This discussion of heath care cost is a little off beat, but it builds on trends that are happening whether we agree with them or not. Most of the health care in the USA is paid for by your employer as part of your benefit package, but like most things, not all are equal.
To make my point, I we need to agree on a few starting points. If you don't agree with these starting points, make your own and see if my argument is still valid or not. The first is the cost of the average health insurance plan for the company. Let's agree that it is $10,000. Nest, we need to agree on who and how many people are covered by that policy. This is where it gets more complex. For our example, lets say that it covers the employee and their wife and two kids. Further, let say that 25% of the wives work and have an insurance plan too. I say that it might get complicated, but this is the way it really works. By running the math, cost per person actually covered is $3,333 since the employer actually only has to cover 3 people. Now it gets even more interesting.
What if the company has a single worker who has no dependants? Their cost would them be the $3,000 above. Knowing this, why wouldn't an employer favor hiring a single person over one who had a bunch of kids and a wife who did not work or have other insurance? May be they do!
What about workers who are worth more or less for the employer? This is reflected in how much they are paid. Look at a worker who makes $30,000 and one who makes $100,000. If both are single like above, the heath care insurance is 11% and the other is only 3%. As you can see, the low paid worker cost the employer a lot higher percentage of their actual worth. Do you think that this might be a factor in automating the low paid work out of a job while the high paid worker keeps their job? I leave it to you.
Another point is the size of families. It is clear that lower paid workers tend to have more kids than do higher paid workers. It is also true that higher paid and thus higher skilled workers tend to have two workers. Using the same numbers from above, let's look at one family who has two employed high paid workers compared to a family who has 5 kids and only one worker. The cost for the employer for the low paid worker is $23,331 and for the high paid worker only $3,000. Don't believe my numbers, calculate your own.
What can we draw from the above? People with poor skills should have fewer kids, but it is just the opposite. These same people tend to have only one bread winner too. Look at the immigrants who we have been letting in. Ask yourself, are these people "more" or "less" skilled than the average American? You know the answer. Next, do they have "more" or "less" kids than the average American? Again, you know the answer. The bottom line is that with the facts on the table and the trends, there is no way that our society can afford high quality health care for the growing number of low skilled workers that we have, so what can we do? We have to have policies that prevent the mix of our society from becoming "3rd world".
In this blog, I only picked on health care, but there are many other areas of the economic model that are being affected and most in way that you would not like if you were to open your eyes and look ahead to see what with be happening as a result on our short range decisions. The gap in earnings is going to get worse. Social justice as is being promoted is only going to get worse if we do not open our eyes and protect the future of our children by making those difficult decisions today!
PS--Look at Obamacare. Obama tried to help poor people with poor job skills and big families by mandating that companies had to keep kids on their policies from age 18 to age 26. This was an addition of 8 more years and that was "not" for free. Like the companies described above they had to pay much more in health insurance for these marginal workers. Automation is a function of how much pay can be eliminated vs the cost of the automation. In the case of Obamacare, it made it a lot more economical to eliminate these low paid employees with a bunch of kids and that is exactly what has been happening. I know that a lot of people have good intentions, but one has to look ahead at the impact of simple minded good intentioned decisions. As I stated above, we have to minimize the number of low skilled people that we have in our society and encourage them to have a minimum number of children. Our problem is not global warming, it is population growth from the "bottom"! We have that in Africa today and the world is going to reap the results. Mark my word.
To make my point, I we need to agree on a few starting points. If you don't agree with these starting points, make your own and see if my argument is still valid or not. The first is the cost of the average health insurance plan for the company. Let's agree that it is $10,000. Nest, we need to agree on who and how many people are covered by that policy. This is where it gets more complex. For our example, lets say that it covers the employee and their wife and two kids. Further, let say that 25% of the wives work and have an insurance plan too. I say that it might get complicated, but this is the way it really works. By running the math, cost per person actually covered is $3,333 since the employer actually only has to cover 3 people. Now it gets even more interesting.
What if the company has a single worker who has no dependants? Their cost would them be the $3,000 above. Knowing this, why wouldn't an employer favor hiring a single person over one who had a bunch of kids and a wife who did not work or have other insurance? May be they do!
What about workers who are worth more or less for the employer? This is reflected in how much they are paid. Look at a worker who makes $30,000 and one who makes $100,000. If both are single like above, the heath care insurance is 11% and the other is only 3%. As you can see, the low paid worker cost the employer a lot higher percentage of their actual worth. Do you think that this might be a factor in automating the low paid work out of a job while the high paid worker keeps their job? I leave it to you.
Another point is the size of families. It is clear that lower paid workers tend to have more kids than do higher paid workers. It is also true that higher paid and thus higher skilled workers tend to have two workers. Using the same numbers from above, let's look at one family who has two employed high paid workers compared to a family who has 5 kids and only one worker. The cost for the employer for the low paid worker is $23,331 and for the high paid worker only $3,000. Don't believe my numbers, calculate your own.
What can we draw from the above? People with poor skills should have fewer kids, but it is just the opposite. These same people tend to have only one bread winner too. Look at the immigrants who we have been letting in. Ask yourself, are these people "more" or "less" skilled than the average American? You know the answer. Next, do they have "more" or "less" kids than the average American? Again, you know the answer. The bottom line is that with the facts on the table and the trends, there is no way that our society can afford high quality health care for the growing number of low skilled workers that we have, so what can we do? We have to have policies that prevent the mix of our society from becoming "3rd world".
In this blog, I only picked on health care, but there are many other areas of the economic model that are being affected and most in way that you would not like if you were to open your eyes and look ahead to see what with be happening as a result on our short range decisions. The gap in earnings is going to get worse. Social justice as is being promoted is only going to get worse if we do not open our eyes and protect the future of our children by making those difficult decisions today!
PS--Look at Obamacare. Obama tried to help poor people with poor job skills and big families by mandating that companies had to keep kids on their policies from age 18 to age 26. This was an addition of 8 more years and that was "not" for free. Like the companies described above they had to pay much more in health insurance for these marginal workers. Automation is a function of how much pay can be eliminated vs the cost of the automation. In the case of Obamacare, it made it a lot more economical to eliminate these low paid employees with a bunch of kids and that is exactly what has been happening. I know that a lot of people have good intentions, but one has to look ahead at the impact of simple minded good intentioned decisions. As I stated above, we have to minimize the number of low skilled people that we have in our society and encourage them to have a minimum number of children. Our problem is not global warming, it is population growth from the "bottom"! We have that in Africa today and the world is going to reap the results. Mark my word.
