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What Happened to Benefits in 1973

What Happened to Benefits in 1973 SAGE Publications, Inc.1973DOI: 10.1177/088636877300500406 Susan Schock Corporate Financing AMERICAN industry seems reconciled to an ever-increasing level of benefits as a percentage of total compensation. General Electric in 1956 paid $47 million in benefits ; last year, the company paid $2:16 million, a 36o percent increase. This cost jump was all out of proportion to the company's io percent increase in number of employees and to the consumer price index's climb of 62.5 percent. These figures present the benefits story in a nutshell, not only for GE, but for nearly every employer in the United States. Benefits now average any- where from 13 percent to 35 percent of a corporation's total payroll, and from 4 percent to 5 percent of a company's total operating costs. Most companies concede that they are at a loss about how to control benefits costs. The fact is, many of these costs are out of a company's control. Take Medi- care and social security increases, which are set by the federal government. "Since most of our employees earn close to the maximum taxable salary," explains Walter O. Boyle, until recently senior vice-presi- Corporate Financing (July-August 1973), @ 1973 http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Compensation & Benefits Review SAGE

What Happened to Benefits in 1973

Abstract

What Happened to Benefits in 1973 SAGE Publications, Inc.1973DOI: 10.1177/088636877300500406 Susan Schock Corporate Financing AMERICAN industry seems reconciled to an ever-increasing level of benefits as a percentage of total compensation. General Electric in 1956 paid $47 million in benefits ; last year, the company paid $2:16 million, a 36o percent increase. This cost jump was all out of proportion to the company's io percent increase in number of employees and to the consumer price index's climb of 62.5 percent. These figures present the benefits story in a nutshell, not only for GE, but for nearly every employer in the United States. Benefits now average any- where from 13 percent to 35 percent of a corporation's total payroll, and from 4 percent to 5 percent of a company's total operating costs. Most companies concede that they are at a loss about how to control benefits costs. The fact is, many of these costs are out of a company's control. Take Medi- care and social security increases, which are set by the federal government. "Since most of our employees earn close to the maximum taxable salary," explains Walter O. Boyle, until recently senior vice-presi- Corporate Financing (July-August 1973), @ 1973
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