Month: June 2022

As Pandemic Continues, More Older Adults Are Working — What’s Tempting Them?

Mary Pat Campbell

Link: https://www.magnifymoney.com/news/working-older-adults-study/

Excerpt:

Amid the coronavirus pandemic, a rising share of adults 65 and older are working. In late April and early May 2020, 19.5% of Americans 65 and older were working. That figure jumped more than 2 percentage points in late April and early May 2022 to 21.9%. At the same time, the share of U.S. adults who reported that they’re retired is up similarly — from 14.9% in April and May 2020 to 17.4% in April and May 2022.

More than a quarter of working Americans 65 and older are self-employed. 25.6% of employed older Americans are self-employed — more than triple the rate among working Americans 25 to 39. Meanwhile, the government isn’t the landing spot it once was for older workers: In April and May 2020, 15.2% of employed Americans 65 and older worked for the government. In April and May 2022, however, that percentage plummeted by a third to 10.1%.

New Jersey saw the largest jump in older adults in the workforce since the beginning of the pandemic. In April and May 2020, 18.1% of Americans 65 and older were employed in New Jersey. By April and May 2022, that was up 18.9 percentage points to 37.0%. The other states with double-digit increases were West Virginia (17.2 percentage points) and Pennsylvania (14.6).

North Dakota saw the biggest dip in the percentage of adults 65 and older in the workforce. The rate of older working adults went from 36.0% in April and May 2020 to 25.0% in April and May 2022 — a drop of 11.0 percentage points. Other big drops were seen in Wisconsin (8.3 percentage points) and North Carolina (6.3).

Author(s): Alex Cook

Publication Date: 6 Jun 2022

Publication Site: Magnify Money

Where Does CalSavers Stand?

Mary Pat Campbell

Link: https://www.asppa-net.org/news/where-does-calsavers-stand

Graphic:

Excerpt:

CalSavers, the state-provided retirement plan for employees whose employers do not provide one, was launched on July 1, 2019. Now, more than two and a half years later, where does it stand? 

Registration

Registration was set to take place in three waves: 

  • Wave 1: Employers with more than 100 employees had to register by Sept. 30, 2020. 
  • Wave 2: Employers with 51-100 or more employers had to register by June 30, 2021.
  • Wave 3: Employers with five or more employees must register by June 30, 2022. 

CalSavers has reported that the number of registered employers more than tripled in 2021

Author(s): JOHN IEKEL

Publication Date: 24 Feb 2022

Publication Site: ASPPA

New York pension fund wants to remove Twitter’s entire board

Mary Pat Campbell

Link: https://www.protocol.com/bulletins/new-york-pension-twitter-removal

Excerpt:

The New York State Common Retirement Fund, one of the nation’s largest pension funds, announced that it will vote to remove all of Twitter’s directors at this week’s annual shareholder meeting. The vote against the directors is unlikely to result in change, but it shows mounting institutional pressure for Twitter to resist Elon Musk’s vision for relaxed content moderation policies.

Thomas DiNapoli, the New York state comptroller and trustee to the estimated $279.7 billion fund, said the Twitter board of directors had repeatedly failed to enforce the company’s own content moderation policies.

“Allowing this content on social media platforms facilitates the radicalization of individuals through repeated exposure to violent rhetoric, hate speech and examples of previous violence,” DiNapoli wrote in the public letter to Twitter’s directors. DiNapoli placed particular emphasis on Twitter’s failure to remove footage from a livestreamed mass shooting that took place in Buffalo, New York, last weekend. The alleged shooter espoused white supremacy ideology and pointed to social media sites including 4chan as the source of his radicalization.

Author(s): Hirsh Chitkara

Publication Date: 23 May 2022

Publication Site: protocol

Pensions watchdog warns about climate risk in rebuke of HSBC banker who downplayed danger

Mary Pat Campbell

Link: https://www.reuters.com/world/uk/uk-pensions-regulator-says-pension-schemes-should-not-ignore-climate-change-2022-05-23/

Excerpt:

UK pension schemes should not ignore climate change, a senior executive at The Pensions Regulator said on Monday, the first watchdog to weigh in after a top HSBC banker was suspended after playing down the financial risks of climate change.

Regulators across the world have been putting pressure on the financial services industry to take climate change into account when calculating risks to their business models.

Stuart Kirk, a senior HSBC banker in charge of sustainable investments, had said at an industry event last week that central bank policymakers and other global authorities were exaggerating the financial risks of climate change. read more

The bank has since suspended him pending an internal investigation, sources familiar with the matter told Reuters on Monday.

Publication Date: 23 May 2022

Publication Site: Reuters

Ohio Teachers Pension Touts Past Transparency Awards, Fails To Disclose Special Investigation By State Auditor

Mary Pat Campbell

Link: https://www.forbes.com/sites/edwardsiedle/2022/05/23/ohio-teachers-pension-touts-past–transparency-awards-fails-to-disclose-special-investigation-by-state-auditor/

Excerpt:

The nearly $100 billion State Teachers Retirement System of Ohio never tires of telling its members of past transparency awards it has received from Ohio State Auditor Keith Faber. The fact that Faber’s office is currently conducting a special investigation into the pension’s transparency practices, prompted by public records lawsuits and numerous member complaints—the results of which could, says the auditor, affect the retirement system’s rating in the future—is not disclosed by the pension.

