Report:

Putting America Back to Work

Released by: CALPIRG Education Fund

As the national health reform debate begins in earnest, some pundits have suggested that America cannot afford to invest in health reform. The resounding response from political and thought leaders has been that America can't afford not to. 

The current, unsustainable rise in health care costs imposes economic burdens on families, businesses, and state budgets – burdens that will soon become completely unbearable. U.S. PIRG's January 2009 report, Health Care in Crisis, predicts that without health reform family insurance policies will cost, on average, $24,691 a year in 2016. These findings are consistent with similar reports from AARP, the Urban Institute, and the New America Foundation, among others.

Yet when considering landmark legislation, the American people and their representatives in Congress ought to hear more. They ought to hear how legislation could benefit them, and, especially in these times of economic distress, they need to understand how it will affect their economic future.

The White House Council of Economic Advisor’s recent report, The Economic Case for Health Reform offers the beginning of an answer. This report concluded that a reduction in the growth of health spending of 1.5 percentage points could allow a .24% drop in unemployment consistent with no inflation for each year it occurred. A .25 drop in national unemployment means 500,000 jobs a year. The report also concluded that a less costly, more efficient health system will allow our economy, to grow more rapidly, yielding an 8% increase in the Gross Domestic Product (GDP) by 2030.

National economic reports, however, mean little to Americans who are worried about their job or small business or concerned about whether their kids will ever have a chance at a decent job. U.S. PIRG's analysis, presented below, should help address those worries directly. In the chart below, we adapt the Council of Economic Advisors findings to estimate the state by state impact that health reform could have on job creation over five years and longer term economic activity for every state in the nation, and the District of Columbia.

 

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