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Summer 2006 / No. 68

Benefit cost increases continue to moderate

Employers’ benefit costs have been increasing, but at a much slower rate. Benefit costs, increasing at 6.5 percent in 2004, are now increasing at only 3 percent according to the Labor Department. And while benefit elimination is having some impact, BusinessWeek reports that businesses are keeping costs down "mainly by shifting more of the burden of paying (for benefits) to workers." Apparently, voluntary business is both driven by, and is an indicator of, increasing corporate efficiency.