Increased Health Insurance Costs Affect Worker Compensation, Bureau of Labor Statistics Says
Health insurance costs are "swallowing up more of employers' total spending on compensation to workers," according to new numbers from the Bureau of Labor Statistics, the Boston Globe reports. Spending on benefits by private-sector employers increased by 24% from March 2000 to March 2004, in large part because of higher health insurance premiums, according to BLS. Over the same period, worker wages increased by 15%, but they represent a "declining share of the total compensation employers pay to workers," the Globe reports. The current trend marks a "sharp reversal" from that of 1994 to 2000, when worker wages increased at a faster rate than benefit costs, according to the Globe. The BLS numbers indicate that benefits represent 29% of total worker compensation in 2004, compared with 27% in 2000, and that wages represent 71% in 2004, compared with 73% in 2000. According to several studies, many employers in recent years have shifted more of the cost of health insurance to workers through higher premiums and copayments. Denis McSweeney, head of the Northeast region for BLS, said that many employers are "constrained by the cost of benefits," adding, "They're there to run a business, and they realize with rising benefit costs they don't have the ability to give everyone the increase in wages." Heather Boushey, an economist at the Center for Economic and Policy Research, said, "The insurance costs have risen so much for employers. It's obviously got to come from somewhere" (Blanton, Boston Globe, 6/25).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.