Factually! with Adam Conover - The Stunning Decline of American Life Expectancy with Anne Case and Angus Deaton

Episode Date: April 29, 2020

For generations, American life expectancy has only improved. Then two economists discovered that for one group in particular, it’s actually falling: White Americans without a college degree. Nobel Prize winning economists Sir Angus Deaton and Anne Case join Adam this week to explain the causes of what they call “deaths of despair", and why capitalism is at the root of the problem. Learn more about your ad choices. Visit megaphone.fm/adchoices See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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So if all of that sounds good, if you want a big box of delicious snacks like this for yourself, use the code factually for $15 off your first order at Bokksu.com. That's code factually for $15 off your first order on Bokksu.com. I don't know the way. I don't know what to think. I don't know what to say. Yeah, but that's alright. Yeah, that's okay. I don't know anything. Hello, everyone. Welcome to Factually. I'm Adam Conover. And hey, I'm coming to you live once again from my home recording studio. Got a brand new microphone, put in the investment to get for this week, I want to take a little bit of a break off of this one issue. And I want to talk more about one of the ways, one of the hidden ways in which America has drastically changed over the last couple of years. Now, look, a lot of bad shit has happened since 1900. We've had two world wars, a variety of famines, a bad season finale, a Game of Thrones. But despite all those disasters, there's been a plausible narrative of constant progress in American life, that things are always getting better.

Every generation is doing better than the one before it. Right. Just to give you one example, we're constantly living longer. one example, we're constantly living longer. Between 1900 and 2013, the average American life expectancy increased by 30 years from 49 to 79 years. That's an incredible, incredible improvement. Now, let's talk about what it used to look like back then. If you go back to 1900, one in 40 people would die every year. That's a huge number. And children accounted for half of all deaths. Like imagine a world where preschools had a 50% graduation rate because half the students would die before graduation day. Yeah, times were really dark back then. So what was killing all these kids? Well, largely it was infectious disease. But through the first half of the 20th century, this situation

changed dramatically. Improved sanitation, cleaner water, increased immune resistance for better it was infectious disease. But through the first half of the 20th century, this situation changed dramatically. Improved sanitation, cleaner water, increased immune resistance for better nutrition, and the introduction of antibiotics led to a 90% decrease in death from infectious disease in the first half of the 20th century. 90%! Again, that is a huge improvement. In fact, we made so much progress curing and preventing infectious diseases that by the 50s, the big killers were cancer and heart disease, lifestyle diseases. You know, I guess once people weren't so worried all the time about their children dying, they had time to take up new hobbies like smoking. Hey, but then those problems went down drastically as well because we got, you know, smoking cessation into the culture. We had new

treatments, better diets, heart disease deaths went down and cancer deaths followed. They still killed many people today, but not nearly as many as they killed back then. So this story about life expectancies rising since 1900 is one of dramatic, almost miraculous improvement. Whether you are young or old, you are likely to live longer from that age than you would have over a century ago. That story of constant improvement seems to be true. And the 20th century led us to believe that progress against death is inevitable, unending progress forever. That is, until two scholars dove into the demographic data and discovered something shocking. data and discovered something shocking. In this century, the 21st century, there has actually been a hidden epidemic of deaths, an epidemic that trashes that narrative of constant progress.

And look, I know the epidemic we're all thinking about right now is COVID-19, but this epidemic is just as and possibly even more powerful. And it's one we need to take extremely seriously. Here's what it is. For white Americans without college degrees, life expectancies are actually going down. This has never happened before. Remember, our narrative of the 20th century is constant progress, life expectancies constantly improving because of new medicines, new treatments.

So what could the reason be for a sudden dramatic decline, especially among a group, white Americans, that we think of as being dominant or more fortunate in American culture? This trend, and it really is a real trend, it really is happening, it completely scrambles so many of our notions about America. And it also illuminates some real brutal truths about our society that we would not see otherwise. Once you dig in to why this is happening, it will change the way you view America forever. And to help us do that, we have today, this is so cool, I'm extremely honored, we have the scholars who discovered this startling trend on the show today. This is one of the biggest sociological discoveries of the century,

and we got them on the show. They've just written a book examining the reasons behind this social catastrophe. It's called Deaths of Despair and the Future of Capitalism. Please welcome Anne Case, an economics professor at Princeton, and Sir Angus Deaton, a Nobel Prize winning economist affiliated with Princeton and USC. I know you're going to love this conversation. They're delightful. They're penetrating, and they have so many fascinating things to say. Please welcome Angus and Anne. Well, Angus and Anne, thank you so much for being on the show. Such a pleasure to be with you. Thank you.

So, you know, we're talking remotely because COVID-19 pandemic is still with us, and I believe will still be with us when our listeners hear this. And, you know, to a certain extent, maybe it seems odd to talk about this issue when there's a lot of sort of more emotionally hot deaths and disease that we're dealing with on a daily basis as a country. But what you discovered is really a more pernicious underlying story of death in America that is really striking. Can you tell us what these deaths of despair are and how you came across them? Sure. So we use deaths of despair as a shorthand for death from suicide, drug overdose, and alcoholic liver disease.

