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I don't understand why this isn't a red herring. Minimum wage may be remaining stagnant but total employee compensation has been rising steadily, it's just that

I don't understand why this isn't a red herring. Minimum wage may be remaining stagnant but total employee compensation has been rising steadily, it's just that most of that compensation is in the form of spending on employee benefits like insurance. If people quit expecting employers to provide them with anything except for cold hard cash then you'd likely see wages increasing with time. To expand a bit more on this, large companies in America can negotiate rates with the insurance companies they interact with (assuming they don't own one in house). This creates a scenario where a dollar into the insurance budget yields more than a dollar worth of value and so it makes much more sense to invest heavily in the insurance than in outright wages because a dollar paid to an employee only ever yields a dollar with of value to the employee.

bart_spoon 7y ago
Increased spending on employee insurance is due to increasing healthcare costs. Even if companies are spending more on their employees healthcare, employees are still paying more on healthcare than ever before. So, that still means less money available for everything that isn't healthcare, and is functionally equivalent to a pay cut.
- sobhaobnONJ 7y ago
  An increase in spending is an increase in spending, it is still a part of the total compensation an employee has received. My point was purely that lensing the issue through minimum wage by itself seems like a distraction in terms of understanding employee wealth, I'm not arguing that employees should stop wanting more because they're getting enough.
hinkley 7y ago
It's rare for a company to offer health insurance to employees who are pegged to minimum wage. If salaries are going down due to inflation, then you may have a point but it's a perverse one; medical costs are going up way faster than anything else. Both are reasons to support socialized medical coverage, but they don't really enter into this particular line of discussion.
- sobhaobnONJ 7y ago
  Truthfully I agree but I'd argue this seems more like a reason to decouple healthcare from employment entirely. Such as with socialized medical coverage like you suggest.
  - ambicapter 7y ago
    Large US Companies are incentivized to keep healthcare something they solely provide because it ties their employee's health coverage to their employment status, putting pressure on them to keep their job or face paying their hospital bills in full.
    - hinkley 7y ago
      Which in almost any other conversation would be called extortion.
      - asdff 7y ago
        It really shows you whose interests a politician is working to advance when they state how much Americans love their private extortion plans.
        cosmodisk 7y ago
        And yet people go and vote for them with hopes that some random real estate billionaire will bring prosperity to their homes. The entire thing would collapse after first election if people would vote with brains instead of feelings.
- gowld 7y ago
  If medical costs increase more than the amount of general inflation's effect on both medical costs and the rest of wages, than covering those increasing costs while holding the rest of wages constant is a wage increase. If you don't like that, it's a social issue and a policy question, but it's not evidence what wage (how much employer is paying for employee benefits) is stagnant or droppiing.
boomboomsubban 7y ago
>This creates a scenario where a dollar into the insurance budget yields more than a dollar worth of value Using this same logic, a better use of that dollar would be spending it on taxes as the even larger government can negotiate even better rates with healthcare providers, providing even more value to the employee. Instead, the company fights to keep that dollar so they can spend it as they see fit, and the employee wants that dollar so they can use it as they want to.
- sobhaobnONJ 7y ago
  That's not entirely true. Taxes on production and services are ultimately taxes on consumption, this is part of why many economists have advocated for a mix of raising income taxes on specific income brackets and having a more generous EITC. You could of course do as you propose, but that same logic could also be used to argue that we simply shouldn't let healthcare providers negotiate with employers and instead restrict them to dealing directly with State entities (since otherwise the bargaining power becomes slanted against individuals). Edit: I didn't clarify well, the reason I mentioned the point about production taxes is because many minimum wage employees work in places like Walmart that sell commonly needed items and thus some of the benefit is lost because you've increased costs for the people you're helping. In theory this isn't a problem for luxury goods but that's more complicated so I haven't talked about those much.
  - boomboomsubban 7y ago
    > and thus some of the benefit is lost because you've increased costs for the people you're helping This is nonsensical. If paying that one dollar in taxes necessitated raising the prices, then the company spending it on insurance would also necessitate raising prices.
- kangnkodos 7y ago
  "government can negotiate even better rates" Yes. Up to a point. It's true that in general, the government currently pays less than private insurers. What's not clear is what happens if/when the government is the only one paying hospitals to keep their doors open. At the reduced rate, hospitals will have hard choices to make. Only about 20% of hospitals are for-profit. For the other 80%, less money coming in the door will result in changes of some kind. I can't imagine how hospitals can do that, and make things better for patients at the same time. Something's got to give.

