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Originally published at Forbes.com on January 20, 2020.

What do the jobs of the future look like? And what are the prospects for older adults who may be seeking those jobs in the future?

That’s a question raised by a recent book, On the Clock: What Low-Wage Work Did to Me and How It Drives America Insane, by Emily Guendelsberger (2019). Well, strictly speaking, she doesn’t have any particular interest in the work opportunities for older adults but it’s relevant anyway.

Her primary contention is that American corporations have taken the Taylorism and the speed-ups of the past and applied to the point of making low-wage jobs simply inhumane, meant to chew up workers and spit them out, secure in the knowledge that there will always be an inexhaustible supply of willing workers. Her America is a dystopia for the “other half” who live in torment to ensure that we receive our mail-ordered goods quickly, for example. And the misery of these jobs clearly make them unsuited for older adults looking to supplement a retirement income, let alone those seeking to reduce the arduousness or stress level of their prior occupations.

But the bulk of her book is a memoir-ish recounting of three stints in low-wage work, as a young journalist between jobs and without family obligations. In December 2015 she worked as a seasonal employee, a “picker,” for Amazon in southern Indiana, just across the state line from Louisville, Kentucky. In summer 2016 she worked in western North Carolina at a Convergys call center. And in September and October of 2017 she worked at a McDonald’s in San Francisco. She prefaces her book with her first experiences working in food service, scooping ice cream as a teen, when she learned the expression “in the weeds” (as used in the blue collar world, stuck in a rush and frantically trying to get through it) and the Ray Kroc favorite, if you’ve got time to lean, you’ve got time to clean, by which managers everywhere call for their underlings, when the register gets quiet, to be otherwise productive when they feel they’ve earned some relaxation after a busy period.

The problem, Guendelsberger says, is that low-wage workers are now always “in the weeds,” and never have “time to lean,” as corporate management designs these jobs for a frentic pace.

In her experience at Amazon, she works 12 hour shifts five days a week, and is exhausted and sore, popping Advil day after day. She describes struggling to keep up with the scanner that, one item at a time, sends her off to collect goods through a cavernous warehouse, with no opportunity to chat with co-workers except for lunch and breaks (that’s Time Off Task, too much of which gets a talking-to). No phones or other personal items are permitted, but she eventually sneaks in audiobooks to listen to; she also sings when in the more isolated parts of the warehouse. What’s more, the job sucks up more time of her day than he scheduled shift because she must arrive early to avoid the risk of being late and accruing a “point,” too many of which result in automatic termination, and there’s a rush of workers arriving in the parking lot and the building at shift-change; besides which, she is a smoker and the walk outside to the smoking area consumes her scheduled breaks.

As described by Guendelsberger, this is hardly a job an older adult can do. But at the same time, the co-workers she ultimately meets for drinks after-hours don’t think it’s all that bad; it pays better than any other job these women might be able to get, they’ve grown accustomed to the pace, they are less worried about the consequences of occasional chit-chat or bathroom breaks. One woman pushes herself to be the “power hour” winner, “picking” the most items for the reward of a small vending-machine credit, and the satisfaction of meeting a challenge.

And she mentions, as an incidental comment, that the more recently-built Amazon warehouses/fulfilment centers (it is a pet peeve of Guendelsberger’s that Amazon uses the latter term) operate differently, and, in fact, a little digging finds reporting from 2017 about new warehouse systems in which Kiva robots bring the products to the “pickers,” who no longer have to walk but must still be able to stand for the entire workday. (Is the standing truly necessary or is it just a norm? Could a worker sit on a stool for part of their workday?)

At Convegys, the pace is just as frentic, even if more stressful than physically arduous. Workers receive several weeks of training, then are sent out into the cubicles, with trainers floating to provide assistance for difficult cases — which, at the beginning, means “all of them,” since, Guendelsberger reports, she must log into, and feed data into/pull data from, six different computer systems to solve the customers’ problems and simultaneously upsell them to new products and services. Her calls are monitored, her Time Off Task is monitored, she’s told she may never place a customer on hold without their consent, even if they’re a “screamer.” She doesn’t quite know how smart the monitoring software is or how much she’s at risk of being scolded for failing to try to sell a DirecTV system to a cellphone customer who’s calling to try to get some leniency for an unpaid bill, so she’s particularly anxious about this.