And, you know, as tragic as it is that upwards of 200,000 people might die of coronavirus, annually 150,000 people in America die from one of these deaths of despair. Every year. Every year. Every year. So just puts that in perspective a little bit, but that often happens under the radar. Do you want to pick up how it is? Yeah, and you put it in the context of the coronavirus. This will go on long after the coronavirus is gone,

although we're supposing and hopefully that the coronavirus is gone, although we're supposing, and hopefully, that the coronavirus will go. And this is, you know, revealing, you know, a deep dysfunction somewhere in American society. And we think of it as the, you know, capitalism, as it's configured in America today, really is not serving less educated Americans. So tell me about why this discovery or this trend that you found is so surprising to you that it's so remarkable. Because, hey, you tell me 150,000 people die a

year due to those causes. Maybe I say, yeah, that sounds normal, perhaps. I mean, unfortunate, but I don't understand demographic trends. So, but you saw this and you were stunned by it. Why is that? Well, we saw it the other way around, actually, in some sense, that what we did was we were working on, we promised to write a paper on suicide. And so we came at it from a little bit of this, which was that we noticed that among white non-Hispanics in midlife, suicide rates were rising. Well, as you say, you could put that in a category and say, okay, so what? Suicide rates go up and go down. But then what we thought was, when we wrote this

up, it would be a good idea to see what was happening to all deaths in middle age for white non-Hispanics, just to see whether suicide was contributing to this or not. And that was when we found the really astonishing thing, and this is what made people sit up and pay attention, which was that all-cause mortality, I mean, just death rate for people in middle age, after declining for a century, you know, with odd breaks here and there, but after declining for a century had stopped declining and actually begun to climb. And that was really, really big news. That's not supposed to happen. So, you know,

even if you say, well, okay, 150,000, you know, what's the normal number for the normal numbers, quite a lot less than that, but nevertheless. And then we discovered that the fastest rising things that were contributing to this total increase in mortality were the things we were looking at, suicide. But then what are the other ones? Well, it was drug overdoses. And then after drug overdoses, it was alcoholic liver disease. Some people might even add some of the diabetes, the obesity, other parts of this epidemic. But we've kept it fairly narrow just because we didn't want to risk overstating the case. And it's also the case that, like, is it a big deal or a little deal?

Well, it was a big enough deal that it made life expectancy fall for three years in a row in the U.S. And that hadn't happened in a century. Overall, across all people, life expectancy? Across all people in the U.S., life expectancy fell for three years running. And it was also the case that this was happening to whites in the U.S. during a period of time

when all-cause mortality and these deaths of despair were falling for African Americans, they were falling for Hispanics. And so there was something different about what was happening to whites. And when we just dug a little farther, it was only happening to whites without a four-year college degree. So whites with a college degree look just like Europeans. Things continue to improve, their lives were good, their pain levels were low, their mental health was stable. So what we found was that this group of whites with who hadn't been to college for four years were at risk not only of what we would call morbidity,

which is ill health, but there was a real body count. And I think it was the body count that got people's attention. So tell me a little bit more about how prior to this, you said life expectancy had never gone down this way for three years in a row. We had never seen death rates increase for this group before. Why is that? We've had this long trend of just improved life expectancies in the United States because of what modern technology, medical advances, better nutrition, all the sort of fruits of civilization. All of the above. But since 1970, two things happened that were really important. One, there was behavioral change. A lot of people stopped smoking once they fully got the message about the link with lung cancer. And at the same time, onto the market came these inexpensive,

really effective antihypertensives, so controlling blood pressure. So heart disease mortality, which is one of the engines for progress against mortality in the 20th century, just improved dramatically. So we see that all around the rich world, that mortality rates fell. And, you know, if you go back to the beginning of the 20th, sorry, the beginning of the 20th century, yes. The causes of death were very different then. Many children didn't live to see their first birthday. The leading causes of death were tuberculosis and influenza.

And, you know, what happens ever since the middle of the 19th century, when progress against disease really started, you check off one disease against another, you find a cure, you clean up the water supplies, which brings down infant mortality a lot. You find as people get better and get better housed, tuberculosis goes away. And then as Anne said, at the end of the century, you're talking about people quitting smoking and antihypertensives for controlling blood pressure. So all of this is unfolding all around the world in which life expectancy at birth, the number of years you can expect to live, is steadily increasing. And you

get occasional things where it goes flat for a year or two, but, you know, it hasn't gone down in America since the last pandemic, which was 100 years ago, or it hasn't gone down for three years in a row. Since the Spanish flu. Yeah. Yeah. So those are all, when you look at that list, those are all major explanations for why life expectancy would improve. I mean, the whole country quit smoking, basically, or at least a large number of people do. You have these major medical advances. You've got, you know, major public health initiatives. Cleaning up the water supply, right, is obviously a huge advance. obviously a huge advance. So it seems like, yeah, if you see the number going in the other direction, it must take something as huge to make that change. What are the explanations that you

have looked at for these rising deaths? So the rising deaths from alcohol, liver disease, and suicide, and drug overdose. We've just finished a book on this subject because we really wanted to take a deep dive into this. And what we found surprised us a little bit, I think. It has very little to do with current economic conditions. We saw these deaths rise before the Great Recession, during the Great Recession, and continue to rise after the Great Recession. It's very hard to find the Great Recession in our trends for these deaths of despair. But we think we have to go all the way back to the early 1970s when globalization and technical change started to really gain traction in the U.S.

