Reparations for Slavery
The subject of granting financial reparations to American descendants of slaves has long provoked discourse between academics and social justice advocates alike. For centuries, enslaved Africans and their descendants were kept on American plantations against their will, brutally harmed and forced to perform labor every day. In 1619, slavery was first introduced in the United States, in the Jamestown colony of present-day Virginia. It was not until January 1, 1863, when the abolition of slavery was announced under the Emancipation Proclamation of President Abraham Lincoln (“Slavery in America”). The amount of time slavery existed in America is still longer than the amount of time since its abolishment. The effects of slavery still remain today. In The New York Times’ “ The 1619 Project” examining the history of slavery, author Trymaine Lee acknowledges modern examples of systemic racism. Legal segregation and Jim Crow laws plagued American society for the greater part of the twentieth century. Redlining and housing discrimination against black Americans created a wide economic gap between the average black and white families in America (Lee). While segregation has since been outlawed, many schools are still arguably segregated, with majority-white schools receiving visibly more funding than their African-American-majority counterparts. Academic achievement and police brutality continue to threaten the lives of black Americans.
These systemic, economic ills of racism can be linked to America’s past involvement in the slave trade. A Pew Research study indicates that 63% of Americans today believe that the legacy of slavery continues to impact the position of black people in modern society, while also citing how "more than four-in-ten U.S. adults think the country hasn’t gone far enough in giving black people equal rights with whites...” (Horowitz). The persistent economic gaps between Americans of different racial groups can be reduced through granting of financial reparations. The implementation of financial reparations for American descendants of slaves will reduce historical and systemic racial inequality and can be implemented via the approval of federal legislation that already exists.
Racial inequality has been continuously apparent in society. Since the origin of slavery in early world history, the oppression of black people has perpetuated the wealth and economic success of their white counterparts. As described in “The 1619 Project,” a special report on the history of American slavery by The New York Times Magazine, slavery “provided political power, social standing, and wealth for the church, European nation-states, New World colonies and individuals,” (Elliott Hughes). If the inhumane practice of enslaving people was used to create mass amounts of wealth for white oppressors, reparation payments can be used to account for this unjust creation of wealth. In an essay analyzing the faults of capitalism in America, Matthew Desmond asserts that early economic success in America was due to “our nation’s unflinching willingness to use violence on nonwhite people and to exert its will on seemingly endless supplies of land and labor,” (2). His statement furthers the notion that the financial well-being of white people has historically existed at the expense of people of color.
The widening of the gap between black and white Americans has not been accidental. In fact, the federal government has played a significant role in the creation of wealth inequality. As Lee writes for the New York Times, “plundering of black wealth was...etched in law and public policy,” (3). He continues to assert this idea by examining specific examples of the federal government’s failures to create economic equality. President Franklin Delano Roosevelt’s G.I. Bill was one of his “most enduring legacies,” (Lee 4). However, while giving veterans easier access to mortgages, this legislation allowed for the Veterans Administration to adopt “the same racially restrictive policies as the Federal Housing Administration” that granted loans to racist developers (Lee). Trymaine Lee’s article also reminds us that, while Roosevelt’s economic policies provided a foundation for a successful American middle class, domestic and agricultural workers, the majority of whom were black, were ineligible for these “wealth-building programs” such as Social Security (Lee). The impossibility of attaining the same economic privileges as white Americans thus led to a greater economic gap between black and white people. Lee’s article on the racial wealth gap in America also quotes Duke University professor William A. Darity Jr., who argues that because one’s wealth is largely dependent on the financial success of their family’s previous generations, black Americans are at a disadvantage because of recent injustices preventing the accumulation of generational wealth (Lee). As a professor of both African American studies and public policy at a prestigious university, Darity clearly possesses the credentials necessary to offer an insight as to what the underlying causes of the racial wealth gap are. Irina Ivanova of CBS News also provides quantitative data highlighting just how large the gap is, showing white families are worth about $171,000 on average, as opposed to just about ten percent of that figure being the average wealth of a black American family (1).
Proposed federal legislation, titled H.R. 40, would divert federal funds towards the study of reparations. Congressional attention would be diverted towards the subject of reparations for slave descendants, and while the bill would not yet implement these reparations, Sheryl Gay Stolberg of the New York Times explains that a congressional commission would be created “to develop proposals to address the lingering effects of slavery and consider a ‘national apology’ for the harm it has caused,” (Stolberg). Such a commission would be made up of thirteen members and would receive $12 million in federal funding, as noted by The Philadelphia Inquirer (Russ).
A reasonable question to be raised regarding the implementation of reparations is who would be eligible. This is a question that could be studied and answered by the congressional commission. Professor William Darity, mentioned in Lee’s article for “The 1619 Project,” is cited in the Huffington Post with an answer. Darity proposes that for one to qualify for reparations, that individual would have to provide identity himself on a formal document as “black, African-American, colored or Negro” and have legitimate proof of an enslaved ancestor (Craven). This article also quotes Darity as stating that $9.12 billion would be owed, while economist Larry Neal estimates $6.4 trillion (Craven). This same article responds to questions regarding just how reparation payments could be made, pointing to statistics showing that “in fiscal year 2014, the U.S. government spent $3.5 trillion...only 20% of the nation’s gross domestic product” (Craven). While a lack of widespread support and an abundance of questions surrounding the achievability of reparations casts doubt on the issue, simple questions regarding the issue can be answered through the congressional approval of a commission to study reparations.
Numerous questions surround the subject of reparations. Political gridlock and economic debate have resulted in no legitimate blueprint for implementation. While the subject is controversial, with many skeptics, there is no debate that the legacy of slavery is detrimental to the current lives of black Americans. At the very least, productive research and discourse on the issue are owed to the people who have suffered economic misfortune as a result of centuries of discrimination. Education of the public and outspoken criticism of political leaders who refuse to act will result in long overdue financial compensation for this country’s most painful legacy.
Craven, Julia. “We Absolutely Could Give Reparations To Black People. Here's How.” HuffPost, HuffPost, 23 Feb. 2016, www.huffpost.com/entry/reparations-black-americans-slavery_n_56c4dfa9e4b08ffac1276bd7.
Desmond, Matthew. “American Capitalism Is Brutal. You Can Trace That to the Plantation.” The New York Times, The New York Times, 14 Aug. 2019, www.nytimes.com/interactive/2019/08/14/magazine/slavery-capitalism.html.
Ferris State University. “Slavery in America.” Slavery in America - Timeline - Jim Crow Museum - Ferris State University, www.ferris.edu/HTMLS/news/jimcrow/timeline/slavery.htm.
Horowitz, Juliana Menasce. “Most Americans Say the Legacy of Slavery Still Affects Black People in the U.S. Today.” Pew Research Center, Pew Research Center, 17 June 2019, www.pewresearch.org/fact-tank/2019/06/17/most-americans-say-the-legacy-of-slavery-still-affects-black-people-in-the-u-s-today/.
Ivanova, Irina. “If Black Families Were as Rich as White Ones, U.S. Economy Would Be $1.5 Trillion Bigger.” CBS News, CBS Interactive, 20 Aug. 2019, www.cbsnews.com/news/racial-wealth-gap-costs-economy-1-5-trillion-dollars-report-finds/.
Lee, Trymaine. “How America's Vast Racial Wealth Gap Grew: By Plunder.” The New York Times, The New York Times, 14 Aug. 2019, www.nytimes.com/interactive/2019/08/14/magazine/racial-wealth-gap.html.
