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Since 2002, employer spending on benefits has shot up faster than wages, with the rise largely fueled by the rising costs of health insurance and retirement benefits. Since productivity growth won't support the rising cost of health-care and other benefits, the entire "Employer-sponsored system of benefits in its current form may be unsustainable," according to a panel of 17 experts questioned by the U.S. Government Accountability Office. Indeed, the panel agreed that soaring benefit costs are already forcing employers and workers to make increasingly tough trade-offs between wages and benefits, according to a new GAO report on employee compensation.
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