Donald Trump is second only to Ronald Reagan

[RunningMn9]

That may be the case for you, but for an increasing number of American workers, they’ve seen their wages go up so slowly that inflation is making their “gains” completely immaterial, while at the same time they’re losing benefits like health care, or seeing their defined-benefit retirment plans get turned into defined-contribution retirement investment accounts that will almost certainly not provide a livable amount of income when the workers retire.

I was simply using my own case for demonstration purposes. The Forbes article that I linked treats the economy as a whole, and doesn't focus on my personal economics. My quick conversation with the author of that article started over another article he had written: A conservative scholar questions whether the US really has an inequality problem.

When trying to understand that, I happened upon this article from the Economic Policy Institute (EPI) on wage stagnation. Scott and the EPI don't see eye-to-eye, needless to say. I'm not an economics expert so sorting through who is making the correct points is a bit of a fool's errand (for me).

My understanding of his basic point is that a focus on wages ignores what has become a big part of our compensation, which is benefits that we want. And while I understand and agree that not everyone gets benefits, or gets good benefits, from the perspective of compensation that's fairly irrelevant. It isn't the fault of my employer that the cost of health insurance has skyrocketed. The notion that he is expected to match that rising cost, while also increasing my wages irrespective of those cost increases to him, is absurd to me.

Of course, I work for the greatest boss in the land, and our salary increases always exceed inflation anyway, but I don't feel that he is obligated to do that. Certainly not for me, as I am already sufficiently compensated (IMO).

[LordMortis]

If the cost of health insurance goes up for my boss, for the same plan, and he continues to pay it, of course my compensation has gone up.

I don't think I accept that. If a dollar suddenly became two dollars but everything cost twice as much, I would not accept that I am being compensated twice as much for my work. That's economic voodoo. If my work place is providing my insurance that covers x as my compensation and the cost of x goes up my compensation is not being increased. This is part of the problem of healthcare to the workplace.

As someone who just had the rug ripped out from underneath him with regard to healthcare availability I feel the real compensation changes and have no say in the matter, irrespective of how the company operates or pays. They could have their costs increased dramatically and may be compensating the insurers way more but what I am being compensated is considerably worse.

I'm 98% sure LM mispoke and meant to reverse the question. Still, I'm hard pressed to imagine a scenario where benefit costs go down.

I don't think I misspoke. I may not be clear but I stand buy what I said. Not being clear is a gift I was born with.

If the cost of health insurance goes up for my boss, for the same plan, and he continues to pay it, of course my compensation has gone up.

But your purchasing power and standard of living have not gone up. If your employer is paying $1,000 a month now for something that used to be $100, you aren't 10x richer, nor are you enjoying 10x better health. At best he saved you from being $1,000 a month poorer -- I don't mean to diminish that, but you didn't get ahead.

This! Kraken gets me.

I'm not 10x richer. But my compensation has increased by 10x. Standard of living stagnation is a different thing than compensation stagnation.

Then we're holding different conversations. I don't care if I make twice as much as my father did. I could never support a family of 7 of my salary and I won't be getting a pension and work sponsored health care for the rest of my life.

In my end of the conversation your compensation is the same. Your compensation isn't the direct deposit place holder for a number you never see increase. Your compensation is the promise of a level of healthcare provision should you need it with limited reduction of the numbers in that place holder.

What you want to talk about doesn't interest me. I'm not sure why it should. That might be a failing on my part.

It isn't the fault of my employer that the cost of health insurance has skyrocketed. The notion that he is expected to match that rising cost, while also increasing my wages irrespective of those cost increases to him, is absurd to me.

It's not their fault but it is part of what they sold you on when you went to work for them. They didn't sell you on "we pay $500 a month for your insurance and we may alter the deal at any time and btw what that $500 gets you is subject to the whims of the medical market". If they elect to continue pay $500 as costs increase or switch carriers to one that provides less benefits, then I am being compensated less. The dollar cost of my compensation doesn't matter to me. I'm not working for fear of losing the dollars paid for my health care. I'm working for the continuation of my health care benefit.

My guess is when you start to retirement plan you'll see the benefit of employer provided health care in terms of what is provided and not in terms of how much they are paying. Though if they don't provide health care as part of pension as most don't anymore, you'll shift when you have to look at what you will be paying because your agreement will no longer be with your employer, it will be with your insurer.

[Rip]

It's bad enough that the Koch machine is talking about supporting Democrats instead of Republicans over trade, tariffs and spending.

You sure it isn't more about access to cheap labor?

[Rip]

No worries, Trump will be gone soon and you will need to find someone else to blame for whatever calamity is being anticipated then. Been there done that, again and again and again. I figure we are ahead of the game as Reagan was supposed to have destroyed democracy decades ago.

