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Rising health costs have wiped out wage increases – for the past 12 years!

Christian Schappel
by Christian Schappel
October 18, 2011
1 minute read
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Median household income (adjusted for inflation) has fallen from around $55K to roughly $50K since 1999, says the U.S. Census Bureau. There are two big reasons for the drop.
They are:

  1. The recent economic crises, and
  2. The fact healthcare costs increases for employers have soaked up money that would’ve gone into wage increases (since 1999 the cost of health insurance provided by an employer has risen close to 160%).

One thing you should know about the $5,000 drop in median household income: That figure does not take into account workers’ increased share of health insurance premiums, deductibles and other out-of-pocket expenses over the years, according to a recent report by the Milwaukee Journal Sentinel.
So the decline in household income is actually much greater.
An analysis of healthcare costs by David Auerbach, a health economist at Rand Health, and Arthur Kellermann, VP of Rand Health, paints a less bleak picture — but still shows the impact skyrocketing healthcare costs have had on families’ income.
The analysis found the income gains of a median income family of four from 1999 through 2009 (after accounting for inflation and including the cost of health benefits paid by an employer) were almost completely wiped out by increased spending on health care.
It found the average family of four had only about $95 more in monthly income to devote to non-health spending in 2009 compared to 10 years earlier.
Source: “Wages hit by rise in cost of health benefits,” by Guy Boulton and Ben Poston, Milwaukee Journal Sentinel, 10/1/11.

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