Retirement should not mean hardship – but many older Americans live in poverty

As inequality has grown, American seniors have been exposed to financial distress in ways that often go unnoticed

By Katherine Newman | The Guardian | May 24, 2019

Vivian Majors spent her life cleaning houses while her husband, Martin, worked as a carpenter. Their bodies broke down in their 60s. She is now 71, living on her own and struggling to pay her bills. He is in a nursing home and has Parkinson’s disease. She survives on a $960 monthly social security check and $50 in food stamps. Hardened by years of physically taxing work that left her hovering around the poverty line, Majors, now retired, is girding herself for more years of financial hardship.

Elderly poverty was supposed to be a thing of the past. Social security supposedly wiped out the scourge of old-age penury, signaling one of the great social-policy triumphs of the modern era. But this is far from the whole story. Inequality, which has grown markedly in Europe and North America since the 1970s, has widened the gap between the secure and insecure in all age groups, and has exposed American seniors to financial distress in ways that often go unnoticed.

Opelousas, Louisiana has the highest rate of elderly rate in the US.

Opelousas, Louisiana, has the highest rate of elderly rate in the US. Photograph: Annie Flanagan/The Guardian

According to research from the University of Massachusetts Boston, material hardship bedevils millions of Americans such as Majors who are over 65.

Opelousas, Louisiana (population 16,480), where Majors and her husband grew up and raised their own children, has the highest rate of elderly poverty in the US. Seventy-five percent African American, Opelousas is home to men and women who have worked all their lives. But in 2017 the average per-capita income in the town was only $15,266 a year, and 45% of its population lived in poverty.

Mary Quick sweeps after the Holy ghost Community Meal in Opelousas, Louisiana.

Mary Quick sweeps after the Holy Ghost Community Meal in Opelousas, Louisiana. Photograph: Annie Flanagan/The Guardian

Few Opelousas retirees received sick leave or healthcare coverage while they were working, and virtually none can count on a pension to support them when they can no longer work. A lifetime of poverty rarely translates into what the rest of the country defines as true retirement. Instead, the working poor often stay on the job past retirement age.

The statistics from Opelousas are extreme, but its labor market’s underlying conditions – which residents have faced all their lives – are echoed across the country. Of those who are still of working age, 62% of African Americans and 69% of Latinos have no retirement savings. Come retirement, they are almost entirely reliant on social security. When that is the sole source of income, economic hardship is likely to be the outcome – not to the extent it was before social security was created, but a great deal more than for workers with long histories in often better-paid private-sector jobs.

Holy Ghost Community Diner in Opelousas, Louisiana.

Holy Ghost Community Diner in Opelousas, Louisiana. Photograph: Annie Flanagan/The Guardian

In the US, the poverty line was set by the Department of Agriculture as a multiple of the price of a typical “food basket” in the 1960s. It has been updated and benchmarked for family size every year since. The incidence of poverty for Americans over 65 has declined significantly, even further if measured against the poverty rate in the 1930s and 40s. Social security expenditures have played a crucial role in bringing about this improvement. As this safety net spread and the benefits available increased, poverty moved decisively downward.

We tend to think of inequality as shaping the lives of children and working-age adults, depending on their educational attainment. But the trajectory of inequality powerfully affects older people as well. Their lives in old age are a natural extension of their experiences in the prime working years. Social security is, in the end, insufficient to protect a surprisingly large number of older Americans from poverty.

Vivian Majors takes care of her husband Martin who has Parkinson’s disease.