Pulte Homes, the largest builder of new homes in the US, recently released a survey that says among people over 50 asked about retirement plans and 41% said they will never be able to afford it. Many of the people who can retire believe that they will have to put it off to buy time to increase the funds they will need to stop work.
The results are not much of a surprise. Americans are leaders in borrowing. not saving. The devastated economy damaged many people’s investment portfolios and gutted home prices, which decimated the equity value of many houses. What was once the primary source of retirement funds is now just an underwater mortgage held by a bank.
It may seem particularly hard to imagine people working into their 60s,70s, and 80s. An important part of the American dream has been to retire on a pension or a substantial IRA. But, now even some government pensions are in danger of being insolvent as the rolls of the retired public workforce grows but state municipal pools of capital do not.
It is in the nature of things that some people will work longer than they might have fifty years ago, because they can. Modern medicine has not slain obesity or alcoholism, but it has created drugs and treatments that lengthen many people’s lives. The balance of the long-lived aged eat well and exercise or simply have good genes.
The biggest losers as people over 65 stay at work for another decade or more are those in their 30s and 40s. Unemployment is above 17% based on the government’s broadest measurement scale. The middle-aged often cannot afford to work for the minimum wage. People in their 20s and 30s can hope that the economy will return to what it was five years ago, and, they can live with their parents.
The desire or need for many of the aged to work beyond what was once a normal retirement age adds to the intractability of the unemployment problem. The recession has cause businesses to cut people to stay profitable, or, sometimes, to survive. A concern about the time and scale of the recovery has kept businesses from adding jobs. Many companies find that they can do more with fewer people, pushing up the productivity of those who are happy to have a job and fear being fired.
It is often pointed out that some jobs are gone forever. These include many manufacturing jobs and some jobs in the financial services industry. In states like California, the government may never be able to use the number of municipal workers it had two years ago.
Government data show that each month there are fewer jobs available for the people seeking work. A generation ago, the competition for those openings would have been mostly among the relatively young and able-bodied. Now, the battle to work includes the able-bodied over 80.
Douglas A. McIntyre
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