Obesity Update
George Washington University researchers added in things such as sick days, lost productivity, even the need for extra gasoline — and found the annual cost of being obese is $4,879 for a woman and $2,646 for a man.
That is far more than the cost of being merely overweight — $524 for women and $432 for men.
Full article on calculating the real cost of obesity.
Women are almost twice as expensive as men. Not clear why.
If true, the free market wage for obese people should be lower. And female obese workers should be paid less than male obese workers. I believe I read at an earlier post at this site, that this is what happens.
If so, then obese people are paying the cost of their obesity and it is not being shifted to others.
If the externalities are all internalized, why are we worrying about the problem?
There is an interesting NYT editorial by Christina Hoff Sommers on why women earn less than men and why Congress shouldn’t intervene and muck things. It is summarized in Daily Policy Digest here:
http://www.ncpathinktank.org/sub/dpd/index.php?Article_ID=19857&utm_source=newsletter&utm_medium=email&utm_campaign=DPD
Too back Ms Sommers ignores much of the gender discrimination that you’ll often find. If I’m out sick for a month I keep my salary and benefits, including my 401K match. Lots of companies drop a woman’s 401k match if they are out for a pregnancy. That’s just one example. There are many more that she’s made a career out of ignoring.
It’s a lot harder to shift costs than most people think. That’s another reason why regulations in the group market for health insurance do not achieve what they assert they achieve (and what most people mistakenly believe they achieve).
Most people think that group health insurance spreads the premiums of health insurance equally between healthy and sick workers. To the naif observer, this appears to be the case because the regulations charge the employer a premium that can only vary by employees’ ages, not health status.
However, the sick (or, to be more accurate, the medically costly, because pregnancy is not a sickness) pay through lower premiums. Professor Gruber observed this with respect to mandatory maternity benefits: The “beneficiaries” (women of childbearing age) paid through lower wages (which I discussed in a study I wrote a while back: http://tinyurl.com/2f9fqyq). Thus community-rating rules simply add friction and opacity to the cost of health insurance.
If policymakers really think that the healthy should subsidize the sick (and idea to which I do not subscribe, but may be unavoidable in a mass democratic state), then it would be better to do it through explicit monetary subsidy.
I think that artk doesn’t have this right. I know it’s hard to separate pregnancy and child care from gender, but for present purposes we should all try. People who become pregnant and anticipate child rearing responsibilities are going to be less focused on the job. And less present on the job. Those would seem to be facts of life.
Why shouldn’t employers take that into consideration? It affects their bottom line. That doesn’t mean they are anti woman. Or even anti children. It just means that wages tend to be eaual to current and expected productivity.
There is a more basic answer to artk, and it is so simple I don’t know why economists have to keep repeating it to noneconomists. If there really were gender discrimination, that means that women would be paid less than the value of what they produce (marginal productivity). So if I hire all women workers, I will get the same output at lower cost than a rival who hires all men. Not only will I make more profit, in a competitive market I will drive my competitor out of business.
People who argue that there is real discrimination are at the same time implying that employers are not profit maximizers. And not just some employers. They are implying that ALL employers are not profit maximizers.
This conclusion is prima facie not credible.
Well, Joe, I know that it’s foolish to believe that people, including hiring managers at large corporations, are rational economic actors. Discrimination trumps economics every day.
artk, hiring managers can be as foolish as they like. The issue is: are women being systematically paid less than men for the same work? If so any enterprising entrepreneur can set up shop, hire only women, and make a bundle. But if not, then there is no market imperfection to be exploited.
Common sense would suggest the latter. I believe economic studies confirm that observation.