17 12 25
Full time 60 25 50 66 45 27 59
Part time 19 9 14 12 9 6 11
Union 85 72 43 83 67 51 77
Nonunion 46 15 41 49 33 19 44
Average wage less than $15 per hour 35 11 29 39 24 15 35
Average wage $15 per hour or higher 71 34 59 72 52 32 65
Establishment characteristics
Goods producing 64 32 50 70 49 30 66
Service producing 47 18 39 48 33 20 43
1 to 99 workers 37 9 32 43 24 14 37
100 workers or more 67 36 53 65 51 32 61
Geographic areas
Metropolitan areas 52 22 42 54 37 23 48
Nonmetropolitan areas 44 15 38 49 31 18 44
New England 51 21 42 49 36 16 43
Middle Atlantic 55 28 42 52 36 24 45
East North Central 56 24 46 55 38 21 53
West North Central 56 22 46 52 34 17 49
South Atlantic 47 16 41 53 34 19 45
East South Central 44 13 41 56 36 26 53
West South Central 45 17 38 52 30 17 46
Mountain 49 17 42 48 33 23 45
Pacific 47 23 37 55 44 31 50
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