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US study shows one-third of adults suffer severe income fluctuations
By Josh Varlin 7 June 2017
A recent survey by
the US Federal Reserve indicates that income volatility—shifts in income from
month to month—regularly affects large shares of the US workforce and can be
extreme. Income volatility makes weathering unexpected expenses nearly
impossible for many workers, and compounds problems associated with low
savings, student loan debt and informal work in the “gig economy.”
published by the Consumer and Community Development Research Section of the
Federal Reserve Board’s Division of Consumer and Community Affairs last month,
is based on an October 2016 survey of 6,610 households. The survey collected
extensive data on respondents’ personal finances, employment characteristics,
income, retirement and other indicators of economic health.
The report’s shocking findings give some indication of the social
crisis confronting vast sections of the US working class. One significant
finding is that 32 percent of adults “say that their income varies to some
degree month to month, and 13 percent struggle to pay bills in some months due
to income volatility.” Forty percent of people with volatile incomes struggled
to pay their bills because of irregular income schedules.
Income volatility disproportionately affects racial and ethnic
minorities, with 70 percent of white adults reporting income stability compared
to only 60 percent of blacks and 59 percent of Hispanics. Moreover, blacks and
Hispanics are more likely to report that income volatility resulted in economic
hardship than whites, even after controlling for a number of factors.
Nevertheless, according to the study, “Non-Hispanic white adults
with a high school degree or less are somewhat less likely than those of other
races and ethnicities or those with more education to report that their
financial well-being improved in 2016.”
Seventeen percent of all US workers have variable schedules, with
half of these workers having schedules that could vary with three days’ notice
or less. Variable schedules are not only a contributing factor to income
volatility, they also make finding childcare for working parents extremely
difficult, especially if they are told they need to work last-minute.
Income volatility is often obscured in “snapshot” studies or
studies that look at annualized data, rather than looking month-to-month.
The New York
Times, in a May 31 article titled
“Steady Jobs, With Pay and Hours That Are Anything But,” highlights the burden
this places on working parents. The Times interviewed
Mirella Casares, a worker at an Ocala, Florida Victoria’s Secret clothing
store, whose variable schedule and low pay makes it necessary for her to
supplement her income as a waitress at Olive Garden. “The lowest hours I’ve
gotten is 15 and the highest I’ve gotten is 39,” Casares told the Times .
Her schedule at Victoria’s Secret, which frequently changes at the
last minute, makes it difficult for the 27-year-old mother to find childcare
for her two young children.
The Times also
interviewed Tomika Waggoner, a nursing home aide in Newport, Kentucky, who also
copes with income volatility. Her work schedule is largely determined by the
availability of care for her 15-year-old son, who has epilepsy. Waggoner, 44,
had to use a $700 tax refund to pay for graduation costs for her daughter and
some debt. Other families use tax refunds to pay for doctor’s visits.
Income volatility is also affecting broader layers of workers
besides the “working poor.” Diana Farrell, the president and chief executive of
the JPMorgan Chase Institute, told the Times,
“Only households that earn $105,000 or more a year are secure against the
volatility they are exposed to.”
Even middle-income households can experience monthly expenses that
shift by $1,000 or more. In the words of Jonathan Morduch, director of the US
Financial Diaries project, “instability and insecurity are increasingly a part
of middle-class life, too.”
Medical bills are often the cause of unexpected expenses, with an
accident or unexpected medical emergency causing financial difficulties for
months, even for middle-income workers.
The Federal Reserve study notes that 23 percent of adults faced “a
major unexpected out-of-pocket medical expense in the prior year” and that a
quarter of adults skipped some kind of health care in the past year due to
affordability. This was in 2016, after the implementation of the Affordable
Care Act, commonly known as Obamacare.
Ten percent of adults “are carrying debt from medical expenses
that they had to pay out of pocket in the previous year,” working out to about
24 million people.
