In this thread on who is to blame for the current economy a question came up regarding wages in the US. A statement was made that wages in the US are ‘stagnant’ with some data showing that…well, it showed that wages have increased, but the increase has been marginal.
Now, it’s been decades since I took economics in college, but I seem to remember that there are different aspects of this when calculating real compensation vs real wages. One of the things I seem to recall is that while real wages (i.e. take home pay) has been marginally increasing (correct me if I’m wrong here btw), it’s been the real compensation that has risen at a much higher rate (this would be things like insurance, medical, pharmaceuticals, etc)…true?
How exactly do economists calculate real wages and determine if they are rising, stagnant or falling…or do they even bother (as I said, it’s been years and I’m going on memory).
I don’t know the answer to your question, but I’d point out that insurance doesn’t collect interest. It’s like gambling, you pay more than you expect to get back based on the odds that you’ll get a particular price level of medical need. If you got that insurance money straight up and saved it yourself, you would theoretically have more money to deal with an emergency due to collecting interest and not paying the overhead for the insurance company.
The move towards nanny-pay might itself be a drain on the economy.
Emphasis on the word “might”. I’m more throwing it out just to tag it on to your question.
All insurance is like this, which is why many large companies are self-insured, with the official insurance company basically administering the program. If you have enough people in a program, you can predict the level of money you’ll need to cover everyone. You’re right that it’s like gambling. Just think of term life. You might do better saving the premiums, but if you die tomorrow your heirs win.
While companies are indeed paying more for health insurance, so are the employees - thus take home pay may be stagnating (or falling) even worse than the figures show. Compared to last year I pay a bit more for insurance, but the insurance no longer covers 100% of hospital stays, only 90%. Luckily my cardioversion was cheap, but I’d be out a lot of money if my wife’s retina surgery hadn’t been covered. (There is a maximum, so there is a ceiling as to what I’d pay.) Sure my company is paying more also, but for purposes of stimulating the economy I have less to spend, not more.
So it doesn’t seem that there is a clear answer, it all depends on what you want to measure.