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#6 what an astonishing sense of entitlement these liberal do gooders have, and how little financial knowledge and awareness.

Are you implying that conservatives would be perfectly at ease if their benefits were cut? Libertarians?

The Harvard faculty are upset that they are receiving a cut in total compensation. Whether their original plans were inefficient or not, the changes being made without a salary increase are effectively a wage cut. Their anger is understandable, and as a fellow worker, you should be happy that employees with bargaining power are using it. I hope they strike.

Perhaps, but I'm still highly disturbed at the suggestion that someone making six figures (as is explicitly stated in the article) does not have an emergency savings of a mere $1,500, and is proudly willing to state such.

Who cares? They're getting their pay docked and they're upset! For what it's worth, I can easily believe that supporting a family on low six figures in Cambridge is not easy. Would we criticize a two parent household with two five figure incomes for saying this? I doubt that very much. I'm also willing to believe that they are just trying to bargain effectively by claiming to have no cash savings.

Either way, I would be troubled for my own prospects if highly qualified people were not fighting compensation decreases, so this is definitely a good thing and not being on the professors' side is crazy.

derek seems confused about how labor markets work.

The fact that a Harvard professor is able to bargain for higher compensation does not imply that all workers will get higher compensation.

"For what it’s worth, I can easily believe that supporting a family on low six figures in Cambridge is not easy."
I cannot.
"Would we criticize a two parent household with two five figure incomes for saying this? I doubt that very much. I’m also willing to believe that they are just trying to bargain effectively by claiming to have no cash savings."

It's not entirely clear that they're actually getting a decrease in compensation. You may be jumping the gun. It's quite possible that there's a university contribution to an HSA that is part of the plan and significantly defrays the deductible increase. I only say this because of my experience with similar transitions at quite a few companies. They could easily be described in broad terms the same as in the article, however with the relevant details left out.

It is of course possible that Harvard is reacting in a way to the Cadillac tax different from other employers I've known.

And yes, I would be concerned about a household with two income earners adding up to six figures not having an emergency fund, and I would criticize them.

Wouldn't a Harvard prof get a big raise by moving along to Silo Tech where his CV would be a big boost to the school's prestige? Or is just being at Hallowed Harvard the most important thing? Perhaps Harvard could cut salaries if that was the case.

Actually, universities know that they can continue to annually raise tuition until applications for admission begin to fall. Why wouldn't they cut salaries until professors quit and applications for open positions receive no interest?

They are moving to a HSA, like many other companies. Lower premiums help, but most of it is an offset of this year's increase.
I doubt the school is paying less this year on their side. I'd say no cut in compensation.

The hermit crab ordering seems to work by each crab essentially calls dibs on the shell he wants, and the biggest crab is able to choose the shell he wants. the largest crab doesn't want a smaller shell, so he only chooses the largest shell available to move into. The next largest crab isn't large enough to take the largest shell from the largest crab, and he doesn't want a smaller shell, so he secures its rights to the shell the largest crab is using once he vacates it, etc. down the chain. If you note, there are instances where a little crab was trying to secure a larger crabs shell, and a middle size crab just moves the little guy out of the way. Instead of ifghting, the little guy just takes that shell.

So a nice example of everyone acting selfishly leading to an efficient outcome?

So this only works when the attribute is correlated to might? i.e. larger shell usually implies stronger crab?

Say, they were trying out shells that best fit their color. Now enforcing the best fit algorithm seems harder?

It seems that the number of vacant shells should far exceed the population of crabs. I'm surprised there is any competition for shells.

The competition is for shells that have already been inhabited by crabs. The crabs hollow out the extra space inside their shell, making it roomier and more comfortable for them. Thus used shells are more valuable than new ones. It is the largest crab who has the most work, as he must move out of his comfortable (but too tight) home and get to work on hollowing out a new one.

“What I don’t have time to do is find $1,500 in my back pocket.” Most of us are obliged to search the sofa.

Most people think you have "made it" by the time you are a Harvard professor, such that having to come up with $1,500 for an unexpected medical expense wouldn't be a big deal (and the amount is capped at that level!) I think there's a few things going on here: 1) high incomes in coastal cities are used to bid up real estate prices, rather than increase free spending money 2) people raising more than 1 kid in said coastal cities end up with much different lifestyles as the price of raising kids goes up with the real estate prices (child care labor costs,etc.) 3) Professors may have high levels of student loan debt due to tuition spiral of recent years for grad and undergrad education.

Having a high household income is MUCH different for a family of 2 working parents with multiple kids, with daycare, increased medical costs, larger housing needs, etc. than for a DINK household with minimal expenses, and even more so in expensive zip codes.

Indulging in price elasticity in real estate is freely spending money.

Don't you mean saving?

