Privatization and Exploits: The Issues with the American Economy

By
Vicente Santos
on
May 2, 2021
Category:
Economic Policy

The American economic model has been, without a doubt, one of the most successful economic models to ever exist in human history. This is largely due to the ease of conducting business in the US, the low regulations compared to fellow capitalist nations, and the abundance of resources. Despite all this economic prosperity, the American economy still faces many issues.

One of these issues is that the American economy has allowed for almost everything to be privately owned. The entire principle of most private companies is to make money. Making money providing goods like technology or cosmetics is moral because these companies are not attempting to turn a profit on things that are needed for the basic citizen. This is how most countries with capitalist models operate. Everything but the necessities is free game for companies to capitalize on. However, in the United States, for-profit corporations and entities often set up businesses on essential services. 

One great example of this problem is the American healthcare system. The American healthcare system is one that is very privatized and has many for-profit companies. In fact, according to The Commonwealth Fund, 67% of healthcare providers in the U.S. are private companies. Unlike government-subsidized or government-provided healthcare, which exists to provide a free/low-cost service to citizens of their countries, for-profit healthcare exists solely to make money off this service. In 2020, healthcare companies made billions of dollars in revenue while thousands of Americans died because they could not afford the rising price of healthcare. Take another developed country, Germany. Because all Germans are entitled to free healthcare, no German died in 2020 because they could not afford healthcare. Almost all developed nations in the world except the U.S. have a free or affordable public healthcare service that every citizen can access. This is because, in other economies, healthcare isn’t seen as something to capitalize on. It is seen as a basic right that is essential to the prosperity of a nation. The objective of a private healthcare company isn't to keep citizens healthy, but to squeeze as much money as they can out of their citizens. 

The privatization in the US isn’t just limited to healthcare. There are private for-profit prisons and for-profit schools, all of which take services that are required to have a functioning society and turn them into money-making machines. The fact that our economy enables and even encourages companies to profit off of the suffering, imprisonment, and education of Americans, all in the name of making money, is downright despicable.

Another issue that plagues our economy is the abysmal treatment of workers. The American economic system encourages exploiting workers in the name of minimizing cost to increase profits. In the end, it is the company's choice if they want to treat their workers fairly or not, but the problem is not companies choosing to treat their workers poorly. It’s the fact that the system allows them to do this.

This is where concepts like minimum wage, paid leave, and benefits come in. Rules like these are put in place to prevent the exploitation of workers. If a government did nothing to regulate and police the way companies treated workers, many companies would pay their workers as little as humanly possible because they can. Things like minimum wage prevent this from happening. Even though the U.S. has a system of required worker benefits, this system is minimal compared to other developed nations. There are clear, material benefits to compensating workers. It leads to more financial stability and less poverty, and enables workers to participate in the economy more. These are hugely beneficial in the long term, but they are not initially profitable, so American companies do not partake in these practices. An example of a worker's right that is not mandated in the U.S. is paid parental leave. Parental leave is an essential part of having a humane employment practice. Workers need paid time off to bond with, raise, and care for their children. Without this, low-wage workers would have to choose between finding someone to care for their child or leaving their job and caring for the child themselves. This is why paid parental leave is required in nearly all developed countries. In Finland, employees at any workplace, regardless of what the job is, are entitled to almost 24 paid weeks of leave. If the said parent is single, they are entitled to nearly 47 paid weeks.

Paid parental leave is also a right in much less economically developed countries. Laos, a poor Southeast Asian nation with a GDP per capita more than 20 times less than the United States, offers 90 days paid parental leave at 100% pay. Now, would you like to guess the United States policy on how much parental leave employers are required to give their workers? 0. The bottom line is, there is no national standard for paid parental leave. Even though some workers get leave, the average maternity leave in the US is only ten weeks. In addition to our appalling parental leave practices, there are also very few protections to keep employees from getting their work hours taken advantage of. In most businesses, part-time jobs reap no benefits. However, a massive issue is that what is considered full-time is largely left to the employer to decide. For example, an employer could say to get benefits, a worker must work 37 hours a week to be considered full-time. However, the employer does not offer a full-time position and says that they could work as a part-time worker for 35 hours a week. This is highly exploitative: it coerces and manipulates workers into working more for less. For obvious reasons, this is not allowed in other developed countries. In France, all employees are entitled to benefits such as parental leave and, in some places, healthcare. In addition to that, the work week is capped at 35 hours a week, and there is a definite line between part-time and full-time. These laws exist to protect the worker against exploitative practices. In the U.S., all of these practices and exploits are motivated by the same thing: maximizing profit and minimizing cost. There is no valid reason why the U.S., the richest country in the world, has such a hard time taking care of its workers. The economic system encourages and allows the idea of maximizing profits and minimizing costs by exploiting workers.

Sources

www.commonwealthfund.org/international-health-policy-center/countries/united-states. 

https://data.worldbank.org/indicator/NY.GDP.PCAP.CD

https://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_008009/lang--en/index.htm

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Vicente Santos

Hi! My name is Vicente. I am a 15 year old Chilean/American from California. My hobbies include hiking and kitesurfing. Politically, i identify as a leftist who possesses strong anti-capitalist views.