This Press Release issues a statement by Stephen Herzenberg, economist and executive director of the Keystone Research Center, on the U.S. House of Representatives’ vote on H.J. Res 66 and H.J. Res 67, which would repeal rules recently issued by the U.S. Department of Labor allowing states and large cities to create retirement security plans for private-sector workers.
HARRISBURG – Stephen Herzenberg, economist and executive director of the Keystone Research Center, issued the following statement in response to Wednesday’s U.S. House of Representatives vote on H.J. Res 66 and H.J. Res 67, which would repeal rules recently issued by the U.S. Department of Labor allowing states and large cities to create retirement security plans for private-sector workers:
“The legislative majority in the United States Congress nakedly communicated Wednesday that it stands firmly with Wall Street against Main Street when it took a first step to preventing states and localities from created retirement savings vehicles for private sector workers in the United States. In Pennsylvania and the nation, over half of private sector workers have access to no retirement plan at all through their job, not even a 401(k)-plan with inadequate contributions.
“The collapse of retirement security in the private sector is a critical dimension of middle-class economic anxiety in America. Eighty-six percent of Americans believe that the nation faces a retirement crisis, with 57 percent strongly agreeing there is a crisis, according to a 2015 study by the National Institute of Retirement Security.
“In the absence of federal action to address this crisis, a growing number of states, and now big cities such New York and Philadelphia have begun to step into the void. With a green light as a result of the new U.S. Department of Labor rules, these states and cities have begun to set up systems under which all private sector workers have access to a retirement savings plan, with contributions automatically made to the plans each paycheck unless workers opt out.
“Bowing to pressure from financial services firms that fear the new state and local plans might reduce the high fees associated with many financial market savings options, Congress wants to block this systemic approach to reducing retirement security. The human consequences if they succeed will include more seniors living out their golden years in economic distress, losing their homes, and depending on social programs to get by.
“The action Congress took yesterday emphatically answers the question which side are you on? Those who voted yes are on the side of Wall Street.”
Yesterday in Philadelphia, former state representative and now Philadelphia City councilwoman Cherelle L. Parker (9th District) introduced a resolution calling on the U.S. Senate to vote ‘no’ on repealing the DOL rules. The Keystone Research Center urges the Pennsylvania legislature to enact a similar resolution that would preserve the state’s option for bipartisan action to create its own “retirement security for all” plan, following in the footsteps of states such California, Illinois, Connecticut, and Maryland. KRC also urges Pennsylvania Sen.’s Pat Toomey and Robert P. Casey, Jr. to vote no.
Dr. Herzenberg serves on the Retirement Security Task Force for Private Sector Employees in Philadelphia, chaired by Councilwoman Parker. A resolution to create the Task Force was unanimously approved by Council. Since November, the 16-member Task Force has been meeting with the purpose of exploring best practices to address the retirement security crisis in Philadelphia and to make recommendations to Council regarding potential solutions.