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The one stat I look at is that wage taxes have been growing as fast as GDP since 2000. Wage taxes, which do not include benefits and are flat except for excluding most of the income above the cutoff, have been growing much faster than any measure of jobs, wages, and hours. Workers are reporting far more income to the IRS than employers are reporting to the BLS.

Okay, I'll be the pessimist and go with a modified third possibility. No pundit or member of MSM will call them on it. A Republican candidate may serve it up as a counter in a debate but that's it.

Sorry, Steve. It is what it is.

Living up to your name, you optimistically lump non-healthcare benefits into the "benefits" that have risen lo these past few years, when in fact you know that the rise in the compensation is almost 100% due to the astronomical rise in the cost of health care.

So, while it may look like the average American worker is enjoying greater benefits, the fact is that they are getting the same benefits (or less), only it now costs more.

This is not an increase in benefits. Wages are a much better way to look at the true state of the American workers' lifestyle, an to be even more correct we should consider that those same dollars in our paychecks are now worth 15% versus the dollar index.

I'm all for being an optimist, but let's try not to be too panglossian.

You are correct that the (D) candidates, which one assumes to be their average grade in economics, are only focusing upon earned income that does not incorporate the benefits portion of real compensation in any way, shape or form.

Not to mention completely discounting the history of the U.S. since 2000, we can safely assume that (D) is their average grade in history as well. Somehow or another, they appear to think that comparing inflation-adjusted incomes at the height of the previous economic and employment cycles (2000) with the current day is appropriate, conveniently forgetting that we had a full-up recession in 2001, complete with a lagging peak in unemployment in 2003.

Oh, and they're also missing the changing demographics of income earners in the U.S. - pretty sure that's another (D) somewhere....

What's remarkable is that the distribution of income didn't change much from that peak despite these factors. And you don't have to take my word for it. Using Census income data, which is likely what they're basing their arguments upon) and adjusting for inflation, I animated the change from 2000 to 2006 by age group - here are the links:

Age 15-24: http://tinyurl.com/2kfd9a
Age 25-34: http://tinyurl.com/3x5rmc
Age 35-44: http://tinyurl.com/2sabrn
Age 45-54: http://tinyurl.com/2s323v
Age 55-64: http://tinyurl.com/2dm34p
Age 65-74: http://tinyurl.com/yrlp7k

You can see a remarkable shift in 2003, coinciding with the post-recession unemployment peak - most notably at the lowest age ranges and the Age 15-24 group in particular, as it delayed the entry of these youngest income earners into the workforce.

You can also see the effect of the aging of the baby boom generation as they've moved upward into the older age ranges.

And you also see that despite all the economic bad news, even when it comes to inflation-adjusted incomes, we find that the U.S. in 2006 is at least as good as it was in 2000, the peak year in the previous economic and employment cycles.

And that's not even tracking the same individuals over time - where we find that upward income mobility is the same or better than its ever been:

http://tinyurl.com/2ae9s6

Grodge:

The compensation index is adjusted for CPI inflation, and the BLS takes health care costs into account in its CPI calculation. They explain it at this page: http://www.bls.gov/cpi/cpifact4.htm .

That doesn't mean their adjustment for healthcare inflation is perfect, of course. If you have a better way to take healthcare inflation out of the compensation numbers, I'd like to see it, and I bet the BLS would, too.

From your reference: "Although medical insurance premiums are an important part of consumers' medical spending, the direct pricing of health insurance policies is not included in the CPI. As explained below, BLS reassigns most of this spending to the other medical categories (such as Hospitals) that are paid for by insurance. The extreme difficulty distinguishing changes in insurance quality from changes in its price forces the CPI to use this indirect method."

Just because there is no better way to measure health care inflation, does not mean that the current method is accurate. It's not.

American workers are paying higher prices for health care insurance which is reflected in "higher compensation", while the health care product they receive is not necessarily better. I'll repeat: Wages are a better way to judge the financial condition of the American worker.

I appreciate your point-of-view on the issue that American workers are "better off" with this "higher compensation", but I would respectfully disagree.

