Monday, June 15, 2009

After GM the UAW Should Manage Universal Healthcare

In the 1950s the United Auto Workers (UAW) successfully pushed America’s auto companies into granting the unionized workers free healthcare for life. Sixty years later, in the wake of the collapse of two of the big three automakers, the Obama administration is pushing for near-universal healthcare for all Americans. Hopefully, the lessons of the past will be learned before we find the United States in the same position that the auto companies are in today.

The fact of the matter is that the excessive costs heaped on the auto companies by the UAW’s demands, overburdened the companies and ultimately brought about their downfall. GM and Chrysler were unable to remain competitive due to the expensive cost structure. According to the Economist approximately $1400 of every GM car goes to healthcare costs– far more than its competitors.

The union demands were shortsighted at best. Universal autoworker healthcare seems appealing on the surface. Seemingly, this is why the unions pushed for it in the 1950s. However, by forcing a system that reaped short term benefits, the UAW ultimately hurt itself, the auto companies, and consumers in the end. By greedily taking more than their fair share of the pie, the union bosses put an onerous burden on the autoworkers and auto companies of the future.

The healthcare debate today is running a parallel course. It is easy to think that universal healthcare is a great idea. Helping people stay healthy is noble and caring- two characteristics that are generally applauded in America. However, like the unions of yesterday the Democrats of today do not comprehend the huge impacts such a program will have on the country.

As has been discussed elsewhere, (See a prior post: a government run, universal healthcare program is inefficient and detrimental to the aim of providing good healthcare. Like GM’s shareholders, America’s taxpayers will unduly bear the burden of an excessive and expensive healthcare program. Like GM, American healthcare will slowly begin a drastic decline in quality. Unlike GM, however there will be no one to bail out the colossal failure to come.

The bottom line is that nothing comes free. Providing ‘free’ universal healthcare is a complete misnomer. Ultimately, it is the taxpayer who will foot the bill (especially in a paygo system). Don’t be fooled by the claims of kindness and caring that Obama and his cronies try to instill in their healthcare plan. It is anything but. Universal, government run healthcare may help a couple of people in the short run, but it’ll hurt America– the taxpayers, the healthcare consumers, and the healthcare industry– in the long run.

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