The following information comes from Joshua Franzel's presentation 'Optimizing Your Total Compensation Package' at the June 2012 Government Finance Officers Association conference.

Figure 1

[Figure 1: chart - Joshua Franzel, SLGE / data - BLS Employer Cost of Employee Compensation]            

As one might expect given rising pension costs and health care inflation rates, over the past eight years there has been a change in the percentages wages and salaries, retirement and savings, and health care benefits make up of state and local government employer costs for overall employee compensation. The percentage salary makes up in employer cost for employee compensation has gone down from 68.8% in 2004 to 65.4% in 2012. The percentage retirement and savings benefits make up of employer costs has gone up. More specifically, defined benefit costs have gone up from 5.6% of employer costs for employee compensation in 2004 to 7.5% in 2011; during this same period many governments have also raised employee contribution rates. Employer costs for defined contribution savings have remained relatively flat, increasing from .7% in 2004 to .8% in 2011. Regarding heath care benefits, while many governments have increased employee co-payments, premiums, and deductibles, among other cost-shifting and saving initiatives, the percentage health benefits make up of employer costs for employee compensation has increased from 10% in 2004 to 11.6% in 2011.

Figure 2

[Figure 2: chart - Joshua Franzel, SLGE / data - BLS Employment Cost Index (seasonally adjusted)]

As can be seen in Figure 2, given more general labor market and benefit cost drivers, state and local employer costs for employee wages, salaries, and benefits continue to increase from quarter to quarter. That said, it appears that the amount of these increases has been trending downward. This is not surprising given wage freeze policies many governments have implemented in response to the recent economic downturn, increases in the amount public employees are required to pay for their health care, increases in employee contributions to retirement plans, and, more generally, low inflation rates.