There is a new, troubling study on the financial status of most American workers. The National Institute on Retirement Security (NIRS) found that the median American worker has just $955 saved for retirement through defined-contribution plans such as 401(k) accounts. Given the expected job losses from robotics and AI, the study only deepens concerns about the economic and political pressures facing this country in the years to come.
In my new book, “Rage and the Republic: The Unfinished Story of the American Revolution,” I discuss those impacts from robotics and AI on our democracy. Using the most conservative estimates of job losses, the book explores how a large population of unemployed citizens will affect their relationship with the state.
We cannot maintain a “kept citizenship” while preserving the essential elements of the American republic. A large population of static, unemployed citizens poses challenges for what I call a “liberty-enhancing economy,” an economy that affords citizens independence from the state.
This study magnifies those concerns. If accurate, it suggests that even a short displacement in employment will return state support. Many jurisdictions are already launching Universal Basic Income (UBI) pilot programs. If this republic is to survive in the 21st Century, it will require developing new areas of “homocentric” jobs while avoiding predictable measures to subsidize positions that will inevitably be lost to robotics.
Notably, the study found that among those with positive retirement plans, median savings were much higher at $40,000.
Those with a defined contribution (DC) plan are far better off with an average savings of $179,082.
The takeaway from the report, for me, is the need to instill greater private savings. Some workers are barely paid above subsistence. However, we also need to educate citizens about the importance of setting aside retirement funds to the extent possible.
As I previously wrote, I am a great fan of the Trump Accounts. The $6.25 billion gift of Michael and Susan Dell (now augmented by dozens of corporations) could offer the single best hope for the survival of our system. Millions of young people will be able to experience the benefits of investments, savings and, most importantly, economic independence.
The study also shows the growing dangers of the collapse of the social security accounts. Despite assurances made when Congress established the system, Congress has continued to draw on Social Security funds to avoid reducing spending levels. The system could fail for these workers, who will not be able to draw upon money taken from their paychecks for the purpose of retirement. It is one of the most outrageous betrayals in United States history.
To this day, Democrats are opposing efforts to make major changes to guarantee the viability of the system for future generations, including the use of private investment accounts that could no longer be raided by Congress for easy money.
All politicians express alarm at the potential failure, but they attack any efforts to address the underlying problems as an attack on social security. As a result, we just drift toward this cliff knowing that most citizens have practically no other source of retirement support.
The social contract is broken. People who build this country and do the work have f’n earned a right to survive with dignity, not like dumb animals.
US citizens have no accessible health care, crap educational system, precarious retirement, no reliable transportation, rampant wage theft amidst lousy pay, no upward mobility, people can’t afford a house OR rent, and you think this is normal? The poor have no power, they can’t live with constant price increases in everything from tires, insurance, food, and electricity. They are quite aware they are seen as useless eaters and derelicts. They are angry AF, since playing by the rules all their lives with nothing to show for a lifetime of labor. People are so stressed they’re on their last nerve, breaking down in the streets so the lucky and greedy can demand more violent policing. (Watch a few copcam videos.) You who disregard the welfare of fellow citizens are disparaging workers, electricians, a hairdresser, your garbage man, restaurant server, plumbers, snow removed, good teachers and well deserve the rage that will no doubt come home to haunt you. These people are not asking for a bloody handout, just respect.
I am amazed that when I come to work, for lunch, the staff are ordering takeout food and bringing in Starbuck’s coffee drinks in the morning. I bring my lunch in a paper bag. I drink one cup of coffee and estimate that it costs less than a quarter for the ingredients. Yet, I see people all the time who are on Medicaid come in with the latest phones, bags, shoes, expensive nails and designer clothes, driving nicer cars than I do.
There is a mindset that is at the root of this crisis. It takes time and persistence to get ahead in this world, but it can be done. It might mean working six or seven days per week for a time. It might mean not eating out, driving an older car, no sodas, no alcohol, cigarettes or dope.
It can be done. It is a matter of discipline and persistence.
It has been some time I’ve read anything by Karl, but this:
“A large population of static, unemployed citizens…”
Sounds a lot like industrial reserve army
Any Marxists out there want to jump in?
Scary! Many Americans have become so dependent upon others helping them and they don’t want to or don’t know how to help themselves anymore.
Jeanne, you’re identifying one leg of the root issue. Self-reliance matters. A constitutional republic depends on citizens who can manage their own economic lives. When that capacity weakens, dependency naturally grows.
