Study: Rising Health Care Costs Gobbling Up Workers’ Take-Home Pay

It’s no secret that the cost of health care for employers and employees has dramatically increased over the years. A new study, however, suggests these ballooning expenses may now also be depressing employees’ actual take-home pay.

Employers now spend about $537 billion on group health insurance policies per year, up about 15 percent from 2000 and roughly 20 times more than employers spent in 1960, according to a report issued Wednesday, February 13, by the Kaiser Family Foundation. The amount employers spent on health care increased almost every year during the past five decades, according to the report.

The Kaiser Foundation noted that employers have accordingly paid their employees lower total wages—as a portion of their total compensation—as these health care expenses have consistently increased. Specifically, Kaiser examined total employee compensation as a share of gross domestic product during a period of more than 45 years.

Total wages have fallen from 51.8 percent of GDP in 1960 to 45.6 percent of GDP in 2006. At the same time, however, health benefit costs have grown from 0.6 percent of GDP in 1960 to 4.1 percent in 2006.

“While policymakers and others bemoan the rapid growth in the already high cost of health care, policy options that would have a significant impact on cost growth have not emerged,” stated the report, which was prepared by Paul Jacobs, a health research consultant at the Kaiser Foundation. “Absent fundamental change in cost growth, or a retreat from our country’s reliance on employer-provided health insurance, these trends seem likely to continue.”

Also of note, the Kaiser Family Foundation pointed out that health insurance premiums have risen 78 percent since 2001, while inflation and workers’ earnings have increased only 17 percent and 19 percent, respectively, during the same period.

Souce: Mark Bruno of Financial Week, a sister publication of Workforce Management, 2/14/08.

Job Seekers: Keeping the right perspective

Abridged: CareerSetEtc.com

SAN FRANCISCO, CA -- Most of us prefer a full-time, 40-hour-a-week job. We tend to like weekends off, and, if we are skilled, expect appropriate compensation for the value we provide to a company. Does any of this sound like what you get from temporary jobs? Well, no. But such jobs can be valuable career builders, provided you keep the right perspective

If you're in a temp job situation, waiting for the right career break, it is essential to not let discouragement get the better of you. The most important thing to remember is that the circumstances you're facing now are not permanent. Things can and do change in a hurry, but you've got to stay positive.

Perhaps more to the point, temporary jobs can be a character-building experience. If you weather several months of this and are able to stay positive, at the end, you'll be a stronger and more capable person. Then when the right opportunity does finally come along, you'll be ready. You will believe in yourself and your abilities, knowing that you can make it through tough situations. Your confidence will go a long way in getting you the job you've been waiting for.

Source: The Career Newsletter, 2/18/08