Sunday, September 24

when will big business support universal health care

My girlfriend, who's British, and I have been talking a lot about universal health care, something she's really passionate about. She thinks the U.S. is callous or stupid or both to not offer it, despite being such a rich country, and couldn't believe it when I told her that when I was growing up, my family went without health care for years.

My dad had long-standing heart problems, and doctors told him he needed heart bypass surgery or he'd only live maybe another year. But there was no way we could afford the bills, which would have been tens of thousands of dollars. So my dad changed his diet, and he lived another 10 years, although not as long as he might have if he'd had proper medical care.

So given our debates, I was fascinated to read Malcolm Gladwell's article in the New Yorker, "The Risk Pool," which covers health care, company pensions, and the "dependency ratio."

I'd never thought before about the dependency ratio, which is the ratio of pensioners to workers that a company like General Motors has. They're flailing now because they promised pensions to hundreds of thousands of workers over the years, while automation reduced the need for workers, and overseas competition has cut into their share of the car market. (It also helps explain the success of countries such as Ireland, who have low ratios, the failings of other countries, and suggest that while China is booming now, in a few decades it will be facing massive problems.)

But getting back to U.S. business, what's a company like G.M. to do? In 1950, the head of the United Auto Workers, Walter Reuther, pushed for spreading the costs of pensions and health care over the largest group possible. Companies like G.M. resisted, thinking it would give workers too much power, since they would be free to move from one job to another and take their long-term benefits with them.

At least one big business, Bethlehem Steel, seems to be coming around to the view that universal health care is the only way to go. They went bankrupt, largely because their workforce had shrunk drastically, while they still were paying the pensions they'd promised years before. The bankrupt company handed their pension obligations to the U.S. government's Pension Benefit Guaranty Corporation, an agency that makes sure people receive their benefits when private pensions go belly-up. (See the agency's official site, or the Wikipedia page on it.)

Then Bethlehem Steel reincorporated, sleeker having shed this responsibility. Now they're profitable.

This seems ridiculous: companies resist pooling retirement and health responsibilities, until they can't meet their obligations anymore, and only then do they hand it over to the government.

At least the new head of Bethlehem Steel is plain-spoken about supporting universal health care:
"Every country against which we compete has universal health care," he said. "That means we probably face a fifteen-per-cent cost disadvantage versus foreigners for no other reason than historical accident.... The randomness of our system is just not going to work."
I'm not sure what he means by historical accident—the U.S. health care system, or Bethlehem's bankruptcy. Moves toward universal health care have been strongly opposed by a variety of big companies, so I don't think our current system is any accident. But I agree: the randomness of our system, where people's benefits depend on which company they happen to get hired by, isn't going to work.


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