And Obama, and Clinton and yada yada yada. Enough with the “republicans are such victims”. Both sides bitch when their horse isn’t winning. The only difference is that this time, one side can definitively say “he lies...like a lot...here’s proof”. And we’re talking multiple times a day, not just every now and again. And he may very likely be a stooge for Putin.

If a dem wins next time, you can go back to bitching about that and we’ll act like you are now. How’s that?

That's the rub. I have lost faith in our system as a whole. I had hope that the shitstorm that Trump is causing would shock the system back into shape, but the more time goes by, the more it seems that's unlikely.

That whole line of reasoning is such crap. You don’t treat a head wound by hitting the patient again on the other side of the freakin’ head. Then to act surprised when the patient doesn’t get better afterwards?

You had me right up until you decided this time is different. It isn't.

[hepcat]

So you don't think there's demonstrable proof that Trump lies far, far more than any other politician?

[RunningMn9]

I don't think I accept that. If a dollar suddenly became two dollars but everything cost twice as much, I would not accept that I am being compensated twice as much for my work.

You are conflating two things that have no actual relationship. Your employer compensates you $X one day, and then $X + $Y the next (where $Y > 0). Your compensation has increased, regardless of what you can buy with $X + $Y. I understand your position where you can still fall behind if $Z (cost of living) exceeds $X + $Y, but that has little or nothing to do with your employer or your compensation.

Outside of the factors that are normally considered part of inflation, in which case they are factored into the analysis already. I guess what I'm saying is that I'm sympathetic to the notion that you are using "wage stagnation" to describe the impact where your rise in compensation (which is undeniable likely) is still being outstripped by rising cost of living (due to factors outside inflation). I just would like to be more precise when we are talking about the math, which is where economists are going to dwell.

If my work place is providing my insurance that covers x as my compensation and the cost of x goes up my compensation is not being increased. This is part of the problem of healthcare to the workplace.

We will have to agree to disagree on this point I think. I *think* the issue is that you view the "health insurance plan" as the benefit, and so it doesn't really matter to you how much it costs your employer, whereas I view the paying of the health insurance premium as the benefit, and so I interpret cost increases to my employer differently.

[Rip]

So you don't think there's demonstrable proof that Trump lies far, far more than any other politician?

I think they all lie more than most of us can calculate. Proof is just a matter of him sucking at it.

[LordMortis]

You are conflating two things that have no actual relationship. Your employer compensates you $X one day, and then $X + $Y the next (where $Y > 0). Your compensation has increased, regardless of what you can buy with $X + $Y. I understand your position where you can still fall behind if $Z (cost of living) exceeds $X + $Y, but that has little or nothing to do with your employer or your compensation.

I don't accept this. When considering compensation, we are consider all compensation. Remember that was a rule I accepted in your inequality article. I don't accept that my considerations of my health care compensation are the monetary value of health care at the moment. My health care compensation is for the promise of health care. To tell me that if health care costs increase to 500x for the same level of health care I getting for x, my compensation has gone up 500x. The cost to my company for providing that level of health care has gone up but my compensation, the level of health care I am receiving, remains the same. I not conflating. You're dictating the terms of what it means to be compensated to fit your narrative. So I am telling you right up front where I'm coming from. If that's not a conversation you are interested in, so be it. It's the one that interests me and when I see "stagnant" compensation, that's part of the lens through which I am looking. 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. 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, how "productivity" has advance the technology of the supply of compensation, not just dollars to compensated.

I just would like to be more precise when we are talking about the math, which is where economists are going to dwell.

Which is weird. Your idea of precision seems like my idea of ignoring data points. Dollars seem arbitrary to me, whereas what the dollars translate to seem like what we really care about. 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.

We will have to agree to disagree on this point I think. I *think* the issue is that you view the "health insurance plan" as the benefit, and so it doesn't really matter to you how much it costs your employer, whereas I view the paying of the health insurance premium as the benefit, and so I interpret cost increases to my employer differently.

I think we have to figure out how to old the same conversation. Until we do, we're stuck but at least we're coming close to agreement on what our different conversations are. I don't think any one doesn't see " "health insurance plan" as the benefit" but I go further and say its not just a benefit, it is the actual compensation. You don't, you see the dollars the company spends on paying for health insurance as the compensation.

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.

[Zarathud]

Trump doesn't just suck at lying. He's pathological about not caring about telling the truth.

If the goalposts are how much someone lies, Trump is by far the worst politician.

If the goalposts are not ever lying, Trump is still the worst.

[hepcat]

So you don't think there's demonstrable proof that Trump lies far, far more than any other politician?

I think they all lie more than most of us can calculate. Proof is just a matter of him sucking at it.

Ah, so your baseline is "everyone sucks". Got it.

[Isgrimnur]

Basket of goods logic

The cost of benefits to your employer certainly impacts their other decisions, but in most cases, the employees don't care about what the cost to their employer is, they care what the direct impact to them is. And putting the costs on their W-2s isn't going to make most of us start caring about it.

