Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Stay on top of the latest market trends

Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Corporate profits have dramatically outpaced wages and health benefits since the turn of the century, leaving workers on the hook for more of their health care costs even as their purchasing power falls, according to a review of federal data.

Key quote: "If I were a middle-class American, I’d be outraged," said Regina Herzlinger, a professor at Harvard Business School. "I’d demand much greater transparency about how much I’m getting in health insurance and wages."

Expand chart
Data: Bureau of Economic Analysis; Chart: Chris Canipe / Axios

The bottom line: American workers have not seen their wages grow in tandem with the success of their employers.

Meanwhile, health spending has been growing faster than the broader economy. Health benefits consequently are getting more expensive for employers to offer, and companies are responding by making employees shoulder more of their own health care costs — either through higher premiums or higher out-of-pocket costs, like deductibles and copays.

What it means: Health care is eating up a bigger share of paychecks that already don't go as far as they used to.

  • "Plans are getting less generous because (employers) are paying more in absolute dollars," said Michael Chernew, a health economist at Harvard Medical School.
  • "Your health benefit being 10% of your compensation isn’t as meaningful today as it was 15 years ago because spending on health care has grown more quickly," added Erin Trish, a health policy professor at the University of Southern California.
  • "If a hospital visit is expensive, someone — either the employer or the worker — is going to pick up that cost," said Matt Fiedler, a fellow at the Brookings Institution.

Yes, but: Economists say reducing the generosity of employer health plans is not necessarily a bad thing, because generous plans might encourage people to use more health care services than they need.

Plus, "the idea that an employer should be deciding what kind of health care benefits an employee gets is kind of crazy," said Dean Baker, an economist at the Center for Economic and Policy Research. But, Baker adds, there has to be a viable health care alternative for workers.

What to watch: Whether employee compensation increases more quickly, especially as companies predict even bigger profits under the GOP tax plan.

  • There is no evidence the temporary, one-off bonuses announced by many companies, and attributed to the Republican tax cut bill, will drastically change the stagnant trajectory of worker compensation.

The details: The data are from the U.S. Bureau of Economic Analysis. The growth of three economic indicators — corporate profits, wages, and money employers spent on health insurance for their employees — were compared with overall economic growth over the past 16 years. Health coverage and wages were singled out because workers often value those compensation items most when they take a job.

The analysis showed:

  • Corporate profits were 4.7% of the U.S. economy in 2000 and climbed to 9.1% by 2016.
  • Employer health coverage mostly stayed flat, going from 3.2% of GDP in 2000 to 3.7% in 2016.
  • Salaries and wages decreased quite a bit. They represented almost 47% of the economy in 2000 and dropped to 43.4% in 2016.

Go deeper

Dion Rabouin, author of Markets
5 mins ago - Economy & Business

Workers are getting a really bad deal

Illustration: Eniola Odetunde/Axios

This week's spate of data highlighted the difficulties Americans who have lost their jobs have had bouncing back from the coronavirus pandemic, and just how much those who have managed to keep their jobs have been working.

What's happening: The Labor Department reported Thursday that the productivity of American workers fell by a revised 4.2% annual rate in the fourth quarter, the largest decline in 39 years.

FBI: Trump appointee arrested in connection with Capitol riot

Photo: Samuel Corum/Getty Images

The FBI on Thursday arrested former State Department aide Federico Klein, a Trump appointee who worked on the former president's 2016 campaign, on charges related to the Jan. 6 storming of the Capitol, according to a court filing.

Why it matters: The 42-year-old Klein is the first member of the Trump administration to be arrested in connection with the insurrection, which led to the former president's second impeachment and charges against over 300 people.

Biden confronts mounting humanitarian crisis at the border

Illustration: Eniola Odetunde/Axios. Photo: Pool/Getty Images     

Just over a month into his presidency, President Biden is staring down a mounting crisis at the border that could be just as bad as the ones faced by Barack Obama and Donald Trump, if not worse.

Why it matters: Immigration is an issue that can consume a presidency. It's intensely and poisonously partisan. It's complicated. And the lives and welfare of vulnerable children hang in the balance.