4 ms·

>> giving way to an alternative where employers simply pay employees in full for services rendered, and employees are left to make their own decisions –for bett

by markbnj 12y ago

>> giving way to an alternative where employers simply pay employees in full for services rendered, and employees are left to make their own decisions –for better or worse–about where and how to allocate those dollars for their needs. That is so completely disingenuous. I think we can assume that blog writers at the WSJ are aware that wages have been stagnant for the majority of workers for over two decades, despite significant gains in productivity. So, really, what they meant to say was "giving way to an alternative where employers stop paying for benefits."

mkirlin 12y ago
Yep. If anything like this actually happens, there isn't a chance in hell that money's getting funneled into the pockets of the employees.
DamnYuppie 12y ago
Currently employers get better rates for their benefits then an individual can on the open market. As such this will open the flood gates for even higher insurance premiums, seems like a wind fall to the insurance providers. This is similar to the push away from pensions to 401k's in the 70's and 80's. It was supposed to be great for the individuals, more flexibility and control, can take it from job to job. Yet instead it was great for the financial services industry as they got to charge a higher service fees on their mutual funds to more people. The only people to lose out where the employees as the companies got reduced liabilities and payouts and the financial services sector go a large bump in service fees....
- nulltype 12y ago
  Could employees of different companies form a group that could get better rates? One of the problems with 401ks is that they are still related to your employer.
  - ibealexm 12y ago
    Yes - it's called a government. Pretty much all other countries already have such healthcare plans in place.
  - DamnYuppie 12y ago
    Would that not be similar to a Union?
myblake 12y ago
Yeah there's also no mention about the tax implications of this stuff which is nontrivial, I suspect the example of paying $50,000 and benefits vs. $57,500 and no benefits ignores the tax implications in a way that doesn't help the employee but perhaps does the business.
vinceguidry 12y ago
Eh, the article is focusing on the trends. If the trend continues, that's where we could well end up. Of course, right now, it's a "tell us which government-approved program you want us to contribute to," in the same way that my alcoholic father refused to pay his child support, but would instead paternalistically pay my mom's rent. But eventually as the burden to understand social insurance gets shifted over to employees, it could easily go that way. People will look up and say, well we have this huge 'benefits' apparatus whose only real purpose is to manage the social costs of health care when it looks like people are managing just fine without it. You and I might look at the apparatus as overbearing, but the reality of it is, most people just don't have the time, patience, or inclination to care about their health, and it imposes huge social costs. When Grandma starts losing the little quality-of-life she has left, rather than an honest discussion, we have people saying, "keep her alive at all costs!" A big part of the health care infrastructure we have is structurally set up to deal with people making irrational demands of it. Once people start to understand health and how to think about it and pay for it, there's no reason why things like the individual mandate can't go the way of the dodo.
fweespeech 12y ago
Yeah, it really is the employers cutting benefits to avoid cutting the headline salary numbers that the vast majority of people focus on when they negotiate.
jasode 12y ago
>employers stop paying for benefits. I'm curious if the majority frame it that way. To me, employers never really paid for benefits. It was the employees wages that was converted into health insurance as a loophole to circumvent WWII wage controls. Using this "employee's-total-compensation" frame of reference, the real value add from the employer was having a Human Resources staff handling the administrative headaches of benefit plans. The "employer's health insurance" has always been the "employee's money" that was preallocated. Today, employers providing health insurance is a voluntary arrangement. Employers do it to stay competitive in attracting job applicants. If employers are voluntarily providing insurance, and if the employer insurance component goes away, it seems logical that they will also voluntarily adjust wages offered in the marketplace for employees-DIY-insurance (because WWII wage controls are no longer preventing it.) As an analogy, when Amazon or other retailer says they offer "free shipping", does that really mean they pay shipping? Isn't it really us, the customers that pay that free shipping? Therefore, "free shipping" is just a synonym for "the shipping cost you paid is baked into the price and through Orwellian doublespeak, we restate it back to you as free shipping." Isn't "free shipping" frame-of-references similar to "employer provided insurance"?
- markbnj 12y ago
  It doesn't really matter. It's a pretty simple equation: the WSJ is describing a model where benefits are being reduced while at the same time employees are being "paid in full" as an alternative. I don't think I am reading between the lines there. To follow your analogy, I think it's clear to most people that if a retailer does away with free shipping and does not reduce the price of the product, no mutually beneficial exchange of value is taking place. The cost is going up. So the WSJ is being dishonest in attempting to characterize this as a trade-off.
  - jasode 12y ago
    >the WSJ is describing a model where benefits are being reduced while at the same time employees are being "paid in full" as an alternative. I don't think I am reading between the lines there. I think you're misinterpreting what WSJ wrote. The "paid in full" in this context means wages are adjusted up. (I'm not saying that in real life, the businesses will do this. I'm just emphasizing what "paid in full" means mathematically as WSJ wrote it.) If you read the later paragraph[1], you'll see that they mean for the total monetary compensation to be adjusted up (via the dollar contribution.) This is in contrast to the current situation we have. If we use WSJ's phrasing, ever since WW2 wage controls, we've been "paid partially" in dollars. today: compensation "paid partially in dollars" + employer insurance possible future: compensation "paid in full as dollars" (DIY insurance) Again, the above is just the interpretation of the text. As to whether or not things will play out that way, that's more of speculation about economics and politics. The journalist and we readers can't predict the future and know for sure if businesses will use it as an opportunity to "trick" employees by never adjusting wages or actually readjust wages to stay competitive in recruiting. In my opinion, a possible future includes ABC Inc offering $50k-with-employer-insurance and XYZ Inc offering $60k-with-DIY-insurance. [1]from the article: ... employers consider whether the “best” option is simply to give employees a certain “defined contribution” dollar amount toward their monthly health insurance, ...

by markbnj 12y ago

mkirlin 12y ago

Yep. If anything like this actually happens, there isn't a chance in hell that money's getting funneled into the pockets of the employees.

