Sunday, May 31, 2009

Job Lock

Conservatives often frame the economic arguments about government social programs in terms of taxpayers having to pay for people to not work, which pretty much shows that they have no idea what government assistance is actually like. You cannot live any kind of decent life off of government assistance. I don't care if we're talking food stamps, disability, unemployment, WIC, AFDC, they pay shit. They also require a lot of time spent jumping through hoops and red tape, so no matter how you slice it, you're always better off having a job. (One guy once complained to me about the hoops he was having to jump through to get disability. "But if I was a n******, all I'd have to do was walk in the office and they'd be throwing money at me." It doesn't matter how obviously stupid that statement is, he knew it was true because it was what Reagan had told him.) Now, don't misunderstand me, I know there are people out there who do it, but I see no evidence that they are the rule. Any sensible person would just get a job, because that clearly gives you a better life.

These programs are not designed to be lived on. They're designed to give you just enough to keep you from being evicted or starving while you move through a crisis. This was certainly my experience in 1999 when I lost my job, and collected 7 weeks of unemployment while looking for a new job. No, I probably wouldn't have been evicted or starved without it. What would have happened, more likely, is that after 2 or 3 weeks, I'd have just taken s job at 7-11 or Taco Bell, and been unable to devote myself to looking for a decent job full time. It's much less likely that I would have been able to find the right interview where I was able to spin certain aspects of my previous job into experience, and for the first time in my life land a job that could not have been done by trained monkeys.

Anyway, conservaitves and libertarians often talk about how higher taxes hold people back from starting their own businesses. I don't doubt their sincerity, and I'm sure the Joe the Plumber scenario happens from time to time, but I would bet that a situation similar to mine is much more common: a person would like to quit their job and go into business for themselves, but without affordable healthcare options, they're pretty much stuck. So this piece from Washington Monthly sounds pretty on the money:

Universal health insurance, far from suppressing entrepreneurship, could be a boon to it.

The main reason for this is a phenomenon known as "job lock," a term coined during the last round of debate over universal health coverage in the early 1990s. Job lock refers to the fact that workers are often unwilling to leave a current job that provides health insurance for another position that might not, even if they would be more productive in that other position. This is because employer-provided insurance is traditionally the only reliable form of fairly priced private insurance coverage available in the U.S. The alternative is to purchase insurance in the nongroup market, where insurance prices and availability are typically not regulated, so insurance companies can drop individuals when they become ill or charge them exorbitant prices. As a result, individuals feel "locked" into less productive jobs.

Over the past fifteen years, dozens of studies have documented the detrimental impact that job lock has on the economy. These studies typically compare the mobility of workers who are at firms with insurance but do not have an alternative source of coverage (such as spousal insurance or COBRA continuation coverage) to those who do have an alternative source of coverage should they leave the firm. The studies find that mobility is much higher when workers do not have to fear losing coverage; job-to-job mobility is estimated to increase by as much as 25 percent when alternative group coverage is available.

Job lock is a serious problem for our society, because one of the bedrocks of our long-term economic success is our fluid labor markets compared to other nations, like France and Germany, that make it expensive and administratively burdensome to hire new employees or to fire unproductive ones. Job lock diminishes our international advantage in this area, since other nations with universal health insurance coverage do not have this problem.


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