How National Health Care Will Improve Your Salary

by Fred Siegmund

The latest turn in the health care debate drops the public option but would extend Medicare eligibility downward to begin at 55 years old.

Since the words “public option” bring automatic opposition, health care reform supporters in Congress apparently decided to address the politics with some new words even though Medicare is already a public option.

The long-term failure of our health care system to assure affordable health care continues to confront many people with unpleasant work and job decisions that affect national labor markets.

In the turmoil of downsizing, outsourcing and globalization in the last 15 to 20 years, many people had health care, but were forced out of jobs and therefore out of affordable health care.

The unemployed are already under financial pressure, but the lack of health care at ages less than 65 only adds to the pressure for the unemployed to find another job and continue to be part of the full time labor supply.

However, those over 55 would be more likely to leave the labor force if they had access to affordable health care.

Older Works will Retire if They Have Health Care

People aged 55 to 64 are more likely to leave the labor force because they have had at least 30 years to work, to build up equity in a house, and to save.

They might have enough assets to be able to work part time, pursue other interests or retire.

It will be harder, though, if they have to pay $15,000 or more for individual health care.

The evidence from the Bureau of Labor Statistics suggests that more of those aged 55-64 are continuing to work at a time when younger people are having trouble finding jobs and the unemployment rate is high.

Data from the Current Population Survey shows the labor force aged 55-64 is growing at more than three times the rate of the entire labor force. The increase is not just a one year change.

From 2000 to 2008, the U.S. labor force, which counts all adults over 16 years of age, increased by 11.7 million when the labor force aged 55-64 increased by 7.3 million.

Participation of the Labor Force is Skewed

A lower birth rate between 1962 and the early 1980s has limited the population of people aged 35 to 44 in the last decade, resulting in a smaller number in that age range entering the labor force.

This explains part of the shift from a younger to older labor force, but not all of it.

The labor force participation rate for 55 to 64 year olds, measured as the ratio of the labor force to population, keeps going up and it keeps going up faster than other age ranges.

Since 1990, the labor force participation rate of those aged 55-64 has increased 8.8 percent. For those aged 44-54, it is up 1.2 percent. For age ranges from 16-24, 25-34 and 35-44 the participation rates have all dropped.

Business is always better off with a larger labor force. More people in the labor force holds down wages. If people aged 55-64 have the choice to leave the labor force without losing affordable health care, the national labor supply will decline because there are people aged 55-64 who stay in the labor force to keep their health insurance.

When business fights against the public option and Medicare at 55, they are also fighting for lower wages.

(image: Speaker Pelosi)

About the author: Fred Siegmund covers America's jobs as part of work doing labor market analysis and projections for a client base of recruiters, trainers and counselors. Visit him at

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