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WAGE INEQUALITY AND RESULTS

November 20, 2019

WAGE INEQUALITY AND RESULTS

My followers know that I constantly harp on wage inequality as (other than Trump) our number one domestic issue and that I occasionally discuss economic externalities (unexpected results) that give credence to such assessment. Some such unexpected consequences of wage inequality are of little moment but some are of considerable significance, and a squib in a magazine I read recently points out such an externality (if it is one) involving an economically worrisome combination of housing, healthcare and wage inequality in Colorado, which I have reproduced as follows:

“Percent of Coloradans who have forgone health care as a result of the high cost of housing, according to a recent study by the Colorado Health Institute. Researchers found that while the average Colorado housing cost rose 77 percent over the last decade, the state’s median income increased only 4.5 percent.”

In other words, housing costs in Colorado rose an average of 7.7 percent a year while median income only rose less than one half of one percent a year. Result? Suffering and death and/or bankruptcy for want of sufficient income. This not so surprising result is only an externality depending upon the view of the assessor and may simply be an expected result in and of itself and since limited to one state is perhaps not so foreboding, but let’s consider other externalities (or simple results) flowing from this one comparison (such as comparisons of this 4.5 percent increase in wages for the last ten years with the increased and inflationary costs of food, new cars, insurance premiums etc. over the same period). When medical or any other sector of the economy hogs income, then little if any disposable income is left for a movie, new furniture, restaurants etc. with the result that the general economy is depressed, and resort to credit cards (at confiscatory interest) only make a bad situation worse.

Colorado is joined by many other areas in which housing costs are exploding, especially around Silicon Valley and mini-Silicons elsewhere in the country, and especially around university towns and reworked city centers where young millennials are congregating but with a falling birth rate are not reproducing sufficiently to ameliorate future labor shortages. (AI and robots to the rescue?)

Thus where I live here in Florida we have such high housing costs that the well to do are enduring labor shortages because workers cannot afford to live here. Politicians are talking of building housing with reasonable rental rates in order to attract workers. It seems the rich and corporate class are willing to go to any lengths to preserve the status quo other than the obvious answer to the housing conundrum, i.e., raising wages so that workers have the wherewithal to stay in or near town and trim their hedges, walk their dogs and teach their kids.

The squib I have taken the liberty to quote above, I think, showing that human beings suffer and die for want of sufficient income to seek medical help and pricey drugs, is a bridge too far, especially in a country where we brag that we are the richest in the world. Who’s we? It’s not the great mass of people who by reason of wage inequality and even those insured when insurers set the terms of the policies.

It seems to me that our present healthcare “system” is overpriced and in the final analysis even cruel in its application in a world where suffering and death and medical bankruptcies are less important than  profit-making. I am therefore in favor of a Medicare for All or some form of single payer coverage perhaps based on the Canadian template, where I read recently that one Canadian when asked about his out of pocket expenses said that his only out of pocket experience was when he reached into his pocket to bring forth his health card and that he had no other expenses.

Well-funded detractors who favor the status quo of profit over life and medical costs that millions cannot afford will come up with claims of socialism, the end of America and other such rant reminiscent of claims made by Republicans when FDR proposed a social insurance program we know as Social Security, and we all know how that worked out, what ever the ism.

Back to my personal rant > If those who favor maintaining the cruel, inefficient, profit first and costly healthcare “system” we now have wish to keep their good times rolling, then they are going to be disappointed when we enact a healthcare law that covers every American and their “system” becomes outdated, like the sudden decline in buggy whip sales when autos were invented, and among other things, they are going to be doubly disappointed when we also pass laws that end wage inequality and outlaw grossly misnamed “right to work” travesties.

No way? Can’t happen here? Wanna bet? With labor shortages many such good things can and will happen. The superrich don’t like to trim hedges – especially their own – and corporations don’t know how.      GERALD         E

 

 

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