Anirban Basu | WYPR

Anirban Basu

Host, Morning Economic Report

Anirban Basu, Chariman Chief Executive Officer of Sage Policy Group (SPG), is one of the Mid-Atlantic region's leading economic consultants.  Prior to founding SPG he was Chairman and CEO of Optimal Solutions Group, a company he co-founded and which continues to operate.  Anirban has also served as Director of Applied Economics and Senior Economist for RESI, where he used his extensive knowledge of the Mid-Atlantic region to support numerous clients in their strategic decision-making processes.  Clients have included the Maryland Department of Transportation, St. Paul Companies, Baltimore Symphony Orchestra Players Committee and the Martin O'Malley mayoral campaign.

He is the author of numerous regional publications including the Mid-Atlantic Economic Quarterly and Outlook Maryland and is routinely asked to contribute to local media, including on his radio show on WTMD, 89.7 FM/Baltimore and here on WYPR's Morning Economic Forecast.  Anirban completed his graduate work in mathematical economics at the University of Maryland.  He earned a Masters in Public Policy from Harvard University in 1992. His Bachelors in Foreign Service is from Georgetown University and was earned in 1990.  He is currently working toward his J.D. at the University of Maryland, Baltimore.

Wage growth, student debt, employment in steel cities, levels of wealth based on age and looking at where people are moving for work.

Changes in population, marriage age, home prices, age of homebuyers, and personal wealth. 

A recent Harvard Business Review article indicates that over the past four decades, changes prompted by corporate America have placed workers and the broader American society at risk. Here’s what authors Teresa Ghilarducci and Tony James mean. The shift from defined benefit pension plans to employee-directed contribution 401K plans represents a major driver of America’s impending retirement crisis.  Beginning during the 1980s, this shift in retirement benefits helped companies reduce their retirement liabilities and better meet their quarterly financial targets.  

American life expectancy, unemployment rates, defining wealth, economic expansion and fertility rates. 

One of the most difficult aspects of preparing for retirement is projecting one’s future living costs. After all, it’s not easy to determine how much inflation there will be or how your lifestyle or health will change.  According to the Nationwide Retirement Institute, 44 percent of workers aged 50 and over believe that their living expenses will stay the same one they leave their careers behind.  

The Reports: May 21-25

May 29, 2018

This week: Improvements in the national economy, eyeglasses, retirement across the world, when retirees can expect to live comfortably, and the rise in female homebuyers.

The Gig Economy

May 25, 2018

You may have heard of the so-called gig economy – the one in which people earn money not at regular jobs, but by occasionally engaging in activities that generate income for them.  Recent research indicates that the gig economy is particularly important to growing numbers of retirees, who are looking to expand their incomes without committing themselves to a demanding employer.  According to a 2017 Prudential Financial survey, approximately 31 percent of workers who only work in the gig economy are baby boomers.  

Listen to learn more. 

As we discussed last week, there is a conventional wisdom that one needs about $1 million to retire comfortably, that may or may not be true.  Given that many Americans have literally nothing saved for retirement, a million dollars sounds like plenty.  But according to a new report from personal finance site GoBankingRates, depending on where one lives, retirees could blow through that one million dollar nest egg in as little as 12 years.

The Reports: May 7-11

May 21, 2018

This week: Financial inclusion, global health care, the World Cup economy, public employees, and the changing American car business. 

Every once in a while, an organization will publish their rankings of the best and worst states or cities for retirement.  Bankrate recently did just that, ranking the nation’s fifty largest metropolitan areas.  Bankrate considered a host of factors, including cost of living, taxes, crime healthcare, public transit, weather, things to do, and the percent of population 65 or older. Get the results in this episode.

This week: Manufacturing job loss, steel tariffs, the pension crisis, wealth and life expectancy, and investments in children's education.

This week: Retail space, supporting working women, car buying, tax reform and wages. 

A report from the National Institute on Retirement Security entitled 'Millennials and Retirement:  Already Falling Short,' further contributes to our collective understand of how vast the nation’s retirement crisis has become. The analysis finds that 66 percent of working Millennials have nothing saved for retirement, and the situation is far worse for Millennial Latinos. Among Latinos, about 5 in 6 Millennials who are working have nothing saved for retirement. The report further indicates that a bit more than a third of Millennials actually participates in employer-sponsored retirement plans despite the fact that two-thirds of Millennials work for employers offering such plans.

Unretirement

Apr 20, 2018

Many of us plan retirement for years.  We contribute to our 401ks.  We pick out a place in Florida.  We tell our kids and grandkids that it’s going to be OK, but that they’re going to have to take care of themselves from now on.  And then the day comes – we retire – and then, sometimes, we decide, that retirement is just not for us.  Economists refer to this lifestyle U-turn as unretirement.

