Retirement is okay, if you’re fond of irony, and if you thrive on constant low-grade anxiety.
The irony is structural – those of us who are now retired are the last Americans who ever will be. We spent our working lives in the one period of actual middle-class prosperity America has produced, a time when everyone did well, workers and captains of industry alike. The GI Bill sent our fathers back to school after the Second World War, and they sent us off to college, in the years when college was actually affordable – and demanding too, with high standards. We then moved into relatively well-paying jobs, in an era when paying your folks well was a good business decision, so you could retain them, even if paying them well ate into short-term profits at bit. Long-term profits mattered more, and the right people, well-motivated, assured those, in the days before everyone was disposable, before off-shoring and the automation of everything. Even our cohorts who didn’t go to college did pretty well, in the days when skilled-labor was always in short supply and unions could bargain for a few more bucks and a few more benefits. From the fifties through the late seventies there was a détente between labor and management, even if uneasy at times. America was the richest country in the world, the only truly rich country after that awful war, and, if workers forced the issue, there was enough to go around. Most everyone owned a home, and eventually paid off their mortgage too. No one had a couple of hundred thousand dollars in student loans hanging over them, or massive credit card debts either. Everyone was doing well, from top to bottom.
There’s no point in waxing nostalgic about those days. They’re gone. Globalization took care of that, and automation, and the triumph of the free-market ideology of the right, positing that everything can be monetized and sharing the wealth is for suckers, as the winners should keep what they’ve won – all of it – and everyone else is a loser who deserves scorn, and no more than scorn. That may have started with Reagan, famous for busting the Air Traffic Controllers’ union and talking endlessly about welfare queens and young bucks using their welfare checks to dine on steaks and whatnot, and peaked with Mitt Romney’s forty-seven percent comment and Paul Ryan and the rest talking about the Makers and the Takers. The counter to that, that Occupy Wall Street movement, came to nothing. The One Percent owns it all – and they own the government too. Citizens United took care of that, as they now can spend unlimited funds to make sure that what they want to happen will happen. They stumbled in 2008, with the election of Barack Obama and a Democratic Senate and Democratic House, which gave us Obamacare and Dodd-Frank and the Lilly Ledbetter Fair Pay Act and so on, but they’re working hard on correcting that. They see all that as a temporary stumble, an anomaly, and maybe they’re right.
The irony remains. This normal retirement is anything but normal. It’s a historical anomaly, which thus makes it full of low-grade anxiety. Half of the 401(k) disappeared in a puff of smoke when the economy collapsed at the end of the Bush administration – the only asset. Those who owned homes, rather than renting here off the Sunset Strip in Hollywood, saw that asset disappear in a puff of smoke too – their mortgages went underwater and many lost their homes to foreclosure. These things happen when everyone, from Clinton through the second Bush, thought that having rules for the financial industry was an assault on economic freedom, and was keeping us from real prosperity too. Many still think that, and if they get their way, which is quite possible, this could happen again. That can keep you anxious, even if anxious in the background, so to speak. The small pension from almost thirty years in middle management in aerospace and manufacturing is an anomaly too. The fixed-asset pension is a thing of the past. It’s like getting a monthly check from a dinosaur, and dinosaurs went extinct. Most companies took what their employees paid into their pension system, in lieu of full wages, and spent it all on day-to-day operations, or on acquisitions that didn’t pan out, or on exotic financial instruments that turned out to be scams. All that their employees got was an apology, if that, which makes a few of us no more than lucky. That’s an odd feeling.
Of course there’s Social Security, and Medicare, but the Republicans are forever talking about privatizing Social Security, changing it from a fixed-benefit program to one where everyone is required to set aside funds and invest them in the markets, so they can get big bucks when the markets soar. That would indeed pump a ton of money into almost every company listed on the exchanges, and make a whole lot of financial advisors extraordinarily rich, but the whole idea is a bit scary. Markets do crash. They just did, only a few years ago, and as for Medicare, the Republicans’ current proposal, the Ryan Plan, is to make Medicare a voucher program, where you get a few bucks each month to find what healthcare insurance folks might be willing to sell to smelly old folks. That’s a market-based solution, where all parties are free agents, free to make what deals they can negotiate, where each party tries to pull one over on the other. That sort of freedom doesn’t seem very appealing, but then these are just proposals. Obama and the Democrats, finding those ideas appalling, have countered with their usual offer to only cut Social Security benefits here and there, and cover less in Medicare, to preserve both systems. Having that back-and-forth percolating in the background isn’t exactly comforting – but constant low-grade anxiety is part of retirement now.
It’s no wonder that retirees follow what’s going on in Washington quite a bit. They’re not political junkies or policy wonks. Aside from the Tea Party ideologues in the funny hats, they’re anxious. And it’s no wonder they follow the economic news too, for the same reason. If we ever pull out of this economic mess we’ve been in since Bush’s last months in office, things could shift back to a situation where there might be enough to go around, for everybody. The good old days will never return, but if the economy were humming along, we might be able to approximate at least some aspects of that time long gone. After all, politicians of both parties talk about restoring the middle class, because everyone knows it has pretty much disappeared, and the general notion is that we need jobs, lots of them, so people are out there buying stuff, lots of stuff. They’d be happy. Manufacturers and those who provide services would be happy. There might even be enough tax revenue from all that economic activity to shore up Social Security and Medicare.
