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UP / Thumb of Michigan | From Clay:
I'm neither pro nor con on any particular situation, but- it would be worth noting. The origin of a lot of today's workplace benefit packages has its roots in wartime economy when offering things other than direct monetary compensation was a way to maneuver around governmental restrictions on wages, rations, etc.
Thats almost exactly what I have been told by some "old timers" who were in the workforce during WW 2. There were wage freezes (along with other price controls) initiated by the Government. The only way to attract a limited work force to your place of business over another was to offer bennies of some sort. The problem was, it continued on after the war ended. And has grown into a monster in some cases.
Pensions for one. They're too easy to underfund, whether a company realizes its doing so or not. The onus of returns on the underlying investment to fund the pension is ultimately on the shoulders of the employer. Thats certainly not what the primary focus of most any company is. Or Governmental organization. Its very easy to make a promise today, knowing that no one who made the promise will be there down the road when its time to pay out.
The largest defined benefit plan in the USA- Social Security- is always close to being short of dough. Defined Benefit plans have bankrupted some of the largest companies in the USA. Or at least, had a major hand in it. A defined contribution plan is portable, and I believe can provide for a good retirement.
Medical insurance is another thing I think was rooted in good intentions but has just grown out of control. There's too many people involved between the payee and the person that needs to get paid for services rendered. I could use as an example a relative who was a dentist in a manufacturing town. The insurance benefit to most of the employees of the largest employers in the area was very generous. But there was a lot of desks that his bill had to cross before he could get paid. The bill for total administration costs dwarfed the cost of his services time and time again.
A couple administrations ago, when Obama care was being debated, I did have some lengthy discussions with some friends who had lifetime medical through their employers. And really had no clue what that cost was. Where the discussions got a little contentious was that they felt they were not able to get any tax breaks at all whatsoever, while everyone knew that business hardly ever paid taxes. I of course disagreed on both counts- but the huge tax break I contended they were getting via untaxed bennies was a major source of irritation for them. I thought they were getting a pretty valuable bump in wages and income via free UNTAXED insurance. Plus, their employer was also able to deduct the premiums. They disagreed; they earned those bennies. Which was the point I was trying to make- they were getting something for nothing from a tax standpoint. If the bennies were removed, and they were instead paid the value of those bennies, they'd be liable for income taxes on the entire deal. Yes, I understand that there are tax incentives for those who pay for insurance out of pocket. But getting to that part of the discussion never seemed to happen.
Anyway- and I am in no way a fan of paying a lot of taxes- but I wasn't getting some of the push back some had to single payer health insurance. That is, as long as it was all in or all out from an employer standpoint. In a kind of perfect world, the employers would cease offering and paying for health care. The employees would pay for their health care via deductions for coverage in their paychecks. Seemed like a very simple solution to me. That obviously didn't happen, and likely never will. | |
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Just a thought about wages and benefits
