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Businessweek Archives

Income Swings Can Be Deadly

Economic Trends


Health risks for the middle class

With restructuring and contingent employment now purportedly inherent features of modern-day global capitalism, Americans have had to face the possibility that heightened income instability is the price they have to pay for a dynamic, expanding economy. Indeed, most people know folks who lost jobs because of downsizing over the past decade and suffered a sharp (if only temporary) income decline in the process.

A recent study in the American Journal of Public Health focuses on an aspect of income instability that has received relatively little attention up to now: its negative impact on individuals' health. The results suggest that sharp income drops can result in significantly higher mortality risks, even when such setbacks are only temporary.

In the study, a team led by Peggy McDonough of Ontario's York University used U.S. survey data from 1972 through 1989 to compare the death rates of people 45 and over with their income levels. As in earlier studies, researchers found that the lower one's income, the higher one's risk of dying.

Other things being equal, those whose household incomes averaged less than $20,000 (1993 dollars) over a five-year period were two to three times as likely to die in the next five years as those with average incomes over $70,000. And those with family incomes in a middle range of $20,000 to $70,000 had a 50% higher chance of dying than those in the high-income group.

The most provocative findings, however, relate to income stability. The researchers report that sharp income drops--of 50% or more in a five-year period--had little subsequent effect on the already high mortality rates of low-income people. And temporary drops of this size had insignificant effects on the relatively low death rates of high-income (over $70,000) individuals.

Rather, it was the health of people in the middle income group that suffered significantly if they had experienced a sharp income decline in the prior five years. Such occurrences actually doubled their risk of death, raising it to the elevated levels found among those in the lowest income group.

At the very least, these results are troubling. They confirm that poverty or near-poverty income levels are seriously detrimental to individuals' health, especially when they persist. (Another finding was that low-income people experienced even higher mortality if their low incomes had persisted for at least four of the prior five years.) And they suggest that income instability, even in the form of a temporary sharp drop in income, can pose increased health risks for the middle class.

To the extent that America's rising income inequality and instability will expand the numbers of vulnerable individuals in low- and middle-income groups, write the authors, "the findings forecast a worsening of the nation's health."BY GENE KORETZReturn to top

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It's the boys who need pepping up

It has long been thought that girls are at a disadvantage in public schools compared with boys, suffering from lower expectations, less confidence, and often less support from teachers. Whatever the validity of this view in the past, however, a recent nationwide survey of 2,600 high school students and teachers, grades 7 through 12, suggests that it's girls rather than boys who are currently in the ascendancy.

According to the survey, conducted for Metropolitan Life Insurance Co. by Louis Harris & Associates, girls like school more than boys do and have more confidence in their abilities. Some 74% of girls say they are very likely to go to college, compared with just 61% of boys.

Further, more girls than boys feel they get positive feedback from teachers for answering correctly, and more girls (76% vs. 67%) report getting helpful comments when they answer incorrectly. Similarly, about a third fewer girls than boys (19% vs. 31%) complain that teachers don't listen to them. For their part, teachers see girls as more confident, more focused on education, and more likely to graduate from college.

In many respects, minority girls lead the pack in positive outlook, priding themselves on their ability to succeed and finding their teachers the most encouraging. By contrast, minority boys are the least likely to believe they will attend college or attain their job goals.

Interestingly, these results jibe pretty well with reality. More girls than boys go on to college these days, and minority boys--especially blacks--are the least likely to further their education or do well in the economy.BY GENE KORETZReturn to top

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