Russ, Valerie. “What You Need to Know about Reparations after the First Congressional Hearing Convened on the Topic in More than a Decade.” Https://Www.inquirer.com, The Philadelphia Inquirer, 22 June 2019, www.inquirer.com/news/what-are-reparations-america-h-r-40-congressional-hearings-democratic-presidential-candidates-20190619.html.
Stolberg, Sheryl Gay. “At Historic Hearing, House Panel Explores Reparations.” The New York Times, The New York Times, 19 June 2019, www.nytimes.com/2019/06/19/us/politics/slavery-reparations-hearing.html?module=inline.
The Supplemental Nutrition Assistance Program, or SNAP, feeds the impoverished population of the United States. Formerly known as food stamps, SNAP allocates money to people who cannot support themselves well enough to buy their own food. The program is utilized by over 42 million people per year. SNAP can be administered to many different types of people, including those who work low income jobs, are unemployed, those with disabilities, and the homeless (SNAP-Eligible Households 1). A report summary from the Economic Research Service that was released by the United States Department of Agriculture identified a cluster of design flaws that show that SNAP is not the best possible version of itself. Evidence of decline in SNAP success was found when the study examined major policies of the program and their flaws (Oliveira et al. 2). Since the program supplies for so many people, it is vital that the program thrives. So, what can we do to improve the effectiveness of SNAP? It is going to require changes to all aspects of the program. In order to improve the effectiveness of SNAP, there must be a new balance within the policies regarding eligibility, a redirection of government funds so that the program receives the money it needs to provide, and a nutrition filtering system that regulates the types of specific products that can be bought, but does not exclude certain stores.
There are variations within the participant eligibility standards that do not rationally determine who can get SNAP help. Many variables contribute to the issues with SNAP’s acceptance system, including state governments having control over their usage of the broad-based categorical eligibility, meaning they can choose if the eligibility system will look at non-cash means-tested programs beyond the traditional asset tests or gross income evaluations. The goal of this is to promote participation in SNAP, but the issue with this policy is that higher income people have been able to slip into the program and it raises the overall program costs (Oliveira et al. 3). Impoverished people of the United States must have equal and consistent access to SNAP in order for it to be labeled as functional. The program must be beneficial to all of those seeking financial support that need it, not just a select few. As of now, SNAP has a semi-loose set of requirements for eligibility, which can mean that people with high incomes are qualifying, hogging funds from those who are not being paid as much and need help paying for food. Sonny Perdue, the US Secretary of Agriculture (the group who oversees the program) is in favor of altering the current SNAP system. His belief is that people “expect their government to be fair, efficient, and to have integrity-” He gets behind the change from his former USDA hired stance because change will “prevent abuse of a critical safety net system, so those who need food assistance the most are the only ones who receive it.” (Vu 2). Perdue is fit to evaluate SNAP’s effectiveness because he is well informed regarding food and pricing. Another conflict within the eligibility is that children and adults are being grouped together and tested on their eligibility for SNAP, causing a hole in the programs fairness. On one hand, the current policies let stable people in and shut others out, but on the other, a rule proposed by the Trump Administration proves that making the program stricter could be just as problematic. The rule would more heavily test those hoping to get into SNAP, but it would then be applied to the youth. If the government looks at wages, these kids will be shut out because they do not work yet. Perdue took his stance after the Trump Administration proposed said change, which was a new rule that intensified the requirements for getting into SNAP. The rule would outlaw automatic acceptance to SNAP for people already receiving state and/or federal financial assistance. This would mean that heavier evaluation would be done, which is a benefit of this change. Some aspects of the new rule put children at a disadvantage. If it were to be passed, around 500,000 students would lose access to SNAP (Vu 2). So, there must be a mixture of the two that would keep wealthy people out through evaluation while also not isolating children from eligibility. The system for eligibility testing must be more precise, not harsher or more lenient.
Even if the eligibility system were to be flawless, SNAP lacks the funds it needs to be truly effective. If the US set aside more money for the program, there would be less people that go hungry. Money must be taken from an over funded organization like the military. With its budget already approaching 718 million dollars in 2020 according to the Congressional Budget Office, who analyze economic and budgetary issues in the US, the military is draining the country’s funds that could be benefiting the people better directly, specifically those who really need it, the hungry (Long-Term Implications of the 2020 Future Years Defense Program 2). Even James N. Miller, former Under Secretary for Defense for Policy, and Michael E. O’Hanlon, director of research in Foreign Policy at the Brookings Institution where he specializes in U.S. defense strategy, the use of military force, and American national security policy, agree that the military does not need that much money. They do not doubt that the Pentagon will put the money to good use, but they said that in some instances, “it makes no sense under a strategy focused on China and Russia to grow the force overall.”, meaning that the money has potential for technological proliferation but that they don’t need the excess money to grow the force (Miller and O’Hanlon). The money should instead go to SNAP to help people of the general population instead of the population of those fighting for our military. Becoming eligible for SNAP is one thing, but having success within the program is another. Steven Carlson, research analyst who previously directed Office of Policy Support at the Agriculture Department’s Food and Nutrition Service, argues, “SNAP benefits fall short of what many participants need to purchase and prepare a healthy diet and that additional benefits would increase food expenditures and improve food security.” Carlson goes on to list off the current issues caused by lack of funding, the most worrisome being that families cannot even make it through the month. In fact, he found that, “a quarter of all households exhaust their benefits within a week of receipt, and more than half exhaust benefits within the first two weeks.” Most households end up having to focus their own earned money on food, defeating the purpose of SNAP completely (Carlson 3). Families on SNAP need more funding so they can lead healthy lives and focus their money on other things outside of the program.
SNAP could be improved with the previously provided ideas, but in order to connect the puzzle and actually perfect the effectiveness so that all of those in need are provided for, the program also needs to make sure the people are healthy. The cheapest meals happen to be unhealthy. In fact, Harvard conducted a study in which it was discovered that eating healthy is significantly pricier than buying unhealthy alternatives. Experts from the Harvard School of Public Health conclude that, “...healthier diet patterns...cost significantly more than unhealthy diets...On average, a day’s worth of the healthiest diet patterns cost about $1.50 more per day than the least healthy ones.” This ends up being about $550 extra per year. (Mozaffarian et al. 3). Understandably so, people on SNAP tend to turn to unhealthier foods. Children on SNAP are significantly more likely to be overweight or even clinically obese because of the prices on the food they can buy. The New York College of Pediatric Medicine ran many tests to narrow down the correlation between SNAP and obesity. For one, SNAP-eligible children who got SNAP in the last month were more likely to drink soda than those who did not receive benefits (Researchers at New York College of Pediatric Medicine Target Obesity 2). A health editor named Jessica Firger wrote an article where it was discovered that bottled water prices grew higher than sugar-sweetened beverage prices. It would not be rational to demand higher pricing on the items, so the United States must regulate the food that can be bought on SNAP funding (Firger 2). However, the means of filtration of what foods can be bought with SNAP cannot also be restrictive of what stores people can shop at. The study by the USDA that was already mentioned shows that SNAP participation drops due to accessibility when certain stores do not meet the health standards (Oliveira et al. 4) Instead of excluding certain stores from the program, SNAP must put restrictions on which products can be bought specifically.
If these improvements were made, they would combine to make SNAP an extremely helpful program. It would include the right people, have sufficient funds, and also would keep people eating healthy foods. With so many people in need of SNAP in the United States, the people must come together to mend the program in order to better the lives of our impoverished population. Through strong petitions and articles depicting the current issues, the USDA and government will have no choice but to alter SNAP. It seems impossible for citizens to make such large changes, and a single person will not start a revolution. However, there is strength in numbers. Convincing the people in charge that we are willing to make change is enough to influence them to make it. The people of the US must fight for the poor and combat poverty.
