The dignity of a living wage

Across America, labor activists and other progressives are calling for a higher federal minimum wage, often citing the personal financial challenges that confront low-paid retail and fast food workers. The current minimum wage is $7.25/hour, though some states have adopted a slightly higher one. Advocates are calling for a new minimum wage ranging from $10.00 to $15.00 an hour.

Whenever a minimum wage hike is proposed or debated, opponents claim that doing so will reduce jobs. At the far end of that spectrum, virulent opponents of any minimum wage law claim that such government mandates are “job killers.”

Yes, I suppose if you got rid of the princely $7.25/hour minimum wage, you could take the same hourly rate and pay three people $2.00/hour and still have a $1.25/hour as a bonus for the CEO. But that’s not “job creation,” it’s exploitation. Take away the minimum wage and you get a labor situation like that in Bangladesh, where wealthy corporations pay factory workers a pittance and subject them to dangerous working conditions. (After all, American factory jobs moved overseas to avoid paying workers good wages and benefits!)

Current minimum wage and low-wage earners often find themselves having to access public benefits such as food stamps to get by. The low minimum wage means, in effect, that American taxpayers are indirectly subsidizing corporations such as Walmart and McDonald’s and their shareholders by supporting living expenses for workers who can’t afford to live on their paltry paychecks alone.

Above all, we need to frame this debate in terms of human dignity. Okay, so maybe that high school senior from an upper middle class family who works part-time to earn spare cash can get by on $7.25/hour. But for those supporting themselves and others, a full-time job at least should pay for the basics. In fact, let’s remember that Congress’s intent behind enacting the federal minimum wage law during the heart of the Great Depression of the 1930s was to provide a living wage. It’s a shame that we have to invoke the hardship of our last systemic economic meltdown to remind ourselves of that.

Bookends of a coming mega-meltdown

Twenty or so years from now, Americans will look back and ask: Why didn’t we do more? Why didn’t we accept some modest sacrifice to avoid the extreme suffering of today? Why did we ignore what was so perfectly clear back then?

No, I’m not talking about climate change, though you can add that one too. Rather, I’m looking at the scary, jolting confluence of sky high student loan repayment burdens concentrated on one end of the adult age spectrum, and woeful shortfalls in retirement funding for a majority of Americans on the other. I’ve written on both of these topics before (especially America’s retirement readiness), but let me add one excellent investigative piece and one important study to the mix.

Student loan debt

If you’re in college or grad school, or you’re a parent of someone who is, you likely know the score. Gone are the days when a few thousand dollars saved from the family budget covered a big chunk of a child’s tuition and expenses. Income levels have stagnated for most in the U.S., but tuition costs have soared. And the lion’s share of people seeking post-secondary education must borrow money, often gobs of it, to pay those bills.

If you want more detail, the Rolling Stone‘s Matt Taibbi has written a superb investigative article — Ripping Off Young America: The College-Loan Scandal – that is must reading for anyone affected by the financing of higher education. Here’s a snippet:

How is this happening? It’s complicated. But throw off the mystery and what you’ll uncover is a shameful and oppressive outrage that for years now has been systematically perpetrated against a generation of young adults. For this story, I interviewed people who developed crippling mental and physical conditions, who considered suicide, who had to give up hope of having children, who were forced to leave the country, or who even entered a life of crime because of their student debts.

…[T]he underlying cause of all that later-life distress and heartache – the reason they carry such crushing, life-alteringly huge college debt – is that our university-tuition system really is exploitative and unfair, designed primarily to benefit two major actors.

First in line are the colleges and universities, and the contractors who build their extravagant athletic complexes, hotel-like dormitories and God knows what other campus embellishments….

…Next up is the government itself. While it’s not commonly discussed on the Hill, the government actually stands to make an enormous profit on the president’s new federal student-loan system….

The crisis is compounded by a horrible entry-level job market for recent graduates. It’s hard to pay off those loans and save a bit of money when you’re doing your 5th or 6th unpaid internship.

Retirement funding

In the meantime, at the older end of the population, the nation’s largest generation is hurtling towards the traditional retirement years. The only problem is that many Boomers will be in no position to retire, even if Social Security remains intact. Their numbers just don’t add up.

Recent confirmation of the dire situation comes from the National Institute on Retirement Security, a non-profit, non-partisan research and education center. Its 28-page study, The Retirement Savings Crisis: Is It Worse Than We Think?, by labor economist Nari Rhee, is clearly laid out and alarming to read. Here are the major findings:

New NIRS research finds retirement savings are dangerously low, and the U.S. retirement savings deficit is between $6.8 and $14.0 trillion.

