The many faces of outsourcing
The Bush administrations unwillingness to deal with health care costs menaces Wisconsin jobs and workers pocketbooks.
The many faces of outsourcing
By Roger Bybee
As the Grim Reaper of outsourcing-related job loss now shadows gleaming office parks in Waukesha and the Fox Valley and sooty factory neighborhoods in Kenosha and Manitowoc we realize that the crisis is not solely the result of Corporate Americas endless search for lower wages. The greed-fueled health care cost crisis is another contributing factor to outsourcing.
Not only are industrial jobs shipped off to Mexico and China, now even highly-paid professional jobs are being “outsourced” to India and other misery-wage nations. A new study by researchers from Cornell and the University of Massachusetts estimates the loss of 406,000 U.S. jobs to these nations in 2004.
Part of our government’s response must be to remove all tax incentives to corporations that reward shifting jobs overseas and stashing profits (recently estimated at 31 percent of total U.S. corporate profits) in “tax havens” like Bermuda. We must insist that huge, highly profitable corporations reciprocate the loyalty shown them by the workers and taxpayers who subsidize their prosperity.
At the same time, we must also recognize that holding down healthcare costs is one of the most central ways to stop outsourcing and restore our economic strength. Even our most responsible and conscientious employers face ever-intensifying pressures because of spiraling health care costs. Just since 2000, U.S. healthcare premiums have soared by a staggering 59 percent. That means Wisconsin employers, especially small firms, face huge difficulties because of unaffordable health premiums. How much of the rising costs can they pass on to good employees in terms of deductibles and co-pays and still retain them? In Wisconsin, workers’ share of premiums has climbed by 49 percent since 2000, while workers’ wages have crept up by only 12.2 percent.
Even big corporations like the U.S. auto firms now find themselves pushed to the wall by health costs. It now costs $900 to $1,300 more to produce an auto in the U.S. than Canada. The differential is a stunning $4 an hour more per worker in the U.S.
Why are U.S. health costs so much higher than elsewhere? It is mostly because of America’s massive and parasitic insurance-HMO bureaucracy. “As much as half the health-care dollar never reaches doctors and hospitals—who themselves face high overhead costs in dealing with multiple insurers,” estimates Dr. Marcia Angell, former editor-in-chief of the New England Journal of Medicine.
Despite per-person health care spending that is nearly double any other nations, America’s overall quality on a variety of key health indicators is only 15th best in the world, as ranked by the World Health Organization. But instead of addressing the twin emergencies of our health care crisis and the torrent of jobs leaving America, some politicians are shamelessly sounding false alarms. To take the heat off of big campaign donors, President Bush and others have tried to blame medical-malpractice claims and “frivolous” lawsuits for the outflow of jobs and soaring health premiums. Tort “reform” is the answer, he informs us.
But by tort reform the president means effectively closing the courtroom doors to ordinary citizens who have suffered harm at the hands of medical providers or big corporations. In reality, this alleged legal “crisis” is fabricated: The rate of tort filings has actually been falling since 1975. Moreover, the Consumer Federation of America reports that malpractice costs are at their lowest point in history, just 55 cents of every $100 spent on health care.
Clearly, the election-year rhetoric of Bush and others offers only preposterous explanations and non-solutions for our job losses and soaring health costs. Depriving us of our constitutional right to our court system will neither halt the outflow of good jobs or curb skyrocketing health costs. Instead of Bush’s clumsy attempt at misdirecting public concern, we need to deal squarely with the core of the problem: the unchecked power of the for-profit bureaucracies of the insurers, HMOs, and drug companies. These bureaucracies consume vast resources through wasteful duplication, huge CEO pay, enormous overhead, and ruthless pricing practices. This is where serious cost cutting must begin.
Roger Bybee is a Milwaukee-based writer and consultant.