October 30, 2003
Employment Costs are Up
According to the Bureau of Labor Statistics total compensation costs for civilian workers rose 1% from June to September of 2003.
The bulk of the increase has been in the cost of benefits. For private industry the cost of benefits increased 1.4% while the cost from wages and salaries went up 0.9%.
Posted by Steve at October 30, 2003 10:18 AMThis has already become part of the new Left meme on the economy:
"There may be new jobs, but since there are fewer benefits, the jobs are, net, not as good."
This is clearly a play on the "McJobs" theme of the Reagan years.
On a more serious note, however, my source on medical spending says that this is likely to be a steadily growing issue. Since medical spending continues to spiral, more and more employers are limiting their health benefits. This, in turn, affects consumer behavior, both in terms of choices of health plans, but also what they choose to do w/ those plans.
And it's apparently a factor (where benefits are constant but employee chip-in rises) in rising levels of un-insurance, i.e., more people choose not to go for medical benefits b/c they're being forced to pay out more for them.
Posted by: Dean on October 30, 2003 11:13 AMI agree Dean it is going to be a growing issue, which is why I find Max Sawicky's views on Medicare so unfathomable. Only a complete dunce would say there is no demographic issue with Medicare.
Posted by: Steve on October 30, 2003 12:57 PMIs there a demographic issue w/ Social Security?
If there is one, then there MUST be one w/ Medicare, b/c they're paid for about the same way (transfer payments, via a payroll tax), and they cover roughly the same crowd (>65).
If there ISN'T one in SS, there STILL might be one in Medicare, since not only are people living longer (and therefore taking Medicare payments for a longer period), but the healthcare costs of the elderly are, often, substantially higher per incident. And they are often chronic (i.e., they go on and on), rather than episodic (single incident, then cured).
This one is eventually going to come and bite us....
Posted by: Dean on October 30, 2003 01:00 PMDean, check out this post. In particular look at the graph. The graph shows the increase in cots associated with aging and the increase in costs due to non-aging issues. Its pretty clear the bulk of the problem is due to aging.
Your intuition is correct here, all around. You can have a problem with Medicare and not SS due to the acceleration of medical costs.
Posted by: Steve on October 30, 2003 01:35 PMWhat's on your mind, if you will allow the overstatement?
