Medicare for All Would
Transform the Labor Market for the Better
Protesters
supporting “Medicare for All” hold a rally outside PhRMA headquarters April 29,
2019, in Washington, D.C.WIN MCNAMEE / GETTY IMAGES
March 14, 2020
A Medicare for All health
care system would create millions of new jobs despite critics’ concerns that
it would cause widespread job losses by eliminating the private insurance
industry, according to a new analysis by the Economic Policy Institute (EPI).
The report arrives at an
apposite moment in history, as the flaws of the United States’ piecemeal,
semi-private health care system have become more glaring as COVID-19 sweeps across
the globe.
Opponents of the Medicare for
All proposals offered by Sen. Bernie Sanders, I-Vt.,
and Sen. Elizabeth Warren, D-Mass., have argued that the plan would
eliminate nearly 2 million jobs in
the private insurance sector. But the analysis from EPI, a progressive think
tank, found that a Medicare for All system would not only replace those jobs
but also create millions of new ones.
More than 20 recent studies concluded
that a Medicare for All system would cost less than the status quo. A recent
study published in the Annals of Internal Medicine found
that much of the added costs that Americans pay compared to nations that
already have single-payer health systems comes from propping up the system
itself. Roughly 34% of all health costs are
spent on covering overhead — bloated salaries for insurance company executives
and administrative costs — which comes out to $2,497 per person each year,
about four times what Canadians pay.
The main reason that research
consistently finds that Medicare for All would cost less than the current
system is that it would eliminate about 1.8 million private insurance jobs,
according to a recent estimate. But
this would not “profoundly affect the total number of jobs in the US,” EPI
argued. While it is a significant number, American companies laid off 21.9 million workers in
2018 without any policy eliminating an entire industry.
“Our economy generates a huge
amount of job churn every year,” said Josh Bivens, EPI’s economic research
director. “This churn is the hallmark of growth in productivity — getting more
economic output with fewer inputs. Relative to the scale of other gross measures
of job churn, the churn associated with M4A [Medicare for All] is not large.”
Spaced out over a four-year
phase-in period, these job losses would add just 2% to the national rate of
layoffs, the report noted, adding that there have already been 1.7 million
layoffs over the past four years in the finance and insurance sectors.
Other economists have also
argued that propping up these jobs is not a good reason to sacrifice affordable
health care.
“Treating the health care
system like a (wildly inefficient) jobs program conflicts directly with the
goal of ensuring that all Americans have access to care at an affordable
price,” Harvard University economists Katherine Baicker and Amitabh Chandra
said in a 2012 article in the New England Journal of Medicine.
But EPI found that Medicare for
All would also go a long way in easing the pain from those job losses.
“Fundamental health reform
that, like M4A, guarantees access to insurance regardless of one’s current job
status is a key part of making [job] transitions easier,” Bivens wrote in the
report.
In contrast, there are 6.4
million unfilled jobs in the US economy right now, according to the Bureau of Labor Statistics. Medicare for All
would inherently “increase job quality substantially by making all jobs ‘good’
jobs in terms of insurance coverage and by increasing the potential for higher
wages” by decoupling insurance from employment, Bivens writes.
And many of these workers, and
those in billing and administration that could also be threatened with layoffs,
would be able to find new jobs in an expanding health care sector, the report
argues.
Past research published by
the Political Economy Research
Institute estimates that “expanded access to health care could
increase demand for health services by up to $300 billion annually,” Bivens
wrote. “Given the current level of health spending and employment, this would
translate into increased demand for 2.3 million full-time-equivalent workers in
providing healthcare.”
Beyond that, Medicare for All
also expands coverage for long-term care.
Estimates show that Americans
provided about 34 billion hours in
unpaid long-term care in 2018.
“If this care was divided up
among full-time paid workers, it would require 17 million new positions. Of
course, not all of this currently unpaid care would be converted into paid
positions in the job market,” Bivens wrote. “But if even 10% of unpaid care
translated into new jobs, it would create enough new demand for workers to
essentially offset the displacement of workers in the health insurance and
billing administration sectors.”
So while overhauling the health
care system may lead to some job losses, they are relatively small compared to
the overall economy and many workers would be able to find new jobs in the same
industry. Beyond that, Medicare for All would effectively double the number of
“good” jobs available by providing every worker with health care, creating more
choice for employees and boosting wages since employers no longer have to cover
health insurance costs.
Increases in job quality and
wages would also apply to the overall labor market. And universal health care
would also reduce “job lock,” in which workers stay in positions they do not
like to keep their health coverage.
A 2015 review found that
job lock reduces the rate of people leaving their jobs by 15 to 25%. Medicare
for All would allow workers to seek out better matching jobs and start their
own businesses. The United States ranks dead last in self-employment among
the world’s wealthy democracies at around 6%, while the rates in Europe
consistently exceed 10%. Such a policy would also help small businesses hire
workers since they would not have to offer health insurance to compete with
larger companies.
“First, because health care is
nearly universally provided in other rich countries, workers choosing to start
their own businesses in those countries do not face a cost confronting would-be
entrepreneurs in the U.S.,” Bivens wrote. “Second, small businesses in the U.S.
are at a distinct disadvantage in recruiting employees because the cost of
providing health care coverage is significantly higher for small companies.”
Ultimately, it will be up to
policymakers to ensure that transitioning to a Medicare for All system helps as
many people avoid long-term job losses.
“The more progressive the taxes
that finance health reform, the less they will drag on job growth,” Bivens
wrote. “Increased public spending combined with progressive tax increases would
almost certainly boost the level of aggregate demand and lead to lower
unemployment, all else equal.”
There would undoubtedly be
challenges in implementing Medicare for All, just like there are challenges in
upkeep of the current piecemeal system. But the policy would be worth it, the
report argues, both in terms of better health outcomes and in economic growth.
“A fundamental health reform
like Medicare for All would be an unambiguously good policy for the labor
market, for the economy overall, and for U.S. workers,” Bivens said in a statement.
“Besides the obvious benefits of expanding health care to millions of uninsured
and underinsured Americans, Medicare for All could raise wages, boost
productivity, and help small business owners.”
This piece was reprinted by Truthout with permission or license.
It may not be reproduced in any form without permission or license from the
source.
Igor Derysh is a New York-based
political writer whose work has appeared in the Los Angeles Times, Chicago
Tribune, Boston Herald and Baltimore Sun.
Donations can be sent
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"The master class
has always declared the wars; the subject class has always fought the battles.
The master class has had all to gain and nothing to lose, while the subject
class has had nothing to gain and everything to lose--especially their lives."
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