Not a Subsidy
12 May 2006
Editor, The Washington Post
1150 15th St., NW
Washington, DC 20071
Dear Editor:
Applauding Massachusetts' effort to guarantee health-insurance to all citizens, E.J. Dionne asserts that "employers who insure their workers provide an indirect subsidy to employers who don't" ("States’ Rights - for the Right Ideas," May 12). Nonsense.
Like wages, employer-provided health insurance and other fringe benefits are parts of workers' packages of total compensation - packages determined by competitive market forces. It makes no more sense to say that employers who offer health insurance subsidize employers who don't than it does to say that employers who pay average wages of $25 per hour subsidize employers who pay average wages of $10.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Editor, The Washington Post
1150 15th St., NW
Washington, DC 20071
Dear Editor:
Applauding Massachusetts' effort to guarantee health-insurance to all citizens, E.J. Dionne asserts that "employers who insure their workers provide an indirect subsidy to employers who don't" ("States’ Rights - for the Right Ideas," May 12). Nonsense.
Like wages, employer-provided health insurance and other fringe benefits are parts of workers' packages of total compensation - packages determined by competitive market forces. It makes no more sense to say that employers who offer health insurance subsidize employers who don't than it does to say that employers who pay average wages of $25 per hour subsidize employers who pay average wages of $10.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Posted by Don Boudreaux on
Monday February 26, 2007 at 2:04pm