The Bureau of Labor Statistics (BLS) today reported a 3.2% unemployment rate for workers age 55 and older in June, an increase of 0.1 percentage points from May. The low unemployment rate for near retirees is good news. The bad news is that no one can work forever, and our calculations report a collapse in retirement plan coverage for near retirees in the 36 years since Reagan took office.
Unfortunately, workers in the four rust belt states -- states where workers once had bargaining power -- suffered steeper declines in retirement plan coverage rates than did workers in the rest of the country. Thanks to unionized manufacturing jobs, 61% of near retirees in Michigan, Ohio, Pennsylvania, and Wisconsin were covered by a retirement plan at work during Reagan's first term. The share of covered workers collapsed by 10 percentage points to 51% during Obama's second term, after which these states voted for Trump. In the rest of the U.S., the share declined by 7 percentage points, from 53% to 46%.
The closing coverage gap reflects a race to the bottom in which firms are less likely to offer retirement benefits. As a result, workers are at greater risk of facing poverty and hardship in old age.
Obama’s automatic IRA plan didn’t get anywhere, and in 2017 Congressional Republicans rolled back support for state and city coverage reform efforts. Now it’s up to the Trump administration to make a dignified retirement possible for workers by expanding Social Security and increasing access to retirement savings plan for future generations through Guaranteed Retirement Accounts (GRAs). GRAs are individual accounts requiring contributions from employees, employers, and government throughout a worker’s career. They provide a safe, effective vehicle for workers to accumulate personal retirement savings.