Wednesday, September 10, 2014

The wage you are paid is not the total cost to employ you. See the numbers here.

One of the many reports the Department of Labor's Bureau of Labor Statistics (BLS) puts out is "Employer Costs for Employee Compensation". It offers a pretty detailed dollar and cents look at how much it costs to employ a worker.

Here is one part of the report for June 2014. I highlighted the "Service" sector because the pay range is where most young people will fall.  You can compare it to the other two broad sectors to see the differences.

The first number in  YELLOW is total compensation which is comprised of "Wage" and "Non-Wage" compensation--$16.70.  The Non-Wage money outlay for a business is the addtional costs (some elective and some mandatory) they incur to employ you--$4.82.  This is in GOLD along with the hourly wage you actually receive after the employer pays these to (1) you indirectly or (2) other entities (insurance companies, State and Local governments, etc).

After you recieve your $11.88 per hour worked you will be responsible for additional deductions from your wage, such as Social Security, Medicare and Federal Income Tax Witholding and any other benefits you may elect to take.  Take note that the employer ALSO matches the amount you pay into SS and Medicare!

This kinda gets lost in the debate over raising the minimum wage.  Many of these additional costs are percents of wages paid so an increase in the MW is not only going to affect the actual wage paid but the TOTAL cost of employing a worker.

Useful information, don't you think? :)



View My Stats