According to the National Coalition on Health Care, about half a million Americans traveled overseas last year to have surgery that costs two to three times more in the US. The ironic name for this is "medical tourism."
In News Target, Jessica Fraser gives an example of this: a 60-year-old Oklahoma woman went to India to have hip surgery that cost around $7,000. The same operation would have clost $40,000 here in the US. With her hotel and airfare, the total cost was $12,000?still less than one-third what it would have cost here in the States. India has many physicians who have trained in the US or the UK. Americans can now even purchase special health insurance that will send them to foreign countries for needed surgery.
It may be cheaper to get your surgery abroad, but the cost advantage of taking your business to low-wage countries such as China or India, where labor costs in manufacturing are 20% percent lower than in the US, is often NOT the bargain it seems, when wages are adjusted for low productivity.
On average, the manufacturing sector in Central and Eastern Europe and Mexico pay between 10% and 15% of the compensation paid in the US. In Turkey, the level is around 5%. The manufacturing sector in India and China only pays between 2 and 3% of the US compensation level. However, a new report finds that the cost competitiveness of emerging economies is not as strong as suggested by wage differences, because while their workers are paid much less, they are also much less efficient.
Since lower wages go together with lower productivity, we may soon see manufacturing jobs RETURNING to the US.
Art credit: freeimages.co.uk
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