Carlson, Steven. “More Adequate SNAP Benefits Would Help Millions of Participants Better
Afford Food.” Center on Budget and Policy Priorities, 30 July 2019, https://www.cbpp.org/research/food-assistance/more-adequate-snap-benefits-would-help-millions-of-participants-better.
Firger, Jessica. “Soda and Other Sugary Beverages Are Getting Cheaper Worldwide-Posing
Severe Health Risks.” Newsweek, 25 May 2017,
“Long-Term Implications of the 2020 Future Years Defense Program.” Congressional Budget
Office, 9 Aug. 2019, https://www.cbo.gov/publication/55500.
Mozaffarian, Dariush, Rao, Mayuree, Afshin, Ashkan, Singh, Gitanjali. “Do Healthier Foods and
Diet Patterns Cost More Than Less Healthy Options? A Systematic
Review and Meta-Analysis,” BMJ Open, December 5, 2013
Oliveira, Victor, Prell, Mark, Tiehen, Laura, and Smallwood, David. Design Issues in
USDA’s Supplemental Nutrition Assistance Program: Looking Ahead by Looking Back, ERR-243, U.S. Department of Agriculture, Economic Research Service, January 2018.
“Researchers at New York College of Podiatric Medicine Target Obesity (Consumption of
Sugar-Sweetened Beverages and Obesity in SNAP-Eligible Children and Adolescents).”
Obesity, Fitness & Wellness Week, NewsRX LLC, 14 Sept. 2019, https://go.gale.com/ps/i.do?p=GPS&u=mlin_s_weyhs&id=GALE|A598749851&v=2.1&it=r&sid=GPS&ugroup=outside.
“SNAP-Eligible Households.” Hunger and Health, Feeding America, 2019,
Vu, Nancy. "Trump Food Stamp Policy Could Cut Free Lunch For Half A Million
Students." UWIRE Text, 11 Oct. 2019, p. 1. Gale General OneFile, https://link.gale.com/apps/doc/A602355419/GPS?u=mlin_s_weyhs&sid=GPS&xid=c2d38e2f. Accessed 20 Oct. 2019.
A Minimum Wage that Works
As of 2018, there were 38.1 million United States citizens living in poverty, according to the US Census (US Census Bureau). The Living Wage Calculator, an MIT website and information source, defined the poverty threshold in 2017 as $24,793 a year for a family of four (Glasmeier and Nadeau). In many cases the low income of impoverished families leads to a cycle of many generations living in poverty. To break the systemic cycle, the country needs a solution that will elevate a large amount of citizens out of poverty without the current government subsidies given to the poor. A contrasting solution to providing subsidies to the poor, is to create laws to aid those below the poverty threshold so they can help themselves. Based off numbers provided by the Living Wage Calculator, one specific solution could solve most of this problem by raising the national minimum wage to a living wage (Glasmeier and Nadeau). Currently, the federal minimum wage has not been raised since 2009. The issue of the national minimum wage has been argued over for decades. When some people discuss the issue of a living wage, they bring up many different aspects affected by resolving poverty such as the economy, small businesses, morals, and politics, which make this a very complex problem. People and political parties have argued over whether moving to a living wage is morally right or wrong for the nation and fiscally good or bad for the economy. To successfully raise the minimum wage to a living wage with positive effects on the nation, the challenges of the implementation need to be evaluated, the process of how the raise will work needs to be discussed and the limitations of the impact of the raise need to be determined.
Most of the states that have not yet shown interest or support in the bill believe the implementation of the bill would be too great a challenge or would present economic hardships for their states. Data from the National Conference of State Legislatures (NCSL) on the 2019 state minimum wages shows that the states that have not adopted the increased minimum wage are mostly southern states and states with low populations (National Conference of State Legislatures). These states may not believe in the raised minimum wage because of their current economic challenges. It can be hard for them to believe that a more costly minimum wage would benefit their state by providing more money for the residents to spend and more opportunity for these residents to pay additional taxes. Another argument against raising the minimum wage is the potential ill affect it may have on small businesses. Adam Uzialko, an experienced business journalist, cites the Fiscal Policy Institute which found that over a three year period, “... small business activity... grew at a rate of 3.1% in states with higher minimum wages, compared with a rate of 1.6% in states with lower minimum wages. Employment grew 1.5% more quickly in states with higher minimum wages. Annual payroll and average payroll per worker increased more quickly in states with higher minimum wages” (Uzialko). People and states have misconceptions that the raise of the minimum wage will have negative affects on small businesses, but as seen in this research that is not the case. Additionally, many small business owners find that offering higher wages gives them an advantage in hiring better employees. Adam Uzialko acknowledges that, “many business owners... understand they have to remain competitive if they want to keep their best workers and continue bringing in the candidates with the most potential” (Uzialko). The increased minimum wage will actually grow businesses and employment in the nation.
But before implementing an increase, people must discuss the challenges and clarify potential obstacles. There must be discussion and agreement on how moving from a $7.25 to a $15 federal minimum wage will work. As proposed by the Democrats, a smart way to implement the new minimum wage would be to gradually increase the wage from $7.25 to $15 over time. Based on proposed legislation the Economic Policy Institute, an organization which provides economic information to the public, states, “the Raise the Wage Act of 2019 would gradually raise the federal minimum wage to $15 an hour by 2024” (Economic Policy Institute). This gradual raise would keep the economy stable while the minimum wage is being raised, helping businesses as well as families in poverty. Once the initial living wage of $15 per hour is met, the wage will need to be maintained overtime to keep low income families from returning to poverty due to rising expenses. This will be done by adjusting the minimum wage every few years to keep pace with inflation. As stated by the Economic Policy Institute, “after 2024, the US must adjust the minimum wage each year to keep pace with growth in the typical worker’s wages” (Economic Policy Institute). The act of increasing the minimum wage to track with inflation is to prevent a recurrence of the current situation of the minimum wage not being increased for over a decade. The final piece needed to enact a raised minimum wage is for the U.S. Senate to pass the bill that has already gone through the House of Representatives. Some states have seen the need for the change and have passed laws to raise minimum wage ahead of the federal government. According to Representative Robert C. Scott’s Fact Sheet, “red and blue states have recently passed minimum wage increases. Since 2014, 16 states have raised their minimum wage, including red states like Alaska, Arkansas, Nebraska, South Dakota, and West Virginia” (Scott). The fact that both parties support a raised minimum wage exhibits how much of a need there is for this increase.
Although both parties agree the need for the increase exists, there are a number of obstacles which may limit the impact of raising the minimum wage. For instance, some fear that a minimum wage increase to only $15 will limit the growth of businesses and increase employment for the impoverished because of inflation. Representative Robert C. Scott argues that “a raise in the minimum wage predominantly benefits low-wage workers, precisely those most likely to put additional income directly back into the economy, kick starting a virtuous cycle of greater demand for goods and services, job growth, and increased productivity” (Scott). If the $15 minimum wage is not gradually increased to keep up with inflation, it will leave people behind, having the same effects as the current outdated federal minimum wage. Workers may also experience a diminishing return on their income if there is no wage alignment with the current cost of living, but their productivity increases. The Economic Policy Institute emphasizes that, “the economy has grown dramatically over the past 50 years, and workers are producing more from each hour of work, with productivity nearly doubling since the late 1960s” (Economic Policy Institute). Given these findings, it is clear that minimum wage workers deserve a raise due to their increased productivity. Furthermore, adjustments should periodically be made to reflect increased effort and cost of living increases. Finally, some are convinced raising the minimum wage will lead certain companies, particularly in manufacturing, to automate low level jobs. Yet, there will be new jobs created by automation that will make up for jobs lost to it. Senior entrepreneurship writer at CNBC, Catherine Clifford suggests, “... that employment prospects for some workers in higher-wage occupations are boosted by minimum wage increases, consistent with a story in which some jobs are lost to automation, while others are created” (Clifford). Although some workers may lose their jobs to automation, more jobs will be created. Thus, the net gain will still have a positive impact on the economy and employment overall.
