Conventional Meaninglessness « The Baseline Scenario
How much do you “contribute” to your benefits? Let’s say you work in the public sector and have a $60,000 base salary. You also have a health care plan that is worth $12,000, of which you contribute $3,000, so you end up with a post-benefit salary of $57,000 and a health care plan worth $12,000 for a total value of $69,000. Compare that to your sister in the private sector who has an $80,000 base salary but has to pay half the cost of her equivalent health plan. So she has a post-benefit salary of $74,000 plus a $12,000 health care plan for a total value of $86,000. You “contribute less to your benefits,” but your sister is much better off.
The idea that you can compare the amount that people contribute toward their benefits is based on the assumption that first everyone in the world bargains for salary and then everyone in the world bargains separately for benefits. That’s nonsense. Insofar as there is any bargaining, there’s only one bargaining phase, in which you bargain for both and all you care about is the total value. The amount you nominally “contribute” to your benefits is meaningless, because you also pay for benefits by accepting a lower salary. A lot of the pain over restructuring retirement benefits for unionized manufacturing workers was because their unions had specifically negotiated for those benefits instead of wage increases decades before — and management went along because it wanted to push those costs far into the future.
#Wisconsin : Les employés du secteur public « contribuent » moins à leur assurance santé parce qu’en échange, ils ont accepté de gagner moins.