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News from EPI Medicare for All would boost wages, expand workers’ options, and likely create jobs

A new report from EPI research director Josh Bivens finds that Medicare for All would bolster the labor market, strengthen economic security for millions of U.S. households, and would likely boost the number of jobs in the U.S. labor market.

Opponents of a single-payer health care system have quoted an analysis of the economic effects of Medicare for All that includes the projection that up to 1.8 million jobs in the health insurance and billing administration sector could be eliminated if the policy were implemented. Bivens notes that this number has been stripped of all context that is included in the original study, and is often misleadingly presented as the predicted net employment effect of Medicare for All. But while Medicare for All would indeed lead to lower demand for labor in the health insurance and billing administration sector, it would boost demand for other types of jobs overall. For example, expanded access to health care could increase demand for health services by up to $300 billion annually, which would translate into an increased demand for 2.3 million full-time health care workers.

Further, several Medicare for All plans have provisions to pay for long-term care services, which would create jobs. In 2018, U.S. households provided roughly 34 billion hours in unpaid long-term care. If divided up among full-time workers, it would require 17 million new positions. Even if 10% of this unpaid care was converted to paid positions, it would create enough jobs to essentially offset the displacement of the health insurance and billing administration workers.

Additionally, Bivens finds that Medicare for All would:

  • Provide a potential boost to wages and salaries by allowing employers to redirect healthcare spending to workers’ wages.
  • Increase job quality by ensuring that every job would come bundled with a guarantee of health care.
  • Lessen the income loss, stress, and economic shock of unemployment and job transitions by eliminating the loss of health care that accompanies job-loss
  • Support self-employment and small business development—which is low in the United States relative to other rich Organisation for Economic Co-operation and Development (OECD) countries—by eliminating the daunting cost of health care from startup costs.
  • Inject new dynamism into the overall economy by reducing “job lock”, by allowing workers to go where their skills and preferences lie, not just to workplaces with affordable health plans.

“A fundamental health reform like Medicare for All would be an unambiguously good policy for the labor market, for the economy overall, and for U.S. workers,” said Bivens. “Besides the obvious benefits of expanding health care to millions of uninsured and underinsured Americans, Medicare for All could raise wages, boost productivity, and help small business owners.”