Reprinted with permission from DCReport
Donald Trump's inept handling of the coronavirus pandemic is condemning millions of older Americans to get by on much smaller incomes and forcing many into permanent poverty, a new study shows.
These people can anticipate shorter lives with less robust health, while taxpayers will bear the burden of care for many years of increased welfare benefits and subsidies.
The pandemic forced 2.9 million Americans ages 55 to 70 to leave the workforce in just March through June, a study by the Retirement Equity Lab at The New School found.
That's 50 percent more than the 1.9 million older workers forced into retirement in the first three months of the Great Recession in 2007. Viewed in percentage terms, 7 percent of older workers left the labor force in recent months, compared with 4.7 percent in the Great Recession.
By the end of September, 4 million older workers could be displaced permanently from the job market, the study projects. And if America faces a prolonged recession because of the coronavirus, which is a distinct prospect, that number would continue growing into next year.
The one thing we know is that Donald Trump lacks the deep knowledge, critical thinking skills, emotional maturity and ability to separate sound advice from nonsense that are needed in a crisis.
Those forced out of work are disproportionately minorities and women, highlighting the structural racism and misogyny in America's labor and retirement systems.
Months of denial, crazy ideas and incompetence by the Trump administration have resulted in America having by far the highest infection rate among wealthy nations.
Hundreds of Thousands Dead
There can be no doubt that Trump's inaction, neglect, incompetence and corruption are largely responsible for America's more than 160,000 deaths, a figure that may nearly double by Election Day on Nov. 3.
In the past month, America recorded five times as many new infections as the combined populations of Australia, Canada, Europe (excluding Russia and Turkey), Japan and South Korea.
Those areas have twice as many people as America. That means our infection rate is 10 times that of all those areas combined. And deaths occur disproportionately among older Americans, which is prompting many teachers, nurses and others to leave the workforce rather than foolishly risk death.
In the December 2017 update of my biography The Making of Donald Trump, I predicted he would fail to act effectively in a pandemic.
"Sooner or later a crisis will arise," I wrote, citing "a deadly virus hopscotching around the world on jetliners creating the kind of pandemic that killed Donald Trump's grandfather a century ago. Whenever the big crisis comes the one thing we know is that Donald Trump lacks the deep knowledge, critical thinking skills, emotional maturity and ability to separate sound advice from nonsense that are needed in a crisis."
Reduced Social Security Benefits
Social Security benefits are based on the 35 years of highest earnings out of 38 years. Being forced out of the labor market can mean fewer than 35 years or fewer years at higher pay. It also can force people to seek Social Security benefits at 62, normally the earliest eligible age, rather than collecting a larger benefit by waiting.
The maximum benefit this year at age 62 is $2,265, while someone who waits to collect at age 70 gets $3,790. The worker who waits until age 70 to collect — most likely white and well paid—gets $1.67 for every $1 the younger retiree collects.
Those figures massively overstate typical benefits because few workers qualify for the maximum. The average Social Security benefit last year was only $1,470 a month.
The older workers forced into retirement sooner than they wanted tend to labor in lower-paid occupations and those that expose them most to the risk of contracting COVID-19. Older executives and other office workers can work from home, while that option doesn't exist for those in physical jobs from stocking grocery store shelves to driving buses.
This means that those involuntarily pushed out of the labor market are likely to depend on Social Security for most or all of their income in old age. These workers are unlikely to have pensions or significant retirement savings and are likely to still be paying off a mortgage, assuming they even own a home.
The impact of Social Security benefits is enormous. This year about 65 million Americans — retirees, widows and widowers, disabled people and orphans will collect $1 trillion. That's a nickel on each dollar of Gross Domestic Product.
There is also a strong institutionalized racist component in the reduced income disaster facing older Americans forced out of the labor market because Trump & Co. don't know how to deal with the pandemic.
Because of the kinds of jobs they tend to hold, almost 30 percent of white people can telecommute while fewer than 20 percent of black people can.
Few low-wage workers can do their jobs from home. Only 9.2 percent of the bottom fourth of workers can work from home compared with 61.5 percent of those in the top quarter, an Economic Policy Institute analysis found.
Long after Trump is out of the White House taxpayers will be forced to shoulder much of the cost of these shortened working careers through more old-age welfare benefits, subsidizing housing and other costs.
There is a solution to this awful legacy — increasing Social Security benefits so the average benefit lifts older workers significantly above the poverty line.
Nancy Altman, president of Social Security Works, says this solution will do the trick if combined with other actions. "Americans are desperate. Those fortunate enough to have 401(k)s are depleting those savings. Those old enough to claim Social Security are doing so. But workers who claim early have their Social Security benefits reduced permanently, setting them up for destitution when they become octogenarians and have spent down their other assets," Altman warned.
"Social Security's modest benefits must be expanded, as the Democratic Party is proposing. As part of that expansion, those who claim early should face a smaller reduction.
"That is not only affordable; it will dramatically reduce poverty and increase economic security," said Altman, co-author with Eric Kingson of Social Security Works, a book debunking myths about the program. In December they will be out with a new book on the widespread benefits of increasing Social Security benefits.
Demands for welfare and charitable services would fall; average lifespans rise; and, most important of all, show something Trump lacks — regard for human life.
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