How We Drive Our Jobs Away

How We Drive Our Jobs Away

"How We Drive Our Jobs Away -
The most recent government action in American health care has made things much, much worse. The result: a fiscal black hole.
By Fareed Zakaria, April 18, 2005

Which part of North America makes the most cars? If you answered Michigan, you would have been right for 100 years. But you would not be right anymore. Last year the Canadian province of Ontario surpassed Michigan in car production. Of course, most of the cars made in Ontario are manufactured by America's Big Three - General Motors, Ford and Daimler-Chrysler. These companies are shifting production out of the United States for one overwhelming reason: massive health-care costs. An American worker costs them more than $6,500 in health care per year. In Canada, which has a government-funded and -run health-care system, the cost to the employer per worker is just $800. While the Big Three are an unusual case, they highlight what might turn out to be the most significant threat to the competitiveness of American firms in an increasingly global economy: our out-of-control health system.

This year General Motors will pay about $5.2 billion in medical and insurance bills for its active and retired workers. That adds $1,500 to the cost of every GM car. For Toyota, whose products are manufactured in many countries abroad, these costs add just $186 per car. When China and India start making cars for sale in the United States and Europe, you can be sure that their health-care costs will be less than $50 per car."