The cost of economic inequality to the nation’s physical health
After its unsuccessful push to reconfigure the US health care system, the Trump administration has signaled that it will turn its attention to tax reform. While the details of the administration’s plan are still unclear, President Trump has indicated in the past a willingness to embrace measures that would greatly favor the wealthy, including tax cuts for the rich and a repeal of the estate tax.
This could not come at a worse time for lower-income Americans. According to the Center on Budget and Policy Priorities, the estate-tax repeal would increase the concentration of wealth at the top of the US economy. Due to the tax’s up-to $5.49 million gift exemption, repeal would benefit only the wealthiest o.2 percent of Americans who are in a position to leave such a sum to their heirs. This move would add to the already substantial wealth and income inequalities in this country, which have increased significantly since the late 1970s, and would do nothing to address the country’s real earnings crisis: the large reduction in incomes since 2000 for low- and middle-income Americans.
In concert with tax cuts for the wealthy, Trump has proposed large cuts to safety-net programs that protect the health of lower-income Americans. In doing so, Trump’s tax plan and budget blueprint will deepen gaps in health and longevity between those who are thriving in our economy and those who are not. In a paper published recently in The Lancet, we reviewed the literature assessing changes in survival gaps between rich and poor Americans since 1980 and found that health gaps widened between 1980 and 2014. Characteristic of this trend, middle-income and high-income Americans have seen an increase of over two years of additional life expectancy since 2001, while the poorest 5 percent of Americans have seen no gains in survival. In some cases, such as among white women with low income or educational attainment, life expectancy even fell. The longevity gap is stark, with the richest 1 percent of Americans now living 10 to 15 years longer than the poorest 1 percent. If current trends continue, the life expectancy gap between the poorest and wealthiest 20 percent of Americans will grow by nearly a decade in a single generation — from 77 vs. 82 years for Americans born in 1930, to 76 vs. 89 years for those born in 1960.
Two key trends may account for the widening gap in survival across income groups in this century: Poverty has deepened, and it has also become a stronger risk factor for early death. Since 2001, household earnings have decreased for Americans in the lower two-thirds of the income distribution, with the largest losses affecting those at the bottom — earnings decreased by 17 percent for men and women in households at the 25th income percentile. Americans at the top of the distribution had to contend with fewer losses or, in some cases, none at all. Compounding the challenge for low-income Americans is the steepening income-survival gradient. Simply put: The poor and non-college educated have been left out from the health gains enjoyed by middle- and upper-income Americans. On a number of health measures, conditions for the poor are deteriorating.
Although as a society we have never had better information about causes of disease, better availability of healthy food, or better medical technologies, access to these and other health inputs is increasingly determined by ability to pay. Public subsidies have not kept pace, leading to widening differentials in access. Education, historically a door to economic opportunity and better health, is increasingly out of financial reach for many Americans. Rising economic insecurity has also contributed to an array of stress-related adverse coping behaviors that are harmful for health, including the persistence of smoking and the resurgence of opioid use. Poor health can also limit economic productivity, deplete household income, and create a negative feedback loop. The growing link between income and health may signal the emergence of a 21st century health-poverty trap.
In the past, public investments in the health of economically vulnerable Americans have led to significant health improvements. To dismantle the health-poverty trap, we must pursue similarly bold initiatives that take into account the structural causes of poverty in America, moving beyond our focus on individual risk factors to address the distribution of incomes and the link between income and health.
Here are just a few ideas to start the conversation. Health care reform that incorporates a single-payer system would be an excellent first step. Not only would it broaden access to care, it would also ease the burden of medical costs on families that can ill-afford to spend thousands of dollars on treatment, allowing them to invest instead in assets like education, nutrition, or quality housing. Further steps could include working to achieve a livable, $15 minimum wage, extending coverage of the earned-income tax credit, or reforming the estate tax to lower its gift exemption and divert funds into programs that benefit the public good. Universal basic income is another policy solution with the potential to mitigate income inequality. While the concept — a regular, guaranteed payment to each citizen regardless of employment status — is controversial, it has been gaining traction, as countries like Finland begin to study its practical effects. Expanded public subsidies for key determinants of health also will be necessary to decouple income and health and to ensure that all Americans have the opportunity for healthy lives.
Trump’s regressive positions on tax reform and proposed cuts to social programs stand to move us in exactly the wrong direction, and will probably result in wider health gaps between rich and poor Americans. We should take the opposite course, as we have in the past, to help Americans avoid a 21st century health-poverty trap and the further widening of health gaps.