Millennial pessimism over capitalist system, job-killing AI, affects retirement saving

Millennials awaiting job interview
Some millennials see the inequity of CEO-worker pay, high housing costs, and the threat of AI and feel no hope for retirement unless the economic system changes. (Photo: Shutterstock)

 

Mainstream views of the need to save for retirement aren’t cutting it with some millennials, who aren’t saving at all but instead living in the moment and looking to a collapse of the current economic system and/or a move to socialism to enable them to survive in retirement.

An Alternet report finds that millennials really harbor little hope for retirement, unless it’s through their own efforts and a transformation of the economy—including a basic or universal income.

And while many reports attribute that pessimistic outlook to high student debt, low pay and high unemployment, another factor in millennials’ worldview—and others’, as well—is the potential for automation and AI killing off jobs as we know them.

And it’s not as new an idea as one might think; back in 2016 Elon Musk said in a CNBC report that automation of low-skilled jobs would not only throw millions out of work, but would also drive the economy to providing a universal basic income.

And in a Vox report the same year, former union president Andy Stern also said that a universal basic income would be the best response to the social and economic disruption caused by technological change.

A gloomy future worldview that includes resource wars, a collapse of capitalism and even “an apocalyptic ‘total breakdown of industrial society’ or ‘capitalism morphing into a complete plutocracy’” is common among millennials, who look to what were once called communes but are now termed self-sustaining communities as a means of mutual support in old age, with the report saying that a “utopian hope, that we could theoretically end up in a sort of fully automated post-work social democracy à la ‘Star Trek,’” is a common thread in the millennial conversation about the future.

In fact, many believe that “that retirement savings plans are the domain of bourgeois millennials” who have advantages that most don’t—with small business owner Jon Good quoted in the report saying, “The economic realities of my generation make the expectations for my parents’ generation seem ludicrous to me—having a job with benefits and that pays enough that I can make rent, and save for retirement and also maybe for a down payment on property seems like a lottery. Maybe 15 percent of my peer group has this, and having it is a combination of luck and family connections rather than skill and work ethic.”

More millennials, according to a recent Pew Research poll, live in poverty than any other generation. The study noted that “5.3 million of the nearly 17 million U.S. households living in poverty were headed by a millennial.”

The report quotes political organizer Holly Wood saying, “I’m absolutely convinced over how quickly friends have lost their pensions, 401ks and IRAs to bubble crashes that there is no safe place to ‘save’ for retirement. And the best way to plan for retirement is by building tribes of like-minded peers who have committed themselves to group survival.”

Source: Satter M. (2 April 2018). "Millennial pessimism over capitalist system, job-killing AI, affects retirement saving" [Web Blog Post]. Retrieved from Benefits Pro.


Millennials, tech industry driving adoption of paid leave programs

More employers are voluntarily offering paid leave benefits to win over millennial workers in an increasingly competitive marketplace, but costs related to workforce management and thin profit margins in many industries have hampered widespread voluntary adoption, according to The Paid Leave Project’s report, “Emerging business trends in paid family medical leave.”

The project, an initiative managed by “action tank” Panorama, interviewed representatives from 470 large U.S. employers across 23 industries to find top reasons for voluntarily offering paid leave programs – as well as main barriers to offering such benefits.

The leading factor that prompts most companies to voluntarily offer the benefit is employee demand, particularly from millennial workers who hear about other companies’ paid leave policies from the media as well as from their friends and family members who receive such benefits. More than 40 percent of companies that already have paid leave cited this as a driver.

Some employers say they want to be considered a “best employer” within their industry. Says a representative from a manufacturing company: “A company can choose to be in the middle of the pack, but we don’t see that as a competitive advantage. We want to be leaders.”

Employers in specialized industries or geographies with a tight labor market say a compelling benefits package, including paid leave, is key to attracting and retaining top talent. “The war for talent is pretty bad,” says a representative from an aerospace company. “We are taking a deeper dive at looking to expand (our) total rewards.”

The tech industry is leading the way, with employers like Netflix and Spotify, respectively offering 52 weeks and 26 weeks of parental leave. Part of this is because other industries are increasingly needing tech talent as the “digital revolution” is now transforming their own sector, including transportation, retail, telecommunications, healthcare, and manufacturing. Some companies in these industries are directly reaching out to technology companies to benchmark against their benefits.

The main challenge to offering paid leave is cost, including paying for a resource to temporarily fill a role while also funding the employee’s leave,

“Employers from retail, manufacturing, transportation and others with a high concentration of hourly workers indicated that coverage is particularly challenging for their sectors,” the authors write. “Given the nature of production and frontline roles, it can be logistically complex for such workers to cover their coworkers’ duties in addition to their own.”

Those industries with low profit margins, such as retail and transportation, find it particularly difficult consider offering paid leave because it just isn’t financially viable, they contend.

