Wages and Non-Wage Compensation

Economists frequently assume that employees “pay for” employer-provided fringe benefits, such as contributions to retirement plans, in the form of reduced wages. This paper challenges these assumptions. Because low-income employees receive little tax benefit from saving in qualified retirement plans, they may not be willing to accept a one dollar reduction in their wage in return for an additional dollar contributed to their 401(k) plan. We find that employers reduce wages of high-income workers by 90 to 99 cents for every dollar contributed to a 401(k) plan, but they reduce wages of low-income workers by only 11 to 29 cents.

NeighborhoodInfo DC, an Urban Institute project, has amassed a data warehouse measuring the health and vitality of Washington, DC neighborhoods. This fact sheet is the first publication in our effort to extend our analysis to the council districts in Prince George's County, Maryland. The following information summarizes selected population and socioeconomic changes in Prince George's County between 2000 and 2010 using the latest tract-level 2010 U.S. Census population data and the 2005–2009 American Community Survey. We provide countywide averages, as well as the individual changes in the county’s nine districts.

Economists frequently assume that employees “pay for” employer-provided fringe benefits, such as contributions to retirement plans, in the form of reduced wages. This paper challenges these assumptions. Because low-income employees receive little tax benefit from saving in qualified retirement plans, they may not be willing to accept a one dollar reduction in their wage in return for an additional dollar contributed to their 401(k) plan. We find that employers reduce wages of high-income workers by 90 to 99 cents for every dollar contributed to a 401(k) plan, but they reduce wages of low-income workers by only 11 to 29 cents.

This report updates and extends the Economic Security Index (ESI), an integrated measure of the share of Americans who experience large declines in their "available household income"-their household income after paying for medical care and servicing their financial debts. Americans are still coming to grips with the effects of the "Great Recession" on their economic security. Despite a number of valuable examinations of the downturn's effects, surprisingly little is known about the dynamic experiences of Americans as their economic standing has changed from year to year amid a turbulent economy. This report fills this gap.

The Congressional Budget Office, the Rand Corporation, and the Urban Institute have estimated that the Affordable Care Act (ACA) will leave employer-sponsored coverage largely intact; in contrast, some economists and benefit consultants argue that the ACA encourages employers to drop coverage thereby making both their workers and their firms better off (a “win–win" situation). This brief's analysis shows that no such "win–win" situation exists and that employer-sponsored insurance will remain most workers' primary source of coverage. Analysis of three issues-the terms of the ACA, worker characteristics, and the fundamental economics of competitive markets-supports this conclusion.

In this book the authors analyze trends in the creation of "good jobs" over time, and in the skills workers need to obtain these jobs, using a unique measure of job quality. They use the Longtiudinal Employer Household Dynamics (LEHD) data from the Census Bureau for 12 states to analyze these trends. They also consider the impacts of job displacements from good-paying jobs, and also trends across different kinds of metropolitan areas. The authors find that the US labor market continues to create good jobs, but that workers increasingly need higher levels of skill and education to obtain them. They consider the implications of these findings for a range of policies on education and job training as well as economic development.

In this paper we analyze labor market outcomes over the business cycle from 2000-07, as well as the labor market effects of the Great Recession since 2008. We use data from the Current Population Surveys (CPS) to analyze these outcomes. We find that hourly wages grew only modestly for most groups, and annual earnings stagnated, between 2000 and 2007. Young and less-educated men did relatively poorly, while highly-educated and high-earning workers did relatively well, especially among women. During the recession, the groups that fared badly during the preceding economic cycle were also the ones hardest hit during the downturn. A slow recovery is forecast from the recession, and we likely will return to a relatively weak labor market afterwards. The implications of these findings for policy are considered.

Labor market deterioration during the Great Recession has been both substantial overall and unevenly distributed across regions and types of workers. In particular, low-skill workers have lost proportionately more jobs than other workers nationwide and done particularly poorly in a number of states. This fact sheet shows the loss of low-skill jobs by state over the recession and how it compares to overall job losses by state.