Editore"s Note
Tilting at Windmills

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October 16, 2003
By: Kevin Drum

NATIONAL HEALTHCARE....Southern California supermarkets say they have to freeze wages and cut back on healthcare benefits because of competition from Wal-Mart. LA Times business columnist Michael Hiltzik is skeptical:

Although Wal-Mart has announced plans to create 40 California "supercenters," the behemoths that include grocery departments, none has been built in the state and the schedule for a rollout is murky.

There's some question of how deeply 40 supercenters could cut into the market shares of three chains that operate 1,546 California supermarkets among them. [Mark Husson, a supermarket analyst for Merrill Lynch] estimates that Wal-Mart's plans might gain it a 1% share of the state market over the next four years.

Goodness. One whole percent. That does sound like it calls for drastic measures.

Of course, the ostensible issue here is that Wal-Mart pays its employees crap wages and offers miserable healthcare, which allows them to operate with lower costs. But as Hiltzik points out, "the unions do raise a reasonable issue in asking why, when a competitive playing field is tilted one way or another, it's always necessary to grade the field down to the lowest level." That's an especially salient question these days, when CEO salaries are routinely graded up to the highest level.

Still, it's a fact that healthcare costs do continue to spiral in the United States, and it makes life miserable for businesses that have to deal with it. These guys don't want to be in the healthcare business, don't want to have to compete with other businesses that have lower healthcare costs than them (here or overseas), and don't want to be in a constant war with their employees over day-to-day healthcare issues.

Which is why I continue to be surprised that the business community hasn't come out in favor of national health insurance yet. Sure, I know business leaders tend to be conservative, but you'd think a pocketbook issue like this would bring them to their senses. Individual businesses have virtually no leverage to reduce healthcare costs, and the only way to remove this albatross from around their necks is to hand it off to the feds.

In the end, I suspect that this is what will finally lead the United States to a single-payer healthcare model. At some point, business leaders will finally have had enough and will insist that the Republican party change its tune and support national healthcare. By all odds, this day is probably no more than a decade off.

Kevin Drum 10:00 AM Permalink | Trackbacks

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