[LawBeefaroni]

If my work place is providing my insurance that covers x as my compensation and the cost of x goes up my compensation is not being increased. This is part of the problem of healthcare to the workplace.

We will have to agree to disagree on this point I think. I *think* the issue is that you view the "health insurance plan" as the benefit, and so it doesn't really matter to you how much it costs your employer, whereas I view the paying of the health insurance premium as the benefit, and so I interpret cost increases to my employer differently.

So what happens your insurance changes to a lesser plan at a higher cost? Is that increased compensation? What about if the reason for the switch isn't market pricing but because the boss is in a relationship with the sales rep at the new insurer? ( I know your awesome boss wouldn't do this, but for the sake of illistration, let's pretend).

I do get that total compensation is different than wages. Maybe we need a different measure, like (take home pay + pension/401k contribution) - (taxes + health insurance + medical expenses). I mean we can carve up and analyze corporate earnings in more ways than a baseball career. Why aren't there more commonly used metrics for wage-earners?

[LordMortis]

Basket of goods logic

The cost of benefits to your employer certainly impacts their other decisions, but in most cases, the employees don't care about what the cost to their employer is, they care what the direct impact to them is. And putting the costs on their W-2s isn't going to make most of us start caring about it.

I care. I treat company money like it's my own. But I also consider what they are providing to me is the health care benefit, not the burden of the price of the health care benefit. If some other company offers me the same care package or better, my preference is not based on either companies ability to negotiate for that level care. My preference is based on the level of care provided and how much comes out of my pocket.

I can take that a step further, though it actually gets more abstract. My company does a 3% match for 401K and allow me take advantage of up to $18,500 a year in safe harbor through that 401K. They love my 401k company because of the rates they've negotiated. I hate the investment company offerings for investment and I am unimpressed with the commissions they charge me. I would consider it a better compensation if I get that same 3% match and up to $18,500 in safe harbor at company with better investment selections with lower commissions to me, irrespective of how much it costs my employer to use the investment company. What they pay to be able to compensate me with an identical or superior 401k plan is irrelevant to the purposes of how I perceive compensation.

[Isgrimnur]

I recently started up my 401k contributions again because I'd maxed my Roth IRA $5,500/year limit. My 401k has all of 13 options.

The government wants you to equate the amount of funds that your company spends on healthcare coverage to dollars rather than a basket of goods. That's the whole point of putting it on your W-2. So that, supposedly, you'll be grateful for how much extra they pay.

[stessier]

That's the whole point of putting it on your W-2. So that, supposedly, you'll be grateful for how much extra they pay.

Is that really why it's there? I just always assumed it meant I'd be taxed if it hit some level but I just didn't make enough. I also always wondered how they came up with the number. My company is self insured - and I'm in a high deductible plan. I know what they pay and what I pay. If the difference between that and what they report is the administrative costs of the plan, we need to get a new plan.

[LordMortis]

I recently started up my 401k contributions again because I'd maxed my Roth IRA $5,500/year limit. My 401k has all of 13 options.

We have like 30+ options. That's part of what my company considers a selling a point. I find the options to be terribly managed. As I learned more and more I basically said screw your options and the vast majority of my tax deferment (and match) is going in to their version of SPY, for which I am charged something like 1.5% annually and my company is also being charged. Where as if I forego the safe harbor contributions aka tax deferment with penalty for withdraw before 59.5 and invest myself it costs me $6.95 per trade (once in and once out) and .1% annually to invest directly myself.

The more I think about it, the more I debate reducing my contributions to the 3% match, accept the greater tax burden now and try to align myself for a day where my income is basically nothing later with all of the benefits it may entitle me to, such as increased access to reduced health care costs. The problem is, with our current tax system and federal government and "deal making", we can't prepare for what 2019 holds in store, much less 2024 or 2029 or something further.

Which brings us right back to Drazzils thesis (with no argument)

I think that Donald Trump is second only to Ronald Reagan in the destruction of the social safety net.

[LordMortis]

That's the whole point of putting it on your W-2. So that, supposedly, you'll be grateful for how much extra they pay.

Is that really why it's there? I just always assumed it meant I'd be taxed if it hit some level but I just didn't make enough. I also always wondered how they came up with the number. My company is self insured - and I'm in a high deductible plan. I know what they pay and what I pay. If the difference between that and what they report is the administrative costs of the plan, we need to get a new plan.

Yeah, I have the option to take my contribution pre or after tax, so I thought the purpose of the W-2 expression was to be grateful to federal government for putting health care subsidies in your employers hands.

[Isgrimnur]

Right now none of it is taxable.

