I am honored my SCEPA working paper, "New Policies for an Older Unemployed Population" has made the top ten download list for the Social Science Research Network, (SSRN) for three different sub categories; Food Stamps and Food Assistance, Medicaid and Rates of Coverage! "New Policies for an Older Unemployed Population" outlines issues facing older unemployed workers, such as living with low incomes and without health insurance for longer periods of time due to increases in the duration of unemployment. I recommend expanding and reforming retraining programs to better accommodate the needs of older workers and the creation of tax incentives to encourage employers to hire older workers.
Alan Pyke of ThinkProgress.org reviews the shrinking benefits of the 401(k) system after the recent announcement by AOL that the company will only provide matching funds to employees in one lump sum payment at the end of the year.
In his article, "One Sneaky Corporate Trick Will Make Your Retirement More Insecure," he states, "The change means that workers lose the flexibility and portability that the 401(k) system of accounts provides, which has long been seen as a bright spot for workers in a dim overall system."
He includes my comment, "This move exposed the fatal weakness of the program and paves the way for all of us to think about a better system. The system enables employers to allow workers to contribute to a plan, but it in no way obligates them to make a match."
Pyke adds, "If even workers who are lucky enough to receive matching funds from an employer like AOL or IBM are having the value of that voluntary employer contribution undermined, then the myths about the 401(k) system are harder for financial advisers to maintain."
After much backlash, AOL retracted its decision and reinstated its former 401(k) policy matching contributions on a per-period basis rather than an annual lump sum. For more on AOL's redaction and what it means for retirement security, listen to my interview on NPR's Morning Edition segment, AOL Reverses Changes to Retirement Contribution.
The Annual Robert Heilbroner Lecture on the Future of Capitalism:
Towards Full Employment, Financial Stabilization & Environmental Sustainability
The failure of austerity policies in both the United States and Europe is clear. But it's time to move beyond documenting failure. Now we need solid policy solutions that promote long-term economic recovery for working people, the poor, and the middle class - not just the 1%.
On February 12, Economist Robert Pollin presented SCEPA's annual Robert L. Heilbroner Memorial Lecture on the Future of Capitalism. Pollin proposed a post-austerity policy agenda that lays out a clear path to job creation and lowering public debt - while advancing greater equality and environmental sustainability.
Robert Pollin, Distinguished Professor of Economics at the University of Massachusetts-Amherst, received his PhD from The New School and studied under Robert Heilbroner. He is co-director of the Political Economy Research Institute (PERI) and co-author of a recent study that debunks the notion that austerity policies can promote economic growth by starving social spending.
This event celebrated the fall issue of The New School's Social Research journal, "Austerity: Failed Economics but Persistent Policy." It was jointly sponsored by Social Research: An International Quarterly, the Center for Public Scholarship, and the Environmental Policy and Sustainability Management Program at The Milano School.
The President's "myRA" proposal is an old idea with a slight twist. It would allow employers to send workers' contributions to a guaranteed non-profit government bond plan. This is a good move. The program would extend tax breaks that are currently only avaliable to high income workers. This is both a fair and good move.
However, the proposal would move myRA accounts to commerical IRA accounts when savings exceed $15,000. These accounts could then be tapped before retirement, which is a bad move. Another detriment - the program is voluntary, which will limit an individual's ability to accumulate adequate funds for retirement.
Unfortunately, these possibilities for leakage make this proposal woefully inadequate to deal with the retirement crisis. The President should support expanding Social Security, Social Security contributions, and a universal guaranteed prefunded account on top of Social Security.
I would like to keep everyone abreast of recent editorials surrounding both the relevant research and President Obama's "myRA" plan.
Obama MyRA Proposal Unlikely to Boost Retirement Savings
January 29, 2014
A Guide to Obama’s Plan for Retirement Savings
January 29, 2014
New Retirement Plan, myRA, Could Spur Savings for Those Who Were Shut Out in the Past
New York Daily News
January 30, 2014
Connecticut Group Wants State MyRA
January 29, 2014
MyRA Retirement Plans: Everything You Need to Know
January 30, 2014
On December 10, 2013, I am honored to testify before the Nebraska Legislature’s Retirement Systems Committee hosted by its chairperson, Senator Jeremy Nordquist. The hearing will discuss LR344, legislation calling for an interim study to examine the availability and adequacy of retirement savings of Nebraska’s private sector workers.
In the last 10 years, Nebraska has seen a decline of 9% in the number of employers offering retirement plans to their workers, dropping from 66% to 57%. As a remedy to a looming retirement crisis caused by a lack of retirement income, I propose Nebraska open up its public pension system to private sector employees by creating State GRA accounts. This would provide residents access to professional money managers and allow them to choose among a variety of investments, including a guaranteed fund similar to the Thrift Savings Plans offered to federal employees and the TIAA-CREF plan offered to university professors.
On November 21, 2013, I had the pleasure of presenting the opening keynote at a plenary in Chicago sponsored by TIAA-CREF and the Governing Institute, "Roads to Retirement Readiness: Ensuring Retirement Security for You Workforce Roundtable." The forum was an exploration of the potential to solve the impending retirement crisis on the state level. Given my work with The New School's Schwartz Center for Economic Policy Analysis documenting the growing lack of retirement plan sponsorship on the state level, I presented our policy proposal, State Guaranteed Retirement Accounts (State GRAs). My fellow speakers included Rhode Island State Treasurer Mark Dingley, former Utah State Senator Dan Liljenquiest and Senior TIAA-CREF Economist Paul Yakoboski.
Following a debilitating federal shutdown that failed to resolve conflicts over government spending and economic recovery, I joined with my fellow SCEPA economists to both edit and contribute to an upcoming journal publication that critiques the mainstream acceptance of austerity policies that persist politically despite continued economic stagnation.
“Austerity: Failed Economics But Persistent Policy,” is the November 1st issue of Social Research: An International Quarterly, a publication produced by The New School’s Center for Public Scholarship. The volume includes thirteen essays by leading economists, including Robert Pollin, Rick McGahey (my co-editor), and Willi Semmler, offering tools to escape austerity’s ill-advised vision and concrete policies to create economic growth and prosperity for all people, rather than just a wealthy few.
The volume describes austerity policies both here and abroad, how implementation has restricted economic growth, and why government officials continue to support these policies in spite of their poor track record. Specifically, authors argue that austerity policies hamper economic recovery, but remain popular among elites as a tool to lower labor costs and taxes while increasing profits. A real path to economic recovery and long-term fiscal health requires refocusing the debate from how to eliminate debt to how to eliminate mass unemployment.
Alternative policy proposals include a federal loan guarantee program for small businesses (Pollin), creation of a permanent federal government job guarantee program (Hamilton), and an expansion of Social Security to stabilize the economy and bolster the bargaining power of labor (Ghilarducci).
The issue can be ordered online.