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April 1998, Vol. 121,
No. 4
Précis
Welfare, work, and transit
Time well spent
Retirement planning: today's workers
must make more decisions
Précis from past issues
- Welfare, work, and transit
-
- Recent changes in social service programs
mandate that States require parents or caretakers
receiving welfare benefits engage in work within 24
months of receiving such public assistance. A recent
study, Welfare Reform and Access to Jobs in Boston, Statistics
of the U.S., from the Bureau of Transportation
Statistics, Department of Transportation, outlines some
of the challenges facing recipients trying to get to work
and the transit systems trying to provide them an
affordable transportation option.
-
- The basic problem is that employers in the
industries most likely to hire entry-level workers are
often located in places both remote from where public
assistance recipients live and difficult to travel to.
Some suburban areas can only be reached by commuter rail,
which is expensive and in many cases fails to provide
direct service to the actual job site. Even when the
public transportation system did provide direct access,
the trip often takes too long or requires multiple
transfers. Also, transit service hours may not match work
schedules.
-
- The report detailed a study of transit
service from a central point in one area of Boston with a
high concentration of public assistance cases to
potential employers in high-growth areas for entry- level
work. The findings were stark:
-
- Not one of the employers could
be reached within 30 minutes by public transit.
- About 14 percent could be
reached within 60 minutes.
- About a third could be reached
within 90 minutes.
- Almost half could not be
reached within 2 hours.
-
- The report concludes that "technology
innovations such as flexible routing, advanced
paratransit services, and other applications of
information technology" be considered for improving
service, along with service innovations such as extended
schedules, modified routes, and daycare services at
transit stations.
Top
- Time well spent
-
- It has been some time since we have had
much fun here at BLS with price data and the cost of
living. The Dallas Federal Reserve Bank, on the other
hand, included an intriguing essay on "Time Well
Spent: The Declining Real Cost of Living in the
United States," in their 1997 Annual Report.
The authors, W. Michael Cox and Richard Alm, rather than
adjust prices to a basket of goods, normalized them to
wages in manufacturing and expressed values in the
working time required to purchase any of a wide range of
goods and services. This allowed a number of useful
comparisons of what they term the real cost of living,
not "measured in dollars and cents but in the hours
and minutes we must work to live."
-
- The most
mind-boggling: In 1944, computer-processing capacity
measured in millions of instructions per second (MIPS)
cost 732,681 lifetimes per MIPS. In 1997, a MIPS went for
27 minutes worth of labor.
-
- The most useful: In 1920,
the median house cost 7.8 hours of work per square foot.
This fell to 6.5 hours in 1956 and to 5.6 hours in 1996.
"Plus, todays homes come equipped with many
more amenitiesfrom central heat and
air-conditioning to a full range of kitchen
appliances."
-
- The most factoidal: It
takes less time to earn enough for a fast-food burger (9
minutes) than it takes to order it, find a table, and eat
it.
Top
- Retirement planning: today's
workers must make more decisions
-
- Since 1986, defined contribution
retirement plans, such as the 401(k), have been offered
more commonly to private employees than have traditional
defined benefits plans. According to a recent Federal
Reserve Bank of New York staff report, How Workers Use
401(k) Plans: The Participation, Contribution, and
Withdrawal Decisions, by William F. Bassett, Michael
J. Fleming, and Anthony P. Rodriguez, this is part of a
trend toward an increasingly responsible role for
individual workers in retirement planning. They conclude,
however, that "many either are not participating or
are participating in a minor way." Fully a third of
workers offered 401(k) plans decline to participate, they
say. They find further that among workers with family
incomes under $15,000 per year, almost two-thirds are not
using the plans offered them.
-
- Bassett, Fleming, and Rodriguez also find
that of the nearly half of workers who report taking a
lump-sum distribution from a retirement plan before
retirement age, only 28 percent roll the funds into
tax-qualified retirement accounts. Again, lower income
workers are least likely to participate in the
tax-qualified retirement option. Because their data
source did not measure household assets or savings, they
did not draw definitive conclusions about how well
workers retirement plans would support future
consumption. They did conclude however, that their
findings should "raise concern that many workers may
not be adequately saving for their retirement
years."
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