DD--Cost of employer-sponsored health coverage. The amount reported with Code DD is not taxable

Forbes

The requirement that the benefits are reported on your form W-2 is "for informational purposes only." The purpose of the rule, according to the IRS, is to "provide employees useful and comparable consumer information on the cost of their health care coverage." And believe it or not, that specific requirement wasn't a partisan move: it was actually proposed by a bipartisan quartet made up of Sen. Max Baucus (D-MT); Michael B. Enzi (R-WY); Sen. Charles E. Grassley (R-IA); and Sen. Ron Wyden (D-OR).

But let's be honest: is it really just for informational purposes? The IRS and Congress both say yes - for now. But a number of taxpayers fear that it's not. That fear isn't totally unfounded. The tax free treatment of health care insurance benefits is a whopping $180 billion tax break to employees. And while for now raising the notion of taxing health care coverage - especially now that it's mandated - would be political suicide, that doesn't mean that won't change. You know that somewhere, some Senator has circled that number - $180 billion - in red ink.

[Isgrimnur]

Grassley (2008)

Grassley said, "The point of the proposal is to inform people about their health care costs. Once informed, they might seek changes including improved efficiency, reduced waste and fewer unnecessary procedures, balanced with the natural need to have good coverage. Some employees might want to receive different compensation in the form of a higher salary, additional vacation, or more child care instead of more health coverage than they need. As long as people are insulated from the cost and just think someone else is paying for it, then it’s easy to overlook expenses. But once they realize they themselves are paying for it, it should spark a genuine conversation about what to do. Without any knowledge of how much they are paying, though, people aren’t equipped to join the debate, and their view, generally, is, don’t touch my health care. And so nothing can get done politically and costs continue to spiral."

Baucus said, "Today, Americans don't have enough health care information. We often don't know how much our health care costs, or why there has been the rapid spike in prices in recent years. Making people aware of how much is spent for their health insurance coverage is an important step in helping us all become more informed about health care costs. When people get a sense of the cost of their insurance, they may look for ways to reduce the waste and inefficiency that are driving up costs in our health care system. This idea goes hand in hand with other steps to lower health care costs, like comparing the effectiveness of medical treatments and getting that information to the public, too. Finding ways to lower health care costs, along with measures to increase access and cover more Americans, will be an important part of the health care reform agenda I intend to pursue in the Finance Committee next year."

Wyden said, "Educating Americans about their health care costs is an important first step in reforming the system. If everybody could clearly see what their employers were paying for their health insurance coverage, they’d understand why their wages have been so stagnant in recent years. This could lead workers to demand that their employers offer more efficient health coverage options. I hope the public reads this proposal and gives us their reaction so we can craft a bill that will bring health care costs out of the shadows and provide consumers with information to make better decisions about their health care."

Enzi said, "Most American workers do not realize how much their employers pay for their insurance plans – nor do they realize how these costs reduce their wages and other benefits. By putting this valuable information into the hands of workers, we can help them become smart health care consumers with the knowledge they need to make the best decisions for themselves and their families. Including the cost of employer contributions to health insurance is an important step toward helping families find the health care plans they need at prices they can afford."

Nelson said, "With health care costs soaring at twice the rate of inflation, Americans must have a clearer picture of how much they and their employers are spending on health care. We need to empower Americans to be better health care consumers and make economic decisions that are in their best interest. This has to happen on the coverage end and on the service end, no matter whose pocket it is coming out of. This has the potential of lowering health care costs across the board."

How many of you have had a seat at the table when employer healthcare decisions are being debated or decided?

[Blackhawk]

I had hope that the shitstorm that Trump is causing would shock the system back into shape, but the more time goes by, the more it seems that's unlikely.

Maybe, but we've been in a situation where a course correction is impossible. In Novemeber, then again in 2020 we'll have the chance to see whether the system was 'shocked back into shape.' Until then it's just choosing optimism or pessimism.

Or better yet, cranking up the voltage and continuing to shock.

[LawBeefaroni]

How many of you have had a seat at the table when employer healthcare decisions are being debated or decided?

Oh, man. I've had to sit at like 3 sides of that table at once.

[stessier]

Grassley said, "The point of the proposal is to inform people about their health care costs. Once informed, they might seek changes including improved efficiency, reduced waste and fewer unnecessary procedures, balanced with the natural need to have good coverage. Some employees might want to receive different compensation in the form of a higher salary, additional vacation, or more child care instead of more health coverage than they need.

Who doesn't know a coworker who has forgone healthcare and been able to negotiate one of those other benefits?

[LawBeefaroni]

Grassley said, "The point of the proposal is to inform people about their health care costs. Once informed, they might seek changes including improved efficiency, reduced waste and fewer unnecessary procedures, balanced with the natural need to have good coverage. Some employees might want to receive different compensation in the form of a higher salary, additional vacation, or more child care instead of more health coverage than they need.

Who doesn't know a coworker who has forgone healthcare and been able to negotiate one of those other benefits?