…The average working household has virtually no retirement savings. When all households are included— not just households with retirement accounts—the median retirement account balance is $3,000 for all working-age households and $12,000 for near-retirement households.  

The findings confirm that the American Dream of retiring comfortably after a lifetime of work will be impossible for many. Based on 401(k)–type account and IRA balances alone, some 92 percent of working households do not meet conservative retirement savings targets for their age and income. Even when counting their entire net worth, 65 percent still fall short.

Where the twain meet

Let us fast forward 20 years and assume we’ve done nothing besides making some minor tweaks to Social Security and lowering the interest rate a tad on student loans.

It’s 2033, and millions of Boomers are working into their 70s and 80s, not by choice, but rather by necessity. The Social Security Trust Fund is running dry, and older Americans who didn’t have, or already burned through, retirement savings are faced with a 25 percent cut to Social Security benefits, funded now on a pay-as-we-go basis by payroll taxes on aging Gen Xers and Millennials.

These younger folks, by the way, are struggling to pay off student loans that are not dischargeable in a bankruptcy proceeding. For many, their finances have required them to make some hard decisions, such as having fewer or no kids.

Of course, this means they’re less likely to be in the market to buy the big suburban houses put on sale by older Boomers looking to downsize their living spaces and reduce living expenses. (It wouldn’t have mattered anyway, as their credit ratings are blown from their student loans and the credit card debt they’ve taken on to make ends meet.)

In the year 2033, many of the Gen Xers and Millennials are hoping to pay off their student loans and modest mortgages (that’s all the house they could afford) by their late 50s. Some of their retirement prospects, by the way, are even dimmer than that of the average Boomer.

In 2033, what we could’ve done now will seem so obvious…

Obvious, but not easy. It will require belt-tightening by institutions and individuals who can afford it, higher taxes on some (including raising the payroll tax cap to beef up Social Security), creative public policies to recreate the retirement system, an all-out war on the student loan racket, more emphasis on community needs, and less tolerance for extravagance, waste, and corruption. Some kindness will go a long way, too.

It may sound like I’m preaching the meme of austerity. No, to the contrary. I’m suggesting that we strive to live comfortable, healthy, safe, and enriching lives rather than be in a state of want. But we’ll need a values adjustment to get there.

(By the way, much of this will help to address global climate change. Less mad, privatized consumption will have a cooling effect on our planet, literally and figuratively.)

Call me Chicken Little, Cassandra, whatever

The sky is falling. But this begs the philosophical question: If the sky falls on Washington D.C. and Wall Street, but no one there heard or felt it, did it really fall?

Seriously, at a time when dramatic measures are needed to avoid terrible societal and individual pain later, our leaders in the private, public, and non-profit sectors aren’t exactly sounding the alarm bells. And much of America is oblivious to, or willfully ignoring, this coming mega-meltdown.

We do have choices, but time is running out.

Working Notes: Next Avenue on Boomer suicides, Gary Namie on workplace bullying targets, and USA Today on unpaid internships

With the weekend in sight, here are three pieces well worth a full read:

Next Avenue on Boomer Suicides

Suzanne Gerber, in a disturbing blog post for Next Avenue, examines the large spike in suicides rates among Baby Boomers during the economic meltdown era:

The Centers for Disease Control and Prevention released a report on suicide rates in this country last week, and the news was shocking. From 1999 to 2010, the age-adjusted suicide rate for 35- to 64-year-olds in the United States was up by 28.4 percent (to 13.7 per 100,000).

The dire economic situation and other pressures may well be the reasons:

Noting that suicide rates tend to rise during times of financial stress — and 2008 might go down in the history books as one of the worst years in modern American history — Dr. Ileana Arias, CDC deputy director, acknowledged, “The increase does coincide with a decrease in financial standing for a lot of families over the same time period.”

…Arias further observed that the spike in suicide rates could be a reflection of a combination of stressors specific to baby boomers. As the sandwich generation, many of us, while fighting our own financial battles, are also taking caring of aging parents, many with dementia, and providing economic and emotional support to our adult children, who are having difficulties launching their own independent lives.