And, again, just as at the Amazon warehouse, the workers have a different different perspective, because the local economy is struggling enough (in this case due to the collapse of the local furniture industry as Americans turned to imports) that these jobs are appealing. Her trainer’s pitch is that pay starts at $10.50 per hour but people who meet sales and other goals can get the equivalent of $15 – $16 per hour, and, in fact, she notices that some of the women are falling in to the rhythm of it and making those sales.

How stressful is the job, for her co-workers, those, at least, who make it past Guendelsberger’s five weeks, who become more comfortable with the “launch sequence” and who can tune out the screamers and who can upsell successfully? Could a company like Convergys lower its training costs and increase its productivity and its profits by reducing stress levels, reprogramming its systems for easier use, easing up on the constant supervision? (Guendelsburger describes an incident related to her of a woman who was followed into the bathroom by the manager to verify that she wasn’t faking her digestive distress, and also says that panic attacks were fairly routine.) Or does call-center work, despite its seeming unskilled nature (requiring only a high school diploma), actually require real skills and aptitudes which can only be identified by hiring a large pool of candidates and seeing who succeeds, like a stereotypical “weeder” college course? We don’t learn this from the book.

Her third job was at McDonald’s, but not just any McDonald’s. The McDonald’s in San Francisco she characterizes as “one of the best entry-level McJobs in the country” due to city ordinances that dictated a $14 per hour pay rate, paid sick leave, and mandated scheduling predictability. Yet she describes something that’s far from “the best” — scheduling so tight that there’s a constant rush, a never-ending line, which she attributes to the desire to push workers to their limit to get as much profit as possible. (It doesn’t help that the various ways in which a typical suburban McDonald’s shifts work onto customers — filling drinks, getting napkins, straws, and ketchup — aren’t possible at a McDonald’s surrounded by the homeless, and that this was probably just a bit too soon for the self-ordering kiosks to have been implemented.)

And this is where she loses me: a never-ending line in a tourist locale means lost customers, who go elsewhere. It doesn’t make sense. And anyone who’s been to a fast food restaurant during off-peak hours, in off-peak neighborhoods, knows the never-ending line is not the norm, though, yes, when the register is quiet, workers will be assigned to other tasks, expected to clear tables, clean, refill ketchup dispensers, etc. At our local Culver’s, one of the regular employees is a woman well past retirement age, who doesn’t seem frazzled or distressed. It seems reasonable that the never-ending chaos of her San Francisco McDonald’s is the result of the high minimum wage, and the indispensability of high-effort work for that wage to be able to run the store at a profit.

So what does this all add up to?

To a large degree we don’t know. How much more will these jobs be automated in the future? How much of the physical work will be eliminated? But her book points to a bigger question raised by the push to boost the nationwide minimum wage to $15 or even higher: there is a trade-off involved in minimum wage boosts, and an individual worker has no control over this. Would a worker who would accept something less than the so-called “living wage” in order to supplement retirement income, and in order to work in a less demanding fashion, at a slower pace, have a place in an economy with only high-wage, high-effort jobs?

December 2024 Author’s note: the terms of my affiliation with Forbes enable me to republish materials on other sites, so I am updating my personal website by duplicating a selected portion of my Forbes writing here.

Originally published at Forbes.com on November 20, 2019.

Or does he just want to do whatever minimum is necessary to keep the bond rating agencies off his back?

Here’s the story: yesterday, Illinois Governor JB Prizker spoke to the Economic Club of Chicago about, among other topics, pensions. (There’s YouTube video available to view, and I’ve transcribed his full comments at the bottom of the article, to )

His introductory comments were a story that he appears to tell repeatedly: Illinois is “a state on the rise,” and a “leading force for talent,” with a growing economy and fiscal problems which are unpleasant but solvable, especially once Illinois has more tax revenue in its so-called “fair tax,” that is, the graduated income tax that he hopes to pass after a constitutional amendment change which he likewise hopes voters will approve in 2020.