He shows either a fundamental lack of understanding how compensation, health insurance, and health care works, or a fundamental disdain for the proles.

instead of more health coverage than they need.

No one knows what coverage they need. They make an educated guess at best and take a gamble in many cases.

[LordMortis]

How many of you have had a seat at the table when employer healthcare decisions are being debated or decided?

Rub salt in that wound, why doncha. This is where seeing the benefit change (and drastically) is what I am experiencing when I can strongly say the compensation for my labor and commitment to the company was drastically altered. And I'm suddenly seeing the potential value addition of unions first hand. Being given a deal and then having no recourse but to put up and pray the deal is not altered further or quit when the deal is altered is demoralizing and it doesn't put me in a good place to trust the deals I have with my employer now or in the future.

Kinda reminds me of certain presidency and administration and party, only I don't think my company expects loyalty beyond what is legally required.

Grassley said, "The point of the proposal is to inform people about their health care costs. Once informed, they might seek changes including improved efficiency, reduced waste and fewer unnecessary procedures, balanced with the natural need to have good coverage. Some employees might want to receive different compensation in the form of a higher salary, additional vacation, or more child care instead of more health coverage than they need.

Who doesn't know a coworker who has forgone healthcare and been able to negotiate one of those other benefits?

Since becoming a professional, every employer I've worked for has given the option for monetary compensation in lieu for health care and usually there are two income families that take this option. That compensation is usually pretty trivial. I don't know the current rate at my current employers is but I'm guessing it's less than $200 a month to opt out of coverage that most people use to cover an entire family. While $2400 a year is a lot of money. It's nothing for health insurance, even crappy insurance. Going back to the idea that the deal if for the coverage, not for the money.

[RunningMn9]

Well, let's see if we can't help by busting out The Treatment(tm).

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.

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.

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).

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.

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.

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?

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.

[noxiousdog]

Since becoming a professional, every employer I've worked for has given the option for monetary compensation in lieu for health care and usually there are two income families that take this option. That compensation is usually pretty trivial. I don't know the current rate at my current employers is but I'm guessing it's less than $200 a month to opt out of coverage that most people use to cover an entire family. While $2400 a year is a lot of money. It's nothing for health insurance, even crappy insurance. Going back to the idea that the deal if for the coverage, not for the money.

Ours is pretty significant. $600 per month extra if you don't need the family options and around $800/month if you want to go with a high deductible plan.

[RunningMn9]

So what happens your insurance changes to a lesser plan at a higher cost?

This is part of the equation, and it's a common refrain over the past 15 years. From the employee's perspective, they have taken a loss of pay, right? Employees almost universally only care about net pay and out-of-pocket health care expenses (in this example).

All I'm suggesting is that if the market dictates that thing A costs more this year than it did last year, and your employer is faced with two options: A) pass the cost increase on to you; or B) shield you from the cost increase by absorbing the cost increase on their end - clearly option B) is an increase in compensation. It's just one that is unfortunately transparent to you.

If we are at a baseball game and you are staring down at your phone, and a foul ball comes screaming at your face, but I catch it - your life is no better than it was before. But it's a shit ton better than it would have been if I didn't stop the ball from smashing your eye holes in. So despite no apparent change, I've done you a solid. To tie it to the health insurance front, the difference is that you are so focused on your phone that you never noticed the ball or me catching it.

This isn't to say that no one has ever had their employer do shit that harmed them and reduced compensation in the name of their bottom line. That happens too. I've had it happen to me multiple times.

[LordMortis]

I think the best we can achieve here is that when contemplating compensation, it seems obvious that we are both right.

That's why I think we are having different conversations. I can live with that. But you should know where I am coming from if I am claiming I can't do as much today as my did could in 1979 when my salary seems on the surface to be clearly superior, irrespective of productivity gains and from where I sit, the US middle class is shrinking irrespective of productivity gains and the gap widening. People at the top of the middle class are getting ever bigger homes with ever better toys and bigger portfolios to hand an advantage to their children. The people who aren't at the top of the middle class are making do with less and are extending less and less advantage to their children.

Health care is a measure of the phenomena I am looking at and health care is in this nation is part of the compensation package for employment unless you are an exception.

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.

Do they make that clear to you when you hire in and do they stand by that commitment? Maybe that's where my view of the world is too narrow. My potential employer saying "We are going to pay x dollars to your health care through this company" is not something I've ever heard of. "We offer this plan and you may opt out for this money" is all I am familiar with. With some companies having the dream antiquity of "after x years you will be vested and this plan will be covered at x% for the for the rest of your life"

So despite no apparent change, I've done you a solid.

That I do not deny. OtOH, if I make an arrangement for you to catch balls so I can look at my phone and it becomes more difficult for you to catch the ball, while you're doing me more of a solid, our arrangement is the same.

[malchior]

LordMortis, this is the guy I was chatting with (he’s a friend of a friend):

article.

