The irony is that unions helped create the health care mess in the first place. Ever wonder why most Americans receive their health insurance through work? After all, we don't get our home or car insurance through our employers. Nor do most employers pay directly for other essentials like housing or food.
Our current employer-provided health insurance dates back to World War II, when FDR's National War Labor Board tried to impose wage and price controls to stem inflation during the war boom years. But the board found it easier to impose price controls than effective wage controls since it was possible to simply shift pay increases from cash into employer-provided benefits like health insurance. Such benefits were exempt from the board's control and weren't subject to taxes, making employer-provided health insurance even more attractive.
As a result, unions began demanding generous health care benefits as part of their bargaining strategy, which is why so many of the Cadillac health care plans cover unionized workers -- literally since the kind of plan envisioned is exactly what General Motors provided its workers. But what was bad for America was bad for General Motors, to turn an old adage on its head. GM's estimated $54 billion in health care obligations for its retired unionized workers helped drive the company into bankruptcy, from which it was only able to emerge by giving away 17.5 percent of the company's stock to the United Autoworkers' health trust fund.
Linda Chavez is chairman of the Center for Equal Opportunity and author of Betrayal: How Union Bosses Shake Down Their Members and Corrupt American Politics .
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