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You had an amazing employer to have all that. The one thing I have that you didn't list is that our bookstore sells discounted movie theater tickets to students and staff.
In any case, I would give up most of that for more cash, except the health insurance. If we moved to national health care I would give up all of it. If they wanted to pay me an extra 5-6000 I would just buy my own health insurance off of the Obamacare exchange, since the insurance costs the employer $1000/mo because they gouge them. I've searched individual plans with the same features that cost 5-600/mo, but since they pay 90% there is no benefit to me choosing not to cover under theirs.
There is NO WAY anyone can take advantage of maximum benefits to even come close to making up the shortfall in wages. No way. Cash is king and I would take cash over that b.s. ANY DAY.
They send out a letter totaling up our "real compensation" every year so we can feel grateful for their beneficence for letting us work for them. The value of the benefits is always like $30K on top our salaries. Bullcrap, if that's what I'm worth give me the 30K cash and I'll figure out my own damn health insurance and gym membership. It'll be well less than 30K I guarantee that.
Just normal Silicon Valley companies such as Intel, Apple, Google and the like. Yeah, we had discount movie tickets, and discounts to restaurants, as well.
I understand you'd rather have $30K cash. Many people would. The reason companies provide these types of non-cash compensation is federal & state income taxes. Let's say the value of those non-cash items really is $30K. Let's say the employer gives the employee $30K in lieu of those benefits. After federal and state income taxes, that $30K might only be $18K to 20K or so, depending on assumptions. In order to get $30K in cash after tax, the employer must give the employee closer to $50K or so again depending on assumptions.
This is an example of the distortions introduced by our income tax system: it costs the employer less to give you $30K of benefits in non-monetary form than to give you $50K in cash compensation. This is the primary reason the price of health care has increased so much since WWII.
Normal Silly-con companies, right. The MAJORITY of people don't even get 40 hours any more, let alone health insurance, vacation, family leave, or sick days. Trust me, if you get all those things, then you are an exception, not a rule.
Normal Silly-con companies, right. The MAJORITY of people don't even get 40 hours any more, let alone health insurance, vacation, family leave, or sick days. Trust me, if you get all those things, then you are an exception, not a rule.
Do you have a source for this? I'm genuinely curious what percentage of full time workers have access to those benefits. I did find this from March 2015: http://www.bls.gov/news.release/pdf/ebs2.pdf
According to that report by BLS for all full time civilian workers:
- 88% get paid holidays
- 87% get paid vacation
- 78% get paid sick leave
- 80% have access to medical benefits
It doesn't have anything I saw for cross sampling of how many had all of them, but giving high percentages for each I'd be surprised if most full time workers didn't have those benefits.
Just normal Silicon Valley companies such as Intel, Apple, Google and the like. Yeah, we had discount movie tickets, and discounts to restaurants, as well.
I understand you'd rather have $30K cash. Many people would. The reason companies provide these types of non-cash compensation is federal & state income taxes. Let's say the value of those non-cash items really is $30K. Let's say the employer gives the employee $30K in lieu of those benefits. After federal and state income taxes, that $30K might only be $18K to 20K or so, depending on assumptions. In order to get $30K in cash after tax, the employer must give the employee closer to $50K or so again depending on assumptions.
This is an example of the distortions introduced by our income tax system: it costs the employer less to give you $30K of benefits in non-monetary form than to give you $50K in cash compensation. This is the primary reason the price of health care has increased so much since WWII.
Sounds like our income tax system is not as progressive as its detractors would have us believe.
Do you have a source for this? I'm genuinely curious what percentage of full time workers have access to those benefits. I did find this from March 2015: http://www.bls.gov/news.release/pdf/ebs2.pdf
According to that report by BLS for all full time civilian workers:
- 88% get paid holidays
- 87% get paid vacation
- 78% get paid sick leave
- 80% have access to medical benefits
It doesn't have anything I saw for cross sampling of how many had all of them, but giving high percentages for each I'd be surprised if most full time workers didn't have those benefits.
I think the point is that there are a ton of employers out there with Walmart-class jobs where everybody is part-time. At 32 hours, you're marched out the door. The employer isn't on the hook for health insurance, sick time, paid holidays, vacation time, retirement plan, or the other expensive compensation offered to the full-time employees.
