> There is no indication at all that companies would compensate employees more if they didn't have to pay for their health insurance.
Employers use a figure called "total compensation" for what it costs them to employ someone. This includes salary and the cost of all the benefits, including all the so-called "employer paid" taxes and benefits. The WSJ ran an article long ago that showed employee productivity matched total compensation, not salary compensation.
Employers certainly do care about the cost. They don't care what percentage of those costs go to employee takehome pay. But offering pre-tax health insurance means the employer can offer less total compensation.
Any economic article that talks about salary instead of total compensation is either ignorant of accounting reality or is trying to mislead.
Employers use a figure called "total compensation" for what it costs them to employ someone. This includes salary and the cost of all the benefits, including all the so-called "employer paid" taxes and benefits. The WSJ ran an article long ago that showed employee productivity matched total compensation, not salary compensation.
Employers certainly do care about the cost. They don't care what percentage of those costs go to employee takehome pay. But offering pre-tax health insurance means the employer can offer less total compensation.
Any economic article that talks about salary instead of total compensation is either ignorant of accounting reality or is trying to mislead.