Gary Namie on WBI’s “Target-centric” Perspective

In a lengthy and strongly worded blog post, Dr. Gary Namie of the Workplace Bullying Institute writes that in the mix between bullying target and aggressor, he’s taking the side of the target and won’t apologize for the aggressors. Here’s a snippet:

Are bullies demons? Bully apologists abhor “demonizing” abusers in the workplace. What’s the alternative? Revere them. Thank them for showing us how loathsome and dark can be the human condition? Ignore their cruelty foisted on the best and brightest workers whose principal goal of every day is to be “left alone” to do their jobs? Of course, that’s exactly what bully apologists do. We think they stand on the wrong side of the moral fence.

We at WBI are target-centric. We’ve chosen the other side. We didn’t start the U.S. Workplace Bullying movement to treat it as an academic exercise in neutrality. Targets deserve and need support. Institutions do a fine job of defending perpetrators.

USA Today on Unpaid Internships

Susannah Griffie reports for USA Today on a petition drive by a New York University sophomore to press the school’s career services office to stop listing unpaid internships:

Would you ever work up to 40 hours a week for free?

That’s what many college students do. It’s called the unpaid internship.

New York University sophomore Christina Isnardi is publicly pushing back against the trend of unpaid internships by petitioning the NYU Wasserman Career Center to remove illegal unpaid internship postings on its job search website, CareerNet.

Working Notes: Moyers on wealth inequality, EHS on workplace bullying, adjunct profs organize, and more

Several interesting items worthy of attention:

Moyers on American wealth inequality

Bill Moyers presents an excellent video essay on America’s out-of-control wealth inequality. Click above to watch, or go here for a preview:

The unprecedented level of economic inequality in America is undeniable. In an extended essay, Bill shares examples of the striking extremes of wealth and poverty across the country, including a video report on California’s Silicon Valley. There, Facebook, Google, and Apple are minting millionaires, while the area’s homeless — who’ve grown 20 percent in the last two years — are living in tent cities at their virtual doorsteps.

“A petty, narcissistic, pridefully ignorant politics has come to dominate and paralyze our government,” says Bill, “while millions of people keep falling through the gaping hole that has turned us into the United States of Inequality.”

EHS on Workplace Bullying

Laura Walter, in a lengthy, substantive piece for EHS Today (a periodical for environmental, health, and safety professionals), writes about the effects of workplace bullying. Here’s her lede:

A few years ago, Maria had never even heard the term “workplace bullying.” But by the time she shared with EHS Today the path her professional life has taken in recent years, she used words like “traumatized,” “powerless,”  “hostility,”  “retaliation,”  “mafia” and “war zone.” All this from a self-described happy, optimistic person who loved her job as a nurse and who never expected to become the target of bullying at work.

Dr. Gary Namie and the work of the Workplace Bullying Institute are featured prominently in this article.

Adjunct Professors Organizing

SEIU, America’s largest service workers union, is organizing part-time faculty in colleges and universities. Overall, adjunct professors comprise one of the most exploited groups in higher education, receiving paltry salaries and minimal, if any, benefits in return for heavy-duty teaching responsibilities. Peter Schmidt reports for the Chronicle of Higher Education:

A national labor union that has made strides in organizing adjunct instructors in Washington, D.C., and its Maryland suburbs is starting a similar regional campaign in Boston and is planning one in Los Angeles, too.

Service Employees International Union developed its “metropolitan” organizing strategy out of a belief that, by unionizing adjuncts at enough colleges in a large, urban labor market, it can put other colleges in that area under competitive pressure to improve their own adjunct instructors’ pay and working conditions.

As the article points out, Boston is among the cities selected for organizing efforts. On Saturday, Massachusetts Adjunct Action held a symposium at the Kennedy Library, drawing participants from some 20 area schools. Go here for social media commentary on the event.

Unpaid Internships Across the Pond

Peter Walker reports for The Guardian that the British government will investigate 100 firms for potential violations of wage laws stemming from their use of unpaid interns:

The government has referred 100 companies for investigation by HM Revenue and Customs after a campaign group told ministers they might be breaking the law through their use of unpaid interns.

The firms, which have not been identified publicly but are understood to include a number of household names, were referred by Jo Swinson, the junior employment minister, after a meeting she had with Intern Aware, which campaigns against the abuse of the internship process.

I hope this will inspire unpaid intern activists and the U.S. Department of Labor toward similar initiatives!

Hat tip to “Interns ≠ Free Labor” Facebook group

Fidelity exec on U.S. retirement savings

Fidelity’s head of asset management told the U.S. Chamber of Commerce that America faces a crisis in terms of retirement readiness. Beth Healy reports for the Boston Globe:

Fidelity Investments’ president of asset management, Ronald O’Hanley, issued a stern warning Wednesday before a gathering of the US Chamber of Commerce that Americans are not saving enough for retirement and are in danger of living their later years in poverty.

