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Wednesday, February 15, 2006

It Will Fix That, Too?

Harold Meyerson's "Doing Good Jobs, But Losing Them" gives an outstanding history of Ford's Wixom assembly plant, which is closing in 2007.

At first reading the article I thought Harold was going to attack only Ford, for it's failure to redesign the cars Wixom puts out to make them appealing. The workers he met with for the interview feel that is a big part of their problem. It's not a small part of it, that's for sure, as he points out the Lincoln Town Car they make hasn't been made over in 10 years, while Cadillac has redone their entire line, twice in that time frame.

What the article really was about is in the last few paragraphs, the lack of univeral health care in the US. A lot of us blame the UAW and it's insistance (much) higher than average wages, and benefits for part of GM and Ford's problems. Meyerson claims it's because they are paying health care for their workers.

Meyerson's asserts that the unions political weakness is the problem, because of it they haven't been able to secure universal health care, and has kept the cost of employees up. That is only partially true, in two ways.

One the UAW has never really pushed politically for a universal system. Other unions with lower wage workers have, but the UAW has consistently challenged any change to the health care of their workers. Even modest proposals for small increases in copays or deductibles were stonewalled for years.

The second is congress' lack of will to enact a major tax increase that would affect everyone. That would be required for universal health care to be implemented. If it wasn't, the other option, and the one congress defaults to, "Tax those nasty businesses", would still cost the employers of all those UAW workers for their health care. It would just shift who Ford and GM give the money to.

The problem with taxing the businesses for it is how they will (still) have to pay for it. If we assume that union's won't get legislation passed to allow them to "opt out" of a national system,(I think they would, as a way to boost membership) and business pays for it, we end up like France, Germany, Spain and Italy.

In those countries where business taxes provide most of the subsidy to "nationalized health care", unemployment is double or better the US rate. France's unemployment rate was estimated at 10% for 2005, Germany's is 12.1%. Anyone who thinks Ford and GM won't still have to cut jobs to pay health care bills is crazy.

There are countries where more of that burden is placed on the taxpayers themselves. Canada's unemployment rateis currently 6.5%, Denmark is 5.2% and Great Britain is 5%. Each of these countries, while still having higher income taxes than the US, use VAT's or GST's to pay for most of their health care.

So to prevent workers from getting the axe, you have to charge them from their pay for the health care in the check out lines and when they get their car fixed. The question would then go back to "Does Congress have the will power to try and send that message to the people?" If they do come up with that intestinal fortitude suddenly, can they sell it to the 85% (+/-) of the population who has health care coverage already?

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