According to a recent Associated Press survey, almost a quarter of Americans say they plan to never retire, and it isn’t because they all love their jobs. The United States faces a retirement crisis. Workers have been forced to assume more and more financial risk, and as a result, many won’t have enough to live with dignity when old age arrives. Boston College’s Center for Retirement Research projects that half of workers will reach retirement with too little savings to fund it. When tens of millions of Americans all have the same problem of setting aside too little money for retirement, it’s not a failure of individual initiative. It’s a sign of a structural problem—one that can’t be solved by scolding people to save more.
Fortunately, this is a problem that a public option for retirement savings can help fix. What we propose is a new, supplemental pension—in addition to Social Security—that is federally administered, open to everyone, and simple and safe to join. It would follow workers even if they change jobs, and it would last for life. Our public option wouldn’t solve the retirement crisis on its own, but it would offer participants a more secure future.
The public option is most familiar from debates over health care, where proponents argue for a public health-insurance plan that would be available to everyone and coexist with private plans. Public options, while underappreciated as an approach to public policy today, have been part of the American social and economic landscape for centuries. The Constitution gives Congress the power to create the postal service, which today provides a public option for mail and package delivery that coexists with FedEx and UPS. Millions of Americans take advantage of public schools, another public option, even as others opt out and send their children to private schools. If not for these options, families might theoretically hire private carriers to mail their letters and private schools to educate their children. But some families couldn’t or wouldn’t, and private companies’ interests may not align with society’s. Society as a whole functions better when everyone has access to communication and education.