Another favorite narrative of the leftosphere is that there have been no significant wage and salary increases for working Americans in the last few years. Thus, they say, economic booms don’t serve the middle class. But we know better. There have been increases – significant increases – and they’ve all gone to healthcare costs–which have gone up and up due to bad public policy created by, you got it, the Left. Here’s Grace-Marie Turner on the matter:
Investor’s Business Daily yesterday published an article I wrote for them about how rising health costs are gobbling up the take-home pay of workers who have job-based health insurance.
This helps explain why people feel they are working harder and harder and just can’t seem to get ahead. A recent ABC News/Washington Post poll found that only one in five Americans feels they are getting ahead financially.
Of the nearly $3,000 in pay increases that workers received between 2000 and 2005, they have taken home less than $900 of the money. The rest went to benefit costs that are subtracted from their paychecks before they ever see the money. More than one-third of the average wage increase went to pay for higher health insurance premiums and a fourth of it went to retirement contributions.
Workers are increasingly benefit-rich but cash-poor. Maybe it’s time for a rebalancing. Visibility of the full costs of these benefits, not just their health insurance copayments and pension contributions, would be a big help.
So you know why premiums are going up? Four basic reasons: 1) government health insurance mandates, 2) overconsumption due to the HMO model, 3) the death spiral driven in part by the first two reasons and Medicaid expansion to children (who’re lower risk, so keep premiums down when in the risk pool), and 4) the unfair, unbalanced tax code proping up employer-based healthcare.
The next time you hear someone utter the term "free-market healthcare" with reference to our current system, try to hold your vomit.