 |
TDC IDEA - An Affiliate of the State Data CenterThe official website of The Development Corp.'s
|
 |
New York Numbers Moving Sideways
by Paul Grasso, March 18, 2010
The United States Department of Labor reported a drop in the unemployment rate in January from 10% to 9.7%. That was the good news.
Interestingly, even though the national unemployment rate dropped, 30 states reported unemployment rate increases, 11 states reported no change, and only 9 states reported a decrease in their unemployment rate. Michigan again reported the highest unemployment rate in the nation (14.3%).
Although the national unemployment rate fell from December 2009 to January 2010, the most recent data from the New York State Department of Labor shows local unemployment jumped significantly.
Unemployment Statistics (NYSDOL Data):
Meanwhile, the more comprehensive measure of unemployment and underemployment, called the U6 measure, showed a rather sharp improvement:
The Employee Benefit Research Institute (EBRI) recently released its 2010 Retirement Confidence Survey. The EBRI surveyed 1,153 people (902 working Americans and 251 retirees) over the age of 25. Their report contains some interesting and surprising information.
What is not surprising is that in the current economy many Americans continue to have a difficult time making ends meet. Two income households have become one-income households and are dipping in to their retirement savings just to keep their heads above water. And, the survey reveals that many Americans are unprepared for retirement.
The survey indicates that:
- 46% of workers do not know how much money they will need to retire;
- 24% of workers indicated that they will retire later than they originally planned;
- 27% of workers have less than $1,000 in savings;
- 54% of workers have less than $25,000 in savings, excluding the value of their home and defined benefit plans;
- 29% of workers feel "very confident" about eventually having enough money to pay for basic expenses during retirement;
- 33% of retirees feel "very confident" about continuing to have enough money to pay for their basic expenses during their retirements;
- 16% of workers feel "very confident" that they will have enough money for a "comfortable retirement;"
- 54% of workers responded that they will need at least $500,000 for retirement;
- 77% of workers expect to receive money from Social Security. (In 1991, 88% responded that they expected to receive money from Social Security);
- 11% of workers surveyed are likely to purchase a guaranteed income plan for their retirements;
- 19% of workers and 22% of retirees are confident in banks, while even fewer (12% and 13%, respectively) maintain confidence in insurance companies.
What you can conclude from the survey is that many American workers are not adequately prepared for retirement. When Franklin Roosevelt signed Social Security into law in 1935, a newborn was expected to live on average for 60 years, while someone who had attained the age of 40 was expected to live to the age of 69. A pension entitlement age of 65 seemed like a safe fiscal bet then. With people living longer because of advances in medicine, many retirees now live for 25-30 years after reaching retirement age.
With the recent volatility in 401(k) plan assets and in home values, the perceived inadequacy of personal retirement savings accounts, and the lack of confidence in banks and insurance companies, many people will find themselves working well past the age that they had hoped to retire.
It will be interesting to see the effect a substantial number of employed people who delay retirement will have on the job market. Younger job seekers may have difficulty finding jobs or getting promoted and many of the recently unemployed may find it increasingly more difficult to find work. What will the effect be on those groups being able to save for their own retirement? Stay tuned.