It's education and healthcare, stupid

CC0 Pixabay via picryl

Experts are puzzled over American discontent while economic indicators ride high. Yet they consistently fail to recognize what seems to me an obvious factor: the exorbitant cost of education and healthcare.

My feeds have been awash in stories and analyses of the disconnect between economic indicators of a prosperous America and people's simultaneous sourness on their economic prospects. The Atlantic tackles the problem perennially (e.g., Apr. 2022, Oct. 2023, Nov. 2023, Dec. 2023, Jan. 2024). Yesterday I caught up on my podcast backlog with Paddy Hirsch and Darian Woods enumerating five explanations for The Indicator earlier this month.

To be fair, the explanations are multiple, complicated, and interrelated. Almost every writer fairly points to inflation as a capstone problem. As Hirsch put it, Americans care less about mathematical formulae than about strain on the wallet at the gas pump and the grocery checkout. 

Moreover, The Indicator helpfully told me, data show that even if wages are keeping up with inflation on average across the economy, that's not the experience of many, if not most, Americans. Wages in volatile markets, especially for young people who have the economic flexibility to change jobs more readily, are outpacing inflation times over. But wages in career tracks, for middle-aged and older Americans tied to mortgages and other responsibilities, are failing to keep pace with inflation. So yes, we're rightly frustrated when a smiling employer gleefully announces a wage hike, yet we somehow have less money in our pockets at month's end.

At the same time, I have been frustrated repeatedly by writers' and analysts' failure to recognize an elephant in the room: the exorbitant cost of education and healthcare in America. The problem is amplified by inflation, but it's not a byproduct of inflation, and it won't be remedied by any number of interest-rate hikes.

Let me interject that there is an overarching problem as well that analysts often fail to recognize, which is simply that economic indicators are not interchangeable with human happiness. American culture habituates us to equate, mistakenly, economic prosperity with personal joy. Yet ample social science data gathered around the world show that wealth, whether societal or personal, does not necessarily correlate with happiness; much less is it causal. And see Matthew 6:19-24. A productive society by economic measures is not necessarily a society that produces art, that affords opportunity for recreation and leisure, or that values freedom for individual and interpersonal fulfillment.

Even by economic measures, though, healthcare and education are anomalous sectors. As a matter of morality, healthcare cannot be left to the free market—and I say this as an economic conservative—because the essentiality of healthcare for survival makes any bargain inherently unfair, any playing field invariably unlevel.

Similarly, education, at least in part, also must operate extrinsically to the free market for goods and services. Education does not guarantee upward economic mobility. But upward economic mobility is profoundly unlikely without education. And a market has no incentives to provide educational opportunity as long as labor is abundant.

Consider: A society based on slave labor might look marvelous by economic measures: full "employment," efficient resource distribution, pyramid-building productive capacity. Yet there is zero potential for laborers' upward social or economic mobility. In America, we purport to abhor servitude and to prize socioeconomic potential as "the American dream."

Both healthcare and education are therefore imperative in our society; their absence, or unattainability, is hard felt. But the free market will provide neither in adequate supply. Healthcare will be unattainable for those unable to pay the going price. Education is a byproduct of a healthy economy only insofar as it is necessary to ongoing productivity. The economy won't provide for retraining as long as labor is abundant, and upward mobility is not even on the board.

This isn't an abstract problem. This is what Americans feel on the ground.

I went to the ER in the fall.  I was in the hospital for maybe seven hours, out-patient.  I am lucky to have insurance that covered most of the roughly $15,000 cost.  I am blessed with employment that allows me to cover without much strain the roughly 10% of the cost allotted to me. 

But for many Americans, in many instances, medical treatment is unaffordable or entails bankrupting medical debt. People choose to live with pain—not economic pain, but real pain, sometimes a toothache, sometimes terminal illness—because they can't afford healthcare. 

Why would we expect that people suffering with pain and ailments, unable to see doctors, would ever report feeling good about the economy?

My wife and I make decent money (for now). By some measures, our U.S. household ranks as high as the 93rd percentile by income. By tightening our belts for a few years, we mostly managed to put our one child, after public K12, through a bachelor's program. Still, she had to borrow about $50,000, much of it at 6.5%, to close the gap for four-year university. And we co-signed on those loans even while we were still, in our 40s, paying off our own higher-education debt. Neither our education debt nor the mortgage on our modest home discounted our income on the FAFSA that blithely informed us of our ample capacity to pay for college. And again, we're lucky and blessed. We could make it work.

For too many Americans, the cost of higher education is crippling or prohibitive. To my point, the economy doesn't care about education other than an efficient means to an end. The only relevant question is whether the hamster wheel is still turning. There's no need for people to better themselves, their lot. 

Why would we expect that people without hope for a better life for themselves or their children would ever report feeling good about the economy?

Education costs and debts work an enormous strain, financially and emotionally, on Americans. Healthcare costs, sometimes risks, sometimes debts, work an enormous strain, financially, emotionally, and physically, wearing us down, day after day.

And here's what really gets my goat: Things don't have to be this way. My cousins in Canada and Europe don't suffer under these strains. They have affordable healthcare and education. They are free to move about their lives.

My cousins pay more in overall tax burden—but not much more, and maybe less if I factor in my lifetime healthcare and education costs, as well as property taxes. And don't get into it with me over quality. As to education, I teach in Europe, and my students there are, to be frank and on average, better equipped as liberal arts undergrads than my American 1Ls, not for lack of work ethic. As to healthcare, I haven't met my primary care doctor since three primary care doctors ago. The reason I went in the fall to the ER, where I waited for five hours to be seen, was that neither my primary care network nor any area urgent care had a single opening. My "best healthcare plan anywhere in the world" must have been mislaid with my jetpack.

Can you imagine an America in which a university degree or a hospital admission would not have to be followed by years or decades of monthly payments? in which people could retrain for better jobs without incurring crippling debt? in which people could change jobs without sweating the burden of massive debts or the risk of losing access to life-saving medicine for themselves or their families?

That would be a free market. A level playing field. 

That's not what American corporations want. So that's not what Congress wants.

It's ludicrous (ludacris?) to expect that people—consumers—would radiate joy about a rosy economy as long as they're shackled, compelled to run the hamster wheels of a market that's not really free.