Gap between compensation and cash income

People are not feeling confident about this economy because it is not producing tangible benefits for most individuals and families.  What compensation gains that are trickling down from higher productivity over the course of this economic cycle has gone to health insurance and not cash on the direct deposit slip.  The Labor Department notes that this trend is continuing:

Another report from the Labor Department Wednesday showed that workers' compensation — including wages and benefits — grew 0.7 percent in the first quarter, the slowest pace in two years. Many economists were expecting a 0.8 percent rise. The report suggests that the weak labor market is making employers a bit less generous with their compensation.

The LA Times is reporting that between 2001 and 2005, the rate of increase for health insurance has been ten times as fast as the rate of increase of their cash compensation.

Workers with job-based coverage for their families saw earnings rise 3% from 2001 to 2005, while their health insurance premium contribution increased 30%, according to the study by researchers at the State Health Access Data Assistance Center at the University of Minnesota.

Even with the mild tax benefits of being able to treat employee health insurance co-premiums as untaxed income, this is a larger slice of the family budget in both absolute and proportional terms than it was in 2001.  This is a continuation of the trend of hard to avoid costs increasing far faster than either costs in general or compensation.