The New Politics of the Retirement Crisis

Originally published in the April 2019 issue of The New Republic magazine.
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In 2014, 64-year-old Jim Whitlock was earning a good salary as an inspector at Boeing, where he planned to work for another six years. His wife, Cheri, who was 54, was investigating public records for a title insurance company. Then Jim’s diabetes, sleep apnea, and chronic fatigue dramatically worsened. In May of that year, he was forced to retire early, and Cheri found herself serving as his primary caretaker in addition to working full-time. “The financial hit of it all was quite frankly pretty hard,” Cheri told me. Some months, she had to choose between making her next car payment, purchasing groceries, or paying the electric bill.

Two years later, when Jim was diagnosed with early onset dementia, small luxuries the Whitlocks had long taken for granted—like going to a movie or buying yarn for knitting—began to feel out of reach. Caring for her husband taxed Cheri, too. Her doctor worried about her skyrocketing blood pressure and how little sleep she got every night.

Cheri assumed she would never be able to retire. “All of Jim’s retirement funds were going to his care, we were looking at the potential of losing our house, and I was looking at a very destitute future for myself,” she recalled.

As dire as their financial situation was, Cheri and her husband were still better off than many Americans. Jim had an employee pension from Boeing, and when he passed away last July, after a rapid decline, he had a life insurance policy that doled out just enough money to keep Cheri out of poverty—and will, one day, allow her to retire. Very few Americans can say as much. Today, almost half—​45 percent—have $0 saved for retirement. Roughly the same number don’t simply worry about being financially insecure when they retire; they actually expect it. Indeed, just within the last few decades, retirement and senior care have become some of the most intimidating and untenable costs people face in their lifetimes, a burden more crushing than paying for college or buying a house.

Our modern system for dealing with the elderly emerged during the New Deal, when very different social and economic conditions reigned. The average life expectancy was 61 years old, most women didn’t work outside the home, and many workers had pension plans that provided them with a steady source of income in their old age. Private pensions were themselves a relatively new invention. In 1875, American Express offered the first such plan to employees who had been “injured or worn out” working its rail, barge, and horseback delivery lines. At the turn of the century, railroad barons implemented them, eager to remove aging workers from their ranks without political blowback. Many of those pension funds went bust during the Great Depression. Observing the decimation of millions of dollars in life savings, the federal government recognized that it needed to step in, and created the Social Security Act of 1935.

Over the next 30 years, life expectancy rose, the economy boomed, and in 1965, with flush federal coffers, the government passed Medicare to aid the growing elderly population. Both Social Security and Medicare, however, were designed to be supplemented by other sources. Benefits were nothing if not modest​—enough to keep people out of poverty but hardly enough to live on. Lawmakers had assumed that people would be able to draw on individual savings to augment their government subsidies. And for much of the twentieth century, they were right. Between World War II and the 1990s, most of the middle class earned enough from their jobs to enjoy a fairly comfortable retirement. But during that same period, an ideological shift was underway, as employers began scaling back the benefits workers relied upon to provide for themselves in their old age.

In 1982, when Social Security almost went bankrupt, some of the new think tanks that were establishing themselves in Washington at the time—like the Heritage Foundation and Cato Institute—pressed President Ronald Reagan to privatize the program. But when they realized doing so would be politically perilous, given Social Security’s strong support among seniors, strategists decided to promote a different approach. Politicians would assure seniors their Social Security benefits would remain the same, tell young people they could expect no benefits to be left when they retired, and convince current workers that private investment was a safer, more lucrative option.

The retirement vehicles known as 401(k)s first appeared in 1978, and within five years, nearly half of all large firms were offering them. Advocates made rosy projections, promising things like 7 percent annual compounded returns. “There was a complete overreaction of excitement,” Bank of America’s head of retirement services recalled in a 2017 Wall Street Journal articleBut when recessions hit in the 2000s, millions lost their savings. Today, these early enthusiasts admit their analyses failed to account for a trifecta of factors: the large swings in the stock market, the ordinary investing mistakes people routinely make, and the huge fees charged by money managers. (For the typical worker, fees can easily eat up 20 percent of a retirement fund over time.)

A century after railroad companies introduced some of the nation’s first pension programs, employers have all but relinquished their sense of obligation to care for their workers in their old age. Today, pensions are nearly gone, and most small businesses don’t even offer 401(k)s. In 2013, just 28 percent of large companies in the United States provided retiree health coverage, down from 66 percent in 1988.

