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Friday, March 18, 2016

'Calculate Your Economic Risk'

Why we need social insurance:

Calculate Your Economic Risk, NY Times: Two economic issues loom especially large in the United States today: widespread economic insecurity and soaring levels of income inequality. These ... issues ... are a prime concern of ordinary citizens. “How much economic risk do I face in the future?”... “How does my risk differ from that of others?” ...
We have discovered that, for many Americans, the future risk of poverty is far from trivial. Take someone who might be thought of as having a relatively low probability of poverty: an American who is in his or her later 30s, white, not married, with an education beyond high school. It turns out that the 15-year risk of poverty for such a person is actually 32 percent. ... If we project across a longer span of adulthood, it appears that a clear majority of Americans will experience poverty....
Race, education, marital status and age make a huge difference in terms of who is more or less likely to experience poverty. For example, the five-year risk of poverty is 5 percent for an American who is 45 to 49, white and married, with an education beyond high school. In contrast, the five-year risk for an individual who is 25 to 29, nonwhite and unmarried, with an education of high school or less is a whopping 72 percent. ...
We are in danger of becoming an economically polarized society in which a small percentage of the population is free from economic risk, while a vast majority of Americans will encounter poverty as a normal part of life.
With our calculator, Americans can for the first time examine their own economic vulnerability. Our hope is that such information will be both sobering and a clarion call to action.

    Posted by on Friday, March 18, 2016 at 02:20 PM in Economics, Social Insurance | Permalink  Comments (16)


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