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01/26/2015

Janitor's Insurance (January 26, 2015)

For those unfamiliar with the insurance industry or corporate financing "janitor's insurance," sometimes termed "dead peasant's insurance," are life insurance policies corporations buy "on" (not "for") their employees whereby the corporation is the named beneficiary. (See my related March 20, 2013 interview with Prof. Kochenberger.)  Beyond the moral objection of profiting from an employee's death, even in instances where the person dies years after they left their employer, these polices perversely incent companies to compromise on insuring employee health and workplace safety. These life insurance policies have been bought in bulk by the financial, service and other industry sectors and today make up a substantial percent of all life insurance policies.

There's however another, more literal form of "janitor's insurance" that's equally if not more morally objectionable and perverse if for no other reason than in this case there are no third-party stockholders to satisfy.

Along upper Connecticut Avenue in the District of Columbia, where average annual household incomes substantially exceed $100,000 (more than twice the District's average), my, now former, 4707 Connecticut Avenue neighbors, not unlike many other condo residents and their governing boards throughout the area, intentionally do not employ their custodians. This has been the case at 4707 Connecticut for over the 20 plus years their janitor has been polishing the building's brass features, vacuuming its carpeted halls, watering its expensive landscaping and hauling curbside the residents' considerable trash.  The janitor has instead been employed by a cleaning service agency. This decision is expressly for the purpose of attempting to avoid paying for the janitor's healthcare. As the building's management company representative told me bluntly and without hesitation, we do not employ him because he is in poor health.  The janitor's employer does provide him some amount of health insurance but of what quality is completely unknown by the building's residents nor their concern since, again, he's not their employee.

If intentionally making the janitor a subcontractor to claim he's not the building's employee (not their responsibility) sounds like a perfect example of the fallacy of circular reasoning, where the conclusion is the premise, you would be correct.  Logic aside, this form of janitor's insurance is similarly morally abhorrent.  Here the building's residents do not price his death, they devalue his life.  This is done of course in a state, again the District of Columbia, that ranks first in income inequality and where there also exists the greatest disparity in male lifespan. African American men in DC, one of whom is the janitor, die on average 15 years younger than whites, or the uniform race of building's condo board.

Even dispensing with moral duty, it's a fool's errand.  The building's residents have been paying for the janitor's health care insurance all along since assuredly the cost has been embedded in their cleaning service contract.  Even when it comes to healthcare "free" is a four letter word.  It only gets worse when you realize the residents could readily ensure the janitor obtains optimum quality, substantially subsidized health care insurance via the Affordable Care Act and easily pay the balance of his premium with moneys saved from its canceled cleaning service contract.  More likely, since the janitor's compensation is modest, he likely qualifies for DC Medicaid in which case the building's residents would pay for none of his health care (since it's already a cost paid by their state tax).

You might think in a wealthy, solidly left-learning neighborhood the building would be at least marginally enlightened.  They're evidently not.  They have no mutual or shared obligations.  They face no, as President Obama phrased it, "defining challenge."  There are no moral questions, just economic ones.  We're a market society.  However unintelligible, our raison d'être is cost efficiency. We do not value a human life, certainly not a janitor's life, we just commoditize it.  All that's left is to bundle janitor's life with janitor's health insurance.

(Postscript: after spending nearly two years failing to convince the building's residents and its condo board they could meet their moral duty and save money and after attempting to solicit the DC Council's interest, the DC Office of Human Rights, the Howard University law clinic, the Washington Post and others, I sold my unit and moved though not before giving the janitor a check to cover approximately one year's health insurance premium via the DC health care marketplace.)

 

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