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How to Raise Wages

This study identifies a host of issues with wage rates in America, including how federally mandated employee benefits raise the cost of hiring for employers. While there has been some slight variation from quarter to quarter, the growth of compensation costs has generally outpaced the growth of wages. In fact, since 2005, quarterly growth of health insurance, legally required benefits and paid leave has averaged 0.71 percent, 20 percent higher than the average quarterly wage growth of 0.59 percent. The point is that employers are paying more for labor per hour each year. These costs will naturally have an effect on workers ‘wages, workers’ hours or the number of workers hired. The study concludes with an emphasis on five key ‘solution’ areas for reform: reduction of corporate taxation, wage and benefit flexibility, flexible health plans, deregulation, and support for skill enhancements. The study finds that promoting high-paying jobs, easing the burden of labor costs and allowing workers to negotiate their benefits would go a long way in at least increasing individual take-home pay.

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