O’Hanley told attendees at the chamber’s capital markets summit that the country needs to “act now to avert the looming catastrophe America faces if we don’t get serious about addressing the inadequacy of our retirement savings system.”

Already, nearly four in 10 retiree households do not have enough income to cover their monthly expenses, according to the Boston mutual fund giant’s research. And well over half of Americans have less than $25,000 in total savings, not counting their homes or pension plans, O’Hanley said.

It’s a message we cannot repeat too often.

The Future of Social Security

Of course, if we’re talking about retirement readiness, then the health of the Social Security program must be considered as well. The topic is all over the news right now because the folks in Washington D.C. are taking hard looks at how to shore up the Social Security retirement and disability funds. On the always interesting Next Avenue site, Richard Eisenberg has a good overview piece that examines the possible policy options:

You’ve probably heard a lot lately about President Barack Obama’s Chained CPI (Consumer Price Index) budget proposal, which would cut future Social Security annual cost of living increases, as I’ll explain shortly. But I’d like to tell you about other ways Social Security may be changing to remain solvent — and the one strategy for claiming benefits you might want to take advantage of before it disappears.

America’s economic meltdown continues for millions: Articles worth reading

The human costs of our ongoing economic crisis continue to mount. If your primary impressions of the economy are shaped by the rise in the Dow Jones Average, you might be wondering what I’m talking about. But for countless millions of others who are more concerned with the challenges of paying their bills, feeding their kids, saving for the future, and finding work, crisis remains an apt way to describe this economy.

I’ve collected a number of articles and blog posts that help us to connect the disturbing dots:

Bob’s cousin

Bob Rosner, blogging for Workplace Fairness Weekly, writes about “Broken Hearts: Unemployment’s Devastating Impact“:

Last week my cousin died of a heart attack. After working continuously for the first two-thirds of his career, recently he’d bounced from short term jobs to stretches of unemployment. This cycle is tough enough on someone just starting out a career, but for someone in their early 60′s, it can literally be a heartbreaker.

Read what he has to say about maintaining hope through the 4 “Ps”: perspective, pride, pals, and possibilities.

Profits over people — by a longshot

But hold on, it’s not as if our economy remains in complete meltdown mode. Nope, that just applies to the vast millions who are struggling to make ends meet and to secure decent work. Derek Thompson, business writer for The Atlantic, sums up the situation in meaty blog post:

Here are two things that are true about the economy today.

(1) The Dow Jones industrial average is poised to set a new record as corporate profits stretch to all-time highs.

(2) There are still fewer working Americans today than there were before the start of the Great Recession.

He goes on to explain:

When the economy crashes, we all crash together: corporate profits, employment, and growth. But when the economy recovers, we don’t recover together. Corporations rack up historic profits thanks to strong global demand, cheap global labor, and low interest rates, while American workers muddle along, their significance to these companies greatly diminished by a worldwide market for goods and people.

The forgotten

Although the official unemployment rate continues to improve very slowly, overlooked in those figures are the millions who are no longer included in the counts. Annalyn Kurtz reports for CNN.com:

An often overlooked number calculated by the Labor Department shows millions of Americans want a job but haven’t searched for one in at least a year. They’ve simply given up hope.

. . . These hopelessly unemployed workers have just been jobless so long, they’ve fallen off the main government measures altogether.

. . . Five years ago, before the recession began, about 2.5 million people said they wanted a job but hadn’t searched for one in at least a year. Now, that number is around 3.25 million.

The future of retirement

As I’ve written frequently here, the demise of retirement as a normal lifespan experience may be one of the longer-term effects of our economic condition. Steven Greenhouse, labor reporter for the New York Times, offers a thorough look at the future of retirement in the U.S.:

While retirement has assumed myriad forms across the country, many economists and other experts on retirement see some common, increasingly worrisome trends. A growing number of workers are convinced they will not have a comfortable retirement. A Boston College study in October found that 53 percent of Americans were “at risk” of being unable to maintain their pre-retirement standard of living once they retire, up from 30 percent in 1989. A study last May by the Employee Benefit Research Institute found that 44 percent may not have enough money to meet their basic needs in retirement.

Burdening next generations

As the cost of a college education continues to climb, student loan debt rises with it. Martha C. White reports for Time on the economic repercussions of massive student loan debt:

The broader economic implications are troubling. Graduates struggling to dig out from a mountain of student debt also tend to put off getting married, buying homes, and having kids. And since a bigger chunk of their income will go towards servicing the mortgages or car loans they are able to obtain at higher rates, they’ll have less spending power when they do eventually buy big-ticket items like homes and cars.

