I have seen the future: no more retirement; people will work until they drop.
The conventional wisdom is that this is the richest country in the world. Our wonderful market mechanisms have generated great wealth and opportunities which have contributed to a steady improvement in our quality of life.
Well, the U.S. is a rich country and the economy has generated great wealth and opportunities but as for a steady improvement in our quality of life—I guess the question is for whom?
Increasingly it appears that working people are facing a future of never ending work, and at jobs that will provide few if any benefits (material, social, or community).
What leads me to say that? CNN Money offers one reason:
The percentage of American workers with virtually no retirement savings grew for the third straight year, according to a survey released Tuesday [March 9, 2010].
The percentage of workers who said they have less than $10,000 in savings grew to 43% in 2010, from 39% in 2009, according to the Employee Benefit Research Institute’s annual Retirement Confidence Survey. That excludes the value of primary homes and defined-benefit pension plans [which are different from the more common defined contribution plans—they are pretty rare].
Workers who said they had less than $1,000 jumped to 27%, from 20% in 2009.
The article suggests that workers are going to have to get smart–delay their retirement and use their extra working years to boost savings. But—are there really going to be good, stable, well-paying jobs for people? There sure aren’t many now and the predictions are far from rosy.
Compounding the problem is the growing attack on Social Security—a system that remains well funded and administered, although you would never know it from the media and most of our political leaders. The “consensus” is that the most important thing that government needs to do to save the economy is cut social spending, and social security is on or near the top of most cut lists. Tragically the consensus is plain wrong.
Regardless, President Obama appears to have embraced this conventional wisdom. Last month he created a new commission and charged it with developing suggestions for reducing the national debt. He appointed former Clinton Administration Chief of Staff Erskine Bowles and former GOP Senator Alan Simpson as the co-chairs.
Here is what The Hill has to say about this commission:
The goal of the commission, created through an executive order, is to come up with a fiscal reform plan, which could include tax increases, spending cuts and changes to entitlement programs, aimed at bringing down the deficit to a level equivalent to 3 percent of the country’s economy. That’s the level the White House said is sustainable over the long term.
“Everything’s on the table,” Obama said at a ceremony after he signed the executive order creating the commission. “That’s how this thing is going to work.”
Sadly, everything being on the table means entitlement programs and the commission’s real mission is to provide political cover for an attack on the two biggest and most popular ones: Social Security and Medicare.
Alan Simpson, for example, has spent years trying to dismantle the social security system. Bowles is only little better.
Unless there is real popular resistance the outcome is easy to predict. The Commission will recommend cutting Social Security benefits and delaying the retirement age at which people can collect their full benefits. It is worth remembering that 65% of those over 65 rely on Social Security for over half their income.
Such a future—work harder, work longer and for less—-it sure is a good thing that this is such a rich country.