First, I should note from a political perspective that I am a moderate independent. I have voted for both republicans and democrats and consider myself to be fiscally conservative, pro business and socially conscious. I support need based programs that provide necessities to those who truly need, not those who are lazy, unmotivated and/or irresponsible. I also support reasonable consumer protection regulation by the government because there is undoubtedly a despicable amount of greet and corruption in our society. To that end, honest business people should be able to enjoy the benefits of capitalism without undue hardship imposed by over-reaching government regulation or involvement in the markets.
So, that said, what is my take on the health care reform issue? Well, frankly, I think that what Obama has proposed makes a lot of sense and ultimately would help our industry. Here's why:
It's no secret that we are a low-wage industry. Many of our industry jobs require low levels of literacy competency, only basic physical skills and they pay accordingly. According to the Travel Industry Association of America, our industry employs 7.7 million people, but our payroll is only $194 billion - that math works out to about $25,000 per year on average. Curious about Virginia? The average drops to about $20,400 based on TIA data. Factor in management wages that are well above those averages and you can easily see what I mean by, "we are a low paying industry". [The 2009 Federal Poverty Guideline for a family of four is $22,050.]
It's also no secret that health insurance is expensive. To be specific, the national average employee's contribution is approximately $3,350 per year, for an employer based plan (individual plans are significant more expensive). Can you imagine living on $20,000/year? How about $16,650 after paying your health insurance premium? Of course not, and that's precisely why many (maybe most) of our line level employees are forced to make the difficult "choice" to go without insurance at all. In turn, many live a less healthy life than those with basic health insurance coverage.
It's also no secret that healthy, happy employees are more productive. Well, if your earnings are on the cusp of poverty level and you can't afford health insurance, you don't exactly have a strong foundation for a healthy, happy lifestyle. Here's where I think health reform can really help our business. IF all those associates who are currently uninsured could get basic health insurance at a reasonable cost, or even free for some of the lowest paid in our field, then perhaps they will be more productive workers? It's hard for me to imagine what it must be like to live day to day wondering if tomorrow you will have some medical issue and no insurance to help get you through it. Perhaps for some it's a way of life they are accustomed to, but for others it is a psychological burden each and every day. I can imagine it would be a positive change in one's persona if that were no longer a worry; and I can imagine that person might provide better service if they felt more secure in their own life...
You see where I'm going with this... healthier, happier, more secure feeling employees would lead to more productive service minded associates, which would lead to more satisfied customers, which would lead to more recurring business and higher perceived value of 'experiences' and consequently higher average rates. I can imagine a hospitality industry where we combine all the great service and jobs skills training already in place, with happier, healthier associates and I envision a dramatically changed "experience" for our customers.
To be clear:
- No, I do not think that employers should pay line level associates more so that health care is more affordable for them. I believe that market competition will dictate what each position is worth.
- No, I do not think that the employers should be burdened with the aggregate cost of insuring every associate. Again, I think that competition will dictate what benefits are necessary to attract/retain staff. Specifically, the degree to which the company subsidizes the insurance plans should be market driven, not dictated.
- No, I don't believe it would cost hospitality employers significantly more money. True, under Obama's proposal, businesses would be required to offer company subsidized health insurance to all employees. However, because of the currently high costs many hospitality firms have extremely low enrollment. For example, a mid-size management company may have 1,500 employees with only 200 or so enrolled in the plan. Well, if that enrollment suddenly sky rocked from 10 or 15% to 100%, said company would have substantially more purchasing power and distribution of risk and in turn would negotiate far lower rates with the insurers. Furthermore, many of the aforementioned associates earning low wages may qualify for the government sponsored program without further expense to the employer.
- Yes, I believe that every American should have access to basic health insurance. We are too advanced of a nation to have 46 million (approximately 15% of the population) without insurance.
- Yes, I believe that with a group plan with millions of participants, the government can create a very affordable public option (keyword being: option) to further enhance the competition.
Questions Remain:
- Is the plan fool proof? No.
- Will is cost taxpayers and business owners? Probably.
- Is it worth it? I think so, especially if ultimately there are more options and more competition that drive down the per family costs without sacrificing quality of care while providing a basic need to millions of hard working Americans.
- Is a compromise possible in Washington? Humm, time will tell. I sure hope so and promise that any elected official representing my district who doesn't work in good faith toward a compromise will surely lose my vote.
In the meantime, I encourage you to take a trip and stay in a hotel - it's good for the economy and your sanity.
