One of those things I shook my head at back in the go go dot-com era was how numbers became to flexible, and manipulation became to widely accepted and embraced. Nowadays, everything is open to "interpretation".

An economy is a tricky thing to measure to begin with. It's like trying to take the average temperature of your house, it all depends on where you measure. It's cold in the fridge, warm by the water heater, and damp in the basement. If you pick and choose the right spots, you can get wildly differing scenarios. If you only measure in the freezer, the attic, and the basement, the house is too cold. If you measure inside the lit stove, inside the furnace duct, and above the living room lamp, it's too hot. Most people just mean what it feels like when you walk in the frot door, sitting on the sofa, and lying in bed.

The economy is harder to measure, because getting a consensus on which spots are the "best" spots is difficult at best. And best for whom? The majority? The middle class? Recent immigrants? City dwellers? Farmers? Guys named Bob? You have to sharpen the mind to process all the math, to get a picture that's accurate for the economic rung you inhabit, and aspire to reach.

I was reading the George Will piece in the Washington Post [note: piece in not linked as a protest. Newspapers hardly if ever link to relevent blog posts, even if a national story breaks on a blog. So I refuse to link to newspapers. Google around, you'll find it.], and he mentioned that wages were stagnant only if you didn't include benefits. Which is silly, because they're called benefits for a reason. I think this is a classic measurement connundrum, because he's right and totally wrong.

Medical coverage, group life coverage, group disability coverage, dental, and penions are very valuable benefits. Trying to purchase any of these coverages individually outside of your employer is prohibatively expensive for many people. It's not unusual to hear of people taking lower paying positions in exchange for full coverage. George Will is right, this ia valuable benefit that is unfairly ignored.

But he's counting it in the wrong category. It's not like your employer hands you a wad of cash, and then you spend it on coverage. The employer picks the health plan, and the premiums, and how much you have to pay. This reality is reflected in the Consumer Price Index, as the CPI doesn't count employer paid health care premiums. While benefits are a benefit to employees, it's NOT INCOME; it's a COST to the employer.

A quick example might help things out here.

You work for ABC company. You get paid $40,000 + major medical, which costs an additional $5,000. To keep things simple, the employee pays nothing (this is getting quite rare nowadays, most people have to a pay a percentage towards their coverage). George is saying that you are really getting $45,000 worth of compensation: $40,000 cash + $5,000 benefits = $45,000 compensation.

Next year premiums increase to $10,000. To stay profitable, the company lays people off and freezes wages. By Will's math: $40,000 salary + $10,000 benefit = $50,000 compensation. Yay, you're wages are rising my friend, live the American Dream well! But wait, what's that? You don't feel like you got a $10,000 increase? Well, I hate to tell you, but you're right. Let's take a look at take home pay, that little statistic that Geroge has just dimissed. $40,000 this year's salary - $40,000 last year's salary = $0 increase (assuming you didn't get laid off). I hope you didn't get laid off, because 0% increase vs. 3% inflation hurt enough as it is.

Although the medical premium doubled, it's not like the quality of your medical care doubled. In fact, the premium probably tripled and the employer reduced the plan coverage to lower the price. So what you're probably REALLY getting is worse medical coverage at a higher price. Plus, as the co-pays probably got higher, you get to take home less money to reinject into the economy. You just got whacked with the nasty end of the health care inflation stick, and it hurts.

George is right in that Benefits need to be counted, they are very valuable. But it should be counted as a cost against corporate profits, or as an income stream for the health care sector, not as personal income. It's something you can lose, not something you can spend. That would be take home pay, which George points out, has been stagnant for quite a number of years.

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Oh, what's that? Your company is doing well enough to absorb the premium increase and still pay a raise? Man, it must be nice to work at Google or Exxon.