When the moderator raised the question, “Why wouldn’t we ask for shared sacrifice across the board by also asking for a pension constitutional amendment?” Pritzker’s reply was defeatist: people wouldn’t vote for it, so it’s not worth trying. The possibility that Pritzker could advocate for it, change minds, explain the importance of it – all of which he intends to do with respect to his “fair tax” – he doesn’t even take into consideration.

Then he launched into a series of dubious claims about the state pensions and reform possibilities.

On the COLA: “First, what we’re talking about, what everybody is really talking about, is there’s a 3 percent COLA cost of living adjustments on pension in the state of Illinois, 3%, and everybody knows that our inflation rate is lower than 3 percent. So what would this pension amendment do? It would essentially take it from 3 percent to whatever the inflation rate is for that year. [With an amendment, if actual inflation were CPI] you would save essentially 1.3% in the cost of living.”

To begin with, Pritzker knows full well that the COLA adjustment is not merely a matter of saving 1.3% due to differences in COLA in any one year. That adjustment compounds from year to year, and this has a far greater effect, because the actuarial liability is not merely what the state pays for pensions in any given year, but what it will pay in the future, as a debt owed to retirees.

What’s more, a constitutional amendment is not merely about that 3% annual adjustment, though that is the most obvious source of savings. Generous early-retirement provisions are another huge contributor of costs: Tier 1 teachers are able to retire without any benefit reduction at age 60 (with 10 years of service) or age 62 (upon vesting at 5 years of service). Teachers with 35 years of service can retire as early as age 55 without reduction. For state employees, benefits are unreduced at the earlier of age 60 with 8 years or upon attaining 85 age + service points (e.g., age 55 and 30 years of service or a similar combination). For university employees, provisions are even more generous: age 55 with 8 years of service or any age with 30 years.

What’s more, Pritzker launched into a long history lesson in which he said that the COLA began in “1968 or 9” at 1% or 1.5%, then increased in increments as inflation increased. What he doesn’t mention is that compounded COLA, in its current form, dates to 1989, and prior to then, COLA adjustments had only been simple and noncompounded.

On the Contracts Clause: Pritzker then defends his unwillingness to support an amendment because any changes would be found unconstitutional due to the “contracts clause” of the U.S. Constitution. An analysis by Mark Glennon at Wirepoints explains that “contracts may be impaired if there is a significant and legitimate public purpose behind the contract adjustment” – a test that surely Illinois pension reform would meet, in its current circumstances when pension contributions, even merely to meet a 90% funding target in 2045, is absorbing such a large portion of state spending.

On the buyouts: Pritzker then touts the two buyout programs currently running in the state (TRS describes these on its website; the other systems offer the same provisions). These two programs allow, in the first place, Tier 1 members to trade their guaranteed 3% adjustments for the non-compounded, half-CPI adjustments offered to Tier 2 members, for a lump sum at a 30% discount; and offere inactive (terminated vested) members to collect a lump sum equal to 60% of the value of their future pension (that is, not actuarially-fair but at a 40% reduction). The TRS website reports paying out $6.1 million to 222 inactive retirees (out of 14,598 in total), to which my reaction is “good! No one has any business forgoing retirement benefits under such terms,” and $72.4 million to 592 new retirees in 2019 (which, quite honestly, makes a little more sense to take, if you suspect your benefit has a chance of having its COLA reduced without any such compensation in the future).

But what does Pritzker claim? He mixes up the two buyouts and says that the offer is a 60% buyout of total pension liability for new retirees, where this is actually only the case for inactives. He claims 20% of new retirees are choosing the buyout (this might be true – TRS on its website says 16% of new retirees are, the others don’t make any claim), but, again, this is only for the buyout of the guaranteed 3%. And he claims that this will produce “potentially $25 billion of savings.” The reality is that the initial implementation is producing liability reductions much, much smaller than this figure – just $13 million in the first year, according to a July 2019 analysis.

