Catherwood LibraryILR School

The cost of U.S. labor rose .3% in the first quarter (down from .6% at the end of 2008), marking the smallest recorded gain yet. The number was lower than analyst expectations, signaling that the recession is having a negative impact on wages and benefits. Economists expect employment expenses to remain relatively flat considering the number of layoffs and cutbacks by firms. Labor costs make up about 70% of companies' expenses and include wages, benefits, and tax expenses such as social security. The cost of benefits alone (which includes bonuses) actually rose .5% from the end of last year, and total costs for government employees increased .8%.