Mike Meeropol wrote: > > > If the value of compensation is the market price of the services provided -- > for example, health insurance -- then this clearly overstates the increase > in income. The "contribution" of employers to employee health insurance > premiums have gone WAY UP, much faster than wages have risen in nominal > terms, but the value of what has been purchased has declined --- The only > way to deal with this would be to deflate the compensation percentage > related to health insurance by general medical inflation as opposed to the > CPI. > The value to the worker is the money wages he saves by not paying himself, so I think the market cost is the right number. The real purchasing power of labor compensation in money terms would reflect the use of a proper price index which would include medical price inflation. Even if you value the fringes at cost, Larry Mishel has shown (and will show again in the upcoming State of Working America) that labor compensation has still stagnated from a distributional standpoint. Fringes are distributed disproportionately to higher income and wage levels, as you must know. Consumer note: Pearlstein is not one of our more incisive economics reporters.
