Universal Health Care is a Win, Win

The falling value of the dollar should be dramatically boosting our exports. This should increase domestic employment. Believe it or not, we're seeing some of that. Otherwise, our unemployment numbers would be even higher than they are. A major reason we are not seeing a greater benefit is because the American labor market is not structured for international competition.

A big hindrance to American labor's competitiveness around the world is the tying of health care to employment. We expect employers to provide health insurance for the employees. This one item adds significantly to labor costs. If we did not participate in a global marketplace, we could continue this practice indefinitely. Or, if the rest of the world followed this same model we could continue this approach to health care with no adverse consequences to our competitiveness. But, that is not what the other industrialized nations of the world are doing.

Nearly all the other major industrialized nations have some sort of government provided health care which leaves private businesses completely out of the picture. That means those businesses have no health care expenses associated with their labor costs. In comparison with American labor market, it is as if those foreign businesses were having a portion of their labor costs subsidized by their governments. That is a significant competitive advantage. It is so significant, in fact, that if it were a more direct subsidy, the United States would be suing those countries in the World Trade Court for unfair practices.

It would be extremely arrogant to expect the rest of the world to change to our system of health care. They happen to like their way. Many U.S. companies that have shifted parts of their operations abroad like their way also. Being able to operate without the costs of health care has been a driving factor in the export of jobs.

American labor can hardly be expected to suddenly give up employer provided health care with nothing to replace it. That would be a catastrophe. We can't fault American businesses for wanting to keep expenses down, either. Without some remedy, the steady export of jobs abroad will likely continue.

There have been a lot of proposals circulated to address the problem of Americans who either have no health care insurance or are woefully under insured. A significant number of these would place the burden for this insurance on the backs of the employers. In terms of world trade, this is exactly the opposite of what needs to be done.

To improve their global competitiveness, our businesses need for us to adopt a government provided system of universal health care. There are ways this can be done without putting the insurance companies out of business. In fact, depending upon how such a program is structured, it could even increase their business. This would be a win for businesses because their domestic costs would go down. This would be a win for labor because it would be easier for companies to add more jobs. That is why both business and labor should be leading the crusade for universal health care.

That's Wade's two cents.

Wade Houston
July 9, 2008