Wages and Non-Wage Compensation

How employers respond to automatic pension enrollment is important to the debate over how to increase retirement savings for all Americans. We recently completed a study showing that employers with autoenrollment have lower match rates than those without it, suggesting that employers may be trying to offset their higher costs. In contrast, the Employee Benefit Research Institute finds that employers with automatic enrollment have increased match rates since 2005. The two studies measure different concepts and use different time frames. A large sample of 401(k) plans reporting match rates before and after autoenrollment is needed to fully understand employer responses.

The stock market lost 56 percent of its value between September 30, 2007, and March 9, 2009. These losses reduced the retirement savings of American households. Recently, however, a good portion of these losses has been reversed. Equities gained 53 percent between March 9, 2009 and August 31, 2009.

Many have suggested that reducing or eliminating the tax exclusion of employer-sponsored health insurance (ESI) could generate significant additional tax revenue to fund expansions in health insurance coverage. In this paper, we focus on two specific policy design elements: (1) a cap, or dollar limit, on the amount of employer-sponsored health insurance premiums excluded from taxable income; and (2) an index that determines how this cap might grow over time. Our analysis shows that limiting the tax exclusion would provide substantial funding for health reform and mitigate the huge inequities built into the current treatment of employer premiums.

This brief examines the size and characteristics of the low-wage workforce and whether low-wage workers experience wage growth. We define low-wage workers as workers whose hourly wage rates are so low that even if they worked full-time, full-year their annual earnings would fall below the poverty line for a family of four. This wage rate is $8.63 in 2001, equivalent to $10.50 in 2008. Almost one-third of all workers ages 16 to 64 are low-wage workers in 2001. From 2001 to 2003, we find some evidence that low-wage workers are moving to higher wage jobs. But, the majority of low-wage workers either remain in low-wage jobs or are not working at all.

This report uses the Health Insurance Policy Simulation Model (HIPSM) to quantify the intermediate and longer-term implications if America’s health care system is not significantly overhauled. Under a range of economic scenarios, the analysis shows an increasing strain on business owners and their employees over the next decade if reform is not enacted. There would be a dramatic decline in the number of people insured through employers, and millions more could become uninsured. There would be large growth in Medicaid/CHIP enrollment and spending, and increased spending on uncompensated health care. Middle-income working families would be the most affected.