Is America “On the Beach” about its retirement funding crisis?

Is America simply waiting for the huge, coming crisis in retirement funding to overtake us? What happens then?

The situation reminds me of the 1959 movie, On the Beach, starring Gregory Peck and Ava Gardner. In the film, Australians are attempting to carry on with their everyday lives, while knowing that massive, deadly nuclear fallout, which already has wiped out most of the rest of humanity, is heading their way. When that occurs, they, too, will have no hope for survival.

For years I’ve been writing here about the emerging retirement funding crisis, and I’ve seen little evidence that things are getting any better. In fact, a major new research report by the non-profit, non-partisan National Institute for Retirement Security (NIRS) concludes “that the U.S. retirement savings crisis continues to worsen, and that the typical working household still has virtually no retirement savings.”

The new report, The Continuing Retirement Savings Crisis (authored by Dr. Nari Rhee and Ilana Bouvie) is a thorough update of a 2013 NIRS report, The Retirement Savings Crisis: Is It Worse Than We Think? NIRS concludes that the situation remains very dire. Here are some key points drawn from the 2015 report:

  • “When all households are included— not just households with retirement accounts—the median retirement account balance is $2,500. The median retirement account balance was $3,000 for all working-age households as reported in a previous 2013 report.”
  • “For near-retirement households, the new analysis finds that the median retirement account balance is $14,500.”
  • “(S)ome 62 percent of working households age 55-64 have retirement savings less than one times their annual income, which is far below what Americans need to be self-sufficient in retirement.”
  • “Even after counting households’ entire net worth—a generous measure of retirement savings—two thirds (66 percent) of working families fall short of conservative retirement savings targets for their age and income based on working until age 67.”

Personal and public policy responses

For those in a position to do so, this means paying close attention to retirement funding and engaging in steady, informed saving and investing. However, the realities behind the numbers are that many Americans will not be in a position to make up large shortfalls in expected retirement funding needs.

Clearly, we need to respond on a public scale simply to provide the means for a minimally secure, dignified retirement. The NIRS report agrees, observing that “(p)ublic policy can play a critical role in putting all Americans on a path toward a secure retirement by strengthening Social Security, expanding access to low cost, high quality retirement plans, and helping low income workers and families save.”

Now we get it, sort of

A recent NIRS public opinion survey “revealed that an overwhelming majority of Americans – 86 percent – believe that the nation faces a retirement crisis” and “that 75 percent of Americans are concerned about their ability to achieve a secure retirement.”  

In other words, America now understands that this is a crisis. 

It’s why I invoked On the Beach: We seem to know what’s coming, but we’re basically conducting business as usual. I guess it’s easier than imagining the specter of millions of people heading into their senior years with little or no retirement savings and a frayed safety net beneath them. Many around my age (50-somethings) are bravely saying, “I’ll just have to work forever,” but for a whole lot of reasons, that choice won’t be available to everyone.  

This is not a fun topic; it is a source of anxiety and stress for many, especially among my age cohort. However, unlike the Australian denizens in the movie, we are not necessarily doomed. We can undertake measures to soften this crisis — like shoring up the Social Security system, which is eminently do-able —  especially if we can summon more collective concern, caring, and kindness than what now dominates our political dialogue.

Instead of feeding on the usual nastiness that pervades typical cable news programs, let’s wrap our attention around these more significant concerns with some genuine heart quality and determination. The stakes are too high not to do so.

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Related posts

Hard looks at joblessness, retirement funding, and Generation Jones (2014)

Suicide and the Great Recession: Will we heed the tragic warnings? (2013)

Retirement party (2013)

Retirement expert: “Most middle-class Americans will become poor or near-poor retirees” (2012)

The press discovers the coming Boomer retirement crisis (2011)

When Boomers retire (or try to): America’s coming train wreck (2010)

Not-so-random acts of kindness for the non-saintly among us

Maybe some of the course rubbed off on me.

Maybe some of the course rubbed off on me.

Last November, I was crossing the street near Boston’s Faneuil Hall when I saw a man huddled in a blanket, shuffling past me in the opposite direction. I caught a glimpse of his eyes for only a second, but I could see a lot of sadness in them. When I got to the other side, I turned around and watched him make his way to a public bench, where he sat and seemed to just stare down.

