Sunday, June 12, 2011

You're Not Making Much These Days, Are You?

This helps explain how wages have gone down over the years:
What do you make? I bet you just flashed on your salary. Or what your last direct deposit pay stub said was transferred into your checking account. If that’s your answer, you’re coming up about 30 percent short of what you’re really paid once all the benefits your employer covers are added in.

According to fresh data from the Bureau of Labor Statistics, total average hourly compensation, which accounts for both salary and benefits, in the first quarter of 2011 was $30.07. Of that total, $20.91 (69.6 percent) was straight up salary and wages, while the other $9.15 (30.4 percent) was the value of benefits paid by employers, including health insurance, vacation and sick days, and the employer share of Social Security and Medicare.
When I recently read my MoneyWatch colleague (and fellow freelancer) Amy Levin-Epstein’s take on 5 Myths of Freelancing, I nodded in agreement that the pluses of freelancing outweigh the minuses. But spending some time poring over the BLS benefits data sure does make for a painful day of benefit-challenged freelancing.
Benefits are the key to understanding how important compensation is when you factor in what a person makes now as opposed to what they used to make. When you take a job now, as opposed to ten years ago, the real shift in wages centers around the fact that employee benefits just aren't worth as much anymore.
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