And beating up (D) candidates over the issue is disingenuous while the (R) candidates do nothing to ameliorate the situation: Reference the Medicare part D boondoggle.

I've actually had this discussion with left-leaning individuals before, and there response is typically a combination of the following:

1) The CPI is a sham, so those numbers are bogus (no alternative given to CPI)
2) Some mumbo-jumbo about the falling "civilian population-to-employment ratio", while simultaneously claiming that the rise in household income is due to more household members working (no explanation given regarding this contradiction)
3) The poverty level rose for a couple of years, so everything MUST be horrible (ignoring that the poverty level is still lower than it was for most of the 1990's)
4) BUSH SUCKS!!!!

Grodge:

Also from the reference: "Currently, the index employs an indirect method for measuring price changes for health insurance premiums... the weights for most of MCS indexes reflect out-of-pocket expenditures plus allocated health insurance benefit payments."

The BLS has an imperfect algorithm for taking inflation out of health insurance premiums, and has provided indexes of worker compensation resulting in part from that imperfect algorithm. Your argument is "It's wrong because it's imperfect." I agree with you: it's imperfect -- but I have to assume that it's just as likely overstating inflation as understating it, until a new, better set of indexes is published by someone who has a better algorithm.

Regarding which side's candidates I choose to beat up: it doesn't depend on the side (D vs R), it depends on the fallacies in the arguments of the individual candidates. R's who insist on a balanced budget amendment, and R's who subtly infer that all illegal immigrants are brown-skinned people who sneaked across the Mexican border seeking welfare money, will get similar treatment from me, as they have in the past. (Exception: I will probably continue to ignore Dennis Kucinich regardless of what he says; Dennis Miller aptly summed him up as continually playing "the moron card.")

Your original argument was that the Dem candidates are disingenuous for talking about wages and not about compensation. Wages are stagnant. Wages are a better indicator of the well-being of workers, unless they are getting something more for their increased non-wage compensation.

For whatever reason, the cost of health care benefits have gone up, and I would surmise it is not because the product is significantly better. The mumbo-jumbo about 401(k) matches as part of the non-wage compensation increase is meant to obscure the real fact that it's the health care costs which are determining the increase in compensation.

Dem candidates are pointing out that wages, and thus workers' lifestyles, are stagnated. Why is this a flawed argument?

The Fed's manipulation of the money supply makes any wage increase virtually irrelevant.

It devalues the dollar by printing more money thus erasing the benefits of wage increases.

Neither the Republicans nor the Democrats -- with the exception of Republican and libertarian Dr. Ron Paul -- ever address this issue.

The real debate ought to be whether we continue to allow a private banking cartel to manipulate the nation's money supply or whether we return to a system of "real" or "hard" money as was the case prior to 1913 the year the Fed was created in secret by a small cabal of wealthy European and American bankers bent on controlling the nation's money supply.

Income taxes on wages are spent by the government to pay down interest on the debt not for so-called "essential" government services which is why 1913 is also the same year the Federal Income Tax became law.

Wage increases or lack thereof are used as a political football by Republicans and Democrats alike to make the general public believe they want to affect real change.

The Fed's manipulation of the money supply makes any wage increase virtually irrelevant.

It devalues the dollar by printing more money thus erasing the benefits of wage increases.

Neither the Republicans nor the Democrats -- with the exception of Republican and libertarian Dr. Ron Paul -- ever address this issue.

The real debate ought to be whether we continue to allow a private banking cartel to manipulate the nation's money supply or whether we return to a system of "real" or "hard" money as was the case prior to 1913 the year the Fed was created in secret by a small cabal of wealthy European and American bankers bent on controlling the nation's money supply.

Income taxes on wages are spent by the government to pay down interest on the debt not for so-called "essential" government services which is why 1913 is also the same year the Federal Income Tax became law.

Wage increases or lack thereof are used as a political football by Republicans and Democrats alike to make the general public believe they want to affect real change.

I don't know who or what to believe. Even Brian Wesbury has two conflicting articles. His Monday morning outlook on 10/15 says wages are up 8.4% over the last two years. But his Data watch article on 11/15 says wages are flat vs a year ago. Of course he may be talking about two different "wage" statistics.
There must be some reason 2/3s of the country disapprove of the President (R) and Congress (D). And if was all about the war I would think the Democrat controlled congress would get a better approval rating.