And that’s not even addressing the psychological impact of mountainous debt and reduced hopes. Cryn Johannsen of the Economic Hardship Reporting Project writes about the spectre of suicide in connection with student debt:

Suicide is the dark side of the student lending crisis and, despite all the media attention to the issue of student loans, it’s been severely under-reported. I can’t ignore it though, because I’m an advocate for people who are struggling to pay their student loans, and I’ve been receiving suicidal comments for over two years and occasionally hearing reports of actual suicides.

Inequality = more stress and illness

America’s wealth gap is widening despite the supposed economic recovery, reports Rick Newman for U.S. News & World Report:

The problem, however, is that the recession raised the bar for success while leaving fewer haves and more have-nots. America as a whole may be just as wealthy as it used to be, but the wealth is being shared by a smaller slice of the population. And that rearrangement may end up being permanent.

In this piece for BillMoyers.com, Theresa Riley interviews epidemiologist Richard Wilkinson, an authority on the destructive public health consequences of societal inequality:

The pattern we’ve found in our research is quite extraordinarily clear. More unequal countries, the ones with the bigger income differences between rich and poor have much more violence, worse life expectancy, more mental illness, more obesity, more people in prison, and more teenage births. All these problems get worse with greater inequality, because it damages the social fabric of a society.

The end of the American dream?

Joseph Stiglitz, a Nobel laureate in economics, assessed our economy in the context of the November election:

In this election, each side debated issues that deeply worry me: the long malaise into which the economy seems to be settling, and the growing divide between the 1 percent and the rest — an inequality not only of outcomes but also of opportunity. To me, these problems are two sides of the same coin: with inequality at its highest level since before the Depression, a robust recovery will be difficult in the short term, and the American dream — a good life in exchange for hard work — is slowly dying.

Stiglitz’s public policy prescriptions “include, at least, significant investments in education, a more progressive tax system and a tax on financial speculation.”

Goodbye to trickle-down economics?

The policies that led us to this widening gap between the haves vs. the have-less and the have-nots have been at least 30 years in the making, with “trickle-down economics” being the policy mantra of the era. This concept held that if wealthy people could keep more of their money and businesses could be freed of regulatory safeguards, the benefits would trickle down to everyone else. The centerpiece of trickle-down theory was that tax cuts to the wealthy would give a jump start to America’s economic engine, an assumption rebutted in a non-partisan Congressional Research Service report discussed in this Huffington Post piece.

If you’re interested in learning more, read some of these articles and start connecting the dots for yourself. We’re at a critical economic juncture in America, and the well-being of all but the most fortunate is at stake.

Retirement party

Vinny during his last full week at Con Ed, Dec. 2012

Vin Poliseno in his Con Ed office, Manhattan, Dec. 2012 (David Yamada, photo)

Will the retirement party become a thing of the past?

I just finished a quick weekend trip to New York City to attend a retirement party for a long-time friend, Vincent Poliseno, who spent 44 years working for Consolidated Edison. Vinny and I met in 1989, when we started a master’s degree program in Labor and Policy Studies at Empire State College of the State University of New York. Both of us were great procrastinators, and it took us a loooong time to finish that degree program! But this allowed us to plant the seeds of an enduring friendship.

At Con Ed, Vinny began at the entry level, did two years of military service in the early 70s, and then returned and progressed steadily up the ladder. Most of his time was spent in Con Ed’s Manhattan engineering department, where he became a union shop steward and eventually served in a management role. His tenure at Con Ed covered many major crises facing the city, including 9/11 and Hurricane Sandy.

Celebrating in Brooklyn

At the scenic Giando On the Water restaurant near the Williamsburg Bridge in Brooklyn, Vinny’s family, friends, and co-workers gathered to pay tribute to him upon his retirement. In addition to a great meal (hey, this was an Italian retirement party, after all), we were treated to a hilarious speech by one of Vin’s colleagues and brief but warm remarks from the guest of honor himself.

Vin is the kind of person who makes the extra effort to help people in good times and bad. It showed that night: He spent the last hour of the dinner posing for pictures with people who stood in line as the cameras clicked away.

For 44 years, Vin helped to keep the lights on. (Williamsburg Bridge, Brooklyn side, photo by David Yamada)

Vin helped to keep the city’s lights on for 44 years. (Williamsburg Bridge from Brooklyn; David Yamada, photo)

Goodbye to retirement parties?

