U.S. real wages fall 0.6% as employer health costs jump 6.4%: BLS
- Private-industry real wages and salaries fell 0.6% in the year to September.
- Private-industry health benefit costs rose 6.4% over the year, BLS data show.
- Civilian compensation costs rose 3.4% over 12 months; wages and salaries rose 3.1%.
- The BLS released the Employment Cost Index on Oct. 30, 2026.
WASHINGTON, D.C., UNITED STATES — Wages and salaries for private-sector workers in the United States fell 0.6% over the year to September after adjusting for inflation, while employer costs for health benefits rose 6.4%. Total compensation costs for private industry workers climbed 3.4% over the same 12 months, as benefit costs rose faster than pay.
Pay trails inflation
The U.S. Bureau of Labor Statistics (BLS) published the figures in its Employment Cost Index for September 2026, released on Oct. 30. In current dollars, private industry wages and salaries rose 3.1% over the year and benefit costs rose 3.9%.
“Inflation-adjusted (constant dollar) wages and salaries decreased 0.6 percent over the year,” the bureau said of private industry workers. That compares with a 0.4% inflation-adjusted decline in the year to June 2026 and a 0.6% gain in the year to September 2025, according to BLS data.
Health benefits outpace pay
Health benefit costs for private industry rose 6.4% over the year, up from 6.0% in the year to June 2026 and 6.1% a year earlier, the bureau’s figures show. That is roughly double the 3.1% growth in private-sector wages and salaries.
For all civilian workers, compensation costs rose 0.8% in the three months to September, seasonally adjusted, with wages and salaries up 0.7% and benefit costs up 0.9% from June. Over 12 months, civilian compensation costs rose 3.4%, wages and salaries 3.1% and benefits 3.9%.
Within private industry, union workers saw compensation costs rise 4.3% over the year, compared with 3.3% for nonunion workers. State and local government compensation costs rose 3.5% over the year, but inflation-adjusted wages and salaries for those workers fell 0.5%.
Changes to the index
The BLS said that beginning with December 2026 data, the index will introduce updated employment weights and remove workers’ compensation costs. The next release is scheduled for Jan. 29, 2027.
What it means for employers
The September figures show employer benefit costs growing faster than pay, with health costs leading, while workers’ wages lost ground to inflation over the year.
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