The banking crisis that started on Wall Street has hit the US hard. We’ve been losing jobs and public services that are vital to sustain our local economies and communities. And investment and support for retirees and seniors haven't been spared.
The politicians have shifted the debate from how we deal with the economic crisis – to reducing the debt by cutting public spending and services. The retirements of public employees are under fierce assault. Forty-four states have recently passed laws curtailing public retirement benefits. The average monthly Social Security benefit for a retired worker was about $1,177 in 2011. Public employees will start joining the ranks of the marginalized elderly.
With an ageing population, this problem is only set to worsen. 10,000 reach retirement age every day—this will continue for 20 years. By 2030 about one in five people in the United States will be over 65.
For those who have retired this means less money for housing, heating, putting food on the table. All the essentials. And it's not just the retired that are feeling the pinch - millions more are now expecting to have to continue working once they are 'retired.' We urgently need to invest in the system that rewards and supports senoirs.
We need to speak up - cuts are not the only way. And while the blame for the economic crisis lies largely at the door of the banks they must be part of the solution.
Growing old, we all know the golden Hollywood version - unfortunately the reality for many Americans is closer to the stuff of nightmares. A combination of efforts to cut and privatise Social Security mean millions are not getting the support they need or deserve.
Social Security is the premier anti-poverty program for seniors, and it’s under attack by Wall Street-inspired privatization efforts. Contrary to the rhetoric of Wall Street financiers anxious to profit from privatization and their advocates in Congress, Social Security, according to its 2012 Trustees Report, has a large and growing surplus, and without efforts by Congress to cut it, will continue to pay benefits for America’s working families for decades to come.
It adds nothing to the federal deficit. With only a modest increase in the cap on income that is subject to the tax, affecting the wealthiest earners, the Trustees note Social Security can continue to pay benefits for the next century and beyond.
And now, lets look at the story the numbers tell. In the private sector, only two in 10 Americans have a secure pension. Three in 10 have only a 401(k) or similar savings plan. And the rest – half – rely almost exclusively on Social Security. In 2011 nearly 55 million Americans received Social Security benefits, some eligible by age, others as dependents, others who are disabled. It is the backbone of secured retirement.
Of the roughly 40 million Americans 65 and older, one-third live are low-income-- income less than twice the federal poverty level . And the older you are, the worse it gets. The poor/near-poor status for ages 75 to 84 is 38%, and it is 44% for people 85 years and older.
The retirements of public employees are under fierce assault. Forty-four states have recently passed laws curtailing public retirement benefits. Public employees will start joining the ranks of the marginalized elderly.
Participating in a private plan doesn’t mean a worker is adequately preparing for retirement. The median 401(k) account balance was only $25,000 in 2006, $40,000 for workers approaching retirement age. And account balances have fallen by a third since late 2007, leaving many older workers unable to retire just as our economy is shedding millions of jobs.
What Robin can do
Social Security is the bedrock of America’s retirement system. But it has been the target of Wall Street for privatization, and by the deficit hawks for cuts. Further, by itself it is often inadequate for the unemployed or under-employed.
We know what we’d do. We’d get Robin Hood involved. Urgently. Serious investment in the creation of good jobs with solid wages – from which Social Security is drawn – is critical. An expanded federally-funded jobs program is long overdue.
A Robin Hood Tax could also help shore up state budgets that have been slashed over the last four years. Funds directed at education, for example, keep teachers on the job, and should require pensions be left in tact. Reliance on worker contributions to pensions puts a strain on family budgets already too thin and creates even greater inequality.
Government programs to enhance retirement – Social Security, Medicare and housing assistance - need to be supported and expanded. Robin could do that, too.
The billions that could be raised by a Robin Hood Tax would be a first step to start raising the cash to pay for the Social Security, Medicare, and housing assistance that would give every American the secure retirement they need.