The reason health insurance became an employment perk was because of a tax loophole created during World War II. From A History of Employee Benefits and Taxation[1]:
> At the same time, the federal controls on wages was leading to significant angst and frustration among the labor market, and the threat of widespread strikes and other forms of labor protest became a serious threat to the economy and war effort. In response, the War Labor Board implemented a new income tax exemption to employers sponsoring employee health plans. This made employer contributions deductible on federal returns, while the benefits were entirely tax-free, to the employees [3].
> What started as a measure to avert crisis and labor strikes ended up becoming an expectation. As more and more employers leveraged these tax-benefitted health plans, American workers grew accustomed to getting their health insurance through work, rather than as individuals. The end of the war and the return home of American GIs exposed more workers to the new system, reinforcing its popularity and utilization [3]. By the 1960s, employer-sponsored health insurance plans had overwhelmingly displaced the formal individual market, a status that has persisted right into the start of the 21st century and provided a central tenant of the Affordable Care Act of 2008 [4].
In my opinion, this is yet another example of how even the most well-intentioned legislation can have disastrous consequences if it fails to account for incentives and second-order effects.
This quotation carefully skirts around the actual reason why health insurance became an employment perk and why a tax loophole was created during WWII. In an intentionally deceptive way (not by the poster, but by the original author.)
People were getting their insurance through their unions. Before the unions started doing this, nobody associated health insurance with employment. This made people grateful and happy with their unions. The government, in order to weaken the unions, paid employers to give their employees insurance with a tax break.
Not understanding this makes the first sentence completely unconnected to the rest of the text. Health insurance was not a raise, heath insurance was an intentionally union-breaking subsidy to businesses to give bosses more leverage on wages.
> People were getting their insurance through their unions. Before the unions started doing this, nobody associated health insurance with employment. This made people grateful and happy with their unions. The government, in order to weaken the unions, paid employers to give their employees insurance with a tax break.
Do you have a source for this? Nothing I've read has made such a claim. Even the NYT says that the root cause of employer-based health care was wage freezes during WWII followed by the tax-exemption of employer-provided health insurance.[1][2]
Goes to show that health care is not the only factor that people consider when starting a business. It's possible that other factors are significantly more important, enough so that people will start businesses in the US despite the poor health care - in my experience the availability of investment and networking opportunities is a huge factor.
But hey, got to have those profits...