Waiting for a Raise

Rising healthcare costs need to be understood as the most important financial issue affecting the middle class. This slow, inexorable squeeze and subsequent pressure on jobs and income must be released. The St. Louis Fed helpfully illustrates the volcanic rumbling in this chart of median household income:

Most American workers waiting for a raise feel like the unfortunate Pompeii resident above, frozen in time.

Or are we?

The Kaiser Family Foundation has updated its annual survey of employer-sponsored health plans for 2016, illustrating another banner year for premium increases — for the first time averaging over $1,500 per month for family coverage:

What happens if we recognize that healthcare benefits are compensation, and add these two graphs together? After all, every dollar paid towards health insurance is a dollar that could have gone home with the employee (minus taxes, of course):

By this crude measure, total compensation increased from $63,700 in 1999 to $74,061 in 2015 — a 16% increase, instead of a 2% decrease in median income over the same period.

While conflicts of interest within the current system may prevent a graceful transition, it is still possible for concerned individuals and businesses to shelter from the coming eruption. Specifically, employers have an unprecedented opportunity to generate value by teaching their employees the financial and physical rewards of good health.

Employees have everything to gain from making better lifestyle choices to reverse chronic disease, and the best way to reduce healthcare spending is to require less healthcare.