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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: GraceZ who wrote (51878)1/28/2006 11:10:40 AM
From: Mike Johnston  Read Replies (1) of 110194
 
If medical costs are inflating, then companies are either forced to slash the benefits or to cover that cost. When the business covers the cost, it leaves less money for cash wages so that the employee will get smaller raises in the future.

Another possibility is that increased costs are passed on to the price of final product or service. In that case the employee will get the raises, but the prices of products and services in the economy will rise, as many companies have to do the same thing.

So either way, the total compensation registers an increase, but the employee is not better off because of corresponding rise in inflation.
It is a wash.
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