Retirement in the US looks good for the few

Last week, the Institute for Policy Studies in the US released an interesting report entitled “A Tale of Two Retirements”. The report looks at retirement assets in the United States, highlighting some thought provoking facts about the lack of pension provision across the population, but also the vast inequality between the few and the many.

According to the report, “The company-sponsored retirement assets of just 100 CEOs add up to as much as the entire retirement account savings of 41% of American families (50 million families in total)”. 100 individuals have accumulated almost $5 billion in retirement savings while much of the population has nothing. This is not sustainable.

Capitalism provides people and companies with the freedom to draw upon the resources of the world, to pursue new business ventures and to generate wealth in the form of paper currency and financial assets. Governments are tasked with setting the regulatory environment, but for the most part that freedom is enshrined in western society. That’s a good thing.

However, the unfortunate by-product of the capitalist system is wealth inequality. This inequality is further enforced by the fact that power and wealth go hand in hand. If consumption is what drives service based economies, then surely concentrated wealth in the hands of the few only serves to dampen real demand. The system needed fixing before it feeds its own demise.