Universal Healthcare and UBI are Socialist

Decoupling employee healthcare from corporations with a restricted form of temporary universal minimum income program would create more efficient and dynamic capital markets.

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In today’s service driven digital economy, human capital has become corporations most valuable asset. Knowledge workers drive innovation today, not natural resources or manual labor.

Thus, the efficient use of knowledge workers is paramount for the operation of our modern economy. The transition to a “service based”, “digital”, “Industry 4.0” economy is well understood and agreed upon, but the implications of this drastic shift have not permeated through the economic system. Interactions between companies have evolved to match this new paradigm, but the employee company relationship is still stuck in the industrial age.

The main goal of the industrial age was to mold workers into specialized tools that perform a single function as quickly as possible for as long as possible in a factory. This created a strong incentive for companies to protect and keep their assets by providing company benefits to employees.

Employer Based Private Health Insurance came to the forefront during World War II. During the war, an executive order was signed that froze wages to prevent wage inflation due to the labor shortage caused by the majority of eligible workers fighting in the war. Businesses were clever and used fringe benefits like health insurance to compete over talent. Then, in 1943, the Internal Revenue Service decided that employer-based health insurance should be exempt from taxation. This made it cheaper to get health insurance through a job than by other means. [1]


The axiom, Once you give a benefit, it’s impossible to take it back continues to hold true. This benefit that began innocently enough with the best intentions has become a serious burden and cost on our society. The problem is becoming larger and larger which makes changing this benefit one of the most urgent issues we face today.

It would shine a light on vampire companies as employees finally have the ability to leave for greener pastures.

Not only has healthcare costs ballooned to 17.9% of GDP, but human capital is consistently underutilized as workers are stuck in jobs that they despise because they are fully reliant on their company sponsored healthcare for their family or they do not have the time to search for a more ideal job. These employees could be more productive in other roles, but the current system of incentives have created too many barriers.

Removing the tax benefits for employee based healthcare would be the first step to creating a more fluid and dynamic workforce. This regulation reduces employee salaries by placing that capital into inefficient healthcare markets slowing down the ability to create universal access to healthcare.

Allowing human capital to be more liquid would increase productivity dramatically across the economy. People could more easily leave employers that do not match their skills, culture, or personal preferences and take the time to find a company where they can excel for that companies benefit.

It would also shine a light on vampire companies as employees could finally have the ability to leave for greener pastures, letting the air out of stale organizations at a rapid pace allowing their capital to be allocated to better companies.

Tools like universal guaranteed healthcare and universal basic income (UBI) can be used as decisive and effective tools to keep the gears of our global economies well lubricated and turning. in our service based economy, we need to continue to think about policies and systems that help humans work better, not factories, or farms.



[1] https://www.nytimes.com/2017/09/05/upshot/the-real-reason-the-us-has-employer-sponsored-health-insurance.html

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