Task Force Takes on Retirement “Crisis”
Huge numbers of older Wisconsin residents have little in retirement savings.
Sarah Godlewski.
The numbers in the first paragraph of Gov. Tony Evers Oct. 21 executive order were scary:
“In the United States, the typical working-age household has less than $3,000 in retirement savings and the average retirement-age household has only $12,000.”
That’s why, Evers said, he was creating a Task Force on Retirement Security to assess the “overall preparedness” of Wisconsin residents to retire in “financial security” and to draft recommendations on how to deal with the state’s “retirement crisis.”
The Task Force had its first meeting Friday in Green Bay.
Financial experts say it’s hard to find state-by-state statistics on how well – or how poorly – those nearing retirement, or who are retired, are doing financially. One national statistic: A Federal Reserve Bulletin said the median values of retirement accounts were about $60,000 in 2016 – about what they were in 2013.
The National Retirement Risk Index added this:
”The retirement landscape is shifting dramatically, making the outlook for retiring Baby Boomers and Generation Xers far less sanguine than for current retirees.” The report noted that: ”50% of households are ‘at risk’ of not having enough to maintain their living standards in retirement and ”Explicitly including health care in the Index further drives up the share of households ‘at risk’.”
The Social Security Administration estimates that 21 percent of married couples, and 43 percent of single seniors, rely on Social Security for 90 percent or more of their income.
Other national statistics come from the federal Survey of Consumer Finances (SCF), which found that older Americans are sliding deeper into debt. The group found that 70 percent of residents between the ages of 65 and 74 had debt in 2016 that averaged $47,000 compared to just 50 percent of those in that age bracket who had any debt in 1989.
And, of those in the 65-to-74 age bracket in 2016, 38 percent had mortgages that averaged $79,000, while half of those over 75 in 2016 had debts that averaged $20,000, the SCF found. This again was a big increase from 1989, when only 21 percent of those over 75 had any debt.
Three Wisconsin statistics underscore the governor’s warning of a looming “retirement crisis”: Wisconsinites are older than the national average; Residents of northern Wisconsin’s rural counties are aging the fastest; and the state’s median household income is less than the national average.
Also appointed were Evers Deputy Chief of Staff Kara Pennoyer, senior officials of three state agencies, and 12 others that include local officials, union leaders, a UW-Madison professor and an AARP’s advocacy director.
“It’s not that Wisconsinites don’t want to save, it’s that they have been living under economic conditions that have made saving either impossible or inaccessible,” Godlewski said when the Task Force was announced.
“Recently, AARP Wisconsin did a study that identified 1 in 7 registered voters in Wisconsin have no way to save for retirement at work,” the Democrat serving her first term said. “Yet, 82 percent would take advantage if a savings program for retirement was available. ”
In a Twitter post last week, Godlewski added: “10 states … are now implementing or creating state-run retirement programs… According to the Wisconsin Poverty Report, the elderly poverty rate has been increasing since 2015 and is now at a high of 9.5%… Over 80% of Wisconsinites are worried and are afraid that they won’t have enough to last through their retirement.
Godlewski is a fan of Oregon’s state-run retirement plan, which she said now covers 64,000 businesses and ”enrolled 22,000” in less than two years.
One Task Force member, who asked to remain anonymous to speak candidly about its mission, conceded that Godlewski is politically ambitious, but also “serious about making something happen here.”
That Task Force member added: “It’s a winning issue – though complicated – so the challenge is to educate the public and frame it tightly.”
The Retirement Security Task Force is one of seven Evers created in his first 10 months as governor. Other panels are studying climate change, caregiving, criminal justice, prescription drug prices, payroll fraud and transportation.
Steven Walters is a senior producer for the nonprofit public affairs channel WisconsinEye. Contact him at stevenscotwalters@gmail.com
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When you consider important subjects, this is a very big one, sitting somewhere between the Meaning of Life and Jared Kushner’s forthcoming Middle East Peace and Prosperity Plan. For the Task Force, achieving understanding will be far easier than coming up with substantive positive change in a nation that has changed in fundamental ways in recent decades, ways that are now deeply entrenched.
My father came to this country as a youngster from the former Yugoslavia. He finished 9th grade and worked in the paint department at the Milwaukee Nash/American Motors plant for 44 years until his retirement in his 60s. He was able to buy a house, raise four kids, take vacations and buy a car every few years, a Nash or Rambler, but, nonetheless, a car. He retired with a UAW-CIO pension and lived out is life without being financially insecure or sinking into poverty.
Almost all of that is gone, replaced by an economic system of vast insecurity, which continues all the way to the end of life. How that happened clarifies the challenges that the Governor’s Task Force faces if it seeks to move beyond understanding to action. We now live in the most unequal society in the developed world, with an economy, symbolized by the 401k and the “gig,” an economic system that generates inequality, insecurity and unanticipated consequences like the Great Recession, the opioid crisis and plane crashes.
The sources of that inequality, and the inability to save are now deeply entrenched, and a basic question for the Task Force would appear to be: what can be done to address a global and national problem in a single state, especially when that state has been largely controlled by those who have sought to create that inequality?
How can we move away from an economy and a society now built around a single value, that being shareholder value? Can we conceive of a political situation in which the Kochs, Menards, Hendricks will support any meaningful positive action on this front, actions such as progressive taxation or union protections? Can we conceive of a resurgence of union strength, which improved the lives of vast numbers of Americans, when legislatures and courts are now stacked with ALEC anti-union/pro big corporation types, and the unions are mostly screwed up? Can we imagine a future in which rural and small town people realize that those who are screwing them are not minorities and immigrants who they believe – because they have been schooled to believe for 40 years – are living off their hard earned tax dollars, but, instead, by those at the very top? And in which the Republican lessons of the past 40 years, i.e., government is bad and stupid, and businessmen are good and really smart, can be unlearned?
Finally, Is the task force willing to state that the heart of the problem is our extreme income inequality? In that context, it might be worth Task Force members reading a new book, “The Great Leveler: Violence and the History of Inequality.” Apparently, there are no – “no” as in zero – historic examples of societies with our levels of inequality that have not experienced mass violence. Part of the Task Force’s charge can be to find a way to be the first to do so.