Friday, January 8, 2010

Basics in logic seem absent from the healthcare and wages discussion

Economist Austin Frakt is baffled that there's any controversy at all over the idea that health-care premiums eat away at wages. "The notion that premiums and wages offset one another has an impressive pedigree,"
This observation is all well and good but it doesn't speak to the issue at hand, namely will an employers reduced costs in terms of health benefits be transferred to their employees in increased wages. For all of the bloviating by Ezra and others on this issue they haven't provided a shred of evidence to support this conclusion. They are assuming that this savings will be transferred to employees.

Meanwhile those of us who live in reality understand that increased profits are never returned to employees in terms of wages. One need only look at the increases in production, in the stock values of companies and in their profits and the stagnation of employee wages over the last 30 some odd years to understand this.

This is where Ezra's technocratic leanings are insufficeinctly cynical to comprehend the policy issue at hand. Ezra points to a study that proves "A" and tries to argue that because of "A" then we can assume "B" - that's a logical fallacy and one that completely ignores the realities of capitalism.

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