Few US adults are prepared to pay for unexpected expenses. As
the World Socialist Web
Site has previously reported,
some two-thirds of Americans “would be unable to pay for an emergency medical
expense of $1,000, such as an emergency room visit or the cost of repairing a
broken-down vehicle, out of pocket.”
This has continued to hold true, with the Federal Reserve study
indicating that 44 percent of adults “say they either could not cover an
emergency medical expense costing $400 [significantly less than $1,000], or
would cover it by selling something or borrowing money.”
Many workers supplement their formal employment with “informal
income-generating activities,” including through participating in the “gig
economy.” Twenty-eight percent of adults participate in these informal
income-generating activities, which can include working part-time as an Uber
driver, for example.
Other findings from the Fed report include:
· Thirty percent of US adults report “either finding it difficult
to get by or are just getting by financially.”
· Almost a quarter of US adults “are not able to pay all of their
current month’s bills in full.”
· Only 27 percent of part-time workers and 8 percent of contract
workers are offered paid sick leave.
· “One third of borrowers with some college, a certificate, or a
technical degree are behind on their education debt payments, compared to 11
percent of borrowers with a bachelor’s degree who are behind.”
· Almost half of all black and Hispanic retirees report that “poor
health contributed to their decision about when to retire.”
These statistics indicate a social crisis in the United Sates
affecting wide layers of workers, far from merely a small “underclass” or
“precariat.” With contract, low-wage and irregular work increasingly common, it
is no wonder that US workers have economic anxiety and have little faith in the
Deaths from drug overdoses see largest increase in US history
By Genevieve Leigh
7 June 2017
Deaths from drug overdoses jumped by the largest margin ever
recorded in US history in 2016, according to preliminary data compiled by the New
York Times. While the precise number will not be available until December
due to the months it takes to certify an overdose death, the Times estimates
that in 2016 more than 59,000 people died from drug overdoses, a 19 percent
increase from 2015.
The scope of
this public health crisis is immense. Drug overdoses now far surpass both the
annual death toll from HIV/AIDS at the peak of the US epidemic in the late ’80s
and early ’90s and the number killed in the country’s peak year of gun
violence, 1993. It is now the leading cause of death among Americans under the
age of 50.
drugs responsible for deaths in recent years, accounting for more than half,
are opioids. More Americans have died from opiate overdoses in the last two
years than in the entire Vietnam War. Opiates include illegal drugs like heroin
and drugs that are often legally prescribed for pain, such as hydrocodone and
oxycodone (known by the brand names Vicodin and OxyContin, respectively).
synthetic pain killer, is the deadliest opioid and the drug that many blame for
the rising death toll. Since 2014, fentanyl and its cousin, carfentanil, have
proliferated dramatically. These drugs are extremely lethal. Less than half a
teaspoon of pure fentanyl is enough to kill 10 people. Carfentanil, which is
used as an elephant tranquilizer, is 5,000 times stronger than heroin. For a
human, an amount of carfentanil equal to a few grains of salt can be a lethal
Opioids, like many other highly addictive drugs, often sweep
through entire towns and regions. In Ohio, fatal overdoses more than quadrupled
in the past decade, according to the data analyzed by the Times. In
Dayton, Ohio the number of overdose deaths reported in the first 33 days of
this year is already more than half the yearly totals for the past two years.
The coroner’s office for the county, overwhelmed with corpses, was forced to
use refrigerated trucks to store bodies for up to a week on three separate
Kenneth M. Betz, director of the coroner’s office in Montgomery
county, Ohio, told the Times, “Our staff is, quite frankly, tired.
The doctors are tired. The investigators are tired. We’ve never had volumes
like this.” These workers, along with rehab clinicians, youth counselors and
emergency room staff witness the horrors of the epidemic on a daily basis.
responders on the front lines often see scores of overdoses in a single day
when a “bad batch” of one or another drug arrives in a town. Social service
workers in places like West Virginia and Florida have been flooded with cases
of children who need homes due to the circumstances of their parents’
addiction. The overall psychological toll of these experiences on workers is
is a problem confronting all types of people regardless of skin color, gender,
nationality or even income. However, the most devastating consequences of
addiction are felt by the working class and poor.
depressed areas with high poverty and unemployment, including regions
devastated by deindustrialization, have become breeding grounds for drug abuse.
