The Rich Are Sucking the Marrow From Your Bones in This Good, Normal Economy

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The Department of Labor announced its latest employment figures today: More jobs were added and unemployment is lower, but wages only increased by 0.2%, or a 2.7% increase over last year. That’s lower than the 3.5% wage growth economists say should be expected from such strong growth, according to NPR. CNBC described today’s wage growth figure as “frustratingly low.” People who do not, for example, have yachts or a “finance guy” probably already knew this: The jobs are out there, but they’re just not paying enough. What is going on at the top? Two stories from this week offer insight: Rich people love money, always need more of it, and don’t want to share it with you.

Axios reported this morning that the health care industry will make “massive” profits in the second quarter of 2018, more than any quarter of the past 12 months. How did they achieve this impressive feat of capitalist glory? Axios attributes it to two things: the Republican tax bill, which cut the income tax costs of one company by 93% last quarter, and the “growing sales of prescription drugs, medical devices, tests and procedures—that reflects both higher prices and more quantities sold.” Pfizer, one of the biggest drug manufacturers in the U.S., has raised prices on its drugs twice just in 2018; Medicare drug prices have risen at 10 times the rate of inflation in the past five years. Bloomberg reported last month that “255 brand drugs had increases between Feb. 1 and July 15" of this year, per data from GoodRx, a drug pricing site.

And pharmacy benefit managers (PBMs), the companies that administer prescription drug plans on behalf of insurers, are reaping an extra layer of profits off of already-expensive drugs. A report, also highlighted this week by Axios, from the pharmaceutical research firm 46Brooklyn showed some states are paying PBMs hundreds of dollars more per pill for the cancer drug Gleevac than it actually costs. Indiana pays its PBMs $300 per pill for an $84 drug. Where do those profits go? To middlemen. They don’t go to improved care or wider access; they go to lining a rich guy’s pocket.


Meanwhile, 45% of diabetes patients report going without insulin due to the cost—which comes as no surprise as the drug increased 353% in price between 2001 and 2016, according to WebMD’s Health News.

But health industry profits are not the only evidence of how the rich are profiting. Yesterday, Apple announced that it had become the first company valued at $1 trillion. As the New York Times noted, a 2017 study by economists at University College London showed that “the difference between how much it costs American companies to make their products and how much they sell those products for” is higher now than it’s been “since at least 1950.” The Times described this as “a metric of the power that companies possess in their markets,” but it’s also indicative of something much more simple: How much profit companies are making. As industries consolidate, with huge players like Apple and Google in tech or AT&T and Comcast in communications dominating their fields, competition decreases and profits increase. It’s a lot easier to sell someone shitty cable service that costs too much when they only have a couple of options, or even only one.

Apple has so much money that it is currently sitting on $267 billion in cash reserves. $267 billion, just sitting there. Meanwhile, 40% of American families can’t cover the expense of a $400 emergency. These realities are inextricably related.

Does this seem fair or sustainable? No, it isn’t. But who has the time or money to try and do anything about it; everyone’s working all day to buy their fucking insulin.

Splinter politics writer.

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