In April 2022 Board News under the heading, “STRS Ohio earns auditor of state’s top rating from transparency for second year,” the State Teachers Retirement System of Ohio’s website boasts:

…..

Perhaps not surprising, this self-professed paragon of transparency is not touting the following ugly facts provided to me by the auditor’s office in a recent email:

“In October 2021, Auditor of State Keith Faber informed STRS that his office was launching a special audit after receiving numerous complaints, following the release of a report issued by Benchmark Financial Services Inc. titled “The High Cost of Secrecy: Preliminary Findings of Forensic Investigation of State Teachers Retirement System of Ohio,” commissioned by Ohio Retired Teachers Association.

….

In other words, it appears the Auditor of State’s transparency rating system merely asks whether a public agency has policies and procedures addressing transparency, not whether the agency is, in fact, being transparent in its dealings with the public in compliance with applicable laws. Such a rating system is of limited value to stakeholders, in my opinion, and presents the very real risk of being misinterpreted, as well as unduly relied upon, by the public.

Author(s): Edward Siedle

Publication Date: 23 May 2022

Publication Site: Forbes

417(e) Barometer

Mary Pat Campbell

Link: https://burypensions.wordpress.com/2022/05/24/417e-barometer/

Excerpt:

The 417(e) segment rates for April, 2022 were just released and two takeaways:

  1. 50 basis point increase in one month indicates that lump sums being paid out of Defined Benefit plans will be greatly decreased in 2023 from 2022; and
  2. The economy is in a recession similar to 2008-9.

Author(s): John Bury

Publication Date: 24 May 2022

Publication Site: Burypensions

U.S. Births Increase for First Time Since 2014

Mary Pat Campbell

Link: https://www.wsj.com/articles/u-s-births-increase-for-first-time-since-2014-11653364861

Graphic:

Excerpt:

U.S. births increased last year for the first time in seven years, according to federal figures out on Tuesday that offer the latest indication the pandemic baby bust was smaller than expected.

American women had about 3.66 million babies in 2021, up 1% from the prior year, according to provisional data from the Centers for Disease Control and Prevention’s National Center for Health Statistics. It was the first increase since 2014. The rebound spanned age groups, with birthrates rising for every cohort of women age 25 and older.

Births still remain at historically low levels after peaking in 2007 and then plummeting during the recession that began at the end of that year. The total fertility rate — a snapshot of the average number of babies a woman would have over her lifetime — was 1.66 last year, up from 1.64 the prior year, when it fell to the lowest level since the government began tracking it in the 1930s.

Author(s): Janet Adamy and Anthony DeBarros

Publication Date: 24 May 2022

Publication Site: WSJ

The ECB Has a Huge Dilemma: Price stability or Bail Out Nations

Mary Pat Campbell

Link: https://mishtalk.com/economics/the-ecb-has-a-huge-dilemma-price-stability-or-bail-out-nations

Graphic:

Excerpt:

The spreads between German government bonds and those of the PIGS (Portugal, Italy, Greece, and Spain) have skyrocketed in recent weeks. 

This comes while Eurozone inflation is at a record high 8.1 percent. 

….

On June 16, Bloomberg reported Lagarde Tells Ministers ECB Plans for Limit on Bond Spreads

….

There is no single interest rate that makes any sense for Germany, Greece, Spain, Italy, and Portugal. 

The Fed is struggling to find the neutral rate, and I believe will overshoot, but at least there is a neutral rate. 

Lagarde is on Mission Impossible with 19 countries in the Eurozone, all with a different neutral. 

In theory, the sovereign bonds of Germany and Greece are the same. Default risks are the same.

In practice this is total nonsense, and for the third time the idea is being tested. 

Author(s): Mike Shedlock

Publication Date: 20 Jun 2022

Publication Site: Mish Talk

Births: Provisional Data for 2021

Mary Pat Campbell

Link: https://www.cdc.gov/nchs/data/vsrr/vsrr020.pdf

Graphic:

Excerpt:

Methods—Data are based on 99.94% of all 2021 birth records received and processed by the National Center for Health Statistics as of February 10, 2022. Comparisons are made with final 2020 data and earlier years.

Results—The provisional number of births for the United States in 2021 was 3,659,289, up 1% from 2020 and the first increase in the number of births since 2014. The general fertility rate was 56.6 births per 1,000 women aged 15–44, up 1% from 2020 and the first increase in the rate since 2014. The total fertility
rate was 1,663.5 births per 1,000 women in 2021, up 1% from 2020. Birth rates declined for women in age groups 15–24, rose for women in age groups 25–49, and was unchanged for adolescents aged 10–14 in 2021. The birth rate for teenagers aged 15–19 declined by 6% in 2021 to 14.4 births per 1,000 females;
rates declined for both younger (aged 15–17) and older (aged 18–19) teenagers. The cesarean delivery rate rose to 32.1% in 2021; the low-risk cesarean delivery rate also rose to 26.3%. The preterm birth rate rose 4% in 2021 to 10.48%, the highest rate reported since 2007.