Oh, and Prizker says, this “is good for the taxpayers and good for those who are choosing it who get the money up front and get to do whatever they want with that without having to wait.” Yet I suspect that if any private sector offered buyouts on such unfavorable terms, he wouldn’t hesitate to call for the government to step in and shut it down. If the program really were as he describes it – a full buyout of retirees’ pensions, at retirement age, at a 40% reduction, it would be insanity, except for the small number of retirees with terminal illnesses.

On the police and fire consolidation: Pritzker reasonably observes that politicians have observed for 72 years that 650 state and local pension systems make no sense. Why was Prizker able to get this passed? Because he promised free money, that is, increases in investment returns at no cost, without touching the local administration, and because the “pension intercept” law, passed in 2011, which gave the state the authority to finally force municipalities to fund their pensions, created enough pain to generate the political will to solve the problem.

But, not surprisingly, he neglects to inform his audience that this consolidation bill also boosted the pensions of the Tier 2 workers among police and fire employees, without any actuarial analysis of the cost. What’s more, local plans which already were large enough so that they will not see substantial increases in asset returns due to future economies of scale, will nonetheless bear the same burden of the (unknown) future cost increases as the small plans. And, finally, the state and local plans are not even a part of the $134 billion in unfunding on the state’s balance sheet.

Prtizker’s bottom line:

Here’s how Pritzker wraps up his comments on pensions before moving on to other topics:

“I’m focused on it, we’re doing a lot, there are a lot of things that we can do but anybody that thinks there’s a silver bullet in one constitutional amendment, that is not something that you should focus on, you should focus on the entire group of things that we need to do to reduce our pension liability, which I’m doing.”

Readers, after listening to him speaking at length, here’s my conclusion: in his heart, he believes that Illinois systems are rightly pay-as-you-go, with enough of a cushion to placate those who say otherwise. (Yes, I had observed this before.) After all, he was willing to add in another ramp for pension contributions until he got an earful from those ratings agencies and others, and backed off.

Recall that Illinois will sooner or later need to revise its pension legislation due to the too-deep Tier 2 pension cuts, benefits that are so low that Tier 2 teachers are, according to the actuarial valuation itself, not even getting out what they pay in themselves through their employee contributions. But the Tier 2 benefits and the long-term reduction in liabilities as more Tier 2 teachers enter and Tier 1 teachers die, mean that the future funding schedule is dependent as much on the slowing of PBO as is it the boosting of contributions. Assuming all projected assumptions pan out, according to the most recent report (p. 111), it will take until 2030 to bring the plan up from 40% even to the still woeful level of 50%, and until 2036 to restore the plan to the 60% funding level that the plans had as recently as 2007.

Against these numbers, Pritzker cannot reasonably pat himself on the back for a buyout and a consolidation of unrelated pensions, while simultaneously shrugging off true pension reform as too hard. Not, that is, unless he just doesn’t care.

December 2024 Author’s note: the terms of my affiliation with Forbes enable me to republish materials on other sites, so I am updating my personal website by duplicating a selected portion of my Forbes writing here.

Originally published at Forbes.com on November 17, 2019.

On Saturday, I recounted the ways in which the Chicago Teachers’ Pension Fund was set up for failure, with most teachers never seeing any of the money they paid in but the lucky few hitting the jackpot with comfortable benefit payouts at young ages, and, for those in the early years of the plan, without paying much of anything into the plan at all.

Not surprisingly, the plan was troubled from the start. Again perusing Chicago Daily Tribune articles from a database search, here’s the early history of that plan after its initial implementation in 1895 told through excerpts from those articles:

July 27, 1896, “Defects in Pension Law”

Secretary Graham of the Board of Education . . . pointed out the defects of the law . .. as follows:

“This law is unjust and oppressive to the Superintendents, principals, and other employees of the Board of Education who receive over $1,200 salary. All of the teachers and employees are taxed 1 per cent, but only those who receive $1,200 or less receive an annuity which is one-half of their salaries [because of the $600 maximum]. . . .

“Again, there are teachers and other employees who either cannot or do not wish to teach or work in schools for twenty-five years, and these persons have to stand a tax for years without any possibility of reaping any benefit. . . .

“On the other hand, . . . There are a score or more of teachers who were retired on pensions before the law had been in operation six months, and who therefore have never paid the 1 per cent tax for a single year.”

