Rising health insurance costs negatively impact worker wages

Even though American workers are more productive than ever, inflation-adjusted median family income has dipped 2.6 percent--or nearly $1,000 annually since 2000. The culprit: Rising health insurance costs. (Source: "Rising Health Costs Cut Into Wages," Washington Post, March 24, 2008.) "Benefits now devour 30.2 percent of employers' compensation costs, with the remaining money going to wages, the Labor Department reported this month. That is up from 27.4 percent in 2000. Since 2001, premiums for family health coverage have increased 78 percent, according to a 2007 report by the Kaiser Family Foundation. Premiums averaged $12,106, of which workers paid $3,281, according to the report."

An article in the March 5 issue of the Journal of the American Medical Association stated that employer-sponsored health-care plans create the "myth" that workers are getting their health benefits for little or nothing. But, as the authors wrote, "workers and households pay for health insurance through lower wages and higher prices." This results in workers, unions, and employers having to decide between better wages or keeping health insurance benefits.