Wages Are Stagnant While Healthcare Costs Rise

Wages Are Stagnant While Healthcare Costs Rise

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Why Our Wages Are Going to Increased Healthcare Costs

Life in the USA is arguably very good for Americans. Unemployment is at 3.6 percent through May 2019. This is improved by .3 percent since fall of 2018. While textbook logic indicates a strong economy should push wages upward as business opportunities increase and more labor is needed that’s not the case in our country’s current workforce.

Corporate funds once used to pay wages are now being used to fund the employer portion of health insurance costs. So, wages are often stagnant, while healthcare costs continue to rise.

Workers in the lowest salary ranges are suffering the greatest financially with this shift in corporate spending.

To illustrate how the employer contribution is a bigger portion of a lower-earning employee’s total compensation, consider two-worker families, as follows. A $5,000 family-deductible is 10 percent of the take-home pay for someone earning $50,000 and only 5 percent of take-home pay for an employee earning $100,000 annually. In this way, when employers choose to spend funds on healthcare instead of wages, it’s the lower-income families who suffer the most.

A study co-sponsored by the Council for Affordable Health Coverage points to a rise in healthcare costs as the main reason we are often seeing downward pressure instead of wage increases for employees.

Instead of wages going into our paychecks, into our pockets, and into healthier living, the dollars we earn are increasingly spent on medical tests, exams, and medications.


According to the Bureau of Labor Statistics, wages have gone up a mere two percent since 2015. While American workers are individually struggling with stagnant salaries, healthcare spending weighs heavily on the employer’s bottom line. Contact BenefEx to discuss how to structure the most useful health benefits plan for your company today.