Sticky wages is the concept that few employees will agree to a nominal decrease in wages even if there is a decrease in productivity. However, the Kaiser Family Foundation found that although nominal wages may not be decreasing, the amount of money workers are paying for health insurance is rising quickly (full report).
“Workers on average are paying nearly $4,000 this year toward the cost of family health coverage – an increase of 14 percent, or $482, above what they paid last year… The jump occurred even though the total premiums for family coverage, including what employers themselves contribute, rose a modest 3 percent to $13,770 on average in 2010, the survey found. In contrast, the amount employers contribute for family coverage did not increase.”
With employees bearing a larger and larger share of health insurance costs, pressure to increase decrease benefit generosity will build as workers begin to switch to less generous health insurance plans.