![]() For both industries, that increase is higher than that of compensation or benefits. Here’s what we found:įor civilian and private industries, the cost of wages and salaries has increased by over 3%.Īs of June 2021, labor cost for civilian and private industries rose to 3.2% and 3.5%, respectively. Overall, the amount of increased labor cost heavily depends on the type of industry. ![]() While it’s obvious that labor cost has an impact, its extent is divided amongst compensation, wages, and benefits. Within the past 30 years, productivity in this industry has increased by over 1,000%. That’s the largest and most significant decline out of any industry, which also pairs perfectly with the largest increase in productivity. The labor cost of computer and electronic products has decreased by 78.4% since 1987. ![]() This can also be paired with very stagnant productivity, as productivity in the industry has only increased by 4.9% over 30 years. Metal ore mining has seen one of the steepest percentage increases in labor costs since 1987, reaching a whopping 202% increase. During this same period, government employees only saw an increase of 2%. There was an increase in compensation costs of 3.1% for private industry workers from June 2020 to June 2021. Here are the facts:Ĭompensation costs for private industry workers increased 33% more than that of government workers. In truth, there are several factors to consider when comparing industries, such as whether or not they’re private or public, among other things. The sector went from having increased labor cost in 2020 to decreased labor cost in 2021.Īcross the many industries in the U.S., there are also vast differences in labor cost. While this might not seem like a lot on the surface, the difference between these two percentages is massive. However, as of the second quarter in 2021, that number has dropped to -10.9%. In 2020, labor costs for this sector were up by 0.07%. While this isn’t a stand-out number, it does correlate with lackluster productivity growth, as productivity from the last year to now only increased from 2% to 2.4%.įrom 2020 to 2021, the durable manufacturing sector has seen the most drastic decline in labor cost, decreasing by 155.71%. The business sector has the highest percentage increase in labor costs, at 1.4%. This is especially true when considering the fact that labor costs the previous year had only decreased by 0.8%.Īnd this correlates with productivity, as the nonfinancial corporate sector also experienced a 10% increase in productivity compared to the previous year. Here are some insights our research uncovered:Īs of 2021, the nonfinancial corporate sector has experienced the largest decrease in labor cost, totaling 5%.Īs of the second quarter of 2021, this sector has experienced the lowest labor costs. For example, the nondurable manufacturing and nonfinancial corporate sectors can have vastly different labor costs. Public schools are the most expensive, paying out $545.8 billion, while hospitals and colleges pay $347.4 and $218.9, respectively.ĭifferent sectors of the economy are also impacted by labor costs in unique ways. public schools, hospitals, and colleges pay out the most in labor costs. The most common correlating factor being productivity, as over half of these industries experienced a fall in productivity in tandem with their increased labor cost. In 2020, unit labor cost increased in at least 21 industries. Travel Arrangement & Reservation Services In 2020, the industries that experienced the largest increases in unit labor costs were air transportation (106.9%), amusement parks and arcades (76.4%), and travel arrangement and reservation services (73.7%), all of which were impacted by social distancing policies and closures.Ĭhange in labor costs by industry Industry The top 3 industries with the highest increase in labor costs experienced a productivity decline of over 38%. Here are some insights our research uncovered: With that in mind, it’s unsurprising that the COVID-19 pandemic has caused massive drops in productivity that result in increased labor costs. Labor costs can be significant, especially for industries that experience a reduction in productivity. Private industry workers cost employers an average of $27.44 per hour worked for wages and salaries and $11.47 for benefits in 2022.įor further analysis, we broke down the data in the following ways: The air transportation industry has seen the largest recent increase in labor cost, rising by 106.9% in 2020. Public schools have the highest labor cost in the U.S., amounting to $545.8 billion annually. The average labor cost is typically 20-35% of gross sales, depending on the industry. However, not every industry is created equal, and the COVID-19 pandemic has also affected labor costs. For any industry, labor cost is an important factor to consider.
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