 

It’s no surprise, then, that 46 percent of Americans expect to be financially insecure when they retire, anticipating their government and employers will do next to nothing to help them. But these grim fears also open up a political opportunity. In the last election cycle, Democrats campaigned heavily on health care (by mid-October, 55 percent of their television ads centered on the issue). It’s this focus, many suspect, that helped them improve their margins among elderly voters, with seniors casting their ballots almost evenly between the two parties—a marked shift from years past.

There are signs that retirement will play a significant role in the 2020 race. In February, Bernie Sanders reintroducedthe Social Security Expansion Act, with sponsorships from three other leading Democratic presidential contenders: Cory Booker, Kirsten Gillibrand, and Kamala Harris. They belong to a congressional caucus dedicated to increasing Social Security benefits. Formed last fall, it already has more than 150 Democratic members, and Sanders and Elizabeth Warren, another presidential candidate, are its co-chairs in the Senate.

The party has come a long way from its stance a decade earlier, when few liberal politicians would endorse the expansion of Social Security. In the early 2000s, the boldest promise most Democrats would make was to “preserve” benefits or “fight cuts.” Their rhetoric only began to change after 2010, when advocacy groups like Social Security Works were launched to help transform the conversation.

Congress has signaled a willingness to consider policy proposals beyond Social Security, too. Representative Pramila Jayapal’s new Medicare-for-All bill includescoverage of long-term care, and just last year, with Republicans controlling both chambers, Congress expanded Medicare coverage to seniors with multiple chronic illnesses. The success of that bill suggests real bipartisan support exists for strengthening the national insurance program.

Encouragingly, the states have also begun to propose solutions. In 2017, Hawaii launched a program to reduce the cost of senior care, dispensing $70 a day for up to 365 days to family caregivers. In 2018, Maine voters considered a ballot measure that would have established the nation’s first universal home care program. The proposal suggested taxing Maine’s highest earners to pay for caregiving for any adult aged 65 and older who wanted it. It didn’t pass (powerful groups like the Maine Hospital Association and the Maine State Chamber of Commerce torpedoed the effort), but similar ideas will likely surface elsewhere. This year, legislators in Washington state are voting on a bill to provide residents with up to $36,500 for costs like nursing home fees, in-home care, and wheelchair ramps—assistance of a kind that Cheri Whitlock and her family would no doubt have eagerly welcomed.

Politicians who address retirement understand they can reach not only the elderly, but those who care for them. More than 40 million people provide unpaid caregiving, spending on average 20 percent of their incomes each year on expenses like mortgage payments and medical bills. The home health and personal care sector, meanwhile, employs some three million people nationwide and is one of the fastest growing in the economy. Most aides are women, who earn very little and work unpredictable hours. For them, and for families who rely on their services, a plan for universal long-term care would surely represent a welcome change. Few issues in American politics cut across so many constituencies, and affect the lives of so many.

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Bernie, the Billionaires, and the School Board

Originally published in The American Prospect on May 12, 2017.
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Just 20 percent of eligible Los Angeles voters turned out to the polls on March 7 to vote for their city’s next mayor and school board officials, and turnout is likely to be even lower for Tuesday’s school board runoffs. And yet, this race that barely anyone will vote in has turned into a high-stakes battleground, complete with record-setting amounts of political spending and bitter negative campaigning. It has pitted some of the richest men in American against none other than Bernie Sanders, in a brawl over the future of public education in the nation’s largest state.

Incumbent board president Steve Zimmer, backed by labor, is running against the education reformer Nicholas Melvoin; in another district, labor-backed Imelda Padilla is facing off against the charter-backed Kelly Fitzpatrick-Gonez in an open race.

Los Angeles is last of the big-city school districts to hold elections for local school board members—mayors in cities like Chicago and New York appoint their school boards, and Washington, D.C., dissolved its local school board altogether in 2007, giving education decision-making power to the mayoral-appointed schools chancellor.

Despite the current showdown, Los Angeles is hardly anti-reform. With 279 charter schools, Los Angeles has more charters than any other city in the nation. According to the National Alliance for Public Charter Schools (NAPCS), roughly 156,000 LA public school students—24 percent of total enrollment—attended charter schools during the 2015-16 school year. The second highest city on NAPCS’s list was New York, which enrolled 93,610 students in charters that year.

But the ambitions of national reformers still far exceed the district’s appetite for change, at least thus far.

Although the LA school board has approved most petitions for new charters and charter renewals, charter advocates say they feel the board’s support for opening new ones is waning.

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And in September of 2015 The Los Angeles Times published a confidential document from billionaire Eli Broad’s foundation, revealing plans to increase Los Angeles’s charter school market share to 50 percent over the next eight years. This transformation would require the creation of 260 new charters, at a cost of $490 million. The bombshell report sparked intense controversy.

