Jim and I just saw a disturbing /engrossing/very important film called “Inequity for All”. I encourage everyone to see this film! It had a huge effect on me. It takes complex, abstract economic concepts, adds humor and the human element, and makes these concepts very approachable and easy to understand.

From the film’s site:

• In 1983 the poorest 47% of America had $15,000 per family, 2.5 percent of the nation’s wealth.
• In 2009 the poorest 47% of America owned ZERO PERCENT of the nation’s wealth (their debt exceeded their assets).
• At the other extreme, the 400 wealthiest Americans own as much wealth as 80 million families – 62% of America. The reason, once again, is the stock market. Since 1980 the American GDP has approximately doubled. Inflation-adjusted wages have gone down. But the stock market has increased by over ten times, and the richest quintile of Americans owns 93% of it.

How does income inequity pertain to responsible long-term care (LTC) planning?

When I began my long-term care insurance career in 1989, sales of long-term care insurance (LTCi) nationwide were slow. The biggest battle I fought was people’s ignorance, not fear. In those days, people insisted the government would pay for their long-term care, their kids would take care of them, or they would never need long-term care. The media, too, were very ill-informed. Most media coverage disparaged LTCi at every opportunity, and called it a non-essential rip-off. Even the insurance industry considered LTCi to be its illegitimate step-child in those days.

In 2013, the above issues have pretty much been dismissed. Studies today prove the majority of people now admit they might need LTC, and that they are financially unprepared to pay for it.

Interestingly, LTCi sales still languish

In today’s world, the ever-present stress of job insecurity, having to stay in a job you hate, toxic co-workers, working in order to have medical insurance, longer hours, job cutbacks, stagnant wages, higher tuition, overhead, and debts, with no visible way out of such predicaments, is common. Many are understandably scared.

When people live with these types of fears, they often suffer from emotional, irrational inertia and the inability to act affirmatively. We LTCi specialists can show them $50/month premiums they can easily afford. They might have nursed their own mother for years, at considerable physical and economic loss, yet they are paralyzed with fear and do not purchase reasonably priced LTCi. They cannot act.

Inequity for All describes the vicious cycles that result from income inequity. Slow LTCi sales, despite the fact that most now understand LTCi ownership is the only rational solution to big problems many of us will face, is one more dangerous by-product of this nation’s mounting income inequity.