There are lies, damn lies and statistics.

The reason we (Democrats) say this is because it's true when you look at the median worker.

http://www.epi.org/content.cfm/webfeatures_snapshots_20070905

This, by the way, is the reason people don't object when Democrats say "your real wages are falling". For most people, it's true. For the average of all workers, it's false. We all know how that's possible: the gains are concentrated in a small population & large enough to offset the total losses in the rest of the population.

It's a fine time to be wealthy in America, but it kinda sucks for most people.

Grodge;

"Wages are a better indicator of the well-being of workers"

This is a fairly meaty assumption. Let's assume that your other assertion is correct, that the 6.7% increase in total compensation is (almost) solely due to rising health care costs. If employers chose to increase wages instead of increasing compensation (and health care costs increased the same amount), would wages continue to be a 'better' indicator of well-being?

Steve;

The gains appear to be concentrated in the early 2000s. Any insight on the more 'sluggish' recent quarters?

J

Steve,
You ask, "If employers chose to increase wages instead of increasing compensation (and health care costs increased the same amount), would wages continue to be a 'better' indicator of well-being?"

Obviously, it depends on how much wages are increased; if the increase is ample, then the offset of higher wages could make up for any reduced benefits outlays.

We are not questioning the generosity of employers. We are looking at the efficacy of looking at wages versus compensation for the discussion of how workers are doing in this economy.

Grodge;

That was me (Jeremy) not Steve, I addressed him seperatly, but I can see how the seperate address would appear to be a 'signature'.

"We are looking at the efficacy of looking at wages versus compensation for the discussion of how workers are doing in this economy."

And that was precisely my point.

You assert that the increase in compensation is due solely to increases in health care costs. Let's assume this is true.

Case #1: Employers pay for rising health care costs.

Steve measures compensation and shows it has risen to match the costs of health care. 'Well being' has kept pace with rising costs.

You measure wages and show they remain the same. This indicates that 'well being' as well has remained the same.

Case #2: Employees pay for rising health care costs.

Now consider if employers had increased wages INSTEAD of increasing compensation. So that 6.7% increase in compensation instead is applied solely to wages.

Steve measures overall compensation and shows it has risen 6.7% to match increased health care costs. Since overall compensation includes wages. 'Well being' again keeps pace with increased costs.

You measure wages and find they have risen 6.7%. Using wages as a measure of 'well being' you would conclude that 'well being' has increased. When in fact it has kept pace with increased costs.

Steve's method of using overall compensation to measure 'well being' is more accurate than using wages alone.

J

Jeremy,
Sorry about the name mix-up.

Steve said "...who will ask them follow-up questions about the robust growth in workers' compensation since the year 2000."

As you said, the 6.7% increase in compensation made up for the rise in health care costs-- you use the word "match"-- so I don't see how the take-home benefit for the workers can be described as "robust."

The Dem candidates are recognizing the "match" between the rise in compensation and health care inflation, which leaves wages as the best measure of well-being assuming such a "match."

Thank you.

"Regarding which side's candidates I choose to beat up: it doesn't depend on the side (D vs R), it depends on the fallacies in the arguments of the individual candidates."

Steve

From John Edwards web page;

"Middle-class wages have stagnated in recent years even as the economy has grown."


So were is the fallacy. The democratic candidates are ussually refering to middle class wages or median wages. YOU are the who has some what covertly changed the subject to total compensation and it appears you include the great increases that go to a small minority on the top of all inclme earners.

Real median wages have been stagnant as savings are down, cost are up and compensation is down. While the wealthiest 1% have taken in most of the wage and compensation increases.

http://www.nytimes.com/2007/08/29/us/29census.html?_r=1&oref=slogin

Grodge:

If I'm not mistaken, Jeremy is not saying that there has been 6.7% increase in compensation to match health costs, but is conducting thought experiments to describe the irrelevancy of wages as a sole measure of worker prosperity.

