Ezra Klein is a nice, smart, young guy who’s made a name for himself by posting about healthcare reform. I believe that for the best of reasons he’d prefer that the U. S. healthcare system were like that of France, Germany, or even the United Kingdom. There are however, limits to his expertise viz.:
But health-care coverage is not a benefit. It’s a wage deduction. When premium costs go up, wages go down. When premium costs go down, wages go up. Yet workers don’t know that.
Uh, no. There’s a good reason that workers don’t know that”. Because it ain’t true.
Like a lot of people Ezra appears to confused about wages and compensation. Total compensation = wages + benefits. Since benefits are untaxed, $1.00 worth of benefits is worth something like $1.28 worth of wages.
Historically, that’s the reason we have employer-provided healthcare insurance at all. When wage and price controls were imposed during World War II, employers needed some non-wage method of attracting and holding employees so they offered healthcare insurance.
For the last thirty or so years an enormous proportion of the increase in workers’ total compensation has come in the form of benefits, particularly healthcare insurane benefits.
And workers know this. Or, at least their unions do. It’s the reason that unions have been fighting the taxation of healthcare insurance tooth and nail. A large part of their workers’ compensation is in the form of healthcare insurance, strategically so since it’s a way of getting more money than they could get through wages alone. If UAW workers were compensatd in the form of wages alone, it would amount to about a 10% pay cut.
It must be remarkable living in a world in which everyone acts against their own best interests. Certainly not the world I live in where I see lots of prudent, even ruthless self-interest.