Muted wage growth could be linked to healthinsurance

Posted 5/10/2018

A new study of IRS data purports to answer the question of why U.S. wage growth has been so muted even though unemployment is so low - because health insurance premiums have been undermeasured. Average premiums for employer-sponsored health insurance plans are roughly $1,000 higher than previously thought, according to the analysis from Jeff Larrimore of the Federal Reserve and David Splinter of the Joint Committee on Taxation, with a gap between the IRS data and that used by the Labor Department’s Current Population Survey. The authors of the report also noted that the rising values of fringe benefits, such as health insurance, may have offset potential wage gains for middle-income workers.

Market Watch