Jeremy is merely pointing out that IF health care costs increased by 6.7% AND the employer were to match that increase in the compensation package, whether that increase occurs in wages or in benefits is irrelevant, and likewise, stagnant wages COULD be a poor measure of worker prosperity IF benefits rose more than the actual costs of health care.

I don't know the answer, and am enjoying the interchange. I also hope that y'all don't just keep talking past each other.

muirgeo:

So, to you it's all about wages, and benefits mean nothing. In other words, if all benefits were eliminated, and converted to wages, it would make all the difference to you and John Edwards. I take it you would support outlawing employer-paid health insurance, forcing a conversion of that cost to money wages.

It might sound odd, but I might be able to agree with you and John Edwards that employer provided health insurance benefits should be eliminated by converting it to money wages. To you, benefits are nothing, wages are everything. To me, it would solve two problems: it would eliminate your complaints about stagnant wages, and would also give the healthcare recipient (now earning a much higher wage) total responsibility for paying the healthcare bill, which would foster a more efficient system.

Regarding your point about inequality: I presume you would place union workers in the middle class. As the chart indicates, union workers enjoyed a 10% improvement in real compensation from 2000-2005, half again as much as the 6.7% overall gain. That means the non-union group had to be averaging less than 6.7% improvement. Not sure what that implies about "the rich," but it doesn't appear to support your hypothesis about them.

I'll concede that Jeremy is correct: increasing non-wage compensation is important in determining the well-being of workers.

Steve's original post, however, is taking the Democratic candidates to task for concentrating on wage stagnation while overall compensation has increased.

If not health care inflation, then what accounts for non-wage compensation growth? Are workers enjoying better health care or greater benefits elsewhere for this increase in compensation? What is the point of the post?

Democratic candidates may be disingenuous for failing to mention the "robust" increase in compensation in favor of the stagnated wages, but if that is the case then why aren't the average wage earners buying this argument that they are all so much better off? Is the MSM and the liberal cabal that powerful in deluding Joe Sixpack of his great fortune?

Methinks not. I'll leave the last word to y'all.

"So, to you it's all about wages, and benefits mean nothing."
Steve


Steve not about wages but about MEDIAN wages or if you have numbers for MEDIAN compensation that'd work too.

Compensation increases I believe are again going mostly to top paid executives and CEO's.

I'm a doctor and my patients health care benifits have been decidely cut with high deductible policies and high co-pays.

I think your numbers are more dis-ingenous then what the democratic candidates are claiming.

You perspective is illustrated as follows. 10 guys in a bar with an average compensation of $40,000 and a median of the same. Bill Gates walks in and you're all excited about how well the average workers compensation has increased while the median didn't budge.

Well, that is a nice discussion of what has happened to wages in relation to the USA economy, but, what has happened to the wages of US workers in relation to global economy?
http://es.finance.yahoo.com/currency/convert?from=USD&to=EUR&amt=1&t=5y
Taking into consideration that the USD vs EUR from 2003 until today has shanged from 1 to 0,67, that means that the USA workers wages have decreased a 33% in European terms. If you get the data for 2000 you will find out an even more dramatic decrease. On the other hand, if you tell me that a strong currency is not good, please remind that the European economy is performing more or less the same way. Nevertheles, the Eurozone economy is nowadays nearly twice more important in relation to the USA economy than in 2000.

Luis,

The Euro-USD rate only affects American workers who are paid in dollars and then use those to buy something made in Europe or take a vacation, etc.

Meanwhile, if I work for a US exporter, I'd be pretty stoked by the extra sales my company would be getting.

I'd say a strong currency helps the consumer, while a weak currency helps the producers - its a trade off.

Muirgeo, The average can be very different from the median, but it may not be in this case. Bill Gates makes a lot of money, but there are so many people in the median that the average will still be close to the median.

Also, compensation is more likely to increase than wages since wages are taxed while benefits are not. If wages are the all important issue, then those who desire increased wages will support tax reform that taxes benefits.

