economy

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How I Realized Poverty is Self-Perpetuating

couponsThis past Sunday, I found the following in the coupon section of the paper: “Buy a $50 Visa Gift Card and receive $10 off your order of $50 or more!”  Well, hey, I can put together a list of things I need, or can use in future, that adds up to $50, and I can use that gift card to buy gas or other necessities; in the process I’ll save $10 on things I’d buy anyway!  Good deal!

Then it hit me.  I am fortunate enough to have sufficient disposable income to take advantage of the offer.  If, however, I was eking by from paycheck to paycheck, thus was unable to pay $100 all at once to garner the great savings (10% of the total), I couldn’t take advantage of it, and I’d have to pass on saving an extra and sorely needed $10.

In other words, too often you must have money to save it, or make more of it…too often, those who most need the savings or increased income literally can’t afford to take advantage of the typical means for getting it.

We in the middle class can relate to this on a different level: we can’t take advantage of the same investment vehicles available to the wealthy because they require a million dollar buy-in, for example.  We must pay an ever increasing chunk of our paycheck to insurance premiums with ever increasing out-of-pocket costs, increasing our cost of living with no concomitant increase in salary – another example.

But even more systems are set up in this same “no-win” way for the “working poor” – folks who work hard at the kind of low-wage jobs that keep us going (maids, clerks, lawn care, home health aides, social service workers, maintenance workers) yet still live in poverty.

Here just a few of the myriad things that work to keep the poor, poor:

  • can’t get a car loan, so, presto, no car to get to work, daycare, grocery store, etc.
  • no health insurance so must pay out of pocket for everything – costs that are far higher than those charged to insurance companies; add to that living in substandard housing which exacerbates asthma, allergies, some still with lead paint, causing more illness
  • neighborhoods with “D” or “F” rated public schools…so much for a decent education
  • lots of coupons are found in the daily paper…unless you can’t afford the subscription, then that option is out as well
  • vehicles for saving for the future (IRA’s, investments, even savings accounts) require a minimum deposit and balance to qualify

We hear, often, of folks beating poverty and making it big.  Unfortunately, that is a very small minority, and the ticket up and out is usually through professional sports or the film/music industry.

As an executive with large social service agencies, I know what those who care for your profoundly disabled son’s/parent’s care are paid, and it’s not a living wage.  We all know what the hotel maids and all service workers on whom we depend are paid, and we know it’s insufficient.  Even teachers and bank tellers are paid ridiculously low wages given the skill and education required.

So, please keep this in mind the next time you see headlines about workers at MacDonald’s and Walmart fighting for a decent wage.  They have lots of company in folks with jobs that are far more crucial.

Then keep in mind that the only way out of poverty – or the lower-middle class for that matter – is through wages paid.

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Hey Kids, You Want Us Out of the Way? Really?!

how Boomers are annoying the worldPerhaps you’ve noticed… an increasing number of notable bloggers are yelping about how unfaiiiirrr it is that we Boomers refuse to retire, purportedly keeping the unemployment rate high as a result, and some news sites are now jumping on the whine wagon.

Then, there’s Congress, bemoaning our life expectancy as ruinous to Social Security; if we’d just die sooner all would be solvent!  By the way, this one would be laughable given that a majority of Congressfolk are Boomers, except they don’t have to rely on SS so they really don’t care…

Hmmm…. so unless we head on down to FL for early bird specials, or better yet, head on up to that big early bird special in the sky, we’re (fill in the blank):

  • greedy
  • selfish
  • uncaring
  • unscrupulous
  • thoughtless
  • all of the above

Well, kids, bloggers, pundits, Congress, and news folks, here’s another take for you to ponder…and write about if you’re feeling generous:

  • over 60% of Boomers are supporting their grown children in one form or another…you sure you want us to stop working?
  • If you paid as much into the SS system as we did over the last decades, just to have the fund raided by Congress year after year, which is the only reason it’s not solvent (back in the ’80’s President Reagan even made sure that preparations were made for the influx of Boomers he knew to be coming…), and then be told that you really ought’n to expect the return you paid for, you would no doubt really be whining
  • oh, and keep complaining….that’s the way to get an inheritance….or our vote.

We’re here.

For many a year.

Working without fear.

Get used to it.

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Want Economic Recovery? Then Ensure a Strong Middle Class

Did you know that in the late ’70’s, the wealthiest 1% of Americans took in 9% of the nation’s total income; in 2007 that same 1% took in 24%?

By economic standards, 1% of the population having almost 25% of all income is telling…the last time there was such a concentration of income at the top…was 1928, according to Robert Reich, Professor of Public Policy at UC Berkeley, and former Secretary of Labor.  It’s a troubling indicator at best; at worst it’s our last warning that unless we mount of major comeback of America’s middle class, we are in economic hot water, and cooking fast.

Why?  Because the rich spend less relative to their income, and invest wherever they can find the best rate…which is often overseas.  Therefore they do the least for the American economy, vs. those of us in the middle class, who spend a much larger portion of our income (because we are always striving for a better life…good for us!) so we are a boon to the economy, and we invest right here in the good ol’ USA.