A better economy and employment rate will help provide opportunities to those below the poverty line. The $15 minimum wage should give the poor opportunities to pull themselves out of poverty and a chance to make a better life for themselves and their families. Taking the approach of a gradual increase, will leave time to work through the challenges of implementing the raised wage. This will allow small businesses and states to find their new equilibrium as the wage moves from one level to the next. The hurdles of inflation and businesses turning to automation will also create a new normal as the economy and industries evolve. In order to put the $15 minimum wage into effect people should support senators, organizations, petitions and protests that promote the increase of the federal minimum wage. Providing those below the poverty threshold with a living wage gives them a hand up instead of a handout.
Clifford, Catherine. “Here’s new evidence minimum-wage hikes result in workers being replaced by robots.” CNBC, 17 Aug. 2017, https://www.cnbc.com/2017/08/16/evidence-minimum-wage-hikes-result-in-workers-being-replaced-by-robots.html. Accessed 30 Oct. 2019.
Economic Policy Institute. “Why America Needs a $15 Minimum Wage.” Economic Policy Institute, 5 Feb. 2019.
https://www.epi.org/publication/why-america-needs-a-15-minimum-wage/. Accessed 17 Oct. 2019.
Glasmeier, Amy K. and Nadeau, Carey Anne.“Bare Facts About the Living Wage of America 2017-2018” Living Wage Calculator, Aug. 2018, https://livingwage.mit.edu/ articles/31-bare-facts-about-the-living-wage-in-america.
National Confrence of State Legislature. “State Minimum Wages | 2019 Minimum Wage by State.” National Confrence of State Legislature, 7 Jan. 2019, http://www.ncsl.org/research/labor-and-employment/state-minimum-wage-chart.aspx. Accessed 30 Oct. 2019.
Scott, Robert C. “Raising the Minimum Wage: Good for Workers, Businesses, and the
Economy.” Committee on Education and the Workforce Democrats, House of Representatives, United States. https://edlabor.house.gov/imo/media/doc/ FactSheet-RaisingTheMinimumWageIsGoodForWorkers,Businesses,andTheEconomy-FINAL.pdf. Accessed 17 Oct. 2019.
US Census Bureau. “Income, Poverty and Health Insurance Coverage in the U.S.: 2018.” The United States Census Bureau, 24 Sept. 2019, https://www.census.gov/press- releases/2019/income-poverty.html.
Uzialko, Adam C. “How Small Businesses Are Affected by Minimum Wage.” Buisness News Daily, 11 Sept. 2019, https://www.businessnewsdaily.com/8984-increased-minimum-wage.html. Accessed 30 Oct. 2019.
Lowering the Cost of Healthcare
Healthcare across America is often criticized for its flaws, many of which cause a limited accessibility rate to low-income Americans. Healthcare is often considered to be a necessity, seeing as it is extremely useful and can come with many positive aspects that greatly benefit those who need it most. According to the U.S Census, the amount of people in the U.S that purchased health insurance decreased by two million people from 2017 to 2018, which presents a clear issue in how it is sold and distributed (US Census). Although healthcare is an asset many people strive to obtain, over the last few years they find themselves unable to do so as a result of the increasing cost. Healthcare organizations have identified this issue, and 29.1% of CFOs of healthcare providers are focusing on “identifying and managing cost-reduction initiatives”, the greatest of every category surveyed according to deputy editor at CFO Publishing David McCann.(McCann). The decreasing rate of insured low-income Americans has not ceased however, as this extreme issue of cost also presents moral decisions to be made between healthcare receivers. A study conducted by Corrine Lewis, a senior researcher at the U.S foundation The Commonwealth Fund, which works to improve the healthcare system, points out that many Americans below the poverty line surveyed say that an inability to afford treatment and medications lead to “tough choices between their health and the financial well-being of their family,'' which is unethical and is a pressing issue that is in need of solving(Lewis). This study builds on the findings of the Kaiser Family Foundation, a non-profit organization dedicated to an improvement in healthcare, who displays that 1 out of every 4 Americans say it is difficult to afford routine healthcare(Kirzinger). Even reasonable solutions to these problems, for example an increase in the amount of electronically distributed care, contain major flaws that cause them to be extremely difficult to implement due to low-income Americans’ limited resources. Given these findings, it is clear the unrealistic cost of modern-day healthcare is in need of alteration in order to provide health insurance to people who desperately need it. In order to provide quality healthcare to Americans below the poverty line, the federal government should lower healthcare costs by removing unnecessary services, controlling the cost of prescription drugs, and increasing the use of telemedicine and other electronic medical services.
In contrast to the limited amount of services in the past, the field of medicine today provides a broad, and at times extraneous, amount of amenities to its patients. Patients put trust in their doctors, and expect them to do everything in their power for their benefit. Due to the increasing distrust between providers and patients with ill-advised transparency of costs and recommended procedures, this bond is beginning to tear(Lewis). As a result, more and more inessential tests are performed on unknowing patients. According to Fierce Healthcare, a science-based news outlet, “doctors still order unnecessary medical tests that rack up millions”, which in turn increases the cost of care with no benefit to the receiver(Finnegan). This view is supported by the Institute of Medicine, who agrees that an excessive amount, “30% of health spending, or roughly $750 billion, “was wasted on unnecessary services in 2009(IOM). These services and procedures prove to have no use to their receivers, while still charging patients, especially those who are below the poverty line, prices they struggle to afford. The federal government and medical institutions should decrease the amount of unnecessary tests given to patients by transparently briefing the patients themselves on the exam’s procedure and possible results, and giving them a larger say in its necessity. This would lower the amount paid by patients for their care, improving how accessible healthcare is to patients unable to pay expensive rates, as well as benefit doctor-patient trust by truly investing them in their care. A key problem with this solution is many tests can not be determined useful or not until the results are returned, where a seemingly-avoidable exam could save a life. Doctors hold this responsibility to provide the best possible care in order to save lives, and many health problems doctors come into contact with are treatable by prescribed drugs and medications.
Prescription drugs are intended to be able to fill a patient’s needs and assist them with their health issues, but inconsistencies in their cost create issues in their availability. Prescription drugs account for 19% of all Medicare spending according to the Kaiser Family Foundation, a non-profit organization, which is significant, but not the greatest factor(Kirzinger). Considering this 19%, many patients rely on the accessibility of prescription drugs in order to maintain their health. Consistency within the cost of the drugs is paramount, because the expense determines if uninsured or low-income patients can still purchase and receive pharmaceuticals. In spite of the importance of availability of the drugs, prices often fluctuate, but steadily rise, to the expense of the consumer. Inmaculada Hernandez, a professor of pharmaceuticals at the University of Pittsburgh, published a report in early 2019 that provides evidence on the extreme increase in drug cost. According to Hernandez, the cost of “injectable brand-name drugs increased annually by 9.2 percent and 15.1 percent, from 2008 to 2016, respectively”(Hernandez). The drastic rise in its cost limit the availability of prescription drugs, and prevent people from receiving them when they need it most. The Academy of Actuaries, who deals with the measurement and control of risks in our world, often publishes articles discussing and analyzing the uncertainties of drugs. If costs of these drugs were lowered, however, additional people could take these supplements, which according to the Academy of Actuaries, would “lead to better overall health outcomes and even lower overall health care costs (A.A.O.A). In order to lower costs, improve the availability of healthcare, and implement this procedure, the federal government would need to have the ability to negotiate with pharmaceutical manufacturers. Currently this is prohibited under the Medicare Program Part D, which “is one of the largest users of medications, and taking advantage of its size by wringing out better pricing and higher rebates could help lower prescription drug costs” (A.A.O.A). Altering this program would allow the government to lower the cost of prescribed drugs, which ultimately increases both theirs and healthcare’s accessibility to those who could not previously afford it. This program might be difficult to alter, however, but with the rapid increase of both mental and physical illnesses, another form of medical care is needed as soon as possible to guarantee accessibility to care, such as electronic care.
