Saturday, April 30, 2011

How Benefit Costs Affect Growth in Cash Compensation



Healthcare price inflation is not only a long term deficit problem. It is a short term problem for wage earners. This graph shows that the rising costs of healthcare premiums paid by employers becomes a large share of total compensation and crowds out increases in cash compensation. Add that problem to rising gasoline prices and rising food prices and one can see the plight of middle class wage earners. Their spending on other needs is very limited.

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