Anne Case and Angus Deaton
100 «¬® ̄°±² ³««³°® ́
cost, like wages, and the employer does not care whether the price o
labor takes the form o wages or health insurance or other bene¥ts.
The inexorable rise in the cost o health care invariably compromises
both employment and wage growth.
For high-skilled workers who earn $150,000 per year, for example,
the cost o health insurance is a tolerable fraction for a ¥rm, but for a
lower-skilled and lower-wage worker, the health insurance cost can be a
deal breaker. The ¥rm tries to ¥gure out whether it can do without the
worker or whether it can perhaps outsource the job to the booming in-
dustry o companies that supply low-skilled labor. Outsourcing is grow-
ing quickly in Europe, too, and health care is increasingly expensive
everywhere. But because health-care costs in other countries are not
borne by employers and are not tied to employment, there is no im-
mediate link there between rising health-care costs, on the one hand,
and lower wages and fewer good jobs, on the other. The high costs o
health care don’t encourage Canadian and European ¥rms to shed jobs.
Providing health care through employers would be less o a strain i
U.S. health care were not so exceptionally expensive. As societies get
richer, it makes sense for them to spend more o their national income
on prolonging life and on making it less painful. The reduction in can-
cer mortality is one o the success stories o modern medicine. But not
all medical expenditures produce such (or even any) bene¥ts, and the
costs o the whole system hamper the economy as a whole, contributing
to falling wages, worsening jobs, declining marriages, and the conse-
quent deaths o despair. The United States, unlike other rich countries,
exercises no control over the prices o new drugs or procedures, and its
health-care sector, including doctors, device manufacturers, hospitals,
and pharmaceutical companies, has developed immense political power.
The health-care industry has ¥ve lobbyists for every member o Con-
gress. Although there is lobbying on behal o health-care companies in
Europe, its scale pales in comparison to that in the United States.
The opioid epidemic in the United States is largely a failure o regula-
tion and control in an environment where pharmaceutical companies
have great political inuence. Along with the rise in mortality rates since
the late 1990s, the United States has witnessed a rise in morbidity with
a sweeping increase in self-reported pain, disability, di¾culty socializing,
and inability to work. Pharmaceutical companies and their distributors
took advantage o this growing desperation, pushing opioid painkillers
such as OxyContin, a legal drug that is essentially «½³-approved