The declining middle class in the United States is a popular talking point these days and is a pressing issue in the current presidential campaign. But while the state of middle Americans presents immediate concerns, it also will have a large impact upon the future of the country.
That is one of the conclusions that can be gleaned from a recent report by Pew Charitable Trusts. Examining 104 metropolitan areas, the study found a wide disparity in access to retirement plans across the country. As more and more companies have abandoned defined pension plans, many Americans have seen a reduction in their financial security.
The caustic view would be to consider this to be simply a bad break for employees who do not have the skills or the wherewithal to seek more lucrative employment. But the fact is that the situation will impact all Americans in the future. As the Pittsburgh Post-Gazette wrote editorially: “Lower rates of retirement security portend more reliance on government aid programs. That means we all pay for income — and pension — inequality.” Or, as the Associated Press wrote: “It’s an issue of growing importance on a local level as governments consider how they can help out. Not doing so could mean facing a population unable to take care of itself in the future, which could put undue strain on programs like Medicaid, food assistant programs and other services.”
For many workers, the traditional pension has largely been replaced by 401(k) plans that include contributions from both employees and employers. But the Pew research found that 40 percent of full-time workers have access to neither form of retirement savings. It also found that access varies by location, ranging from 71 percent of workers in Grand Rapids, Mich., having a retirement plan to only 23 percent in McAllen, Texas. The Vancouver-Portland metro area ranked in the highest quartile of regions in the study, as did Seattle and Spokane.