February 9, 1900, “State of Pension Fund – School Officials Fear Imminent Wiping Out of Surplus”

A further examination of the school teachers’ pension fund made yesterday showed that the statements concerning its condition made at the meeting of the Board of Education on Wednesday evening, and which prompted the board to name a committee to revise the pension law, were, if anything, under the mark. The fund’s liabilities are greater than its income, and it is felt to be a question of only a short time when the surplus will be wiped out and no more money remain with which to pay pensions. . . .

“The whole theory of the pension law is wrong,” said Trustee Christopher. “It provides that every teacher who serves twenty years can retire on half salary, providing the amount is not more than $600 a year. In return the teachers pay 1 per cent of their salaries into the fund. Take the case of a teacher who pays for the full twenty years. If her salary has been $1,000 a year, she pays $200 for the full term. The first year’s pension amounts to $500, or $300 more than she has paid in, and each succeeding year’s pension is just so much more. That sort of an arrangement is bound to fail.”

The plan proposed by the committee is to consult some good insurance actuary, and see if the law cannot be changed so as to provide for a permanent fund.

May 13, 1900, “Blow to Pension Hopes – Actuary Vail Says Teachers’ Fund is Insolvent”

The schoolteachers and employees’ pension fund was declared hopelessly insolvent yesterday. The statement was made by H.S. Vail, formerly official actuary for Illinois, Indiana, Iowa, and Wisconsin, to the George Howland Club of Men Principals, which had requested the investigation. The advice which accompanied the report was that legal steps should be taken at once to close up the fund, recognizing the various equities involved.

The article further reports that Vail calculated a deficit of $618,484, based on an approximate present-value calculation of liabilities only for existing retirees; with assets of $92,177 and liabilities of $716,661, that’s a funded status of 13%.

May 30, 1900, “Teachers’ Fund at Crisis – Deficit of $1,393 in Pension Board for Single Month”

The insolvent condition of the school teachers and employees’ pension fund, reported in The Tribune earlier in the present month, was verified last evening when the Pension Fund commission, consisting of the members of the Board of Education. . . voted to sell two $1,000 water certificates to meet a deficit of $1,393 accruing for the month of April alone.

September 20, 1900, “Cut in School Pensions”

A reduction of 25 per cent in the annuities paid to teachers out of the pension fund was voted last night by the Pension board. . . . it must be followed soon by another reduction, since the fund is not on a sound basis.

After a pension reform bill was introduced, which would have paid $400 after 25 years of service . . .

March 10, 1901, “Figures Expose Pension Dream”

The proposed pension bill framed by a committee of teachers and school employees, which was said a week ago to be nearly ready to go to Springfield, was shelved practically at a meeting yesterday afternoon. J.H. Nitchie, an actuary, was called in, and he told the committee some facts about life insurance. He discouraged the dreams of those who have expected to create a pension fund that would pay a much higher rate than for regular associations. . . .

Mr. Nitchie is supposed to have shown the committee that they still hope to get something for nothing and that the contribution of 1 per cent of the salaries will earn less than $100 a year for the contributors who retire after twenty-five years of service.

A new pension law was indeed passed in April 1901, but without much change: in addition to the 1% contributions, new money flowed in in the form of half the value of license fees from “street railroads or elevated railroads,” and teachers were offered the option to opt out of the system. In addition, the prior 25% reduction was maintained.

On November 14, 1901, the Tribune reported that pensions were reduced again, from $450 to $240.

On May 13, 1907, new legislation was passed which raised the potential maximum back to $400 (though the school board had discretion in terms of payments) and increased the annual employee contributions, as flat dollar amounts, from $5 per year for those with less than 5 years of service to $80 for those with over 15 years, along with providing that interest from “school funds” would be directed into the fund. Teachers were also again required to participate.

On May 21, 1911, the school board was authorized to contribute directly to the funds, up to a match of the teachers’ contributions, when combined with interest on school funds.

On June 11, 1913, this prior authorization of board of education contributions was made mandatory, and the board was authorized to voluntarily contribute double the prior amount.

