Retire on time? Good luck with that

As a citizen of this great country, I like to think that the U.S. is number one at everything it does. (I’ve lost track of my long-form birth certificate, but I assure you I was born in Manitowoc, Wis. Who would make that up? Only someone who was actually born in Two Rivers. Either way, I’m as American as Alvin Styczynski.)

One thing that our country really, really sucks at, though, is socialism. I have no doubt that we’re socialists now because I hear it from conservatives all the time. Of course, we’ve been creeping toward socialism for decades, but the tipping point came when we elected a president who wanted to hike the top marginal tax rate up to less than half what it was under Comrade Dwight David Eisenhower.

There’s a simple formula for figuring out if your president is a socialist, by the way.

Here it is:

(M)(T) + HS = SQ

In short: SQ (socialism quotient) is determined by the product of a president’s melanin levels (M) and the top marginal tax rate (T), plus the average number of times per day Sean Hannity calls that president a socialist while screeching like a deranged bridge troll who’s been tricked out of his pouch of magic beans (HS).

Still, despite toiling under a socialist despot for four years now, we’re nowhere near achieving Karl Marx’s egalitarian utopia.

I was reminded of this recently when the Employee Benefit Research Institute released a poll about Americans’ levels of optimism regarding their retirements.

According to the poll, 28% of Americans are “not at all confident” that they’ll have a comfortable retirement – the lowest number recorded since the poll was first conducted 25 years ago. In addition, 36% of workers say they’ll have to postpone retirement until after the age of 65, and a full 7% anticipate that they’ll have to work forever (unfortunately, that’s nearly impossible, unless the benevolent nanobot swarm seizes control sooner rather than later).

A little more than 20 years ago, workers showed much more confidence in their ability to retire on time. In 1991, only 11% of Americans expected to work past the age of 65, and 50% expected to retire before 65, compared to just 23% today. Meanwhile, a distressingly large number of Americans have failed to save for retirement. Twenty eight percent of workers have less than $1,000 in savings (not counting their primary residence), while a majority (57%) have saved less than $25,000.

Now, much of this no doubt has to do with the stumbling economy of the last five years. Another likely reason is that Americans are simply bad at saving for the future.

But I think the biggest reason is that workers’ wages have failed to keep up with productivity for the past 40 years, and as a country, we’ve tolerated historically high levels of income and wealth inequality.

One very revealing graph can be found here. It charts workers’ wages against productivity since 1948. Whereas productivity and wages rose pretty much in lockstep from 1948 to 1973, they diverged sharply in the early ’70s. Since then, workers’ wages have basically plateaued, while productivity has continued to rise sharply. So that raises an obvious question. Where has all that wealth gone, if not to workers? Clearly, it has trickled upward.

Indeed, during the last 40 years, income and wealth inequality have increased tremendously (even as shouts of “socialism” have skyrocketed, thus proving that our country is either remarkably inept at implementing socialism or really awful at spotting it).

Here’s a quick and dirty summary (which I’ve quoted before) from Paul Buchheit of

Based on Tax Foundation figures, the richest 1% has TRIPLED its share of the income pie over the past 30 years, mainly through tax cuts and financial deregulation. If their income had increased only at the pace of American productivity (80%), they would be taking about a TRILLION DOLLARS LESS out of our economy.

That amount of money, taken in just one year, could provide a $40,000 per year job to every unemployed person and new college graduate in the United States and have enough left over to pay off the deficits of all 50 states.

Of course, waxing nostalgic about the days when the super-rich took less out of the economy may sound a bit too much like socialist agitprop, so let’s put it this way: Imagine how much more workers would have if their wages had come even close to keeping up with productivity.


Based on U.S. Census Bureau data, created the following two charts, which show the change in real family income from 1947-1979 and from 1979-2009. 

Worst. Socialist. Country. Ever.

As you can see, the bottom 20% actually fared better than the top 5% from the late ’40s to the late ’70s. Since then, the bottom 20% has bottomed out, even as productivity has soared.

So maybe people’s feelings of insecurity have something to do with their failure to take advantage of the rising economic tides. That sinking feeling they’re experiencing isn’t an illusion, after all.

Hopefully, we can figure this all out before retirement becomes a luxury for the lucky few. 

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