U.S. Millionaires: a Racial Breakdown

This video examines wealth through the prism of race.

It compares the share of the nation’s African-American, Hispanic, Asian-American and white populations who have net worth exceeding $1 million; net worth equals financial and other assets minus mortgages and other debts. If the fact that there is a racial divide isn’t surprising, the magnitude of it might be.

Other factors also have an enormous influence over who gets rich, and understanding this becomes increasingly important amid rising inequality. The biggest determinant of wealth is whether our parents are rich, as recent research has shown. Age and education are also crucial. That’s because older people have more time to save and accumulate wealth, and a college education typically leads to jobs that can add an estimated $1 million to the total amount that a worker earns over a lifetime.

But even when the data are sliced by age and education, there are deep economic inequities in our diverse society, as this video produced by Bloomberg Business shows.Learn More

Prescription drugs

Seniors Vulnerable to Drug Price Spikes

Total U.S. spending on prescription drugs by individuals, insurers and governments jumped 13 percent last year – the largest increase since 2001. One in four Americans report having difficulty paying for medications.

Older Americans are somewhat shielded from the full impact of rising drug prices by Medicare’s Part D program, which greatly expanded their coverage. Since Part D’s implementation in 2006, seniors’ average out-of-pocket spending on medications has actually declined, from $708 to $564 annually in 2012.

But a recent trend of price spikes for specialty drugs might be a snake in the grass for seniors on fixed incomes. Since most take multiple prescriptions, they face greater odds of needing at least one of these expensive medicines.

Drug cost stability for seniors “is starting to reverse as newer specialty drugs come into the marketplace,” said Juliette Cubanski, a senior Medicare policy researcher for the Kaiser Family Foundation. Part D plans “are covering these drugs and people are taking them, but the costs are going up.”

They include new breakthrough drugs that cure – rather than just treat – Hepatitis C, as well as medications for rheumatoid arthritis, multiple sclerosis, and cancer. Kaiser estimates that a senior who takes one of the 12 specialty drugs it analyzed can pay anywhere from $4,400 to $12,000 per year out of their own pockets, even after taking into account Part D’s subsidies. …Learn More

Social Status in the Age of Vermeer

A Lady Writing

A Lady Writing

By the 17th century, the Netherlands had developed a major financial industry and thriving maritime commerce in goods produced by the country’s textile mills, dairy farms, herring fisheries, and sugar refineries. The resulting large and diverse middle class supplies the rich subject matter for a portrait exhibit at Boston’s Museum of Fine Arts.

The paintings in “Class Distinctions: Dutch Painting in the Age of Rembrandt and Vermeer” are grouped into one of the three classes: the upper crust, the middle classes, and the laborers and indigent.

The Dutch elite – nobility, textile merchants, and wealthy landowners – commissioned portraits “to express and affirm their status,” according to exhibit materials. These paintings are replete with class symbols, such as the gleaming armor worn by princes to highlight their privilege as well as military prowess. The status symbols in the exhibit’s signature 1665 painting above by Johannes Vermeer, “A Lady Writing,” go beyond the silver inkwell and pearls on the woman’s writing table. Status is also implied in what she is doing: “The very act of writing tells us she is educated and literate and has the leisure time to write letters,” the exhibit states.

But in the Golden Age of Rembrandt and Vermeer, the true sign of prosperity was the Dutch middle-class, which was the largest and most highly stratified class. This big tent took in everything from trained professionals and skilled artisans to modest shopkeepers. Middle class people might be extremely wealthy shipbuilders, successful goldsmiths, respected barbers (who performed minor medical procedures), or modest tailors and bakers. They were also often defined by “the [investment] capital at their disposal,” which distinguished them from the rich who inherited their wealth and the poor who earned low wages by selling their unskilled labor.

The Shipbuilder and his Wife

The Shipbuilder and his Wife

“The very top of the middle class” can be seen in the above 1663 masterpiece, “The Shipbuilder and his Wife.” The shipbuilder, Jan Rijcksen, an investor in the Dutch East India Company, was so well-off that he could afford to commission a portrait by the most fashionable painter in Amsterdam: Rembrandt van Rijn. In the painting, Rijcksen is receiving an urgent letter from his wife, Griet Jans.Learn More

Poker chips

Is Betting on Fantasy Sports Addicting?