I disagree with his analysis. I'll assume he doesn't have an agenda to distort and just decompose the flaws I see in it. (Though I suspect an agenda all the same).

Rules #1 and #2 appear to make sense when viewed through the lens he created. He ascribes choices as to why productivity decoupled from household wages. This is simply not measurable but there is a value in qualitative descriptions if they can be related to actual world conditions. This is where I think his analysis fails. His factor may be true but they don't reflect the *earning* reality of the typical American worker. The number of hours worked by family is surely variable. As he discussed it is dependent on many factors but still the relationship between household income is very important. You can compare household income across generations. They have to be adjusted for differences in family makeup but in the end over and over it has been shown that much of the "bottom" 80% or so puts in more work (as measured in time) to earn the "same" or less real wage as in the past.

As to rule #2 I get what he is saying but that is essentially a hidden tax. If I am still getting the same product (health care) as people got in the past, it doesn't matter when that money doesn't make it to the worker. It is compensation but one they have no control over and provides them no additional benefit. That's why I argue that health benefits act more like a tax than anything else. One that is growing at a above inflation clip at that. Calling it compensation is factually true but not all that accurate when describing American worker finances.

His rule #3 is probably well off in times of historically high inequality. The mean is completely distorted by the top 10% or so seeing wage increases above the historical average. This one simply doesn't pass the laugh test. At points over the last decade 90%+ of wage increases was being captured by 1% of the workers. That pushed up the mean and pushed down the median. Which one describes the actual effect on the largest group more accurately? Economists use median for a reason. Also this was the point I started suspecting this guy had no economic training because he is making very poor economic arguments. Just looked it up - he has a background in sociology. That could be part of the reason behind the poor methodology at work here.

Rule #4 makes sense but I don't think it matters much. Local pockets of labor are local pockets of labor. They aren't going to represent the whole.

Rule #5 he makes a claim - they use different adjustments and doesn't seem to support them. Maybe it is true but I suspect he is getting this wrong based on the general sloppiness here. Maybe not 100% fair but whatever that is my take.

Rule #6
He goes off the rails here for real. I'm not even decomposing this. It makes absolutely no sense. Profits may go to the average worker...but they probably aren't. Let's be real here.

His chart - this is black chart statistical magic of the worst sort. He literally cooked up something that supports his argument and doesn't explain how he got there. It is useless. He said he'll share it but I'm reasonably sure it'll be turtles all the way down.

[RunningMn9]

I disagree with his analysis.

As is our option. I certainly wanted to disagree with his analysis too. But studying this has been his career for like 30 years, with multiple PHDs from Harvard that I don't have. So I chose to be pretty careful when talking to him, since he's a legitimate expert on the topic, and I'm not.

I knew how I would react to Smoove_B disagreeing with an analysis that I made regarding complex Software Engineering topics, and realized that I didn't want to be the Smoove_B in this scenario. Or me disagreeing with Smoove_B's analysis in his area of legitimate expertise.

[LordMortis]

https://thelogicofscience.com/2017/04/0 ... -arrogant/





Not quite analogous but close enough to make me smile.

[malchior]

I disagree with his analysis.

As is our option. I certainly wanted to disagree with his analysis too. But studying this has been his career for like 30 years, with multiple PHDs from Harvard that I don't have. So I chose to be pretty careful when talking to him, since he's a legitimate expert on the topic, and I'm not.

Your post amounts to a appeal to authority which is a pretty basic logical fallacy. FWIW I did a quick search and several times his criticisms have been attacked for being inaccurate (e.g. here is one where they pretty much laugh in his face.) He also works for Institutes with a known bias. Now that doesn't necessarily mean much because I'm sure they hired him because they have similar viewpoints. Still Brookings and the Manhattan Institute aren't exactly known for great economic thought. It is mostly seen as the Conservative thought train that gives us financial policies for the likes of the Paul Ryan's of the world to lean on.

I knew how I would react to Smoove_B disagreeing with an analysis that I made regarding complex Software Engineering topics, and realized that I didn't want to be the Smoove_B in this scenario. Or me disagreeing with Smoove_B's analysis in his area of legitimate expertise.

FWIW I didn't go to Harvard but I did concentrate in Economics and Finance during my Business Degree and I've kept up with it for some time so it isn't like I'm approaching this untrained.

Also I didn't notice this was 4 years old until I was looking into some criticism of his work but it really, really hasn't held up. Wages are still persistently stuck despite tax cuts and record low unemployment. Every economist is scratching their head right now but apparently the profits will be going to the workers anytime now.

Edit: I missed the part entirely where you claim his 30 years studying this established his expertise. I'm sure it is important but again I pointed out above his background is clearly not in economics. That much is clear because he makes Econ 101 level mistakes in his work. The CAP guys laughing in his face made a similar argument about his deflator arguments. The guy is likely very much a policy expert in something but he certainly is not an economist. Therefore I'd argue perhaps we shouldn't be relying on his economics expertise especially when he is making easy to spot economic errors that even a rank "amateur" saw immediately.

