Americans delaying retirement due to financial stress

It’s an understandable problem for many Americans yet the response from Washington on the crisis remains a mystery. In a normally functioning system, older workers retire which opens up space for younger workers to enter. Thanks to changes by the Republicans back in the 1980s, many Americans are much more reliant on the whims of Wall Street for their financial security. Somehow both Congress and the White House thought that it was OK to talk about the Wall Street failures without actually doing anything about it. The made-for-TV moments were all great fun but wouldn’t it have been nice to see someone bother to rein in the gamblers of Wall Street who pilfered other peoples money?

Now we are faced with the problem of backlog in employment when we need to inject new workers yet it will take some time. Wall Street has nicely bounced back with bonuses that are as bloated as ever though the rewards to customers are nowhere to be found. Considering how critical this issue was during the election and all of the talk about this being the worst recession since the Great Depression (the Great Recession as some call this) there remains a lack of seriousness throughout the political leadership in Washington. Tackling the tough issues was supposed to be a priority rather than an afterthought as it is today.

To the long list of reasons American companies aren’t hiring — business losses, tight credit, consumer retrenchment — add the fact that many of their older workers are unable, or afraid, to retire.

In other parts of the developed world, people are retiring as planned, because of relatively flush state and corporate pensions that await them. But here in the United States, financial security in old age rests increasingly on private savings, which have taken a beating in the last year. Prospective retirees are clinging to their jobs despite some cherished life plans.

As a result, companies are not only reluctant to create new jobs, but have fewer job openings to fill from attrition. For the 14 million Americans looking for work — a number expected to rise in Friday’s jobs report for August — this lack of turnover has made a tough job market even tougher.

An American in Paris, France. BA in History & Political Science from Ohio State. Provided consulting services to US software startups, launching new business overseas that have both IPO’d and sold to well-known global software companies. Currently launching a new cloud-based startup. Full bio here.

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