Thursday, September 27, 2012

THE source of Middle Class income stagnation in the US in one easy graphic...

Ok, maybe not the source, but this HAS to be strongly considered.

Employer contributions to a workers heathcare plan are considered a "non-wage" form of compensation. The employee does not pay it, the employer does.

As you can see from this graphic, not only has the employee portion of their healthcare premiums increased significantly since 2000 (which they pay out of there earned income/wages), but the employer contributions on behalf of the employee (which the employee NEVER sees) has also increased dramatically. 

Source: Wall Street Journal
More of the firms money that goes into non-wage benefit compensation is not available to give raises or to hire more people.

Each employee becomes more expensive in wage + non-wage compensation.  Firms hire fewer workers "at the margin" and/or there is less money available for employee compensation.

A source (not necessarily THE source) of income and employment stagnation in the last 12 years for the Middle Class?

Seems somewhat reasonable to me. What do you think? 
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