April 11, 2005

An Economic Disaster?

Matthew Yglesias thinks that the nominal increase in wages of 2.5% and the increase in the inflation rate of 2.7% is an economic disaster. Of course, in reading the story we also find out that when benefits are factored in people actually did compensation grew faster than inflation.

With benefits factored in, workers' total compensation did outpace inflation in 2004, even if they didn't see it in their paychecks. But employers also are requiring workers to pay a greater share of their premiums.

So this really isn't a disaster. A problem? Sure, I'd go along with that, but disaster? Please.

On another interesting note, Matt thinks it is okay to be misleading in one's political rhetoric. Maybe he should tell Kevin Drum.

Posted by Steve at April 11, 2005 12:38 PM | TrackBack
Comments

Have you bought a 'penny' postcard recently? And why raise the first class stamp from 37 to 39 cents. Why not go to 40 and then increase in increments of 5 cents.? Do we still need pennies?

Posted by: yportne on April 11, 2005 04:59 PM

One thing that bothers me here is medical benefits. I'm betting that they form the majority of the growth in benefits an employee received. I have two concerns. First, are wages being transformed into increasingly costly medical benefits and second, are those benefits really that useful? Here's a personal anecdote.

I'm a graduate student in the University of California system. We receive a pretty ample health care package. I would guess that it's somewhere between $1000 and $1500 in value per year and includes a few hundred dollars in paid for routine medical care. My issue? I'd rather have the extra income than the paid for medical care that comes with the package. I rarely use that medical care benefit (and haven't yet in the years I've had such benefits either here or elsewhere used up my quota). My benefits are no doubt subsidizing someone else's consumption of medical care.

Posted by: Karl Hallowell on April 12, 2005 07:59 AM

I'm actually getting a pretty decent deal on my coverage. At least considering the alternatives.

Posted by: Timothy on April 12, 2005 08:50 AM

Once again, my proposal for health care reform is to make medical benifits taxable income.

Could Medicare benefits be made taxable? That would be an interesting development.

Posted by: Buzzcut on April 12, 2005 09:25 AM
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