Look, there are people who mow the lawn at Harvard. The people who mow the lawn at Harvard are statistically more likely to have kids then the people who are professors (high income and high IQ both correlate with having fewer children). The people who mow the lawn at Harvard have much lower income then the professors at Harvard even after accounting for government help. They both work at the same location so you can't use that argument.

Bottom line: Why should the people who mow the lawn at Harvard have any sympathy for the professors? If the professors can get more money out of Harvard good for them. But for them to whine like little punks because their healthcare costs are going up like everyone else in America is something that disgusts me.

Side note: I know a lot of people who mow lawn at the local university and have kids. That is why I choose that example. I use to mow lawns for a living myself for that matter. I don't recommended it, but it can be fun on a nice day.

It amuses me that commenters here appear to assume that the hallowed Harvard professor is the sole income for his/her family of four, and that the faculty paycheck is the only income. One of my professors had been at Harvard his whole career. He became a house master, eliminating all of his daily expenses, with university-paid servants to boot. Naturally, he hired his wife on his staff. They rented out their lovely home in Belmont. He also sold lots of books, and was hired to lecture elsewhere. When he retired, he bought an island off the coast of Maine and moved there. It makes me very happy that they whine like stuck pigs when their precious policy preferences come home to roost.

#4: Dangit, Darryl, I toldcha ta wear yer sweat pants, not yer swim trunks. Now Ima havta steal a lawnmower ta git yer bail money. That makes four this month.

#2: No, but using one -- and flushing it -- should be.

And you have to put the seat down afterwards, or else you're part of the GOP's "War on Women".

I wonder if Norman and John are volunteering to be observers and enforcers of their, admittedly, civilized proposals. Something in their writing style tells me they are, and enthusiastically so.

Yes, most Indian wipe and clean their behind with hands, and yes they also eat with their hands.

Daniel Davies 3xample only works because he is trading very few oranges. Have him buy 5,000 oranges rather than 5 and the example completely breaks down. The fee he collects becomes insignificant if the volume is very large.

But the action in the foreign exchange markets is massive -- billions of dollars a day -- so the example he does just does not work the way he thinks it does.

#5- Don't argue from price?

# 4 - at least he wasn't able to accidentally start it while trying to steal it.

In high school I worked at a grocery store that had a walk-in beer cooler. People would often use this as a way to steal beer. Sometimes they would just chug one in the back. But one time a guy in sweat pants went in, tucked the pants into his socks, and filled them as full as possible with beer bottles. He was weirdly shaped and clinking loudly when he came out and walked towards the door. When we stopped him, he still said, "What? What did I do? I didn't do anything!"

#6: It's really tough being upper middle class these days, and probably unfair, too.

On #4, adoption costs can be negative. If you adopt a foster child in California, you keep the fostering stipend, which is about $900 per month, plus medical and other benefits. For the $50,000, you are essentially buying a new baby with no known issues.

#6: Harvard's mistake was that they didn't lie enough about the new health plans. They should have first promised all faculty that if they liked their old plan, then they could keep it. Then, Harvard should have denied that anyone's out-of-pocket costs were going up, while making the new plans so complicated that no one would really know what was in them. After the new plans came into effect and people found out the truth, if anyone wanted to repeal and replace the new plans, as the faculty now seem to want to do, then Harvard could just label them as "obstructionists". Apparently, Harvard did not avail itself of certain health policy "expertise" from down the road at MIT.

@BC - This comment confuses where the debate at Harvard versus ACA is. Harvard seems fundamentally about getting to a better balance for faculty between income in kind -- health care services -- and income in cash. ACA is fundamentally about transferring income to those that did not have health insurance. ACA needs further evolution -- probably in the direction of eliminating the role of employers in transacting for health insurance purchases -- in order to get better value for money in health care ("reduce health care costs").

@ThomasH, this comment confuses a joke with serious, detailed analysis of the ACA and Harvard health plans.

#6 At least some of the dispute seems to come from the idea of some A&S faculty that "Harvard" (as opposed to the faculty through their wages) is paying for part of the cost of health insurance. Maybe if Summers were still President he could have cleared up this misunderstanding. It is disheartening to see the Harvard faculty as confused about this point as Hobby Lobby and SCOTUS. The level of economics education in this country really is deplorable.

As I understand the difference between the old and new plans (the write-up is not hugely clear) Harvard want to add a some co-pay that they estimate will induce some changes in behavior that will in the aggregate result in faculty exchanging a bit less medical service for a bit more cash. The write-up did not give an estimate of how much. Of course how this works out in any one person's case depends on initial conditions, appetite for risk, and luck. Given conservative bias (and bias about whether one is making sub optimal choices about health service use), resistance to this change is not unexpected.

#5 Why tax incidence. This sounds like the market clearing price varies by child characteristics. Not surprising.

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