The American Worker - Wages And Benefits: Compensating American Workers

The Census Bureau reported in Income, Poverty, and Health Insurance Coverage in the United States: 2003 (Washington, DC, 2004) that the median household income of Americans in 2003 was $43,318. Incomes differed according to age, as shown in Table 6.2, and such factors as education and work experience, as shown in Table 6.3. For example, the median income of someone over twenty-five with a professional degree was $82,007, compared to someone with only a high school education, who had a median income of $25,935.

In order to attract and keep the best employees and earn a level of loyalty from them, many U.S. employers with more than twenty-five employees offer benefits and incentives, including health insurance and paid time off. Health insurance is costly to both the employer and the employee. Increasing numbers of uninsured workers over the last twenty-six years demonstrate how expensive health benefits have become. (See Table 6.4 and Figure 6.1.) In 2004 the majority of American workers (69%)

TABLE 6.2

Household income by householder age, 2003
[Numbers in thousands. Households as of March of the following year. A.O.I.C. stands for alone or in combination]
	Under 65 years
				25 to 34 years
	Total	Total under 65 years	15 to 24 years	Total	25 to 29 years
All races
Total	112,000	88,951	6,610	19,159	8,737
Under $2,500	2,535	2,143	366	469	267
$2,500 to $4,999	1,266	995	240	249	148
$5,000 to $7,499	2,717	1,865	318	355	180
$7,500 to $9,999	3,593	1,891	254	352	199
$10,000 to $12,499	4,032	2,120	295	500	251
$12,500 to $14,999	3,708	2,025	293	460	218
$15,000 to $17,499	3,933	2,359	353	571	288
$17,500 to $19,999	3,501	2,122	286	471	237
$20,000 to $22,499	3,888	2,705	391	691	341
$22,500 to $24,999	3,327	2,210	289	544	255
$25,000 to $27,499	3,683	2,680	269	635	353
$27,500 to $29,999	3,035	2,175	260	525	275
$30,000 to $32,499	3,882	3,155	364	858	444
$32,500 to $34,999	2,677	2,018	186	499	245
$35,000 to $37,499	3,417	2,801	243	743	360
$37,500 to $39,999	2,607	2,039	158	493	249
$40,000 to $42,499	3,420	2,883	202	715	356
$42,500 to $44,999	2,381	1,940	157	494	220
$45,000 to $47,499	2,721	2,339	167	604	272
$47,500 to $49,999	2,227	1,830	120	430	196
$50,000 to $52,499	3,012	2,666	149	659	321
$52,500 to $54,999	1,963	1,679	127	362	158
$55,000 to $57,499	2,343	2,021	81	503	251
$57,500 to $59,999	1,833	1,598	81	366	167
$60,000 to $62,499	2,442	2,204	106	533	242
$62,500 to $64,999	1,648	1,420	57	299	135
$65,000 to $67,499	2,007	1,792	82	395	155
$67,500 to $69,999	1,550	1,353	61	296	110
$70,000 to $72,499	1,995	1,829	84	404	178
$72,500 to $74,999	1,398	1,259	37	265	93
$75,000 to $77,499	1,835	1,669	32	364	150
$77,500 to $79,999	1,243	1,125	40	256	103
$80,000 to $82,499	1,575	1,454	39	357	136
$82,500 to $84,999	1,162	1,079	26	199	87
$85,000 to $87,499	1,362	1,249	53	247	89
$87,500 to $89,999	968	884	33	127	38
$90,000 to $92,499	1,362	1,263	21	243	103
$92,500 to $94,999	888	813	21	140	51
$95,000 to $97,499	1,114	1,011	28	205	70
$97,500 to $99,999	804	716	23	125	31
$100,000 and over	16,945	15,573	219	2,157	716
Median income dollars	43,318	50,171	27,053	44,779	40,408
Standard error dollars	188	149	404	360	350
Mean income dollars	59,067	64,812	33,629	55,292	48,692
Standard error dollars	216	253	386	415	499
Gini ratio	0.450	0.428	0.431	0.405	0.400
Standard error	0.0025	0.0028	0.0100	0.0060	0.0088
B-Cell	1,140	1,140	1,140	1,140	1,140
Income per household member	22,966	23,219	13,520	19,380	18,324
Standard error	96	103	207	180	245
Total persons in households	288,049	248,298	16,440	54,660	23,218

still had access to company medical plans with at least some portion of the premiums paid by the employer. The average monthly cost to employees was $264.59 for family coverage and $67.57 for individual plans. Race was a significant factor in health insurance coverage either offered through employers or privately purchased. As Table 6.5 shows, those of Hispanic origin are more than twice as likely to be uninsured than other ethnicities, while whites were more likely than any other ethnic group or race to have health insurance.