I decided to go back across the street, and then I walked over to the man. I pulled some money from my wallet and offered it to him, saying that it looked like he could use something to eat. He appeared to be in very bad health, but when he saw that I was giving him twenty dollars and we began talking, his face lit up. He was very grateful for the money, and I believe he was appreciative that someone took a few minutes to converse with him.

What some might call a random act of kindness actually wasn’t all that random. Last fall I completed a non-credit, online adult education course, “The Science of Happiness,” led by psychology professors associated with UC-Berkeley’s Greater Good Science Center. It was a substantial course on emerging scientific discoveries about what makes people happy, with weekly readings, video lectures, and quizzes, as well as mid-term and final exams. Among our optional assignments was to engage in random acts of kindness, drawing on psychological literature indicating that giving promotes happiness in both the giver and the receiver.

Indeed, a little voice from that course was speaking to me when I walked up to that man and gave him money, and I found myself feeling very emotional afterward. Since then, I’ve repeated this act maybe a half dozen times, approaching people who appear to be very down on their luck, saying hello and giving them a twenty dollar bill. Over the weekend it was a man sitting on a subway bench with all of his worldly belongings stuffed into a grocery cart. Earlier this month it was a woman digging through a trash receptacle in search of food, a few feet away from where I was enjoying my lunch.

A couple of times the recipients didn’t say much to me, but on other occasions they expressed surprise and deep gratitude. One man even hugged me. When you see someone’s facial expression go from weariness and despair to a big smile in a matter of seconds, then you know you’ve made someone’s day a little better.

I have hesitated to put this in a blog post because I don’t wish to portray myself as being someone I’m not. I walk by most people I see panhandling on the street, and I’ve never volunteered at a homeless shelter. And let’s be honest: Twenty bucks isn’t exactly a huge sacrifice for a single guy earning a professional salary. But I thought I’d offer this story as just one example of how the non-saintly among us can make a modest difference in the world. No, it’s not “social change” in the grander way that I’d like to see, but if enough of us engage in these acts, then maybe the good stuff starts to add up to something substantial.

Your not-so-random acts of kindness need not be the same as mine. But I can pretty much guarantee that whatever you decide to do, both you and the recipient(s) will feel better because of it.

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This piece has been cross-posted on my personal blog, Musings of a Gen Joneser.

In addition to rethinking abundance, let’s spread it around a little better

Economist Arthur C. Brooks, president of the American Enterprise Institute, a conservative think tank, suggests in an op-ed piece for the New York Times that we embrace abundance without excessive attachment to material things:

In other words, if we are lucky enough to achieve abundance, we should be thankful for it and work to share the means to create it with others around the world. The real trick is the second part of the formula: avoiding attachment.

In Tibetan, the word “attachment” is translated as “do chag,” which literally means “sticky desire.” It signifies a desperate grasping at something, motivated by fear of separation from the object. One can find such attachment in many dysfunctional corners of life, from jealous relationships to paranoia about reputation and professional standing.

In the realm of material things, attachment results in envy and avarice. Getting beyond these snares is critical to life satisfaction.

I think it’s great advice for people who are blessed with sufficient disposable income to have spending options. As I wrote here back in 2012, research suggests that the correlation between happiness and income levels tends to peak at somewhere around $75,000, subject to obvious variables such as cost of living differentials. Furthermore, studies indicate that giving to others can increase our personal happiness and that money spent on creating memorable experiences rather than on accumulating more stuff tends to be more satisfying. (Brooks acknowledges the latter point in his article.)

Abundance for some

However, at least here in the U.S., we’re living in an age of a widening wealth gap, with that $75,000 mark looking like an illusion to a majority of its citizens. Millions are living paycheck-to-paycheck, and still more are doing worse than that.

Don Lee reports for the Los Angeles Times on a new Pew Research Center study showing that the “wealth gap between middle- and upper-income households has widened to the highest level on record.” He continues:

…(T)he typical wealth of the nation’s upper-income households last year was nearly seven times that of middle-class ones. By Pew’s calculations, that is the biggest gap in the 30 years that the Fed has been collecting statistics from its Survey of Consumer Finances.