The broader question is whether we are intentionally forming citizens with the knowledge, engagement, and self-reliance necessary for self-government. If one leg weakens, the whole structure becomes unstable.
You know, you could write children’s books.
Post World War II a new Monetary system was created. The United States dollar has been the world’s primary reserve currency for over 60 years. Under the Bretton Woods system, the dollar was pegged to gold and most other currencies were pegged to the dollar. As a result of this arrangement, dollars were used as the main intervention currency and, hence, reserve currency.
Just before the end of World War II, many people were killed for the debts that had accumulated by Nations, People had to be eliminated in order to eliminate the debts, putting an end to their monetary system, in order to instate a new Monetary system (the Bretton Woods system).
8+ Billion People now inhabit the earth, a reduction in this population will come either by Nature or Man to restore balance. The times are ripe, both Monetarily (Debt Cancellation), Technologically, and Sustainability (Over-Population) for a new Monetary system once again. We are on the cusp of a Holocaust once again.
The Mamdani Solution – NYC
(a.k.a.: The Social Security Soylent Solution)
The Scoop’s are coming
It is a shame that so many middle class workers are living just beyond their means and have large credit card debt and little or no savings. It proves that advertising is very effective in convincing so many to live beyond their means by purchasing so much that truly isn’t needed. Do you really need a TV in every room of your over-sized house? That is just one example; but there are hundred of more ways that average Americans have been convinced that they need a yearly vacation some where, a bathroom for every bedroom plus, the latest gadgets and electronics, so much that clutters our lives while promising us luxury and comfort. I do not understand how people can enjoy an extravagant vacation somewhere while putting it on an over-loaded credit card and still enjoy themselves while knowing that they truly cannot afford it yet feel compelled to purchase it for some societal prompting that says their American life would not be complete without it. I have no pity for them but I do have a fear for my children who will be burdened with all of these spenders as they age out into retirement and have to be cared for by someone younger. This is going to explode even the most carefully conservative budget and few are paying attention to this.
So you’re proposing we should all live like you do and be constantly angry at everyone who’s not as perfect as you? And, especially, do not help the needy and the poor. Is that about right? Asking for a friend.
Dear anonymous: You are not asking for a friend, you are being a jerk. I had massive debt when I got out of law school and it took a long time to pay it down. I do not use my credit cards and pay outrageous interest because it is stupid to do so. I simply live within my means and do everything I can to sock every dime possible into a retirement savings. If I have a home project, I save for it then do it instead of paying 20% to the bank for putting it on a credit card or taking out a bridge loan on the house. I don’t believe in immediate self gratification, I’ve learned patience and to pay as I go. You may consider being responsible instead of insulting those who are responsible……just a thought!
If he had that thought, it would be his first.
My opinion, Professor Turley is prescient with this column. I’m glad somebody is raising this issue. It’s starting to look like the Luddites will finally be proven right with a vengeance.
The existential problem facing the West is that if we satisfy the Luddites by redistributing wealth while China and Russia direct their wealth toward war machines, the bad guys will eventually overtake us. All the more insane is that we’ve spent the last 40 years giving away our critical manufacturing to China. Anyone who opposes tariffs against China in this context is a both a fool and a traitor, and yet they oppose and won’t explain why. The real answer is short-term greed, not inflation fighting. Never underestimate the power of liberal Kool-Aid spiked with dark money.
Given AI and robotics, the threats will only accelerate. I’m glad somebody more important than me shares my concern.
Prescient? How about giving Trump’s people credit for the plan. Turley is just a talking head.
So you got a crystal ball for Christmas?
Your phone number is listed on a restroom wall in Hoboken… and it’s your handwriting.
Diogenes,
Chinese households save approximately 34%–45% of their disposable income. In contrast, the US personal savings rate is much lower, often hovering around 3%–5%.
Our economy is supported by spending, consumerism. China’s culture of thrift and saving puts their citizens in a better position to weather economic disruptions. We can’t. We need government help when there are serious economic disruptions because the majority of workers live paycheck to paycheck and that is often holding down two or three jobs.
Now AI and automation threatens higher paying jobs and the savings they have are not going to help at all.
Retirement accounts are useful tools. But tools do not fix formation. If citizens are not formed for long-term thinking and economic self-reliance, new account structures are bolt ons.
Economic fragility creates a vacuum. Power moves toward whoever has capacity. When self-reliance declines, government management expands. That is structural, not partisan. The long-term solution is forming citizens capable of independence.
