Measuring the American Social Contract

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Egbert Jones
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1 Measuring the American Social Contract Part 3 of 4 Social Contract Indicators: Social Protection Lauren Damme Next Social Contract Initiative, New America Foundation July, 2011 Valuable research assistance provided by: Amanda Huffman and Kristen Johnson

2 Social Contract Indicators: Social Protection Contents* 1. Income Replacement Rates of Social Security, U.S. 2. Pension Replacement Rates, International Comparison 3. Health Care Coverage, International Comparison 4. Health Care Expenditures per Capita, International Comparison 5. Mandated Paid Leave, International Comparison 6. Unemployed Receiving Unemployment Insurance Benefits in the U.S. 7. Unemployment Insurance Coverage, International Comparison *For full descriptions, citations, and context, see: Rethinking the American Social Contract: The International Labor Organization s Decent Work Agenda in the United States, by Lauren Damme 1

U.S. Dollars Social Contract Indicators: U.S. Social Security Benefits Social Security Benefits Replace an

$100,000 $90,000 $80,000 $70,000 Past earnings Benefits % replacement rate $58,900 34% $87,800 28% $60,000

Average High Maximum Earnings level Source: National Academy of Social Insurance, 2007.

3 U.S. Dollars Social Contract Indicators: U.S. Social Security Benefits Social Security Benefits Replace an Average of 40% of Pre-retirement Earnings of Workers with Continuous Work Histories, Retiring at Age 65* $100,000 $90,000 $80,000 $70,000 Past earnings Benefits % replacement rate $58,900 34% $87,800 28% $60,000 $50,000 40% $40,000 $30,000 $20,000 $16,700 54% $9,400 $37,200 $15,570 $20,610 $24,000 $10,000 $0 Low Average High Maximum Earnings level Source: National Academy of Social Insurance, *Most workers do not have continuous work histories, and lower-income workers with more physically demanding jobs tend to retire before age 65. 2

Replacement Rate Social Contract Indicators: Pension Replacement Rates 120% U.S. Social Security Pensions are Less Generous than Mandatory Private Sector Pensions of Other OECD Countries 1 100% 80% 60% 59% 40% 42% 20% 0% Source: OECD, 2011.

1 "The Pensions at a Glance indicators, covering all 34 OECD countries, are designed to show future entitlements for workers who entered the labor market in 2008 and spend their entire working

4 Replacement Rate Social Contract Indicators: Pension Replacement Rates 120% U.S. Social Security Pensions are Less Generous than Mandatory Private Sector Pensions of Other OECD Countries 1 100% 80% 60% 59% 40% 42% 20% 0% Source: OECD, Gross pension replacement rates for public and private mandatory pension schemes for average male earners in the private sector. 1 "The Pensions at a Glance indicators, covering all 34 OECD countries, are designed to show future entitlements for workers who entered the labor market in 2008 and spend their entire working lives under the same set of rules. The results presented here include all mandatory pension schemes for private-sector workers, regardless of whether they are public or private (OECD Pensions Indicators)." 3

5 Social Contract Indicators: Health Care Coverage The United State is the Only Developed Country without Universal Healthcare Coverage 4

6 Dollar expenditure per capita, US$ PPP 2008 Social Contract Indicators: Health Care Spending $8,000 Americans Spend Over 2.5 Times More Per Capita on Healthcare than the OECD Average, but Do Not Have Universal Coverage, 2008 $7,538 $7,000 $6,000 $5,000 $4,000 $3,000 $2,930 $2,000 $1,000 $0 Source: OECD.stat health data, *2007 data 5

7 Weeks Social Contract Indicators: Paid Annual Leave 350 United States is the Only Developed Country with No Mandated Paid Annual Leave Unpaid Leave Full-Time Equivalent Paid Leave Source: Center for Economic and Policy Research, *18 weeks of paid leave starts in

8 U.S. Workers (in millions) Social Contract Indicators: U.S. Unemployment Insurance 300 Even with Emergency Federal Unemployment Insurance, 16.2 Million Unemployed Americans Do Not Receive UI Benefits U-6 Unemployment measure (N.S.A.) UI continued claims, including federal UI programs (N.S.A.) Unemployment Insurance weekly claims (continued claims, N.S.A) 16,249,069 Americans - the unemployed, part-time for economic reasons, and the marginally attached - receive no UI support 50 0 Source: U.S. Department of Labor, June 2011; Author's calculations. U-6 = Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons. N.S.A = Not Seasonally Adjusted Data 7

Percent of unemployed population covered by UI benefits Social Contract Indicators: Unemployment Insurance 180% 160% 140% 120% 100% 80% 60% 40% 20% 0% Unemployment Insurance Coverage is Low in the U.

9 Percent of unemployed population covered by UI benefits Social Contract Indicators: Unemployment Insurance 180% 160% 140% 120% 100% 80% 60% 40% 20% 0% Unemployment Insurance Coverage is Low in the U.S average 43% Source: Activation Policies in Finland, OECD, May equal more than 100 percent as calculations for some countries include employment assistance and social assistance for those willing and able to work (jobseeker s allowance), available to persons who are able to work and whose income is insufficient to provide for their family s livelihood. 8

Department of Legislative Services

Department of Legislative Services Maryland General Assembly 2008 Session HB 627 FISCAL AND POLICY NOTE House Bill 627 Economic Matters (Delegate Taylor, et al.) Unemployment Insurance - Eligibility -