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What people call "salaries" does not include employer cost of benefits. For instance, US health care spending grew 4.3% in 2016 [0]. Since many employers cover
by bko 8y ago
What people call "salaries" does not include employer cost of benefits. For instance, US health care spending grew 4.3% in 2016 [0]. Since many employers cover health care in the US, a growth in health care expenditures on the employer side can be seen as a increase in salary. And since health care benefits is a disproportionate amount for low or middle income workers, this will hamper their wage growth the most in relative terms.
In other words, if 25% of your "pay" is health care, and health care is growing at 4%, your effective "salary" can be said to be growing at 1% as long as your premiums and coverage stay the same.
[0] https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsHistorical.html https://www.cms.gov/Research-Statistics-Data-and-Systems/Sta...
- eptcyka 8y agoI think the meager growth in health care spending is not nearly big enough to cover the discrepancy between the increase in salaries predicted by extrapolating market forces and what the salaries actually are. Not to mention, most low paying jobs don't provide health care.
- bko 8y agoThis is something that can easily be referenced. Benefits make up around 30% of workers wages with health insurance around 8%. If health care expenditures grow at 4%, that's 0.32% wage growth from health care costs. You may consider that insiginificant but I don't. https://www.bls.gov/news.release/ecec.nr0.htm https://www.bls.gov/news.release/ecec.nr0.htm
- SketchySeaBeast 8y ago> If health care expenditures grow at 4%, that's 0.32% wage growth from health care costs. So if you earn $100,000 each year you get a raise of $320 due to health care? To be honest with you, that seems pretty insignificant. And it's also sort of a feedback loop - the quality of care isn't increasing - the system is only costing more because the system can charge more. All that's doing is accounting for "healthcare inflation", and if a cost of living raise is a significant raise, something is wrong.
- conanbatt 8y agoExcellent point! Healthcare truly should be the #1 policy discussion in the US, due to the magnitude of its economic impact and how the current status quo is not supported by economists on either side of the aisle. I wish that someone drafted some economic-concensus presidential mandates for trump to irresponsibly sign before his term is over and someone argues for socialization of healthcare.