Well, let's see if we can't help by busting out The Treatment(tm).
LordMortis wrote:I not conflating.
Well, you aren't conflating those two things, but that's not what I suggested you might be conflating.
To me, it *seems* like you are conflating the issue of compensation with the issue of cost of living. Maybe you aren't. But cost of living is part of the set of equations that you care about. It's not part of the set of equations that determine your compensation. So while I can agree with your position that an increase in compensation doesn't matter if it doesn't get you anywhere, that in particular isn't really a problem with stagnating compensation. It's a problem with the rise in cost of living.
As a simplified example: Someone gets paid $50,000 per year. The cost of bread and milk goes to $10/loaf and $15 per gallon. If that person gets a $1000 per year raise, but that $1000 isn't enough to cover the new cost of bread and milk, their wages/compensation haven't stagnated. It's not on the employer to determine compensation based on the cost of bread and milk.
The national average wage in 1980 was about $12k. The national average wage in 2016 was about $48k. $12k in 1980 dollars converts to about $36k in 2016 dollars. That tells me that clearly wages haven't stagnated, right? (the national wage averages are taken from the Social Security Administration, and the inflation calculations are taken from a CPI inflation calculator).
And that's just wages, that's not total compensation.
LordMortis wrote:You're dictating the terms of what it means to be compensated to fit your narrative.
I don't think that I'm doing that. I'm explaining how I interpret compensation, which defines my "narrative". I don't have a narrative that I'm trying to push, and so am not trying to game the discussion to match it. And I'm fully acknowledging that you have a different interpretation, which is causing different conclusions. I'm not assigning any value judgment to either conclusion (I'm not suggesting that I am right and that you are wrong). I'm trying to make a determination for which interpretation I think is more correct.
LordMortis wrote:I don't care of I am 500x if 500x still purchased one unit of health care when x used to purchase one unit of health care.
Yes, that's why I drew a distinction between what it seemed like you were considering the "compensation" (one unit of health care) versus what I was considering the "compensation" (the cost of one unit of health care).
For what it's worth, my position is based on the notion that the cost of one unit of health care is totally unrelated to my compensation. It's part of my cost of living, whether my employer pays it or not. So if my employer only paid 50% of the premium, I would have to pay the other 50%. My position is reinforced by the fact that my previous employer did not pay 100% of the premium. I had to pay the balance out of my salary. Not having to pay the balance out of my salary was a direct (and substantial) raise when I switched jobs (even if my salary was the same gross amount, although my gross salary was increased as well).
LordMortis wrote:Now, if you want to make things interesting again, we can move on to what unit of health care provided in the late 70s vs what unit of health care provides in 2018
Given your position on what is actually considered compensation, I would say that defining a unit of health care provided in the late 70s vs what a unit of health care provided in 2018 means. Most people will probably compare out of pocket costs in late 70s versus out of pocket costs in 2018, although I think that a better measure would be a comparison of the % paid out of pocket vs real cost. If you are paying a lower % of the cost now, because the cost has exploded so much since the 1970s, is that better or worse for you? I mean I understand that in terms of raw dollars it's worse, but since the cost of healthcare has nothing at all to do with your wages, I don't know that I would agree that it's economically true.
LordMortis wrote:Dollars seem arbitrary to me, whereas what the dollars translate to seem like what we really care about.
But you don't get paid in terms of what we really care about. IMO, that's the disconnect here. And while I understand why you are viewing it through that lens, I don't see any reason why I should.
LordMortis wrote:I would rather talk about compensation in terms of how many Hershey bars you could buy in 1979 for $.25 vs how man you could buy today for $.25 and compare that wages than I would wages without reference points at all. How many Hershey bars my employment gets me is much more important than how much direct deposit increases a number at my credit union twice a month, without context.
Isn't that the point of comparing wages, while adjusting for CPI? If I took the average wages in 1980, and applied CPI to them to bring them into 2016 dollars, I would discover that actual average wages in 2016 are 33% higher than I would expect if wages "stagnated" and only grew at the rate of inflation.
I get the immediate counter to that, which is that big ticket items like health insurance premiums aren't included in the CPI computation (or at least I don't think they are). But neither are curved 4K TVs. Are we allowed to just keep adding things to the CPI computation until it achieves the desired result?
LordMortis wrote:From an outrageous perspective.
Company one can get health care provision x for $7000 a month
Company two can get health care provision x for $200 a month
Both companies offer you the same the health care x if you come to work for them.
If you are seeking compensation, this means logically you should work for company one because they are compensating you 35x as much for health care costs.
I don't accept your math.
Can I adjust your scenario slightly?
Company A and B can get the same / similar health care provision for $1000 a month
Company A pays 100% of that $1000 premium as part of their benefits package
Company B pays 80% of that $1000 premium as part of their benefits package
All other things being equal, we would agree that Company A is offering additional compensation than Company B, right? I understand that the real world is more complicated than this. Company A and B might be offering different salaries (maybe Company A offers salary that is $100 less per month). Generally Company A and Company B won't be offering identical plans, and other factors will contribute to different pricing that they are able to get from the insurance carrier.
I think the best we can achieve here is that when contemplating compensation, it seems obvious that we are both right. Clearly the quality and out-of-pocket cost of the health care provision is one of the critical pieces of information many people use when evaluating opportunities. But just as clearly (to me), the amount of the burden that the company is shouldering towards paying those premiums is a critical piece of information.
I went from paying $320 per paycheck for health insurance to paying $0 per paycheck for health insurance, with no loss in salary. It's hard to not consider that an obvious and direct increase in compensation.