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Well, the reason employer-sponsored health care took off was that WWII wage controls were still around for years of the post-war economy. Growing employers, au
by zach 18y ago
Well, the reason employer-sponsored health care took off was that WWII wage controls were still around for years of the post-war economy. Growing employers, auto manufacturers in particular, could not offer higher wages to attract workers. So they offered employer-sponsored health programs and attractive pensions. In the 1970s, when Nixon brought back wage controls, they improved their low-deductible health care plans to no-deductible plans.
Here's the scenario. From its boom era, Detroit ended up saddled with lots of pensions, expensive health care, and a special interest which fights cutbacks fiercely. It was basically building up an deficit that, when combined with horrible mismanagement, sent it into tremendous debt and would hobble it when it hit bad economic times and lost access to the capital markets.
Does that scenario look familiar? That's about what's happening to the United States. Hey wait, did a presidential hopeful write this op-ed? Hmm.