rise faster than pay
Percentage rise is 5 times that of workers' pay. Average annual
premiums paid by Colorado workers and employers for family
coverage hit $12,386.
By Will Shanley, Staff Writer
Tuesday, December 5, 2006
Health care costs in Colorado have jumped 82.2 percent since
2000, more than five times the earnings increase for workers.
For family health coverage, the average annual premium paid by
workers and employers rose to $12,386 in 2006, up from $6,797 in
Meanwhile, worker wages statewide grew by 15 percent, or $3,947,
to a median of $30,337 per year.
Those findings were reported Monday in the study "Premiums
Versus Paychecks: A Growing Burden for Colorado's Workers."
Families USA, a health care advocacy group based in New York,
prepared the report.
Employers are asking workers to absorb an ever-greater share of
rising health care costs, cutting into employees' net income,
the report found.
"Workers don't have as much bargaining power as they once did,"
said Sylvia Allegretto, an economist with the Economic Policy
Institute, a nonpartisan group in Washington, D.C. "And we've
had this ever-increasing inflation that was eating up those wage
Allegretto said the nation's sluggish wage growth is also due to
a deceptively weak job market.
Despite a relatively low unemployment rate of 4.4 percent
nationwide in October, Allegretto said some people have simply
left the workforce, which skews the unemployment rate lower.
Even though health care costs continue to escalate, separate
research shows that the pace of that growth has moderated.
Health insurance premiums increased by 7.7 percent this year,
the smallest one-year jump since 2000, according to a study
released in September by the Kaiser Family Foundation.
Still, the Families USA report noted, "As premiums increase and
plans offer thinner benefits, working families are shouldering a
growing share of health care costs."
Lexie Carlson, a retired metro-area schoolteacher, can relate to
Carlson said she gets roughly a 3.5 percent cost-of-living
increase in her pension payments each year. But she says the
modest bump never makes it into her bank account because she is
increasingly paying a larger tab for health insurance.
"It's pretty frustrating," said Carlson, 59, a former middle
school art teacher in Cherry Creek. "It's like I don't even get
But not all workers are feeling pinched.
Joanne Kozovich, a 26-year- old working in the accounting
industry, said: "I'm happy with the cost of my insurance. I
don't expect to get it for free."
Rodney Lee, 52, works in sales for an oil drilling company. He
said his firm pays for his entire health care plan and that "my
wages aren't stagnating."
Search for solutions
Companies are looking at ways to blunt the increasing expenses,
including altering retirees' benefits.
Employers say they are being forced to look for a variety of
solutions to rising health care costs, including passing
additional expenses on to workers.
"It's a big challenge for not only Qwest but all employers,"
said Erik Ammidown, director of employee benefits for the
Among other strategies, Ammidown said the company this year
rolled out what's called a consumer-driven health plan, which is
akin to a 401(k) plan for medical expenses, and has expanded
programs aimed at improving employee health.
In addition, Qwest starting next year will require any former
management employee or nonunion employee who retired after 1990
to pay future increases in health care costs.
Partly because of high health care costs, real earnings -- or
wages adjusted for inflation -- declined slightly nationwide
over the past six years to a median of $27,299, according to
Monday's Families USA study, which used data from the U.S.
That downward trend mirrors the findings of the 2006 Economic
Report of the President.
The annual report showed that the average real wage for workers
with a bachelor's degree declined 5.2 percent, from $54,396 to
$51,568, from 2000 to 2004.
Workers with high school degrees saw paychecks increase 1.6
percent, from $28,179 to $28,631, according to the president's
report, which used data supplied by the Department of Commerce.
Those figures -- adjusted for inflation -- do not include other
benefits provided by employers, such as health care and
The nation's 12 percent gain in production has surprisingly
failed to create real wage gains.
Allegretto, the economist, said that while real wages declined
during the past six years, there are signs that this is starting
She said real wages increased by 1.1 percent in 2005, the first
increase since 2001.
"The interesting point is that we've had stellar productivity
numbers," said Allegretto, pointing to the nation's 12 percent
growth in gross production since 2000. "That usually translates
into real wage gains, but we haven't seen that."
Staff writer Will Shanley
can be reached at 303-954-1260 or