And wages began to fall for less well-educated workers. Jobs became less secure. Without a good job, it became much harder for people without a B.A. to get married. So that people started to cohabit. But in America, those cohabitations are quite fragile. So we move in together. We might even have a kid. But then we break up.

We both repartner. But the father of the children may not know his kids. So work life is fragile. Home life is fragile. And so it becomes kind of like a Durkheimian recipe for suicide, that social integration really breaks down. And we think of, let me try to put this carefully, all of these deaths are in some sense self-inflicted, right? So suicide is most obviously so, but also, you know,

if you deal with your unhappiness or your depression by hitting a quart of scotch every night when you come home from work or, you know, if you… Numb yourself out taking opioids. Opioids and drugs and so on. So those are, you know... So we thought of suicide as a metaphor that these are all, you know... But it's not true that people who are dying of alcoholism, for instance,

necessarily want to die. You know, one psychiatrist who treats addiction said to us, I have patients who say, you know, this is going to kill me. I don't know how I'm going to get out of this without dying, and yet I don't want to die. You know, help me. So that's different from someone, you know, who shoots themselves. But nevertheless, this Durkheimian view of society having come apart, of alienation, of the sense in which people are not attached to their communities and other people anymore, or that attachment is fading slowly over time, is a very strong way of thinking about all these deaths. And how did you come to that conclusion?

Because it strikes me that, hey, you know, figuring out, well, we improved the water supply, we quit smoking, you know, that's a very clear correlation. But the conditions that you're talking about are much more diffuse. They're much more subtle. They're much more our character as a society and general societal breakdown. I mean, this is sociology leading to, you know, health outcomes. for years talking about the fact that without good jobs, people can't get married and their world starts to collapse around them. So we've read quite a lot of the accounts that sociologists have brought us. And it's hard for us because we have death records. So any one of us can go online and pull down millions and millions of death records, which we've done. The death record has education, which is how we can say that this is happening for people without a bachelor's degree, but not for people with a bachelor's degree. Unfortunately, it doesn't have on there, what hope did you have for the future, right?

Or what was your worldview or have you lost faith in yourself? So we don't have those on the death records, but what we can do is try to triangulate, sort of look over time and see when this hit and see the extent to which there's a really close articulation between between the fall in wages for men without a college degree, which started back in the mid-'70s, and the uptick in these over time of these three causes of death. You say we know that cigarette smoking causes deaths. We didn't then. And in fact, the greatest statistician

of the 20th century, Ronald Fisher, never, he went through his grave believing that smoking did not kill people. And, you know, that's as much a sociological phenomenon. People have been telling that story, have won this argument. And so I don't think you want to think of our arguments as very different from those sort of arguments sort of idea and do you see this regionally at all if you look at uh particular regions that have had a you know uh higher decline in wages or or a more stagnant economy do you see uh higher deaths of this type in those places it's that also hard to do. There have been people who have done deep dives into very specific plant closings, for example, and looking at what happens to suicide

then. But what we see actually is that this is happening throughout the U.S. In every state, all three causes of death have risen from 2000 through 2018. There was a small downturn in drug overdose deaths last year, the last year being 2018. That's the last year we currently have data for, which could largely be explained by the arrival of naloxone, Narcan. Five million units of Narcan were distributed in 2017. So it may be that 2017 was a high watermark for drug overdose deaths. We don't know that yet. We're waiting to see. But it happens and it's happening in inner cities.

It's happening in rural areas. It's happening in the suburbs. So the rural areas have gotten a lot of attention in the press. They like to make it into a story about rural America. And certainly it's happening there, but it's happening everywhere. But it's also true that some of the drug companies like Purdue targeted areas where there'd been a big loss of employment and where people were in despair. And they pushed doctors, pushed enormous amount of pharmaceutical pills, opioids, into those communities.

On the other hand, those people don't die from alcohol poisoning very much because, you know, for religious reasons, most people in West Virginia are Baptists who don't drink. And in other places, alcohol was much higher. So you get this increase in deaths of despair pretty much everywhere. Well, it strikes me that one of the reasons that this gets connected rhetorically to rural America is that the trend you're talking about is among white men and women. White men and women, excuse me. Yeah, yeah, yeah. There's been almost, in terms of increase, the increase has been almost identical for men and women. Men have been

more likely to kill themselves in these ways, have always been more likely, but the increases have been almost identical. It's worth thinking about that a little bit because, you know, about half the reporting of our work says it's men, And every single thing that we've written that this increase is sort of in parallel for men and women. Wow. And that's an interesting sociological phenomenon because people don't seem to be able to imagine that these deaths are, you know, these drug deaths, these alcohol deaths, these deaths are, you know, these drug deaths, these alcohol deaths, these suicides are happening among women too.

