Retirement should not mean hardship but many older Americans live in poverty

As inequality has grown, American seniors have been exposed to financial distress in ways that often go unnoticed

Vivian Majors spent her life cleaning houses while her husband, Martin, worked as a carpenter. Their bodies broke down in their 60s. She is now 71, living on her own and struggling to pay her bills. He is in a nursing home and has Parkinsons disease. She survives on a $960 monthly social security check and $50 in food stamps. Hardened by years of physically taxing work that left her hovering around the poverty line, Majors, now retired, is girding herself for more years of financial hardship.

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Elderly poverty was supposed to be a thing of the past. Social security supposedly wiped out the scourge of old-age penury, signaling one of the great social-policy triumphs of the modern era. But this is far from the whole story. Inequality, which has grown markedly in Europe and North America since the 1970s, has widened the gap between the secure and insecure in all age groups, and has exposed American seniors to financial distress in ways that often go unnoticed.

Opelousas,
Opelousas, Louisiana, has the highest rate of elderly rate in the US. Photograph: Annie Flanagan/The Guardian

According to research from the University of Massachusetts Boston, material hardship bedevils millions of Americans such as Majors who are over 65.

Opelousas, Louisiana (population 16,480), where Majors and her husband grew up and raised their own children, has the highest rate of elderly poverty in the US. Seventy-five percent African American, Opelousas is home to men and women who have worked all their lives. But in 2017 the average per-capita income in the town was only $15,266 a year, and 45% of its population lived in poverty.

Mary
Mary Quick sweeps after the Holy Ghost Community Meal in Opelousas, Louisiana. Photograph: Annie Flanagan/The Guardian

Few Opelousas retirees received sick leave or healthcare coverage while they were working, and virtually none can count on a pension to support them when they can no longer work. A lifetime of poverty rarely translates into what the rest of the country defines as true retirement. Instead, the working poor often stay on the job past retirement age.

The statistics from Opelousas are extreme, but its labor markets underlying conditions which residents have faced all their lives are echoed across the country. Of those who are still of working age, 62% of African Americans and 69% of Latinos have no retirement savings. Come retirement, they are almost entirely reliant on social security. When that is the sole source of income, economic hardship is likely to be the outcome not to the extent it was before social security was created, but a great deal more than for workers with long histories in often better-paid private-sector jobs.

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Holy Ghost Community Diner in Opelousas, Louisiana. Photograph: Annie Flanagan/The Guardian

In the US, the poverty line was set by the Department of Agriculture as a multiple of the price of a typical food basket in the 1960s. It has been updated and benchmarked for family size every year since. The incidence of poverty for Americans over 65 has declined significantly, even further if measured against the poverty rate in the 1930s and 40s. Social security expenditures have played a crucial role in bringing about this improvement. As this safety net spread and the benefits available increased, poverty moved decisively downward.

We tend to think of inequality as shaping the lives of children and working-age adults, depending on their educational attainment. But the trajectory of inequality powerfully affects older people as well. Their lives in old age are a natural extension of their experiences in the prime working years. Social security is, in the end, insufficient to protect a surprisingly large number of older Americans from poverty.

Vivian
Vivian Majors takes care of her husband Martin who has Parkinsons disease. Photograph: Annie Flanagan/The Guardian

The US is an outlier in terms of elderly poverty in the wrong direction. Retirement expert Teresa Ghilarducci, a professor at the New School, points out that a higher proportion of older Americans are below the threshold set by the Organization for Economic Cooperation and Development than all other advanced economies in the world except for Australia and Switzerland.

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This perspective is corroborated by the Gerontology Institute at the University of Massachusetts Boston. Its Elder Economic Security Standard Index provides a more fine-grained understanding of hardship, conditional on household size, location, housing and health status, among other variables. The index shows that in 2016 a majority of American seniors lacked the financial resources required to pay for basic needs. The numbers are higher for those living alone than those in two-senior households, but overall the material hardship of the elderly is significant. The variation across the states is pronounced. But in every state, the share of older adults living in the gap between the federal poverty line and the Elder Index is larger than the share living in poverty.

Rates
Rates of old age poverty in the world. Illustration: Forbes

Theirs is an economically uneasy life. Like the near poor more generally, older households above the poverty line miss out on federal and state benefits from Snap, or food stamps, to housing grants to Medicaid designed to assist those in need. They are on their own and yet facing significant shortfalls in the resources needed to survive at a minimally acceptable level.

Gaps were particularly problematic for women who, on average, received $4,500 less per year in social security benefits than men because they had lower lifetime earnings and worked fewer quarters to take time out for caregiving.

The gender gap reminds us of one of the most important aspects of elder poverty: it does not generally descend at the end of a career. Instead, it is a function of the inequalities that beset people during their working years. In this sense, elder poverty isnt really about elders; it is about lifetimes spent under conditions of accumulated economic marginality.

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Original Article : HERE ; This post was curated & posted using : RealSpecific

This post was curated & Posted using : RealSpecific

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