« Traveling for Work | Main | Wasting Time? »

July 26, 2005

The US: Caught in the Middle

I came across an interesting editorial by Paul Krugman of the New York Times yesterday. His column focused on Toyota’s recent announcement that it would be opening up an assembly plant in Ontario, Canada. Several Southern states offered millions in incentives to Toyota to persuade the company to set up shop there. But Toyota snubbed them all and went north of the border instead, where Canada was extending significantly smaller incentives.

Given the bigger financial incentives and the abundance of cheap labor in the South, Toyota’s decision is a bit confounding on its face. But according to Krugman, there were two driving factors behind the decision: A more educated workforce and Canada’s universal healthcare system. In a press release, Canada’s minister of industry said this about Toyota’s decision:

“It says that Canada is open for business, that Canadian workers and companies can compete with the world's best, and that federal and provincial governments, working hand in hand with excellent local company management, can win the battle of inches for North American product mandates.

“This is the way forward for our economy. We are a small, trading nation that is more heavily dependent on exports than any of our G7 competitors. We need to attract world-class companies to this country, to keep them, and to make sure they expand here.”

Perhaps many more companies will follow Toyota’s lead. Indeed, Toyota has proven to be one of the great companies of the past 25 years. Why wouldn’t others model themselves after such an organization?

Meanwhile, another New York Times columnist, Tom Friedman, wrote a book not long ago called The World is Flat. The thesis of the book is that the whole world is moving to a more level platform in terms of competition for work. He worries about the threat to American jobs from countries like India, China, the Philippines and Pakistan -- given their access to dirt-cheap labor and talent.

The whole thing makes it a bit scary to be an American. On the one hand, companies are choosing to open plants in a neighboring country because of its more advantageous healthcare coverage; on the other hand, it’s already well-established that we can’t compete with the labor costs of China.

In other words, we’re the greatest economic powerhouse in the world, yet the future of our jobs looks awfully grim when viewed through the lens of global competition.

Share this post: Digg, StumbleUpon, del.icio.us, Facebook, Twitter, etc.
Bookmark and Share

Posted by Thad on July 26, 2005 at 02:41 PM | Permalink | Comments (7) | TrackBack (0)


TrackBack URL for this entry:

Listed below are links to weblogs that reference The US: Caught in the Middle:


I have long found Paul Krugman's commentaries to be suspect. Case in point: did he mention that Toyota has announced plans for factories in Texas, Kentucky, and West Virginia? Suddenly, the conclusion that all auto makers are heading north seems less reasonable.

Chinese labor pools will begin to look less favorable, now that China has FINALLY agreed to no longer link the value of their currency with the US$. That will begin a slow but gradual rise in the cost of Chinese goods and services. The Bush administration has argued in favor of such a revalue for years; its about time.

Posted by: Charlie on the Pennsylvania Turnpike | Jul 27, 2005 9:35:24 AM

Personally I feel that health care in the US is a major problem to the working middleclass.
Hospitals can't run on just grants and donated funds. Hospitals need to get their money out of the patients. Patients would be glad to give hospitals their money if the insurance companies didn't drop every claim they reviewed. We are hard working people that need to have cooporation and better health care providers. Its not easy for a single mom to work,provide all,then deal with an insurance company that feels emergency room visits and operations are not covered. Why do we have to fight for everything.

Posted by: Edie | Aug 3, 2005 11:30:26 AM

The problem is that the System has grown too fat and bloated. Of course we all moan when an insurance company denies our claim. But how many claims has that company paid that were fraudulent? Before you answer 'that's not my problem', if the company goes out of business, it is your problem.

Ambulance chasing lawyers, doctors padding their bills, people trying to get every kind of elective surgery covered by insurance (it's not a 'nose job', but a 'diviated septum', yeah!), to the hordes of illegal aliens coming across and expecting free medical care: are all to blame.

Simple answer? Well, step 1, close the damn borders. Step 2, deport illegal aliens. Step 3, crack down on abuses (as above). Then face the facts that while things will never be as cheap as they were for our grandparents when they were our age, the medical advancement (not to mention inflation) is now greater than they could have ever imagined.

Posted by: Charlie on the Pennsylvania Turnpike | Aug 8, 2005 9:17:19 AM

As a Canadian now living and working in the U.S., I wonder how U.S. companies manage to compete with more advanced countries (and even most 3rd World nations) that offer universal healthcare. Surely a more sensible solution would be to treat healthcare like education, national defense and other things that we all pay for out of the public purse, because we are all better off when we do.

If we did that, we could do away with all those ambulance-chasing lawyers and insurance companies that refuse lifesaving treatment. There would still be a place for private insurance, as there is in most other countries, but just not in regulating basic healthcare.

Posted by: Lawrence | Aug 16, 2005 11:29:16 PM

Interesting article but I don't understand what illegal immigrants have to do with the healthcare system. I think that's a different issue all together. The system has not provided sufficient coverage for the American citizen which is a wide spectrum of people in different socio-economic status. So why not address that rather than look for the miscelleneous aspect to blame in the inadequacy or drawbacks of the health system in providing health for every american.

Posted by: Cheke | Aug 17, 2005 9:07:09 PM

The problem with our healthcare system is the insurance companies and the American citizens selfishness/laziness. When companies started to offer insurance as a benefit, we the citizen started to expect it...and then demand it. By allowing the corporation (our employer) to choose for us who would provide our insurance we took the power of OUR buying power out of the equation.

If the power to choose the best provider for our healthcare needs went back to the private sector and we were more involved with the "benefits" offered, the insurance companies would be forced to be more competitive. We would be more aware of the charges from our service providers and see when they have overcharged us for services not rendered. I mean, come on, $5 for an aspirin? Or what about those lump sum charges for a procedure, some of which we never receive!

I for one am tired of receiving a bill from a service provider for the balance of services rendered that the insurance company did not pay and I never see an itemized bill. How did we ever become so trusting of corporations who have no soul? We somehow believe that they have our best interests in mind when in fact it's all about money...ours.

Just consider for a moment what the healthcare industry would be like if there never was any insurance. Do you really believe that the cost of services would still be so high or would it come into line with what people could really afford? I certainly wouldn't pay for services not rendered. And you can bet your bottom dollar I would pick up the phone and complain about an over inflated cost for a product.

The healthcare industry is a game of wooing using high dollar incentives for healthcare providers to use their products and we the people are paying the cost. The losers are those who are entirely dependant Medicare/Medicaid. No, I for one will do everything I can to see that America never has socialized medicine and the freedom of choice gets back into the hands of the people, where it belongs. I am tired of being used and abused by so called "benefits". Wake up people and get off your lazy butts and take responsibility for yourselves, the corporations are killing you anyway!

Posted by: Rebecky | Aug 21, 2005 6:05:51 AM

>> The system has not provided sufficient coverage for the American citizen which is a wide spectrum of people in different socio-economic status<<

Not sure I follow your line of reasoning; the US Heathcare System is far and away better than any other in the world.

Now if we were to stop paying for illegal alients (an impossible feat, unless we stop illegal immigration), there would be more funds to pay for those of us who are law abiding.

You can't connect those dots?

Posted by: Charlie on the Pennsylvania Turnpike | Aug 21, 2005 8:17:45 AM

The comments to this entry are closed.