A sculpture looking shameful

Money Shame Surfaces in Tough Times

It’s easy to overlook the emotions that swirl around money. But they often come to the surface when our financial security is thrown into question.

The spread of the coronavirus has kicked Americans’ financial anxieties into high gear, a Kaiser Family Foundation poll found last week. More than half of the workers who were surveyed fear they will lose income when their workplace is closed or their hours are reduced.

Reduced income is hitting low-wage, part-time and hourly workers hardest and fastest. But even among people with more financial resources, more than half are concerned they’ll have to dip into retirement savings or college funds.

Even when financial problems stem from events that are outside of an individual’s control, a feeling of shame can take over. Shame is the thread running through three TED videos that explore the emotions around money.

With economists increasingly predicting a recession in the wake of the virus, it might be useful to keep in mind the insights and coping mechanisms discussed by the speakers in these videos.

Shame is that “intensely painful feeling or experience of believing that we are flawed … based on our bank account balances, our debts, our homes, or our job titles,” Tammy Lally explains in the first video.

Lally, a financial coach, believes her brother was driven to suicide by his shame about his bankruptcy filing earlier that same day. She said she was judgmental at first but, after encountering financial problems of her own, came to a better understanding of the intense pressures her brother was feeling.

Lally’s and her brother’s shame around money was rooted in their childhood, she said: the siblings learned from their parents that money would make them happy. “We internalized that into the money belief that our self-worth was equal to our net worth.”

As the coronavirus pummels the stock market and slows the economy, many workers are feeling under enormous financial pressures. But Thasunda Duckett, who runs the consumer division of a major bank, said in a second video that people only compound the pressures when they blame themselves.

“We have a fraught relationship with money, because it comes with judgment,” she said.

Duckett and Lally both recommend one thing people can do if they’re experiencing money issues. To overcome some of the shame and anxiety requires letting the burden go by talking openly with others about money – you will quickly learn that you are not alone.

“Money can no longer be a taboo topic,” Lally said.

In 2007, a year before the financial crisis hit, Elizabeth White, a Harvard Business School graduate and one-time international consultant, was tumbling into “economic freefall.” …Learn More

Factory worker

If People Can Work Longer, They Will

A majority of adults believe there’s better than a 50-50 chance they will still be working full-time after age 65, a new study found.

The evidence suggests this goal is fairly realistic.

In the study, adults ranging in age from 18 to 70 were asked to rate themselves on a 1-to-7 scale for 52 different cognitive, physical, psychomotor, and sensory abilities that determine their capacity to work. These abilities run the gamut from written comprehension, pattern recognition, and originality to finger dexterity, reaction time, and vision acuity.

Of course, physical abilities decline with age. But when the researchers compared older and younger participants in the study, they found that many self-assessments of their abilities were very similar. For example, psychomotor abilities – such as hand steadiness, manual dexterity, and coordination – were at peak levels for the people in their 30s. But these abilities were only slightly diminished for the people in their 60s. And despite concerns about cognitive decline among older workers, the difference between 50- and 60-year-olds was minor.

The heart of the research, funded by the U.S. Social Security Administration, was determining whether each individual’s distinct set of abilities affected his or her work capacity, as well as how long and how much the individual intends to work as they age. This issue is important, because extending a career is a powerful way to improve one’s financial security after retirement.

To determine this capacity for work, each individual’s self-assessed abilities were matched up with the skills required to do nearly 800 different U.S. occupations. The researchers then calculated the percentage of these occupations each person would be able to do, given their education and training level.

Here are three of the central findings:

The more occupations people can do, the more likely they were to say they would work past 65.

Workers over 60 with a higher capacity to work said they would be more likely to remain employed even after 70.

One in four of the retirees with a very high capacity for work would consider “unretiring” and returning to the labor force. …Learn More

Payday loan art

People on Disability Use Payday Loans

Taking out a high-cost payday loan is an act of desperation, and people on federal disability are some of the biggest users.

Nearly 6 percent of households under 66 and on disability use payday loans, compared with 4 percent of the general population, according to Haydar Kurban at Howard University, who did the analysis for the Retirement and Disability Research Consortium.

The financial vulnerability of disability recipients was starkest in the months after the 2008-2009 recession, when their use of payday loans spiked to 22 percent. The rate of borrowing also rose at the time for the general population but by much less.

Disability benefits under the federal Supplemental Security Income (SSI) program average about $900 a month. To eke out a living, people on disability try to supplement their income with food stamps, Medicaid, some work, or housing assistance from the government or a family member – and some use payday loans to raise quick cash. (A small share of people in this study are not disabled but receive SSI to supplement their Social Security benefits.)

Despite the very low incomes of the disability beneficiaries, they are attractive customers for payday lenders, Kurban said, because the benefit checks provide extra assurance the loans will be repaid. …

Learn More

Art of a large group of people

Privilege in the Age of the Coronavirus

I appreciate how privileged my husband and I are that we are able to remain in our home, where we feel fairly safe.

He is a retired Boston high school teacher. I have a good job that also provides me with some degree of flexibility when needed, and my boss didn’t resist, because of my autoimmune condition, when I asked to work at home early last week.

A young couple in my condo building with a new baby fled last weekend to a relative’s house in rural Connecticut, where the husband will be able to telecommute to his high-paying job in Boston.

Yes, our 401(k)s are getting pummeled. But this national crisis is immediate and far more consequential for the millions of Americans who must work even in a pandemic. Workers have two concerns, and they are intertwined: health and money.

