Happy Labor Day

Happy Labor Day! Robert Samuelson asks a pertinent question today: “Where did our raises go?” He’s right to ask:

Since the start of the century, blue-collar wages have gone up a dismal 0.6 percent per year, adjusted for inflation. Over the past two years they’ve gone up… zero percent.

Samuelson would like us to believe this is because of spiraling health care costs: employers are paying so much more for health care benefits that they can’t afford to pay us any more in actual wages. Anything is possible, I suppose, but as you all know, the BLS keeps track of something called the ECI, or Employer Cost Index, which tracks the total average cost of employing somebody: wages, benefits, office space, payroll taxes, etc. Naturally this means they track the cost of health care benefits, and since they do that there’s no reason not to break it out separately and let everyone see it. And they do:

As you can see, this matches several other charts I’ve posted over the past few years. Health care costs have subsided a lot since the early aughts and are barely growing at all these days. In fact, the employer cost of health care has been essentially flat since the end of the recession.

It’s true that corporations are doing well these days, with healthy profits and strong growth. It’s also true that they aren’t giving most of their employees much in the way of raises. There’s a reason for that, but health care ain’t it.

Happy Labor Day.


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