“The latest data reinforces the larger story of America’s middle-class household wealth stagnation over the past three decades,” Pew said. “The Great Recession destroyed a significant amount of middle-income and lower-income families’ wealth, and the economic ‘recovery’ has yet to be felt for them.”

An economic system that provides selective abundance

Brooks engages in some rhetorical sleight-of-hand when he says that “we should be thankful for [abundance] and work to share the means to create it with others around the world.” In other words, he’s not suggesting that we share big chunks of our own abundance with others. Rather, if you read the rest of his article, you’ll pick up an implicit defense of a market-based economic system that supposedly can provide others with abundance as well.

There’s a problem with that, of course. The economic system that has produced so much inequity over the past three decades isn’t exactly creating an abundance of opportunity these days. Steady jobs with good pay and benefits are in increasingly short supply. Around the world, the same corporate entities that took millions of those jobs out of the U.S. are now putting their manufacturing plants in countries where they can pay workers a fraction of what their American predecessors once earned.

Toward something better

If you’ve read this blog for any stretch of time, you know that I’m not going to call for a socialist utopia to replace the big, bad capitalist system. I’m way past the point of pitching any rigid economic ideology as the answer to our wealth gap. But I’ll happily repeat my belief that a robust private sector must be complemented by strong public and non-profit sectors, as well as an ethic of giving that asks more of the most fortunate. On balance we need a healthier mix of economic opportunities, regulatory safeguards for the public good, and a social safety net.

In his New York Times piece, Brooks writes that his inspiration for rethinking abundance was a travel encounter in India with “a penniless Hindu swami,” a “son of Indian petroleum engineers” in America who had traded in his MBA and the fast track for a more contemplative, austere life. That certainly provides grist for a curious narrative (well-paid think tank executive takes life lesson from ex-pat living in self-imposed poverty), but the deeper truth is that austerity and detachment from material goods are much easier to opt for voluntarily than finding yourself with no other choice.

No Ho Ho: Will Amazon’s warehouse workers benefit from the holiday shopping rush?

Now that the holiday shopping season is moving into full swing, a lot of folks will be clicking and shipping through their gift lists by way of Amazon. As someone who does not enjoy in-store shopping, I understand the appeal. However, I doubt that Amazon’s warehouse workers will be the main beneficiaries of the company’s holiday sales intake, and that should give us pause as we make our shopping choices.

Back in February I explained why I cancelled my Amazon Prime account, citing concerns over how the company treats its warehouse workers:

I cancelled my Amazon Prime account earlier this week, and until working conditions for their employees improve, I won’t be shopping there nearly as often as I have previously.

Amazon Prime is a premium membership service that guarantees two-day shipping on almost every item ordered. For frequent customers such as myself, Prime offers easy, dependable, click-and-ship ordering, with hardly any waiting time for delivery.

However, revelations about Amazon’s labor practices have become increasingly disturbing, more specifically the working conditions in its vast merchandise warehouses. For me, the final straw was a recent Salon investigative piece by Simon Head, “Worse than Wal-Mart: Amazon’s sick brutality and secret history of ruthlessly intimidating workers,” detailing how the situation is much worse than I imagined….

I’ve cut down on my Amazon orders during 2014, and I’ve resisted the temptation to rejoin Prime. I’ve searched around in vain for evidence that Amazon is making any major effort to treat its warehouse workers better.

To be sure, Amazon’s delivery systems are what Wired called a “Massive Wish-Fulfilling Machine.” Marcus Wohlsen concludes his detailed look at Amazon’s warehouse and delivery operations this way:

Amazon’s warehouses are designed to be wish-fulfillment machines, calibrated to feed our consumer wants with aggressive speed and precision at a scale that has yet to find its limit. We keep supplying more wishes to Amazon, and Amazon keeps turning them into more stuff.

