The role of health-care and retirement benefits in a postindustrial economy

It is not news to anyone that the United States produces nothing anymore. We have transitioned from an industrial to a service based economy in roughly thirty years in a process dubbed deindustrialization. The typical job in the 1950s was a life long, well paid, pensioned, unionized, and relatively secure manufacturing job. These jobs have recently been replaced by mechanization or outsourced to Southeast Asia. The American economy is now a service sector economy, specialization in the provision of services such as food, medical care, education among other things. The jobs found in the service sector are for the most part short term, lacking in job security, non-unionized, and with few retirement or healthcare benefits. My question is; how do pensions and healthcare coverage fit in with this new organization of our economy?

In our former industrialized economy, health-care was provided primarily by the unions and the corporations themselves. Pensions were provided by the government through Social Security and through the corporations. In a service sector economy, it is impossible for employers to provide adequate health-care and pensions to their employees. Many of them are relatively temporary and low paid, leaving little reason to provide benefits. It is extremely inefficient to constantly shift between health-care policies. The same goes for pensions. It is impossible for modern service sector workers to acquire pensions because of their constantly shifting work situation.

Who should provide these services, if not the employer? My answer: the federal government. Jobs may shift endlessly and their employers go through periods of success and failure, but the government will always be there to pick up the tab. By having the federal government take over health-care coverage from the workers (preferably in a single payer system), it would consolidate the health care system and give the government a direct incentive to promote public health. By providing a strengthened Social Security system, workers could contribute a portion of their income to one source that would always be there, not one that will only be built during the duration of their employment.

The cost of the health care and pension shift to the federal government would be paid for by increased taxes on businesses. This might not even be necessary because the increased productivity and job creation of businesses without the constraints of health insurance for its workers would translate into an increase in tax revenue. The key to a service sector economy is portability. By giving responsibility to the federal government, workers' pensions and health care coverage would be absolutely portable, and likely save a lot of money along the way.

This is all hypothetical. The fact that we could barely pass a health care bill the Heritage Foundation was advocating for 16 years ago shows how unrealistic this is.