In many ways, Vin’s career represents a throwback: 44 years at one company, steadily moving up, and finishing with a retirement party and a decent pension.

Unfortunately, that relatively secure path — earning the benefits of hard work and long-term commitment to a single employer — is rapidly going by the wayside. Many people in the age group immediately following Vin’s have been caught in the web of nasty layoffs by employers who deem them too expensive or otherwise expendable. Others have scant retirement savings and will have to work much later into their lives than they anticipated.

Different stories

The website of “Set for Life,” an excellent documentary by Susan Sipprelle on the challenges facing middle age workers in America, has been collecting stories of people who have been beaten up by this economy and job market. Here are snippets from three of them:

It’s getting worse, I’m now 55 and have been out of work for a year, like others, living off of my retirement. When I was in my 30′s, I could find another sales position in a week! Now no one will give me the time of day. They say that employers cannot discriminate because of age, yet every application I fill out asks for either date of birth or year of high school graduation. . . .

***

I am a 58-year old female and I’ve been unemployed since Sept. 2011. I was released from my job as a website administrator with very little explanation. . . . Right now I’m living off unemployment that will end very soon, my savings, and my retirement fund that are quickly dwindling. . . .

***

55 and wondering who pulled the trap door. Worked Fortune 100 for 27 years and have been out of work since 2008 with no luck at finding anything remotely close to the salary I once made. There are no Companies willing to hire in our age group, and even entry level jobs dont exist.

I’m not claiming that life “owes us” a steady job capped off by a nice party and a pension at the end. But it appears that we are witnessing the rapid demise of the post-WWII American middle class dream. The idea of a life well lived and played by the rules, including a relatively secure retirement, has become an illusion for millions.

***

Related post

Not “Set for Life”: Boomers face layoffs, discrimination, and bullying at work (2012)

Working Notes: 401(k) blues, challenging unpaid internships, and Shape magazine on workplace bullying

I use this Working Notes feature to flag items worthy of attention. Here are pieces on 401(k) plans and the retirement funding crisis, unpaid internships, and workplace bullying (especially as relevant to younger women).

1. Steven Greenhouse on 401(k) plans — Here’s more evidence of the crisis in retirement funding, in the form of a thorough look at the inadequacy of 401(k) plans as retirement funding vehicles, courtesy of labor reporter Steven Greenhouse of the New York Times. It begins:

JOHN GREENE worked for 30 years at an Oscar Mayer plant in Madison, Wis., deboning hams and loading boxes of hot dogs. His 401(k) plan grew to $60,000, and soon after retiring he began withdrawing $3,600 a year from it, money that allowed him and his wife to take what he called a wondrous two-week trip to Scotland, his ancestral homeland.

But when the financial markets plunged four years ago, his 401(k) dropped to less than $18,000.

2. Plaintiff Eric Glatt on unpaid internships — Eric Glatt, lead plaintiff in a class-action lawsuit against Fox Searchlight Pictures for unpaid wages to interns working on the production of “Black Swan,” explains why he and others were not paid for their labor in this blog post for Other Words:

Because I, like scores of other workers on that film, was a relative newcomer to the industry. And being a newcomer to the film industry often means doing unpaid work, an illegal arrangement camouflaged behind the term “internship” — a term the movie industry embraces for its promise of alchemy, magically removing costs from budgets to the delight of producers and shareholders.

Eric is now pursuing his law degree at Georgetown University Law Center. I wrote up a blog post about an enjoyable brunch meeting we held in New York last December with writer Ross Perlin (author of Intern Nation) and journalist Tiffany Ap.

3. Jeannette Moninger for Shape magazine on workplace bullying — The September issue of Shape magazine includes a lengthy, informative feature on workplace bullying by Jeannette Moninger. Jeannette is a health writer who convinced the editors of Shape to devote quite a bit of space to this topic. Hat’s off to both for bringing this information to a demographic (younger women) often targeted by workplace bullying. (It’s also the first and likely only time that I’ll be quoted in Shape!). Here’s the lede:

When Stacie started as an account manager at an architectural firm two years ago, she couldn’t believe her luck. In a tough market, she’d landed her dream job at age 31, complete with a great salary, friendly coworkers, sleek high-tech offices, and a corporate gym membership. There was just one problem: Her boss was a nightmare.

