Employment Benefits: Private or Public Welfare?

Abstract

This report is concerned with the subject of occupational welfare, i.e. benefits received by employees in addition to wages or salaries, which are commonly referred to in various terms, such as employment or employee benefits, fringe benefits, non-wage benefits, or, more recently, as remuneration package. The examination of recent and earlier data indicates that employment benefits are widespread throughout industry but their distribution favours considerably higher level employees. Recent changes in the structure of the labour market, e.g. the increase in part-time work in certain sectors of industry, further accentuate the inequalities in this distribution. The findings of the study raise a number of issues for social welfare policy. For while employment benefits are received, and perceived, as rewards for contribution to economic production, a significant proportion of their cost is borne by the State through taxation revenue foregone, and by the community through higher prices of goods and services. Occupational welfare is therefore a ‘hidden’ part of the overall social welfare system. While it may be deemed appropriate that people receive rewards that are commensurate with the value of their contribution to economic production, the contribution by the State negates the accepted redistributional principles on which the public social welfare is, or is believed to be, based.