Slashing Your Purchasing Power

Over the weekend, the world almost ended (really, it did) because one of the candidates for president suggested that rampantly bad economic conditions for working people might actually breed bitterness.

Or, something to that effect.

The matter of whether or not Senator Obama’s “bitter” point was in fact offensive has been debated at length. Some of my personal favorites include Robert Reich and TPM.

I will refrain from adding to the cacophony. Instead, let’s circle around to the matter of health care costs. After all, the rising cost of health care is putting pressure on corporations and therefore affecting their ability to hire workers, right?

Well, yes and no.

A refrain gaining traction in towns and cities across the country is that the employer-based health care system is beating up the backbone of the American economy (business). But, when one takes a longer view at the troubling trend of rising health care costs, a lesser-known story comes to the surface.

Credit Ezekiel Emanuel of the National Institutes of Health and Victor Fuchs of Stanford University (hat tip to Alternet) for revealing who is really bearing the burden of rising health care costs (link).

As is usually the model, when the price of doing business, in this case health care, goes up, business finds a way to either pass the cost on to consumers, or it finds a way to lower its operating costs.

Consider what this means in real terms.

According to Fuchs and Ezekiel, over the past 30 years, health care premium costs have sky rocketed by some 300%. During that same period, inflation-adjusted corporate profits have risen by 200%, while wages for workers have quite literally stagnated.

So, costs go up, corporate profits go up, but wages stay the same.

I bet that reality is enough to get ordinary folks plenty bitter.


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