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The link between health care costs and job creation

February 06, 2011|By TIM ROWLAND

In noting that Washington County lost more than 440 jobs last year, Timothy R. Troxell, executive director of the Hagerstown-Washington County Economic Development Commission, said something you almost never hear a development advocate say: The reality was probably worse.

We certainly expect our development officials to be cheerleaders, but it's more helpful when, like Troxell, they're honest. That way, we know how much needs to be done.

EDC figures show that businesses added 300 jobs in the year, for a net loss of 140. However, Troxell said, there were many job losses that didn't show up on the EDC's radar because the companies did not approach the EDC for consultation.

Washington County's unemployment was the highest in Maryland west of Baltimore City, and — despite the fact that we are supposed to be the hub of regional commerce — we have the highest unemployment rate in the area, save for the rural counties of Morgan in West Virginia and Fulton in Pennsylvania.

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Perhaps more troubling is that large outfits seem to be avoiding Washington County like the plague. Norfolk Southern's $95 million intermodel freight depot, expected to provide close to 5,000 jobs in a decade, went to Chambersburg, Pa.

A $150 million Macy's distribution center that will employ a minimum of 600 people, and as many as 1,900, went to Martinsburg, W.Va.

When U.S. Silica moved its headquarters out of Berkeley Springs, W.Va., it found a new home in Frederick County, Md.

There are all kinds of reasons business comes and goes and chooses one site over another. Maybe Maryland wasn't willing to match the staggering tax break West Virginia gave Macy's. Maybe Washington County didn't have enough land in the right spot for Norfolk Southern. U.S. Silica President and CEO John Ulizio said this week that it was looking for a spot that had a more happenin' downtown (as a Berkeley Springs native, I am horribly offended and outraged by this statement, forgetting, for the moment, the truth of the matter).

Based on their campaign literature, the people we sent to Annapolis this winter seem to think that the jobs issue is pretty important. That's nice.

I'm not brimming with confidence, however, since most of our lawmakers are probably philosophically opposed to the one thing that might do the most good.

When U.S. representatives talk of the "Jobs Killing Health Care Act," they have four of the five words right. A perfect score would mean amending the statement to read "Jobs Killing Health Care Costs."

If you know anyone who runs a business of any size, ask him or her this: What would it mean to your company and your hiring policy if your health care costs were cut in half? Do not ask this question if you don't have some time on your hands to hear out the full answer.

Opponents of health care reform have the right tune, but the wrong lyrics. You don't think it's constitutional to be forced into buying insurance? Fine. So cancel your automobile insurance and try telling the cops that the Framers told you to do it.

No, the real flaw with health care reform is that it only beats around the bush on cost-containment, and the reason is obvious: One man's cost is another man's profit. Insurance companies, drug companies and medical companies were very, very good at stirring up "the little guy" to do their dirty work at town meetings. Though they were the ones with something to gain, it would have been bad form for men in suits to show up and start screaming at Barney Frank. 

It is not hyperbole to say that the insurance companies often were draining the pockets of the very people who marched in Washington on their behalf. That must have gotten quite a chuckle back in the boardrooms.

For 20 years now, we've been warned about the obscene increase in medical costs as a percentage of GDP. No one listened back then, and no one seems to understand the severity of the issue today. In the U.S., we spend twice as much on health care as any other industrialized nation and our health in general is significantly worse.

Here's why health costs matter: Contain health care costs and you add jobs. Add jobs and you increase taxes and consumer spending. Increase taxes and consumer spending and you increase business growth and reduce the deficit. Increase business growth and reduce the deficit and you add jobs.

The pity is that every political party in America — from Democrats to Republicans to the Tea Party to Libertarians to the Greens — have part of this formula right.

That's not the problem. The problem is that none of them can unstrap their political blinders long enough to admit that they also have part of it wrong and, as such, all work together on a solution.

Tim Rowland is a Herald-Mail columnist. He can be reached at 301-733-5131, ext. 6997, or by e-mail at timr@herald-mail.com. Tune in to the Rowland Rant video at herald-mail.com, on antpod.com or on Antietam Cable's WCL-TV Channel 30 at 6:30 p.m. New episodes are released every Wednesday.

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