Think about the first responders, service-industry workers, or post office employees who are in contact with the public, constantly exposing themselves and, as a result, their families to the coronavirus.

Low-income people are also very vulnerable. Research shows that they are less healthy for reasons ranging from less access to employer health insurance to higher rates of smoking and obesity. Diabetes is more pervasive in low-income populations too.

Yet public health officials tell us that people with underlying conditions are far more vulnerable to getting seriously ill if they contract the virus – and these are the same people who usually don’t have the luxury to telecommute. Many low-income workers also live in crowded conditions, often with older relatives in fragile health.

Many workers are grappling with the realization that the economy is starting to slow down – and they will be the first to feel it. Consider the cleaning ladies or dog walkers whose clients are asking them not to come to the house this week or the servers at the restaurants shutting down in Manhattan, Massachusetts, Illinois, and across the nation. …Learn More

Market Drops Hit Those Who Don’t Invest

Photo of the cast of Sweat

Photo by T. Charles Erickson

How fitting that I would see the play “Sweat” on Feb. 28 – a Friday night at the end of a week in which the stock market dropped 12 percent and the specter of recession reared its ugly head.

The Pulitzer Prize-winning “Sweat” – I saw the Boston revival – is about the havoc the boom-bust economy and falling financial markets wreak on working people’s employment security and their personal lives. In fact, the timeline of the play is bracketed by 2000, when the stock market crashed, and 2008, when it crashed again.

At the beginning of each scene, a voice-over broadcasts the day’s bad financial news. The stock market never crosses the lips of the characters in the play, which is set in a local bar that is the social center of the working class town of Reading, Pennsylvania. Their chief concern is the fate of their jobs at the steel tubing plant. But the unspoken stock market is an invisible character shaping their plight.

Playwright Lynn Nottage got her inspiration for “Sweat” during visits to Reading over 2½ years. Two female characters and each of their sons work at the plant – very typical of a factory town. The bartender used to work there until he injured his leg. An immigrant who is a busboy at the bar briefly gets a shot at the American dream as a scab worker when the company locks the union out of the plant. There is tension between the immigrant and the long-time residents, and between the assembly line workers and the one worker who is promoted to management. But in the end, all of their lives are tragically upended by the plant closing.

Factories began shutting down in the 1980s, in part because U.S. manufacturers learned they could hire workers at much lower wages overseas. But manufacturing’s long-term decline was perpetuated by the 2001 recession, which was triggered by a market drop, and a second recession that began with the 2008 market collapse.

Which brings us to 2020. …Learn More

Photo from inside a factory

Hypertension, Arthritis? Keep Working!

The growing list of effective medications available for managing a variety of chronic conditions seem to be changing the way we work and retire.

For example, older workers at one company who suffer from arthritis and high blood pressure – two relatively easy conditions to treat – are able to keep working just like their healthier co-workers, according to a new study from a research consortium funded by the U.S. Social Security Administration.

In fact, the two specific groups in this study – employees with hypertension or a combination of arthritis and hypertension – actually worked an average of four to 10 months longer, respectively, than the healthy workers. This counterintuitive finding might owe to the fact that people with chronic conditions are motivated to work longer to maintain their employer health insurance. Another possibility is that, because of their condition, they pay closer attention to their overall health and take better care of themselves.

The researchers, who are from Stanford University’s Medical School and Princeton University, had the advantage of access to nearly 4,700 employees’ detailed medical records, which allowed them to track how their health progressed over an 18-year period, until they retired.

A limitation of the study is that the employees aren’t representative of the general working population. They were mainly white men employed in Alcoa smelters and fabrication plants around the country. And because it was very common for them to join the company in their 20s and qualify for a 30-year pension, their average retirement age was only 58.

But older workers in a wide variety of professions are reckoning with the need to work longer than they might have planned so they can afford to retire.

A chronic medical condition doesn’t have to be a barrier to working as long – or even longer – than everyone else. …Learn More

State Uninsured Rates All Over the Map

Map of Uninsured rates

A decade after the passage of the Affordable Care Act, about one out of every five Texans under age 65 still do not have health insurance. Georgia, Oklahoma and Florida are close behind.

The contrast with Hawaii, Minnesota, Michigan, and New Hampshire is stark – only about one in 20 of their residents lacked insurance in 2018, the most recent year of available data, according to the Kaiser Family Foundation’s annual roundup of insurance coverage in the 50 states.

Despite this glaring disparity, the share of Americans lacking coverage has dropped dramatically across the board, including in Texas. Texas’ uninsured rate fell from 26 percent in 2010 to 18 percent in 2018. This translates to 2.3 million more people with health insurance. (Large populations of undocumented immigrants in states like Texas can push up the uninsured rate.)

States that had fairly broad coverage even prior to the Affordable Care Act’s (ACA) 2010 passage didn’t have as far to fall. For example, Connecticut’s uninsured rate is 6 percent, down from 10 percent in 2010.

One upshot of these two trends is that the disparity between the high- and low-coverage states has shrunk. Certainly, the strong job market gets credit for reducing the ranks of the uninsured. But millions of Americans who don’t have employer insurance have either purchased a policy on the insurance exchanges or gained coverage when their state expanded Medicaid to more low-income residents under the ACA.

For example, just two years after Louisiana’s 2016 Medicaid expansion, the uninsured rate had fallen from 12 percent to 9 percent.

But the initial benefits of the ACA seem to have played out. The U.S. uninsured rate increased slightly, from 10 percent to 10.4 percent between 2016 and 2018.

The share of people who are underinsured is also rising, the Commonwealth Fund found in a recent analysis. …

Learn More