Employers in Midwest Pay Lower Hourly Cost Per Employee

September 21, 2005

Even figuring in the relatively high cost of workers’ compenstion insurance, employers in Midwestern states like Missouri and Illinois paid a lower hourly costs for employee compensation than the national average.

According to data released today by the Bureau of Labor Statistics, employers in the West North Central region paid an average of $22.45 an hour for employee compensation in June 2005.

The $22.45 an hour for the West North Central region includes $16.23 for wages and salaries, or 72.3 percent, plus $6.22 for total benefits, or 27.7 percent. Legally required benefits like Social Security and Medicare, unemployment insurance and workers’ compensation insurance took up the largest piece of the total cost at 8.5 percent. Other forms of insurance, such as health and life, took up 7.2 percent, while paid leave takes up 5.7 percent.

The West North Central region includes Missouri, Iowa, Kansas, Minnesota, Nebraska, North Dakota and South Dakota.

In the East North Central region, which includes Illinois, employers paid a total of $24.96 an hour for employee compensation and costs. Wages and salaries took up $17.27 an hour, or 69.2 percent, while total benefits took up $7.69, or 30.8 percent of the total. Legally required benefits made up 8.6 percent of the costs, while insurance such as health and life took up 8.1 percent. Paid time off represented 6.4 percent of the total costs.

Other states in the East North Central region include Indiana, Michigan, Ohio, and Wisconsin.

For the Midwest as a whole, which includes both the East and West North Central divisions, total compensation costs were $24.18, including $16.95 for wages and salaries and $7.23 for benefits.

Nationally, employer costs for employee compensation averaged $25.86 per hour worked. Wages and salaries, which averaged $18.21, accounted for 70.4 percent of these costs, while benefits, which averaged $7.64, accounted for the remaining 29.6 percent.

Topics Commercial Lines Business Insurance

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