At the peak of the Great Recession, 20% of employees were part time. It's dipped a bit to about 18%.
Citation from the BLS: Employment Situation Summary
Click on table A-9. 122-ish million full timers. 26.6-ish million part-timers. 18%.
So you have 18% of the labor force as part timers who typically get no benefits at all. And then you have about 20%-ish of the full timers who receive no or minimal benefits. It's not the "majority" but it's probably 1/3 of the labor force.
Sounds like our income tax system is not as progressive as its detractors would have us believe.
Huh? It may have been political suicide but Mitt was correct. 47% of the population pays essentially no Federal income tax.
My effective tax rate is up over 20%. My health insurance isn't taxed and that's about $8K. I have a 401(k) safe harbor of about $5K that is tax deferred. That's the only part of my compensation that isn't subject to FICA and Medicare taxes.
The Federal income tax is extremely progressive until you're affluent enough that you can disguise your compensation as dividends and capital gains. And with dividends, the IRS still insists that you pay yourself a "reasonable" salary.
I understand you'd rather have $30K cash. Many people would. The reason companies provide these types of non-cash compensation is federal & state income taxes. Let's say the value of those non-cash items really is $30K. Let's say the employer gives the employee $30K in lieu of those benefits. After federal and state income taxes, that $30K might only be $18K to 20K or so, depending on assumptions. In order to get $30K in cash after tax, the employer must give the employee closer to $50K or so again depending on assumptions.
There aren't many people who get $30K of completely untaxed compensation. Employer contributions to retirement funds are tax-deferred so the taxes are collected eventually. It's mostly medical insurance. I don't know anybody who gets $30K worth of health insurance from their employer. Even for a gold-plated plan that covers everything, you'd need to have a very geriatric workforce to come even close to that kind of group family premium. That's not the typical composition of the typical tech company. it's usually old school rust belt companies that have the high geezer ratio and are getting hammered with extremely high group premiums.
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Quote:
Originally Posted by GeoffD
There aren't many people who get $30K of completely untaxed compensation. Employer contributions to retirement funds are tax-deferred so the taxes are collected eventually. It's mostly medical insurance. I don't know anybody who gets $30K worth of health insurance from their employer. Even for a gold-plated plan that covers everything, you'd need to have a very geriatric workforce to come even close to that kind of group family premium. That's not the typical composition of the typical tech company. it's usually old school rust belt companies that have the high geezer ratio and are getting hammered with extremely high group premiums.
Don't be so sure. I know that the cost of mine is $1,900/month now, and that's $22,800/year. For two people. For employees with several kids that would be even more. We pay about $200/month and it's a high deductible with medical savings account, even so we expect to have changes next year to avoid the employer paying 2 million in "cadillac tax". While we do have some old codgers here, the average age is in the 40s. Our employer attempts to keep our benefits in the area of 80% 90% of the best companies to attract the best people and tell us that we are at about the top 83% currently.
There aren't many people who get $30K of completely untaxed compensation. Employer contributions to retirement funds are tax-deferred so the taxes are collected eventually. It's mostly medical insurance. I don't know anybody who gets $30K worth of health insurance from their employer. Even for a gold-plated plan that covers everything, you'd need to have a very geriatric workforce to come even close to that kind of group family premium. That's not the typical composition of the typical tech company. it's usually old school rust belt companies that have the high geezer ratio and are getting hammered with extremely high group premiums.
I picked $30K as an example. You may be right that it is too high. But it isn't just health insurance that is a non-monetary benefit -- go back to that list & you'll see a ton of things are true non-monetary and non-taxed.
Regardless -- pick a reasonable number, then compare it to a tax-protected analogue. It is an example of an economic distortion.
There aren't many people who get $30K of completely untaxed compensation. Employer contributions to retirement funds are tax-deferred so the taxes are collected eventually. It's mostly medical insurance. I don't know anybody who gets $30K worth of health insurance from their employer. Even for a gold-plated plan that covers everything, you'd need to have a very geriatric workforce to come even close to that kind of group family premium. That's not the typical composition of the typical tech company. it's usually old school rust belt companies that have the high geezer ratio and are getting hammered with extremely high group premiums.
I think it was actually 23K. But still...
What my employer does is total up the maximum potential value of all the non-salary benefits and then use that to say "you don't need raises this year, look at everything we do for you."
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