Larger companies—those with more than one hundred employees—generally offered more benefits to their employees than smaller employers did. (See Table 6.6.) Forty percent of employers with more than one hundred employees offered vision care as a benefit in 2003, compared to 18% of employers with fewer than one hundred employees. Unions also ensure more workplace benefits for their members. Table 6.6 shows that 90% of union employees were offered medical coverage versus 67% of nonunion employees.

	Under 65 years
	25 to 34 years		35 to 44 years
	30 to 34 years	Total	35 to 39 years	40 to 44 years
All races
Total	10,421	23,222	10,997	12,225
Under $2,500	202	439	242	197
$2,500 to $4,999	101	174	78	96
$5,000 to $7,499	175	334	157	177
$7,500 to $9,999	153	399	186	213
$10,000 to $12,499	249	452	219	233
$12,500 to $14,999	242	401	178	223
$15,000 to $17,499	283	543	284	258
$17,500 to $19,999	233	502	259	243
$20,000 to $22,499	350	631	278	353
$22,500 to $24,999	290	454	216	238
$25,000 to $27,499	281	675	318	357
$27,500 to $29,999	250	551	261	290
$30,000 to $32,499	414	718	333	385
$32,500 to $34,999	254	498	252	247
$35,000 to $37,499	383	715	376	339
$37,500 to $39,999	244	502	251	252
$40,000 to $42,499	358	748	360	388
$42,500 to $44,999	275	539	224	315
$45,000 to $47,499	332	634	325	308
$47,500 to $49,999	234	441	246	196
$50,000 to $52,499	338	800	372	427
$52,500 to $54,999	204	451	198	253
$55,000 to $57,499	251	561	258	303
$57,500 to $59,999	199	463	233	230
$60,000 to $62,499	291	643	318	326
$62,500 to $64,999	165	376	175	201
$65,000 to $67,499	240	538	267	271
$67,500 to $69,999	187	389	191	198
$70,000 to $72,499	226	530	244	286
$72,500 to $74,999	172	341	181	160
$75,000 to $77,499	214	488	220	268
$77,500 to $79,999	153	302	132	170
$80,000 to $82,499	221	436	203	233
$82,500 to $84,999	112	300	130	170
$85,000 to $87,499	159	396	183	214
$87,500 to $89,999	90	251	129	122
$90,000 to $92,499	141	418	189	229
$92,500 to $94,999	89	216	104	112
$95,000 to $97,499	134	297	127	170
$97,500 to $99,999	94	221	102	118
$100,000 and over	1,440	4,454	1,997	2,457
Median income dollars	49,018	55,044	53,543	56,033
Standard error dollars	583	402	706	487
Mean income dollars	60,825	69,246	67,608	70,720
Standard error dollars	631	494	732	668
Gini ratio	0.400	0.404	0.405	0.403
Standard error	0.0082	0.0055	0.0080	0.0075
B-Cell	1,140	1,140	1,140	1,140
Income per household member	20,160	21,321	20,615	21,967
Standard error	258	182	268	256
Total persons in households	31,442	75,421	36,066	39,355

Paid time off in 2004 was made available to approximately 77% of employees working in the private sector. This included holidays, sick days, personal time, and vacation days. Seventy percent of workers were entitled to paid jury duty and fifty percent were allowed time off with pay for military service if they were in active duty or the reserves. Table 6.7 reflects the power of unions in securing benefits for their members, as 90% of union workers in 2003 got paid vacation time versus 78% of nonunion workers.

