NY Times editorial on globalization and Canada’s healthcare system

Paul Krugman has a great editorial in yesterday’s NY Times about Toyota’s decision to pass over some southern states and put one of its new plants in Ontario. One of the big lures, as Krugman points out and as many Americans are slowly starting to realize, is Canada’s healthcare system, which “saves auto manufacturers large sums in benefit payments compared with their costs in the United States.”

Krugman rightly points out that in the global marketplace the US is becoming less and less competitive because of its lack of a nationally funded healthcare system. The overwhelming cost generated by the private insurance system here costs employers billions of dollars while Canadian employers are, relatively speaking, barely affected by the cost of providing basic health insurance to its employees. The danger to US workers, as Krugman indicates, cannot be exaggerated:

You might be tempted to say that Canadian taxpayers are, in effect, subsidizing Toyota’s move by paying for health coverage. But that’s not right, even aside from the fact that Canada’s health care system has far lower costs per person than the American system, with its huge administrative expenses. In fact, U.S. taxpayers, not Canadians, will be hurt by the northward movement of auto jobs.

To see why, bear in mind that in the long run decisions like Toyota’s probably won’t affect the overall number of jobs in either the United States or Canada. But the result of international competition will be to give Canada more jobs in industries like autos, which pay health benefits to their U.S. workers, and fewer jobs in industries that don’t provide those benefits. In the U.S. the effect will be just the reverse: fewer jobs with benefits, more jobs without.

I really don’t know what it will take for business and people down here to get the message that a public health care system would save everyone tons of money and make the US much more competitive. I really like how Krugman ends his editorial, too:

Funny, isn’t it? Pundits tell us that the welfare state is doomed by globalization, that programs like national health insurance have become unsustainable. But Canada’s universal health insurance system is handling international competition just fine. It’s our own system, which penalizes companies that treat their workers well, that’s in trouble.

As this tends to be something people ask me about a lot, let me just say this: I am really happy to be in Vermont. One of the hardest things about living here, though, is to see how people who don’t have access to affordable health care suffer. For that matter the amount that my employer and I put in to coverage for my family is, compared to Canadian standards, astounding. People here only see that as acceptable because they don’t have a tangible alternative to compare it to in the way that one does having lived in a completely different system. If people here really understood how the health care system in Canada works, they would be calling for the same thing here. Maybe the fear of losing good jobs to other countries will help push things in the right direction.

Thanks to Steve Cavrak for alerting me to this at this bright and early hour.

Now back to my regularly scheduled last-minute writing session for my online course! 🙂