Treasury official calls for policies to reflect worker mobility

Posted: Friday, January 06, 2006

ATLANTA - Government policies should better reflect how often workers change jobs, according to the No. 2 person in the U.S. Department of Treasury.

Deputy Treasury Secretary Robert Kimmitt told a group of bankers, students and professors at Georgia State University on Friday that the government needed to get out of the way of greater economic prosperity that would result when people felt freer to change jobs. He cited rules on pensions and health coverage as two impediments to what he called a growing trend of worker mobility.

"The tax code, our regulatory environment, other decisions we need to make, need to keep pace," he said.

Kimmitt said an 18-year-old worker is likely to have 10 different employers by the age of 38, a faster rate of job change than previous generations.

His comments came as part of a coordinated effort by the Bush administration to send senior officials across the country Friday talking up the economy, sometimes using identical phrases.

Bush and Kimmitt both noted that productivity had increased 3.5 percent annually for the last five years.

Kimmitt, though, stressed that allowing workers greater freedom to move from job to job could magnify that productivity. No specific proposals are being drafted, he said, but such concerns will be a factor as the administration considers recommendations from a bi-partisan commission on reforming the entire tax code.

Two academic experts who didn't attend the luncheon speech are skeptical of how much impact the economy would feel from greater worker mobility.

"The notion that workers are more mobile now than they have been in the past, the evidence isn't clear that that's so," said Bill Custer, director of the university's Center for Health Services.

Some workers feel locked into a job if they can't take their health coverage with them to a company that doesn't offer medical insurance, he said. But that's a minority.

Two-thirds of all private-sector jobs in Georgia, for instance, are at-large employers, which typically offer coverage and are required by law to accept a new worker who was covered at a previous job, regardless of existing medical problems.

Also, employers usually offer benefits as a way to hold onto good workers, said Pat Ketsche, an associate professor in the university's Institute of Health Administration.

"For employers, it's a double-edged sword because there's a cost associated with turnover," she said.

