Deaths of Despair, a new book by Princeton economics professors Anne Case and Angus Deaton, begins with some sunny facts. For a little more than a hundred years in the United States, beginning in 1900, mortality declined. Life expectancy at birth went from 49 to 77 years, increasing by nine years between 1970 and 2000 alone. At the start of this period, the main causes of death were infectious diseases: tuberculosis, pneumonia, and gastrointestinal infections. The influenza epidemic of 1918 and two world wars briefly reduced life expectancy, but in general, advances in science meant that more people in the U.S. lived, and they lived longer. People survived the vulnerable years of infancy to the more resilient years of adulthood, and coasted through the once-again vulnerable years of old age. It’s a story we love to tell: Progress. Science. Triumph over diarrhea.
Death in midlife is especially uncommon. In 1900, for white men and women aged 45–54, there were 1,500 deaths per 100,000. By 2000, there were about 400. If trends continued, it would have been somewhere around 250 today. But after the year 2000, something happened. The mortality rates for middle-age white, non-Hispanic people without a college degree stopped declining. And then they went up. These people weren’t dying of an infectious disease or a violent global war; they were dying of suicide, drug overdoses, and alcoholic liver disease and cirrhosis, or what Case and Deaton call “deaths of despair.” The authors note that in 2017 alone, 158,000 Americans died these “deaths of despair.” “That is,” they write, “the equivalent of three full 737 MAXs falling out of the sky every day, with no survivors.” In another comparison, the number of people in the U.S. who would still be alive if declining mortality trends had continued after 2000 is around 600,000, compared to the 675,000 people who died in the HIV/AIDS crisis beginning in the 1980s. Simply put, the white working class is dying at an unprecedented rate.
It is hard to say why with any certainty. But there are other distinct changes that have happened to the working class. Most notably, for the last 50 years, their wages have stagnated. If you were in this cohort, your median earnings lost 13 percent of their purchasing power between 1979 and 2017, while the national income grew by 85 percent. Good paying, safer union jobs were replaced by bad jobs, which were in turn replaced by worse-paying, more dangerous ones. “The prolonged decline in wages,” Case and Deaton write, “is one of the fundamental forces working against less educated Americans.” And this, they argue, drives people to deaths of despair. “Jobs are not just the source of money,” they write, “they are the basis for the rituals, customs and routines of working-class life. Destroy work and, in the end, working-class life cannot survive.”
Another important connection is that both phenomena are unique to the U.S.: Wages have stagnated in America much more than in other wealthy countries, and the U.S. is the only wealthy country to experience such a rise in suicides, drug overdoses, and alcohol-related deaths. Case and Deaton have a powerful explanation for all of this. First, the root cause is the U.S. health care industry, which, since the 1960s, for many different reasons, has become wildly expensive. And second, it is all enabled by the broken, uniquely American system of employer-provided health care.
As is often noted, employer-provided health care was an accident of history. Prior to World War II, the market for health insurance was small; few people wanted to buy it. During the war, a giant gob of working-aged people evacuated the workforce and flowed into the war effort, which created a vacuum in the labor market. In 1942, to prevent an ascending spiral of wage increases (as employers tried to outbid each other for the scarce number of remaining workers), the government established the Office of Economic Stabilization. The department promptly froze wages.
Shrewd employers offered their employees health benefits instead of wage increases, and in 1943, the IRS decided that these contributions would be tax deductible, which encouraged the practice. Soon, strong unions bargained not only for increased wages but more elaborate health care plans. The number of people active in the health care system exploded. In 1960, over two-thirds of the population had health insurance, up from around 9 percent in 1940. The booming postwar economy fertilized the health care industry, and soon it was in full bloom.
Employer-provided health care was a wartime work-around, and it should be noted that its future continuation wasn’t inevitable. In 1945, after only seven months in office, Harry Truman proposed a universal health care system. It was clear that, while union contracts could win health care for their members, others were already left out of the system. When workers retired, for example, they often lost their health care, right when they needed it most. Truman was intent on expanding the egalitarian ethos of the New Deal into health insurance and felt it necessary to stress that it wasn’t “socialized medicine,” because “the American people want no such system.” Truman’s prevarications failed to convince, and the American Medical Association, among other lobby groups, attacked the idea, saying that it was proposed by “followers of the Moscow party line.” Unions, who had fought viciously for their benefits, lined up with the health care lobby, sandbagged their position, and opposed universal health care. The initiative died. It wouldn’t emerge as a viable topic of discussion for almost 70 years.