However, Amazon’s systems continue to exact a human toll on warehouse workers. For example, Dave Jamieson, writing for the Huffington Post in May, detailed a lawsuit filed by South Carolina employees:

A new batch of Amazon warehouse workers sued the online retailer in federal court last week, claiming the company’s workplace policies don’t leave them with reasonable time to eat their lunches.

In the lawsuit filed in South Carolina, seven warehouse workers say they were required to continue working and complete their tasks even after their unpaid half-hour breaks began. Once they were done, they would have to wait in line to go through a security screening, then take a six-minute walk across the massive warehouse to get some fresh air and eat.

All told, the holdups typically left them with “less than 18 minutes” to enjoy their lunches….

In addition, here’s how Jason Del Rey, writing for re/code in June, previewed a CNBC documentary on Amazon’s working conditions:

While CNBC found warehouse employees who were thankful for the pay and benefits that come with a job at an Amazon fulfillment center, several spoke out about against the unrelenting pace of work and unreasonable expectations that take a physical and mental toll on employees.

“I felt like Amazon was a prison,” one former female worker said in the documentary. She and others interviewed reported tough working conditions that include being timed on just about any action imaginable, from bathroom breaks to packing boxes to picking products off of shelves.

Amazon is among the companies that seek out older workers who roam the country in search of short-time and part-time employment, especially on a seasonal basis. Journalist Jessica Bruder was interviewed by public radio’s Here and Now program on the phenomenon of “workampers”:

A story in Harper’s Magazine opens a window into some of these people. They’re called “workampers” (a contraction of working and camping) and they travel across the country in their RVs, often performing seasonal work, selling fireworks, pumpkins, Christmas trees. They even work part-time in huge Amazon warehouses.

Jessica Bruder is author of the story, “The End Of Retirement: When You Can’t Afford To Stop Working,” in the August issue of Harper’s. She told Here & Now’s Robin Young that this movable work force is a great thing for companies like Amazon.

As you might guess, many workampers are doing what they do because more secure, higher paying jobs have eluded their grasp, especially during this ongoing economic crisis. They probably won’t be enjoying a lot of holiday cheer as they nurse their tired bodies after long, demanding shifts. 

 

Hard looks at joblessness, retirement funding, and Generation Jones

Many members of “Generation Jones,” that span of late Boomers and early Gen Xers who are in their middle years, face tough times right now. This cohort has been hit especially hard by the ongoing economic crisis, with many losing jobs in mid-career and finding it difficult to obtain new employment and to save for retirement.

Decades ago, many Gen Jonesers confronted a rough economy while launching their work lives. During the late 70s and early 80s, the economy was in severe recession, inflation ran very high, and employers were cutting back or eliminating pension plans. Academic studies indicate that graduating into a recessionary economy can impair earning power for years. So this group has been unlucky in terms of both entry-level and mid-life labor markets.

I concede my bias on this topic. I’m a member of Generation Jones, and these realities are hitting many among my age group. As the following pieces indicate, we’ve got a lot of work to do in order to rebuild both opportunity and a safety net. Here goes:

Ann Brenoff, blogging for the Huffington Post, says that she’s bombarded by advertising appeals from retirement planners, but the real problem is that most people lack sufficient funds to invest for retirement, period:

My inbox is bombarded daily with pitches from retirement planners who claim to hold the secret to my “dream retirement.”

…Here’s the problem I have with them: They ignore the elephant in the room, which is, it’s too late for most boomers to join their party. Spending less and saving more — if even possible — won’t close the gap between what we have and what we will likely need.

…What I don’t understand is why everyone isn’t talking about the crazy awfulness that awaits us — and by us I mean the vast majority of people who are woefully unprepared for retirement.

How much money do we need to save for retirement? Paul B. Brown, writing for the New York Times, discusses a new book by finance professor and investment expert Richard C. Marston, Investing for a Lifetime:

Although Fidelity Investments garnered a lot of attention two years ago when it declared that you would need eight times your current salary to “meet basic income needs in retirement,” Mr. Marston disagrees. “Despite the fact that it is very difficult to save eight times income, the goal the company proposed seemed too low to me,” he says.

If you thought eight times current income was daunting, Mr. Marston’s default position will stun you. He says it can easily come to 15 times what you are earning now.

