Editor’s note: This commentary is by Charlie Murphy, who lives and works in Bennington.
Recent news articles have me pondering the conservative perspective on ordinary working people. Jon Lynch, Republican candidate for a House seat in Chittenden County, proposed a self-funding family leave program. John McClaughry, of Vermont’s conservative Ethan Allen Institute, raised a cash-only surgical center in Oklahoma as an example of how to cut health care costs.
Lynch’s idea is a “family leave savings account” that would function the same as a “health savings account.” Taxpayers fund the account — if they wish — with money that is exempt from income tax and can be used to pay expenses during any family leave they choose to take. Lynch views this as preferable to the “heavily regressive tax” that would have funded the mandatory leave bill Gov. Scott vetoed. He likes that his idea would “put Vermonters back in control of our own money.”
But you can’t “control your own money” if you have none. You need discretionary income for these savings accounts to be at all useful, and the low-income people I know live from paycheck to paycheck. They can’t spare the money to fund the account, would get little to no tax benefit from funding it, and could certainly never put in enough to cover the loss of income during an unpaid leave.
The same problem makes John McClaughry’s cash-only surgical center unrealistic for ordinary people. The working people I know put off going to a primary care doctor because they don’t have the cash to pay the deductibles in their health insurance, so how would they pay cash at these surgical facilities?
The facts of working-class life are public knowledge. For example, a 2019 GOBankingRates.com national survey reported that 69% of people had less than $1,000 in savings. A full 45% had no savings at all. Only 15% had as much as $10,000. Mr. Lynch says frugality is the key to his self-funding plan, but for the low-income worker, frugality is required simply to survive.
Statistics like that are too abstract to convey the reality of working-class life in Vermont (or anywhere in the U.S.). Here’s what the statistics mean in real life. I know a married couple who are now considered essential workers. When they were first married, they tried to follow a wise family member’s advice to “pay yourself first” by putting aside 10% of their gross pay for retirement and 5% for emergencies. That ended when their electricity was cut off.
Paying that bill depleted their savings and, as they started and raised a family, they never caught up. Frugality like buying their clothes from Goodwill helped them get by, but survival required that food be given priority over savings. In recent years, they have had to turn to local food shelves to supplement the groceries they could afford to buy.
A few years ago, the husband almost died from a heart attack. Traveling back and forth to an out-of-state hospital required that the wife take off from work — she had no family leave — and eventually leave work entirely. At that time, he had just three days of sick time and she had none.
With no money coming in, family members bought her gas cards and food, but they fell behind in their mortgage and borrowed money from a friend to get by. Getting caught up later meant both paying the mortgage and repaying their friend.
Their current health care plan amounts to “praying to God you don’t get sick,” because they can’t afford to pay a $1,000-a-month premium for a policy that comes with a $10,000 deductible. However, the wife has a chronic health condition requiring that she periodically go to the emergency department to determine if her bowel is perforated. When billed $6,000 for a CAT scan, they were told they had too much income for the hospital to completely waive the bill. They did get a 60% discount, meaning they were responsible for $2,400.
These are working people who are continually digging themselves out of the hole. They are concerned about getting old because they simply cannot afford to live on Social Security benefits. Retirement is just a dream. As my friend told me, it’s “difficult to pull yourself up by your bootstraps when you have no bootstraps!”
They are hardly unusual or unique. The Kavet-Rockler report to the Joint Fiscal Office a few years back found that 78,000 private-sector Vermont workers made less than $12.50 an hour, and 47% of those workers had at least some college. The pandemic has made things even worse as people lose jobs, income and health insurance. When the Vermont National Guard and the Vermont Food Bank distributed food around Vermont this spring, they were overwhelmed by the number of people who needed help.
How in the world would these people put money aside for a family leave savings account, or purchase their health care with cash? So I ask myself, do Lynch and McClaughry not understand that being poor means you don’t have the money to do things that affluent people can do and always have done? Or do they perhaps know but deliberately design policies and programs to exclude people with limited means?
The former is indefensible ignorance. The latter is even worse. Both perpetuate the reality of “Two Americas.”
