Insurance Costs Go Up and Fewer People Have Insurance: A Pleasant Surprise for The Skeptical Optimist
In comments, reader CoRev links to the Skeptical Optimist:
Obviously, “compensation” is more than just wages alone. Compensation also includes the benefits. (In 2007, the average worker enjoys $41 in benefits on top of every $100 collected in wages.) So, that begs the question, Has workers’ real compensation been stagnant since the year 2000?
Fortunately for us (and for the presidential candidates), the Bureau of Labor Statistics (BLS) can help us out. They’ve indexed real compensation (i.e., adjusted for CPI inflation) quarterly for the last 24 years, through Q4 2005, and published it on their data-rich website. Their index uses Q4 2005 as the base quarter for calculating the index. Here’s how the BLS describes their compensation data: “The Employer Costs for Employee Compensation product is a quarterly survey that shows the employers’ average hourly cost for total compensation and its components.”
I charted the BLS numbers, and calculated the change in real compensation for the six years from Q4 1999 to Q4 2005. A pleasant surprise: real compensation per hour has been the opposite of “stagnant”; in fact, it grew by 6.7% in the 2000-2005 interval. That’s better growth than any six-year period in the last twenty years, including 1995-2000.
As PGL notes, we’ve discussed this at Angry Bear before. My take on this is simple… From the BLS page cited by the Skeptical Optimist:
The NCS provides incidence and extensive provisions data for two major benefit areas:
* Health insurance
* Retirement (both defined benefit and defined contribution components)
I don’t have data on retirement benefits, but:
1. Healthcare costs are rising damn quickly… healthcare spending rose from 13.79% of GDP to 15.96% of GDP from 2000 to 2005.
2. The percentage of Americans with Employer provided health insurance is falling. After jumping during the Clinton years, its dropped from over 63% to under 60% since the year 2000.
So… “employers’ average hourly cost for total compensation” is rising means… its costing more money to provide health insurance to a lot fewer people.
Apparently that is what the Skeptical Optimist calls a “pleasant surprise.”
Update… I just noticed that the census site that originated the data on employer provided health insurance used in my earlier post now has completely different data. In fact, the data no longer extends as many years either.
But… here’s the (the latest)… the percentage of Americans with employer provided health insurance in 2000: 64.2%. The percentage of Americans with employer provided health insurance in 2006: 59.7%.
Update 2… in comments, DolB reminds me of his approach to this issue, noting the skew in income distribution. No doubt another pleasant surprise for some…