employees aren’t seeing raises—and it’s not because of their performance. it’s because of rising health care costs.
“Employees may not realize it, but they are getting more expensive.
“It isn’t that their paychecks have suddenly started bulging. It’s that other employment costs—like health and retirement benefits—continue to rise. Benefit costs in the private sector were up 4% year-on-year in the second quarter, more than double the 1.7% increase in wages and salaries. On Friday, the Labor Department’s employment-cost index for the third quarter is likely to show this trend continuing.
“The trouble is, this means employers are paying more for workers without actually paying their workers more. Higher benefit costs eat into profits without directly raising a company’s output in the way hiring more workers would. In fact, this can actually discourage hiring. And the more that companies have to spend on benefits, the less take-home pay goes to workers. This undermines the virtuous cycle of consumer spending and job growth needed to help lower the 9.1% unemployment rate.”
read the full article in the wall street journal.