Can the young Atlas support the heavy burden of an aging population? 58 million Americans currently receiving Social Security Benefits. Over half of elderly beneficiaries receive 50 percent or more of their income from Social Security.
Social Security was never designed as a long-term retirement plan. According to the Social Security Administration for elderly beneficiaries, 53 percent of married couples and 74 percent of unmarried persons receive 50 percent or more of their income from Social Security. This is an incredibly high number that depend primarily on Social Security and also reflects a default usage of Social Security as the main retirement “plan†for many elderly Americans. Yet Social Security needs a constant stream of payments from current workers and this usually comes from the younger workforce. Young Americans are heavily burdened by the massive cost of higher education and are also paying into the system more than they are likely to get out when they reach retirement age. There is some generational debate between the young and the old but one thing is clear and that is many older Americans did not prepare for retirement and are now left with only Social Security as their primary source of income. Whether this is justified the young are saddled with a large burden moving forward and it is only going to get heavier as 10,000 baby boomers hit retirement age each day.
Hand-to-mouth nation: Roughly 40 percent of US households living paycheck to paycheck but two thirds of these families are not considered poor by economic definitions.
People have a hard time believing that in the wealthiest country in the world, we have close to half of our population living hand-to-mouth bouncing from one paycheck to another. A recent paper released by the Brookings Institution’s BPEA conference shows that people living hand-to-mouth are largely those with “middle class†incomes. Of course middle class doesn’t say much in a world where banks are inflating our debt away and the US dollar has lost considerable purchasing power over the last generation. What was telling from the report was that 40 percent of US households live paycheck to paycheck. This might not be a surprise given the vast number of people working in low wage jobs. What was telling from the report was that two out of three of these households represent a part of the “wealthier†income segment of our society. The paper discusses how many of these people are house rich but cash poor. These people basically live in their retirement fund.
Quantitative Easing has been the fuel for rising inequality and welfare for the modern Gilded Age: President Fisher from the Federal Reserve Bank of Dallas mentions QE’s gift to the rich.
As the Fed begins to slightly ease up on Quantitative Easing the reality of the winners and losers is becoming more apparent. QE was welfare for the wealthy and even President Fisher of the Dallas Federal Reserve Bank hints at QE being a massive gift to boost wealth. Well if we merely look at wealth across America, the only group that saw wealth increase after the recession ended was the top 10 percent. QE was ushered in under the guise of helping the nation overall but what we have seen is massive low-wage work taking over good paying jobs while banking profits hit new record highs. The Fed’s balance sheet has ballooned to well over $4 trillion and even though tapering is slowly beginning, there is no sign that the balance sheet is shrinking. The average American may not care about the Fed or even realize what is going on with rising wealth inequality but this is absolutely important. QE was the picture perfect example of welfare for the wealthy.
A land of low-wage jobs: For every job that pays above the low-wage threshold of $15 an hour you have 7 job-seekers. 51.4 million low-wage jobs in U.S.
The Great Recession has only accelerated deeper structural changes to our economy when it comes to low-wage employment. While many good paying jobs were lost during the Great Recession many of the new jobs have come in the form of low-wage employment. Large organizations have used this slack in the market to reduce wages, cut benefits, and ultimately increase profits at the expense of the American worker. A Job Gap Study found that close to 40 percent of all U.S. employment pays $15 or less. The threshold changes in terms of inflationary pressures on housing, food, and other items but this is the largest share of our workforce that is now struggling to meet the daily costs of living. This trend is only increasing as more wealth is filtered into the hands of a very small part of our population. Banking profits hit another record at the same time we have a record number of families on food stamps. The U.S. is largely becoming a bifurcated economy where wealth and income inequality is only getting more dramatic. For every employment opportunity that opens where pay is $15 or more you have 7 job-seekers to this one position.