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- Policy Reform Work
Our projects are designed to empower policy makers to create positive change. With a focus on collaboration and outreach, we provide original, standards-based research on key policy issues.
SCEPA joined with the Economic Policy Institute on Capitol Hill to brief congressional staff and policy experts on tax expenditures, or incentives given through the tax code without scrutiny by Congress.
SCEPA economists are working on the prospects for a more progressive economic order to emerge from the shock of the recession. They have published papers and documents that place current events in a longer-term context as well as policy proposals to deal with short-term concerns. They are also documenting the emerging discussion of how the discipline of economics is reacting to the Great Recession and the questioning of conventional economic analysis.
Lance Taylor, a SCEPA Faculty Fellow, presents an overview of his new book, Maynard’s Revenge, in a Google Tech Talk.
The book, published this November by Harvard University Press, is a timely analysis of mainstream macroeconomics, posing the need for a more useful and realistic economic analysis that can provide a better understanding of the ongoing global financial and economic crisis.
The government spends $143 billion through tax breaks in an effort to expand pension coverage and security. Yet, over half of the American workforce does not have a pension. Retirement insecurity hurts business plans, workers’ lives and retiree well-being. Reform is needed.
SCEPA’s Guaranteeing Retirement Income Project, sponsored by the Rockefeller Foundation and in collaboration with Demos and the Economic Policy Institute, has a plan to guarantee safe and secure retirement income for all Americans.
On June 15, 2016, Tony Webb, director of research at SCEPA's Retirement Equity Lab (ReLab), presented a SCEPA report on Philadelphia's retirement crisis before the Philadelphia City Council Committee on Labor and Civil Service. The report, "Are Philadelphians Ready for Retirement?," was done on behalf of Philadelphia City Councilwoman Cherelle L. Parker and the City Council of Philadelphia. Following the hearing, Councilwoman Parker announced plans to introduce a resolution calling for the creation of a task force to address retirement security for private-sector workers in the city.
Workers across the country face a retirement crisis. However, workers in Philadelphia are faring worse than average.
- Philadelphia’s senior citizens are more likely than senior citizens nationally to rely on Social Security for more than 90% of their retirement income.
- Only 48 percent (less than half) of all Philadelphia workers ages 25-64 had access to an employersponsored retirement savings plan, compared with 53 percent of workers nationwide.
- Only 37 percent of Philadelphia’s workers ages 25-64 participated in an employer-sponsored retirement plan, compared with 45 percent nationwide.
- The median near-retirement household in the state’s metropolitan areas had enough financial assets to generate at most $550 a month in retirement income.
Without changes to our failed system, a growing number of Americans will ride a wave of insufficient savings to deprivation in their old age. More than half of American households who are near retirement have less than $12,000 saved. The number of 65-year-olds per year who are poor or near poor between 2013 and 2022 will increase by 146%.
A recent report by the Bipartisan Policy Center's (BPC) Commission on Retirement Security and Personal Savings takes the first steps toward reform by recognizing the principles necessary to create effective retirement savings vehicles. The Commission's call for Retirement Security Plans to pool resources and decrease administrative burdens supports the need for economies of scale and universal access. The call to expand myRA and create a nationwide minimum-coverage standard supports the need for mandated participation and a shared responsibility between employers and employees. The call for a lifelong income plan supports the need for annuities to ensure seniors don't outlive their savings.
"Growing inequality has made retirement increasingly available to only a few," said Commission member and SCEPA Director Teresa Ghilarducci. "We need a federal plan that serves everyone. With 27 states actively pursuing retirement reform, these leaders have made it clear that the political will for change exists. Historically, we have relied on state innovation to spur federal action. As with Social Security and healthcare (see image), this report recognizes that federal legislation is necessary to provide employers and employees consistency and portability across states.
The Commission recognizes the failure of our current system and sets us on the right path to reform. However, it does not claim these recommendations, even if fully implemented, will solve the retirement crisis."
Ghilarducci stressed that she looks forward to taking the next steps toward comprehensive reform through supporting Guaranteed Retirement Accounts (GRAs). A joint policy proposal issued with Hamilton "Tony" James of Blackstone (from the diverse backgrounds of academia and investment banking), GRAs would provide savings accounts that advance the same principles in the Commission's report. By creating individual accounts on top of Social Security with mandated contributions from both employers and employees, these accounts would pool investments, guarantee a return, and provide lifelong annuity payments.
The report also put forward reform measures for Social Security. Ghilarducci joined with fellow commissioner Alan Reuther to discuss their disagreement with some of the recommended policies on Huffington Post in a blog titled, "A Better Way to Fix to Social Security."
The Department of Labor’s monthly unemployment report released today shows an unemployment rate of 3.4% for workers over the age of 55. The unemployment rate has decreased from 3.6% last month to 3.4%, a decrease of 0.2 percentage points.
In addition to imposing a financial cost on older workers, unemployment can also impose a psychological cost. The unemployed are not unemployed by choice. And being deprived of choice creates a feeling of helplessness.
According to the Health and Retirement Study (HRS), a nationally representative study of older Americans, unemployed respondents were more likely than both workers and retirees their same age to report a general feeling of helplessness. Among 55 to 64-year-olds, 40% of the unemployed agreed with the statement, “I often feel helpless in dealing with the problems of life,” compared to 8% of retirees and 16% of older workers.
Proposals to cut Social Security benefits by raising the retirement age will condemn some older Americans to unemployment, and will force others to continue to work out of economic necessity. Policymakers should prioritize preserving and strengthening the institutions that give people the choice to retire, rather than chipping away at their foundations. This means expanding Social Security and implementing Guaranteed Retirement Accounts (GRAs) to provide workers with effective savings vehicles over their working lives and lifelong income in retirement.