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Corporate profits have risen as a share of the economy[1] and, correspondingly, the share of gdp that's paid in wages and salary has been declining[2]. [1] htt

Corporate profits have risen as a share of the economy[1] and, correspondingly, the share of gdp that's paid in wages and salary has been declining[2]. [1] https://fred.stlouisfed.org/graph/?g=1Pik https://fred.stlouisfed.org/graph/?g=1Pik [2] https://fred.stlouisfed.org/graph/?g=2Xa https://fred.stlouisfed.org/graph/?g=2Xa

prostoalex 9y ago
The very same St. Louis Fed no longer considers wage/salary data to be a reliable measure - employer healthcare costs per worker are now much more substantial and are growing at much faster rate. "Real compensation" is the preferred nomenclature to account for the total compensation package. https://fred.stlouisfed.org/graph/?g=74dI https://fred.stlouisfed.org/graph/?g=74dI and https://www.bloomberg.com/view/articles/2016-09-28/health-care-costs-ate-your-pay-raises https://www.bloomberg.com/view/articles/2016-09-28/health-ca... for more context. Remove the tax deductibility of employer healthcare plans and watch the wage/salary graph magically grow, as the funds get reallocated. Sure, the worker now must buy their own health insurance, which potentially leaves them with even less disposable income than before, but the gross wage/salary graph will go up and to the right.
- drawkbox 9y ago
  A good reason why healthcare should be removed from employers hands. In fact we should only allow salary increases or money for benefits, not benefits such as healthcare for employees. "Real compensation" is not a good measure because it is so unique to situations, and in most cases benefits are not all that great, workers would always take more money and the consumer economy and individual/family insurance market would benefit from that as well. Everyone needs to be in their own individual/family insurance, group everyone together across the nation and move it away from business/employers and selective grouping. Employers do not pay your auto, home, liability insurance of your personal property, why should they have anything to do with your health, that alone is an invasion of privacy and not secure for workers when they can't work due to health. Allowing employers and insurance companies to fix prices in backrooms is part of the problem of wildly inflating healthcare costs due to bad insurance grouping. It also let's companies off from wage increases by saying it is all part of "real compensation" when in actuality the velocity of money is at an all time low[1] in a consumer economy, red alert... [1] https://fred.stlouisfed.org/series/M2V https://fred.stlouisfed.org/series/M2V
  - prostoalex 9y ago
    For businesses it all comes down to deductibility. Company cars were deductible back in the days, so everyone and their brother drove a company car. Then the tax reform removed that deduction, and all of a sudden company cars were no more. Making insurance deductible is also advantageous to large caps over small businesses - Amazon will likely negotiate a better insurance package than Joe's E-Commerce Emporium, and all else being equal rational employees will choose Amazon for their amazing benefits. Which then negatively impacts new business creation, small business employment, entrepreneurship rates, geographic mobility, etc.
    - drawkbox 9y ago
      True, but they could easily get the same deduction for wages/salaries/pay, same rules apply really and labor costs are probably less gamed in terms of balance sheets. Benefits on the job were probably needed at a time but currently they are favoring large caps like you mention. This is ultimately the worst legacy thing that unions left behind eventhough they helped pay go up and brought some good things. Unions should have always been on more pay not benefits. We have got to start leveling the playing field for small/medium business and even self-proprietors. Removing health insurance from employers is key, this will also help being able to change jobs more frequently and not contribute to ageism so much. Insurance companies group people by company usually so small companies are high risk, and individuals even more, the worst way to spread risk. Plus as companies grow more and wages grow less, companies will start to reach a feudal/sharecropper like state where you starting a business is nearly impossible because there is no way to compete. Which then negatively impacts new business creation, small business employment, entrepreneurship rates, geographic mobility, etc. Agreed, this also makes it much easier to start companies in places other than the US that also have a single-payer/individual or private market option and not require the employer to provide it. Employers handling our healthcare and benefits really has added drag to our economy and entrepreneurial/innovative spirit.
      - prostoalex 9y ago
        > Removing health insurance from employers is key, this will also help being able to change jobs more frequently and not contribute to ageism so much. Agree. Unfortunately, there's zero political will to do this. Republicans seem to be hell-bent on destroying Obamacare as a concept, no matter the consequences, and view decreased number of sign-ups and decreased number of insurance sellers, as positive developments and proof that the system "doesn't work". Democrats would surely welcome decoupling of employment and health insurance, right? Except ACA mandates employers with headcount 50+ offer health insurance, which robs the exchanges of a fairly healthy portion of the population that's fit enough to be in the workforce (prior to ACA mandatory health coverage applied to employers with 100+ headcount). Some employers have run the numbers and figured out that if they paid the ACA fines and transferred the employee health coverage to a public exchange, their balance sheet would still be better off. Double win for a federal government - not only there's extra revenue in terms of fines (the money that previously went to a private insurer), the exchange gets bolstered with a significant number of new participants, which dilutes the risk pool and hopefully make everyone's coverage cheaper. Not so fast, said Obama administration, and slapped an extra fine to discourage such behavior https://www.nytimes.com/2014/05/26/us/irs-bars-employers-from-dumping-workers-into-health-exchanges.html?_r=0 https://www.nytimes.com/2014/05/26/us/irs-bars-employers-fro...