Telemedicine and other electronic medical services provide convenience and ease of use that is not present in face-to-face healthcare, and its sky-rocketing availability is now able to lower healthcare costs. The wide-spread use and increasing affordability of technology has caused it to be a beneficial alternative to common practices. Himanshu Kansal, a high-level associate at high point, a company focused on solving world-wide problems, often discusses new ventures in the medical field. Kansal notes that on average, an “appointment via telemedicine costs $79, as compared to $146 for a doctor’s office visit, and $1,734 for an emergency room visit” (Kansal). Unnecessary visits to the emergency room causing patients thousands of dollars is impractical, but can be avoided through telemedicine. Many patients below the poverty line are unable to repeatedly pay for visits to the doctor’s and at times are unable to even transport there, which is an area telemedicine can greatly improve on. As telemedicine has proven itself useful, it prevented “27.9% of parents in a Florida healthcare study from visiting the emergency department” and is projected to save “the Florida healthcare system approximately $113.9 million” according to healthcare-oriented media platform Healthleaders(Healthleaders). By saving both patients and healthcare organizations money, electronically distributed assistance can lower the cost of healthcare. The main limitation to this study is the assumption that Americans with a below average income have access to this technology. Monica Anderson, a director of research at Pew Research Center states “46% of U.S adults with below a $30,000 income do not own a computer”, and as they are the main demographic for this solution, distribution of care may be limited(Anderson). Telemedicine would need to be more readily available to low-income Americans in order for it to be applicable and increase the accessibility of healthcare to all.
Americans below the poverty line are continuing to suffer from the inability to pay for healthcare, and as income inequality is increasing to “the top 10 percent owning as much as 9 times the bottom 90 percent,” the poor are even more restricted from care(Anderson). The government needs to take action now by removing medical exams that provide little to no use or information to the patient, so they can put more money toward more significant things. In order to alter Medicare Program Part D, the federal government should attempt to negotiate with pharmaceutical companies. In addition, increasing the amount of telemedicine distributed is vital to decrease the expensive costs to the E.R. Any person can also sign the change.org petition for free to lower healthcare costs to raise awareness; but in order to have a meaningful impact, the federal government must commit to these actions now to solve this crisis and give Americans the accessibility to healthcare they deserve.
A.A.O.A,“Prescription Drug Spending in the U.S. HealthCare System.” American Academy of Actuaries, www.actuary.org/content/prescription-drug-spending-us-health-care-system#targetText=In many situations, use of,may have a negative effect.
Anderson, Monica, and Madhumitha Kumar. “Digital Divide Persists Even as Lower-Income Americans Make Gains in Tech Adoption.” Pew Research Center, Pew Research Center, 7 May 2019, www.pewresearch.org/fact-tank/2019/05/07/digital-divide-persists-even-as-lower-income-americans-make-gains-in-tech-adoption/.
Finnegan, Joanne. “Doctors Still Order Unnecessary Medical Tests That Rack up Millions, Study Found.” FierceHealthcare, 13 Feb. 2018, www.fiercehealthcare.com/practices/doctors-unnecessary-tests-washington-health-alliiance.
HealthLeaders. “4 Ways Telemedicine Is Changing Healthcare.” 4 Ways Telemedicine Is Changing Healthcare | HealthLeaders Media, www.healthleadersmedia.com/innovation/4-ways-telemedicine-changing-healthcare.
Hernandez, Inmaculada, et al. “The Contribution Of New Product Entry Versus Existing Product Inflation In The Rising Costs Of Drugs.” Health Affairs, 1 Jan. 2019, www.healthaffairs.org/doi/abs/10.1377/hlthaff.2018.05147.
“IOM: 30% of Health Spending Was Waste.” IOM: U.S. Health System Wasted $750B in 2009 - The Advisory Board Daily Briefing, www.advisory.com/daily-briefing/2012/09/07/iom-report.
Kansal, Himanshu. “Telemedicine: The Cost-Effective Future of Healthcare.” HighPoint Solutions, 17 June 2019, www.highpointsolutions.com/telemedicine-cost-effective-future-healthcare/#targetText=An appointment via telemedicine costs,to a RAND Corp. study.
Kirzinger, Ashley, et al., “Data Note: Americans' Challenges with Health Care Costs.” The Henry J. Kaiser Family Foundation, 10 June 2019, www.kff.org/health-costs/issue-brief/data-note-americans-challenges-health-care-costs/.
Lewis, Corinne. “Obstacles for Low-Income Patients.” Obstacles for Low-Income Patients, 1 Dec. 2017, www.commonwealthfund.org/blog/2017/listening-low-income-patients-obstacles-care-we-need-when-we-need-it.
McCann, David. “Hospital CFOs Struggle to Keep Up With the Times.” CFO, 4 Jan. 2018, www.cfo.com/operations/2018/01/hospital-cfos-struggle-keep-times/.
US Census Bureau. “Income and Poverty in the United States: 2018.” Income and Poverty in the United States: 2018, 17 Sept. 2019, www.census.gov/library/publications/2019/demo/p60-266.html.
Lowering Healthcare Costs
Healthcare, or insurance, is the set of services provided by a country to its citizens to treat the ill (Cambridge English Dictionary). Twenty eight million American citizens do not have healthcare, which means they can not get the medical attention they need. (U.S. Census Bureau). World Population Review, a website that was created in 2011 to follow global population and trends, estimates that the population of the United States is approximately 330 million, which means that roughly 8.4% of the population is uninsured, which is a big problem (United States Population 2019). In just the past year, two million less Americans have opted out of healthcare. While Medicaid seems like a viable option, there are tight premises on qualifying, so not everyone can have it. This leaves many young men, women, and children who are in need of care, but cannot get it. Keeping in mind that it is quite difficult to qualify for Medicaid, HealthMarkets, an online health insurance company, explains that the average monthly cost for one person’s healthcare is $477 (How Much Does Health Insurance Cost Per Month?). Many people are unable to afford this, as they need the money to buy necessities such as food, clothes, and diapers. Thus, they cannot easily access tests and treatments. If the cost for insurance was lower, more people would be able to get the help they need. In order to lower the cost of healthcare, the government should allow Medicare to negotiate drug prices, increase payroll tax, and give patients more information on healthcare prices to help them make informed choices.