By March of 2016, education reformers had toned down their public rhetoric and goals, emphasizing that they’d support expanding all types of high-quality schools, not just charters. The modified plan did little to tamp down tensions between charter supporters and opponents. A union-funded study released in May of 2016 reported that the city’s charter sector drains upwards of $500 million a year from the school district’s budget. The teachers union and its allies charged that unmitigated charter school growth “imperils the financial stability” of the district, and limits opportunities for those students who remain in traditional public schools.

Last month, in a 4-3 vote, the Los Angeles Board of Education voted to endorse three controversial bills in the state legislature that would place more oversight and restrictions on charter schools. The California Charter Schools Association strongly opposed the bills, and both Melvoin and Fitzpatrick-Gonez said they would oppose the measures if elected. (Zimmer voted in favor of endorsing the bills, and Padilla declined to take a position.)

Money from outside the city and state has been pouring into the two races. The previous record in outside donations for school board elections had been $7.4 million in 2013. As of April 29, outside spending had already reached $11.3 million, according to the city’s ethics commission campaign finance data. As LA Weekly put it, “To say the 2017 Los Angeles election for school board is the most expensive such race in the history of the United States is an understatement: It is the most expensive by more than 50 percent.” (And this is all for a job that pays $45,000 a year.)

Nationally, charter advocates often justify their reliance on the deep pockets of billionaire supporters as necessary to compete with the spending of local teachers unions. But other sources place reform spending at least in parity with union spending. As EdSource, a nonprofit education news site focused on California recently reported, “In past years, the teachers union far outspent the [charter] association on campaign contributions. Not anymore.”

In the Los Angeles school board race, the charter advocates have outspent the unions by roughly a third, with significant money coming from billionaire-donors like Eli Broad, Michael Bloomberg, Walmart heirs Alice and Jim Walton, Gap co-founder Doris Fisher, and Netflix CEO Reed Hastings.

And LA Weekly reports that $4.1 million has been spent on negative campaigning in the runoffs, compared to $1.1 million in the 2015 race, and under $1 million in 2013. Fifty-eight percent of the negative campaign financing has been directed by charter proponents against Zimmer.

The unprecedented escalation of the races has also attracted some high-profile, highly unusual endorsements from political leaders and celebrities.

“Billionaires should not make a profit off of public school children,” said Democratic senator Bernie Sanders in a statement earlier this month. “That’s why I’m supporting Steve Zimmer and Imelda Padilla for the Los Angeles School Board. They will fight against the Trump/DeVos agenda to destabilize and undermine public schools.”

Sanders’ endorsement—which links the education reform agenda of Melvoin and Fitzpatrick-Gonez to President Trump’s controversial education agenda—reflects a larger national strategy being pursued by advocates of traditional public education since Donald Trump was elected. It attempts to link charter advocates to a man Democrats despise. It also frames Tuesday’s choice as something larger than charter schools or traditional schools: an extension of a national debate about whether the public sector, including education, will be democratic and equitable, or privatized and outsourced to the lowest bidder.

Is it working? Time will tell, but Melvoin seems to be feeling the heat: in an article in LA School Report from March, he discussed pressure to dispel myths that he was a “Trump guy.”

Melvoin and Fitzpatrick-Gonez can claim support, however, from prominent Democratic charter backers. Both have received endorsements from Arne Duncan, the former education secretary under Barack Obama, while Fitzpatrick-Gonez formerly worked as an Obama administration education adviser.

Why the Dichotomy Between Racial and Economic Justice is A False One

Originally published in The American Prospect‘s Tapped blog on July 21, 2015.
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Yesterday, Vox’s Dara Lind published a post analyzing what this past weekend’s protests at Netroots Nation tell us about splits within the progressive movement. I personally don’t think Bernie Sanders handled the Black Lives Matter demonstrators very well, and I imagine his advisers had several serious conversations with him following the conference about how to better approach these voters going forward. He’s a politician—I’m pretty confident he’ll figure out how to campaign more effectively.

It’s the media analysis I’m more worried about.

Lind writes:

There is a legitimate disconnect between the way Sanders (and many of the economic progressives who support him) see the world, and the way many racial justice progressives see the world. To Bernie Sanders, as I’ve written, racial inequality is a symptom—but economic inequality is the disease. That’s why his responses to unrest in Ferguson and Baltimore have included specific calls for police accountability, but have focused on improving economic opportunity for young African Americans. Sanders presents fixing unemployment as the systemic solution to the problem.