But despite these increases in contributions:

October 2, 1915, “Teacher Pension Almost Broke, Asserts League”

The Chicago Teachers’ league declares that the teachers’ pension fund is in danger of bankruptcy. The warning is given in a circular sent to all teachers yesterday. The teachers’ league is a rival organization to the Chicago Teachers’ federation, which has control of the pension fund.

The teachers’ league asks for an actuarial report in connection with the fund.

Dec 22, 1916, “Actuaries Find Public Pension Plans Unsound”

Every pension fund upon which Chicago’s public servants are dependent in old age, sickness, disability, or death from injury, is financially unsound and practically bankrupt, according to the report sent Gov. Dunne last night by the Illinois pension laws commission. From the recommendations for a revised pension system a bill will be drafted and offered to the next legislature. . . .

These are findings of widely known actuaries. Their report recommends a drastic change in the pension system and outlines an ambitious plan to bring the numerous and chaotic public service pension funds under one expert supervision, while preserving them as separate foundations. . .

The report finds that the police and firemen’s pensions were virtually unfunded; in comparison, the teachers’ funded status of 17% was positively sunny.

March 23, 1919, “Public Employee Pension Funds in a Bad Way”

Most of the public employees’ pension funds are insolvent, or are at the jumping off place, and radical methods must be adopted by the present session of the legislature, unless a grave crisis and a possible scandal are to be averted. . . .

The Illinois pension laws commission proposed consolidation of all Chicago pension funds into one, and all non-Chicago funds into another large consolidated fund, citing deficits for the city pensions.

[The commission said,]

“The statewide public school teachers’ fund similarly is headed in the direction of a large deficit. The police and fire funds of the cities outside of Chicago are too small to be sound financially. . . .

“The standard plan proposed by the commission is what the actuaries and other insurance men call a reserve plan. It calls for the accumulation of annuities and toward life insurance for widows’ annuities, from year to year, while service is being rendered, and while these liabilities which will mature in the future are being incurred.”

Did it work? An April 3, 1921 report announces that the Police plan has been reformed and will henceforth be on “sound actuarial footing.” But as for the teachers, the litany of pension unfunding never ended, including this final (for the moment) article with more laments from an actuary-Cassandra on December 21, 1933:

“Favors Revision of the Teachers’ Pension System – D.F. Campbell Urges New Annuity Plan”

Placing of the Chicago school teachers’ pension system on the allocation-reserve basis to supplant the present stipulated annuity plan was urged yesterday by Donald F. Campbell, authority on pension law and actuary of a number of large pension systems of public employees.

All the other pension bases in the city, including those of city and county employees, are on the allocation-reserve basis. Under this plan the pension money reserves are allocated and built up for each employee from year to year while he is in service. These funds, which are invested in 4 per cent municipal bonds, are accumulated from pension taxes and from systematic deductions of the salaries of the participating employees.

This latter system is considered more actuarially sound in that it more precisely safeguards the payment of annuities in future years. The amount of annuity paid to retired employees is computed on the basis of the salary last earned, the length of service, and age.

So there you have it. Of course, the follow-up question of “were the police and fire pensions truly put on a sound footing as proclaimed, and why are they so underfunded now, if so?” will have to wait for another day.

December 2024 Author’s note: the terms of my affiliation with Forbes enable me to republish materials on other sites, so I am updating my personal website by duplicating a selected portion of my Forbes writing here.

The mortality table change ought to be a nothingburger.  But it’s not.

How likely are we to get right, the predictions for the future upon which we base our retirement (and other) policies?

Originally published at Forbes.com on November 7, 2019.

Stop me if you’ve heard this one before: the earnings gap between men and women affects not merely their living standards in the short-term, but also their well-being in retirement.

There’s nothing surprising here.

But the whole discussion is very narrowly focused on income. There’s an elephant in the room: marriage.

Let’s start with the data; to take a few sample age brackets,

• Women ages 20 – 24 earn 89% of their male counterparts,
• Women ages 35 – 44 earn 79% of their male counterparts, and
• Women ages 55 – 64 earn 75% of their male counterparts.

