Health Care and Competitiveness

Greg Mankiw claims that transferring health care costs to a national program will have no effect on US corporate competitiveness (especially GM) in the long run because workers eventually pay the costs anyway. So, if they pay the cost by some alternative method, they then (in the long run) ask for more in wages. This argument misses a couple of important variables by assuming that employer provided private insurance and a national health insurance program are equivalent goods with similar costs and values.

1) The value to the worker of a given quality of health care is the same, whether it is purchased in efficiently through a private insurance scheme or efficiently through a national or regional (e.g. Canadian) system.
2) The value of health care coverage to the worker is greater if it not dependent on continued employment with a single employer.

Therefore, if workers get greater value by having health care coverage not linked to their employer and that greater value comes at a lower monetary cost -- their demands for additional compensation in the long run will be less than if they were getting inferior health care at a higher cost from the employer. Thus, Larry Summers is right and Mankiw and Elmendorf are missing the point.

David Wegman, A Moment to Reflect Along the Way

Last night we honored David Wegman's many contributions to Occupational Health including especially his visionary application of the Nordic model to the United States, by creating a Department of Work Environment at the University of Massachusetts Lowell. It was a wonderful evening. With much humor and great stories. Central to it all were the roles played by David and Peggy's children in their presentations, and recognition of the central role Peggy Wegman played in all of this.

An ice storm canceled the afternoon session, so we were not able to formally present the many awards, including citations by the Governor, State Legislature, and even the U. S. Defense Department. But, my favorite story was about that DOD award, from an ergonomics grad of the program, who also sent a picture of he and his comrades waving from an ergonomically designed tank. To which Greg Wagner replied --"Tanks but no tanks."