Health Care Benefits, Employers and Entrepreneurship

February 13, 2012 in Daily Bulletin

The Economist recently took a look at employee benefits and noted that:

  • Part of the reason why wages in America have stagnated is that employers have increasingly incorporated lucrative benefits as part of an employee’s compensation package.
  • The biggest benefits relate to health care. As life expectancy increases and the cost of health care rises, a commitment by the employer to provide health care is worth a lot.
  • However, unlike pensions which have increasingly become potable, health benefits do not transfer from one employer to another. This discourages employees from switching their jobs which is a problem because job mobility has become increasingly important in today’s economy.
  • Statistics show that if not for employer health benefits job turnover rates would be 25% higher. The current state of affairs also discourages self-employment and entrepreneurship.

To read more about why job mobility is important in today’s economy, as well as the historical developments behind this phenomenon, click here.

Source: The Economist