Add on to this difference, the greater degree to which women work part-time or leave the labor force entirely for caregiving, their greater likelihood to choose to retire early (in part to match an older spouse’s retirement age), and their greater longevity, and lower earnings in retirement are no surprise.

A 2016 study by NIRS (the National Institute on Retirement Security) compiled the statistics (using 2013 data):

Considering all household income, at median, there’s a retirement-income gap of 26% – women’s household income works out to $35,810 and men’s household income, $48,280. (How can an individual man or woman have a “household income”? The study defined this as “the income of the households to which each older individual belonged.”) And the gap grows as elders age – the household-income gap was 20% for the youngest retirees, ages 65 – 69 but increased to 30% for those 80 and older.

Expressed in terms of poverty rates, among the youngest seniors, 6% of men and 8% of women were poor, but only 4% of men ages 75 – 79 were poor compared to 12% of women, and 6% of 80-and-over men vs. 11% of women. (Why would poverty rates drop for the moderately-old men? Perhaps it’s a cohort issue, or perhaps this is just a matter of the lower life expectancy of the poor.)

And, logically enough, it is unmarried women who experience this gap. Married men and women have nearly identical household income levels, which makes sense because income declines by the age of the seniors involved, and women are, on average, younger than their spouses (and the youngest of the men are likely to have wives not yet 65 and excluded the data). Specifically,

• Widowed women have retirement income 21% less than widowed men,
• Divorced women have income 25% less than divorced men,
• Separated women, 27% less, and
• Never-married women, 9% less.

Why is the wage gap least among the never-married? In part, because the earnings of never-married men are low to begin with – lower, in fact, than widowed, divorced, or separated male households. (Curiously, though I suppose a bit beside the point for our purposes, separated households are considerably lower-income than divorced ones – maybe because those are the ones that can’t afford to formalize their financial affairs?)

It would also appear from the data that divorced or never-married women are not lower-income than their married counterparts, if half the household income is “assigned” to them, but since the prevalence of divorced seniors is highest among the younger group whose income is the highest, there aren’t actually any conclusions that can be drawn from this.

But all of this is leading up to the rather obvious point that it is women who are far more likely to be unmarried during their “golden years” than men. Here’s the census data from 2010:

These are remarkable figures. Women are vastly more likely to be widowed than men, both because of their longer life expectancy and the age gap between spouses. Women are also moderately more likely to be divorced than men; presumably their ex-spouses are more likely to remarry. (There were no interesting differences between rates for separated and never-married men and women.)

With respect to widows, it would seem that some of the income gap should be fixable, if it’s a matter of rejiggering Social Security benefits actuarially to reduce by an equal amount when either spouse dies or modifying “50% Joint & Survivor” pension benefits (to the extent they still exist) to reduce by an equal amount when either spouse dies, in an actuarially-equivalent way. But some of the sex-income gap may just be an age-income gap, if there are substantially larger proportions of older widows than widowers.

But it’s the figures on divorce which lead me to the latest Pew poll on attitudes toward cohabitation and marriage.

Although the percentage of adults age 18 and older who are cohabitating with a romantic partner is still small, at 7% of the total, vs. 3% in 1995, the prevalence over a longer span has increased, as more adults age 18 – 44, 60%, have cohabitated, than have been married, at 50%. What’s more, these are not simply young adults on their way toward marriage: 35% have a child from the relationship, and 19% have children from other relationships living in their household (this compares to 70% and 6% for married couples).

But the most startling statistic in this survey was a question about the value of marriage. Younger adults are now more likely than not to agree that it makes no difference whether cohabitating couples marry or not.

We already know that the age at first marriage has been increasing dramatically and that as a result, the portion of one’s adult lifetime spent married has likewise dropped. Does this failure to recognize the value of marriage beyond the possession of a ring and a fun part with gifts, portend longer-term problems?

What’s more, when experts speak of this trend, or of “grey divorces” and their financial implications, it all tends to come out as something that simply can’t be helped. But if marriage is a key ingredient to retirees’ financial well-being, shouldn’t we talk about it?

December 2024 Author’s note: the terms of my affiliation with Forbes enable me to republish materials on other sites, so I am updating my personal website by duplicating a selected portion of my Forbes writing here.