The coronavirus outbreak is wreaking havoc not just on our health care system, but also our economy. Restaurants, bars, coffee shops, hotels, airlines, small businesses, and other groups are sidelining workers, slashing hours, and suspending operations in the wake of the global pandemic.
This will harm the lives of millions of Americans who belong in the middle precariat – a term explored by author Allison Quartz in her book “Squeezed: Why Our Families Can’t Afford America.” What does this term mean, and why does it matter for retirement security?
The middle precariat is “the growing number of middle-class Americans who [are] highly educated but underemployed.” In Quartz’s book, she profiles several individuals who fit this definition, including educators who drive Uber or Lyft in their spare time, older workers who have been affected by changes in the workforce and have to retrain for other jobs, and lawyers and other professionals who, despite having advanced degrees, struggle to afford everyday necessities.
Economic research shows that these workers are not alone. For most workers, according to the Economic Policy Institute, “average wage growth has decelerated sharply, with the biggest declines in wage growth at the bottom and the middle.” Since 1979, “average growth fell to 0.7 percent per year, only one-third of the average rate in the earlier postwar period.”
As a result, fewer and fewer people have the resources they need to afford a secure retirement. According to the National Institute on Retirement Security (NIRS), the median retirement account balance among all individuals is a whopping $0, and 57 percent of working-age individuals do not own any retirement assets in an employer-sponsored plan.
To ensure all public employees can retire with dignity and security, we must protect public pensions so retirees are not left behind. In the coming economic uncertainty, it will be one of the only ways people can afford to retire.