Allowing Medicare to negotiate drug prices would decrease the price of healthcare. As explained by the Tennessean, a branch of USA Today, Medicare currently has no control over drug prices (Tolbert). That being said, the government is allowed to choose the prices of drugs. (Tolbert). If Medicare was allowed to decide, the prices would become more reasonable and easier to afford, as their primary malfunction is to help citizens save money in terms of healthcare. The Department of Health and Human Services, an organization that aims to protect the health of United States citizens, says “as soon as next year, drug prices can start coming down for many of the 20 million seniors on Medicare Advantage, with more than half of the savings going to patients” (U.S. Department of Health and Human Services). This means that not only would they be saving money, they would actually be gaining money too. One argument against allowing Medicare to choose drug prices could be that citizens not on Medicare would have to pay more for their medications, because the drug manufacturers have to make money somehow. However, yet another benefit would be less people going overseas for medicine and drugs and more people buying them here due to reasonable prices. More people buying drugs here would boost the United States economy. Once the prices of drugs are lower, it will become much easier to lower the cost of healthcare all together.
An increase in payroll tax would allow the government to lower the cost of healthcare. As explained by the Internal Revenue Service, commonly known as the IRS, the federal tax agency for the United States, “the current tax rate for social security is 6.2% for the employer and 6.2% for the employee, or 12.4% total. The current rate for Medicare is 1.45% for the employer and 1.45% for the employee, or 2.9% total” (Topic No. 751 Social Security and Medicare Withholding Rates). When the taxes are added up, the total payroll tax is 15.3%, with 7.65% coming from each party. According to Choices for Financing Medicare for All: A Preliminary Analysis, imposing a 32% payroll tax would allow Medicare for All (Choices for Financing Medicare for All: A Preliminary Analysis). In this tax, employees and employers would still be splitting the costs evenly. Medicare for All would be beneficial because it means everyone would get the medical care they need. The same source explains that the tax would raise thirty trillion dollars in ten years. (Choices for Financing Medicare for All: A Preliminary Analysis). This money could be used to further add to the benefits of Medicare, such as increased coverage like mental health evaluations. While some would argue that it is unfair to raise taxes on people who are already paying for their own healthcare, the benefits of healthcare for everyone would outweigh it the overall health care costs for all would be reduced. Once the cost is successfully lowered, information on the prices of different healthcare plans should be shared with patients.
Giving patients more information on healthcare prices will allow them to make educated choices on which healthcare plan is best for them. There are people who do not get the help they deserve because they are unaware of it. One such example comes from an article from MarketWatch, a website that advocates for lowering healthcare costs. According to Holly Lawrence, a journalist for MarketWatch and experienced marketing professional, “in Atlanta, it can cost 600% more to have a colonoscopy in one location than another” (Lawrence). Lawrence goes on to explain “the problem is that patients usually don’t know about local price variations because they’re generally not given cost information by health care providers or insurers” (Lawrence). People may not be choosing the best care for them. Recently, Kaiser Health News has begun a monthly publication on healthcare cost. Their first post, written by Fred Schulte, a senior correspondent at Kaiser News and four time Pulitzer Prize finalist, starts with “this is the debut of a monthly feature from Kaiser Health News and NPR that will dissect and explain real medical bills in order to shed light on U.S. health care prices and to help patients learn how to be more active in managing costs” (Schulte). More companies should do the same reviews, so that people will be able to become more efficient at managing costs. One issue with sharing the prices could be that some medical practices go out of business because their cost is too high to compete with other companies who offer lower prices. However, this likely will not become a problem for years, if ever, because hardly any healthcare prices are currently publicly shared.
Allowing Medicare to negotiate drug prices, increasing payroll tax, and informing patients of their options are all good choices for lowering the cost of healthcare. However, the government carrying out all the solutions simultaneously would yield the most beneficial results. It would cause a significant decrease in the price- more so than any of the solutions could provide on their own. The price is so high today that millions of more people are opting out of healthcare every year. This leads to things like untreated injuries, because people simply cannot not afford to get treated. In extreme cases, death could be a possibility if patients go untreated for too long. It is presenting an increasing problem in our society, and it is time that the problem be solved. Lower-cost health care would easily eliminate these otherwise devastating problems. Health insurance is a basic need for humans, and the government should lower the cost of it so that more people can afford and access it.
“Choices for Financing Medicare for All: A Preliminary Analysis.” Committee for a Responsible Federal Budget, 31 Oct. 2019, www.crfb.org/papers/choices-financing-medicare-all-preliminary-analysis.
“HEALTHCARE: Definition in the Cambridge English Dictionary.” HEALTHCARE | Definition in the Cambridge English Dictionary, dictionary.cambridge.org/us/dictionary/english/healthcare.
“How Much Does Health Insurance Cost Per Month?” HealthMarkets, www.healthmarkets.com/content/health-insurance-cost-per-month.
Lawrence, Holly. “5 Ways to Lower Health Care Costs in the U.S.” MarketWatch, 8 Mar. 2018, www.marketwatch.com/story/5-ways-to-lower-health-care-costs-in-the-us-2018-03-08.
Schulte, Fred. “Bill Of The Month: A College Student's $17,850 Drug Test.” Kaiser Health News, 5 Apr. 2018, khn.org/news/bill-of-the-month-a-college-students-17850-drug-test/.
Tolbert, Alex. “Tennessee's Candidates for Governor Discuss Health Care.” The Tennessean, The Tennessean, 11 Mar. 2018, www.tennessean.com/story/opinion/contributors/2018/03/11/three-ways-congress-could-reduce-health-care-costs-u-s/411391002/.
“Topic No. 751 Social Security and Medicare Withholding Rates.” Internal Revenue Service, www.irs.gov/taxtopics/tc751.
U.S. Census Bureau. “Who Are the Uninsured?” The United States Census Bureau, 23 May 2019, www.census.gov/library/stories/2018/09/who-are-the-uninsured.html.
U.S. Department of Health and Human Services. “Trump Administration Gives Medicare New Tools to Negotiate Lower Drug Prices for Patients.” HHS.gov, US Department of Health and Human Services, 25 Feb. 2019, www.hhs.gov/about/news/2018/08/07/trump-administration-gives-medicare-new-tools-to-negotiate-lower-drug-prices-for-patients.html.
“United States Population 2019.” United States Population 2019 (Demographics, Maps, Graphs), worldpopulationreview.com/countries/united-states-population/.
Health Care and Poverty in America
Sickness does not discriminate. Regardless of wealth or status everyone at one point in their life will experience being sick or getting an injury. However, wealth and status do dictate the likeliness and impact of said injury or sickness. Dhruv Khuller, doctor and researcher at Weill Cornell Department of Healthcare Policy, concurs when he notes that low income people are more likely to have “higher rates of physical limitation and of heart disease, diabetes, stroke, and other chronic conditions, compared to higher-income Americans”( Choksi Khullar, 1). The likeliness of poor health in impoverished communities should facilitate more visits to the hospital or a treatment center, however, the opposite is true. Fewer impoverished people recieve the treatment they deserve, simply because they cannot afford it. Reputable cardiologists from hospitals across the country, Rohan Khera, Javier Valero-Elizondo, and Victor Okunrintemi report from a study of families that contain a person with heart disease that “the mean annual family income was $57 143 (95% CI, $55 377-$58 909), and the mean out-of-pocket expense was $4415” (Khera et. al, 1). The out-of-pocket cost for a family with a single person that has heart disease for a year is just less than a tenth of their income, that may not even suffice to cover basic costs originally. This article also points out that medical emergencies can send a family into a financial crisis (Khera et. al,1). The implication of these findings is that the cost of healthcare is contributing to poverty in America. The contribution to the 40 million people that are impoverished in the US is deplorable (Schaefer et. al, 2). In fact “according to international law…‟every person has the right to an adequate standard of living and where that seems impossible, it is the role of the government to assist them” (Alston, Source 1). The US will be breaking international law if they cannot implement a plan that benefits the health of the people. The government can help to stop the rise in poverty levels attributed the cost of healthcare by providing funded emergency services allowing for a private extended health care option in order to reduce poverty levels, and establish equity.
