Five Reasons Why America Is in Need of a Social Innovation Revolution
You’re paying too much for healthcare
U.S. spends 18% of its GDP, nearly $4 trillion, on healthcare. By comparison, Canada, Germany, Australia, the U.K., Japan, Sweden, France, the Netherlands, Switzerland, Denmark, and the U.S., on average only spend 12%.
The reasons are many, see articles below for more perspective:
- N.Y. Times (08-Nov-19): With Medical Bills Skyrocketing, More Hospitals Are Suing for Payment
- ABC News (19-Sep-19): Why the US spends more on health care than other countries, but doesn’t fare better: Study
- Reuters (29-Jun-19): American caravan arrives in Canadian ‘birthplace of insulin’ for cheaper medicine
- Healthcare Dive (29-May-19): US healthcare spending estimated to grow to $3.6T this year
- N.Y. Times (10-May-19): Many Americans Will Need Long-Term Care. Most Won’t be Able to Afford It
- N.Y. Times (09-May-19): Many Hospitals Charge Double or Even Triple What Medicare Would Pay
- N.Y. Times (02-Apr-19): Americans Borrowed $88 Billion to Pay for Health Care Last Year, Survey Finds
- CNBC (22-Mar-18): Here’s the real reason health care costs so much more in the US
- Washington Post (13-Mar-18): The real reason the U.S. spends twice as much on health care as other wealthy countries
- Harvard Gazette (13-Mar-18): US pays more free health care with worse population health outcomes
- Washington Post (23-Jul-13): The royal birth cost $15,000. The average American birth is billed at $30,000.
- N.Y. Times (16-May-13): New Jersey Hospital Has Highest Billing Rates in the Nation
You’re earning about the same as workers did in 1973
Annual incomes of the bottom 90% of U.S. families are essentially flat since 1973 — rising by only 10% in real terms over the past 37 years. Over the same period, the incomes of the top 1% have tripled.
From 1973 to 2013, hourly compensation of a typical (production/nonsupervisory) worker rose just 9% while productivity increased 74%. In comparison, since 1979 the wages of the top 1% grew 138%, while wages for the bottom 90% increased just 15%.
And most of that wage growth has come from women. Using 1979 as the basis year, wages have declined by 10% for men, risen by 25% for women, mainly due to educational achievement, and just 3% for all workers.
There is a debate over exactly how much or little wages have increased since the 1970s, but as you will see later, there is no question that the rich have grown far richer since then. Consult these stories for additional information:
Bloomberg (14-Feb-19): Wage Stagnation Is One Disease With Many Causes
Forbes (25-Sep-18): Real Wage Growth Is Actually Falling
Pew Research (07-Aug-18): For most U.S. workers, real wages have barely budged in decades
Economic Policy Institute (06-Jan-15): Wage Stagnation in Nine Charts
Your children’s education is lagging and has become too costly
We must recognize that America’s future depends largely on the quality of its education. We have a moral obligation to ensure that our children have the best schooling possible, especially given the growing spectre of global competition.
There’s no question that the U.S. is falling behind in critical professions, including the disciplines of engineering and science, which are essential for a technology-imbued future. America’s educational system is in dire need of a major reinvention, here’s why:
• Cost of education – Since 1971, spending on education has increased more than 100%, yet national graduation rates and achievement scores are flat. More money hasn’t helped American kids, nor has it made them more fluent in languages other than English or more technically adept, two areas where our new graduates are most lacking.
• Educational quality – As Harvard Business Review puts it, “For too long, the American education system failed too many kids, including far too many poor kids and kids of color, without enough public notice or accountability.” An international exam shows that American 15-year-olds are stagnant in reading and math even though the country has spent billions to close gaps with the rest of the world.
• Student loans – Student loan debt in total stands at $1.5 trillion, up $20 billion in the third quarter, with 10.9% borrowers in default.
Refer to these stories for more information:
Harvard Business Review (11-Jan-19): Data Was Supposed to Fix the U.S. Education System. Here’s Why It Hasn’t.
