How Incremental Increases Can Lead to Systemic Collapse

Monday, July 22, 2013
By Paul Martin

Charles High Smith
July 22, 2013

Healthcare insurance illustrates how incremental increases can lead to systemic collapse.

My father’s paystubs from the 1940s, 50s and 60s shed light on the way seemingly modest incremental increases can lead to systemic collapse. My father used his G.I. Bill education benefits to attend college after the end of World War II in 1945, but left to join Sears, Roebuck and Company in 1947. He worked for Sears until the mid-1960s.

I think we can safely assume Sears was a typical corporate employer of the day. It was known at the time for a generous profit-sharing program and well-regarded management training program to recruit management from within the ranks.

My father’s paystub from June 1947 was handwritten. There is a box for “hospital group insurance” but there was no deduction made. The stub indicates my father worked 40 hours that week and earned $36 gross income. After deductions of $4.40 for income tax, 36 cents for unemployment insurance, etc., his net pay was $30.88.

Since he was unmarried, I assume he’d opted out of the hospital group insurance.

By 1951, he was married and had one child, and his July 1951 paystub shows 88 hours worked (working Saturdays was typical in retail), earning a gross pay of $166.40 and a $3 deduction for hospital group insurance. How much Sears paid (if any) of this policy premium is unknown. The $3 works out to 1.8% of his gross pay.

My second sister was born less than a year later in March 1952. Here are the total costs of her birth at one of the finest hospitals on the West Coast, The Santa Monica Hospital:

The Rest…HERE

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