This week: comparison shopping, corporate tax cuts, tax reform, the migration of residents due to income dynamics, and the recent employment report.

This week: Americans' net worth of income, immigration policy, the uninsured, work-life balance in Asian countries, and IRS audits.

Downward Mobility

Apr 12, 2018

A recent Forbes article concludes that there are 8.5 million older workers and their spouses who will experience downward mobility in retirement absent some deviation from current trend. Who are these endangered 8.5 million?

First time homebuyers, executive compensation, job openings, globalization and the possibility of recession. 

There continues to be much discussion regarding America’s retirement crisis. Far too many people lack adequate retirement savings, and face diminished living standards once they stop working. In response, there has been a move toward automatic enrollment in employer-sponsored retirement plans.

Automation, American tourism, credit card debt, bricklayer job security, and working mothers. 

Earlier this year, it appeared that something quite rare was about to occur.  One of the fifty U.S. states, Washington State, was striving to pass a bill that would have instituted a new payroll tax to help cover the cost of long term care, whether in a nursing home, a residence, or elsewhere in a community.

This week: Job growth, mortgage rates, government spending, and the success of Black Panther

Efforts to keep older Americans in the workforce longer could help combat America’s high rates of old age poverty and also reducing inequality—this according to a new report from the Organization for Economic Cooperation and Development or OECD. The Paris-based think tank provides advice on the best policies to follow to its 35 member governments. The report calls upon America to support longer careers for all socioeconomic groups as a way to diminish old-age poverty without placing additional strain on pension systems. More than 20 percent of Americans over the age of 65 have an income that classifies them below the poverty line. For purposes of the OECD study, poverty was defined as half of median disposable household income.  Future retirees face even higher risks of poverty as inequality advances. As indicated in The Wall Street Journal, while America has a higher share of older people in the workforce compared to most major economies, how people fare in their later years depends critically on educational attainment.  The gap between workers with different skillsets is enormous and poised to widen as digital transition progresses according to OECD analysts. One way to support longer careers is by offering flexible or phased retirement. Under such a system, older workers receive a full or partial pension benefit while continuing in paid work, often with reduced hours. Far fewer Americans work part-time in retirement relative to populations in Germany and the United Kingdom. 

Oil prices, disparities in hourly wages, the rate of unemployment, and the growth rate of pregnancies. 

You are probably not looking for a reason to retire early.  The reason is fairly obvious.  Early retirement may be much more pleasant that working well into one’s 60s or 70s or beyond.  But here’s another reason that renders early retirement more appealing – it could lengthen your life.  That’s the conclusion of research made available over the years as well as from a 2017 study published in the journal Health Economics.  As indicated by The New York Times, in that study, three economists from the Netherlands analyzed what transpired when some Dutch civil servants could temporarily quality for early retirement in 2005. Men responding to the early retirement offer were nearly three percentage points less likely to die over the next five years than those who did not retire early. Parenthetically, too few women met the early retirement eligibility criteria to be included in the study. In any case, these findings echo those of other studies. For instance, an analysis in the U.S. found that seven years of retirement can be as good for one’s health as reducing by 20 percent the chance of acquiring a serious disease like diabetes or heart conditions. The salubrious effects of retirement have also been discerned in studies using data from England, Germany, and Israel. This likely reflects the fact that for many people, work can be stressful and can leave little time for exercise.  

The outdoor recreation economy, African-Americans in the economy, consumer debt and productivity growth. 

To stretch out one’s retirement savings, one may have to eventually move to a lower cost city. Many people from the northeast United States end up moving to the American South, with one of the major factors being warmer weather. But that’s hardly the only factor. States like North and South Carolina tend to have costs of living far beneath what one contends with in Connecticut, New York, New Jersey or Maryland.  One of the difficulties in understanding differential costs of living in various areas is a dearth of comparable data.

Household debt, oil imports, the French economy, the rural economy, and immigrants in the direct care industry.

Stock Ownership

Mar 1, 2018

There has been a lot of discussion in recent years regarding America’s retirement savings crisis.  One might think that a significant fraction of this crisis has been resolved by a booming stock market, with the logic being that 401Ks and 403Bs have been sufficiently stimulated to better position Americans for their golden years.  But data indicate that rising or falling stock prices have little impact on the income of wealth of most families. The reason?  They own little or no stock.  As indicated by writer Patricia Cohen, an astonishing 84 percent of all stocks owned by Americans belong to the wealthiest 10 percent of households... 

Anirban on wage growth, worker strikes, variable pay, unemployment rates and millionaire households. 

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