“Losers Die” by John Edward

John Edward teaches economics at Bentley and UMass Lowell. He’s a frequent contributor of columns on economic issues. Here is his latest:

A couple of years ago I wrote a column called Winners Stay. The phrase “winners stay” refers to advantages that the affluent enjoy under trickle-down economics. In the time since publication of that column I have observed many public policy choices and economic results that reflect the reality that winners stay.

In this column I look at inequality from the standpoint of the poor. John Maynard Keynes said in the long run we are all dead. It just happens sooner for the losers.

Life expectancy in the United States is increasing. As economists like to say, that is “all else being equal.” In our society of winners and losers, all else is very much not equal.

Studies consistently show that life expectancy is shorter for the losers. For example, a recent study examined two adjacent counties in Florida. In the high-income county, life expectancy was 83 years for women and 78 for men. In the low-income county, life expectancy was only 78 for women and 71 for men.

The Social Security Administration estimated life expectancy for 60-year-old males. Those in the bottom half of income earners are expected to die almost six years sooner than the top half. A study in Canada found an even wider gap in life expectancy when comparing the bottom and top quintiles (20 percent).

Princeton University investigated the wide disparity in life expectancy across racial lines in the United States. Their analysis identifies income as by far is the strongest factor to explain why Blacks, on average, die younger than Whites.

A recent Ohio State University study looked specifically at income inequality and found “the best evidence to date that higher levels of income inequality in the United States actually lead to more deaths in the country over a period of years.” As observed by the author of the report: “income inequality is a public health concern.”

The link between inequality and “excess death” should surprise no one. Low income means more than a lack of ability to partake in conspicuous consumption. As summarized by an article from the Journal of Economic Literature: “income protects against poor sanitation, unhealthy working and living environments, poor nutrition, and a plethora of infectious diseases.”

A video (available in the Merrimack Valley Library Consortium) called “UNNATURAL CAUSES: is inequality making us sick” examines the cause-effect relationship between income and health (see also http://www.unnaturalcauses.org/). They site many factors that explain why economic losers (my term) die sooner, including:
– Having to work long hours.
– Job insecurity.
– Unsafe neighborhoods.
– Inadequate childcare,
– Chronic stress (see each of the above).
– Lack of time to exercise.
– Lack of affordable and healthy nutrition.
– Exposure to environmental health hazards, both at home and on the job.

They observe the bottom line that among “rich countries” the United States has both “the largest wealth gap between the rich and the rest of the population” and “the greatest gap between high and low mortality rates within a country.”

A study by the Centers for Disease Control and Prevention (CDC) examined the strong link between income inequality and health disparity. They concluded: “population health policies aimed at reducing mortality disparities require an understanding of the socioeconomic context.”

Economic losers — those in the United States with low income — do not enjoy the benefits of what some wrongly declare “the best health-care system in the world.” In fact, the World Health Organization (WHO) ranked the U.S. 37th in providing quality health care.

For example, despite spending about twice as much on health care as any other country, the WHO reports we are only 24th in healthy life expectancy. As they observe: “basically, you die earlier and spend more time disabled if you are an American rather than a member of most other advanced countries.”

How does the WHO explain why such an affluent country would do so badly? The first factor they cite is that “in the United States, some groups, such as Native Americans, rural African Americans and the inner city poor, have extremely poor health, more characteristic of a poor developing country rather than a rich industrialized one.”

In November, Pope Francis observed that: “the earnings of a minority are growing exponentially, so too is the gap separating the majority from the prosperity enjoyed by those happy few.” In December, President Obama gave a speech about “dangerous and growing inequality.” The President did not say what he plans to do about it. Clearly, reducing inequality and improving healthcare go hand in hand.

Before leaving office last week, Boston Mayor Tom Menino offered the opinion that “The big issues we have facing the next generation and the next 10 years [are] inequality and how you bring the city together so that it is working for all the people” (from a Boston Globe interview, 1/2/2014). He identified education, job opportunities, and affordable housing as key elements of solving inequality.

Education is sometimes referred to as the great equalizer. Advisors tell high school students that a College education is the path to income mobility.

However, losers find their path to education obstructed by their limited financial means. Further, College may actually reinforce inequality, even for those who can afford it.

Is a college education worth the high cost? Is it the answer to inequality? More on that next month.

One Response to “Losers Die” by John Edward

  1. C R Krieger says:

    There is also the view that those who are born into the lower reaches of society, economically, do not develop the self discipline and habits that allow them to exploit the available education and job opportunities.  That is to say, by the time these children enter school their life experiences have put them on the wrong path.  An Army recruiter acquaintance told me that you could judge the candidates based on walking into their childhood home and seeing if there were books on a bookshelf and magazines on a coffee table.   Head Start, which has been around for a while, is not doing the job, long term.

    I would guess that even if we could level the income of all (which would be stark for the top 2% and not much for the bottom 20%) it would not change the life and work habits of the young men and women on the bottom rungs of society.  We need to be doing some rethinking so that we (1) do not lose the productive value of those people and (2) can see them self-actualize and achieve great things for themselves, living long, prosperous lives.

    Regards  —  Cliff