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EDITOR OF REDSTATE

Another problem with the Democrats’ Healthcare Legislation

By: Erick Erickson (Diary)  |  August 10th, 2009 at 09:23 AM  | 

RESIZE: AAA

There is another problem with the Democrats’ healthcare legislation that hasn’t been talked about much. It makes a heck of a tradeoff.

In exchange for universal healthcare under a government run plan, Donald Luskin points out an independent analysi that says we’ll see wage stagnation.

That’s right — in exchange for healthcare, don’t expect to ever get a pay raise.

If we expanded health insurance coverage but our current health cost inflation rate continued unabated, the higher overall costs would result in falling wages at the bottom of the earnings spectrum and very slow wage growth on up the earnings distribution. These dismal wage outcomes would persist over at least the next couple of decades, possibly longer.

In other words, only the rich will benefit. The poor and middle class will see their earning power reduced, their disposal income cut, and their potential to rise up from the lower and middle classes cut off.

All of this will be thanks to Obamacare.

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COMMENTS

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  • http://briansimpson.wordpress.com Brian Simpson

    Let?s put this into sentence form:

    * If health care reform finances universal coverage primarily through a mandate to buy health insurance, and if health cost growth continues as it has in recent years, a median worker?s real wage growth rate would be more than cut in half.
    * If health care reform instead accelerates health cost growth because expanded insurance coverage means more health services are consumed, that same median worker would see his real wages shrink.
    * For lower-wage workers the picture is worse. If health care reform finances universal coverage primarily through a mandate to buy health insurance, and if health cost growth continues as it has in recent years, a worker in the 3rd income decile would see no real wage growth.
    * And if health care reform instead accelerates health cost growth because expanded insurance coverage means more health services are consumed, that same low-wage worker would see his real wages shrink dramatically.

    Read the rest of his analysis here.

  • regnad

    Either the obamacare disincentive for employers will run them completely out of healthcare provision or it will drive the cost to the employer through the roof – which is it?

  • http://moelane.com/ Moe Lane

    Riiiiiighhhht. Bored with Crooks & Liars, were we?

    Shoo.

  • BooBooKitty

    in his pocket. Those rodents really skew the nummbers!

  • BooBooKitty

    in his pocket. Those rodents really skew the nummbers!