“The best adrenaline rush ever,” says one of the barrage of fantasy sports commercials broadcast into living rooms this football season.

An adrenaline rush is known to be a hallmark of addiction to other types of gambling, which can trigger the brain’s pleasure center much like the triggers in a drug addict’s brain, according to University of Cambridge psychologists.

Hundreds of thousands, perhaps millions, of Americans are playing fantasy football and other sports online for money. The Internet has made this so accessible that it could facilitate the rapid-fire betting associated with problematic gambling.

Playing fantasy sports is “as easy as ordering a pizza online … [or] texting your friends,” a relapsed gambler told the New York Times. He said he lost nearly $20,000 on football, tennis, and Japanese basketball. And losing is easy but the odds of winning are long: an investigation by the New York State attorney general found that 1 percent of players “receive the vast majority of the winnings” paid out by two prominent sports fantasy websites. …Learn More

Woman holding hurt knee

High-deductible Health Plans on the Rise

Health Plan Deductibles: ChartHealth insurance is really starting to hurt.

Premium increases and deductible creep, documented in the Kaiser Family Foundation’s comprehensive annual survey of employer health benefits, are eye-popping figures. Although there has been a slowdown in medical inflation and health care spending overall, the growing prominence of high-deductible plans is evidence that more of these costs are shifting to employees.

  • One in four workers today is enrolled in a health insurance plan with a high deductible – up from 4 percent a decade ago – exposing them to larger out-of-pocket expenses than traditional health plans if they become ill. [Kaiser’s definition of high-deductible plans is that they are accompanied by a tax-preferred savings plan to help workers pay their medical bills.]
  • These deductibles average around $2,000 for single coverage, but they exceed $3,000 for about 20 percent of single workers. Deductibles average $4,350 for a family plan, but nearly 20 percent face deductibles exceeding $6,000.
  • Average annual premiums for single workers in these plans range from $773 to $1,021, while family plan premiums are $3,660 to $4,407.
  • Everyone’s deductibles are rising much faster than premiums. For example, the share of the annual premium paid by all single workers with health coverage has increased 19 percent since 2010, to $1,071. But their deductibles have risen 67 percent, to $1,077.
  • Retiree health care trends, in contrast, might be stabilizing. Since 2009, the share of larger companies offering the coverage to retirees has bounced around between 23 percent and 28 percent.

Employers are also paying more for annual premiums, according to Kaiser – about $1,000 more per single worker than they paid in 2010 and about $2,800 more for a family plan.

But it’s clear from the data that this shared burden falls heavily on employees.

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Prime-Age Job Market Still Weak

Job Market chart

The job market appears in fine form. August’s unemployment rate, at 5.1 percent, is now at half of its Great Recession levels.

But while the media latch on to the unemployment rate in the federal government’s monthly jobs reports, economists like Gary Burtless of the Brookings Institution are interested in a different number that’s also part of the monthly update: labor force participation among people in their prime working years, ages 25 through 54.

They are the heart of the labor market, and the trend in their participation rate paints a bleaker picture of the job market, Burtless noted in a recent report. In August, the rate was just 80.7 percent – and still below the 83 percent level prior to the 2008-2009 recession.

Labor force participation is the percentage of Americans working or looking for work. It’s critical to how the job market’s faring, because when it declines it means that even people in their prime working years are giving up on finding a job, indicating underlying weakness in the job market.

On a brighter note, the percentage of prime-age workers who have jobs is rising, though this also remains below pre-recession levels.

Burtless concludes, “The labor market is healing, but the sustained drop in participation is an indicator that the job market is still some way from robust good health.”Learn More

Workplace Benefit Inequality

Inequality goes beyond the wealth and income disparities that frequently make it into today’s headlines. Employer benefits also flow more freely to people at the top.

The newly released survey of employers by the U.S. Bureau of Labor shows how stark the differences are.

The charts below compare the share of private-sector workers in the lowest income bracket who receive benefits – their earnings are in the bottom 25 percent of all U.S. workers’ earnings – with the share in the top 25 percent. Four benefits are compared: health insurance, the percent of health premiums paid by employers, paid sick leave, and – since it’s August – paid vacations.

BLS_2_Health
 
 
 
 
 
 
 
 
 
 
 
For the other charts, click here.Learn More

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