bart_spoon 7y ago

Increased spending on employee insurance is due to increasing healthcare costs. Even if companies are spending more on their employees healthcare, employees are still paying more on healthcare than ever before. So, that still means less money available for everything that isn't healthcare, and is functionally equivalent to a pay cut.

sobhaobnONJ 7y ago
An increase in spending is an increase in spending, it is still a part of the total compensation an employee has received. My point was purely that lensing the issue through minimum wage by itself seems like a distraction in terms of understanding employee wealth, I'm not arguing that employees should stop wanting more because they're getting enough.

hinkley 7y ago

It's rare for a company to offer health insurance to employees who are pegged to minimum wage. If salaries are going down due to inflation, then you may have a point but it's a perverse one; medical costs are going up way faster than anything else. Both are reasons to support socialized medical coverage, but they don't really enter into this particular line of discussion.

sobhaobnONJ 7y ago
Truthfully I agree but I'd argue this seems more like a reason to decouple healthcare from employment entirely. Such as with socialized medical coverage like you suggest.
- ambicapter 7y ago
  Large US Companies are incentivized to keep healthcare something they solely provide because it ties their employee's health coverage to their employment status, putting pressure on them to keep their job or face paying their hospital bills in full.
  - hinkley 7y ago
    Which in almost any other conversation would be called extortion.
    - asdff 7y ago
      It really shows you whose interests a politician is working to advance when they state how much Americans love their private extortion plans.
      - cosmodisk 7y ago
        And yet people go and vote for them with hopes that some random real estate billionaire will bring prosperity to their homes. The entire thing would collapse after first election if people would vote with brains instead of feelings.
gowld 7y ago
If medical costs increase more than the amount of general inflation's effect on both medical costs and the rest of wages, than covering those increasing costs while holding the rest of wages constant is a wage increase. If you don't like that, it's a social issue and a policy question, but it's not evidence what wage (how much employer is paying for employee benefits) is stagnant or droppiing.

boomboomsubban 7y ago

>This creates a scenario where a dollar into the insurance budget yields more than a dollar worth of value Using this same logic, a better use of that dollar would be spending it on taxes as the even larger government can negotiate even better rates with healthcare providers, providing even more value to the employee. Instead, the company fights to keep that dollar so they can spend it as they see fit, and the employee wants that dollar so they can use it as they want to.

sobhaobnONJ 7y ago
That's not entirely true. Taxes on production and services are ultimately taxes on consumption, this is part of why many economists have advocated for a mix of raising income taxes on specific income brackets and having a more generous EITC. You could of course do as you propose, but that same logic could also be used to argue that we simply shouldn't let healthcare providers negotiate with employers and instead restrict them to dealing directly with State entities (since otherwise the bargaining power becomes slanted against individuals). Edit: I didn't clarify well, the reason I mentioned the point about production taxes is because many minimum wage employees work in places like Walmart that sell commonly needed items and thus some of the benefit is lost because you've increased costs for the people you're helping. In theory this isn't a problem for luxury goods but that's more complicated so I haven't talked about those much.
- boomboomsubban 7y ago
  > and thus some of the benefit is lost because you've increased costs for the people you're helping This is nonsensical. If paying that one dollar in taxes necessitated raising the prices, then the company spending it on insurance would also necessitate raising prices.
kangnkodos 7y ago
"government can negotiate even better rates" Yes. Up to a point. It's true that in general, the government currently pays less than private insurers. What's not clear is what happens if/when the government is the only one paying hospitals to keep their doors open. At the reduced rate, hospitals will have hard choices to make. Only about 20% of hospitals are for-profit. For the other 80%, less money coming in the door will result in changes of some kind. I can't imagine how hospitals can do that, and make things better for patients at the same time. Something's got to give.