Improving Americans’ abilities to adequately save for retirement garnered some attention during President Obama’s State of the Union address Tuesday night.
For his eighth and final address before Congress and the American people, rather than talking about the traditional list of proposals for the year ahead, President Obama focused his speech on the next five years and beyond—on the future of the United States.
“We live in a time of extraordinary change—change that’s reshaping the way we live, the way we work, our planet and our place in the world,” Obama said Tuesday night. “It’s change that promises amazing medical breakthroughs, but also economic disruptions that strain working families….It’s change that can broaden opportunity, or widen inequality. And whether we like it or not, the pace of this change will only accelerate.”
Looking ahead to the next five years, 10 years and beyond, President Obama posed several major questions that the U.S. must answer, regardless of who the next President is, or who controls Congress. The first big question: how does America give everyone a fair shot at opportunity and security in this new economy?
The U.S. is currently in the midst of the longest streak of private sector job creation in history, he said, with more than 14 million new jobs—the strongest two years of job growth since the 90s—and the unemployment rate cut in half. Despite such progress, greater trends continue to create anxiety for many Americans.
“What is true—and the reason that a lot of Americans feel anxious—is that the economy has been changing in profound ways, changes that started long before the Great Recession hit and haven’t let up,” Obama said. “Companies in a global economy can locate anywhere, and face tougher competition. As a result, workers have less leverage for a raise. Companies have less loyalty to their communities, and more and more wealth and income is concentrated at the very top.”
All of these trends, Obama added, have squeezed workers, even when they have jobs and even while the economy grows. Not only has it become harder for younger people to begin their careers, but it has also become tougher for workers to retire when they want to.
“And although non of these trends are unique to America, they do offend out uniquely American believe that everybody who works hard should get a fair shot,” he said.
But a great education is not the only thing Americans need in today’s economy. Americans also need benefits and protections that provide security, especially when it comes to retirement.
“After all, it’s not much of a stretch to say that some of the only people in America who are going to work the same job, in the same place, with a health and retirement package, for 30 years, are sitting in this chamber,” Obama said. “For everyone else, especially folks in their forties and fifties, saving for retirement or bouncing back from job loss has gotten a lot tougher. Americans understand that at some point in their careers, they may have to retool and retrain. But they shouldn’t lose what they’ve already worked so hard to build.”
For these reasons, Obama emphasizes the importance of federal programs like Social Security and Medicare.
“We shouldn’t weaken them; we should strengthen them,” he said. “And for Americans short of retirement, basic benefits should be just as mobile as everything else is today.”
In Obama’s vision, a hardworking American who loses his job should be able to benefit from federal assistance, not only just to he can get unemployment insurance, but also receive training for a business that is ready to hire him. Even if this new job does not pay as much, Obama urges that there should be a system of wage insurance in place so that these people can still pay their bills.
“And even if he’s going from job to job, he should still be able to save for retirement and take his savings with him,” Obama said. “That’s the way we make the new economy work better for everyone.”
Written by Jason Oliva