New analysis from the Economic Innovation Group (EIG), an organization that describes itself as “a bipartisan ideas laboratory and advocacy organization,” shows that retirement plan access and participation vary significantly by state, but low-wage workers are disproportionately likely to be left out everywhere.
“This dismal access to retirement plans, especially for lower-income workers, has led conservative economist Kevin Hassett and progressive economist Teresa Ghilarducci to co-author a new retirement savings program proposal modeled after the highly successful, federal Thrift Savings Plan,” EIG noted when announcing the research.
Under their plan, “the lower-wage workers left out of retirement plans (like this analysis outlines) could accrue as much as $43,000 with 10 years of matched savings—or $600,000 from age 25 to retirement. This would have transformative wealth-building potential for working Americans.”
Retirement plan coverage runs lowest in the Sun Belt and urban Northeast
- Nationwide, less than half (46%) of workers have access to an employer-provided retirement plan.
- The highest percentage of workers with access to an employer-provided retirement plan is in Minnesota at 59% and the lowest in Florida at 36%.
Lower wage workers report significantly lower rates of retirement plan participation in every state
- In every state, compared to the overall workforce, the low-wage (earning less than $50,000/year) workforce’s access to a retirement plan was at least 3.5 percentage points lower and participation in a plan was at least 6 percentage points lower.
The country’s most populous states are among those with the least low-wage access
- The 10 states with the lowest access rates for workers earning less than $50,000 include the four most populous: California, Florida, New York, and Texas. Others include Arizona, Georgia, New Jersey, Kentucky, Utah, and Arkansas.
ACCESS TO THE COMPLETE ANALYSIS CAN BE FOUND HERE
Headquartered in Washington, D.C., EIG consists of experts from the public and private sectors, produces original research, and works to advance creative legislative proposals that will bring new jobs, investment, and economic growth to communities across the nation.