And I made the same mistake. Why do you think that is? Why do you think that? I think it's just really hard for people to think that women would kill themselves in these ways. And if you go back far enough in the data, women didn't. But that changed. As far back as we can put education on death records, which is back to about 1990,

the trend up for women has sort of matched the trend up for men. So, again, let's be careful about that. The rates are lower. Women are less likely to kill themselves than men. They're less likely to die of drug overdoses. But the increase since the mid-90s, which is the trend of death and despair, is really parallel for men and for women. Which again, as you say, how do we know this is the explanation?

Well, that's an important part of the story. It's men and women. So it's like something to do with the community, not something that's happening to threaten white men's manhood or something. And also the fact that it's less educated people is incredibly important too. And, you know, Sarah McClanahan and Andy Cherlin and Bob Putnam have been writing for years about this bifurcation in society between people who have a BA and people who don't have a BA, and that this class bifurcation, if you think of class in terms of education, has become much, much more important in American society over the last 20 or 30 years.

One more piece of this puzzle that maybe we should put on the table is that the first paper we wrote on this, we wanted to be very specific. So we looked at 45 to 54 year olds. And so in some write-ups, it became sort of a baby boomer problem. But the truth is every generation following the baby boomers is at higher and higher risk. So Gen X has a higher risk than the boomers, Gen Y higher than Gen X, and so on. So unfortunately, it's not going to be a problem where if the boomers would just exit stage right, we'd be okay again. It looks like younger people are at higher and higher risk. Because they're growing into the same patterns as their parents. Because they're growing into the same patterns as their parents.

And their lives, well, the story we tell in the book is that we think that they don't see prospects for themselves. They don't see hope for the future. They've stopped believing in American democracy. And probably rightly so. They don't see it that it's working for them. So a fair fraction of them end up in very bad situations. Of course, we're talking here about people starting at age 25 because everything depends on whether or not you have a college degree. And at age 15, we can't tell that yet.

Right. Now, I think one of the most striking things about this is that you said it's men and women, but specifically white men and women. And that runs contrary to a lot of the story of America. We we tell ourselves that, you know, hey, nothing better than to be a white person in America. Right. That's the then you're the luckiest person on Earth automatically. better than to be a white person in America, right? Then you're the luckiest person on earth automatically. And the story that you're telling, the data that you've collected runs contrary to that. Why do you believe that it is, what about this would be affecting white people more than other folks? It's a really good question. And that was one of the really shocking things when we first

started doing this work, because you think African Americans have always faced racism, right? On average, they have less education. They face discrimination. So when something happens to whites, it's really startling. And we grappled with that for a long time. And the way we've come to think about it is that this is just the wheel coming around again, and this is the time it's coming around for the white working class, that there are a lot of parallels, not perfect, but a lot of parallels to what happened to African Americans in the late 60s and in the 70s when manufacturing left the inner cities. And as the jobs left, men became less marriageable, out of wedlock childbearing went up. On top of that, there was a crack cocaine epidemic. And so we think that a lot of what happened then also because of the Fair Housing Act

at that point, a lot of distinguished leaders in the community would have moved to better neighborhoods. So there would have been a vacuum of leadership that was respected and that helped keep a society together. And so what we see now for the white working class is loss of jobs, loss of marriage, increases in out-of-wedlock childbearing, and on top of that, an opioid epidemic, so that when they threw OxyContin onto the ground, the ground was really fertile for addiction. Right.

So it's the... Blacks escaped this. They got it first. Yeah. And the opioid epidemic as the modern version of the crack epidemic, but for a different group. Yes.

Yeah. I mean, it's not perfect, obviously. There are a lot of things that are not parallel, but we think of this now as being that if you look at the data for, say, life evaluation or hope for the future, what you find is that African Americans and whites with a college degree look a lot more alike. And African Americans and whites without a college degree look a lot more alike. So it seems to be bifurcating much more on education than on race. Of course, the big difference there is that blacks are much less likely to hold the VA than whites.

Yeah. Well, on that note, let's take a really quick break. And when we get back, I want to talk more about the social causes of this and what could potentially be done to reverse it. We'll be right back with more Angus Deaton and Anne Case. So Anne and Angus, you spoke at the very beginning about how the American system of capitalism has some culpability here in this trend. Why do you say that is? Can you expand on that point? Well, let's start with the most obvious thing. There's huge culpability for this opioid epidemic.

Right. So that's the easy one. That's the problem of capitalism, yeah. Well, it's an aspect of capitalism. We have a health care sector, which is basically making profits. That's the easy one. That's the problem of capitalism, yeah. Well, it's an aspect of capitalism. We have a healthcare sector, which is basically making profits. We have an FDA, which approved these drugs in a way that they were not approved in other countries. And other rich countries do not, never allowed those, you know, they use them in the hospitals, and they use them in the clinics, but they don't send people home with 40 oxycontin. And so that sort of ignited this epidemic. They also don't let the salesmen for the pharma companies go around doctor's office pushing these

things. And, you know, they don't pay off the politicians or stop the DAA enforcing the rules for mass transportation of opioids, which are essentially heroin and a pill, to pharmacies in small towns in West Virginia where there are only 300 people and they have 3 million opioid pills. So, you know, that's an aspect where capitalism should never have been allowed. It's not a flaw in capitalism. It's just that capitalism should never have been allowed to run those markets in that way, right? I see. And other countries have capitalism. It's just that capitalism should never have been allowed to run those markets in that way, right? And other countries have capitalism. There's capitalism in Germany, Britain, France, but they don't allow that sort of stuff to happen. So that's one big thing.