The problem with the $75,000 sweet spot

In an opinion piece in last Sunday’s New York Times (link here), psychology professor Elizabeth Dunn (University of British Columbia) and business administration professor Michael Norton (Harvard) tackle the question of how much money we need to be happy and suggest that once we’re at a certain income level, we’ll likely get more satisfaction out of giving than receiving.

$75,000

The authors are quick to acknowledge that “there is a measurable connection between income and happiness” and that “people with a comfortable living standard are happier than people living in poverty.” But they go on to suggest that “additional income doesn’t buy us any additional happiness on a typical day once we reach that comfortable standard,” which in the U.S. “seems to fall somewhere around $75,000″:

Using Gallup data collected from almost half a million Americans, researchers at Princeton found that higher household incomes were associated with better moods on a daily basis — but the beneficial effects of money tapered off entirely after the $75,000 mark.

If you have it, share it

Dunn & Norton summon this survey data to make a deeper point. Instead of falling for the all-too-common American practice of overindulging when our coffers fill up, why not underindulge and find better ways of using our money, like giving back to the community and to those in need? They even cite studies showing that we may get more pleasure by sharing than by keeping it all for ourselves.

They close their piece by suggesting:

But rather than focusing on how much we’ve got in our bowl, we should think more carefully about what we do with what we’ve got — which might mean indulging less, and may even mean giving others the opportunity to indulge instead.

I’m glad that Dunn & Norton are telling us to be generous, for our own sake and — more importantly — for the sake of others. At a time when the official unemployment rate is holding steady at just over 8 percent, and the “real” unemployment rate (including the seriously underemployed and discouraged job seekers who are no longer counted) is roughly double that, those reminders cannot come too often.

Uh, wait a minute

But before we get carried away, let’s break from the financial profile of the average Times reader and look at the bigger picture:

According to the most recent U.S. census data, individual yearly earnings from 2006-2010 (in 2010 dollars) averaged a little over $27,000. And household earnings averaged barely under $52,000.

In other words, most folks aren’t earning anywhere near $75,000. In fact, according to this handy calculator, that income level is at the 88th percentile of American earners, circa 2010. If we’re talking total household income (the measure of the study cited by Dunn & Norton), it would be at the 68th percentile. Even taking into account geographic cost of living differences, there simply aren’t a lot of people making 75Gs or more.

Where does this leave us?

If a $75,000 household income is indeed the magic number for feeling relatively comfortable, then something’s badly amiss when some 68 percent of the population may not enjoy that level of tranquility or satisfaction. We must address the larger economic, social, and political concerns that have brought us to this precarious place, such as the issues discussed in the recent AlterNet interview with Nobel Prize-winning economist Joseph Stiglitz that I excerpted earlier this week.

And finally, at an individual level, if you’re fortunate to have some discretionary income — however you choose to define it — think about how you can use some of it toward the greater good and to help those in need. You have a chance to make a difference in the lives of others.

***

[Note: This is a corrected version of the article originally posted and distributed to subscribers. I mistakenly published a version that did not properly reference the average individual and household income data.]

Suicides spike as Europe’s economy crumbles

The meltdown of the European economy has been linked to rising suicide rates of workers who see no escape from their plight.

Barbie Latza Nadeau reports for Newsweek (link here) on increasing suicide rates in countries such as Italy, Greece, Spain, and Ireland – all of which are in the throes of severe economic crises. She observes that “(i)n the countries most affected by the euro-zone crisis, depression is on the rise and suicides are spreading.” In addition, amid widespread unemployment in these countries, governments are cutting back on social support services for the jobless and those in need of assistance:

“The main reason for the rise in suicides is the recession and now austerity—both making hard times more difficult and reducing funding for mental-health services,” says David Stuckler, a Cambridge professor who coauthored a report on the health effects of the economic crisis in Europe. “Usually an epidemic is thought of as a short-term increase in a disease—by that criterion, suicides would be an epidemic.”

Nadeau begins her piece with three stories of three Italian workers who committed suicide due to their personal financial struggles. I suggest checking it out if you want a clearer sense of the human costs of this recession.

Cutting back when the need is greatest

Austerity can be a sound philosophy and practice when you need to cut back on spending, and surely many individuals and organizations manage to do so when times are tough. But in this context, austerity has meant sharp cuts in government support of those who most need assistance, including social services to help people who are struggling with life’s harsh challenges.

When America faced the Great Depression of the 1930s, the federal government enacted the New Deal legislation that created a stronger social safety net, including the minimum wage, Social Security, and public insurance for our bank accounts. Ironically, it was this influx of government spending, followed by the huge increase in public expenditures necessary to fight the Second World War, that saved capitalism and put America on path for its greatest era of prosperity.