Workers who suffer from job injuries and other physical ailments that come with
poor health insurance and bad living conditions often become addicted to
prescription drugs first before turning to the less expensive street versions.
prescriptions no longer suffice, or who have been cut off from their health
insurance, are forced to buy drugs on the streets in communities often wracked
by crime and violence.
character of the drug epidemic is most evident in treatment options. Rehab
clinics that accept state insurance are scarce, overcrowded and always have
long wait lists. Many have “one strike” policies in which an addict may not
return if he ir she does not complete the program, despite the fact that
experts put the relapse rate for opioid users as high as 80 percent.
combat the drug epidemic have largely been limited to impotent local- and
state-level measures. Many states, including Maryland, Arizona and Florida,
have declared states of emergency over the crisis.
companies have played a decisive role in fostering the opioid epidemic.
Prescriptions for opioids such as Percocet, OxyContin and Vicodin have
skyrocketed, from 76 million in 1991 to nearly 259 million in 2012. This is
enough to supply each American adult with “a bottle of pills and then some,” as
US Surgeon General Vivek Murthy put it last year. A report issued in 2013 found
that hydrocodone, the generic version of Vicodin, had been prescribed to more
Medicare patients than any other drug in existence.
companies go to great lengths to incentivize doctors to prescribe dangerous
addictive painkillers to patients. Companies like Purdue Pharma have gone as
far as creating promotional videos for advertising their drugs in waiting
rooms, and doctors are given incentives for reaching a certain number of
The state of
Ohio filed a lawsuit last week accusing five drug companies of abetting the
opioid epidemic. However, no major drug companies have faced any serious
consequences for their actions.
significant attempt to prosecute a pharmaceutical company was against Purdue
Pharma. In 2007, three of the company’s executives were charged with
misbranding the drug OxyContin and massively downplaying the possibility of
addiction. All three pleaded guilty due to the sheer amount of evidence against
them. The company settled with the US government for $635 million, a mere
fraction of what was made off the drug, which brought in over $30 billion in
sales over the two decades it was on the market.
prosecution did nothing to curb the profit-hungry pharmaceutical companies or
help the millions of people whose lives were destroyed by the drugs. A former
sales representative for drug company Insys Therapeutics recently spoke out
against almost identical practices. The whistleblower, Patty Nixon, said the
company developed a scheme to get the highly addictive drug Subsys to patients
who never should have had it. Subsys, which costs anywhere from $3,000 to
$30,000 for a 30-day supply, contains fentanyl.
NBC news that her job was to make sure Subsys got into the hands of “as many
patients as possible.” The drug was designed to be used on cancer patients, but
like many other opioids it has been widely pushed as a painkiller. One victim
of the scheme, Sarah Fuller, was prescribed the drug for chronic neck and back
pain from two car accidents. Sarah’s father told NBC News that when her doctor
prescribed Subsys, an Insys sales rep was sitting in the room with them.
Fuller’s prescription was tripled within the course of a month, she was found
dead in her house. Prosecutors involved in Fuller’s case say the company paid
hundreds of thousands of dollars to doctors in exchange for prescribing Subsys,
a standard practice. Insys founder Dr. John Kapoor is a billionaire and among
the wealthiest Americans.
profiteering of giant drug companies mirrors that of every other corporate
conglomerate, from the giant energy enterprises to agriculture and technology
companies, all of which subordinate human need, and sometimes human life, to
role of drug companies, the opioid epidemic is produced by a coalescence of the
ills of capitalism. It is the expression of a profound social illness—the
consequence of inequality, poverty, unemployment and a general feeling of
hopelessness that afflicts broad sections of the population, combined with an
economic and political system that leaves those most severely impacted by the
social crisis to fend for themselves.