How to fix the access gap in retirement savings

Welcome to?The Weekly Slice,?the newsletter for people dedicated to creating a more inclusive economy.?Each week, we bring you the latest in inclusive economy news, resources, and events from programs and initiatives across the Aspen Institute.?

In?this week's?Slice,?we look for solutions to the lack of retirement savings in the US, and get a lesson on the role of public education in creating financial equity.

Let’s dig in!

–Lorelle Atkinson

This week’s newsletter is 903 words–a 5 minute read.

Important Testimony?

Rise and Shine: Improving Retirement and Enhancing Savings

Whenever there is volatility in the stock market, there’s hand-wringing about retirement savings (even though market conditions?aren’t as important as factors such as longevity and illness). But no matter what the Dow is doing, we should be worrying about a much more troubling issue: systemic economic exclusion that has put retirement savings out of reach of millions of Americans.?

The good news is that there are incremental steps we can take toward closing the access gap for retirement savings—ones that could serve as a foundation for future improvements. To talk about those next steps,?Ida Rademacher?of the?Financial Security Program?testified before the Senate Health, Education, Labor, and Pension Committee earlier this year. You can find clips of her testimony?here.

Key Takeways:

• Retirement savings is a pillar of the future of wealth.?Retirement savings are second only to home equity as a source of household wealth. Without it, financial security is nearly impossible.?Social Security typically replaces less than half?of pre-retirement wages.
• Far too many lack access to workplace retirement savings.?Approximately?40 million workers?in America currently lack access to a workplace retirement savings plan, and that’s reflected in growing wealth inequality. Black and Hispanic/Latino households have less than half the savings of a typical white household. It’s generational, too, with savings rates tracking lower in younger generations.?
• Lack of portability of retirement savings leads to lost wealth.?The average worker?changes jobs 12 times?over the course of a career, necessitating rolling over or cashing out 401(k) savings each time. Lost savings from job changes alone total?between $60 billion and $105 billion?each year.

Why it matters:

Not having the wealth that comes with retirement savings leaves people less able to invest in economic mobility, care for their health and well-being, and support family, community, and future generations.

What’s next:

Rademacher highlighted ways policymakers can address accessibility gaps, including increasing the number of part-time workers who have access to retirement plans at work, expanding the market for Multiple/Pooled Employer Plans to include workers at nonprofit organizations, and promoting automatic re-enrollment in retirement plans. Existing policy opportunities also allow for automatic enrollment in workplace emergency savings accounts and for enhancing tax-time savings opportunities.

Watch the testimony here.

?Learning Lessons

We Are What We Teach: Re-envisioning Public Education for a Just, Free, and Prosperous America

School’s back in session, and it seems that no one is giving public education a passing grade. It is perpetually underfunded, in spite of research that shows that dollars spent on education create GDP and tax value that exceeds investment costs, and that?education expands the economy equitably?to the benefit of middle and low-income families.

A?recent publication?by the Institute’s?Education and Society Program?argues that it’s time to create a new vision for schools, one that fulfills the three primary purposes of public education:?

• Developing a healthy sense of self that supports students to understand who they are and how to make the most of their talents and passions
• Preparing students to engage effectively in American democracy and civic life
• Enabling students to thrive in the world of work

The skills imparted by these goals are at least as necessary as algebra for functioning in the modern world. And since we’ve made a promise to every student—no matter their race, class, gender identity, language, or any other point of marginalization—this vision must be built upon inclusion. “An outdated vision for education,” say the authors, “cannot meet the moment of crisis or seize opportunities for all Americans, and America, to thrive and prosper.” The program’s future work will examine the reciprocal relationship between education and broader social determinants of success and thriving.?

Read the full paper.

Upcoming Event?

Opportunity by Design: A Discussion on Growing Worker Skills and Talent in the Workplace

When you ask American frontline workers what they want from their jobs, they’re thinking about more than the here and now. In a?recent report?from McKinsey & Company, “job growth” and “learning opportunity” flanked “pay” in the top three worker priorities. The current lack of investment in workers’ skills leaves them trapped in low-paying jobs, and has employers facing high turnover and a disheartened workforce. Work-based learning, it turns out, is good for everyone.?

On September 14, the?Economic Opportunities Program?will host?Opportunity by Design: A Discussion on Growing Worker Skills and Talent in the Workplace. This online conversation—the second in a?three-part series—will address how to design jobs so that they include opportunities for learning and growth.?Washington Post?economics correspondent?Abha Bhattarai?will moderate a panel featuring?Daniel Bustillo?of Healthcare Career Advancement Program,?Jocelyn B. Caldwell?of Walmart, and?Paul Osterman?of the MIT Sloan School of Management.

Register here.

ICYMI

Need-to-know stories you may have missed.?

• The?Aspen Network of Development Entrepreneurs?asked Indian solar entrepreneur?Harish Hande?What Does Sustainability Mean to You??and a few other questions in a recent profile.?Hande will speak at the?ANDE 2002 Annual Conference?this?September 13-15 in Leesburg, Virginia.
• In?Quartz,?Judy Samuelson?of the?Business and Society Program?wrote about how ESG investment might change as significant environmental legislation at long last becomes law.?
• Lack of trust in the healthcare system can create poor health outcomes and increase healthcare costs, particularly in low-income communities and communities of color.?Lisa Fitzpatrick, an?Aspen Health Innovators Fellow, founded?Grapevine Health?to deliver health information to people face-to-face.?Hear her story?in this video from the?Aspen Global Leadership Network.