In fact, if all compensation was converted to cash, and workers could choose their own health plans, many would choose a less expensive one than is offered by their employers. (high deductible policies and high co-pays)

Aaron,
I disagree in that it only affects workers that...
In a global economy, any American consumer is buying products from all of the world economies. Probably they do not realize but what about your PC for example? Even if it is American technology, I bet your that in some moment it has been to China. The food you eat, grown in the American mid-west has needed fertilisers coming from whatever matter from some mine you never know. The machine to grow and cut it even if American brand will have pieces from anywhere: Maybe the engine was built or designed in Germany.

The devaluation of the USD produces that the added value of the US economy decreases in the final products.
In Spain, where I come from, for ages the economists said that a weak currency was something very good: you can devaluate it and your country gains competitiveness, i.e. you decrease salaries to everybody without they knowing it and therefore you produce cheaper than your external competitors. That is bread for today and hunger for tomorrow. You attack the problem (the loss of competitiveness) but you do not attack the causes of the problem (why you have lost competitiveness).

Luis,

While it is true that we are living in a globalized economy, imports still only account for a relatively small percentage of US GDP. It is not above 15%.
http://www.wto.org/english/res_e/statis_e/its2004_e/its04_general_overview_e.htm

Besides, we have a dynamic economy that reacts to changes - if suddenly Godiva chocolates become more expensive consumers can purchase Sees Candy instead. The reverse happens in foreign countries with respect to US products. Its simply the market mechanism that is now signalling America to import less and make more. This is completely normal.

Please also note that the dollar is depreciating on its own not being devaluated by government fiat. That is a different case.


By the way, my job is to export products from the Far East to the USA, so actually, the weak dollar is very much a difficulty for me, personally.

Well, I do about 30% of my business with Europe, so then it is a benefit for me because I began pricing in Euros several years ago. ;)

I would like to bring this point into the discussion:
Taking into consideration the GDP at nominal value http://www.econstats.com/gdp/gdp__q3.htm, the imports of the USA
http://www.census.gov/foreign-trade/statistics/historical/gandsimp.txt
And the exports of the USA http://www.census.gov/foreign-trade/statistics/historical/gandsexp.txt , we take the following information:
In 2002, the imports of the USA accounted for 13,2% of the GDP, the exports were 9,2%.
In 2006, the imports were 16,5% of GDP and the exports were 10,8%. This means that imports increased in this period a 57,6% while exports did for just a 48,3%
With the devaluation of the USD you would expect that, o yeah, the exports get a boost, but imports should drop. Actually, imports have increased even more.
It looks as if, yes, the weak dollar is helping the US exporters but the US economy is hung on products that has to still buy from outside and the weakness of the dollar means that the effort of the US economy to bring them in is bigger.
I am not sure that the global economy can find suppliers for anything anywhere. It goes without sayng that I am not only speaking of raw materials such as oil but of all the different kinds of goods and services including technology development. Obviously in the long run this can change but in the short term it is not so easy.

to Grodge and muirgeo:

Benefits are nearly flat compared to the progressivity of wages and salaries. Therefore, forcing all companies to drop benefits such as healthcare insurance, child care, sick pay, family leave pay, and continuing education subsidies -- and to convert them to their cash equivalent in wages -- would result in a huge increase in the median wage.

I presume you two and John Edwards would support a new law like that, to achieve a big increase in the all-important median wage (notwithstanding what happens to unimportant benefits). If you wouldn't, I'd like to know why.

Everybody references census info. and median wage and compenstions data.

Thomas Sowell makes an interesting point in a recent article; that census data lumps the analysis into groups regarding the population as a whole but ignores any individual family's wage increase and the movement of individuals or families between the various groups, which would be reflected in IRS studies. For example, a first year retiree will likely have a dramatic drop in income/wage/compensation and move to a different quartile/class; the lower income may not indicate a low net worth.

This point seems relavent to the ongoing discussion here.

Employee Bulletin

Amalgamated Industries, Inc.

To: All hourly wage employees

From: Mr. Fred Pangloss, CEO

Good news!!! Your compensation has been increased!!

It is my distinct pleasure to announce that due to the higher cost of health care we are obliged to pay more for your health insurance, which means that we will be forced to pay more for your premiums.

