Companies with Benefits (or) Potential Welfare Losses of Benefits

27 Sep

Many companies offer employees ‘benefits.’ These include paying for healthcare, investment plans, company gym, luncheons etc. (Just ask a Silicon Valley tech. employee for the full list.)

But why ‘benefits’? And why not cash?

A company offering a young man zero down healthcare plan seems a bit like within-company insurance. Post Obamacare — it also seems a bit unnecessary. (My reading of Obamacare is that it just mandates companies pay for the healthcare but doesn’t mandate that how they pay for it. So cash payments ought to be ok?)

For investment, the reasoning strikes me as thinner still. Let people decide what they want to do with their money.

In many ways, benefits look a bit as ‘gifts’ — welfare reducing but widespread.

My recommendation: just give people cash. Or give them an option to have cash.