[milo]

The linked article seems to go off the rails almost immediately. The author make a series of individually valid statements that don't refute the argument he intends to counter. The author's argument seems to boil down to "hourly compensation has tracked hourly productivity." That is, for labor-based industries, the proportion between the overall share of business income that goes to labor and the overall share of income that goes to profit has not changed significantly over time.

While this appears to be true (assuming the author made no serious errors in compiling the final chart) it appears to willfully misconstrue the argument that it is supposedly countering. For three decades, the typical family income rose in lockstep with the national income. In the mid 1970's, that stopped happening and median family income stagnated.

It may be that productivity has risen primarily among workers who make well above the median compensation. The median worker’s productivity could remain flat even as productivity increases economy-wide, in which case we would not expect to see median compensation rise.

But the author doesn't address that supposition, or even propose a means to measure it one way or the other. I suspect that would be difficult to determine, except perhaps counterfactually using something like Shapley's value.

The author's counter argument to this appears to be, "well, you shouldn't expect those numbers to track in the first place." The author doesn't even address the obvious follow-up, "but they did so track for three decades until they diverged; what changed?"

[malchior]

The linked article seems to go off the rails almost immediately. The author make a series of individually valid statements that don't refute the argument he intends to counter. The author's argument seems to boil down to "hourly compensation has tracked hourly productivity." That is, for labor-based industries, the proportion between the overall share of business income that goes to labor and the overall share of income that goes to profit has not changed significantly over time.

While this appears to be true (assuming the author made no serious errors in compiling the final chart) it appears to willfully misconstrue the argument that it is supposedly countering. For three decades, the typical family income rose in lockstep with the national income. In the mid 1970's, that stopped happening and median family income stagnated.

I agree - His rule #4 about looking at compensation vs. wages is literally one of the things people had been exploring in an attempt to explain wage stagnation. Vis a vis that soaring health care expenses were sapping at worker's wages. Not that it was an argument that the stagnation wasn't happening. And then ACA bent the price curve down and the stagnation didn't budge. Oops that wasn't it. But still it is a idea that has been beat to death at point. His problem is one of not understanding commonly used definitions with shit economics analysis on top.

It may be that productivity has risen primarily among workers who make well above the median compensation. The median worker’s productivity could remain flat even as productivity increases economy-wide, in which case we would not expect to see median compensation rise.

But the author doesn't address that supposition, or even propose a means to measure it one way or the other. I suspect that would be difficult to determine, except perhaps counterfactually using something like Shapley's value.

The author's counter argument to this appears to be, "well, you shouldn't expect those numbers to track in the first place." The author doesn't even address the obvious follow-up, "but they did so track for three decades until they diverged; what changed?"

This is a good insight too. I could even agree that we should challenge the assumption that wages should track productivity but you are spot on that you have to first explain the change in trend. For example, he could argue the 3 decade trend was an anomaly. Anything but as it stood when published it was just a huge hole in the analysis.

[RunningMn9]

Your post amounts to a appeal to authority which is a pretty basic logical fallacy.

Awesome, I'm back to GG circa 2002.

It would be an appeal to authority if I was saying "He is right and you are wrong, simply because he's an expert in the field!". It's simply stating facts to point out that he has had a long career and extensive education, very specifically in the field that we are discussing. We don't. You are still free to disagree with him. I am still free to temper my disagreement with him because I recognize that this is not a field that I have any expertise in at all.

Again, if a random person on the internet with vast experience in fast food restaurant management wanted to critique my thoughts on code optimization techniques in embedded communication systems, I would completely ignore him.

Do you at least recognize the irony of linking to American Progress in the middle of a rant about bias/agenda? Jesus H. Christ you have become ponderous to deal with on just about any subject. No thanks.

[geezer]

Your post amounts to a appeal to authority which is a pretty basic logical fallacy.

Awesome, I'm back to GG circa 2002.

It would be an appeal to authority if I was saying "He is right and you are wrong, simply because he's an expert in the field!". It's simply stating facts to point out that he has had a long career and extensive education, very specifically in the field that we are discussing. We don't. You are still free to disagree with him. I am still free to temper my disagreement with him because I recognize that this is not a field that I have any expertise in at all.

Not to sidetrack, but I've never quite been able to square the "logical fallacy" with "appeal to authority." If someone is an authority in a given field, is their knowledge and opinion not to be given more weight than someone without such qualifications?

[malchior]

Your post amounts to a appeal to authority which is a pretty basic logical fallacy.

Awesome, I'm back to GG circa 2002.