Author(s): Brady E. Hamilton, Ph.D., Joyce A. Martin, M.P.H., and Michelle J.K. Osterman, M.H.S.,
Division of Vital Statistics, National Center for Health Statistics

Publication Date: May 2022

Publication Site: CDC

Inflation: Return of a Plague

Mary Pat Campbell

Link: https://www.city-journal.org/inflation-return-of-a-plague

Excerpt:

Experience has once again verified Friedman’s and Lucas’s theories, reducing to nothing the naïve propositions of Modern Monetary Theory, a recent delusion of the American Left. According to this unscientific, ahistorical theory, legislatures can control the production of money and distribute it in a way that satisfies all needs, with no destructive consequences from expanding the money supply. The question of reimbursing a gigantic public debt is not supposed to arise, because no one can force the government to pay what it owes. But this magical solution, adopted in part by Joe Biden, ignores the fact that public debt produces inflation and that a debt that is not repaid, as in the case of Argentina, eventually ruins the currency. All this was well known, at least by economists, so it is surprising that governments in America and Europe had not taken it into account of late. They have short memories. From the 1980s until recently, inflation had been constrained thanks to public policies inspired by Friedman—but policymakers had forgotten its threatening presence, as if it belonged only to the past. We can liken inflation with pathogens: smallpox has disappeared, but vaccination is what made it disappear; stop vaccinating, and the evil can return. In the 1980s, central banks helmed by Friedman’s disciples, such as Paul Volcker in the United States or Jean-Claude Trichet in Europe, raised interest rates and defeated inflation by reducing the money supply. Today, economic policymakers will need to apply the same remedy as in 1980. Central banks are working on this, but their conversion comes late; they have waited for inflation to establish itself before responding, a delay that will make the remedy more painful.

Author(s): Guy Sorman

Publication Date: 14 Jun 2022

Publication Site: City Journal

Will Democrats Try Cutting Social Security and Medicare After a Disastrous Midterms?

Mary Pat Campbell

Link: https://jacobin.com/2022/06/austerity-entitlement-reform-social-security-democrats-gop

Excerpt:

Days after Obama lamented Democrats’ 2010 electoral “shellacking,” his commission released a plan to slash Social Security benefits and raise the program’s eligibility age. Economist Paul Krugman noted at the time that the commission also suggested using newly gained revenue to finance “sharp reductions in both the top marginal tax rate and in the corporate tax rate.”

The plan ultimately did not receive the fourteen commission votes it needed to move forward, and a few years later in 2012, the House voted down a version of the proposal. That didn’t stop the Obama-Biden administration’s push: right after winning reelection — and after cementing much of the George W. Bush tax cuts — they tried to limit cost-of-living increases for Social Security, to the applause of Republican lawmakers.

…..

Like Obama, Biden campaigned on a promise to protect Medicare and Social Security. But as we have reported, Biden is already affirming big Medicare premium increases and accelerating the privatization of that health care program. Biden also has not pushed to fulfill his promise to expand Social Security, even though there is new Democratic legislation that would do so.

And now with Graham’s comments, Republicans are banking on him becoming the old Joe Biden on Social Security if they win in November.

It’s not an insane political bet. After all, Biden for decades proposed cuts and freezes to Social Security and publicly boasted about it. Indeed, Biden spent most of his career depicting himself as an allegedly rare and courageous Democrat who was willing to push off his party’s base and tout austerity.

Author(s): David Sirota

Publication Date: 16 Jun 2022

Publication Site: Jacobin

States Help Business Owners Save Big on Federal Taxes With SALT-Cap Workarounds

Mary Pat Campbell

Link: https://www.wsj.com/articles/states-help-business-owners-save-big-on-federal-taxes-with-salt-cap-workarounds-11653989400

Graphic:

Excerpt:

Business owners are likely saving more than $10 billion annually in federal taxes through state laws that circumvent the $10,000 cap on state and local tax deductions, according to a Wall Street Journal analysis of state data.

The state laws blunt the cap’s effect on owners of closely held businesses such as law firms, hedge funds, manufacturers and car dealerships, while workers earning wages generally can’t take advantage. The strategy, now available in 27 states, converts business owners’ personal income taxes into deductible business taxes that escape what is known as the SALT cap on state and local tax deductions.

Much of the money flows to high-income people in California, New York and New Jersey, while those in Illinois, Massachusetts, Minnesota and Connecticut are likely saving hundreds of millions of dollars as well. It isn’t just a phenomenon in high-tax Democratic states. The proliferating workarounds mark a rare case where a state-tax policy trend has been swift, national and bipartisan, and Utah, Georgia, Arizona, South Carolina and Kansas now have similar laws.

For states, approving the workarounds has been easy, because their residents benefit and state tax collections are barely altered. For business owners, the chance to lower federal tax bills is attractive, and industry groups are lobbying in the states that haven’t yet enacted workarounds.

Author(s): Richard Rubin

Publication Date: 31 May 2022

Publication Site: WSJ