Health Insurance Costs Rise As Wage Rates Stagnate Placing Families At Risk

Written by Dr. Amy K. Glasmeier on 11/02/2015

Health insurance premiums and wage rates are linked. A major component of the living wage tool is the amount of income individuals and family members must spent to purchase health insurance. Health insurance is critical to workers and families to reduce the prospect that an accident or unexpected illness drains a household’s savings or the lack of access to care compromises a household member’s ability to work. In the press today (http://www.wbur.org/programs/morning-edition), reports indicate health insurance premiums are going up. How will Americans pay for increased costs of health care? According to Sunday’s New York Times certainly not through employer-based increases in wage rates. Brought to light in the paper’s Review section, wage rates continue to stagnate despite declining unemployment and brighter economic conditions (http://www.nytimes.com/2015/11/01/sunday-review/the-mystery-of-the-vanishing-pay-raise.html?_r=0). Reports indicate workers’ share of “corporate income is at its lowest since the 1950s” (New York Times Sunday Review 11/01/15 pg 3). Rising costs and stagnant wages are at the heart of campaigns in support of living wages. It is no wonder that the public is clamoring for living wages as evinced in recent public opinion polls conducted for Just Capital (http://justcapital.com), an organization studying public perceptions of economic fairness and corporate responsibility. Their research reports that paying a living wage is an important expectation Americans have of corporations and employers. http://www.huffingtonpost.com/entry/americans-want-companies-to-do-better_56031902e4b0fde8b0d1274c. Bringing these two issues together, how many corporations link their wage rates to the true cost of living of their employees? We will report more on this issue in the coming weeks.