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# Paychecks fell behind prices again. Health insurance costs grew twice as fast as wages.
- URL: https://www.workersrights.news/real-wages-fall-health-costs-employment-cost-index-q3-2026/
- Published: 2026-11-01T05:54:24.000Z
- Updated: 2026-11-01T05:54:24.000Z
- Description: Private-sector wages rose 3.1% in a year, but after inflation they fell 0.6%, federal data released Friday show.
- Author: WorkersRights.News Team
- Tags: Economy

Workers got raises this year. Prices took more.

Wages and salaries for private-industry workers rose 3.1% in the 12 months ending in September, the [Bureau of Labor Statistics reported Friday](https://www.bls.gov/news.release/eci.nr0.htm?ref=workersrights.news) in its quarterly Employment Cost Index. Adjusted for inflation, those same wages fell 0.6%.

The index tracks what employers spend on workers: pay plus benefits. Total compensation rose 3.4% over the year, but benefits did the heavy lifting, climbing 3.9%. Employers' health insurance costs for private-sector workers rose 6.4%, about twice as fast as wages, according to the BLS tables.

## Wages slow down, health care doesn't

The 3.1% wage gain across all civilian workers was "a fresh five-year low," economist Jonathan Basile wrote for [Haver Analytics](https://www.haver.com/articles/employment-cost-index-unusually-steady-compensation-trend-reveals-slower-wage-and-faster-benefit-cost-growth?ref=workersrights.news). Benefit cost growth, meanwhile, hit its fastest pace in three years. Haver said the 0.6% drop in inflation-adjusted wages was the worst since early 2012.

An Nguyen of [Indeed Hiring Lab](https://hiringlab.indeed.com/2026/10/30/q3-2026-employment-cost-index/?ref=workersrights.news) called it the second straight quarter of falling real wages and pointed to health care as the main driver. Citing BLS data, Nguyen wrote that the average monthly premium workers pay for single coverage rose 8.5%, to $174, and family coverage rose 7.6%, to $730\. Those are "the largest year-over-year increases in premiums since 2010," she wrote.

That squeeze hits workers twice. When employers spend more on insurance, there's less left for raises, and workers' own share of the premium keeps climbing too. Family coverage at work now costs [$28,303 a year, and workers' share jumped 9%](https://www.workersrights.news/kff-family-health-premiums-workers-pay-7471-2026/), as we reported last week.

Government workers didn't escape it. State and local government wages rose 3.2%, and after inflation fell 0.5%, the BLS said.

## Union workers kept up

One group did better. In private industry, union workers' wages rose 4.3% over the year, compared with 3.0% for nonunion workers, according to the BLS. Union workers' total compensation rose 4.3%, against 3.3% for nonunion workers.

That gap matters right now. With September inflation running at [3.7%](https://www.workersrights.news/inflation-september-2026-paychecks-diesel/), union raises stayed ahead of prices while the typical nonunion raise fell behind.

The broader picture is the same one we've been tracking all fall: the economy is growing, and [workers' share of it is shrinking](https://www.workersrights.news/workers-share-of-economy-record-low-52-8-percent/). Friday's numbers show where the money is going. More of each dollar employers spend on workers is going to insurance companies, and less is landing in paychecks.

## What you can do

- **Use open enrollment.** If your employer's plan year starts in January, this is your window to compare plans and costs. Our [open enrollment checklist](https://www.workersrights.news/open-enrollment-2027-health-costs-checklist/) walks through what to check.
- **Ask for a raise with the numbers.** A 3% raise in a year when prices rose about 3.7% is a pay cut in real terms. The BLS figures are public and they back you up.
- **Know your rights to organize.** Talking with co-workers about pay is legally protected for most private-sector workers under the National Labor Relations Act, whether or not you have a union.

The next Employment Cost Index comes out Jan. 29, 2027.

### Sources

- [Employment Cost Index – September 2026](https://www.bls.gov/news.release/eci.nr0.htm?ref=workersrights.news), U.S. Bureau of Labor Statistics
- [Q3 2026 Employment Cost Index: Rising Healthcare Costs Keep Haunting Employers](https://hiringlab.indeed.com/2026/10/30/q3-2026-employment-cost-index/?ref=workersrights.news), Indeed Hiring Lab
- [Employment Cost Index: Unusually Steady Compensation Trend Reveals Slower Wage and Faster Benefit Cost Growth](https://www.haver.com/articles/employment-cost-index-unusually-steady-compensation-trend-reveals-slower-wage-and-faster-benefit-cost-growth?ref=workersrights.news), Haver Analytics