And in that time, the cost of health care went through the roof. In 1960, health care consumed about 5 percent of gross domestic product. Today, it is closer to 18 percent. Another way to look at that last figure, write Case and Deaton, is that, in 2017, the amount the country spent was $10,739 per person. “The cost of healthcare,” they write, “is like tribute that Americans have to pay to a foreign power.” It is a flat tax levied on every citizen, regardless of income. But instead of being paid to the government, it’s shipped straight to the health care industry.
Health care became expensive for various intersecting reasons, mainly emanating from wide-ranging and favorable regulations. Doctors’ groups, for example, have successfully lobbied to keep doctors’ wages high by legally limiting the number of people who can practice medicine. Doctors with foreign medical licenses must go through the U.S. medical school system, which itself limits the number of residencies available and thus reduces the number of doctors entering the profession. While licensing is important, it protects doctors from the corrosive effects of globalization that, say, autoworkers have been exposed to. In economic terms, limiting the import of foreign vehicles—which would effectively discourage relocation of auto plants to Mexico or Asia—and limiting the import of foreign doctors isn’t so different. Whether or not you agree with the licensing procedure, Case and Deaton point out, the effect on wages is clear: In 2005, doctors made up 16 percent of earners in the top one percent, and 6 percent of the top tenth of one percent. Their protected wages ensure that the cost of health care remains high.
Favorable protection through regulation drives up the price of health care in other ways. For the last handful of decades, hospitals, insurers, and medical groups have merged and consolidated, right in step with many other industries. This allows them to charge higher prices with less fear of competition. Sometimes, Case and Deaton show, they are able to charge as much as 12 percent above their competitors. Medical procedures in general have increased in price, along with the variety and technical sophistication of medical devices. As is often mentioned, pharmaceutical companies drive up prices of medicine with patent protections that prevent generic producers from offering lower-cost alternatives. The pharmaceutical lobby managed to encourage the passage of laws that prevent the government from using its great size—as the single payer for Medicaid and Medicare recipients—to negotiate for lower drug prices, which has got to be one of the most brazen, illogical protections of corporate welfare you could imagine. The health care lobby outspends almost every other industry, and it is to great effect. “Our government,” as Case and Deaton witheringly declare, “is complicit in extortion by the healthcare industry.”
Worst of all, employer-provided coverage obscures these rising costs; it allows the extortion to fester under wraps. An employee might think of health care as a gift, but this is wrong. It is a cost to the employer, and weighs heavily on their actions. “Employers’ contributions are wage costs,” Case and Deaton write, “as are wages themselves, so the rising cost of insurance premiums—for example, from $2,000 in 1999 to $6,896 in 2017 for the average single-person plan—have played a large part in holding down wages.” That is, health care costs eat into pay, driving down what an employer might typically offer. A cascade of other effects tumble out from there: The increased cost of having employees prompts firms to either fire workers or hire fewer people in the first place, both of which, of course, loads more work on fewer people. It also encourages firms to outsource jobs normally done by employees to other firms, or to shift work to contractors who are not entitled to health benefits. Case and Deaton relay a story told to them by an executive of a major firm who hired management consultants to reduce the “head count” to save on health care costs, by “identifying workers who were dispensable altogether, or whose positions in food service, security, janitorial, or transport activities could be outsourced.” The high cost of health care, coupled with its obscured role in compensation, is the catalyst for outsourcing, downsizing, and contracting out—that is, the dismemberment of working-class life.
In an ugly twist, the math of employer-provided health care often boosts the wages of highly paid workers. For a person making $150,000, for example, an average family plan adds a cost of only 10 percent of their wages, which is a much more manageable-looking sum than the 60 percent it would add to a low-wage worker’s, at half the median income. And because health care costs are still tax-deductible, there is an incentive for companies to offer deluxe health care plans to highly paid workers instead of paying them more, a trend that further widens wealth inequality. Case and Deaton suggest that the tax revenue lost from luxury health care plans for high-wage workers is in the ballpark of $150 billion, which furthers all sorts of inequities in all sorts of different ways by reducing the funds available to education, infrastructure, and any number of socially beneficial services.
