One of those numbers that rarely gets mentioned in the healthcare debate is the cost of "job lock." Because health insurance is tied to employment, people are afraid to risk starting up their own company or taking a job with a new company. The last time we looked at this, the cost of job lock alone figured to be almost as great as the $1 trillion that was then cited as the "cost" of healthcare reform, and that's just the cost in terms of dollars lost from new opportunities. There's another cost to job lock, one that may be still more serious.
David Leonhardt, writing for the New York Times economy page, shows that the cost exceeds just what we lose in incomes created by new companies. Job lock is creating an innovation gap.
In the cradle of American innovation, workers are making career choices based on co-payments, pre-existing conditions and other minutiae of health insurance. ... It is impossible to know how much economic damage these distortions are causing, but they clearly aren’t good. Economic research suggests that more than 1.5 million workers who would otherwise have switched jobs fail to do so every year because of fears about health insurance. Some of them would have moved to companies where they could have contributed more, and others would have started their own businesses.
The idea that more than a million Americans a year are locked into jobs where they can't perform at their peak may seem trivial when compared to the high number of Americans without a job. But the effect of underemployment due to healthcare is an enormous drag on our economy. So large that...
Even before the financial crisis, the decade that will end later this month was on pace to have the slowest economic growth of any since before World War II. The No. 1 reason, I’d argue, was our innovation deficit.
We're so used to seeing America as the creative engine behind the world's economy. Even as we've watched manufacturing jobs disappear from our shores, we've comforted ourselves that the ideas are still being born here.
That's no longer true. And the reason for the decline in American's intellectual capital is as simple as our reluctance to break the tie between healthcare and employment. Somehow Republicans get away with complaining that American corporations can't compete because of the increasing costs of "generous healthcare plans" (plans that actually provide far less coverage than workers in other countries get by default), but they're able to turn around and defend the private insurance industry as the only "American" way of providing healthcare.
Apparently, Republicans have decided that American = loser, because they've set up a system where we can't compete either economically or intellectually.