Scanning the HuffPo RSS feeds, I spotted this insightful piece by Jaron Lanier: "I am writing this on a United Airlines flight over the Atlantic. The flight is tense. We had a mechanical delay and United has been having trouble re-routing customers who will miss connections, apparently because it is now understaffed. The major airlines of the richest country in history tend to be bankrupt, and somehow or other that is considered normal."
That much is familiar. But the analysis is slightly different from what you'd find in the WSJ:
American corporations are increasingly functioning like fashion models. Youth matters most.... The main problem for old companies is that if you’ve had a workforce for a long time, the health care and pension bills pile up.... From them... I always hear complaints about a walloping big “Tax-like expense” they have to pay for health care and pensions, a tax that foreign competitors are excused from.... [C]ompanies facing the Tax that dare not speak its name have a harder time thinking in the long term. Toyota would probably not have been able to fund the development of the Prius if it faced the Tax at home in Japan.
Is this what an America in decline will look like? When Google has been around long enough to have a middle aged staff instead of a gorgeous crowd of healthy young people, will investors dump it for a new Googalike that can hire kids again to get out from under health care and pension costs?
The thing that I've always found amazing is that universal health care in the U.S.A. is solidly opposed by the right-wing corporate establishment, even though these are the people who could benefit most from it in the long term through the business efficiencies and flexibility that it would create. But I guess ideology is more powerful than rational self-interest.
Posted by geoff2 at September 27, 2005 02:00 PMOh, jeeez, Geoff, look at the comparative tax rates in Japan, Germany, England, and Canada versus the US and tell me that the Japanese are getting their health care for free. I'ts not even fancy economics: it's just that a dollar's worth of health care costs a dollar whether the government or the employer buys it.
Nor do I think you can support, with numbers, the notion that it's health care per se that's hitting the airlines (viz the fact that some airlines are quite profitable.) The problem is that the legacy airlines have underfunded "pay as you go" pension plans that the unions got when the airlines were regulated and making mandated profits. (That would be back in the days that a ticket DEN-LGA cost $1000 one way, not $100.) Some of that cost is health care, but a lot more of it was that they weren't actuarily sound on their own and needed money from the airlines.
In other words, the same problem that means Social Security is going to collapse until and unless they can get some better return on people's "cnotributions" than they get now.
Posted by: Charlie (Colorado) at September 27, 2005 07:30 PMCool your jets, Charlie. Nobody said it was free. The point about the article is that in the US health care is a cost that has to be managed by business, and the older the company, the greater the cost. Those who support the present US model have to accept the consequences of their choice, and one consequence is that the system inevitably leads to different costs for start-up and established companies. If you're OK with that, fine - but don't pretend it doesn't exist.
As to your assertion that "dollar's worth of health care costs a dollar whether the government or the employer buys it", the evidence is against you. A "dollar's worth of health care" presumably measures the care delivered to the recipients, while "costs a dollar" includes all overhead costs. On that basis the US system is one of the most inefficient in the world.
Posted by: Geoff Arnold at September 27, 2005 08:38 PM