This is excellent news because this results in higher compensation to you!

(As a side note, your hourly wage will remain the same and your insurance co-pays and out-of-pocket medical expenses will increase. Although it costs more to buy milk, gasoline, food and health care, the government CPI says inflation is tame, so don't worry-- and above all, don't listen to those meddlesome Democrats.)

Have a good day and a wonderful Thanksgiving!

Grodge:
I think you inadvertently confirmed my point.

When Amalgamated pays more for an employee's health insurance, that's the same as giving that employee an equivalent increase in wage and letting the employee pay the portion of the insurance increment that would otherwise have been paid by Amalgmated.

Compensation = (wages + benefits). Add $x to either one, and compensation increases $x.

Happy Thanksgiving to you, too.

If see level rises by 1 foot in the pacific ocean, will there be 1 ft difference in sea levels where pacific and atlantic oceans meet?


At the risk of wearing out my welcome, I need to add two points:

1. I always understood your point about the wages + bennies = compensation. But...

2. I also understand Edwards' point that workers have enjoyed no growth in wages.

Having greater compensation is little solace to hourly workers when the increased compensation only goes toward the inflated cost of benefits.

I still do not understand your problem with drawing this distinction.


I think we agree more than we disagree. The real question should be whether these increased benefit costs are reflected in government BLS statistics and what can be done about the dwindling value of our paycheck dollars.

And I think Edwards is asking the right questions-- albeit in a demagogic fashion-- but it's still more than the so-called "strong dollar policy" Republican administration is doing.


(I promise that's my final final final comment. Thanks for the great discussion.)

The cost of gasoline, groceries, and health insurance is not in the control of the typical employer. Compensation for wages and benefits is.

If a new benefit is $1000 worth of 401K matching, $1000 worth of free lunches and snacks, or $1000 worth of extra health insurance premium coverage, it is (a) $1000 worth of extra compensation, but (b) ignored by John Edwards, because it is not counted as $1000 worth of "wages."

Conclusion: we aren't getting the whole picture from John Edwards.

And I do not understand the problem drawing that distinction.

Steve is up to his elbows in the usual cherry picking data bag of demagoguery.

Trying another starting/ending date bias, the Employment Cost Index for Total Compensation (ECITC) in constant dollars in Q3 2004 was 100.0 and in Q3 2007 was 100.1.

ECITC has been stagnant for data purposes for the last 3 years growing a grand total of 0.1%.

For the 6 years ending Q3 2007, however, ECITC has grown 4.82%.

In other words, the trend is not your friend.

Source: Table 4
http://www.bls.gov/web/ecconstnaics.pdf

Happy thanksgiving to all.

I think Grodge's comment is that benefits + wages are all compensation and should be considered together, but that the increased benefits actually aren't an increase, it just costs more for the same health care coverage.

If an employer pays a worker $10 a day and a free apple, but then apples increase in cost by 20%, the workers still get the same package, so there is no "increase" in my compensation.

In other words they ignore the actual cost of the benefit and the fact that the employer did pay more for it, and if the worker had to pay for it themselves, it would have cost them more as well. The increased cost could also reflect the worker getting better healthcare, too.

I can understand their point if you only look at the worker's side of the equation. Its funny they are so worried that the rich corporations are making all the money, but the rich corporation is paying the 6% increase!

Let's imagine a special job, were the ditchdigger gets paid U$ 1.00 a day in wages, but has a free house, car, gas, food, etc. If the cost of all of those items rose by 10% over several years, but the ditchdigger's employer covered that increase, the argument is that the worker still isn't better off because his wage is the same.

Might as well apply this logic to assets, too. Bill Gates owns a million shares of Microsoft and a mansion. The shares are up 50% and the mansion doubled in value but Bill Gates is not any better off because his salary has stayed the same and he still only owns one million shares of stock and that same old house.

Whoops, I misread the chart. The comment upthread was based on all civilian workers. The data for private industry workers is even more discouraging.

From Table 5 of the upthread link, ECITC has increased 4.18% for the 6 years ending Q3 2007, and decreased 0.60% for the 3 years ending Q3 2007.