The European economy today is different from that of the U.S. during the 1930s, but the point about government support is no less relevant. When people have nowhere to turn, some choose the most terrible option.

On suicide

It pains me that suicide comes up so often in discussions of depression, desperation, and despair related to work and livelihood. Before I began to understand the psychological impact of work and the economy, I did not comprehend how severe setbacks and traumatic experiences linked to employment (or lack thereof) might be related to suicide.

I get it now. The increasing suicide rate in Europe is horrific in itself, as well as the canary in the coal mine. We must pay attention.

Retirement expert: “Most middle-class Americans will become poor or near-poor retirees”

According to economist Teresa Ghilarducci, one of the nation’s leading experts on retirement policy, “(i)t looks like most middle-class Americans will become poor or near-poor retirees,” adding that “(t)he baby boomers will be the first generation that will do worse in retirement than their parents.”

Ghilarducci’s comments appear in The Week, a weekly news magazine, as part of an informative piece (“The not-so-golden years,” April 27 edition) spotlighting a largely neglected Boomer retirement savings crisis that has grave implications for America’s social and economic well-being.

401(k)s vs. pensions

While the economic meltdown is one reason for this crisis, the more systemic cause is the disappearance of the traditional pension plan. The Week reports that from 1980 to 2006, the percentage of private-sector workers with employer-funded pension plans dropped from 60 percent to 10 percent. The 401(k) plan — voluntary and largely employee-funded — would replace the pension as the primary retirement savings vehicle.

Unfortunately, most workers have not built 401(k) accounts sufficient to fund a comfortable retirement; the average 401(k) balance “is just over $60,000,” according to The Week. Even worse, “(m)ore than half of U.S. workers have no retirement plan at all.” Social Security payments “averaging $14,780 a year for individuals and $22,000 for couples” won’t bridge the gaps.

Consequently, it appears that many Boomers will find themselves working much later into their lives, seeking cheaper housing, and cutting back sharply on spending.

Policy options

From a policy standpoint, there are no easy choices. Below are two possibilities; the first is something of a pipe dream for now, the second is more politically viable.

Public pensions for all?

In an earlier New York Times op-ed piece in response to cutbacks in New York State’s pension plan for public workers, Ghilarducci calls upon the states to create public pension plans for all workers:

Rather than curtailing public and private pensions, New York and other states could save millions of workers from impending poverty by creating public pensions for everyone.

While the recession bears some blame for the looming retirement crisis, experts agree that the primary cause is more fundamental: Most workers do not have retirement accounts at work.

Shoring up Social Security

At the very least, we need to ensure the viability of Social Security for generations to come. The anticipated shortfalls in the Social Security fund can be addressed by raising the current cap on payroll taxes that fund the system.

Currently workers pay a flat 6.2 percent in payroll taxes, but that tax caps out on the first $106,800 of income. Eliminating or raising the cap would go a long way toward keeping the Social Security fund in decent shape in terms of paying out promised benefits.

The other option for Social Security is means testing, which would reduce or eliminate benefits for the most economically fortunate. The politics of this possibility will certainly push the “class warfare” buttons, but it wouldn’t surprise me to see proposals enter the picture as the crisis becomes more evident.

Generations at war?

In addition, there’s a potential political war looming in the not-so-far distance, one between the Boomers now facing a bleak retirement and younger generations trying to get their starts in life.

It is fair, for example, to ask people entering the workforce and starting a career to bail out their elders, while facing a brutal job market and carrying enormous amounts of student debt? As I wrote in this short article two years ago, generational battles over taxation and public spending may become ugly and divisive.

No quick fixes

Also, this won’t be solved by older Boomers suddenly deciding to save more, even assuming they are in a position to do so. Retirement funds are built by accruing returns on principal over time, and five or even ten years isn’t a sufficient period to do so, especially at a time of declining rates.

In addition to the individual burdens, the economic ripple effects of so many Boomers going into spending lock-down mode will be significant. What happens when a generation that built an economy based on credit and consumption suddenly puts on the brakes by sheer necessity? We may be about a decade away from finding out.

Folks, it’s not a pretty picture, but I won’t apologize for sounding like a broken record about it in the pages of this blog. It’s a crisis we’d better face earlier than later.

***

The full print version of The Week article is not available online, but a shorter version along with other pieces on the retirement crisis can be accessed here.

For more articles from this blog related to retirement readiness, Social Security, public pensions, and the economy, go here.

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