And are these trends at all visible in those countries or not at all? Almost not at all. So we're beginning to see though in the English speaking countries, they're having small epidemics, but they pale in comparison to what's happening in the US. Except possibly for Scotland, where I come from, which if you've ever seen Trainspotting has always had a bit of a drug culture and a bit of a drug problem. There's one issue here that's worth mentioning, though. Ever since fentanyl became easily manufactured, that's spread into all sorts of places where there were not drugs before. The Europeans are

very worried about that. It's gotten into the African-American community in the U.S., so their deaths have been rising for the last five or six years. And so the drugs are a big part of this. But, you know, we switched from largely legal, which ignited this epidemic in the U.S., to largely illegal, you know, street fentanyl, street drugs. But that would not, that epidemic would not have happened without the legal epidemic to start with. But the other part of this that's really important is that the U.S.'s health care system is leading, we think, to the decline in jobs for less educated Americans. We have the most expensive health care system in the world. And when I grew up, I was raised on the idea that we were the healthiest people in the world. And when I grew up, I was raised on the idea that

we were the healthiest people in the world. And that is not true. We have a lower life expectancy than any other rich country. And if you look just at measures of health, markers of health, our health is poorer as well. So we spend double what most European countries spend as a fraction of GDP on our healthcare, and we don't get much for it. And the way we fund that really expensive healthcare is through employers. So employers who have to health care premiums for their workers see those premiums going up and up and up, so that currently a family policy will cost $21,000 a year. So if you have a worker who's only worth $30,000 to you, and you have to pay 70% of this $21,000 policy for the family, you do what you can to shed that worker. So those workers...

Or make that worker into a freelance contractor. Yes, indeed. So that's... And then people are then not attached to corporations where they would have possibly a ladder up, where if I was smart and I worked in the motor pool, I might get a desk job. And then if I worked hard, I might end up in administration.

And that's my grandfather's story. Yes. Yeah. It's a lot of grandfather stories. And those jobs just don't exist now in the U.S. because of, we think, and largely because of the fact that we let health care costs rise so dramatically. We pretend it's a free market, and it's not a free market. Health care cannot be run as a free market. So we've been talking a lot, you know, the last year or two in American politics, obviously every, you know, presidential debate covers this, that, you know, the cost of healthcare

in America. But I've never heard this argument before that, that high healthcare costs actually reduce jobs, reduce the quality of jobs and reduce the number of jobs because the expense on the employer is more than the employer will pay. But again, that's not just because it shifted to the employer, it's because it is simply so expensive in America. It's like a massive invisible tax. That's right. In fact, thinking of it as a poll tax. I mean, the problem is that that family policy costs pretty much the same whether you're earning $300,000 or you're earning $30,000, right? Because you're talking

about maintaining someone's health or paying for healthcare. And so, you know, for the executive who's earning off a million dollars, the $20,000 family premium is no big deal. But for a janitor or security guard, $30,000, the employer is only prepared to pay $30,000. If they have to pay $10,000 or $20,000 for healthcare, they're not going to hire the person. It just doesn't make sense. It's interesting though what you say, because this has not been much in the public debate. You hear an enormous amount of public debate about raising the minimum wage, for instance, right? And they say, well, debate about raising the minimum wage, for instance, right? Yeah. And they say, well, if you raise the minimum wage, employers are going to fire people. Well, this is just the same.

I mean, it's like a huge increase in the minimum wage as far as the employers are concerned, and they're going to shed people. of the next year, right? Always supposing this is dealt with well, the insurance companies are going to be out a huge amount this year and paying for all this healthcare. You know, people are lucky enough to be insured and they're going to come back with huge increases in premiums next year. Right. Cause we all basically crashed our cars and now our auto insurance is going up.

Exactly. That's right. Yes. And maybe that'll break the system, which in some ways would be good. And so we think part of the reason that the wages for less skilled workers have been falling since 1970 is because health care costs have risen so dramatically over that period. So that these workers are, if they're lucky enough to get a job,

the job comes with lower wages because a lot of it's going into their health care premium. And actually, a lot of people on the right would say, okay, they're getting these health benefits. Maybe their wages are going down, but if you add the health benefits in, they're not doing so badly. But the problem is they can't put food on the table with the health benefits and the health benefits are costing so much because doctors are paid so much

because devices cost so much because the whole health care system is incredibly expensive and and the um fpc was kind of asleep at the switch in allowing hospitals to merge and merge and merge. And when hospitals merge, you would think the synergy should lower the cost, but just the opposite happens. There's been really good recent work on this by economists really finally nitpicking through all these mergers and finding the extent to which the costs rise when the mergers take place.

The other place that people don't connect the dots is that, well, education now is just super expensive. Going to college costs a lot of money. Yes. But we had a once great state university system. Yes. Tuitions were low. But now the states have to pay their share of Medicaid.

