In an interesting column on MSNBC, the writer posits that because other industrialized nations have government health care, jobs are leaving America because health care costs are lower elsewhere. As US health care spirals up faster than inflation, employers find health benefits are a significant challenge to the bottom line:
Will the law of unintended consequences force conservatives to accept universal health care as a consequence of free trade? Or will will the anathema of socialized medicine turn the tide to protectionism? Or will we simply not compete on health care, and lose millions of jobs overseas?
Employers are under no obligation to provide health care. They do so to attract desirable employees. If you don’t offer health care, you are left with the employees who couldn’t get jobs at the companies who do. It is called competition, and if we decide not to play, we will continue to lose jobs overseas.
It’s possible. Keep in mind that government at one level or another already pays over 40% of health care costs in the US.
Canada and the automakers are an interesting case, and not particularly applicable to the overall point in the OP, which is nonetheless valid and deserves examination. Canada used to have pretty high corporate taxes – higher than in the US right across the border. But that didn’t matter too much to the automakers, because their actual automaking operations aren’t particularly profitable even in good years. So yeah, they kind of got a free ride by being in Canada – their health care costs were a lot lower AND their taxes weren’t nearly high enough to offset that savings.
Canada is rejiggering their system – in fact, much of the industrialized world is doing so to become more competitive. Corporate taxes are coming down there. It remains to be seen whether the result of this is a) enough growth to actually increase revenues from the corporate tax, b) increases in other levies such as personal income taxes or sales taxes, c) cuts in social service programs or other budget cuts, d) finding a market for US and European-style deficits or e) other.
To the larger point, I think the jury is still out. As I noted, many countries are cutting taxes in response to international competition – Germany looks to be the latest to get on the bandwagon. But of course all those countries want to keep whatever social services, whether it be healthcare or otherwise, which their populations have seen fit to have provided by the government. Going forward, there will be pressure on all countries to conform somewhat to other countries to make a level playing field. And yes, that may include pressure here for governments to increase its already-large role in healthcare.
As to how the whole thing, as opposed to US healthcare specifically, plays out, conservative economists think that increased growth is all or most of the answer for any given country and in isolation they’d be right. But with everyone doing the same kinds of things, is there enough growth in Gross World Product to provide the growth bump to all of the larger economies while still allowing the vastly-accelerated “catch-up” growth that those same economists believe will happen in developing economies as trade and their governments become free? I’m an optimist and think the answer may be yes, but I freely admit that it’s a hell of a lot of growth.
How many of the jobs that are going overseas are going to countries with taxpayer funded health care? And isn’t some of this comparing health care costs in the Third World with thos in the US?
I know that the high cost of benefits, paired with the strenght of the unions here, is one of the reasons that so much of the film industry is going to Canada.
What I’ve always wanted to see in comparison’s of US and Canadian health care are not only the out of pocket expense of insurance, but also t differences in individual and corporate tax rates of both as well. In the article it mentions the cost per worker in each country, however it doesn’t mention the tax rate to allow Ottawa to fund UHC. Anyone know the financial figures?