DamnYuppie 12y ago

Currently employers get better rates for their benefits then an individual can on the open market. As such this will open the flood gates for even higher insurance premiums, seems like a wind fall to the insurance providers. This is similar to the push away from pensions to 401k's in the 70's and 80's. It was supposed to be great for the individuals, more flexibility and control, can take it from job to job. Yet instead it was great for the financial services industry as they got to charge a higher service fees on their mutual funds to more people. The only people to lose out where the employees as the companies got reduced liabilities and payouts and the financial services sector go a large bump in service fees....

nulltype 12y ago
Could employees of different companies form a group that could get better rates? One of the problems with 401ks is that they are still related to your employer.
- ibealexm 12y ago
  Yes - it's called a government. Pretty much all other countries already have such healthcare plans in place.
- DamnYuppie 12y ago
  Would that not be similar to a Union?

myblake 12y ago

Yeah there's also no mention about the tax implications of this stuff which is nontrivial, I suspect the example of paying $50,000 and benefits vs. $57,500 and no benefits ignores the tax implications in a way that doesn't help the employee but perhaps does the business.

vinceguidry 12y ago

Eh, the article is focusing on the trends. If the trend continues, that's where we could well end up. Of course, right now, it's a "tell us which government-approved program you want us to contribute to," in the same way that my alcoholic father refused to pay his child support, but would instead paternalistically pay my mom's rent. But eventually as the burden to understand social insurance gets shifted over to employees, it could easily go that way. People will look up and say, well we have this huge 'benefits' apparatus whose only real purpose is to manage the social costs of health care when it looks like people are managing just fine without it. You and I might look at the apparatus as overbearing, but the reality of it is, most people just don't have the time, patience, or inclination to care about their health, and it imposes huge social costs. When Grandma starts losing the little quality-of-life she has left, rather than an honest discussion, we have people saying, "keep her alive at all costs!" A big part of the health care infrastructure we have is structurally set up to deal with people making irrational demands of it. Once people start to understand health and how to think about it and pay for it, there's no reason why things like the individual mandate can't go the way of the dodo.

fweespeech 12y ago

Yeah, it really is the employers cutting benefits to avoid cutting the headline salary numbers that the vast majority of people focus on when they negotiate.

jasode 12y ago

>employers stop paying for benefits. I'm curious if the majority frame it that way. To me, employers never really paid for benefits. It was the employees wages that was converted into health insurance as a loophole to circumvent WWII wage controls. Using this "employee's-total-compensation" frame of reference, the real value add from the employer was having a Human Resources staff handling the administrative headaches of benefit plans. The "employer's health insurance" has always been the "employee's money" that was preallocated. Today, employers providing health insurance is a voluntary arrangement. Employers do it to stay competitive in attracting job applicants. If employers are voluntarily providing insurance, and if the employer insurance component goes away, it seems logical that they will also voluntarily adjust wages offered in the marketplace for employees-DIY-insurance (because WWII wage controls are no longer preventing it.) As an analogy, when Amazon or other retailer says they offer "free shipping", does that really mean they pay shipping? Isn't it really us, the customers that pay that free shipping? Therefore, "free shipping" is just a synonym for "the shipping cost you paid is baked into the price and through Orwellian doublespeak, we restate it back to you as free shipping." Isn't "free shipping" frame-of-references similar to "employer provided insurance"?

markbnj 12y ago
It doesn't really matter. It's a pretty simple equation: the WSJ is describing a model where benefits are being reduced while at the same time employees are being "paid in full" as an alternative. I don't think I am reading between the lines there. To follow your analogy, I think it's clear to most people that if a retailer does away with free shipping and does not reduce the price of the product, no mutually beneficial exchange of value is taking place. The cost is going up. So the WSJ is being dishonest in attempting to characterize this as a trade-off.
- jasode 12y ago
  >the WSJ is describing a model where benefits are being reduced while at the same time employees are being "paid in full" as an alternative. I don't think I am reading between the lines there. I think you're misinterpreting what WSJ wrote. The "paid in full" in this context means wages are adjusted up. (I'm not saying that in real life, the businesses will do this. I'm just emphasizing what "paid in full" means mathematically as WSJ wrote it.) If you read the later paragraph[1], you'll see that they mean for the total monetary compensation to be adjusted up (via the dollar contribution.) This is in contrast to the current situation we have. If we use WSJ's phrasing, ever since WW2 wage controls, we've been "paid partially" in dollars. today: compensation "paid partially in dollars" + employer insurance possible future: compensation "paid in full as dollars" (DIY insurance) Again, the above is just the interpretation of the text. As to whether or not things will play out that way, that's more of speculation about economics and politics. The journalist and we readers can't predict the future and know for sure if businesses will use it as an opportunity to "trick" employees by never adjusting wages or actually readjust wages to stay competitive in recruiting. In my opinion, a possible future includes ABC Inc offering $50k-with-employer-insurance and XYZ Inc offering $60k-with-DIY-insurance. [1]from the article: ... employers consider whether the “best” option is simply to give employees a certain “defined contribution” dollar amount toward their monthly health insurance, ...