…the “Nordic” solution is a good model for those in the workforce along with UBS’s Proposal.
However neither of these are solutions for the disabled and seniors who no longer can hold down a job and only have Social Security as their income. I am one of those people. I worked in low income occupations all my life (no college degree) the last for almost 20 years.
Like many others in teh blue collar sector,I had nothing to stash away for retirement after necessary expenses. At best I had around one paycheque (half moth’s pay) in savings at any one time and that was for emergencies. With the demise of the S&Ls decades ago there are no stable, long term, high interest generating opportunities. 401k’s are at the mercy of market fluctuations. Other plans require a hefty initial deposit/investment up front which many who are struggling month to month like I did cannot afford.
One of the issues with poverty in this nation is it is regionally based which is not taken into account. What may be the relative “poverty line” in say Seattle is above that for someone living in Selma. Hence the general “blanket” nationwide level is inaccurate. I live in Portland OR. The general market level monthly rent for a 1 BR is around 1,500$. Meaning for that to be the recommended 33% of one’s monthly gross, he or she would need to be pulling in about 54,000$ a year. Most jobs here are in the 22,000$ — 30,000$ range (the state did approve an gradual increase in the minimum wage ). Even at 15$ an hour that 1 BR apartment would be 55% of one’s monthly gross.
Now let’s go to someone receiving the average monthly SS benefit of 1,250$ (I an many are receiving much less myself under 1,000$). That same apartment would be 120% of the average monthly SS benefit. Rent for a studio flat in the city would take pretty much the full cheque. Even renting a single room in a shared situation would easily be 60% or more, not counting utility share (for myself and many others, closer to 80%). I eas fortunate to clear a wait list for a low income unit, and still am paying 50% of my benefit just for rent alone. Today the availability of low income housing has reached a crisis level. Wait lists are measured in years, not months, and not just 1 or 2, but upwards of 5 years. Is it any wonder there is a serious homeless situation here? New Section 8 certification here has been closed for 28 months with no sign of being restored.
So let us say for discussion, one or both of the above models is adopted (a long shot considering how greed and corruption have become the basis for business, society, and government here today). What benefit will people in our situation receive from this? We already have Medicare and Medicaid (all my Medicare expenses, including premium payments are covered by a my state’s Medicare Savings Plan). Why would I go back to school if I am retired? Why would I try to go back into a workforce that has been shunning older people more and more (particularly the tech sector where future job growth is supposed to occur), even if I could still hold down a steady job? What if the rise of automation really does displace a significant of the workforce?
There are advocacy groups which support expanding Social Security, including increasing benefits to the point seniors and the disabled no longer live in poverty no matter where they are. 2% and 3% living cost adjustments don’t keep up with actual cost increases many face, particularly housing. Sadly, with PAYGO approved the other day, I don’t expect any positive changes anytime soon. Something has to give though, like some form “supplementary income” to help us on Social Security out of poverty (that doesn’t reduce our basic benefits).