prostoalex 9y ago

The very same St. Louis Fed no longer considers wage/salary data to be a reliable measure - employer healthcare costs per worker are now much more substantial and are growing at much faster rate. "Real compensation" is the preferred nomenclature to account for the total compensation package. https://fred.stlouisfed.org/graph/?g=74dI https://fred.stlouisfed.org/graph/?g=74dI and https://www.bloomberg.com/view/articles/2016-09-28/health-care-costs-ate-your-pay-raises https://www.bloomberg.com/view/articles/2016-09-28/health-ca... for more context. Remove the tax deductibility of employer healthcare plans and watch the wage/salary graph magically grow, as the funds get reallocated. Sure, the worker now must buy their own health insurance, which potentially leaves them with even less disposable income than before, but the gross wage/salary graph will go up and to the right.

drawkbox 9y ago
A good reason why healthcare should be removed from employers hands. In fact we should only allow salary increases or money for benefits, not benefits such as healthcare for employees. "Real compensation" is not a good measure because it is so unique to situations, and in most cases benefits are not all that great, workers would always take more money and the consumer economy and individual/family insurance market would benefit from that as well. Everyone needs to be in their own individual/family insurance, group everyone together across the nation and move it away from business/employers and selective grouping. Employers do not pay your auto, home, liability insurance of your personal property, why should they have anything to do with your health, that alone is an invasion of privacy and not secure for workers when they can't work due to health. Allowing employers and insurance companies to fix prices in backrooms is part of the problem of wildly inflating healthcare costs due to bad insurance grouping. It also let's companies off from wage increases by saying it is all part of "real compensation" when in actuality the velocity of money is at an all time low[1] in a consumer economy, red alert... [1] https://fred.stlouisfed.org/series/M2V https://fred.stlouisfed.org/series/M2V
- prostoalex 9y ago
  For businesses it all comes down to deductibility. Company cars were deductible back in the days, so everyone and their brother drove a company car. Then the tax reform removed that deduction, and all of a sudden company cars were no more. Making insurance deductible is also advantageous to large caps over small businesses - Amazon will likely negotiate a better insurance package than Joe's E-Commerce Emporium, and all else being equal rational employees will choose Amazon for their amazing benefits. Which then negatively impacts new business creation, small business employment, entrepreneurship rates, geographic mobility, etc.
  - drawkbox 9y ago
    True, but they could easily get the same deduction for wages/salaries/pay, same rules apply really and labor costs are probably less gamed in terms of balance sheets. Benefits on the job were probably needed at a time but currently they are favoring large caps like you mention. This is ultimately the worst legacy thing that unions left behind eventhough they helped pay go up and brought some good things. Unions should have always been on more pay not benefits. We have got to start leveling the playing field for small/medium business and even self-proprietors. Removing health insurance from employers is key, this will also help being able to change jobs more frequently and not contribute to ageism so much. Insurance companies group people by company usually so small companies are high risk, and individuals even more, the worst way to spread risk. Plus as companies grow more and wages grow less, companies will start to reach a feudal/sharecropper like state where you starting a business is nearly impossible because there is no way to compete. Which then negatively impacts new business creation, small business employment, entrepreneurship rates, geographic mobility, etc. Agreed, this also makes it much easier to start companies in places other than the US that also have a single-payer/individual or private market option and not require the employer to provide it. Employers handling our healthcare and benefits really has added drag to our economy and entrepreneurial/innovative spirit.
    - prostoalex 9y ago
      > Removing health insurance from employers is key, this will also help being able to change jobs more frequently and not contribute to ageism so much. Agree. Unfortunately, there's zero political will to do this. Republicans seem to be hell-bent on destroying Obamacare as a concept, no matter the consequences, and view decreased number of sign-ups and decreased number of insurance sellers, as positive developments and proof that the system "doesn't work". Democrats would surely welcome decoupling of employment and health insurance, right? Except ACA mandates employers with headcount 50+ offer health insurance, which robs the exchanges of a fairly healthy portion of the population that's fit enough to be in the workforce (prior to ACA mandatory health coverage applied to employers with 100+ headcount). Some employers have run the numbers and figured out that if they paid the ACA fines and transferred the employee health coverage to a public exchange, their balance sheet would still be better off. Double win for a federal government - not only there's extra revenue in terms of fines (the money that previously went to a private insurer), the exchange gets bolstered with a significant number of new participants, which dilutes the risk pool and hopefully make everyone's coverage cheaper. Not so fast, said Obama administration, and slapped an extra fine to discourage such behavior https://www.nytimes.com/2014/05/26/us/irs-bars-employers-from-dumping-workers-into-health-exchanges.html?_r=0 https://www.nytimes.com/2014/05/26/us/irs-bars-employers-fro...