Many racial justice advocates don’t see it that way. They see racism as its own systemic problem that has to be addressed on its own terms. They feel that it’s important to acknowledge the effects of economic inequality on people of color, but that racial inequality isn’t merely a symptom of economic inequality. And, most importantly, they feel that “pivoting” to economic issues can be a way for white progressives to present their agenda as the progressive agenda and shove black progressives, and the issues that matter most to them, to the sidelines.

We must push back against this false dichotomy of “racial justice progressives” and “economic progressives.” I think it’s a harmful way to frame what’s going on, and it suggests that we can have racial justice without economic justice, and that economic justice can come about without tackling racism. Neither is true, at all.

Racial justice amounts to far more than dismantling our racist criminal justice system and reining in police brutality. Affordable housing, public education, and quality health care are all issues that impact individuals directly based on class and race. Drawing imaginary lines between them just doesn’t work.

I’m not frustrated with the coverage because, as Lind suggests, I just want to defend Sanders. I am frustrated because attempts to separate economic issues—whether it’s jobs, or retirement savings, or health care, or prisons, or loans, or taxes—from racial justice, is a deeply troubling way to lead a national conversation about racism.

What Would a Sanders Administration Do on K-12 Education?

Originally published in The American Prospect on June 16, 2015.
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P
residential candidate Bernie Sanders has excited his base with some bold ideas surrounding higher education. He’s said college should be a right, that public universities should have free tuition, and that public universities should employ tenured or tenure-track faculty for at least 75 percent of instruction, as a way to reduce the growing dependence on cheap adjunct labor. But Sanders’ stances on K-12 issues—arguably more contentious topics for politicians to engage with compared to higher ed and universal pre-K—have garnered far less attention.

Here’s what we know so far:

1. He wants to roll back standardized testing, but still supports Common Core.

Sanders opposes the expansion of standardized testing we’ve seen through the No Child Left Behind Act (NCLB); he argues that such tests narrow school curriculum and hurt student creativity and critical thinking. However, this past March he voted against an amendment that would have allowed states to opt-out of the Common Core standards without a federal penalty. The amendment also would have barred the federal government from “mandating, incentivizing, or coercing” states into adopting the standards.

2.  He supports expanding the school day and year.

Sanders is a member of the Health, Education, Labor and Pensions (HELP) Committee and in 2011, he worked to raise support for expanding the school day and year. Citing research on “summer learning loss”—Sanders notes that low-income students stand to lose much of what they learn if they’re denied extra-curricular enrichment opportunities. He also secured more funding for after-school and summer learning opportunities in Vermont.

3. He wants to see teachers paid more, and is a defender of pensions.

Sanders believes all educators, from early childhood workers up to college instructors should be paid more. He said, “Something is very wrong when, last year, the top 25 hedge fund managers earned more than the combined income of 425,000 public school teachers. We have to get our priorities right.” And while he believes the public pension crisis “must be addressed” he is more interested in reigning in Wall Street to solve it than reducing retiree payments.

4. He opposes Big Money in politics, but has not taken a clear position on the role of Big Money in education.

Sanders has come out strongly against oil companies, pharmaceutical manufacturers, and other special interests that pour money into politics. Citing these groups as a threat to true democracy—he wants to overturn Citizens United and push for publicly funded elections.

However, whether he will bring the same critical rhetoric to the foundations, consultants, and hedge fund managers shaping education policy remains to be seen. As Anthony Cody, the co-founder of Network for Public Ed pointed out recently, Sanders has yet to speak very clearly on these issues, but his opposition to Big Money elsewhere leads one to think that it’s at least a reasonable possibility.

5. He wants to strengthen who can be considered a “highly qualified” teacher.

The American Association of Colleges for Teacher Education honored Sanders in 2012 for his “outstanding support” for educator preparation programs. In 2011 he introduced the Assuring Successful Students through Effective Teaching Act, which would aim to strengthen the definition of what a “highly qualified” teacher is considered to be, and work to reduce the number of unqualified teachers working in needy schools.

6. He has an unclear position on charter schools, but opposes vouchers.

He voted for the Charter School Expansion Act of 1998, but has not engaged much in the polarized charter debate since. Vermont is one of the few states that do not permit charter schools, in part because the Vermont public education system already allows for “school choice” in other ways. However, Sanders is a strong supporter of teacher unions and collective bargaining, so if he does come to back charters, his support is unlikely to be paired with the type of anti-union rhetoric common in the charter advocacy world.

He also opposes private school vouchers, favoring an expanded federal investment in public schools instead.

So we have some insights, but questions remain. Ultimately if Bernie Sanders wants to win over progressive liberals and campaign as a left alternative to Hillary Clinton, he’ll have to start speaking more explicitly about K-12 education in the coming months.