Health Insurance job lock
June 9th, 2008 | by Brian T. Schwartz |
An article in Business Week describes it well:
Held Hostage By Health Care
Fear of losing coverage keeps people at jobs where they’re not their most productiveWith the democrats ascendant, the political climate is ripe for another push for universal medical coverage. Kelly Services Inc. Chief Executive Carl T. Camden, a proponent of fixing health care once and for all, is taking advantage of the opportunity by rolling out new rhetorical ammunition. Workers, he says, are increasingly shackled to their jobs for no reason other than to cling to their employers’ health insurance coverage. These are people, he says, “who don’t leave a job even though they’re unhappy and would be more productive somewhere else.”
Economists and academics call this phenomenon “job lock.” Studies say it could reduce job mobility by up to 25%, according to Brigitte Madrian, a public policy and corporate management professor at Harvard University’s John F. Kennedy School of Government. A fluid labor market is viewed as a prime driver of U.S. economic growth relative to other industrialized countries.
Job lock creates friction by artificially tethering people to their jobs. …
And so many workers will keep hanging on to jobs they hate. One single mom in New York, for example, is sticking with her graphic design job solely to retain the health coverage for herself and her son. Half her pay goes toward her share of the monthly premium. Her wish? To start a business doing bath and body products. “I feel stuck,” she says.
After a decade of working in a job she wanted to leave, Holmes Johnson found the courage to move on. “Starting my own thing was too overwhelming, and my husband’s plan did not offer the coverage to make us feel secure,” she says. A few months ago, she landed a public-relations position with a comparable salary at Washington law firm Sterne Kessler Goldstein Fox. After checking the firm’s formula for prescription-drug coverage, she made the jump. In what other country, she wonders, would that be the deciding factor
McCain’s health plan, would remedy this, even though it could be better.
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