And their share of Medicaid, the expense goes up and up and up. And there's less money in the state coffers to cover tuitions for in-state kids. So the ability of kids to go to college is really reduced by the healthcare costs that we're paying. So it's another place where it's not obvious that the dots connect, but they certainly do. So you look at where, yeah, if you, it almost, visualizing it as streams of money money it's almost like streams of money are like coming out of this entire uh like major class in america the entire working class population being funneled towards the health care system instead of towards education because the costs there are so exorbitant as well and so you end up with this group that is undereducated for our economy,

also in poor health and unable to work. Yeah, all those things. And the feds, of course, pay for a lot of health care too through Medicare. And until the recent events, if you look at what's determining all these government deficits, as far as the eye can see, if you look at what's determining all these government deficits, as far as the eye can see, it's healthcare, it's Medicare. And so it's getting at the states, it's getting at the feds, it's getting at the employers. And a lot of people who don't have insurance or who now have lousy insurance, that's the other way employers deal with this.

You get insurance where you have really high deductibles. And so people are taking those insurance policies often because they don't have any choice or they can't afford a better one. But then they get sick and they're having to pay enormous sums of money. Insurance and name only. I just wanted to say one other thing about cost,

which is the next most expensive country is Switzerland, where it's 12% of GDP currently. It's 18% in America. So if we just didn't go to the average European country, but we went to the Swiss fraction of GDP, we'd save over a trillion dollars a year, which is a big money. Now that doesn't look like it. No, a trillion is a lot. A trillion is a lot, Anne. A trillion is $8,300 a family. Like that would go a long way for helping people keep body and soul together.

It's also 50% more than we spend on the military. And that's just the waste. That's just the waste. That's just we could do that much better. But we have a health care system that has five lobbyists for every member of Congress. Wow. December 2019 because private equity and hospitals leaned on important members of Congress and got the, you know, removal of surprise medical bills out of the budget package. So if we can't even remove surprise medical billing, you know, we worry that something really bad is going to have to break if we want to see real change.

And the coronavirus may be doing that for us. We're all going to get a huge surprise medical bill. It does seem that coronavirus is a 9-11-sized event that everything is going to be different afterwards, or at least it's going to change a lot of things. And what's more likely to be changed by it than our healthcare system. I don't know how it's, the future is a black box in this way, but, uh, well, let me ask about this. Uh, we've also been talking about how, uh, uh, folks with the, this is really a story of folks who don't have college degrees, who don't have BAs.

And you spoke about the class system that is developing between folks who have BAs and folks who don't. Why is that? Why do we see that bifurcation? What has happened to the economy for folks who do not have college degrees? It's a pretty familiar story that, you know, now people used to use, in the old days, people used their hands. Now they use their brains or computers. And so people in education have a huge advantage and there's enormous number of tasks that are only really doable by people with a college degree, Or maybe they're not, but that's the way the world is set up. We sort of valorized having a college degree.

So a lot of employers are not going to, you know, go for someone who doesn't. There's also been a big political change, which is, you know, the Democrats used to be the party of the working class. And after 1970, they sort of became a party that allied educated elite with the minorities. And so, you know, the white working class was sort of left out of that deal. And, you know, the Republicans were a party of business, essentially. And there was no one left who was really rooting for these people.

And that, I think, has been problematic, too. So some very large fraction, I think it's over two-thirds of people without a VA, think there's no point in voting because elections are controlled by big business and the rich. There was a real hollowing out of jobs in the middle. David Autor, who's at MIT, has written on this very well, that jobs you could do with a high school degree, they could be clerical jobs or they could be administrative jobs, but you didn't need a BA for those jobs and now those jobs are not available to people without a BA. So it used to be the case if you

with a high school degree you could move to a city and the city wages for people with a high school degree were higher than the wages that were available where they came from. Yeah. But now there's really no point in moving because the jobs in the cities aren't available to them. Really? Yeah. Because I've often thought that, you know, I've heard the argument that, hey, one of the big problems in the economy is the sort of regionality of the economy, that like cities have become economic engines and that helping people,

you know, be more mobile that, hey, one of the advantages I had, A, was my BA, but also my ability to move to New York City after college and other folks, you know, say, you know, maybe, hey, they're still in the depressed smaller town that they grew up in and are having trouble launching out of that. And I've often thought, oh, yeah, maybe if those folks just had the chance to move to New York, right, that they would have had opportunity. But you're saying that that is actually not the case, that you still need the degree. That used to be true, but it's not true. And over time, it becomes less and less true. And in most of these really successful cities,

the housing prices are prohibitive. I mean, Los Angeles is bad enough, but try San Francisco. Well, and in many of these cities, like, I mean, in, you know, even in my, this was, this was now 15 years ago, but in my, you know, twenties in New York, you had to have a parent be a guarantor on your apartment application because they wouldn't take someone, you know, even if you had a job, they'd say, no, we actually need somebody with a bank account and assets in order for you to even live in this city. Yeah, that's right. Yeah. So, you know, that's what sort of happened 50 years ago to African-Americans that with the Fair Housing Act, the talented ones moved out of leaving these communities with less talent.

I see. And now we're getting the same amount, the white working class, you know, that all the smart kids, you know, go to college. Not smart. Well, not smart. The kids who can go to college, we take the smart back. Yeah. But the kids who are capable or can afford or parents can afford to help them go to college, and then they do what you did.