Sure Olly, whatever you say. Round of applause for olly.
The corporations, banks, the investor billionaires do not want people saving money. We used to emphasize savings. But that was when everyone made enough to put aside and have more disposable income. That’s no longer true thanks to the eradication of things like pensions, and only needing one job to sustain a family.
We live in a country that runs on spending, consumerism. It’s what keeps billionaire’s pockets filling with cash. Plus we are being nickel and dimed in every possible way now thanks to AI. Most working class families NEED two or three jobs just to afford what is becoming more expensive thanks to the billionaires and corporation’s need for more profits. This is what is leading to the AI and automation problem. Their need for bigger and more profitability by eliminating good paying jobs while seeking for more “creative” ways to make you pay more for less.
In China they have a culture of saving for the future. They have HUGE numbers of people who diligently save for retirement of anything else. It’s ingrained in their culture. Here, “savings” means putting money in investments so hedge fund managers can charge fees and make a profit instead of focusing on the growth of your savings.
Our economy is NOT set up to support saving money. It’s set up to keep spending to support the ultra wealthy and keep corporations profitability climbing.
No mention of social security!
That is because it is not about social security per se, rather personal security.
. SS is enough to buy food, no shelter, no clothes, no transportation of course deduct Medicare payments from the food allotment.
Old folks are expected to live with the dutiful children they reared as shelter bringing with them their SS food payment within the household and babysitting in home, cooking and cleaning.
We know your children are pleased with that schema. We see your children at the protests daily. 😏
Did you read the article? He mentions it’s problems and need to reform and how both party politicians refuse to address it. SS must be reformed and transition into a type of TPS that federal workers enjoy.
Gonna be needen some STYMIE, some UBI, some free WAYMO, some free UBER EATS, some CANCEL THE RENT – We want everything free! I know – Let’s vote for AOC, Bernie, and Mamdani The Commie because they have promised everything can be FREE, right? We simply take every dollar from the top 50% and WA LA my life is good and the top 50% join the bottom and we have 100% Terrible. Problem Solved. MORONS.
Still drunk eh?
When I was growing up, the general feeling among all us kids was that you must take responsibility for yourself in life. “Nobody owes you anything,” was a fact of our lives. So we saved, even as kids. Trump 403b-type accounts are good, but when children feel a lifelong safety net prevails, the outcomes are doubtful.
Good lord, why do these geriatrics always think they are a special lot and should learn from them? Its 2026. Write your biography, see if anyone buys it.
Seriously JT! A meaningmless survey.
Seriously ERB … got a better source, than just whining publicly.
“NIRS conducts high-quality research on retirement issues, with a strong emphasis on the value of defined benefit (DB) pension plans and innovative strategies to expand retirement security. Its research informs public debate and policy development through reports, briefings, webinars, and its annual Retirement Policy Conference in Washington, D.C.”
Source: https://www.loc.gov/item/lcwaN0009017/
Read it before whining.
the 21st Century, it will require developing new areas of “homocentric” jobs … read that healthcare is up and coming. Someone has to take care of all the sick illegals and transsexuals.
how it works. 2008 wall street gambling destroy the market. Next 15 years…federal reserve prints $8 Trillion, US Treasury prints $30 Trillion Dollars
virtually all rewards goes to Wall Street for gambling. To boot, Democrats import 10 million replacement workers to destroy wages and steal jobs.
How about we FORCE wall street to INVEST
a 2% tax on the GROSS of all Wall Street Trades(Bonds, stocks, commodities, etc) or moving money offshore
if I invest in a new car or tool I pay a 6% Sales taxes
That way Wall Street stops money spinning and is FORCED to invest in business to GROW!
Oh BTW…The Average family of 4 OWES $500,000 of Federal Debt….that we printed to RESCUE WALL STREET and FAILED government!
FORCE wall street to INVEST … they already pay taxes on declared profits, its the unrealized harbors the trillions needed to rebuild. Opps, I sound like a CA liberal. My bad.
Somebody has a bone to pick with Wall St. …. I’d use that bone to clobber Jamie Dimon.
Job losses caused by AI… farming is fun.
If they take Trump’s name off this new type of account, it may be more widely accepted
wall street will just figure a way to steal the money!
I’m guessing they already have their fingers in the pot. Reminds me of Geo. W. Bush’s idea … SS accounts mandated to be managed by Wall St. only.
may be? Maybe not. So those who don’t take part because of a word, lose, so more money for the smart ones.
No reflection on you, but we can’t fix stupid.