… begins the headline at the New York Times. It appears that two business trade groups, the Manufacturers Alliance and the National Association of Manufacturers, have come to the conclusion that, big surprise, the manufacturing costs in the US are making it compete with other industrialized nations: Canada, Germany, Britain, South Korea and France, for example.
bq(quote).. Comparing wage compensation to total value added in manufacturing in several countries, the study concluded that the United States was more competitive than Canada, Germany, Britain, South Korea and France. But throw in structural costs – which add 22.4 percent to the cost of doing business in the United States – and American manufacturers’ costs exceed those of counterparts in Canada, Britain and South Korea. Even France, reputedly hostile to business, isn’t far behind.
How is it that the American economic system, thought to be far more friendly to businesses than the European system, has become a competitive disadvantage for American manufacturers? One of the main culprits is health care. And the solution may be something that has traditionally been anathema to corporate chieftains: bigger government.
After corporate income taxes, employee benefits are the second-largest structural cost for American manufacturers, adding 5.8 percent to costs, according to the study. In all major economies, paying for health care means a combination of public and private money. But in the United States, businesses pay a larger chunk than do their European and Asian counterparts.
In Canada, the private sector spends 2.8 percent of gross domestic product on health care; in the United States, the private-sector figure is 7.7 percent. And American private-sector spending falls disproportionately on big employers like manufacturers. Some 97 percent of members of the National Association of Manufacturers provide health care coverage for employees. In 2002 alone, General Motors, which covers 1.2 million Americans, spent $4.5 billion on health care.
p. Coincidence that this point was made here at Gross Anatomy yesterday? I think not.