Monday, October 12, 2009

Costs of Employment Up... Just Not in Wage Form

This American Life's most recent podcast, More is Less, discusses one of the many implications of higher healthcare costs; the fact that less of the increase in costs associated with staffing is actually passed through to the worker in the form of wages (think broken system, greed, and the demand for procedures that may not be necessary from the patients themselves).

As can be seen below, while income has been stagnant in real terms, costs to employers has risen steadily due to the increase in the cost of benefits (i.e. healthcare).

Source: BLS



    Health benefits are 11.4 percent of union members total compensation, but only 6.6 percent of non-union workers.

    In 2001, health benefits for union workers, were 8.1 percent and for nonunion workers, 5.2 percent.

    Health insurance costs for union workers rose more than for non-union workers.

    What motivates unions to negotiate for more expensive health benefits instead of higher wages?

    Are unions responsible for the above inflation run up in US health insurance costs and our current health insurance crisis?

  2. I thought Unions were just better at keeping a bigger share of the increasing cost of health insurance on the side of the business. Insurance cost have gone up for everyone, even union members pay more than they did for the same coverage. Maybe nonunion workers have also had to accept some higher costs and some cuts to benefits that the union workers have not.