Where Did Your Raise Go? It Went to Health Care

Employees are getting more expensive. But wages aren't rising. What is? Everything else that we call "compensation" -- especially health insurance, retirement benefits and contributions to Social Security and Medicare.

Take health care, alone: Between 1999 and 2012, workers' health care costs grew four times faster than earnings, according to a recent report from the Kaiser Family Foundation. As for everything else, employer-paid benefits have increased from less than 10% of worker compensation in the 1960s to nearly 20% today, according to USA Today.

Screen Shot 2012-10-19 at 4.04.07 PM.png

These are aggregate figures, so they might be skewed by extremely expensive employe health care at the top. But there is little doubt that rising medical costs are eating into family budgets from two directions. First, they are forcing employers to withhold more money from wages to pay for health care. Second, they are forcing families to pay more for premiums and out-of-pocket pay. If the monthly cost of medical insurance rises by $100, the worker might to pay $25 more while the other $75-a-month comes out of compensation. Call it a "raise" if you like, but it sure won't feel like it ... unless you get sick.

Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

Why Is Google Making Human Skin?

Hidden away on Google’s campus, doctors at a world-class life sciences lab are trying to change the way people think about their health.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register with Disqus.

Please note that The Atlantic's account system is separate from our commenting system. To log in or register with The Atlantic, use the Sign In button at the top of every page.

blog comments powered by Disqus

Videos

Why Is Google Making Skin?

Hidden away on Google’s campus, doctors are changing the way people think about health.

Video

How to Build a Tornado

A Canadian inventor believes his tornado machine could solve the world's energy crisis.

Video

A New York City Minute, Frozen in Time

This short film takes you on a whirling tour of the Big Apple

Video

What Happened to the Milky Way?

Light pollution has taken away our ability to see the stars. Can we save the night sky?

Video

The Pentagon's $1.5 Trillion Mistake

The F-35 fighter jet was supposed to do everything. Instead, it can barely do anything.

More in Business

Just In