For Roberta Gordon, retirement is an impossible dream. At 76, she works for $50 a day at a grocery store in Corona, California. Over the years, she’s worked at many jobs that didn’t provide pension benefits. Some employers didn’t even pay into Social Security, leaving her with only $915 per month in benefits. Now that her roommate has died, her monthly rent went up to $1,040. She has run up credit card debt and sometimes gets her meals from food banks.
Seniors in Poverty: Roberta Gordon is the human face of two sobering statistics. Among Americans who are 65 or older, 12.4 percent are still in the workforce, up from three percent in 2000. Additionally, between 2015 and 2016, the share of Americans over 65 who are living in poverty rose by 14.5 percent—in just one year!
Post-Pension America: Retirees used to count on a “three-legged stool”: pensions, savings, and Social Security. However, many private-sector employers have switched from “defined benefit” plans, with guaranteed benefits, to “defined contribution plans,” shifting investment risks to workers. With stagnant wages, workers have a hard time saving.
Counting on Social Security: Many retirees count on Social Security as a major portion of their retirement income. Women get an average of $4,500 less in annual benefits than men, which is attributable to factors such as making less money than their male counterparts (and therefore making smaller Social Security contributions) and taking time to care for children and aging parents. Now, with millions more Baby Boomers getting ready to retire, President Trump and congressional Republicans are threatening to cut money from the program to pay for $1.5 trillion in tax cuts for the rich and large companies.
The federal government could shut down on Friday if Congress doesn’t reach an agreement on spending. This would be the first time in history that a shutdown took place when one party – in this case, the internally divided Republicans – controls both houses of Congress as well as the presidency.
What Keeps Running: The military will still be working. But paychecks for the troops – even those in harm’s way in Iraq and Afghanistan – could be delayed. Social Security and Medicare checks, air traffic control, and U.S. mail deliveries will also continue.
But Millions of Americans Will Suffer: When the government shut down for 16 days in 2013:
- Veterans with disabilities had to wait two weeks for their benefits.
- Taxpayers didn’t get $4 billion in refunds for two weeks.
- National parks and monuments closed.
- Cancer patients couldn’t get clinical trials at the National Institutes for Health.
- The Environmental Protection Administration stopped inspecting 1,200 sites, including drinking water systems, hazardous waste facilities and chemical plants.
- The Food and Drug Administration postponed almost 500 food inspections.
Economy Would Take a Hit: S&P Global analysts predict a shutdown will cost the economy about $6.5 billion a week because furloughed federal workers (850,000 in 2013) won’t have paychecks to spend. S&P expects that, as in 2013, the economic slowdown will cost more than 100,000 private sector jobs that would have been created.
If you worked for a company for 20 or 30 years, you used to expect a secure and livable pension.
Now that dream is dying for most private-sector workers.
Only 25 years ago, at large and medium-sized companies, about 60 percent of fulltime workers had pension plans. Now, only about a quarter can count on retirement security.
There’s been a big shift from traditional “defined benefit” plans, with guaranteed incomes for retirees, to “defined contribution” plans, such as 401(k)s, which require workers to risk their retirements on the roller-coaster of Wall Street, without any guaranteed benefits.
Working Americans and retirees are suffering from the decline in good-paying, full-time, union-represented jobs. Even now, 90 percent of union workers participate in some kind of retirement plan, compared to 75 percent of unrepresented workers. And 74 percent of union workers — but only 15 percent of unrepresented employee — enjoy “defined benefit” plans.
A study of 998 workers who were laid off from the shuttered McDonnell Douglas plant in Tulsa, OK, found most had to work at low-wage, often back-breaking jobs, well-past retirement age, often buried by debts. One 79-year-old man with spinal disease still works full-time as a “greeter” at Wal-Mart.
Fighting for Social Security & Medicare
When planning retirement, working Americans used to rely on a “three-legged stool”: employer pensions, their own savings and Social Security.
Now, all three legs are shaky: Private-sector pensions are dwindling. Meanwhile, almost half of all families with working-age adults don’t have any retirement savings.
That’s why, without Social Security benefits, more than 22 million older Americans would plunge into poverty. And Social Security benefits are bare-bones at best, averaging only about $1,360 a month — $16,300 a year.
With the Trump tax cuts for big business and the super-rich adding at least $1 trillion to the federal deficit, Congressional Republicans are threatening to slash Social Security and Medicare.
We can’t let them cut the last lifeline for Americans who have worked hard and deserve dignified retirements.