Forget the raise: health care will cut even more into the paychecks of many American workers next year. The WSJ reports on a new report from Bank of America Merrill Lynch:
The bank surveyed 602 CFOs and other finance executives at companies with annual revenues between $25 million and $2 billion. Of those, 69% said they expected their labor costs to rise to cover the costs of the ACA. The CFOs expected an average increase of 7.1%.More than three-quarters of the CFOs said they would pass those costs along to their employees, and almost two-thirds said they would cut spending in other parts of the business to compensate. Half said they would raise prices to pay for the healthcare.
When Sen. Chuck Schumer sought to distance himself from the ACA he said that the timing for the law was wrong because “and if health care costs were going up, it really did not affect them.” That continues to be untrue. Even if you get insurance from your employer, the lost wages are significant. Anyone who tries to downplay the seriousness of the health care problem is missing the reality of costs that eat more and more into American incomes. In 2009, for example, David Goldhill calculated that even on conservative estimates, a company would put a little under $2 million towards an employee’s health care plan over the course of an employee’s career. If you are concerned about wage stagnation, you have to be concerned about health care.