Liberally yours: Will Trader Joe’s lead America to single-payer healthcare?

Thom Hartmann Host, the Thom Hartmann Program
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Liberally Yours is a regular column in the Daily Caller featuring progressive radio host Thom Hartmann in conversation with libertarians and conservatives. This week he’s joined by Stan Veuger, a resident scholar at the American Enterprise Institute, to debate healthcare.

According to a management memo leaked to the press, Trader Joe’s will drop health care for part-time workers, and will instead give them a $500 annual check to pay for a new insurance plan. This has conservatives screaming that we are all going to be paying for the cost of healthcare for low-income workers, and has liberals scratching their heads and worrying about the future of Obamacare.

At the same time, the AFL-CIO has just passed a resolution essentially saying that they don’t like the possibility that Obamacare may separate healthcare from the workplace.

That makes sense, because one of the major benefits that unions offer is that they negotiate for – or sometimes themselves offer – healthcare. When healthcare is available to everybody, it slightly diminishes the value of being in a union. Or, at least, unions will have to figure out new ways to add value to union membership.

I see this – as well as Trader Joe’s decision to drop healthcare coverage for part-time workers – as a healthy development.

After World War II, when the labor market was tight and employers competed for workers, unions and big businesses alike opposed the national single-payer healthcare program proposed by Harry Truman.

Instead, employers and unions agreed that they could use healthcare benefits as a way to attract and keep employees in union shops. This benefited both unions and employers. And, of course, employees got something out of the deal too – healthcare.

But in the years since 1981, when Ronald Reagan declared war on working people in America, unions have declined to a third of their former size and healthcare benefits have steadily vanished from the American workplace.

What the Affordable Care Act, a.k.a. Obamacare, has begun is the process of ensuring that every American has access to healthcare. They will have it regardless of where they’re employed, regardless of how fully they’re employed, and regardless of if they are employed.

A portion of the American workforce – estimates range from 15 percent to as high as 40 – are fundamentally unhappy with where they work, but stay there simply because their employer offers them health insurance. These people are not stepping out into the world and starting their own businesses. They’re not moving to jobs where they may be much happier, and may even have better opportunities, because they’re locked into place by the fear of losing their health insurance.

Workers in countries with universal healthcare – which includes virtually all of the developed world except for the United States – don’t have this problem. This helps to explain, in part, why so many of the developed world’s economies are so much more vibrant than ours is currently.

As Reaganomics and globalization have, over the past 30 years, decimated the American workforce and loosened the American labor market, the ability to have access to healthcare has become more and more tightly tied to being an employee of a particular company.

Because Obamacare lowers the cost of healthcare for virtually all Americans making less than $80,000 a year, and makes it almost free for most Americans making under $40,000 a year, it weakens the hold that both employers and unions have on employees.

The flipside of this is that it makes it easier for workers to go out and start businesses, or move to a place of employment where they feel more fulfilled, even though that employer may not offer health insurance. As Republicans will tell you with regret, this is a major step down the road to universal healthcare – and, in my opinion, a very good one.

As healthcare becomes more connected to being a citizen of United States, as opposed to being an employee of a particular corporation or a member of a particular union, Americans become freer. This is the freedom that Franklin Roosevelt talked about: the freedom from fear and want.

Trader Joe’s, I believe, gets this. Their part-time workers make a low enough income that they will qualify for free or nearly free healthcare under Obamacare, so with a $500 annual bonus they will easily be able to have their own health insurance. The only reason more employers won’t be taking similar steps is that Trader Joe’s is one of the very, very few companies in America that offers health benefits to their part-time workers.

But with Obamacare, all part-time workers in America will have access to free or very inexpensive health insurance. And, thus, have the freedom to choose the employment or entrepreneurial adventure that best suits them.

The next logical step in this process, of course, is universal healthcare. Obamacare allows individual states to offer that, starting in 2016, and Vermont has already passed it through the legislature and the governor has signed it into law. I predict that once Vermont starts a successful single-payer experiment, other states will follow over the next few years, just like Canadian provinces did, one after another, when Saskatchewan began a single-payer health insurance program.

Trader Joe’s decision to cut part-time workers from its insurance plan, then, is just a symptom that we are moving rapidly towards a national health insurance plan. This is a good thing.


In his analysis of the broader impact of the Affordable Care Act, two of the claims Mr. Hartmann makes are almost certainly true. Some employers are indeed dropping health insurance for part-time workers, and turning full-time workers into part-time workers to avoid the employer mandate. And discontent about Obamacare is certainly widespread, from Congressional Republicans through the AFL-CIO to the general public.

Where Mr. Hartmann goes wrong is in attempting to describe why employers are responding the way they are, why those anti-Obamacare sentiments exist, and what this all should lead to.

Mr. Hartmann chooses Trader Joe’s, one of the very few large employers that offer health insurance to their workers, as his central example. He explains that Trader Joe’s can make its workers better off by offering a cash payment that allows them to buy heavily subsidized health insurance on the soon-to-be-active public exchanges. So far, so good, but the more relevant dynamic is employers reducing their workers’ hours, stripping them of health insurance, and sending them to these same exchanges. This lowers workers’ wages while forcing them to spend some of this new, lower income on health insurance.

They are not doing this to empower their workers, they are doing it to avoid paying for a new mandated benefit. How this is helpful is a mystery to me; if anything, it feels like an unintended parody of French workweek limitations. Mr. Hartmann believes that making these workers personally responsible for their health care will make them more flexible and entrepreneurial, makers instead of takers. Governor Romney may agree with him, but at least in the short run it really just makes them poorer.

And this goes to the heart of the problem with his analysis. Yes, it is, in principle, a good idea to separate the roles of employer and health insurance provider. It would make changing jobs, moving around, and starting new businesses a less risky endeavor, and it would end the unfortunate yet common situation in which losing your job also means losing your health insurance.

Yet what Mr.Hartmann offers as a way out is an even more extreme version of the true source of anti-Obamacare sentiment: a massive government bureaucracy that takes on the role of the nation’s one monopolistic health insurance provider, ending all possible competition and choice in that market forever. A much more straightforward solution would be to end the largest tax expenditure of them all: the exclusion from taxable income of employer-sponsored health insurance, which cost the federal government 250 billion dollars in 2013 alone, or almost a third of its total budget deficit. Such a move would bring all of the benefits Hartmann’s heart desires, without effectively nationalizing almost a fifth of the U.S. economy.

Moderately yours,

Stan Veuger