How Health Care Costs Hurt U.S. Wages

The national health care discussion has largely centered on the 47 million Americans who have no health insurance. But there is another story here - rising health care costs are eating away at U.S. wages. The Washington Post's Michael A. Fletcher takes a look --    

Employees and employers are getting squeezed by the price of health care. The struggle to control health costs is viewed as crucial to improving wages and living standards for working Americans. Employers are paying more for health care and other benefits, leaving less money for pay increases. 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.

Fletcher's piece is important, but in many ways, it's not new news (at least not to NDN, that is). For several years, we've been calling for a comprehensive economic strategy that includes reforms to slow rising health care and energy costs, because globalization intensifies competition in ways that force companies to cut jobs and and wages when costs sharply increase. As Rob Shapiro, chair of the Globalization Initiative, recently laid out in The Landscape of Globalization:

Reforming our health care and energy practices, in short, is now the number one jobs and incomes issue, and one on which American workers and American businesses have real common cause. Both areas are already major public policy issues. Recognizing how the enormous increases in health care and energy costs of recent years directly and substantially affect wages and jobs should give greater sense of urgency to finally addressing both areas, in specific ways that will slow those increases.

Simon has also contributed to this discussion in his blog, taking the longer view on the need for intelligent and comprehensive policies to address the challenges of globalization. 

The economic path forward will not be easy, inexpensive or full of quick fixes. Globalization is bringing about structural changes in our economy that are not well understood, and helping make the American Dream a much more distant reality for too many. Whatever set of policies the nation pursues in the years ahead, it is critical we take a long-term view, and advance a comprehensive agenda that tackles the underlying structural challenges of what was already a very tough go of it in the age of Bush.

Just last week, Rob and Simon combined forces to launch new video on the state of the economy.

NDN remains committed to pushing Congress, our presidential candidates, and other policy experts to contribute to developing a new economic strategy that takes on the challenges of tomorrow. We invite the NDN community and our friends in the press to take a closer look at our prescient work to date.