In their most potent analysis, Case and Deaton stress that the crisis afflicting the white working class today is not an isolated event. The deaths of despair that occur today are similar to the crisis that swept over the African American working class in the 1970s and ’80s. “The first wave of globalization,” they write “hit blacks particularly hard.” This suggests the problem is not necessarily racial but part of a larger trend affecting the working class. Much of the decline in life expectancy in both periods resulted from seemingly self-inflicted wounds (crime, drugs, violence, suicide) instead of exterior forces like a virus or a violent conflict. This made it easy for the wider public (especially highly educated policymakers and pundits) to dismiss the decline as being a problem of individual, moral decay (e.g., laziness) instead of large political and economic forces. A lack of industriousness is the easy and incorrect answer; an assault on wages is the complicated and accurate one.
This is further highlighted by the fact that both waves of increased death and despondency should have brought wages up, as the workforce shrank and firms competed for a smaller pool of workers. But curiously, it never did. The degradation of the welfare state beginning in the 1980s goes a long way to explain it, as reduced welfare benefits encouraged workers of all stripes to go back to work for lower wages. In another strange parallel, the crack cocaine epidemic—which leveled the black working class—was reproduced in the white working class as the opioid epidemic. As crack cocaine in its time preyed disproportionately on blacks, opioid deaths fixated (until only recently) on whites, each cohort exceedingly vulnerable in its time. The point is that while the book focuses on a specific racial cohort that is dying in alarming numbers, it is indicative of a larger historical trend in which the working class, as a whole, loses.
In 1965, Martin Luther King Jr., noted that the “southern aristocracy took the world and gave the poor white man Jim Crow.” He was suggesting that the racial superiority conferred by Jim Crow cleaved the working class, and it is possible this fragmentation enabled the white working class to stave off the destructive effects of globalization and automation by a few decades. Case and Deaton’s argument is that around the year 2000, the privileges granted by Jim Crow ran out. Like the black working class in the late 1970s and ’80s, white workers found their wages had bottomed out, their jobs had been shipped away, and their futures had been made uncertain.
So what’s to be done? Deaths of Despair, in its conclusion, makes a methodical case for the abolition of employer-sponsored plans and the creation of universal health care. It lays out the need to take apart the health care lobby, reduce patent monopolies, break up hospital chains, and build a strong safety net to boost wages. The dissonant aspect of the book is that in support of this, the authors frequently decry the decline of the nuclear family, broken marriages, frayed communities, the absence of religion, and evaporation of the spiritually important aspects of work. They frequently dismiss taxation of the very wealthy as a solution. In this light, the book is an interesting object: a conservative case for universal care.
Those on the left who are interested in a more functional, humane system should take note, because while the aims might be different, the goal is essentially the same: a meaningful, prosperous life for working people, actively promoted and defended by a myriad of functional advocacy groups and the government. (There’s also no reason why you can’t enact universal health care and raise taxes on wealth, capital gains, financial transactions, and estates.) While labor unions seem like a much more viable and potent political force for the current problems than organized religion, there is no reason why they couldn’t unite in a powerful working-class movement to raise wages, abolish the wasteful and cynical private health care industry, and divert resources to the least advantaged. This is what has happened in many other wealthy countries, and it is likely why giant sections of their populations aren’t killing themselves.
There’s an alternate history where the big industrial unions in the late 1970s look at the degradation wrought on the black, inner-city working class, and realize that the exact same thing could happen to them if they don’t fundamentally change the system. They organize a multiracial, cross-class coalition of workers across industries and fight for universal protections for working people; they reject the uneven, piecemeal, and solidarity-ablating benefits from singularly won contracts.
So analogously, it is the professional-managerial class—yet to be afflicted by despair, but still suffering the depredations of the health care industry—that could unite with imperiled working-class people to bring about a more durable, just, and prosperous future. Today, deaths of despair fall hardest on the least educated. Possessing a college degree appears to insulate you from the worst aspects of working-class life. But if the trends continue, who is to say that college-educated workers aren’t next? Highlighting these similar struggles, Deaths of Despair does service to the project of creating a powerful working-class movement bound together in the interest of alleviating a common nuisance, and creating a future worth living to see.