Globalizing welfare

While preparing the most recent issue of TAD, my news review, I had a chance to think about few more articles than usual.

Due to the current events the Middle East since January 2011, immigration issues are a daily presence: I think that not a single day since I started TAD went by without articles discussing the issue, or its side-effects- in each one of the newspapers and magazines that I include in my review.

But while I keep reading once in a while the usual xenophobic chants about the weight of foreigner immigrants on welfare (usually “supported” by at best a biased re-interpretation of official data), something is missing.

And I am not referring to the paradox associated with our demographic trends: as even President Van Rompuy wrote in 2007: “the most racist will be happy to have a nurse from the Philippines or India”.

Most of the currently proposed reforms are converging toward a mix of temporary and permanent immigration.

The missing piece of the puzzle? While retiring benefits are provisioned for also when the worker is a temporary immigrant, usually with a minimum time before (s)he matures a right to benefits when (s)he will reach retiring age, no provisioning is done for the second largest figure in our welfare system: health facilities to support those who will incur the side-effects of the GDP that they helped to produce in our countries.

I will be more specific: if you are on a payroll and, in most European countries, also if you are a registered free-lance or professional, a certain amount is deducted at the source on any salary or payment, to cover for your (potential) access to health benefits, both for private health insurance and to give access to the public healthcare facilities.

If we consider that our lifespan is (hopefully) expanding, we can expect a longer, healthier life.

But, however healthier, it is just part of our human nature that age will bring an increased access to the health system- I remember few articles in France and Spain complaining about retirees from Northern European countries draining resources from the local health system, while they did not finance it.

Obviously, this can be easily solved- within European Union.

Consider the new/old ideas about inviting immigrants (on this blog too, I posted in the past few articles with, as usual, questions and a recap of some data), and have a look of the typical jobs that they will be asked to temporarily fill.

And let’s assume that they will eventually all work in legal, payroll-based jobs, with a regular contract and access to the local healthcare facilities of the country where they are working.

You will see that, however well paid, most temporary immigrants are expected to fill jobs that could have a significant long-term effect on their need to access to advanced diagnostic and health monitoring (e.g. to monitor the possibility of work-related chronic ailments).

Access to clean water and basic healthcare facilities, as well as universal primary education for women is acknowledged to pay a significant role in extending the lifespan expectation in developing countries.

But who is funding the healthcare facilities needed to prevent and monitor “re-imported” ailments?

If you think that this is a figment of imagination, consider something as basic as a European country, Italy.

Quite often, you can read comparisons between the cost of healthcare in Northern Italy and in Southern Italy, and appalling figures about the significantly larger gap between the resources spent, and the resources avaialable.

But for decades after the unification Southern Italy exported to the North (and also in Northern Europe) the only resource readily available- workforce.

Let’s say that you spend 35 years or more working in a factory on activities that have significant side-effects on your long-term health.

When you retire, and, as most Italians used to do, return to your birthplace, who will finance your access to healthcare? In Italy, the main healthcare provider is the State (now de-facto partitioned between regional governments).

In this case, you build up a deficit as, within the same country, it is expected that you provide the same level of healthcare- therefore, beside the political quagmire that this discrepancy generates, some common sense and fairness (no, not “solidarity”- just plain common sense) can, while focusing on removing the waste of resources, also create a nation- (and, eventually, EU-) wide distribution of resources, by simply generating a “social balance sheet” that includes provisioning for long-term healthcare needs generated by specific activities.

Eventually this coming-and-going will become long-term (i.e. until developing economies create enough sustainable local jobs), it will become increasingly common that immigrants will do “rounds” wherever they can find a job- maybe even building a parallel career: one in their own country, and one in the richer one.

If you are interested about more details, let me know- it is just an extension of what I saw in a couple of decades of consulting and number crunching: a political issue, not rocket science, as we are awash in data that could be used to “feed” this model.

It is the same principle that I previously discussed for nuclear energy production- look to the long-term costs of the benefits that you are generating during the usable life of a power station.

If we are considering now the potential costs 100 generations down the road of a piece of equipment, why cannot we manage the costs of our economic system few decades down the road?

Personally, I already met over the last decade immigrants from developing countries who did not plan to resettle in Europe- but only to work in Europe whenever they needed to finance something in their own country: from building the family house, to building an hotel in the Philippines, and retire there.

But they admitted that their main worry is that they are getting used to EU-level universal access to advanced healthcare facilities…

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