Tuesday, June 9, 2009

15% of US GDP goes to health care – with 135% of comparable (OECD) per-capita GDPs – what’s the universal health hold up?

15% of US GDP goes to health care – with 135% of comparable (OECD) per-capita GDPs – what’s the universal health hold up?

Imagine a US economy in which 25% of wages lie below the federal minimum and 30% of families subsist below realistic (not the phony federal) poverty lines (not counting government helps like food stamps -- sounds like something out of “Soylent Green”).

Not merely imagination if we are talking LBJ’s federal minimum wage of 1968: $10/hr ($1.60/hr adjusted for inflation – average income has nearly doubled since!).

Matching believable family minimum needs tables found in the 2002 book “Raise the Floor” (not quack federal poverty lines, computed as three times the price of an emergency diet -- dried beans only please, no canned) with Census historical family income tables reveals in the neighborhood of 30% of American families below minimum needs (without government helps -- eight-grade math is here).

Meanwhile, average top 1 percentile household income reached a stratospheric $1.2 million dollars (hint: 100 X $12,000) in 2006 – just not your over-trained, over-worked family doctor’s household. The 15% of income share relocated from the pockets of bottom 90 percentile earners to top 1 percentile buckets flew right past him or her. (Note match with 15% of GDP we strain to allot to less than universal care.) It’s the labor market, doc.
Bumping up the minimum wage over three years to $12.50/hr (in real terms -- $1 every six months?) would add all of
2 1/2% to the cost of GDP output (how much our per capita GDP typically grows every year or two) and presumably to direct inflation – raise 40% of American workers to a still minimum family needs short $500/wk -- and likely recirculate much demand in the direction of high minimum wage use businesses (lower wage tending to serve lower wage).

The end of the middle class race to the (Wal-Mart) bottom in almost the entire first-world (even in second-world Argentina and third-world Indonesia) is called sector-wide labor contracts: same job description, same geographic locale equals same contract conditions across diverse firms – legislation required.

The French-Canadian “lite” version of sector-wide – in which non-union firms work under terms collectively bargained with unionized firms -- is available right nearby for easy study and adaptation -- Canada’s economy mostly mirroring our own.
What could be tying the tongues of our economic geeks who should be pressing upon we less knowing these make-or-break American labor market moves? In sociobiological (evolved behavior) terms, and to my lay observation: the more momentous and more critical any political or economic issue is, the less likely human male geeks are to be guided by their internal gyros in “pack” dialogue – almost forget challenging the general direction. This is not exactly herd instinct; better called “pack” instinct: “No time for new notions now: the wild pigs are running away!”

No matter how diverse the rationalizations for doing it; whatever the reasons offered for practicality of – all males perform the identical mental operation: all check in (within seconds?) with where “pack” thought is running and why – all tend to get stuck (lost?) in the flow. Females do not automatically perform "pack-check" (within seconds). Females in my experience are able to assess the prospects of new directions and (just as importantly) their marketability in purely substantive, is it a good idea or not a good idea, terms.

”Pack check” may have played its part in keeping our species fat in the rain forests. It can play its role today in keeping even worldwide discussions coherent. But, if you ask me, as long as the inhibition goes unchecked because unconscious, it can contribute to too many modern Americans living too lean.
Looking for a “natural” (as in no artificial inducements) demand boost to ease our two-pronged (financial and real estate) recession: start most Americans toward recapturing that 15% of income share lost over three and a half decades to folks who earn lots more than doctors (the top of top 1 percentile earners). Mere anticipation of renewed buying power to be refreshed by rebuilt bargaining power could unleash a third of a century of pent up demand. It’s the “Great Wage Depression” Americans.

1 comment:

Denis Drew said...


For years I was frustrated by progressive geeks and journalists reporting the federal mis-report of 12.5% below the poverty line – undercutting their own efforts. I emailed every media address I could scrounge up with the developed-1955, federal formula -- to no avail: the power of “pack-check.” Finally, I came up with “Approaching 37% of American Families Below A More Up-To-Date Poverty Line?*” (while dueling with a troll on Ezra) – and the tri-multiple spread may actually have overcome “pack-check” – haven’t seen the 12.5% quote much since. Let’s see if the eighth-grade math surprise at the beginning of this essay can finally begin to undo professional “pack check” resistance (I emailed 5000 of my last attempt) to making our uniquely distorted American labor market our all-or-nothing-at-all national economic focus (no surprise to Tom Geoghegan or Barbara Ehrenreich).