America’s national debt has reached $23 trillion
America is going broke. In the past five years, the national debt of the United States has grown $5 trillion and now tops $23 trillion. That number may seem foreign to you but let’s put it this way: If every American, including every child and senior, had to pay back their share of the national debt, they would owe their friendly local bank $70,336.
• Debt comparison – The average credit card debt per U.S. household was $8,512 in November 2019. How would you like to put another $61,824 on your plastic? That would be unsustainable for your household. Uncle Sam’s debt load is no different.
• Just borrow more – Some say the national debt “isn’t a problem” because, among other things, we can always borrow more. So can you, but do you want to? As you can see from the “no problem” story linked above and below, Business Insider hasn’t even bothered to update its increasingly debatable stance since 2016, changing only the deficit number.
• Emergency fund – As anyone will tell you, you need to set something aside for a rainy day. America has nothing saved for its future. Imagine what would happen if a recession suddenly reared its ugly head caused by something unforeseen…like the coronavirus?
Please see the evidence the U.S. is being run by drunken sailors:
CNBC (31-Oct-19): The National Debt Dilemma
The Conversation (14-Feb-19): Why the $22 trillion national debt doesn’t matter – here’s what you should worry about instead
The New York Times (15-Feb-19): The Federal Debt Is Rising. Concern Is Not.
Business Insider (25-Apr-16): The US government’s $19 trillion debt isn’t a problem
The rich are getting far richer but you are not
In 2018, Uncle Sam gave corporations and rich people a $1.9 trillion tax gift. In any other country such a massive payoff for services not rendered would cause an uproar. It’s time you stand up for your rights, especially since many of you barely make more than you did in 1973.
• CEO pay – In 1965, chief executives were paid on average 20 times what workers earned. By 2012, the ratio was 273-to-1. Fair, right?
• Income inequality – 61% of adult Americans told Pew that there is “too much” income inequality in the U.S., and 42% said reducing income inequality should be a “major priority” for the federal government. No surprise since the income of the 1% more than doubled between 1973 and 2010, going from about 8% to 17% of all income. Not persuasive enough? How about the richest 400 Americans owning more than the bottom 150 million?
• Rich corporations pay no taxes – For decades, profitable Fortune 500 companies have manipulated the tax system to avoid paying even a dime in tax on billions of dollars in U.S. profits. In 2018, 60 Fortune 500 companies paid no federal taxes on $79 billion in corporate income.
Do yourself a favor and read these stories for more context:
The Washington Post (26-Sep-19): Income inequality in America is the highest it’s been since Census Bureau started tracking it, data shows
Economic Policy Institute (14-Aug-19): CEO compensation has grown 940% since 1978
The New York Times (29-Apr-19): Profitable Giants Like Amazon Pay $0 in Corporate Taxes. Some Voters Are Sick of It.
Institute on Taxation and Economic Policy (11-Apr-19): Corporate Tax Avoidance Remains Rampant Under New Tax Law
Bloomberg (18-Dec-18): A Year After the Middle Class Tax Cut, the Rich Are Winning
Chicago Booth Review (2017): Never mind the 1 percent Let’s talk about the 0.01 percent
Economic Policy Institute (26-Jun-13): CEO Pay in 2012 Was Extraordinarily High Relative to Typical Workers and Other High Earners
This summer, we experienced firsthand what a scam America’s hospitals have become. In July, one of our staffers skidded off his bicycle. Se he decided to visit St. Rose San Martin’s emergency room, a local Las Vegas hospital. Total bill for a 90-minute wait and 30-minute exam? A whopping $3,094, excluding x-ray charges.
The New York Times:
For decades, profitable companies have been able to avoid corporate taxes. But the list of those paying zero roughly doubled last year as a result of provisions in President Trump’s 2017 tax bill that expanded corporate tax breaks and reduced the tax rate on corporate income.
On the heels of the tax package that gave a boost to the country's wealthiest, corporations returned much of their tax-cut-fueled earnings back to shareholders in the form of stock buybacks and juicier dividends. Goldman Sachs said $1 trillion in buybacks, a record, were authorized in 2018. More granularly, S&P Dow Jones Indices estimated in May that corporations spent $564 billion on buybacks and $428 billion on dividends in one year through that month.