Raven has posted briefly (Googler Day Care Woes) earlier on a New York Times article today about the turbulent waters that Google has fallen into regarding its in-house day-care program, which it has discovered is getting too expensive compared with the fees it has been assessing its employees.

I started to write a comment, which turned into this post instead.

The NYT author titled his article “On Day Care, Google Makes a Rare Fumble” on the basis that Google had overriden the findings of its focus groups and had upset its employees by planning to sharply increase the prices it charges its employees for day care.

Actually, (although this is not the author’s intent) this story is a parable for the education sector and/or a parable for one-payer healthcare/Medicare.

The key lies in the second paragraph (emphasis mine):

Parents who had been paying $1,425 a month for infant care would see their costs rise to nearly $2,500 — well above the market rate. For parents with toddlers and preschoolers, who were charged less, the price increases were equally eye-popping. Under the new plan, parents with two kids in Google day care would most likely see their annual day care bill grow to more than $57,000 from around $33,000.

So faced with the fact that Google’s child care system is costing more than its competitors, what does Google do? A sensible company that wanted to stay in the business might conside lower costs. But that doesn’t appear to be on the table.

A second sensible response would be to introduce a cafeteria plan or some other voucher system where parents could choose whether to continue to enroll in Google’s child care program or to spend these benefits by utitilizing competitors’ programs. Especially since one-size does not fit all. (Contrary to what some guys think, but I digress…)

As I read the remainder of article, though Google clearly is one of those guys: they decided to reduce choice further by eliminating alternatives and now offers just a single, one-size-fits-all child care program. In its infinite wisdom, the company has decided that it knows what is the “best” day care system for all their employees and will only offer that to them. Evidently they believe that their employees are unable to figure out the best day care choice for their own children.

That arrogance was too much even for the NYT article’s author.

Surprise! Google’s subsidy resulted in demand exceeding supply, which translated to lengthy waiting lists for employees to get their children into the program. Or to look at it another way, they rationed day care by restricting supply. Just like health care in Canada and Britain.

Google’s solution to wait lists was to drive people away, to reduce the numbers on the wait list by charging people to keep their names on the weight list. As the article observed, that tactic worked (Economics 101), which now allows Google to look like heroes when they open enough new spots to accomodate the 300 survivors.

In conjunction with raising prices, Google plans to offset the pain by creating a needs-based scholarship programs (sounds like the way people have been running universities for many years). Given that university tuitions have long risen substantially higher than the rate of inflation, this scholarship plan doesn’t look too promising regarding controlling future price increases.

Is there any bad idea that Google isn’t trying?

Well, at least Google had the sense to avoid creating a one-payer or Medicare-like system of financing.

Or perhaps one-payer is the analogy to what Google has been doing all these years, and they finally realized that it’s a path to financial ruin. Would only our politicians in Washington take heed to Google, if they don’t want to pay attention to what’s happening in Canada and Britain and Europe, where recognition has surfaced that government-owned health care leads to rationing and inferior care.

The NYT author, to no one’s suprise, of course, argues for Google to create what would be analogous to a “public school” approach, that is, to run a mediocre day care program so that everyone can afford it – an equality of misery, which is the Socialist Democratic Party’s approach to domestic issues. Not surprisingly, the NYT editorially seems to favor such approaches.

However, the idea of Google getting out of the day care business itself seems unthinkable. Nor does Google even want to allow its program to face competition by providing “vouchers” that would enable parents to choose the day care situation that works for them – that would seem to be too much a violation of the leftist dogmas to which its owners subscribe.

A free market solution in Google’s eyes: The Horror! The Horror!