Okay, so Prof. Marston recommends saving fifteen times one’s current income?! Only the tiniest percentage of U.S. workers have retirement portfolios on track for that. The gap between the realities facing most Americans and the numbers being recommended by personal finance experts is bonkers, simply mind blowing.

Kevin Kusinitz is a 58-year-old writer who has been unemployed for nearly two years. In this piece for Next Avenue, he reflects upon being part of an age group being passed over for jobs but too young (and broke) to retire:

Like a lot of people around my age, I really didn’t pay close attention to the unemployment situation until I was in the thick of it myself. It was only then that I started reading the heartbreaking stories of perfectly good workers in their 50s who, like me, were shown the door by middle managers all apparently sharing the title: Executive Vice President of Keeping My Own Job by Any Means Necessary.

After decades as a right-of-center kind of guy, I was shocked to wake up one day thinking, “Oh my God, now I know what Michael Moore has been talking about all this time.”

…I’m no sociologist but I predict if this trend keeps up (and, frankly, why shouldn’t it?), the next decade is going to see a spike in older people moving in with their adult children, becoming homeless or even committing suicide because they will have no other options.

Jessica Bruder, writing for Harper‘s, explores the subculture of older American workers who have lost steadier jobs and who now roam the country in vans and camping vehicles in search of extended part-time work such as seasonal tourist sites and warehouse gigs. You’ll have to get a copy of the August issue or subscribe to access the online edition, but here’s the lede from her story:

On Thanksgiving Day of 2010, Linda May sat alone in a trailer in New River, Arizona. At sixty, the silver-haired grandmother lacked electricity and running water. She couldn’t find work. Her unemployment benefits had run out, and her daughter’s family, with whom she had lived for many years while holding a series of low-wage jobs, had recently downsized to a smaller apartment. There wasn’t enough room to move back in with them.

“I’m going to drink all the booze. I’m going to turn on the propane. I’m going to pass out and that’ll be it,” she told herself. “And if I wake up, I’m going to light a cigarette and blow us all to hell.”

Her two small dogs were staring at her. May hesitated — could she really envision blowing them up as well? That wasn’t an option. So instead she accepted an invitation to a friend’s house for Thanksgiving dinner.

Tom Raum, writing for the Associated Press, examines the flattened “workforce-participation rate”, i.e., the total number of employed + job seekers, and reports that many of the long-term unemployed are simply dropping out of the labor market after efforts to obtain jobs have been repeatedly unsuccessful:

But perhaps the most significant factor is unemployed workers “who just drop out of the job market after one, two or three years of looking for work and not being successful,” said Carl Van Horn, a professor of public policy at Rutgers University who studies workplace dynamics and employment trends.

Recent surveys suggest more and more long-time unemployed workers are abandoning the search for another job and leaving the nation’s workforce.

“And they are disproportionately older workers,” Van Horn said. “We have a large number of older (unemployed) workers who are not old enough to retire, yet they are facing discrimination in the workplace and have found it nearly impossible to get another job.”

Is the Social Security system about to go under? You might believe so if you listen to hard right pundits who demonize anything to do with a government safety net, but in reality Social Security is doing much better than many private and public pension and savings plans. This article in YES! magazine offers a more sensible look at the situation. In an excellent set of infographics, managing editor Doug Pibel explains that the Social Security Trust Fund has sufficient funds to pay out expected benefits for the next two decades and that relatively manageable tax fixes can ensure its longer term viability:

Social Security will never “go broke.” As long as people are working, Social Security will have money. . . . There is now $2.8 trillion in the Social Security Trust Fund, which will fully cover expenses for about the next two decades. To make it work after that is pretty painless — we just have to decide who pays.

So far, Congress has refused to extend unemployment benefits for the long-term jobless, a policy choice that disproportionately affects older individuals who have been experiencing severe difficulties re-entering the workforce. In a piece for FiveThirtyEight.com, Ben Casselman explains that arguments against such an extension aren’t panning out:

The case against extending unemployment benefits essentially boils down to two arguments. First, the economy has improved, so the unemployed should no longer need extra time to find a new job. Second, extended benefits could lead job seekers either to not search as hard or to become choosier about the kind of job they will accept, ultimately delaying their return to the workforce.

