Divergent Trajectories: Healthcare Insurance Reforms in East Asia ...

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Illan Nam, Colgate University, Feb 2011Draft in progress, please do not quote or citethe policy effort focused on extending access to those who were least privileged, whilethe component of the initiative that was designed to enhance financial solidarity betweenhigher-income and lower-income workers failed. Finally, in Thailand as well, whileaccess and coverage was dramatically increased, formal sector workers resisted policyproposals to integrate their healthcare insurance program with those of informal sectorworkers.I argue that the variability in the extent of solidarism in the reform outcomesreflects differences in perceptions that segments of workers held about the repercussionsof shared labor market insecurity, which, in turn, affected their incentives to mobilizesubsequently as part of a cross-class coalition. Given that these proposed reformsentailed varying costs and benefits for different groups, where the potential losers –largely, the formal sector workers, and in particular, white-collar formal sector workers –perceived that their increasingly precarious labor status heightened the possibilities oftheir joining the informal or irregular sector, they were more willing to support thereform, calculating that the higher costs they would pay were a form of insurance againstthe risks of deterioration in their employment status.Growing insecurity yielded two possible outcomes for formal sector workers: one,they could become “irregularized;” or two, in the face of diminishing employmentopportunities or more frequent cycles of high unemployment, they could be forced to takejobs that they would have considered themselves overqualified for during more robustperiods of employment. In fact, increasingly over the 1990s, employers’ efforts tominimize labor costs in the face of deepened integration into the world market resulted inthe replacement of formal sector workers with irregularized workers on fixed-term26
Illan Nam, Colgate University, Feb 2011Draft in progress, please do not quote or citecontracts. Somewhat surprisingly, these adjustment strategies affected not only unskilledand skilled manual workers but also white-collar workers. In countries such as SouthKorea and Taiwan, where the developmental state’s growth strategy rested upon thecultivation of more value-added, skilled manufacturing industries, increased tradeintegration heightened vulnerabilities for not only working class but also white-collarworkers. This reflected the fact that export-oriented industrialization, a cornerstone ofthe East Asian states’ developmental paradigm, was underpinned by not only a large poolof skilled and semi-skilled labor but also by skilled administrative and service-basedfunctions that composed a wide spectrum of white-collar jobs that supported these exportindustries.Thus, labor market flexibilization increased employment precariousness for bothformal and informal sector workers. Yet, the former’s proclivities for recognizing thisshared insecurity depended not merely upon the fact but also upon how levels ofinequality mediated their perceptions of the boundaries between themselves and informalworkers. I argue that in more equal societies, a rise in labor market insecurityaccentuated the formal sector’s perception that the boundary between themselves andinformal sector workers was relatively permeable. Because the disparity in educationaland professional qualifications between formal and informal sector workers is muchnarrower in more equal countries, privileged workers are less likely to distinguish ayawning distance between themselves and informal sector workers as well as more likelyto perceive a greater personal stake in redressing the inequities inherent in the healthcaresystem that discriminated against informal workers. Thus, these calculations are moreconducive to their recognition of a shared interest in more solidaristic healthcare and their27
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