Wages and Non-Wage Compensation

Over the last decade, American social policy has increasingly focused on encouraging and requiring work for those receiving government supports. This study analyzes the dynamics of the low-wage labor market and the role of work supports in helping workers move toward economic self-sufficiency. Monthly data from January 2001 through January 2003 shows that over one-quarter of workers earn low wages. We find evidence that low-wage workers are moving to higher-wage jobs, but two years later, the majority of low-wage workers either remain in low-wage jobs or are not working. Our analysis provides some, although limited, evidence that government-provided work supports promote self-sufficiency.

This paper describes an analysis of career earnings patterns developed for predicting the impact of Social Security reform. We produce estimates of age-earnings profiles of American men and women born between 1931 and 1960, obtained from Social Security earnings records. We forecast future individual earnings and estimate the shape and prevalence of nine stylized earnings patterns of U.S. workers. This approach is better than the traditional approach of examining a small number of representative workers who are assumed to have steady earnings throughout their careers, because few workers have level career earnings.

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.