But the evidence doesn’t support either of those arguments. The economy has indeed improved, but not for the long-term unemployed, whose odds of finding a job are barely higher today than when the recession ended nearly five years ago. And the end of extended benefits hasn’t spurred the unemployed back to work; if anything, it has pushed them out of the labor force altogether.

The so-called economic recovery isn’t that for millions of Americans. Long-time populist political commentator Jim Hightower takes issue with, among other things, the positive spin being applied to new jobs created since the worst of the meltdown:

So, it’s interesting that the recent news of job market “improvement” doesn’t mention that of the 10 occupation categories projecting the greatest growth in the next eight years, only one pays a middle-class wage. Four pay barely above poverty level and five pay beneath it, including fast-food workers, retail sales staff, health aids and janitors. The job expected to have the highest number of openings is “personal care aide” — taking care of aging baby boomers in their houses or in nursing homes. The median salary of an aid is under $20,000. They enjoy no benefits, and about 40 percent of them must rely on food stamps and Medicaid to make ends meet, plus many are in the “shadow economy,” vulnerable to being cheated on the already miserly wages.

MIT’s Institute for Career Transitions conducted a pilot project to coach and advise the long-term unemployed, with hopeful results. In order to measure the potential benefits of providing this assistance, the three-month project included a group who received help and a control group who did not. WBUR’s Benjamin Swasey reports:

Long-term unemployment — which, according to [MIT professor and Institute director Ofer] Sharone, disproportionately affects older workers — is at 2.3 percent of the nation’s workforce, a historically high level. More than 38 percent of America’s unemployed job seekers have been out of work six months or more.

. . . “We have a ton of studies showing that once you hit the six-month [jobless] point, by so many indicators it becomes a real crisis,” he says. “It’s a financial crisis. It’s an emotional crisis. And then when you get to this scale of numbers, it’s a social crisis. We’re losing out on a whole cohort of workers.”

. . .Of the group that got support, 30 percent obtained a full-time job or contract work of at least four months. That compares to just 18 percent from the group that received no aid.

“It clearly shows that the job market is very, very tough, even for someone in an ideal situation,” as “most people did not get jobs,” Sharone says. “On the other hand, I think we can say that there’s a meaningful difference to getting support.”

How do the challenges specially facing this age group connect to other social and economic policy issues? Here’s one article that helps us to grasp the bigger picture: In an op-ed piece for the Boston Globe, writer Neal Gabler predicts how historians of the future will regard the current American era, and his assessment is not a positive one. Here are a few snippets:

Historians will wonder…how the gains of social and economic equality that were a century in the making were reversed, and, above all, how the country actually became less democratic, often with the acquiescence of many ordinary Americans.

The first thing historians are likely to fasten on is the historic economic inequality in America today.

…They will look at the nation’s…reluctance to embrace health reform that would provide insurance to those who cannot otherwise afford it, its willingness to cut benefits, like food stamps, that primarily help the young and the elderly, its grudging extension of unemployment benefits to people afflicted by the economic downturn.

…I suspect that historians will view this as a terribly bleak period — another Gilded Age but worse.

…And they will wonder: Why there was so little resistance?

What to do???

If any of these articles offered clear-cut, comprehensive solutions to the crisis, I would be highlighting them. Unfortunately it appears that we’re flying without radar here. Furthermore, as Neal Gabler’s Boston Globe piece suggests, I don’t think the American public is sufficiently aware of the systemic nature of this crisis to be able to connect the dots in ways that lead to political consensus. Right now, employment and retirement remain individual challenges rather than shared priorities, reflecting the social and political ethos in which Gen Joners have spent their adult lives.

I do think that reorienting our views on community and society is an important, necessary start toward addressing the situation. Last week I wrote about competing visions of the future, one being a “technological, top-down, service society,” the other being a world of “useful work, peace, self-fulfillment, and appropriate technology leading to harmony with the environment.” We need this latter view to take hold if we are to reverse the rampant individualism and selfishness that soon may resemble passengers on a sinking ship fighting over too few spaces on the lifeboats (with a small few already having reserved seats). Either our better natures will rise to the occasion, or history will judge us harshly, and deservedly so.

