With the U.S. economy strong and stocks near record levels, retirees’ and workers’ confidence in having enough money for retirement have risen over the past year to all-time highs, according to a long-running survey released Tuesday.
According to the annual report by the nonprofit Employee Benefit Research Institute, 82% of polled retirees are optimistic about their ability to live comfortably in retirement, up from 75% last year. The figure closely matches the levels recorded in 2005 and 2017 and is the highest since the survey started in 1990... Mr. Copeland said the strong economy is likely responsible for this year’s optimistic results.“Typically, as the economy improves and workers become more confident in their current situation, it spills over to their confidence” about retirement, he said. In addition, he added, in a strong economy, many people are able to save more and take steps to plan for retirement, which also boost confidence.
Could you come up with $2,000 in 30 days if you had to? As many as 40 percent of American families can’t, despite the improving economy. Among them is Neal Gabler, who is frequently broke despite his successful career as a writer. As part of a collaboration between The Atlantic and the PBS NewsHour, Judy Woodruff looks at why Gabler and so many other Americans are struggling with savings.
There’s no way to bring back all those steel plants and steel jobs, even if we stopped all imports. Partly that’s because a modern economy doesn’t use that much steel, partly because we can produce steel using many fewer workers, partly because old-fashioned open-hearth plants have been replaced by mini-mills that use scrap metal and aren’t in the same places. So this is all a fantasy.
.. You may remember Bernie Sanders using Denmark as an example. It’s a good one: much better wages, a much stronger social safety net, a mostly unionized work force. But Denmark is as open to world trade as we are. It’s domestic policies — from taxing and spending decisions to pro-labor policies in the service sector — that make the difference. Universal health care and the right to organize matter a lot more for workers than trade policy.
.. Why does the president of the United States have the authority to make decisions (such as imposing tariffs) that have significant impacts on the economy, trade, relationships with allies, etc. — with impunity, and with no input from Congress? What path should Congress be taking to restrict his powers.— Ricky, Saint Paul, Minn.
PK: Actually, Congress voluntarily limited its own role, to protect itself from special-interest politics: it votes big trade deals up or down on a single vote, then stays out of it.
.. However, these powers aren’t supposed to be used arbitrarily: there’s supposed to be an independent study of the issue, and the president acts on the basis of that study. What’s happening with Trump is an abuse of the process: the Commerce Department came up with an obviously bogus national security rationale for tariffs Trump wanted to impose for other reasons.
So we have a process that gives presidents some discretion, for pretty good reasons — but one that assumes that said presidents will act honestly and responsibly. It falls apart when you’re dealing with someone like Trump.
.. PK: President Oprah Winfrey, or whoever, can undo these tariffs with a stroke of the pen. However, we might get into a full-scale trade war before that happens, and in any case the U.S. has already lost its reputation as a reliable negotiating partner.
.. PK: Basically, we have persistent trade deficits because we have low savings and remain an attractive place for foreigners to invest. And as a result, the U.S., which was a creditor country before we began running persistent deficits since 1980, is now a net debtor.
But you want to keep some perspective. Our “net international investment position” — overseas assets less liabilities — is about -45 percent of G.D.P., which isn’t that big a number, all things considered. For example, it’s less than 10 percent of our national wealth.
And the idea that this gives foreigners a lot of power over America has it backward. On the contrary, in a way it makes them our hostages: China has a lot of money tied up in America. Suppose they tried to pull it out: the worst that could happen would be a fall in the dollar, which would be good for U.S. manufacturing and inflict a capital loss on our creditors.
Lot of things worry me; our foreign debt, not so much.
What we see instead is a large decline in personal savings, which are now down to levels not seen since before the financial crisis:
The proposals under discussion would potentially cap the annual amount workers can set aside to as low as $2,400 for 401(k) accounts, several lobbyists and consultants said on Friday. Workers may currently put up to $18,000 a year in 401(k) accounts without paying taxes upfront on that money; that figure rises to $24,000 for workers over 50. When workers retire and begin to draw income from those accounts, they pay taxes on the benefits.
.. Reducing contribution limits would be, in effect, an accounting maneuver that would create space for tax cuts by collecting tax revenue now instead of in the future.
.. Such a move would be likely to push Americans to shift their savings to so-called Roth accounts, where contributions are taxed immediately, and not when they are drawn out as benefits. That would increase federal tax receipts for the short run.
.. Under the rules of budget reconciliation — the method Republicans are employing to avoid a Democratic filibuster of the bill — legislation cannot increase budget deficits after a decade. Shifting revenue by lowering 401(k) limits “raises money early, but loses money late, and that’s exactly the opposite of what you want in a reconciliation bill,”
The central issue in American politics is the economic security of the middle class and their sense of opportunity for their children. As long as a substantial majority of American adults believe that their children will not live as well as they did, our politics will remain bitter and divisive.
.. average hourly earnings last month rose by all of 3 cents — little more than a 0.1 percent bump. For the past year, they rose by only 2.5 percent. In contrast, profits of the S&P 500 are rising at a 16 percent annual rate.
.. Technology has given some employers — depending on the type of work involved — more scope for replacing American workers with foreign workers (think outsourcing) or with automation (think boarding-pass kiosks at airports) or by drawing on the gig economy (think Uber drivers). So their leverage to hold down wages has increased.
.. other factors have decreased the leverage of workers. For a variety of reasons, including reduced
- availability of mortgage credit and the loss of equity in existing homes, it is harder than it used to be to move to opportunity.
- Diminished savings in the wake of the 2008 financial crisis means many families cannot afford even a brief interruption in work. Closely related is the observation that workers as
- consumers appear more likely than years ago to have to purchase from monopolies — such as a consolidated airline sector or local health-care providers — rather than from firms engaged in fierce price competition. That means their paychecks do not go as far.
Workers seeking gigs on their own are inevitably less secure than a group collectively representing their interests. The decline in unionism is also a contributor to the pervasive sense that our political system is too often for sale to the highest bidder.