This Wall Street Journal article on compensation is from last week, but it’s interesting and the timing is good since we’re starting to hear rumbles of compensation discussions. It discusses how Department of Labor statistics show that less of workers’ compensation is going to wages and more towards benefits:
Over the past year, paid leave has been a category that’s increased faster than wages and salaries. Payments to Social Security and Medicare have also grown faster than wages over the past year.
Looking back further over the past decade, health insurance costs have frequently outpaced salary growth, as well. There’ve been just a few quarters since 2006, when the Labor Department began to release this data, in which wages were growing faster than paid leave, Social Security, Medicare, and health insurance — and even then wages were growing just a little bit faster.
The cumulative effect of this is that over time, a slowly dwindling share of what employers spend on their employees actually winds up in paychecks.
The tangibility of a paycheck has a certain emotional quality that most people like and want. That is, it feels good when the direct deposit hits their bank account. That joy wears off after, oh, a year or so. By this time, people have grown accustomed to the amount hitting their bank accounts twice a month, biweekly or whatever, and it doesn’t have the same freshness. If people are lucky enough to get a raise, then that new deposit amount feels new and exciting, but it may be so similar to the previous one that the feeling is short-lived. But even if there is no raise, getting paid offers a feeling of routine security.
Benefits, on the other hand, have less emotional attachment. If your employer pays all or a portion of your health insurance, that feels good, but my hunch is most people completely forget about it and the fact that the government doesn’t even tax it. Likewise, going on vacation (and still getting paid) feels good, but many people struggle to use their PTO. Oh, and raise your hand if you regularly think about your Social Security and Medicare benefits. Okay, I see no hands…Oops, is that someone in the back? No? Alright, never mind.
I guess what I’m wondering is, if salaries and wages satisfy an emotional desire that benefits don’t, could some employers attract a lot more people by significantly raising wages? Or, maybe I’m saying people need to get some perspective on the value of their non-wages compensation? I’ll keep thinking about this and if anyone wants to send along a 10-year analysis of their W-2, that could be interesting.
What’s the AICPA up to?
Earlier this week, the AICPA and CPA.com announced that the were launching “an initiative to provide funding and support to early-stage companies developing innovative technologies for the accounting profession.” Yes, the AICPA has its own startup accelerator because why the hell not. Here’s what they’re looking for:
The Association and CPA.com Startup Accelerator will seek to support as many as five early-stage companies during the next year. The focus will be on startups in two key areas:
- Technology and financial information, which could include advances in artificial intelligence, automation of routine tasks, and the application of blockchain/digital ledgers; and
- Professional competency innovation, which could encompass machine learning to personalize professional education, collaboration tools for mentors and experts, and improvements in measuring professional competency, among other categories
Wouldn’t it be wonderfully ironic if the AICPA ended up funding a company that made accountants obsolete? And I don’t mean a few hundred jobs here and there; I’m talking about something that eradicates the entire profession, leaving the AICPA with precisely zero members. Sure, our careers would be over, but I think it’d be worth it.
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The featured job of the week is a Tax Manager with Abacus Accounting Center in Denver, Colo.
Previously, on Going Concern…
In other news:
- Amazon to Buy Whole Foods in $13.7 Billion Deal
- Booz Allen Hamilton says DOJ investigating its accounting practices
- Spotify’s Loss More Than Doubles Even as User Growth Surges
- Dow Chemical and DuPont Have Won U.S. Antitrust Approval to Merge
- Alarm Clock Dropped Inside Wall Goes Off Daily for 13 Years
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