Employee benefits were not a significant part of most employees' compensation packages until the mid-twentieth century. For instance, in the United States, benefits formed approximately only 3 percent of total payroll costs for companies in 1929. According to U.S. Chamber of Commerce, however, employee benefits in the U.S. now forms about 42 percent of total payroll costs. Employee benefits now form a major source for the provision of income security for Americans. One of the biggest factors is that employee benefits are not taxable. This avoids the necessity of paying federal and personal income tax on the "income". Also, many group-based benefits are obtained at a much lower cost than if the employee tried to attain that benefit individually. Several other factors account for the phenomenal increase in the importance of employee benefits in the U.S. Firstly, in the 1930s, the Wagner Act significantly increased the ability of labor unions to organize workers and bargain for better wages, benefits, and working conditions. Secondly, labor unions from the 1930s to 1950s took advantage of the favorable legal climate and negotiated for new employee benefits that have since become common in both unionized and non-union companies. Thirdly, federal and state legislation requires companies to offer certain benefits to employees. Finally, now that benefits have become such an important part of a job package, employers may find themselves at a disadvantage in the labor market if they do not offer competitive benefit packages. Additionally, ever since the 1940s, wage supplements, particularly in the form of pensions and health insurance, have expanded to provide protections that are the province of public programs in most other Western countries. Building upon the precedents of th ...