The Atlantic Monthly has published an irritating and interesting article called, “The Secret Shame of Middle-Class Americans.”
The author, Neal Gabler, admits that he made some unwise choices, then talks about why he, like roughly half of American consumers, would have a hard time coming up with $400 in cash for an unexpected bill.
Gabler, a film historian known for being part of the duo that succeeded Gene Siskel and Roger Ebert at the WTTW show “Sneak Previews” in 1982, seems to have earned, and blown, more money than the typical broke person. But he talks about a problem that clearly affects a huge percentage of U.S. families: Many have already raided their emergency savings, raided their retirement savings, and even raided their parents’ savings to cover what they viewed as must-pay emergency expenses.
Upheaval in the job market, stagnant wages, and rising health care and college bills have all contributed to narrowing the margin between what Americans earn and what they spend on bills and what feel like necessities every month.
Ups and downs in the stock market and low interest rates on savings accounts have discouraged Americans from making much of an effort to try to increase that margin. Workers now tend to think that the stock market is a casino (run by those evil James Bond villains at Goldman Sachs), and that putting money in a bank savings account is about as modern as listening to music on a Victrola.
Americans’ lack of savings is an obvious part of the disability insurance and the long-term care (LTC) planning crisis, and a less obvious part of the caregiving crisis.
Cigna Corp. (NYSE:CI), Aflac Inc. (NSYE:AFL) and Colonial Life, a unit of Unum Group Inc. (NYSE:UNM), have been some of the companies trying to spread the message that typical workers are flat broke, and that the least society could do is give workers access to affordable voluntary and worksite benefits products that could help those workers handle small bills.
The main theme of the upcoming Disability Insurance Awareness Month (DIAM) campaign, which starts Sunday, is “You should insure your paycheck.” A secondary theme is, “You desperately need to insure your paycheck, because that’s all the cash you have in the world.”
Workers without extra cash can’t afford to pay much for private long-term care insurance (LTCI), let alone save enough to “self-insure.”