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California Trying to Force Private Sector Into Retirement
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shadow777



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California Trying to Force Private Sector Into Retirement Plan?

I hope folks are happy with liberalism?

Is it another case of the nanny state, or an innovative way to help you save?
California lawmakers are pushing a controversial, first-in-the-nation plan that would require private-sector employers to remove 3 percent from every worker's paycheck. The money would go into a new state fund with a guarantee that all withheld funds plus investment gains will be available for distribution at retirement age.
The idea behind the Secure Choice Retirement Savings Program, which got preliminary approval, is for it to be a state-run supplement to Social Security, but only for people who don't have traditional workplace retirement plans. For an estimated 6 million working Californians, the benefit of a pension or 401(k) is out of reach -- so state lawmakers are trying to implement the new mandatory retirement fund for private sector workers.
But critics wonder how the state with a turbulent record of budget keeping and a much-ridiculed public worker pension system can be counted on to protect people's money.
"I think you'll find out that what is promised in the (Secure Choice plan) is not possible to deliver," lobbyist Marc Burgat contends. "If you could deliver guaranteed returns with less than one percent costs, no employer liability, no government liability -- that's a fantasy."
There is also concern that this is another example of government do-gooders trying to force better behavior by its citizens.
But for years, financial experts have warned that people shouldn't solely depend on their Social Security benefits for retirement income. The average California retiree only collects $14,000 per year in Social Security. Advocates of this new effort say the supplemental savings plan will provide a needed boost to retirement needs.
"There are pros and cons to the various approaches," behavioral finance expert Shlomo Benartzi explained to Fox News. "But I think the critical ingredient is to make it easier for people to save for retirement."
Benartzi, who teaches at UCLA and represents the Allianz Global Investors Center for Behavioral Finance, understands the argument of critics but but disagrees that this is an area where the government should butt out.
"We eat too much. We drink too much. We don't save enough. I think the difference in the case of savings is that I think we can fix it. By making it easier to spend less and save more," he said.
Fox News talked to several California workers whose employers don't offer them retirement benefits -- the exact people the Secure Choice program is designed to help. Each liked the idea.
"Most people can't save money and then to save it for when you're retired is very hard. It would be like saving it for 50 years," said Coty, a waitress.
Pascal, who works on movie sets, said, "you need to look for the future and it's just too hard at this point to do it by yourself."
Employers who don't conscript workers into the program are subject to fines, though they will not have to provide any matching funds.
Burgat wonders if that requirement will soon follow.
"So for the employer in California, it becomes another huge burden in a state that CEO magazine is already calling the state that is the hardest to do business in America. It just becomes another opportunity for liability. Another opportunity for a lawsuit and yet another burden we're placing on the employer," Burgat said.
The California plan is the first in the nation, though other states have expressed interest as well as lawmakers in Washington. Before Secure Choice can go into effect, it must get approval from the IRS and U.S. Labor Department. Lawmakers must also vote on it again once a feasibility study is complete. That is expected to happen next year.


Read more: http://www.foxnews.com/politics/2013/07/25/california-tries-to-mandate-retirement-savings-for-private-workers/#ixzz2aO1rSpuc
Mon Jul 29, 2013 12:40 am View user's profile Find all posts by shadow777 Send private message Send e-mail
shadow777



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Low-Income Workers Fleeing California
1.
http://video.foxbusiness.com/v/2205041816001/low-income-workers-fleeing-california/

2.
Updated March 4, 2013, 3:24 p.m. ET
The Reverse-Joads of California
Low- and middle-income residents are fleeing the state. Sacramento's liberal policies may bear much of the blame.

By ALLYSIA FINLEY CONNECT
During the Great Depression, some 1.3 million Americans—epitomized by the Joad family in John Steinbeck's "The Grapes of Wrath"—flocked to California from the heartland. To keep out the so-called Okies, the state enacted a law barring indigent migrants (the law was later declared unconstitutional). Los Angeles even set up a border patrol on the city limits. Soon the state may need to build a fence to keep latter-day Joads from leaving.

Over the past two decades, a net 3.4 million people have moved out of California for other states. But contrary to conservative lore, there has been no millionaires' march to Texas or other states with no income tax. In fact, since 2005 California has experienced a net in-migration of households earning more than $200,000, according to the U.S. Census's American Community Survey.

