GM, the strike and America’s health care burden
Almost 50,000 General Motors workers represented by the United Auto Workers union went on strike just after midnight on Monday. At issue: Workers want the Big Three automakers to address pay disparities that trace back to the Great Recession (people hired before 2007 earn more than those who came on after). The companies can certainly afford that, given that GM’s profits alone topped $8.1 billion in 2018. And, since this is the United States in 2019, do I need to tell you that health care is also an issue in the strike?
Of course not. Health care is always an issue in American workplaces, even if you happen to have a union who, as former vice president and current presidential candidate Joe Biden said at an AFL-CIO convention earlier this year, “negotiated really hard for your benefits.” This is an issue no employer would need to fight with an employee over if Medicare-for-all was a reality.
GM offers hourly employees what’s known as “gold-plated” insurance. Employees currently pay about 3 percent of their annual health care costs. The company has gone from spending $665 million annually on health care for its hourly workers in 2011 to more than $1 billion today. Not surprisingly, it would like to cut that number. As a result, the company proposed upping the employee contribution to about 15 percent. No doubt company executives thought they were being generous: The typical American worker who receives health insurance through their employer pays about 28 percent of their own health care costs annually. But GM employees are furious. One autoworker indignantly told MSNBC, “These plants break us down on a daily basis. Now you are asking us to pay?”
There are lots of reasons to be angry about all this, ones that go well beyond the view of MSNBC’s interview subject. The typical employer is paying more than $14,000 to help insure an employee needing a family health insurance plan. The money isn’t simply an add-on. Part of that money would likely go to employees in the form of salary if it wasn’t getting sucked up by the United States’ overpriced and bloated health care industrial complex.
Furthermore, these health care expenditures are a dead weight on GM and other automakers, eating up money that could go for things such as research and development. In the years before the economic crash, GM claimed health care expenses added $1,500 to the cost of every car. This is one reason Warren Buffett called those expenses “the tapeworm of American economic competitiveness” in 2017 and said he would like the United States to transition to a single-payer system. Other countries do not place this sort of burden on their employers, with the result that they don’t need to directly factor the expense of employees going to the doctor into their product pricing and bottom line.
The passive acquiescence of corporations to this reality is one of the great mysteries of American life. Health care costs are among the most contentious and difficult issues they deal with. They were a factor in a number of the highly publicized job actions over the past year and a half, including the Stop & Shop strike earlier this year and the wave of teachers walking off the job in red states such as West Virginia in 2018. But instead of using their considerable leverage to beg politicians to rid them of this burden, employers such as GM have spent more than three decades seeking ways to cut their bills within this system.
Almost certainly ideological blindness plays a role. But it’s hard not to suspect that America’s corporate titans fear workers liberated from worry about out-of-control health care costs than they value getting freed of the expense. If you need proof, think about this: On Wednesday, GM announced it had ceased paying the health insurance premiums of all striking workers, forcing them onto COBRA. (The workers, as it turns out, will be mostly OK — their union strike fund will pick up the bill for medical insurance, though not the dental and vision plans.) It’s an aggressive move. Medicare-for-all would put a stop to these sorts of power plays. No wonder big corporations want no part of it.