According to Mr. Reich, the programs after the Great Depression moved the economy back to a more “widely shared prosperity” from the initiation of Social Security so the elderly were not longer living in abject poverty, to infrastructure-building programs that paid folks a decent wage while getting them back to work, and the mandating of the 40 hour work week with paid overtime so folks were making a decent living wage.  The GI Bill at the end of WWII got returning Vets the education they needed to improve their job prospects, again giving a burgeoning middle class the boost it needed to thrive and prosper.

However we do this, and it is not an “either/or” proposition but an “and/both” – a combination of business tax breaks, job creating programs, and the closing of tax loopholes so everyone is paying their fair share relevant to size of income – the squeezing out of the middle class must stop.   Not just to ensure a full and faster economic recovery, though.  The middle class has always been the spine of America; and it is what our revolution was designed to ensure, that all citizens can have a better life, not just the exceptionally wealthy, many of whom today get there perhaps not under the most ethical of conditions.

Get behind legislation that is designed to bring health to the middle class, and legislators who understand that this is the missing piece to s0lving our nation’s woes (not just economic, but social through the reduction of fear that drives so much of what is polarizing us right now), and you will be part of a common sense solution that we can pass down to future generations.

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Medicare for Younger Boomers…

…a great idea, or an expansion of a program that has gone beyond it’s effectiveness?
Well, by the response of those Boomers chanting “keep your hands off my Medicare” it would seem the answer is clear.
I wrote the White House & a number of Senators around 2 months ago, recommending that an expansion of Medicare be the alternative to a “public option” – i.e. why reinvent the wheel; just fix the wheel you have (Medicare does need some overhauling to keep it solvent and make it far more efficient) and use it, I opined.
Although my thinking was to use it for all age groups, to start by offering it to most of we AARP types makes more sense.  If that works, it can be further expanded from there.
Given that a whopping 12% of Boomers 55-64 (4.3M) are uninsured according to a Kaiser Family Foundation study, coupled with a huge number 55 & up being forced to retire early and as a result losing the healthcare coverage that goes with their job, we represent a large portion of the population in need of coverage, at a time in our lives when such coverage is essential.
Expanding Medicare is the most palatable way to do this, with far less resistance to it than any other “public” option.  And certainly those citizens who are oh so happy with their Medicare coverage but don’t want the uninsured to have the same security if that means everyone must give a little for more to get, this may calm their fears.
And the time-frame prior to any healthcare reform legislation kicking in will give the Feds the time to clean up Medicare prior to expanding it.
My fellow Boomers, many of our generational colleagues need relief, now.  It is up to all of us to ensure they get it.
Expanding Medicare is the most efficacious way to do just that.
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An Open Letter to My Peers…And Congress

I am:

  • a business owner
  • a centrist Democrat
  • a woman (we are still the gender majority and statistically the greatest users of healthcare)
  • a Boomer (we too are a large number & statistically the ones who have the most to win/lose w/any reform)
  • a member of the middle class (ditto above)
  • self-insured (e.g. not through my business)

As you see, I represent a broad cross-section of those most impacted by any healthcare reform, and as a Centrist Democrat, I believe in fiscal responsibility while helping my fellow Americans who fall ill and/or die every day because they have no insurance.  Useful reform requires thinking and/both, not either/or.

I wish to speak directly to each constituency, member to member.

To my fellow business owners:

When we want to address a problem that only our company/industry is in a position to resolve, we would not ignore it – we would most likely take out a loan (or shall I say would like to if banks were lending…), and get to work on expanding what we must to take advantage of a window of opportunity.  We would carefully calculate the risk and determine that if we do it right, we will not only be able to pay back that loan, but make a profit. 

The “problem” that needs to be resolved here is that clearly the competition created between private insurers alone has not only not reduced customers’ costs, but continues to increase them, so that model has not worked in our market place.  Therefore a new model is called for.   Applying this business model to reform, the Feds would become an insurer so that we “customers” can then reap the benefits that such good ol’ American competition would generate with private insurers (because they are the only “industry” in a position to do so).  There will be an upfront cost – of course.  But using that as a reason for not doing it at all doesn’t make sense.  Doing it in a way that will ultimately pay back the “loan” and then remain solvent, does.

We say that compelling private companies to compete with the Federal Government is not fair competition, thus insurers will be placed at a huge and unAmerican disadvantage.  After all, without significant government subsidies, no insurer has attempted to provide coverages that compete with Medicare.  That said, however, this model has worked in other industries.  The best examples: public and private colleges/universities; what has compelled the US Post Office to work more effectively (or at least try…) has been the private company competition to it.  There is simply no well-thought reason this model cannot also work with health insurance. 