They moved to New York City or they moved to, but for most people, that's just not true anymore. And there's been a big decrease in mobility in American cities. But globalization and technical change came to Europe too, right? And we're not seeing the response be the same there. And the reasons are probably, well, several holds, one being there's a much stronger safety net. So even though wages have been stagnant in the UK for 15 years since the Great Recession, with redistribution both rich and poor have seen growth in in incomes or over time which hasn't happened in the U.S. our safety net is just not as strong the other part being that education systems are very different in the U.S. from the get-go, it's all targeted toward the kids who are going to go to college.

Well, that's great if you're a kid who's targeted for college. But if you're not a kid targeted for college, resources are not spent to make sure that you become a productive member of society and taking jobs that really need to be done and should be paid for what they're worth. Or to put that in a slightly different way, it's not that some kids are targeted for colleges and left behind. It's just that everyone, the educational system is to try and get kids from kindergarten. They're aiming for college.

But only a third of them get there. And so the two-thirds that don't get there are not getting much out of this educational system. And other countries in Europe seem to have avoided this bifurcation as not as severe as what you get here. Well, and there's the, you know, there was the, it feels like, it feels that we moved away from the sort of GI Bill model of education where, hey, it's mass education, mass higher education. You know, sure, rich kids can go to Harvard, but for everybody else, there's a robust public education system, your state, your community college, things like that.

And those institutions still exist, but they've all gotten more expensive in the case of the state universities and not as robust in the case of community colleges. And so those options are not there. And it's interesting in the data that kids who go to community college and get a two-year degree, they earn a little bit more than people who leave with a high school degree. And they're a little bit less likely to die of a high school degree, and they're a little bit less likely to die of a death of despair, but they look a lot more like high schoolers than they look like people with a four-year fee. Now, why is that? Well, part of it is that I was stunned when we started doing this work, because when I went to graduate school, what we learned was people with a BA earned 40% more on average than people without a BA who left with a high school degree.

So a college premium of 40%. That doubled between 1980 and 2000. So now the premium for a four-year degree is 80% of a high school degree. So that was just a stunning increase in the wage gap between those two groups. And that is going to have effects all the way down the line. It also just seems sort of firestuck't see a two-year community college degree as having the same value as a four-year VA. Yeah. Well, now you often hear the argument that when we're talking about the dissolution of American society in this way, this sort of devolvement, you hear the

argument that these are actually cultural problems, that people need to take more personal responsibility. People aren't willing to work hard. Maybe someone might make a generational argument that millennials aren't the entitled millennial argument. Perhaps that's very dismissive. But there's also the argument that, hey, the, you know, the institution of marriage is the problem. People don't get married anymore. People aren't going to church. And sometimes that, those arguments make sense to me when you're, you're talking about, you know, when we're declining, talking about the decline of civic institutions, but I'm curious about how it, how it strikes you. Yeah. There's some of that, but,

you know, what we like to say at this point is supply and demand, supply and demand. And if the story was that people didn't want to work anymore, right, then you would get fewer and fewer people in the labor force, which is happening. But if it was because people were pulling out of the labor force, wages would go up, right, Because you're pulling back on supply. If you pull back on supply, the price goes up.

And, in fact, the price is going down. And so the only story you can tell when wages are going down and labor force participation is going down is one in which jobs are vanishing. So that's the first order story. But, you know, it's also true that lower wages, fewer jobs impact marriage. But, you know, as we say in the book, and I'm sure Anne will say more,

you know, the social things have a life of their own too. So, you know, the changing attitude towards having kids out of marriage, you know, the contraceptive pill, which has changed the way in which people negotiate sex. Those have had big effects too. And we don't want to put those all down to the labor market. But the arguments being made by some commentators on the right, that this is just a cultural change. Those are exactly the arguments that were made back in 1980 about what was happening to

African Americans. You know, it was black culture. That's why they weren't getting married. That's why they started having kids out of wedlock. Well, the culture argument, you could take what was written in 1980 about African Americans, cross out African American and put in white working class. And people are making exactly those same arguments today that it's a loss of virtue. It's a loss of industriousness. But I think really, for me, if you treat people shabbily enough for long enough, bad things happen. And that's what's happening.

If people were being offered prospects for their future, they'd get married. They'd raise their kids in marriage, and they just don't have that available to them now. So that's, I think, but that is a left-right divide. I also like the idea that because I have a BA, I'm more virtuous than someone who didn't. This is, we worry a lot in the book also about the future of meritocracy, right? So I don't know what we would replace it with, but the idea that, well, we all work hard.

Some people bubble to the top. idea that, well, we all work hard. Some people bubble to the top. They're rewarded for that. And they are the best minds doing the jobs that are best for them. But the truth is that the people who bubble up, pull up the ladders. They close the doors. They try to protect their kids. they try to protect their kids they um they get caught up in scandals of uh bribing uh college officials to let their children into colleges right they uh so the one they segregate their neighborhoods they uh yeah there's so many of these of these things that are done in order to uh consolidate that advantage and that economic prosperity and not share it with others. And it leaves people who are left behind, like, vacillating between thinking the system's rigged against me and I'm a loser. Right. So there's anger and there's despair.