Says a representative from a nationwide retailer: “How can I offer paid leave when I can’t even offer comprehensive healthcare, including dental insurance?”

However, a handful of employers in these industries who have embraced paid leave are seeing positive results, including outdoor clothing and gear retailer Patagonia, according to the report.Over the last five years, 100 percent of the women who have had children while working at Patagonia have returned to work. This has led to a balanced workforce and about 50 percent representation of women in all management levels.

For those who offer paid leave, many are also implementing “wrap-around” supports to complement the benefits, such as flexible work schedules to ramp on and off when employees return from leave, providing private locations for mothers to breastfeed, and employee resource groups for new parents. More and more employers are also expanding paid leave for those are providing caregiver services to elderly or disabled family members.

Organizations such as DMEC, the Integrated Benefits Institute (IBI), and providers such as LeaveLogic offer valuable research, tools, and resources for employers as they roll out or expand benefits, according to the report. Moreover, The Paid Leave Project, in collaboration with the Boston Consulting Group, created a comprehensive paid leave Playbook for employers, which includes cost calculator and industry benchmarking data; paid leave policy template; tips for employers in states with new paid leave laws were recently added; and paid Leave best practices and case studies of companies that offer the benefit.

The latest report builds on earlier work by The Paid Leave Project and the Boston Consulting Group, which in 2017 released “Why Paid Family Leave Is Good Business,” a summary report from initial research into the paid leave practices of more than 250 U.S. companies.

In 2018, The Paid Leave Project will focus its research on industry-specific dynamics, the challenges for companies in states with current or pending legislation, and how employers are tracking paid leave data, results, and return on investment.

Read the article.

Kuehner-Hebert K. (2 March 2018). "Millennials, tech industry driving adoption of paid leave programs" [Web Blog Post]. Retrieved from address https://www.benefitspro.com/2018/03/02/millennials-tech-industry-driving-adoption-of-paid/


Eligibility, lack of plans keep millennials from retirement saving

As millennials reach the age to save for retirement, there is a clear lack-of-knowledge in the arena of what plans they need and how to save for them with the continuing costs of their lifestyles. In this article, we take a look at why this is.


Millennials are way behind on retirement savings, but it has nothing to do with self-indulgence or feasts on avocado toast.

Instead, what they actually need are retirement plans, and earlier eligibility to save in them.

A new report from the National Institute of Retirement Security highlights millennials’ precarious retirement futures with the news that only a third are saving for retirement. It’s not because they don’t want to, or are being extravagant, because when the numbers are crunched they actually save at rates equal to or higher than those of their elders—even if not as many of them can do so.

Millennials are getting a raw deal. Not only are traditional defined benefit plans disappearing, with the likelihood that a millennial might actually be able to participate in one, they’re worried that Social Security—which runs way behind the cost of living anyway—will be of even less help to them in the future as an income replacement than it already is for current retirees. Add to that the fact that more than half of millennials are expected to live to age 89 or even older, and they have the added worry of outliving whatever savings they might have managed to stash.

In fact, millennials need to save way more than their elders to stand a chance of having a retirement that honors the meaning of the word. Says the report, “[S]ome experts estimate that millennials will need to make pretax retirement plan contributions of between 15 percent to 22 percent of their pretax salary, which at 22 percent, is more than double the recommendation of previous generations.”

They’re viewed as irresponsible, but 21 percent are already worried about their retirement security, says the report, and while 51 percent of GenXers and boomers contribute to their own retirement plans, just 34.3 percent of millennials participate in an employer’s plan, although 66 percent work for bosses that offer such plans.

In fact, 66.2 percent of millennials have no retirement savings at all. Zip, zilch, zero. And millennial Latinos? A whopping 83 percent have a goose egg, not a nest egg. Latinos have it much worse, incidentally, than any other millennials group, with just 19.1 percent of millennial Latinos and 22.5 percent of Latinas participating in an employer-sponsored plan, compared with 41.4 percent of Asian men and 40.3 percent of millennial white women—who have the highest rates of participation in a retirement plan.

Despite working for an employer who provides workers with a retirement plan, millennials don’t always have a way to save, since said employer may have set barriers in place to prevent participation until an employee has been with the company for at least a year. And millennials are, of course, known as the job-hopping generation—so if they don’t stay in one place they never qualify. Close to half of millennials—40.2 percent—say they’re shut out of retirement plans because of employers’ eligibility requirements, including working a minimum number of hours or having a minimum tenure on the job.

But don’t accuse them of having no desire to participate: when they’re eligible, more than 90 percent do so.

Read the article.

Source:
Satter M. (2 March 2018). "Eligibility, lack of plans keep millennials from retirement saving" [Web Blog Post]. Retrieved from address https://www.benefitspro.com/2018/03/02/eligibility-lack-of-plans-keep-millennials-from-re/