Wednesday, January 9, 2013

Healthcare premiums and stagnant wages all in two easy to read graphs...

Health care costs have contributed to stagnant wages for most workers. I don't THINK this is controversial. 

Below is a chart showing the increase in annual premiums paid for coverage, 2002-2012.  The cost in dollars terms you see below are BOTH the employee and employer contributions to the total price paid for health insurance. The employee pays part of the cost out of their wages and the employer pays part of the cost on behalf of the employee---this is known as "non-wage" compensation.

Source: Forbes
In 2002 a family policy cost $8,003 dollars.  Using the BLS inflation calculator, in today's dollars that would be equivalent to $10,242.  Yet, the policy today actually costs $15,745---$5,503 or 54% more than the if the policy increased at the general rate of inflation as calculated by the Consumer Price Index.

Here is another chart showing the percentage changes in various measures of wages and health care premiums paid by workers.  Green line is the percentage change in wages.  The blue and red lines are what employees and employers contribute in premiums. The gray line is the general level of inflation as measured by the Consumer Price Index (CPI).

Green line is relatively flat.  Red and Blue lines increasing at steady rate.  Red and Blue lines are the ones contributing to the flat green line.  Health care premiums holding down wages.  Can you see it?

Source: Forbes
Note: Not saying this is the WHOLE reason, but as with many issues there are many contributing factors.  This is just one, but a pretty important one
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