- On Capitol Hill
- On Wall Street
- In the Press
- 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.
SCEPA’s Retirement Equity Lab (ReLab) just released a report that is the first to quantify the real effect of the retirement crisis - poverty. The report, “Are U.S. Workers Ready for Retirement?” identifies the share of people whose projected income in retirement will be below poverty across states. This message of downward mobility is important both to individuals whose retirement institutions are failing them and policy makers who will inherit the impact of increasing poverty on both social welfare and municipal budgets.
Poverty As a Result of Little to No Retirement Savings
- 33% of current workers aged 55 to 64 are likely to be poor or near-poor (less than 200% FPL) in retirement based on their current levels of retirement savings and total assets.
- 55% of retirees will be forced to rely solely on their Social Security income.
- Some states are worse off than others. 41% of near-retirement workers in Florida may experience poverty or near-poverty in retirement, followed by North Carolina and Texas.
The Failure of Retirement Savings Vehicles
- Almost half of Americans who were working in 2011 were not offered a retirement account at work.
- 68% of the U.S. working age population (25-64) did not participate in an employer-sponsored retirement plan because their employer did not offer one, they elected not to participate or were not working.
- The amounts saved through employer-sponsored defined contribution (DC) retirement plans are only slightly better off than those without a retirement plan.
In The News:
Forbes: The Retirement Crisis: Why 68% Of Americans Aren't Saving In An Employer-Sponsored Plan
Time: 1 in 3 Older Workers Likely to Be Poor or Near Poor in Retirement
Financial Buzz: Retirement Savings Paucity in U.S. Workers
Employee Benefit News: U.S. Workers Falling Short in Healthy Retirement Savings
Plan Sponsor: Three-Legged Retirement Income Stool More Wobbly
Columbia Journalism Review: How to Bring Clarity and Urgency to Social Security Reporting
SCEPA Faculty Fellow Rick McGahey published an opinion piece on CNN.com today, Where are the Good Jobs?" McGahey explains why the recent job growth has not led to wage growth. The 'weak wage growth puzzles economists. After all, as the labor market improves, workers should be able to get raises as employers compete for a tighter labor force.' McGahey lists four reasons for the suppressed wage growth:
- People are still out of work. In March labor force participation was 62.7%, the U.S. hasn't experienced a labor force participation this low since 1978.
- Job growth is too slow. It took 6 ½ to regain the jobs lost in the Great Recession.
- The jobs created pay worse that the jobs lost during the Great Recession.
- The suppressed wage growth is due to the long-term failure to share productivity gains between workers and businesses.
McGahey recommends that 'we won't see higher wages without two important policy changes: more government stimulus to create jobs, and changes in labor market rules to rebalance power between business and workers.'
This week's Worldly Philosopher, Kyle Moore, discusses how the disparity in morbidity between Black and White individuals can result in unequal retirement time and benefits.
The New England Journal of Medicine recently published two articles calling on the medical and public health fields to engage in the #BlackLivesMatter movement. In a previous post, I spoke about the importance of the #BlackLivesMatter movement to economic policy in general and retirement policy in particular. Policymakers and the public need to understand how different racial group's health status effects retirement. Otherwise, they run the risk of enacting policies, such as raising the retirement age, that are likely to have a disparate impact on communities of color.
Blacks Don't Make it to Retirement Without Health Limitations
We know that being sick increases the chance that a person will retire early. We also know a lot about the differences in morbidity between Blacks and Whites. For example:
- Blacks have a 36% higher chance than Whites of developing a work-limiting health condition during their working careers.
- Blacks develop activity limitations caused by chronic conditions around age 61 – six years before Social Security's normal retirement age - while Whites develop these limitations around 67.