Other employee benefits that were commonly available to workers were retirement plans and life insurance. Retirement plans were offered to 51% of employees, with 42% having the option of participating in a contribution type of retirement plan where they made tax-deferred contributions to a 401(k) plan, often with the employer matching a percentage of their contributions. The level of private industry workers participating in all retirement plans has remained steady since 1990. (See Figure 6.2.)

About one-half of American workers participated in life insurance plans through their employers in 2003. (See Table 6.8.) Approximately one-third participated in short- and long-term disability insurance in both 2003 and 2004. In general,

	Under 65 years
	45 to 54 years			55 to 64 years
	Total	45 to 49 years	50 to 54 years	Total	55 to 59 years	60 to 64 years
All races
Total	23,137	12,360	10,777	16,824	9,504	7,320
Under $2,500	444	224	220	424	242	182
$2,500 to $4,999	176	86	90	155	79	76
$5,000 to $7,499	389	215	173	470	235	235
$7,500 to $9,999	390	194	196	497	215	281
$10,000 to $12,499	443	242	201	431	233	198
$12,500 to $14,999	401	199	202	469	201	269
$15,000 to $17,499	439	205	235	453	201	252
$17,500 to $19,999	411	197	214	452	212	240
$20,000 to $22,499	539	304	235	454	228	226
$22,500 to $24,999	459	242	217	464	240	224
$25,000 to $27,499	609	304	305	493	257	236
$27,500 to $29,999	449	228	222	389	182	207
$30,000 to $32,499	673	387	286	543	279	264
$32,500 to $34,999	426	207	219	408	209	199
$35,000 to $37,499	631	366	266	469	220	249
$37,500 to $39,999	487	271	216	398	216	182
$40,000 to $42,499	740	338	402	479	253	226
$42,500 to $44,999	406	250	156	343	192	151
$45,000 to $47,499	543	273	270	391	208	183
$47,500 to $49,999	504	248	256	335	169	166
$50,000 to $52,499	651	352	299	407	226	181
$52,500 to $54,999	422	221	200	318	161	157
$55,000 to $57,499	503	300	204	373	221	152
$57,500 to $59,999	380	209	171	307	183	124
$60,000 to $62,499	552	337	215	369	242	127
$62,500 to $64,999	417	217	200	271	199	72
$65,000 to $67,499	497	242	255	280	163	117
$67,500 to $69,999	412	208	204	195	113	83
$70,000 to $72,499	503	267	236	308	165	143
$72,500 to $74,999	349	188	161	267	146	121
$75,000 to $77,499	514	274	240	271	183	88
$77,500 to $79,999	341	191	150	187	102	85
$80,000 to $82,499	408	229	179	215	130	84
$82,500 to $84,999	322	178	145	233	153	80
$85,000 to $87,499	359	210	149	193	110	83
$87,500 to $89,999	297	148	149	176	126	51
$90,000 to $92,499	346	207	139	234	146	88
$92,500 to $94,999	273	151	122	163	116	47
$95,000 to $97,499	339	212	128	142	94	47
$97,500 to $99,999	205	120	85	143	95	48
$100,000 and over	5,490	2,922	2,567	3,254	2,158	1,097
Median income dollars	60,242	60,884	59,041	49,215	56,066	41,541
Standard error dollars	396	441	811	517	588	505
Mean income dollars	75,363	75,574	75,120	67,275	73,263	59,500
Standard error dollars	572	772	852	641	840	982
Gini ratio	0.409	0.402	0.417	0.449	0.432	0.466
Standard error	0.0054	0.0073	0.0079	0.0065	0.0084	0.0102
B-Cell	1,140	1,140	1,140	1,140	1,140	1,140
Income per household member	26,916	25,243	29,144	30,595	31,743	28,923
Standard error	243	311	400	352	455	563
Total persons in households	64,783	37,004	27,779	36,994	21,936	15,058

higher paid employees—those making more than $15 per hour—participated more often in life and disability insurance programs. Larger employers with one hundred or more workers had a higher percentage of workers with life insurance (64%), compared with only 33% of workers at companies with fewer than one hundred employees. Metropolitan and rural areas did not have much difference in the number of employees opting to have life or short-term disability insurance. However, only 17% of rural workers had long-term disability insurance in 2003, while 30% of urban workers had it.