Oh Canada

Toyota, Moving Northward

Last night on the third-to-last episode of Queer as Folk, one of the major couples, fearful--in the wake of a bombing incident at a gay-rights rally--that a new law would make null their adoption of one another's biological children if one of them were to die, discussed moving to Canada to escape the currently tenuous political environment for gays in the United States. I admit it--I check the weather in Toronto on occasion, too.

Today, Paul Krugman makes a good case that gays aren't the only thing headed to Canada. Discussing a new Toyota plant that the company decided to open in Ontario rather than here in the states, Krugman nails many of the things wrong with our country:

But last month Toyota decided to put the new plant, which will produce RAV4 mini-S.U.V.'s, in Ontario. Explaining why it passed up financial incentives to choose a U.S. location, the company cited the quality of Ontario's work force.

What made Toyota so sensitive to labor quality issues? Maybe we should discount remarks from the president of the Toronto-based Automotive Parts Manufacturers' Association, who claimed that the educational level in the Southern United States was so low that trainers for Japanese plants in Alabama had to use "pictorials" to teach some illiterate workers how to use high-tech equipment.

Not a pretty picture of America's underfunded educational system, is it? Maybe that lack of education is why people don't understand this problem:

But education is only one reason Toyota chose Ontario. Canada's other big selling point is its national health insurance system, which saves auto manufacturers large sums in benefit payments compared with their costs in the United States.

You might be tempted to say that Canadian taxpayers are, in effect, subsidizing Toyota's move by paying for health coverage. But that's not right, even aside from the fact that Canada's health care system has far lower costs per person than the American system, with its huge administrative expenses. In fact, U.S. taxpayers, not Canadians, will be hurt by the northward movement of auto jobs.

To see why, bear in mind that in the long run decisions like Toyota's probably won't affect the overall number of jobs in either the United States or Canada. But the result of international competition will be to give Canada more jobs in industries like autos, which pay health benefits to their U.S. workers, and fewer jobs in industries that don't provide those benefits. In the U.S. the effect will be just the reverse: fewer jobs with benefits, more jobs without.

You can see where this will leave us, right? One of two things will happen: either the U.S., determined to reduce the cost of health care, will cut out the most wasteful element of its system--managed care companies that siphon off money to fund unnecessary administrative costs--by moving to a national health insurance system, or our companies, saddled with insane costs or unable to find quality employees because they can no longer afford to offer benefits, will start to fail, being replaced, if at all, by businesses that pay their employees less and offer fewer benefits. In other words, our present system has in it the seeds of our destruction as an economic power. By offering health care to its citizens, Canada has gained a competitive advantage over us. And if well-educated American gays start pouring over the border? Judging from the example of the workers who needed pictorials, the nation can ill afford to lose us. I'd like to see the Democrat who dares to make that case during the next election!