That’d be the ideal situation, but the evidence is clear – Republican austerity policies have probably cut economic growth in half this year and raised the unemployment rate by 1.4 percentage points – if you like actual data. Austerity economics – Cut and Grow as the Republicans like to say – hasn’t worked anywhere in the world and hasn’t worked here. Hearing them say it ought to work, in theory, one day, somehow, is just depressing. Hearing them call, over and over, for massive cuts in government spending, tossing hundreds of thousands of government workers out on the streets, or millions, if they got their way, and decimating the contractors who are in business to supply the government with goods and services, ripping out maybe a quarter of all economic activity in the nation, is simply depressing. Another hair-on-fire column from the New York Times’ Paul Krugman is cold comfort, and then these fools went and shut down the government for sixteen days, costing the country twenty-four billion in economic activity – in order to defund Obamacare, or something, which they admitted they knew wouldn’t work at all. It didn’t work of course. They got nothing, and watching all that from the sidelines can make you even more anxious.
That’s why retirees watch the monthly jobs-numbers report. They may no longer be working, but if somehow, someday soon if possible, lots of people are working, the system stabilizes. The middle class may never return, and unions are a thing of the past, and globalization and automation will only increase, but lots of people buying and selling, and paying taxes as they do, would end all this talk about how we’re broke and can’t afford to do anything, so we should stop even what we’re doing now.
That’s the general idea, but that’s not to be:
Even before the federal government shutdown and debt ceiling crisis this month, the nation’s economy was lagging and job growth was sluggish. And the recent dysfunction in Congress seems likely to make the situation worse.
The economy added just 148,000 jobs in September, the Labor Department reported on Tuesday in a discouraging economic snapshot taken just before a federal shutdown that resulted in hundreds of thousands of furloughs. That shutdown, which delayed the release of the September employment report by more than two weeks, is expected to weigh on growth when the next monthly job market data is released on Nov. 8, a week behind schedule.
Yeah, the report was late. The statisticians who compile the data had been sent home without pay for over two weeks, but it wasn’t worth the wait anyway:
This year, in a pattern that has been followed for several years now, economists have been counting on job growth to pick up speed. That could finally start putting a more substantial share of the 11.3 million idle Americans back to work and make a greater dent in the unemployment rate, which ticked down to 7.2 percent last month.
But yet again, those expectations are being dashed. Both experts at the Federal Reserve and private forecasters have scaled back their expectations for growth in output in recent months, with Fed officials and many economists blaming tighter fiscal policy for being a drag on the economy.
Ya think? Tighter fiscal policy kills jobs, as economic austerity theory is right up there with the theory that Jesus rode a dinosaur:
While the Federal Reserve has been trying to promote growth, the rest of Washington has largely been working in the opposite direction, analysts said, with Congress creating drags on the economy through resumption of a payroll tax that began in January, the across-the-board budget cuts known as sequestration that began in March, and then the partial government shutdown and debt ceiling crisis in October. The result has been to accelerate a longer-running trend of a shrinking federal work force; in September, the federal government had the lowest number of civilian employees on its payrolls since 1966.
There’s that data again too:
A recent report from Macroeconomic Advisers, a forecasting firm, estimated that government reductions in discretionary spending as a share of the economy since 2010 had pushed the national unemployment rate higher by 0.8 percentage point than it otherwise would have been, the equivalent of 1.2 million absent jobs. Those same spending cuts have also shaved an estimated 0.7 percentage point off output growth each year. Those drags are separate from the costs of the shutdown, which are expected to reduce the annualized growth rate of gross domestic product in the fourth quarter by 0.2 to 0.6 percentage point, depending on which estimate is used.
As a result, analysts predicted, the economy is expected to advance at roughly a 2 percent annualized pace for the fourth quarter and about 1.5 percent for the full year, or about 1 percentage point lower than might have been achieved without those fiscal hurdles to overcome.
At least someone’s doing well:
The September jobs report was disappointing, with the economy adding 148,000 new jobs instead of the expected 185,000, but stocks rose on anticipation that Fed stimulus efforts would continue well into 2014.
The Fed’s purchase of $85 billion in bonds a month has buoyed Wall Street this year, because the flood of stimulus money makes riskier assets more appealing while keeping interest rates low and reducing borrowing costs. The benchmark Standard & Poor’s 500-stock index is up more than 23 percent so far this year.
On Tuesday, the S. & P. 500 index rose 10.01 points, or 0.6 percent, to 1,754.67. The Dow Jones industrial average gained 75.46 points, or 0.5 percent, to 15,467.66. The NASDAQ composite index increased 9.52 points, or 0.2 percent, to 3,929.57. In the market for government bonds, the price of the benchmark 10-year Treasury note rose 25/32 to 99 29/32, and its yield fell to 2.51 percent from 2.60 percent late Monday.