As for co-ops, those few in existence work so well because they are non-profits – like the government, they are not in it to make money, but simply put their earnings-above-expenses back into improving their services.  Therefore, isn’t that unfair competition to for-profits that must pay huge salaries and give shareholders returns on investment?  Either way, private industry will be competing with a not-for-profit entity of one sort or another, so in essence, co-ops would be equally “dangerous” as competitors.  Then, there is the icing on the co-op concept-as-misguided cake: the fact that the plan being considered right now would be in very few States/areas, and most likely would not be available to the majority of Americans in our lifetime.   There is another glaring flaw to the co-op concept, and that I’ve covered in “to my fellow self-insureds” below.

To my fellow Centrist Democrats (&  you, too, Republicans): 

Given the above formula, you disappoint me greatly by not seeing the fiscally responsible window of opportunity here to both improve competition/significantly lower insurance costs for us with a public option, and do so in a way that will pay for itself so any upfront costs are “repaid” and on-going costs offset.  That is both social and fiscal responsibility… which is what you purport to be all about.

To my fellow(?) women:

As the greatest users of healthcare, from child-bearing to the ever increasing incidence of breast cancer, we have the most to lose with reform that does not create real and significant competition – it is only such competition that will lower costs…that is capitalism…that is the American way and it works.  As I mentioned above, relying on insurance companies, even if you can purchase “across state lines”, to lower your costs as a result would be continuing to trust an industry that clearly does not have our ability to afford them at heart.  For example, they can simply congregate in states that have far less stringent laws for coverage, and then offer a lower premium…for less coverage – this is not a savings.  They will continue to do what they do now:  the two largest health insurers held half or more of all enrollments in 40 of the 42 states studied just last year by the American Medical Association.

Without an outside force keeping their prices in check, they have proven to us over almost a century that they will simply find ways around any lesser legislation, and we will continue to pay for it.

To my fellow Boomers:

All of the above in the “women” section, plus as we age we will be the major users of healthcare, and many of us have miles to go before we qualify for Medicare (the other “public option” of which we will happily avail ourselves).  That means years of exorbitant premiums, even if insurers can no longer drop us when we get sick or refuse to cover us with a pre-existing condition.  Great – we qualify – but we still can’t afford it….

To my fellow Middle-Class:

The poor will be covered – the rich can afford designer care so they don’t care – we’re the ones who will be left to live with the final results of this legislation.  So, what will reduce our costs without sacrificing the levels of coverage we need to stay healthy…or survive a devastating illness?  We’ve said we don’t trust the government to do a plan right…do we really trust insurance companies more…?  With reforms to Medicare to bring its spending under control, it becomes an excellent model to replicate. Apparently even without those controls everyone on Medicare loves Medicare and the rest of us can’t wait to get on it… If Medicare is that effective, useful, needed, it is worthy of replicating for younger Americans as an alternative to private insurance for those who qualify (which, like Medicare, would hardly be “everyone” but in fact quite limited – enough to make a real difference without creating an unfair advantage).

There is only one way we will realize not just immediate but on-going cost reasonableness while not sacrificing our coverages.  We can have both – this is America – when we want the best approach badly enough, we make it happen.

To my fellow self-insureds:

You, like me, have most likely at some point had insurance through an employer prior to buying your own for whatever reason.  Back in 2000 when I worked for someone else, I was given a choice of diminished coverages for the same employee share cost, or increased costs for keeping the same coverages.  This trend has continued and worsened for those with employer provided coverage.  To quickly emphasize this with a real example: Dawn Smith is an aspiring writer living in Atlanta; four years ago, she was diagnosed with a rare, but treatable brain tumor; her doctors are ready to remove it, but they can’t because CIGNA refuses to pay for the surgery.  This is a battle happening right now.

We know that this is then magnified 100% when we pay the entire bill ourselves, and with no more guarantee than has Dawn that we will be covered when we need it the most.

I have seen my insurance bill rise by 33% over the past 1.5 years.  This is simply unacceptable.  Yet I have the lowest-cost insurance available to me here in Florida, and the bare minimum of coverage (“catastrophic” only).  Of the “cost-reducing” options being forwarded in lieu of a public option by some members of Congress, one is the ability for us to go across state lines – in reality, that would reduce my premium very little (I’ve checked) and “co-ops” would take years to develop to the point of efficacy – that’s only after the years it will take to get them up and running…the existing co-ops being used as models have taken as long as 20 years to get to the point where they are now the models to be emulated.  You truly want to wait 20 years? 

And as for cost, co-ops may have premium increases that are less than their competition’s, but that doesn’t make those increases necessarily affordable. Washington State’s Group Health Cooperative of Puget Sound had annual increases for averaging 12.3 percent since 2000; they were 24.2 percent in 2003.

My fellow Centrist Dem’s/Biz Owners/Boomer Women/Self-Insureds, I ask you to consider my words to you peer-to-peer; they are long in coming and carefully thought out, I promise.  I have done my homework – do my own fact-finding rather than relying on pundits with a clearly self-serving motivation (ratings) on both sides of the issue.  I, like you, have the most to gain or lose if this is done…or not done…right.  I ask you to not only refuse to dismiss a public option, but insist on it. In fact, it is our only chance for reform that will be both meaningful and lasting.