Well maybe the Republicans should follow Steve's advice and take it upon themselves to get out the "truth" about wages.

How about a slogan like, "I'm a Republican.... since you all in the middle class are benefitting so much from Mr Bush's economy I will continue more of the same policies...vote for me!!!

That should work right?

Marmico has a good point. The nominal wage remains the same but benefits cost more. Then you get more compensation. Well, actually, we should be speaking of inflation linked to the benefit if in the end it is the same. Furthermore, we have to discount that inflation in hte nominal value of our wage and this comes out that our true salary has decreased. Which brings the point of trusting the inflation indux published by the federal reserve.

Heh. Seems like this topic took the place of GW as having the record for most comments.

While not mentioned in the original post everyone clammering for wage increases better keep in mind what they are willing to pay for goods service. Without a like increase in productivity you'll have a nasty inflation problem and the value of the dollar won't matter.

You can go ahead and give the garbage man a hefty raise but you'll see an increase in the charge for garbage pickup unless the company can pick up more garbage in the same amount of time.

Andrew Tobias wrote a while back that the rich get richer because they can afford to take more risks. I think that is what we are seeing because their compensation includes investments. That's Buffett's point about his secretary paying a higher tax rate than he does.

All of this won't matter much anyway. Whenever we experience what appears to be a concentration of wealth that is on the rise, the government will attempt to tinker with that concentration. It doesn't matter which party is in the WH.

You neglected to mention this bit:

"The constant-dollar compensation and benefit series must be interpreted with caution. Changes in employer costs for employee benefits do not necessarily measure changes in the welfare of workers."

To skeptical for you, I guess. Or maybe not optimistic enough.

(Not favorable enough to Republicans being the real answer, I suspect.)

What would be interesting is factoring out what percentage of that "compensation" is related to health insurance, and analyse how much have health insurance costs grown over the same period of time.

Grodge wrote: "So, while it may look like the average American worker is enjoying greater benefits, the fact is that they are getting the same benefits (or less), only it now costs more."
================================

Interesting discussion, however, it seems some points haven't been raised yet.

1) Isn't the high cost of healthcare directly attributable to rising litigation, govt mandated benefits & other nonsense like Viagra? Ironic that Edwards would make his killing on malpractice lawsuits, then lament his trickledown effects on the common man, as if employers were the bogeyman.

2) Seems to me that professionals' salaries rise faster than BLS indicates because people are climbing the ranks as their productivity increases. To wit, the manager or engineer in 2000 is probably a few steps higher in 2007. If the position and/or salary basis is the same, then perhaps that's a reflection of skills and capability shortfall, rather than an issue of stagnant wages.

3) Why should I care if a garbageman's salary is "stagnant"? I don't see the point in anyone obsessing over semi-skilled trades as some measure of the economy. Experience is not a factor, nor productivity, in calculating salary here. Granted, there are cost of living wages - but if cost of living is stationary, then there is no need for the raise. On the flipside, there is typically a longevity raise which may be justified in minimizing turnover. I can certainly see the experience/longevity factor in the skilled tradesman set, (heck, even a burger-flipper) but less so for the 30 year veteran garbageman. But thanks to the Sanitation Engineer's Union, that's the way it is.

Bottomline, pensions and employer co-pays (medicaid & SS) are shell games designed to hide the true cost of benefits from the employee. I'd rather take all the money and direct a portion of MY wages to an insurance plan that fits my needs, fund my own pension plan and leave it at that.

I have no doubt that SS would not be in the state that it's in now if the employee was solely responsible for paying into it. That way, when Congress deigns to take more from us to fund shortfalls, there'd be pushback from the people.

BTW, Steve, you have a great blog. This is my 1st comment, even tho I've been reading it more or less since the beginning.

Using CPI to discount wages for the welfare purpose is as inappropriate as pricing MBS's or corporates off the government curve. At times the two go tightly hand in hand, but as we all know it's no guarantee.

A "median" CPI would involve paying off average school debt and buying a medianish house under the age of 35 while still being able to afford at least two leaves of abscence for child births, if we are to chose something. But, again, this is no simple task.

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