I’ve just found a great article by Robert M. Ball, titled “Old-Age Retirement: Social and Economic Implications”. For regular readers of the KCS blog, you know that we spend a lot of time trying to highlight and understand both the social and economic ramifications of our failure to provide a stable retirement benefit. Many of the points discussed in Mr. Ball’s article echo topics that we’ve raised, including:
- Over the next 15-20 years will we make the fundamental adjustments that are necessary if older persons are to make the economic contribution that they are capable of making?
- For most workers today, retirement means inadequate food, clothing, housing and a sense of insecurity.
- For those workers forced into retirement (lay-offs) the worker loses more than an income, as they are faced with emotional and spiritual problems equally as serious.
- Work means recognition in our society, and it is largely through work that one gets a sense of being a useful participating member of society.
- Our failure to give the aged a responsible role in the community is making them into a class apart.
- The very technological improvements that increase labor productivity and make it possible to support the aged in retirement constitute a serious threat to the employability of the older worker.
- The older workers who lose jobs are at a greater disadvantage in securing a new one.
- The future will find us with a considerable number of job vacancies at the same time that we have a hard core of unemployed workers (review the current U6 and LPR data).
- Individual savings for old age is extremely difficult for most wage earners.
- What savings the worker generates is often used up during illness or unemployment, or is spent bringing up children.
The article concludes with the following, ” We cannot afford the separation of the aged from the community or the organization of the aged against the community. The aged need the secure place in our national community that can come only from the continued participation in the life of that community, and the national community needs the wisdom and the skill of older persons.”
I suspect that most of you agree with the points being made above. Given that, you’ll probably be shocked to read that this article that I just “discovered” was written in 1950. Mr. Ball was the Assistant Director, Bureau of Old-Age and Survivors Insurance.
I was particularly impressed by his statement regarding the tug of war between those that are unemployed and the significant number of vacancies that employers might have as a result of a skills mismatch. He was quite prescient. Furthermore, he hits on a major issue regarding the transition from defined benefit plans to defined contribution plans, by highlighting how difficult it is for workers to generate enough savings, especially the low-wage earners.
The article is lengthy but well worth the read for anyone who wants to better understand what we are facing today nearly 70 years after Mr. Ball wrote his piece.