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afford it, holiday at the same resorts.
Despite longer working lives, rising life expectancy meant an
increase in dependency that represented an important new labour
demand, not least because much of it was no longer handled within
extended families. The resulting demand for support helped greatly in
the expansion of the service component of employment, not least
because the increased amount of pension wealth and savings held by
many (but by no means all) of the elderly helped to fund the process.
Part of the low-wage demand was met from immigrant labour, with-
out which the care industry would have found it difficult to operate.
Age-related dependency also put major pressures on the public
provision of social welfare, particularly after Medicare was introduced
in 1965 to provide health coverage for the elderly. This was particularly
a problem because many of the elderly remained within the political
process, unlike marginal groups. Instead, they had a sense of entitle-
ment and expectations of action on their behalf. In 2003 Medicare
legislation, which came into effect in 2006, provided prescription-drug
benefits for the elderly (a response to the persistent increase in their
costs above the rate of inflation), a major expansion of social welfare
that reflected popular pressure on Congress and the desire of the
Republicans to outflank the Democrats and ensure support from the
c ha ngi ng p e op l e 77
elderly; but in 2004 it was projected that Medicare s finances would be
exhausted by 2019. As a result, some cuts were made in the budget
agreed in early 2006. Political pressure from the elderly helped to
ensure that Medicare became a programme more for the middle class
than for the poor. Similarly, Medicaid was affected by pressure from
the affluent elderly to join their poorer counterparts in not having to
pay for nursing care.
Care for the elderly was a crucial aspect in the more general rise of
health expenditure. This also affected employment, such that, in the
2000s, among the ten fastest-growing occupations listed by the Labor
Department were medical assistants, physician assistants, social and
human service assistants, home health aides, medical records and
health information technicians, physical therapist aides and physical
therapist assistants. This indicated the high labour requirements of
healthcare, which were accentuated because these jobs could not be
out-sourced abroad as some other service jobs could be.
Greater longevity also put real pressure on company finances, as
pension issues became of greater importance for balance sheets. In
the usa health costs are paid by companies rather than government,
and this hit companies with older workforces, such as General
Motors and long-established airlines, whose labour and welfare costs
are disproportionately high compared to foreign competitors.
Indeed, in 2005, the Pension Benefit Guaranty Corporation, a federal
agency, calculated that General Motors pension fund was $31 billion
short of what was necessary to pay its workforce if the fund was
terminated then. The company was responsible for health insurance
to more than 750,000 current workers and retirees in America, a
number that owed much to the combination of past scale and present
longevity. In 2005 the company lost $8.6 billion and spent $5.2
billion on healthcare costs. An agreement between General Motors
and the United Auto Workers Union reached in October 2005 that
would cut its healthcare liabilities suggests that business had a better
ability than government to rein in expenditure. In October 2005
Delphi, the world s largest maker of car parts, which had been part of
General Motors until 1999, sought protection from its creditors in
the bankruptcy courts.
78 a l t e r e d s t a t e s
Pension provisions also hit big public employers such as town coun-
cils. Health costs and workers compensation for injuries were major
burdens on employers, and, because regulatory regimes varied by state,
an important source of difference in doing business. By the 2000s this
was making California less competitive than many other states, includ-
ing Texas. By 2003 Detroit car makers were having to pay pension and
healthcare costs that exceeded $1,200 per vehicle sold (the estimate for
General Motors cars in 2005 was $1,500). Costs on those made in the
South were less, which encouraged location there. By 2003 more than
295,000 workers worked in the motor industry in Kentucky, Alabama,
Georgia and Tennessee.
While the growth of employment in areas with lower social welfare
costs is, in the long term, a partial solution to the national issue of
pension provision, this scarcely lessens the current problem created by
inadequately funded liabilities, a problem that mirrors that of public
finances. Lower costs to consumers, a crucial driver of economic
growth, threatens established providers, since the lower costs, for exam-
ple in airlines and communications, are often those of newer entrants
(domestic, or foreign via imports) into the industry. The consequences
for the government  that is, the public  are unclear. The liabilities of
the Pension Benefit Guaranty Corporation, the government-supported
insurer of company pension plans, are far greater than its assets.
conclusions
More people meant more pressure on the environment, but rising
living standards were also an issue, because average per capita
consumption rose appreciably. Indeed, consumerism was a driving
force in society, the economy and politics. This consumerism was very
much a matter of individualism, increasingly unshaped by profes-
sional structures, but guided by corporate pressures, the latter present
in particular in the role of advertising. This was seen, for example, in
the active advertising made by personal-injury lawyers and pharma- [ Pobierz całość w formacie PDF ]