Copyright 2004 by the Wyoming Department of Employment, Research & Planning

WYOMING LABOR FORCE TRENDS

Vol. 41 No. 11    

 

 

What's In a Paycheck? Components of Hourly Compensation in Wyoming

by: Douglas W. Leonard, Senior Research Analyst

When people discuss employee pay, they often only consider salaries. While salaries comprise the largest portion of total compensation, recent data indicate that benefits contribute an increasing proportion to total compensation. This article examines the components of hourly compensation in Wyoming for the private sector and local government using data from the Occupational Employment Statistics survey, the Wyoming Benefits Survey, and the Quarterly Census of Employment and Wages.

Hourly wage and benefit costs showed considerable variation across Wyoming industries in 2003. Given that benefits cost increases have accelerated in recent years (Kaiser Family Foundation, 2004), it is valuable to understand how the components of compensation interact within the state. This article examines wage and benefit components and how they collectively provide a complete picture of compensation in Wyoming.

Using data from the Quarterly Census of Employment and Wages (2003), the Wyoming Benefits Survey (Cowan & Hauf, in press), and the Occupational Employment Statistics survey (Cowan & Hauf, in press), we can examine the relationships of compensation components for the private sector and Local Government. The statewide average hourly wage in 2003 was $14.43 (see Table 1). The addition of employer-provided benefits increases the average hourly rate to $16.97. A comparison of total hourly compensation for each industry studied is shown in Figure 1. Natural Resources & Mining employees earned approximately $26.40 per hour when benefit costs are added to salaries. This value is considerably higher than the $10.28 for workers in Leisure & Hospitality.

The data indicate that on average, employers pay 18 cents in benefit costs in addition to every dollar paid in salaries (total benefits divided by wages paid; see Figure 2). The ratio of benefits costs to salaries was highest in Local Government (28 cents), Leisure & Hospitality (26 cents), and Information (24 cents).

Industries paying the greatest hourly benefit wage per hour per worker were Mining ($4.39 per hour) and Local Government ($4.04 per hour, see Figures 3 and 4). Industries paying the least hourly benefit wage per worker included Trade, Transportation, & Utilities ($1.66 per hour) and Education & Health Services ($1.96 per hour; see Table 1). 

Wyoming wage and salary costs vary because of several factors including the type of work performed (year-round compared to seasonal, skilled compared to unskilled), whether or not the workforce is under contract, and the sector in which business entities operate (public compared to private). More research needs to be conducted in these areas to determine the extent of their influence.

Studying how wages and benefits interact to produce total compensation costs provide insight into how compensation is used by firms to recruit, retain, and reward their employees. Future research on how the rising costs of health care change total compensation may furnish evidence of how these elements could affect employer profitability and viability. 

References

Brennan, N. (2003).[Quarterly Census of Employment and Wages]. Unpublished raw data.

Cowan, C. & Hauf, D. (in press) Total Compensation in Wyoming: Wages & Benefits. Casper, WY: Wyoming Department of Employment, Research & Planning.

Kaiser Family Foundation. (2004.) Employer Health Benefits 2004. Retrieved October 1, 2004, from http://www.kff.org/insurance/7148/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=46287 

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