THE BLOG

The Economic Reasons Why the Middle Class Needs SCHIP

Two families have spoken up about their participation in the SCHIP program. The right wing has attempted to paint these families as free-loaders, stupid or lazy. However, the fundamental reality is far more stark. The Bush "boom" has created a small amount of jobs. In addition, the economy has lost high-paying jobs in the manufacturing and information technology - jobs that use to supply the health care for their employees. As a result, median income has declined during this expansion. At the same time, the cost of health insurance has skyrocketed making it more and more unaffordable for more American.

Let's start with some basic economic facts. According to the National Bureau of Economic Research this expansion started in November 2001. According to the Bureau of Labor Statistics, there were 130,883,000 non-farm jobs. In September of 2007 (the most recent information) there were 138,265,000 jobs - an increase of 7,382,000. So over the 70 months of this expansion the economy has created an average of 105,457 jobs/month. Unfortunately, it takes about 150,000 jobs/month to absorb population growth. In addition, over the same period of time the country has lost 1,845,000 manufacturing jobs and 433,000 information service jobs - both high-paying areas of the job market that traditionally provided health care. As a result of low job creation and the loss of high-paying jobs, median family income according to the Census Bureau has dropped for the duration of this expansion.

At the same time, the cost of health insurance premiums has increased far faster than inflation. Here is a chart of the annual increase in health care insurance premiums from Kaisr Health: Notice how the increase in insurance premiums has far out-stripped worker's pay.

This means the number of uninsured has increased:

This isn't rocket science. Here is the simple economic chain of events for the economy.

1.) Job creation is weak.
2.) The economy has lost a ton of jobs that had high pay and health insurance benefits.
3.) As a result, median family income has been stagnant.
4.) At the same time, health insurance premiums have increased far faster than inflation or pay
5.) As a result, the number of people without health insurance has increased.

The right wing is making the "personal responsibility" argument. Well, that's tough to do when the economy isn't creating the kind of jobs that either provide health insurance or can help people pay for health insurance. It really is that simple.