As it happens, most of California's outward-bound migrants are low- to middle-income, with relatively little education: those typically employed in agriculture, construction, manufacturing, hospitality and to some extent natural-resource extraction. Their median household income is about $40,000—two-thirds of the statewide median—and about 95% earn less than $80,000. Only one in 10 has a college degree, compared with 30% of California's population. Roughly 40% of the people leaving are Hispanic.

Even while California's Hispanic population has grown by more than 1.5 million since 2005, thanks to high birth rates and foreign immigration, two Hispanics have moved out for every one that has moved in from another state. By contrast, four Hispanics from other states have settled in Texas and Arizona for every three that have left.

It's not unusual for immigrants or their descendants to move in pursuit of a better life. That's the history of America. But it is ironic that many of the intended beneficiaries of California's liberal government are running for the state line—and that progressive policies appear to be what's driving them away.

For starters, zoning laws, which liberals favor to control "suburban sprawl," have constrained California's housing supply and ratcheted up prices. As Harvard public-policy professor Daniel Shoag documents in a working paper, land restrictions became common in high-income enclaves during the 1970s—coinciding with the burgeoning of California's real-estate bubble—and have increased income-based segregation and inequality.

Housing in California is on average 2.7 times more expensive than in Texas. The median house costs $459 per square foot in San Francisco and $323 in San Jose, but just $84 in Houston, according to chief economist Jed Kolko of the San-Francisco based real-estate firm Trulia TRLA -1.39% . Housing in California is cheaper inland than on the coast, but good luck finding a job. The median home in Fresno costs $95 per square foot, but the unemployment rate is nearly 15%, compared with 6% in Houston.

California's staggering labor and energy costs—it has the nation's most stringent fuel and renewable standards—have helped kill hundreds of thousands of manufacturing jobs in California's interior. Note: Those are jobs that traditionally served as entry points to the middle class. The Golden State has shed a third of its manufacturing base over the past decade. And while the U.S. has added nearly 500,000 manufacturing jobs over the past two years, California's heavy industry continues to erode.

Campbell Soup CPB +0.92% announced in September that it was closing its 65-year-old plant in Sacramento, which employed 700 workers, and shifting production to North Carolina, Ohio and Texas. Chevron CVX -0.16% is moving 800 technical positions—in other words, jobs that aren't physically stationed on California rigs—to Houston.

Non-manufacturing businesses are also moving or expanding operations where labor, land, energy and capital are cheaper. Comcast CMCSA -1.00% announced in the fall that it is moving 1,000 call-center jobs out of California because of the "high cost of doing business." Facebook, FB -1.02% eBay EBAY +1.46% and LegalZoom have opened up Texas offices in the past few years, while PayPal, Yelp and Maxwell Technologies MXWL -2.75% have pushed into Phoenix.

Meanwhile, small businesses that can't leave California so easily have been slow to invest because they are financially squeezed. Rents are prohibitive, and Sacramento takes 9.3% of every dollar over $49,000—and 13.3% over $1 million—that an individual or small business owner earns.

By contrast, small businesses in Texas have been sprouting like bluebonnets in the spring to meet the demands of an expanding population. More people mean more mouths to feed, bodies to clothe and homes to build. All told, Texas has added twice as many jobs as California has since 1990. California's rate of job growth since the recession ended in June 2009 has trailed Texas's by two-thirds.

In a sharp reversal of the 1930s, Texas and the Sun Belt have supplanted the Golden State as a magnet for jobs and people, while California has become America's leading labor exporter. Democrats, however, don't seem to mind so long as the state maintains its high-tech hegemony.

In his State of the State address this year, Gov. Jerry Brown boasted: "We have the inventors, the dreamers, the entrepreneurs, the venture capitalists. . . . When I first came to Sacramento, Steve Jobs and Steve Wozniak had not yet invented their personal computer. There was no wind-generated electricity, and we didn't have the nation's most advanced building and appliance efficiency standards as we later adopted."

Recall, however, that the Okies—poor as they may have been—provided a gigantic pool of labor that fueled California's postwar boom and helped transform the Golden State into the world's eighth-largest economy. The Democrats who have had firm control of the state during its years of decline would do well to remember that a society's most valuable asset is always its people, regardless of their wealth or clout.

Ms. Finley is an editorial writer for the Journal.http://online.wsj.com/article/SB10001424127887324338604578326402863024028.html
Mon Jul 29, 2013 2:14 am View user's profile Find all posts by shadow777 Send private message Send e-mail
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