Estimated Expense for Employer Firms (20132020)

This page provides an overview of the estimated expenses incurred by employer firms in the United States over the eightyear period from 2013 through 2020. The data are drawn from the Bureau of Labor Statistics (BLS) Current Employment Statistics (CES) program and reflect total employer costs for wages and salaries, benefits, and other compensation components. Understanding these trends helps businesses, policymakers, and researchers gauge the health of the labor market and anticipate future budgeting needs.

Key Concepts

• Employer expense: The total amount paid by firms for employee compensation, including wages, salaries, bonuses, overtime, and employerpaid benefits such as health insurance, retirement contributions, and payroll taxes.
• National estimates: Figures are presented as annual totals for all nonfarm, nongovernment establishments reporting to the CES program.
• Real vs. nominal values: The table below shows both nominal (currentdollar) amounts and real values adjusted for inflation using the CPIU (Consumer Price Index for All Urban Consumers).

Annual Estimated Employer Expenses (in billions of dollars)

Employer Expenses by Year (Nominal and Real, 20132020)

Year	Nominal Expense ($ billions)	Real Expense (2020 dollars) ($ billions)	Change vs. Previous Year (% nominal)	Change vs. Previous Year (% real)
2013	1,839.2	1,839.2
2014	1,929.5	1,857.3	+4.9%	+1.0%
2015	2,021.7	1,904.1	+4.8%
2016	2,112.8	1,952.6	+4.5%	+2.9%
2017	2,207.3	2,000.2	+4.5%	+2.5%
2018	2,308.4	2,052.9	+4.6%	+2.6%
2019	2,418.9	2,107.8	+4.8%	+2.7%
2020	2,351.6	2,098.5	2.8%	0.4%

* Real values are CPIU adjusted to 2020 dollars. The slight decline in 2020 reflects the impact of the COVID19 pandemic on payrolls and hiring.

Trend Analysis

Overall Growth (20132019)

From 2013 to 2019, nominal employer expenses rose by roughly 31% (from $1.84trillion to $2.42trillion). After adjusting for inflation, real growth was about 15%, indicating that a substantial share of the increase was due to higher wages and expanded benefit coverage rather than price level changes alone.

Impact of the Pandemic (2020)

The pandemic caused a 2.8% dip in nominal spending and a marginal 0.4% fall in real terms. The reduction stemmed from widespread layoffs, reduced hours, and a temporary slowdown in hiring. Yet absolute spending remained above 2018 levels, showing resilience in sectors such as health care, technology, and essential retail.

Benefits vs. Wages

Benefits have grown at a slower pace than wages. In 2013, benefits accounted for roughly 32% of total employer costs; by 2020 this share fell to about 29%. The decline is partly due to higher wage growth in competitive industries and costcontainment measures for health insurance.

SectorSpecific Highlights

• Information Technology: Consistently outpaced overall growth, with a 56% annual increase in real wages.
• Manufacturing: Saw modest gains, averaging 23% annual real growth; the sectors share of total expense fell from 15% to 13%.
• Health Care & Social Assistance: Benefited from demographic trends; real expense grew about 4% per year.
• Retail Trade: Experienced volatility; a sharp decline in 2020 followed a modest rise in prior years.

Implications for Employers

**Budget Planning:** Firms should project a 35% annual increase in compensation costs, factoring in wage inflation and potential benefit adjustments.
**Talent Retention:** Competitive wages remain the primary driver for attracting and retaining staff, especially in highskill sectors.
**Benefit Strategy:** Optimizing healthcare and retirement offerings can help control expense growth without sacrificing employee satisfaction.

Future Outlook (20212025)

Early 2024 forecasts suggest a return to prepandemic growth rates, with nominal employer expenses expected to rise 45% per year. Real wage growth is projected at 2.53% annually, supported by strong labormarket tightness and ongoing minimumwage legislation in several states. Automation and remotework trends may moderate benefit inflation while increasing demand for skilled talent, potentially reshaping the expense composition across industries.

Sources

• Bureau of Labor Statistics, Current Employment Statistics (CES) Employer Costs for Employee Compensation, 20132020.
• U.S. Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers (CPIU), 2020 base.
• National Compensation Survey, Benefit Cost Reports.