Saturday, September 13, 2003

Rights and Reason: UAW Demands Irrationality

The United Auto Workers is currently negotiating with each of the Big Three U.S. automakers--an unusual arrangement, given that the union typically negotiates with one automaker first, than uses that contract as a model for the other two. The biggest issue facing the automakers is the rising cost of providing healthcare for UAW workers. The union is opposed to any proposal that would require its members to pay any additional share of health costs. This puts an enormous financial strain on the automakers and will likely result in some job cuts.

The UAW makes no apologies for its position. In fact the UAW's leadership supports abolishing the free market in healthcare altogether and adopting socialized medicine. It's an interesting position for a union to take: force healthcare providers to work for the government. No doubt if that were to happen, the UAW and its allies at the AFL-CIO would seek to unionize the physicians and further raise the cost of healthcare by holding the government hostage. As things stand now, neither the UAW nor the AFL-CIO have said anything in support of protecting physician rights under the present managed-care system.

The principal effect of today's government-sponsored managed care system is the widespread entitlement mentality seen by groups like the UAW. They feel they have a right to health care without having to actually pay for it directly. First they shift the cost to their employer. When that doesn't completely work, the costs are shifted onto the physicians through schemes such as the FTC's bogus "antitrust enforcement" policy that forces doctors to surrender their right to negotiate with HMOs. Ultimately, the costs get shifted to the taxpayers at-large, who are forced to subsidize the inefficiencies and losses of the managed care system.

The UAW, of course, feels no obligation to act rationally or responsibly. They have no need to. Unlike physicians, auto workers are represented by a union with monopoly bargaining power, entitling them to exercise political power over their employers. Where one can use force to obtain one's objectives, the need for rational action becomes moot. But that does not change the fundamental instability of the system. The sooner the UAW realizes its demands will only lead to economic collapse, the sooner they will act rationally.

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