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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

Anti-abortion activists' Supreme Court dreams are coming true

Photo illustration: Annelise Capossela. Photos: Kevin Dietsch/Getty Images

This is the moment the conservative legal movement has been building toward for decades: The solidly conservative Supreme Court is about to hear two major abortion cases within a month of each other.

Why it matters: All of this is likely to end with significant new restrictions on abortion and a clear path for Republican-led states to win the next big abortion cases, too — the culmination of a long and bitter fight for control of the judiciary.

Felix Salmon, author of Capital
4 hours ago - Economy & Business

Trump's volatile return to the stock market

Expand chart
Data: YCharts; Chart: Axios Visuals 

Donald Trump this week became both a meme stock and a social-media entrepreneur at the same time, by announcing that a new company called Trump Media & Technology Group was going to merge with an existing company listed on the stock market.

Why it matters: The medium-term promise of Trump's media company is that it will replace Twitter for anybody wanting to keep track of Trump's messages. The short-term promise is that it can be a hot new speculative vehicle for people wanting to get rich quick in the stock market.

Updated 13 hours ago - World

U.S. airstrike kills senior al-Qaeda leader in Syria, DOD says

A displacement camp near the village of Qah in Syria's northwestern Idlib province. Photo: Ahmad Al-Atrash/AFP via Getty Images

A U.S. airstrike in northwest Syria on Friday killed senior al-Qaeda leader Abdul Hamid al-Matar, U.S. Central Command said in a statement.

Why it matters: Syria serves as a "safe haven" for the extremist group to plan external operations, according to U.S. Army Maj. John Rigsbee.