January 30, 2012 7:47AM 

# Cannon’s Second Rule of Economic Literacy 

By [Michael F. Cannon](https://www.cato.org/people/michael-f-cannon) 

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…appears at the end of this a poor, unsuccessful letter I sent to the editor of the *Washington Post*:

> After quoting a scholar who expresses the economic consensus that the rising cost of employer-purchased health benefits “means lower wages and salaries,” “[New study shows health insurance premium spikes in every state](http://www.washingtonpost.com/national/health-science/new-study-shows-health-insurance-premium-spikes-in-every-state/2011/11/16/gIQAhBl7SN_story.html)” \[Nov. 17\] immediately contradicts that consensus by stating, “employers are attempting to shift health costs onto their workers” by “asking employees to shoulder a larger share of the premium.”
> 
> 
> If workers bear the cost of employer-paid health benefits in the form of lower wages and salaries, then increasing the employee-paid portion of the premium is not a cost-shift. Workers would have borne those costs either way.
> 
> 
> Employers cannot shift to workers a cost that workers already bear.

See [Cannon’s First Rule of Economic Literacy](https://www.cato.org/paul-ryans-roadmap-and-the-difference-between-costs-and-spending/).

##### Related Tags 

[Government and Politics](https://www.cato.org/government-politics), [Health Care](https://www.cato.org/health-care), [Regulation](https://www.cato.org/regulatory-studies) 

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