Sunday, July 06, 2008
Universal Health Care & Full Employment
As our economy spirals further and further down the tubes I found these suggestions from Kim Stanley Robinson's book, Sixty Days and Counting, provocative and found myself wondering whether we could ever actually elect leaders with the courage and vision to enact them. This is from another one of his fictional "Cut to the Chase" presidential blog entries:

I've been remembering the fear I had. It's made me think about how a lot of people in this world have to live with a lot of fear every day. Not acute fear maybe, but chronic, and big. Of course we all live with fear, you can't avoid it. But still, to be afraid for your kids. To be afraid of getting sick because you don't have health care. That fear itself makes you sick. That's fifty million people in our country. That's a fear we could remove. It seems to me now that government of the people, by the people, and for the people should be removing all the fears that we can. There will always be basic fears we can't remove - fear of death, fear of loss - but we can do better on removing the fear of destitution, and our fear for our kids and the world they'll inherit.

One way we could do that would be to guarantee health insurance. Make it a simple system, like Canada's or Holland's or Denmark's, and make sure everyone has it. That's well within our ability to fund. All the healthiest countries do it that way. Let's admit the free market botched this and we need to put our house in order. Health shouldn't be something that can bankrupt you. It's not a market commodity. Admitting that and moving on would remove one of the greatest fears of all.

Another thing we could do would be to institute full employment. Government of the people, by the people, and for the people could offer jobs to everyone who wants one. It would be like the Works Progress Administration during the Depression, only more wide-ranging. Because there's an awful lot of work that needs doing, and we've got the resources to get things started. We could do it.

One of the more interesting aspects of full employment as an idea is how quickly it reveals the fear that lies at the heart of our current system. You'll notice that anytime unemployment drops below 5% the stock market begins to flag, because capital has begun to worry that lower unemployment will mean "wage pressure," meaning management faces a shortage in supply of labor and has to demand it, has to bid for it, pay more in competition, and wages therefore go up - and profits down.

Think for a minute about what that means about the system we've agreed to live in. Five percent of our working population is about ten million people. Ten million people out of jobs, and a lot of them therefore homeless and without health insurance. Destitute and hungry. But this is structural, it's part of the plan. We can't hire them without big businesses getting scared at the prospect that they might have to compete for labor by offering higher wages and more benefits. So unemployment never dips below 5% without having a chilling effect on the market, which depresses new investments and new hiring, and as a result the unemployment rate goes back up. No one has to say anything - it works as if by itself - but the fear keeps being created and profits stay high. People stay hungry and compliant.

So essentially, by these attitudes and responses, big business and stock owners act as a cartel to keep the economy cranking along at a high rate but with unemployment included as an element, so that the bottom wage earners are immiserated and desperate, and the rest of the wage earners will take any job they can get, at any wages, even below a living wage, because that's so much better than nothing. And so all wage earners and most salary earners are kept under the thumb of capital, and have no leverage to better their deal in the system.

But if government of the people, by the people, and for the people were offering all citizens employment at a real living wage, then private business would have to match that or they wouldn't be able to get any labor. Supply and demand, baby - and so the bids for labor would get competitive, as they say. That all by itself would raise the income and living standards for about 70 percent of our population faster than any other single move I could think of. The biggest blessing would be for the lowest 30 percent or so - what's that, a hundred million people? Or could we just say, working America? Or just America?

Of course it's a global labor market, and so we would need other countries to enact similar programs, but we could work on that. We could take the lead and exert America's usual heavyweight influence. We could put the arm on countries not in compliance, by keeping out investment capital and so on. Globalization has gotten far enough along that the tools are there to leverage the whole system in various ways. You could leverage it toward justice just as easily as toward extraction and exploitation. In fact it would be easier, because people would like it and support it. I think it's worth a try.

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posted by Mike Clawson at 10:27 AM | Permalink |


At 7/06/2008 08:19:00 PM, Anonymous Miko

You'll notice that anytime unemployment drops below 5% the stock market begins to flag, because capital has begun to worry that lower unemployment will mean "wage pressure," meaning management faces a shortage in supply of labor and has to demand it, has to bid for it, pay more in competition, and wages therefore go up - and profits down.

This is a fairly widely repeated myth, but it's really not true. At the end of Clinton's second term, unemployment was down 3.1% to 4.2%, yet the stock market and economy were robust. Under Bush, unemployment has gone up and the economy is on the verge of death.

While the quoted argument makes some sense, it's definitely not a hard-and-fast rule. For that matter, having a sagging market will lead to lay-offs, so we have the market analysts dream position of being able to say the same thing with a few words changed whether the market is going up or down.

Having a strong market is good for all concerned: it ensures job stability, usually correlates with low inflation, and grows your pension fund. I agree with most of what's quoted above, but let's remember that the market isn't our enemy and that during the Great Depression, it wasn't just "Wall Street fatcats" that were getting hurt.


At 7/13/2008 04:46:00 AM, Blogger JaaJoe

Did you see the Bunk study stating 2/3 of doctors in America want National Health Care. The doctors who did this study also conducted one in 2002 and found that the majority of doctors did not want national health care, the problem with this is that the 2 question surveys drastically differ in there 2nd question. I found this article, 60% of Physicians Surveyed Oppose Switching to a National Health Care Plan, It's worth a read.


At 7/13/2008 05:09:00 PM, Blogger Mike Clawson

Miko, I haven't studied economics to know whether Robinson's assertion has any validity to it, though I'm not sure that one counter-example during the Clinton years necessarily makes it untrue. The '90s were a time of unprecedented economic growth for a whole host of reasons and thus the usual rules may not have applied. But again, I don't really know enough to argue the point.

As for your other example, re: the Bush economy, I don't think it's relevant. Just because unemployment going down often leads to a decline in the market doesn't mean that unemployment going up would lead to a strong market. Robinson's point might be that there is a kind of "sweet spot" (for businesses anyway) right around 5% where there is enough unemployment to eliminate wage pressure but not enough to hurt overall consumption.

At any rate, I don't think Robinson was arguing against having a strong market either. I think he was simply pointing out that it a system that functions best when millions of people are out of work is a flawed system.

He seems to also be implicitly questioning supply-side "trickle-down" economics and suggesting that what is good for workers and consumers will actually ultimately lead to a stronger market overall.


At 7/13/2008 05:11:00 PM, Blogger Mike Clawson

jaajoe - I'm not sure I'd really trust a doctor's opinion on Universal Healthcare. It seems like they have quite a vested interest in maintaining the status quo.


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