A good reason why healthcare should be removed from employers hands. In fact we should only allow salary increases or money for benefits, not benefits such as healthcare for employees. "Real compensation" is not a good measure because it is so unique to situations, and in most cases benefits are not all that great, workers would always take more money and the consumer economy and individual/family insurance market would benefit from that as well.

Everyone needs to be in their own individual/family insurance, group everyone together across the nation and move it away from business/employers and selective grouping. Employers do not pay your auto, home, liability insurance of your personal property, why should they have anything to do with your health, that alone is an invasion of privacy and not secure for workers when they can't work due to health.

Allowing employers and insurance companies to fix prices in backrooms is part of the problem of wildly inflating healthcare costs due to bad insurance grouping. It also let's companies off from wage increases by saying it is all part of "real compensation" when in actuality the velocity of money is at an all time low[1] in a consumer economy, red alert...

[1] https://fred.stlouisfed.org/series/M2V

I have a fundamental issue with a building block of your argument - Real compensation being a bad measure.

REAL compensation will always exist.

Simple systems, like first order approximations, can always do away with complex balancing constants, or recursive functions/costs, and feedback loops.

Similarly, in any real world situation, some fraction of firms will always find a way to plump up their employee compensation, without having to put a real cost to it.

So for example -

Major tech firms have on campus gyms, doctors, free food and so on. (We'll be ignoring the fact thaty they have campus-es in the first place)

Startups do it by offerring risk/reward tradeoffs.

In India I know Firms that provide complimentary transportation - and manage the insurance for that transportation.

Pilots and their families fly free, hospitals give admin staff better health care access, so on and so forth.

These are descriptive, non exhaustive examples.

The point being made is that Real Compensation in the real world will always have to be a calculated/inferred field/value.

So do you prefer getting more money or that same value or less in benefits that you don't decide?

Cash/pay let's YOU decide what benefits you need.

Yes there may be freebies and certain benefits available such as flying for free if there is a seat available, free food, or free passes to places you work etc, these are designed to keep you at work or involved as well.

However healthcare and insurance should NOT be managed by companies that you don't work at typically longer than 1-2 years on average. Should our companies also pay our auto, home and other insurance? so we can change them all when we change jobs? Benefits should only be freebies that aren't private.

You also have to be careful with benefits if they go too far i.e. in the future work will have apartments on campus like in China and a throwback to feudal/sharecropper kingdoms, then your company completely owns you. Better to just get pay, freebies and handle insurance/health and your own private business on your own.

The problem with real compensation is it is not evenly dispersed, cash/pay is. The real value also needs to be spent. You might have benefits that only 25% of a workforce take advantage of, well the 'real compensation' includes everyone using that, it is a bit like a gift card that you only spent a portion of. It isn't real money and sometimes costs the company little compared to the value that is stated.

You are asking me what I like, I like having freebies. I am unsure how my preference makes a difference to the substance of fact.

They are economically easier, because the firms I know can bring economies of scale to bear on them, which I can't do on my own.

But that's opinion.

You are arguing the merits of Real Comp - as if there is some world in which Real comp will NOT exist.

The issue I am pointing out, is that this is a theoretical world, like round cows.

In the real world, this will always be the case, so aside from a rhetorical device, or thought experiment to examine certain models, its not a practical item.

There will always be a situation, Such that, firms in different industries, will possess capital and service advantages, which make it easier for them to pay X$ in costs to the firm, and provide (1+C)*X$ of benefit to their employees.

You can't escape that.

Therefore, you must deal with it.

Real compensation includes these items below and in typical cases employers say they pay 30-35% in benefits, 65-70% in wages:

- gross wages and salaries earned by employees and payable in cash.

- cash allowances, overtime pay, bonuses, commissions, tips, and gratuities if paid by the employer to the employee.

- remuneration in kind paid by the employer to the employee valued at purchaser's prices, including meals and drinks, personal accommodation, uniforms worn outside of the workplace, vehicles or other durables provided for the personal use of employees, free personal travel, free personal fuel, recreational facilities, transport and parking subsidies, and creches for the children of employees.

- real or imputed social contributions and income taxes to government payable by the employee in respect of employment. the value of the social contributions in respect of labor hired, which are paid by employers – these may be actual social contributions payable by employers to social security schemes or to private funded social insurance schemes for employees; or imputed social contributions by employers providing unfunded social benefits.

- income of students from paid work, including the value they contribute through work for an educational institution.

- income received by shareholders who are also employees of the corporation, and who receive paid remuneration (e.g. stock options) other than dividends.

- income by outworkers who are paid by an enterprise for work done.

- the value of the interest foregone by employers when they provide loans to employees at reduced, or even zero rates of interest for purposes of buying houses, furniture or other goods or services.

My guess is you don't take advantage of all those items but your 'real compensation' includes it. Companies are paying you 30% in benefits that they retain. Yes there will always be freebies, but those should just be that freebies, nothing to do with personal health insurance and healthcare. Just pay people more.

For businesses it all comes down to deductibility. Company cars were deductible back in the days, so everyone and their brother drove a company car. Then the tax reform removed that deduction, and all of a sudden company cars were no more.

Making insurance deductible is also advantageous to large caps over small businesses - Amazon will likely negotiate a better insurance package than Joe's E-Commerce Emporium, and all else being equal rational employees will choose Amazon for their amazing benefits. Which then negatively impacts new business creation, small business employment, entrepreneurship rates, geographic mobility, etc.

True, but they could easily get the same deduction for wages/salaries/pay, same rules apply really and labor costs are probably less gamed in terms of balance sheets.

Benefits on the job were probably needed at a time but currently they are favoring large caps like you mention. This is ultimately the worst legacy thing that unions left behind eventhough they helped pay go up and brought some good things. Unions should have always been on more pay not benefits. We have got to start leveling the playing field for small/medium business and even self-proprietors. Removing health insurance from employers is key, this will also help being able to change jobs more frequently and not contribute to ageism so much.

Insurance companies group people by company usually so small companies are high risk, and individuals even more, the worst way to spread risk. Plus as companies grow more and wages grow less, companies will start to reach a feudal/sharecropper like state where you starting a business is nearly impossible because there is no way to compete.

Which then negatively impacts new business creation, small business employment, entrepreneurship rates, geographic mobility, etc.

Agreed, this also makes it much easier to start companies in places other than the US that also have a single-payer/individual or private market option and not require the employer to provide it. Employers handling our healthcare and benefits really has added drag to our economy and entrepreneurial/innovative spirit.

> Removing health insurance from employers is key, this will also help being able to change jobs more frequently and not contribute to ageism so much.

Agree. Unfortunately, there's zero political will to do this. Republicans seem to be hell-bent on destroying Obamacare as a concept, no matter the consequences, and view decreased number of sign-ups and decreased number of insurance sellers, as positive developments and proof that the system "doesn't work".

Democrats would surely welcome decoupling of employment and health insurance, right? Except ACA mandates employers with headcount 50+ offer health insurance, which robs the exchanges of a fairly healthy portion of the population that's fit enough to be in the workforce (prior to ACA mandatory health coverage applied to employers with 100+ headcount).

Some employers have run the numbers and figured out that if they paid the ACA fines and transferred the employee health coverage to a public exchange, their balance sheet would still be better off. Double win for a federal government - not only there's extra revenue in terms of fines (the money that previously went to a private insurer), the exchange gets bolstered with a significant number of new participants, which dilutes the risk pool and hopefully make everyone's coverage cheaper. Not so fast, said Obama administration, and slapped an extra fine to discourage such behavior https://www.nytimes.com/2014/05/26/us/irs-bars-employers-fro...