On Wed, 1 May 1996, Denny Braun wrote:
> Greg Ehrig wrote:
>...
>
> > A more up to date example of bias affecting analysis is the current
> > "stagnant wage" debate here in the US. It is true that real cash
> > wages among manufacturing workers remain stagnant, BUT what is
> > not mentioned is that, when non-cash benefits (pension, health,
> > in-kind compensation) are factored in, total compensation (wages +
> > benefits) has continued to increase. ...
> As for the claim that employers are really paying as much or more in
> compensation when fringe benefits are factored in, Lawrence Mishel and
> Jared Bernstein, THE STATE OF WORKING AMERICA 1994-95 (p. 114) show:
>...
> 2. An increase in employer fringe benefits of 12.5% for health and pension
> ($1.52 up to $1.71) and an increase of 20.9% in employer payroll taxes
> ($1.29 up to $1.56). In essence, Ehrig is partly correct regarding the
> employer increase in this area.
Can we make an empirical observation whether the increase in
dollar value of finge benefits for health is an increase in quantity or an
increase in price? One useful indicator would be the percentage of
workers covered by health insurance: increasing health benefits in payment
terms as a hidden wage increase should not be associated with a declining
percentage of the workforce covered, while increasing health benefits in
payments terms in response to sectoral price inflation would likely be
associated with a declining percentage of the workforce covered.
And to account the increase in taxes for social security funding
on the fantasy that a nation can make provision for claims on future
product by saving up the funds to do so as an increase in 'benefits'
businesses pay to workers goes counter to common sense. Both the
employee paid contribution and the employer paid contribution are
components of a tax, and represent a reduction in the disposable income
of the workers. It can be counted as part of wages to consider the
hiring decisions of firms, but not when dicussing the benefits received
by workers.
Virtually,
Bruce R. McFarling, Newcastle, NSW
ecbm@cc.newcastle.edu.au