It would be an appeal to authority if I was saying "He is right and you are wrong, simply because he's an expert in the field!". It's simply stating facts to point out that he has had a long career and extensive education, very specifically in the field that we are discussing. We don't. You are still free to disagree with him. I am still free to temper my disagreement with him because I recognize that this is not a field that I have any expertise in at all.

Again, if a random person on the internet with vast experience in fast food restaurant management wanted to critique my thoughts on code optimization techniques in embedded communication systems, I would completely ignore him.

Do you at least recognize the irony of linking to American Progress in the middle of a rant about bias/agenda? Jesus H. Christ you have become ponderous to deal with on just about any subject. No thanks.

Nice. No loss. Your condescension is pretty tiring anyway. I'm just sorry I wasted time trying to actually debate it. You clearly weren't even trying to listen.

Your post amounts to a appeal to authority which is a pretty basic logical fallacy.

Awesome, I'm back to GG circa 2002.

It would be an appeal to authority if I was saying "He is right and you are wrong, simply because he's an expert in the field!". It's simply stating facts to point out that he has had a long career and extensive education, very specifically in the field that we are discussing. We don't. You are still free to disagree with him. I am still free to temper my disagreement with him because I recognize that this is not a field that I have any expertise in at all.

Not to sidetrack, but I've never quite been able to square the "logical fallacy" with "appeal to authority." If someone is an authority in a given field, is their knowledge and opinion not to be given more weight than someone without such qualifications?

Of course, but that wasn't what he was saying. Also, the entire point of my analysis was to show the guy made fundamental errors. Believe me or not - they are an opinion of someone who studied the field at some time. Calling that guy an economic expert -- his degrees are in sociology btw - is an overstatement. Sure he went to Harvard and worked in an adjacent field but he is not an expert in economics. He made basic mistakes.

[Isgrimnur]

Not to sidetrack, but I've never quite been able to square the "logical fallacy" with "appeal to authority." If someone is an authority in a given field, is their knowledge and opinion not to be given more weight than someone without such qualifications?

It doesn't mean that they're infallible.

Consider Peter Duesberg:

Peter H. Duesberg (born December 2, 1936) is a German American molecular biologist and a professor of molecular and cell biology at the University of California, Berkeley. He is known for his early research into genetic aspects of cancer, and more recently for his central role in the AIDS denialism movement as a proponent of the belief that HIV is harmless and does not cause AIDS.

Argument from authority

If all parties agree on the reliability of an authority in the given context it forms a valid inductive argument.

Scientific knowledge is best established by evidence and experiment rather than argued through authority as authority has no place in science.

Carl Sagan wrote of arguments from authority:

One of the great commandments of science is, "Mistrust arguments from authority." ... Too many such arguments have proved too painfully wrong. Authorities must prove their contentions like everybody else.

[El Guapo]

Your post amounts to a appeal to authority which is a pretty basic logical fallacy.

Awesome, I'm back to GG circa 2002.

It would be an appeal to authority if I was saying "He is right and you are wrong, simply because he's an expert in the field!". It's simply stating facts to point out that he has had a long career and extensive education, very specifically in the field that we are discussing. We don't. You are still free to disagree with him. I am still free to temper my disagreement with him because I recognize that this is not a field that I have any expertise in at all.

Again, if a random person on the internet with vast experience in fast food restaurant management wanted to critique my thoughts on code optimization techniques in embedded communication systems, I would completely ignore him.

Do you at least recognize the irony of linking to American Progress in the middle of a rant about bias/agenda? Jesus H. Christ you have become ponderous to deal with on just about any subject. No thanks.

FWIW it seems like the logical next step after saying "this guy seems to know what he is talking about, but I am dubious about the merits of what he is saying" would be to check other noted experts in the field.

[geezer]

Not to sidetrack, but I've never quite been able to square the "logical fallacy" with "appeal to authority." If someone is an authority in a given field, is their knowledge and opinion not to be given more weight than someone without such qualifications?

It doesn't mean that they're infallible.

Consider Peter Duesberg:

Peter H. Duesberg (born December 2, 1936) is a German American molecular biologist and a professor of molecular and cell biology at the University of California, Berkeley. He is known for his early research into genetic aspects of cancer, and more recently for his central role in the AIDS denialism movement as a proponent of the belief that HIV is harmless and does not cause AIDS.

Argument from authority

If all parties agree on the reliability of an authority in the given context it forms a valid inductive argument.

Scientific knowledge is best established by evidence and experiment rather than argued through authority as authority has no place in science.

Carl Sagan wrote of arguments from authority:

One of the great commandments of science is, "Mistrust arguments from authority." ... Too many such arguments have proved too painfully wrong. Authorities must prove their contentions like everybody else.

Of course, but one might accept that the "authority" has derived his/her argument through evidence and experiment, yes? It's not to say that anyone is infallible, merely that I find the counter of "logical fallacy" to be a cheap way of dismissing that which someone might not agree with.