It has nothing to do with that. It's simple a matter of converting the cost/value of the additional benefits in the form of employer health-care and other things, and adding that on top of the salary as if they are the same.

Seems pretty logical to me when I look at my paycheck and make that calculation. Am I happy that my employer has control over my medical expenses? Probably not. Am I happy that they get huge discounts from insurance companies on my behalf(and that of their other employees)? Probably am.

Employer health-care coverage has been widespread for most, if not all, of that time. So if my paycheck is slightly down from what it would have been 40 years ago, then 40 years ago I have both health insurance, plus more money (and possibly a defined benefit pension). How am I better off today?

I'm certainly better off today - 40 years ago a lot of activities would have been off limits to me. For example, walking, sitting, missionary position, sleeping on my side, basically everything besides lying on my back. Health insurance simply would not have paid $infinity for me to have treatments that were not yet invented.

As you might expect, these treatments have caused the price of health insurance to go up.