That has nothing to do with jobs. The folks who sell each other hypothetical assets are doing just fine, but there are relatively few of those, and Kevin Drum sums things up:
We should be doing better than this. And if it weren’t for the fiscal cliff deal and the sequester and all the other austerity measures we’ve put in place since 2010, we probably would be. These numbers might very well be double what we’re actually seeing. This, as always, is a self-inflicted wound.
It’s almost as if we don’t want the system to stabilize. Perhaps we now prefer the perpetual twilight of an America that once was but is no more – when there was an actual middle class. What we’re actually in for is perpetual low-grade anxiety, but of course that won’t be confined to puzzled and nostalgic retirees:
Almost 6 million young people are neither in school nor working, according to a study released Monday.
That’s almost 15 percent of those aged 16 to 24 who have neither desk nor job, according to The Opportunity Nation coalition, which wrote the report.
Other studies have shown that idle young adults are missing out on a window to build skills they will need later in life or use the knowledge they acquired in college. Without those experiences, they are less likely to command higher salaries and more likely to be an economic drain on their communities.
This is a lost generation, or one that we threw away, and there may be no fixing this:
The coalition also finds that 49 states have seen an increase in the number of families living in poverty and 45 states have seen household median incomes fall in the last year. The dour report underscores the challenges young adults face now and foretell challenges they are likely to face as they get older.
A young person’s community is often closely tied to his or her success. The Opportunity Nation report tracked 16 factors – Internet access, college graduation rates, income inequality and public safety among them – and identified states that were doing well for its young people.
Topping the list of supportive states are Vermont, Minnesota and North Dakota. At the bottom? Nevada, Mississippi and New Mexico.
“Their destiny is too often determined by their ZIP code,” said Charlie Mangiardi, who works with Year Up, a nonprofit that trains young adults for careers and helps them find jobs.
That’s the definition of being stuck, or of being retired far too early, with no assets at all:
In Mississippi and West Virginia, 1 in 5 young people are idle – higher than their older neighbors. Mississippi has an overall unemployment rate of 8 percent, while West Virginia posts about 7 percent. Like most states, they saw their unemployment rate fall since 2011, but researchers caution that shift could come from fewer residents looking for work and from more who had simply given up their search for jobs.
These young folks reached their twilight years early, and Richard Florida comments on the original Opportunity Nation report in the most recent issue of the Washington Monthly, pointing out that this is kind of a forever thing:
The consequences are dire for these young Americans. They’re not only more likely to have a hard time in the job market; researchers have found that disconnection has scarring effects on health and happiness that endure throughout a lifetime. Unemployed, uneducated youth are at greater risk for criminality and incarceration, and they often go on to become unreliable spouses and improvident parents.
The costs to society are also considerable. The direct support expenses and lost tax revenues associated with disengaged young people cost U.S. taxpayers $93 billion in 2011 alone -a bill that will only compound as the years progress.
Florida is also not impressed with the common conservative argument that the small-government Sun Belt is the promised land of American opportunity, where everyone is free and that Invisible Hand of a totally-unregulated free market makes everything wonderful for everyone:
Eight of the ten areas with the highest levels of disconnected youth are in the Sun Belt, including Charlotte, Atlanta, Tampa, Phoenix, and Riverside-San Bernardino in Southern California. These cities’ economies were focused on suburban sprawl and thus were especially hard hit by the housing collapse. But that isn’t the only or even the biggest reason for their high levels of youth disconnection.
There is a close connection between youth disconnection and education levels or human capital, according to the study. Sun Belt metro areas have fewer highly educated adults and have tended historically to attract people with relatively lower levels of education. In contrast, the metro areas with the highest percentage of college-educated adults – places like Boston, Washington, D.C., Denver, and San Francisco – have smaller shares of disconnected youth.
Sarah Palin used to say that the Real Americans she knew don’t live in cities, but on farms and in small towns all across America, but it seems that the young there are disconnected from everything, and life in general, without hope. All they can do is move to the city, somehow, and hope for is this:
We need to upgrade low-skill, low-wage service work. The fastest-growing job categories – and the jobs that are the most available to young people, especially those with limited education – are low-pay, low-skill service jobs, in food preparation, retail sales, and the like. Those jobs can be made better – not just by mandating higher minimum wages, but by harnessing the creativity, knowledge, and initiative of workers to boost productivity and hence wages. We also need policies that are directly targeted at youth entering the job market. The more marketable skills young people have and the more practical experience they have accumulated in actual workplaces, the better their chances of finding and keeping work over the long term.
Ed Kilgore, who flagged this Florida item, adds this:
Getting government out of the way and hoping for the best just isn’t enough.
No, it’s not enough, but that’s what the Republicans always propose, and that’s depressing enough for a retiree in these mellow twilight years, living off the scraps from a time long ago when people didn’t think that way. These kids don’t even have those scraps. They just get the perpetual twilight, early, so maybe it’s okay to be an old fart. All there is now is looking back. Anyone younger will have to find comfort elsewhere.