A government funded Medicare plan would help to decrease the poverty levels. Dhruv Khuller agrees and states that “rollbacks of the Affordable Care Act, for example, are likely to worsen both health and income inequalities. Repeal of the individual mandate is predicted to increase the number of uninsured people by four million in 2019 and by thirteen million in 2027. Low-income people have to spend a much greater proportion of their income on health care than more affluent people do”(Khuller et. al.1). The lack of specific governmental aid has made it so that more impoverished Americans are uninsured, which causes them to with pay out of pocket costs for expensive healthcare treatments they need. The government needs to remedy this by implementing a funded insurance plan. A funded insurance plan is an insurance plan targeting low income individuals that is paid for by the government or taxes imposed by the government. However, the idea of having funded Medicare for everyone in the United States has proven to be monumental and extremely expensive. Funding options for a government funded plan were explored by political analyst and Pulitzer finalist Ronald Brownstein. He states that the amount spent would be “34 trillion in additional federal spending over its first decade in operation. That’s more than the federal government’s total cost over the coming decade for Social Security, Medicare, and Medicaid combined, according to the most recent Congressional Budget Office projections” (Brownstein,1). This is a huge cost and seemingly not worth it when there are other options that cost less, because of this the funded plan will have to be very limited in order to be sustainable. The plan cannot be as extensive as Medicare for All, a universal healthcare plan proposed by presidential candidates Bernie Sanders and Elizabeth Warren (Brownstein). The funded plan will exclusively apply to injuries and sickness that is either life threatening or prevents the ability to work. In the long run this will make the government money. The cost for the funded emergency services would be covered by the money already in the budget that is being spent on Medicare. According to a study done “Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), and Affordable Care Act (ACA) marketplace subsidies — together accounted for 26 percent of the budget in 2017, or $1 trillion”(CBPP, 1). There is enough money to sustain the plan that will allow for better health and economy.
The funded healthcare plan is a suitable solution for people that are impoverished and need the extra help, but for people that would not be considered low income, a private option should be available. The private option continues to allow people to purchase their own personal insurance (Health Care Service Corporation,1). This option will promote equity or fairness. It will also answer the question, “should the government be allowed to require its citizens to have a pre-planned health care plan?” American ideals are centered around how the people have a choice, so they may not accept a plan that limits the choice. In the eyes of some, the implementation of a funded care system for everyone may even violate some of the rights outlined in the constitution. This may cause the people to look back upon an idea Thomas Jefferson introduced that “every American should have the right to prevent the government from infringing on the liberties of its citizens” (Walker,1). In order to give the people of America the freedom to choose and remain unoppressive, this option is necessary. It allows for private insurance businesses to continue to run and flourish economically. The private option will also make the funded plan more sustainable, considering that medical staff are mostly paid by private insurance companies (Liveclinic,1). The private option is a vital addition to the solution of healthcare and insurance related poverty.
The government needs to implement this plan in order to lessen the impact health care and insurance have on poverty. The funded insurance plan is a feasible plan that will benefit low income Americans. The private option given will allow more successful Americans to maintain good health and will give all Americans the choice to have a more direct say in how their health will be taken care of. This solution is one that can and must be integrated into American society.
Brownstein, Ronald. “The Eye-Popping Cost of Medicare for All.” The Atlantic, Atlantic Media Company, 16 Oct. 2019, www.theatlantic.com/politics/archive/2019/10/high-cost-warren-and-sanderss-single-payer-plan/600166/.
“How Insurance Works.” How Insurance Works | Health Care Service Corporation, www.hcsc.com/understanding-health-insurance/how-insurance-works.
Khera, Rohan, et al. “Association of Out-of-Pocket Annual Health Expenditures With Financial Hardship in Low-Income Adults With Atherosclerotic Cardiovascular Disease in the United States.” JAMA Cardiology, American Medical Association, 1 Aug. 2018, www.ncbi.nlm.nih.gov/pmc/articles/PMC6143078/.
Khullar, Dhruv. “Health, Income, & Poverty: Where We Are & What Could Help.” Health, Income, & Poverty: Where We Are & What Could Help | Health Affairs, 4 Oct. 2018, www.healthaffairs.org/do/10.1377/hpb20180817.901935/full/.
LiveClinic.¨How Do Doctors Get Paid For Healthcare Treatment? ¨Medium,Healthcare in America, 19 June 2018, http://healthcareinamerica.us/how-do-doctors-get-paid-for- healthcare-treatment-f7538b9e59
“New Report: Three Quarters of Those Who Have Lost Jobs and Health Insurance Are Skipping Needed Medicine and Health Care; Many Struggling with Medical Debt.” Commonwealth Fund, 24 Aug. 2011, www.commonwealthfund.org/press-release/2011/new-report-three-quarters-those-who-have-lost-jobs-and-health-insurance-are.
“Poverty Facts.” Poverty Solutions, poverty.umich.edu/about/poverty-facts/.
“Statement on Visit to the United Kingdom, by Professor Philip Alston, United Nations Special
Rapporteur on Extreme Poverty and Human Rights.” OHCHR,
Walker, Carol. “Thomas Jefferson.” Thomas Jefferson, www.mtsu.edu/first-amendment/article/1218/thomas-jefferson#targetText=As he did throughout his,should be sacred to everyone.
Financial Barriers of Higher Education
Colleges and universities have been steadily increasing their cost of tuition for the past few decades. The average costs of tuition for the 2019–2020 school year was $41,426 at private colleges, $11,260 for state residents at public colleges and $27,120 for out-of-state students at state colleges, according to the U.S. College Board survey (Powell and Kerr). Also, entrepreneur and author Zack Friedman wrote in his online article that, “in 2018, over 44.2 million borrowers owed a total of 1.5 trillion in student loan debt to the United States government” (Friedman). These astronomically high tuition costs, and increasing student loan debts mean that more and more lower class citizens are unable to achieve a higher education. The national motto of the United States is ‘E Pluribus Unum’, which is Latin for ‘Out of many, one’, but how can an individual in the U.S. genuinely feel part of that ‘many’, if they are not given an equal chance at education, because of their economic standings? The only way for this nation to become whole again is if the same opportunities are within the grasp of all of its citizens. Despite the possible limitations, the federal government should increase income taxes of the wealthiest 10% of Americans by %5 in order to subsidize the cost of higher education for students in poverty so that crime rates in impoverished communities would decrease, lower class families would have better job opportunities, and local economies would grow.
