Benefit costs rose again in the latest quarter and accounted for more than half of the 0.9 percent increase in total compensation costs for civilian workers from March to June 2004, according to the Department of Labor’s latest figures.

At the same time, total compensation costs, seasonally adjusted, moderated from the 1.1 percent gain in December 2003 to March 2004. These results were just reported by the Bureau of Labor Statistics of the U.S. Department of Labor reported.

Wage and salary costs increased 0.6 percent and benefit costs rose 1.8 percent, continuing to rise sharply. The Employment Cost Index (ECI), a component of the National Compensation Survey, measures quarterly changes in compensation costs, which include wages, salaries, and employer costs for employee benefits for nonfarm private and State and local government workers.

Among private industry workers, benefit costs were one-half of compensation gains during the quarter, with health insurance and defined benefit retirement costs combined accounting for one-quarter of the rise in compensation costs.

Government Employee Costs Also Rising

Among State and local government workers, benefit costs contributed nearly three-fourths of compensation gains during the March-to-June 2004 period, with defined benefit retirement costs accounting for almost one-half and health insurance contributions accounting for one-fourth of the gain in compensation costs.

Benefit costs increased 1.8 percent for civilian workers (nonfarm private industry and State and local government) in the June 2004 quarter, following a gain of 2.4 percent in the March 2004 quarter. Private sector benefit costs rose 1.7 percent for the June quarter, moderating from the 2.6 percent gain in the previous quarter. Benefit costs for State and local governments increased 1.9 percent in the June quarter, following an increase of 1.7 percent in March 2004.