The nation’s talking heads still are debating whether the country is in a recession. Such noise is a distraction from the real issue: The short- and long-term decline in living standards experienced by the vast majority of us is real. (The long list of short-term trends includes word today that annual retail prices shot up 5 percent in June, the biggest 12-month change since May 1991, a time when high gas prices from the Gulf War skewed the annual figure.)
Two studies out this week show the far-reaching consequences of two trends that preceded the current economic mess—the ongoing decline in wages and the widening income gap between the extremely wealthy and everyone else.
The first study finds that rising economic inequality can be correlated to life expectancy. While life expectancy has increased across the United States between 1980 and 2000, the degree to which people live longer has become increasingly connected to their socio-economic status, according to the nonprofit Economic Policy Institute (EPI).
In 1980, those with the highest socio-economic status had a life expectancy 2.8 years higher than those with the lowest status (75.8 versus 73.0 years, respectively). By 2000, that gap had grown: Those in the top decile had attained a life expectancy of 79.2 years—4.5 years more than those in the bottom decile.
The next report highlights why it’s essential the next president strengthens Social Security—and does not “privatize” it and gamble with our retirement in the volatile stock market. In a telephone news conference July 14 sponsored by Americans for Secure Retirement, Tom Neubig of Ernst & Young said most middle-income Americans earning between $50,000 and $100,000 a year are at risk of being unable to maintain their standard of living in retirement.
Neubig’s comments accompanied release of a new study by the Americans for Secure Retirement that finds middle-income earners’ standard of living in retirement could be reduced by as much as one-third. According to the Daily Labor Report (subscription required), the decline in guaranteed pension benefits means more and more workers are increasingly vulnerable when they retire. But the report points out that Social Security provides on average 40 percent of retirement income.
That’s 40 percent more income than many retirees can count on. And while the report makes a great point that future retirees should purchase an annuity using their private savings to bolster their retirement income, the fact remains that without Social Security, the trend of sinking wages and growing income disparity would mean tens of millions of U.S. workers would have to work until they die.
Which is why Sen. John McCain’s disparaging comments about Social Security—he called it a “disgrace“—are so clearly out of touch with the reality of America’s working people.