Primarily, crime rates in impoverished communities would decrease significantly if the federal government subsidized the cost of higher education for students in poverty. This aspect of the solution may be the most beneficial for the nation. Alma Gonzalez, a college student, wrote an article about a possible solution to crime while studying at New York University. Gonzalez identifies that, “A 5% increase in the college graduation rate, for instance, produces an 18.7% reduction in the homicide rate” (Gonzalez 32). This statistical drop in crime rate occurred nation-wide, and many researchers largely attribute this to the increase of college grads that same year, in 2015 (Gonzalez 33). If lower class students were given the opportunity to attend more prestigious colleges, a rise in college graduation would occur, subsequently leading to another drop in certain crimes. Stephen Machin, a professor of economic statistics at the London School of Economics and his associates conducted a study that provided similar results to Gonzalez’s data. Machin states, “there was a 4.7% fall in the conviction rate in the years after the education reform, revealing a statistically significant crime reduced form”...“the same is true of education, with a 5.7% fall in the proportion with no qualifications and an increase of almost a quarter of a year (0.22) in the average school leaving age” (Machin et al). These significant crime and education statistics suggest a critical impact of education on crime. Machin and his associates identify a positive correlation between the two demographics; the more adults entering college, means a lesser number of convicted and incarcerated individuals. Although Stephen Machin’s study was of adults that lived in London, he says at the end of his study that, “We matched out data with that of other countries, including Ireland, Canada and the United States, and found overwhelming similarities in the relationships of crime and education” (Machin et al). This relationship between education and crime is very relevant in the United States. Similarly, data gathered by Lance Lochner and Enrico Moretti from the US census, found that men with no college education are more likely to be incarcerated from 2000 to 2010. The study reported that, “Incarceration rates for white men with 12 years of schooling are around 0.8 percent while they average about 3.6% for blacks over the decade” (Lochner and Enrico 6). This data suggests that if more adults were given things like grants, scholarships, and loans then the rate of incarceration would decrease in communities.
Another notable effect of this subsidization would be that lower class families in the U.S. would have better career opportunities. College courses are the best ways for people to gain experience and knowledge about a subject, which creates a more hirable individual. According to David Edelson Ph.D., the senior vice President and chief financial officer of Public and Land-Grant Universities, adults with a bachelor's degree or higher are, “half as likely to be unemployed as their peers who only have a high school degree, and they make $1 million more on average throughout their lifetime” (Edelson). If the federal government allowed more impoverished students to get these degrees, students would be more likely to achieve higher paying careers in fields they are passionate about. Although a college degree does not guarantee a fulfilling career, it does however, level the playing field for people who actively pursue their goals. Roy Y. Chan, the Director of TRIO, a Student Support Service at Lee University agrees with Machin’s ideas, when he says that according to “2016’s Cooperative Institutional Research Program (CIRP) survey, 60% of college freshman admit that ‘landing a good job’ was their largest factor when considering a college” (Chan). Chan identifies the increasing expectation of prestigious colleges to help students get better careers. Dennis Vilorio, a researcher of the U.S. department of labor statistics, creates a similar claim to Chan, stating that individuals with an associates degree or higher 3% to 7% less likely to be unemployed and earn $200 to $1200 more than individuals with no college education (Vilorio). Vilorio’s data concludes that a college degree provides significant advantages when applying for higher paying jobs.
Finally, the federal government would promote long term economic growth among communities if it subsidized the cost of higher education for students in poverty. By allowing lower income students to achieve a college degree, and consequently raising the number of higher paid workers, the government would indirectly create more middle and higher class citizens. When the number of middle and higher class families begins increasing, so does the amount of money being spent on luxury items and goods. Jonathan Rothwell, a writer of the Brookings online editorial, displays his research on a correlation between higher education and increased spending, According to Rothwell, “the average bachelor’s degree holder contributes $278,000 more to local economies than the average high school graduate through direct spending over the course of his or her lifetime” (Rothwell). The more money a family makes, the more money that they will likely spend on ‘want items’. Families with low paying jobs would not be able to afford these items, therefore giving less back to the economy. Workers are also forced to pay a federal income tax. Julia Kagan, a personal finance editor explains how, the amount that a person pays towards this income tax is dependent entirely on the amount of money that a person earns from their job. For example, if a worker with a low paying job earns 12 dollars an hour, two dollars of that hourly wage will be taxed by the government. Now, assume that a worker with a higher paying job earns 60 dollars an hour, and ten dollars of that hourly wage will be taxed by the government (Kagan 1). On a national scale, the United States government’s best interest lies in creating more higher paying careers in order to collect more tax revenue. Lastly, Lance Lochner and Enrico Moretti also estimated the probable economic benefits in the incarceration study from before. The researchers concluded that if the U.S. federal government increased funding to Pell Grants for students, “a 1-percent increase in male high school graduation rates would save as much as $1.4 billion, or about $2,100 per additional male high school graduate” (Lochner and Moretti 15). This money would be saved in the form of decreased costs of prison accommodations, and inmate charges. The more students that are able to attend college, means fewer people are incarcerated, and the government spends less money on the costs of incarcerating those people.
Although these benefits are highly desirable, there are limitations to implementing this plan in the United States. First, is the ethical dilemma of raising property taxes of the richest 10% of American citizens. Richard Vedder, an American economist and author for the Foundation for Economic Education, would argue that, “these multimillion, and billionaires should not have to pay more for their accomplishments,”(Vedder). Although many people agree with Vedder’s argument, others have found ways to diminish their arguments. Ethical researchers like Jonthan Cohn would debate that, “the argument that opposes (tax raises) suffers from two main faults. One is that it fails to account for the power of luck” ... “The other, albeit related, flaw in the conservative argument is that it fails to acknowledge the debt wealthy people owe to society” (Cohn). A majority of people in the top 10% of wealthy Americans gained their wealth through inheritance. It is due to this fact that an increase in property taxes of the richest 10% of Americans is mostly an ethically right decision.
Next, The other notable limitation is the fact that there may not be enough funds to accommodate a substantial amount of lower class students who are attempting to achieve a higher education. According to Robert Bellafoire, an economic analyst, the top 10% of Americans paid a total of 70% of all income taxes in 2018 (Bellafoire). Bellafoire also found that the total amount paid in income taxes totaled approximately 1.4 trillion US dollars (Bellafoire). This means that the top 10% of Americans contributed a total of 980 billion in income taxes. According to Steven Dillingham of the US Census Bureau, $694.1 billion of that was funded towards education (Dillingham). Even if tax rates for the wealthiest 10% of Americans were to increase, by a minimum of 5%, the amount of money raised in income tax may not be enough to significantly increase the number of students able to achieve a college degree. According to the US Census Bureau, a defining variable like this is completely dependent on the income of the top 10% and the number of high school graduates.
Despite these two possible limitations, the federal government should increase income taxes of the wealthiest 10% of Americans by 5% in order to subsidize the cost of higher education for students in poverty so that crime rates in impoverished communities would decrease, lower class families would have better job opportunities, and local economies would grow. This tax increase would allow more lower class students to achieve a college degree; subsequently increasing those individuals’ chances of getting a higher paying job, making them less likely to commit crimes, and making them spend more in their community. The effects of this tax reform are overwhelming beneficial, not only for individuals but for the nation as a whole. Although, the reform is limited by the ethical dilemmas and financial uncertainties, the benefits of this solution outweigh the possible detriments. This reform would be the most probable way for this nation to truly become united again, and give every one of its citizens a fair chance at the pursuit of happiness. Afterall, we are all just people trying to achieve something greater than ourselves.
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Chan, Roy Y. “Understanding the Purpose of Higher Education: An Analysis of the Economic and Social Benefits for Completing a College Degree.” Researchgate, Research Gat, 13 Jan. 2016, www.researchgate.net/publication/305228497.
Cohn, Jonathan. “Moral Arguments for Soaking the Rich.” The New Republic, The New Republic Newspaper, 17 Oct. 2010, www.newrepublic.com/article/78459/moral-argument-soaking-the-rich.
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Rothwell, Jonathan. “The Economic Value of Education.” Brookings, Brookings, 29 July 2016, www.brookings.edu/blog/the-avenue/2013/11/12/the-economic-value-of-education/.
Vedder, Richard. “Why ‘Free College’ Will Do Little to Help Poorer Americans: Richard Vedder.” FEE Freeman Article, Foundation for Economic Education, 13 Mar. 2019, www.fee.org/articles/why-free-college-will-do-little-to-help-poorer-americans/#0.
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