In a Townhall.com column yesterday, George Will coined a term that deserves widespread use: economic hypochondria. He criticizes the way in which the media—and many of us, even though relatively “healthy,” financially—pounce on every bit of news that might be interpreted as indicating economic hardship.
Will’s column has a certain partisan bent to it, but one needn’t be a Republican to see the larger point. As liberal writer Gregg Easterbrook observed in The Progress Paradox, even the poorest Americans enjoy a standard of living better than more than 99% of the people who have ever lived. In short, let’s keep our economic situation, even when “difficult,” in perspective.
One item in Will’s account deserves further comment. There has been a lot of discussion about the anemic performance of working and middle class wages over the last twenty years. It is a genuine problem. But, as others have pointed out, total compensation has risen more impressively.
My hypothesis is that the discrepancy between what employers feel like they’re paying and what employees feel like they’re making is real—and it’s due in large part to skyrocketing health care costs. Americans demand ever more frequent and more expensive medical exams, treatments, and surgeries. Yet, because the costs of health care are mostly hidden (doctors charge insurance companies, which charge employers, while the consumers, employees, never see a bill), workers don’t gain an adequate sense of how large a chunk of their compensation is comprised by health insurance premiums. This, of course, is beginning to change with the shift of more costs to employees.