A DSD Highlight….
from the Hamilton Project Papers study just release on the Economy and the loss of Public Service jobs…
If the economy adds about 208,000 jobs per month, which was the average monthly rate for the best year of job creation in the 2000s, then it will take until June 2020 – or eight years – to close the jobs gap. Given a more optimistic rate of 321,000 jobs per month, which was the average monthly rate of the best year of job creation in the 1990s, the economy will reach pre-recession employment levels by September 2016 – not for another four years.
The private sector continues to be an engine for growth as the United States recovers from the Great Recession. However, tight budgets force a number of difficult decisions on policymakers (especially state and local ones), who are forced to lay off workers in order to meet their bottom lines. The result is that public-sector employment has been in sharp decline. This has worsened the current economic situation and the nation’s unemployment rate. These cuts – at least in the case of public school teachers – have also compromised our children’s future in ways that fail the even the strictest cost-benefit test. As state and local governments continue to face challenging budgets, a real risk is that they will be forced to make decisions that are both penny and pound foolish…..
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Why you may retire in poverty
Tue, Aug 7 2012
By Mark Miller
CHICAGO (Reuters) – Are you going to retire in poverty?
Today’s seniors are more affluent than the general population. But the generations that follow them – starting with the baby boom generation – will not be as fortunate. The decline of pensions, the erosion of Social Security and the housing crash all are pointing toward a new crisis of poverty among lower- and middle-class seniors in the years ahead.
Social Security and pensions, in particular, have been the two most important factors in keeping seniors out of poverty for decades. Both provide reliable, guaranteed income sources for life. And home equity has been an important fall-back source of assets that can be tapped in retirement. That is because seniors typically have more equity built up in their homes than younger homeowners and carry less debt into retirement.
Indeed, the poverty rate for seniors in 2010 (the most recent year available) was just 9 percent, compared with 15 percent for the general U.S. population.
But the economic safety net is fraying quickly.
As recently as 1998, 52 percent of Americans over age 60 received income from a defined benefit pension, according to a new study by the National Institute on Retirement Security (NIRS). By 2010, that figure had fallen to 43 percent. In the private sector, the decline has been more dramatic – down from 38 percent in 1979 to 15 percent in 2010.
The erosion is continuing, with automotive giants General Motors Co and Ford Motor Co announcing plans to terminate pension plans for hundreds of thousands of retirees, and public sector plans facing financial pressure to increase funding levels and curtail benefits.
How important are defined benefit pensions in keeping seniors out of poverty? The study – which is based on U.S. Census Bureau data – found poverty rates were nine times greater in 2010 in households without defined benefit pension income. Pensions resulted in 4.7 million fewer poor or “near poor” families and 1.2 million fewer families on various forms of public assistance….
… more at http://www.reuters.com/article/2012/08/07/us-column-miller-poverty-idUSBRE8760VW20120807
Look on the bright side of life….