And I'm a loser, right? So there's anger and there's despair. And so we think that we have to do things to make things more transparent. And if we want a meritocracy to continue and not burn out after this generation, we're going to have to do more about opening doors, making sure the doors stay open. So what are things that we could do to keep those doors open? Do you have policy prescriptions that could help unravel this toxic knot that we're in? Well, the first obvious thing is to do something about the health care system. Just afford to waste an enormous chunk of GDP

making a lot of people really rich when they're not doing anything in return for it. And that would make a big difference. But the truth is, this is hard everywhere. Globalization and robots are coming for less educated people. And we should be doing things that make this work better. We would certainly vote for a stronger safety net. That's probably a harder thing to do in America.

But, you know, maybe this crisis will help people get there. So economists like to always argue that globalization and technical change are good things, right? They're making the overall pie bigger. And so we should see it not as something to duck and cover against, but just to embrace. Well, it's a good thing if everyone is able to participate in that or gets a piece of the pie.

But when globalization leads to winners and losers, unless somebody redistributes towards the people who lose jobs and lose a sense of self from that process, we're in trouble. I think European countries do a better job. They tend to have a value-added tax, for example, which is then used to try to have child care education systems that work. Make sure everybody, we just saw the long lines for food banks caused by the COVID-19, but there are long lines for food even without COVID-19. even without COVID-19.

There are people here who just are not participating in the expansion that's taking place. So that's not a policy prescription, but it's more of a description of what we, in pie in the sky, what we might do. Are you hopeful that those things can be done? Are there positive examples that you look towards? Are you hopeful that those things can be done? Are there positive examples that you look towards?

Well, I think the health care, I think it will get broken by the virus. Yeah. And we'll see changes that day. The trouble is, if you do these quickly in a crisis, it's often done badly. if you do these quickly in a crisis, it's often done badly. And, you know, part of our book was the attempt to persuade people. And you said you hadn't seen these dots connected up before. I don't think people have seen that either. That's just to, you know, people say, okay, healthcare costs a lot of money,

but we're rich, we can afford a lot of money. But then when you say, you know, it's destroying this, that's the reason we don't have any infrastructure. That's why public education is hurting. That's why the white working class are much worse off than they would otherwise be. You know, if that were brought more to the front, then maybe something would do something about it. But it's likely to be overtaken by what happens during this crisis. I think also this crisis is one of these things where the balance between public activities, things that you can only do as a community, and things that can be done privately will be seen to be changed because we've been very good at handing things over to the market,

and the market's fantastic at doing a lot of stuff, but it's not very good when it comes to dealing with community issues like public transportation or infrastructure or indeed the public health support that we need when things like this happen. And so many of the factors that you talked about earlier that increased life expectancy brought down the death rate were public initiatives, we stopped thinking about public goods as being good things. You know, people are less, you know, less public parks, public transportation. There's been a dirtiness to the word public for a lot of Americans. That strikes me as something that we need to reverse.

You hear people say, why should I pay for a train that someone else rides on? Especially if that person looks different from me. That racism, I think, is an important part of our relative inattention to public goods. But yeah, I think we really have to, maybe this will push us in that direction. It would be good to have more things that we can only do collectively. The market can't do everything. So, you know, we're very pro-capitalism. It's just that you can't expect it to do things that it can't do. And if you try, you're going to get a mess.

And that's what our healthcare system. And our public health thing is not very efficient. You know, though, we don't want to push that case too far because, you know, if you have an epidemic like this once every hundred years, no one's going to be properly prepared for it. policymakers or even the public takes away from your work, like one core misconception you're trying to correct or one thing that they can take away into their daily lives that can help address this issue? Well, one is, again, keep coming back to healthcare. Just stop thinking of America's healthcare system as the best in the world and focus on the bad stuff it's done from opioids to just too much. And then the second thing is just, you know, if you can't have a successful economy unless you can't leave behind

large chunks of the population who are not sharing in, you know, the benefits as Anne said about globalization and technical change. Those are good things. Those are the things that have made us rich over the last 200 years. But, you know, and we've had periods when it was not shared very equally in other periods where it was, we have to get back to one where it was shared more equally. Yeah.

Well, thank you so much for coming on the show to talk to us about it. This has been a wonderful conversation about a, about a dark topic, but, but I genuinely did enjoy it. And it connected a lot of threads in American society I haven't seen connected before. So I thank you for it. Thank you very much. Such a pleasure. Thanks very much. Okay. Cheers. Well, thank you once again to Angus and Anne for coming on the show. I hope you enjoyed that conversation as much as I did. Their book is called, once again, Deaths of Despair and the Future of Capitalism.

Check it out wherever books are sold. And hey, I want to thank you folks for listening to another episode of Factually. I want to thank our producer, Dana Wickens, our engineers, Ryan Conner and Brett Morris, our researcher, Sam Roudman and our WK for our theme song, I Have Been Adam Conover. You can find me online at adamconover.net or at Adam Conover anywhere you use social media. Thanks so much for listening. We'll see you next week. That was a HeadGum Podcast.