Employees Feeling the Pain: Employers aren’t the only ones feeling the pinch
from rising health care costs. The trend is also affecting employee wages,
according to a report issued by the Kaiser Family Foundation.
Every year companies are spending $537 billion on group health insurance
policies, up 15 percent from 2000 and 20 times more than employers spent in
1960, the report says. The amount that employers spent on health care rose
almost annually over the last 50 years.
As a result of the rising premiums, many employers are paying lower wages,
the report found. When looking at employee compensation as a share of gross
domestic product over a period of more than 45 years, total wages have fallen
from 52 percent of GDP to 46 percent in 2006. At the same time, however, health
benefit costs have grown from 0.6 percent of GDP in 1960 to 4 percent in
2006.
The report also shows that while health insurance premiums have risen 78
percent since 2000, inflation and workers’ earnings have increased only 17
percent and 19 percent, respectively, over the same period.
= Member Only
