Contemporary Employment and Public Health Care

An article in the Sunday NY Times magazine, New World Economy, caught my attention this morning. It contrasted GM with Walmart as kind of a barometer of the changes in employment patterns in the US. Where GM promised lifelong employment and good benefits, Walmart offers...cheap goods. In other words, there is no longer (if there ever was) sense of paternal responsibility by large businesses and employees are left responsible for themselves.

The article argued, rightly I think (see past posts), that the subsidy given to employers in the form of tax benefits related to providing health insurance for employees could be used more efficiently if it was collected as a tax and applied to a public scheme. This makes sense not only for low-wage workers but also white collar workers who change positions quite regularly. While the article talks of a "total reimagination of the basic contract between government, businesses and workers,"the benefits would not be limited to the low end of the wage scale.

Policies that transfer subsidies on healthcare into directly providing insurance policies, see my previous post, could free up benefits for an increasingly mobile professional class. More professionals either are or are treated like consultants/contractors than in the past, yet subsidies support a business model based on lifelong employment with benefits and a pension--a model that is near extinct. How many people do you know that have a pension vs. a 401(k) vs. social security reliance?

The "basic contract" between workers and employers has changed, and so should the methods we use to ensure social welfare. Streamlining the tax code by reducing overall rates, but getting rid of deductions, would result in a more efficient redistribution of wealth and a reduction in the problems associated with concentrated wealth. Similarly, these business subsidies should be cancelled and replaced with a tax that supports a broad social insurance program covering health, life, disability, and personal retirement accounts.