Toyota Recognizes Progressive Policies are Good for Business

Last week Canada joined the short list of nations that recognize the denial of marriage to gay couples amounts to a denial of equal rights.

This week we learn our courteous and enlightened neighbor to the north will be seeing a financial reward for its forward thinking policies as Toyota chooses Ontario as the location for a new manufacturing plant that had been also hotly pursued by several southern states. And why did Toyota choose Canada over the US south, despite their having offered incentives valued in the hundreds of millions? According to Paul Krugman:

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.

But there are other reports, some coming from state officials, that confirm his basic point: Japanese auto companies opening plants in the Southern U.S. have been unfavorably surprised by the work force's poor level of training.

There's some bitter irony here for Alabama's governor. Just two years ago voters overwhelmingly rejected his plea for an increase in the state's rock-bottom taxes on the affluent, so that he could afford to improve the state's low-quality education system. Opponents of the tax hike convinced voters that it would cost the state jobs.

But as the south reaps the "benefits" of GOP domination, their under-funded educational system is only one element of Toyota's decision:

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.

So what's the impact on taxpayers? In Canada, there's no impact at all: since all Canadians get government-provided health insurance in any case, the additional auto jobs won't increase government spending.

But U.S. taxpayers will suffer, because the general public ends up picking up much of the cost of health care for workers who don't get insurance through their jobs. Some uninsured workers and their families end up on Medicaid. Others end up depending on emergency rooms, which are heavily subsidized by taxpayers.

Despite our Dear Leader's Yale MBA, BushCorp™ has proven blind to business reality. But, convinced as I am the the ENTIRE Republican party isn't stupid and insane, when will some of its business savvy elements point out that the US' Jurassic era health and education policies are putting the US at a competetive disadvantage?