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Related posts

I’ve been writing about the burgeoning retirement funding crisis since the first year of this blog. Go here to start scrolling through those articles. In addition, here are three pieces especially relevant to this post:

The three-pronged political attack on the very notion of retirement (except for a few) (2013) — “In America, the very notion of a relatively safe and secure retirement is under relentless attack…. This is not by accident. Only when you connect the dots do you see a unifying force, and it’s very, very political. We haven’t been comprehending how the pieces come together….”

My Labor Day 2013 wish: Good, stable, bully-free jobs for Generation Jones (2013) — An extended commentary, echoing many themes raised here, covering topics such as age discrimination, workplace bullying, and mental health impacts relevant to Gen Jonesers, as well as potential public policy responses.

Suicide and the Great Recession: Will we heed the tragic warnings? (2013) — “In this era of the Great Recession, suicide has become a leading cause of death in America, especially among the middle-aged, and it is to our shame as a society that this reality is not an ongoing, dominant focus of our attention.”

Blog subscriptions

Did you know that you can subscribe to either or both of my WordPress blogs for free? That’s right, every time I publish a post, it’ll land in your inbox. Sign up by going to “Follow this blog” at the top right of Minding the Workplace and/or my personal blog, Musings of a Gen Joneser, and enter your e-mail address.

Worth watching: Robert Reich’s “Inequality for All”

How much inequality can we tolerate and still have an economy that’s working for everyone and still have a democracy that’s functioning? Of all developed nations today, the United States has the most unequal distribution of income and wealth by far, and we’re surging toward even greater inequality.

-Robert Reich, from “Inequality for All”

If you’re looking for an informative, insightful, and lively take on the challenging question of how the American economy threw the middle class under the bus, Robert Reich’s 90-minute documentary, “Inequality for All,” fits the bill.

Reich is now at UC-Berkeley, teaching courses in economics and public affairs, after many years at Harvard’s Kennedy School and a term as Secretary of Labor under Bill Clinton. A prodigious author, he turns to the documentary form to deftly blend economic data, income trends, political changes, tax policy, and personal stories & interviews. It’s not pure wonkishness; the film also tells us something of Reich’s interesting life story, too, and several segments exhibit his sharp wit and self-deprecating sense of humor.

As is the skill of a gifted lecturer, Reich packs a lot into the documentary in a way that doesn’t overwhelm. You’ll learn about the impact of globalization and technology on American jobs, how lower tax rates on the wealthy have had a negative correlation with overall economic health, and how the U.S. economy in 1928 (the year before the stock market crash that led to the Great Depression) looked eerily similar to that in 2007 (the year before the Great Recession). You’ll also hear a wealthy CEO talk about the destructive aspects of extreme wealth concentration, and you’ll listen to stories of people trying desperately to stay in the nation’s middle class.

I have a few quarrels with the film. For example, I think Reich was a little soft on the reasons behind the virulent anti-union tactics of some American companies during the past few decades. I also believe that he needed to spell out the fuller implications of globalization for workers everywhere.  But I recognize that choices must be made to keep a documentary within a watchable length, and overall it makes very good use of our time.

“Inequality for All” opened in theaters last year, and it is now widely available in various DVD, on demand, and streaming formats. I just watched it this week, and I am happy to recommend it.

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One of the extras in the DVD is deleted footage about Reich’s 2002 campaign for Governor of Massachusetts, in which he made it onto the Democratic primary ballot but did not win the nomination. Reich uses a chunk of the segment to explain how personally difficult it was for him to spend so much of his time chasing down people for campaign contributions.

I volunteered for Reich’s campaign the day I read an announcement of his candidacy, and I served as a Reich delegate at the Democratic state nominating convention. The deleted documentary segment doesn’t fully convey the way in which he attracted a lot of supporters who had felt alienated from party politics in Massachusetts, not to mention the fact that he ran a very respectable campaign despite getting in the race late and operating with a shoestring budget.

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.

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