Arnold Kling  

From Autos to Health Care

Thoughts on September 11... Moral Psychology...

The Wall Street Journal reports,

Last year, Ford began offering a buyout package that covers schooling, following an internal 2005 study that showed many of its younger workers would leave if given a chance to attend college. Under this plan, Ford agrees to pay former workers half of their annual pay for four years -- typically $25,000 to $30,000 annually -- plus health-care benefits and up to $15,000 each year for school. Workers surrender retiree health benefits but retain whatever Ford pensions they've earned.

Ford says 40% of its former workers who are going to school are studying in medical fields -- more than half specializing in nursing, followed by radiology, dental hygiene and pharmacology. "Health care is where the jobs are," says Marty Mulloy, Ford's head of labor relations, who helped develop Ford's education buyout plan and is handling this summer's UAW contract talks.

My natural confirmation bias kicks in here. Five years ago, I predicted that people would move into health care from other industries. But I wrote about record store employees as prototypical job losers. But one year later, I did write about the inevitable shift from manufacturing.

I would warn some of the young health care workers mentioned in the WSJ story that Aubrey de Grey has some ideas that might make transform that sector.

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COMMENTS (2 to date)
Frank writes:

Interesting article, but it had a misleading subtitle. It said workers were moving from the auto industry to its nemesis, health care. Actually the nemesis of Detroit is the UAW--the subtitle would be correct if workers were becoming union organizers not health care workers.

shayne writes:

I hadn't seen this in the WSJ, but it isn't surprising. According to OECD numbers, the U.S. spends just over 15% of GDP on healthcare, most of which is funded under a system of guaranteed payment for services, either through government subsidy or private insurance. Odds are that the U.S. will soon nationalize health care (mandated national health insurance) further, and more robustly guaranteeing payment for services. Many people would love to be selling into an industry that guarantees payment for services or goods.

The facts cited in this article tend to support the notion that these workers recognize the guaranteed payment system artifact - similar to the payment guarantee system promised by union affiliation - and tend to gravitate to it.

I wonder how these folks would fare in a true open market system where their revenue was solely dependent on their productivity rather than a guarantee of payment.

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