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Business & Economic Development

On the personal income front, there has been increasing focus on stagnant household income for lower- and middle-income Americans. Becoming health- and life-ready K-12 will help Arizonans and other Americans increase their income, and make better use of what they earn.

But the personal income crisis is much more pernicious than stagnating real wages. In particular, rising health costs are seriously undermining employer profits and employee disposable income. Employers pay more for their employees’ health insurance, and have less money to increase wages. In addition, employers are asking employees to pay a bigger share of health insurance costs—higher premiums and higher deductibles.

The Bureau of Labor Statistics reports that, for the middle 60% of Americans by income, non-inflation-adjusted income increased by only 0.2% from 2007 to 2014, while health care costs increased over 24% and health insurance premiums increased over 42%. This trend will continue, with the Council of Economic Advisers predicting that average per capita compensation, net of inflation and health insurance costs, will not increase for the foreseeable future.

At the same time, higher health costs are not making us healthier. Indeed, Americans’ health is worse, across a range of indicators, including life expectancy, than in many European countries with much lower per capita health spending.

Preventable chronic health conditions are the primary cause of increasing health costs. The main preventable behaviors at the root of these conditions are lack of physical activity and unhealthy nutrition–and (decreasingly) smoking. Yet adult Americans and the traditional health care system struggle to change our health habits.

Please see our latest slide deck for more details.