Here's some sick news: Real wage growth over the past decade hasn't just been below average. It isn't even just the lowest in post-war history. Real wage growth from 2001-2011 was actually slower than during the Great Depression decade of 1929-1939. That's scary. It's sad. It's pitiful.

There are all kinds of explanations for why you haven't been given a raise. Economic growth has been slow. A "flatter" world has increased competition. Those who used to have high-paying manufacturing jobs are now in low-paying service jobs.

But there's a lot more to it. Consider this conundrum: According to the Bureau of Labor Statistics, total employee compensation actually increased 3.58% per year last decade. That was about on par with the booming 1990s.

You can probably guess what's going on. When most people talk about pay, they focus on wages. But wages are just one part of the compensation equation. Growth in total compensation -- including paid time off, health insurance, and other perks -- can vary wildly from wages alone. The difference lately has been extreme: While compensation growth was fairly high over the past 10 years, essentially all of the gain came from employers paying a higher tab for workers' health insurance.

This isn't exactly breaking news, but the numbers might surprise you. Over the past decade, wages grew 0.76% per year; health insurance premiums paid by employers grew nearly 5% annually (both figures are adjusted for inflation). In 1990, employer-provided health insurance made up just less than 6% of workers' compensation. By 2000, it was about the same, at 5.9%. Today, it's 8.4% and growing virtually every month.

The numbers are actually worse than they look. According to the Kaiser Family Foundation, 69% of businesses offered workers health insurance in 2000. By 2009, that number had dropped to 60%. On average, employers are paying far more for their employees' health insurance than a decade ago -- but fewer employers are offering coverage at all. For those that do offer health insurance, costs are exploding off the charts.  

There are a couple implications here. First, and obviously, an economy where what little growth we have goes toward health costs shouldn't be viewed as anything less than a failure. I love you, UnitedHealth (NYSE: UNH), but you aren't the growth America should be proud of. The economy won't pick up until consumers have more cash in their pockets and more confidence in their minds. That simply isn't going to happen as long as health insurance costs eat up all of compensation growth. Getting health-care costs under control isn't just vital to getting government budgets under control. It's vital to getting the private economy back on track.  

But the frustration doesn't stop there. The fact that most of us think that pay has been stagnant over the past decade when employers have actually been giving massive increases via health insurance costs highlights a fundamental flaw of our health-care system: Many of us are oblivious to the cost of medical care. Employers pick up so much of the total tab that millions of workers don't notice the full effect of rising costs. That's a huge impediment to fixing the system.

Ezra Klein of The Washington Post made a good analogy: "Imagine if people who touched a hot stove felt only a small fraction of the pain from the burn. That's pretty much what's happening in our health-care system. It hurts enough that we would prefer it to stop, but the urgency is lost."

What's the solution? All sorts of ideas exist for how to control health costs. Most are in some way tainted by political motives. One idea worth thinking about: A 2005 Purdue paper found that most workers would prefer a dollar wage increase to a dollar increase in employer-provided health insurance. Shifting compensation away from health premiums towards wages won't deliver a net raise, but it would make workers more aware of their health-care costs, and it might even end the perception of stagnant pay. Two steps in the right direction, you might say.

Check back every Tuesday and Friday for Morgan Housel's columns on finance and economics.

Fool contributor Morgan Housel doesn't own shares of any of the companies mentioned in this article. Follow him on Twitter @TMFHousel. The Motley Fool owns shares of UnitedHealth Group. Motley Fool newsletter services have recommended buying shares of and creating a diagonal call position in UnitedHealth Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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