Date posted: August 26, 2013
Next to having a job, the work feature most people worry about is what they’re paid. But when someone looks at their paycheck, is it enough to only look at what the person takes home? N.C. State economist Mike Walden responds.
“And in fact, that is what most people look at when they ask someone, ‘Well when am I going to get paid for a particular job?’ They might say, ‘Well, $35,000 a year.’ Now, you know that when you get your take-home pay. you’re going to have some tax taken out.
“But most people are going to gauge that job and how much they’re paid by what that average salary is for the year. But that’s usually — not for all jobs — but usually for many jobs, that’s not the total picture, because sort of behind the scenes, if you will, oftentimes employers will pay people benefits.
“Now, you don’t see those benefits directly in your check, but they are costing the employer something. For example, this would be benefits if, for example, your employer puts in money for your pension. Health insurance, obviously, if they give you time off for vacation, that’s a cost also.
“Now for some jobs — not all — but for some jobs, these benefits can total one-third of your salary. So, that’s saying that behind the scenes there’s another third that the company is paying. This is why, when you’re looking at jobs and comparing jobs, it’s always very, very important to consider the benefits.”
Category: Economic Perspective