New School economist calls for a ‘Gray New Deal’ for retirees

Economics professor Teresa Ghilarducci of The New School in New York recently painted a dire picture of the retirement situation in the U.S., calling on policymakers to enact what she calls a “Gray New Deal,” recalling the economic relief and stimulus efforts of President Franklin D. Roosevelt implemented during the Great Depression.

Speaking in Washington, D.C., at a policy conference for the National Institute on Retirement Security, Ghilarducci laid out her proposal and a series of what she characterized as “mistruths” about retirement, according to reporting at ThinkAdvisor.

“There are even people who say they are retired but they show up in the data sets as actually working 15 to 20 hours per week,” she explained to the attendees. “In America, if you say you’re retired, you have to pivot and apologize. ‘It doesn’t mean I’m not doing anything,’” she explained, mimicking the apologies she claims some older Americans feel they have to make.

Retirement in America is still centered on work, which differs from other well-developed nations in the Western world, Ghilarducci said. Part of this idea was also explored recently by journalist and management consultant Mark Peabody, who authored a book on the topic of “unretirement.”

Part of the issue also comes down to retirement affordability, which seniors across the country continue to struggle with. Recent findings from the Employee Benefit Research Institute (EBRI) estimated that in certain dire cases, retired couples may need as much as $413,000 to cover medical expenses alone, even if they’re beneficiaries of the Medicare program.

On top of that, there are inaccurate preconceived notions about retirement that persist in the U.S., she said.

“[Some believe that] the cheap fix to our pension financing problem is just a few more years of work from everybody who is, after all, living longer, and for everybody whose jobs are getting easier because of the wonderful technology — of the computer and decline of physical labor,” Ghilarducci said based on the ThinkAdvisor reporting. “All of those things aren’t true.”

Ultimately, what is needed is a “Gray New Deal” for retirees, based on specific retirement objectives, she explained.

“We need Social Security, we need universal pensions, we need to lower the Medicare age to 60, and my research can make the case for 55,” she said. “We need to make it first-payer so that employers [who have] older worker[s can make] their health care insurance a lot cheaper. We need comprehensive retirement reform.”

She also alluded to a future derivation of recent retirement legislation, which she said “just doesn’t cut it.”

“[T]he next generation isn’t any better off than we are,” she said.