Monday, September 3, 2018

Where did the love go?



The midterm elections are ongoing and the avoidance of the issue surrounding the tax cuts seems to be a nonentity with regards to a platform issue; however, health care and education dominate the discussion.   Well here in Tennessee we are the exception they are busy advertising for the electorate to call Marsha Blackburn and Lamar Alexander to let them know we want the tax cuts permanent.  Good plan as they will increase the nation's debt further, risk economic collapse and make wages frozen for decades to come.  As for the 1% no worries there as there is more to follow.  And it has already began with the freezing of public service sector workers wages.   Where did all the love go for that one? 

The reason wages are not rising despite low unemployment rates is the never ending costs to health care.  While some companies are going out of their way to reinvent health care coverage - this story about Comcast is an example  but there are also the attempts by Amazon and company to develop their own insurance, Christian faith based organizations to form collectives and health share and of course startups that are trying to change how we find care and in turn pay for it.  Irony that it is health care that may be killing us.

But in all honesty we are fucked in this country without federal regulation and in turn a switch to single payer programs like Medicare or Medicaid policies that enable us to maintain care regardless of employment or need.  That will not be happening anytime soon.  So vote for the candidate who has not just your best interests but those of the larger picture.  It is not always about you as you are everyone too.   The number one movie this summer was not a blockbuster in the conventional sense but the documentary, Won't You Be My Neighbor, about Mr. Rogers.  He had a message in there about community and love for you fellow man.  Try it you might like it.



Where did our raises go? To health care.

By Robert J. Samuelson
Columnist The Washington Post
September 2 at 5:03 PM

It’s wages vs. health benefits. On this Labor Day, just about everything seems to be going right for typical American workers, with the glaring and puzzling exception of wage stagnation. The unemployment rate is 3.9 percent, near its lowest since 2000. The number of new jobs exceeds the peak in 2008 by about 11 million. Then there’s wage stagnation.

Corrected for inflation, wages are up a scant 2 percent since January 2015, according to the Bureau of Labor Statistics. The gain is roughly one-half of 1 percent annually. Little wonder that many workers feel they’re not getting ahead. They aren’t.

A strong and growing economy is, by the textbook, supposed to put upward pressure on wages as companies bid for more workers and employees shop around for higher pay. All sorts of plausible theories have been advanced to explain why this doesn’t seem to be happening.

Demographics are cited. Well-paid baby boom workers are retiring and being replaced by lower-paid millennials; this drags down average wages. Or the Great Recession left workers and employers with psychological scars. Workers are more concerned with job security. They are leery of pressing for big wage increases, just as companies are leery of providing them. Mismeasurement of wages is another theory.

All these explanations may matter, but a major contributor — perhaps the major contributor — may lie elsewhere: health costs. Money once reserved for wage increases is now diverted to pay for employer-provided health insurance. A new study provides stunning estimates: For the bottom 60 percent of U.S. workers, wage gains have been completely wiped out by contributions for employer-provided health insurance.

“For many workers, rising health insurance premiums were eating up every last cent of their pay increases and more,” the study said. This affects how “people buy houses, save for retirement, launch their children into adulthood and otherwise try to get ahead in life.”

The study focused on full-time, year-round workers from 1980 to 2015. It did not cover people who were unemployed or had government insurance (Medicare, Medicaid and the Affordable Care Act).

Using government data and a private survey from Willis Towers Watson, a consulting firm, the study compared wage and salary income to the cost of fringe benefits (mainly retirement and health benefits).

For the bottom 50 percent of workers, employers’ health insurance contributions averaged 30 to 35 percent of companies’ total compensation packages. Companies also increased the premiums that workers themselves must pay to get coverage. From 1999 to 2015, worker premiums for a family plan more than doubled in inflation-adjusted dollars, from about $2,000 annually to almost $5,000.

As this shows, higher health-care costs fall heaviest on lower-paid workers. The reason: Insurance coverage is a bigger part of their total compensation. (In the example, the $5,000 is 10 percent of income for a worker making $50,000 but only 5 percent for a worker making $100,000.)

It has long been known that rapidly rising health-care costs put downward pressure on workers’ wages. But “no one has put the numbers quite like we have . . . [showing] how it affects stagnant pay and the distribution of pay,” said Sylvester Schieber, a retired economist with Willis Towers Watson and the study’s co-author, along with Steven Nyce, the firm’s research director. The study was also co-sponsored by the Council for Affordable Health Coverage, a business group.

The problem is plain: We’d all like both cheaper health insurance and higher wages, but the way the health-care system is operating today, we might get neither. As insurance premiums get more expensive, inflation-adjusted (“real”) wages will continue to stagnate or decline.

This might be acceptable if the medical system were delivering better care for all the extra spending. But, as Nyce and Schieber note, the opposite may be the case. They compare the United States with other advanced societies:

“There is considerable evidence we are receiving less in the way of good health care. . . . We have fewer doctors and fewer doctor visits per capita. We have fewer hospital beds and lower hospital occupancy rates. We undergo more MRI and CT exams, and spend more than twice as much on drugs per capita, on average, than residents of other highly developed countries.”

This is obviously a problem that transcends health care. Let’s grant much excellence in today’s system. Still, its chief flaw is that it is silently determining the nation’s priorities without anyone assigning it that role. Medicare and Medicaid spending is squeezing most other government activities — certainly not what we intend. High private insurance premiums condemn millions of workers to stagnant or falling incomes. We recoil at disciplining health-care spending, because that seems inhumane.

By accident, health care has become labor policy and economic policy. We may all be among the injured.

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