As my dad reaches retirement age this year, conversations about what comes next have become more frequent between us. Retirement is on his mind although not in the “I’m ready to retire and vacation for the rest of my life” way. The reality is that for him, as is the case for millions of low-wage workers, retirement is a looming dark cloud of uncertainty and economic instability. 
According to a 2015 report from the National Institute on Retirement Security, more than half of households near retirement age had less than a year’s worth of income saved for retirement. This is alarming considering most Americans need about $1.7 million in savings for retirement. With the decline in the use of traditional pensions and employer sponsored retirement plans, most retirees rely almost exclusively on Social Security benefits. For low or minimum wage workers, pensions and employer sponsored retirement plans have been virtually nonexistent to start with, having historically been left to plan for retirement on their own. As a result, low-wage workers oftentimes solely rely on Social Security retirement benefits, which ends up being an amount that puts or keeps them below the poverty line. Low-wage workers end up having less lifetime earnings and as a result receive less social security benefits. As such, nearly half of California workers are on track to retire with incomes below 200 percent of the federal poverty level. Like everyone else, low-wage workers deserve and need financial security in retirement.
At the root of it, this is an economic and racial justice issue. Black, Indigenous, and other People of Color (BIPOC) are far more likely to be paid poverty-level wages than white workers, leaving them at a disadvantage to even have disposable income to put into a retirement savings account, especially when they are living paycheck to paycheck. We have to understand the structures, which are the economic and social policies and practices, that have created this disadvantage for BIPOC folks and that includes understanding the discriminatory roots behind the history of the minimum wage.
To begin, we have to recognize that the prosperity of the United States was achieved through the exploitation and occupational segregation of people of color. The legacies of slavery, Jim Crow and the New Deal have codified inequality in America. Slavery and Jim Crow devalued the types of work that Black, Asian, and Latinx people mostly work in (e.g. service and domestic work). The power of these workers has been historically and intentionally limited. One example is in how the Fair Labor Standards Act and the Wagner Act excluded many of the occupations most commonly held by Black, Asian, and Latinx workers, stripping their rights to labor unions and collective bargaining and fair labor practices and working conditions. The effects of these policies are present today as millions of BIPOC people remain trapped in low-paying, low benefited jobs, unable to save for their retirement. Undocumented workers face additional challenges as they are excluded from the social safety net while contributing billions of dollars a year to the Social Security retirement pot without ever benefiting from their contributions.
We have seen how this racial capitalist system that devalues and harms the lives of BIPOC groups has shaped inequities during the COVID-19 pandemic. Essential workers make up about half of all workers in low-paid occupations and have experienced high rates of COVID-19 related illness and death. The pandemic has brought to light the fundamental issues with inequities in wages, benefits, and worker protections for BIPOC people. Low-income workers have been especially impacted by COVID-19, experiencing further setbacks such as having lost a primary earner to COVID-19, lost income, sickness, and having to dip into emergency savings. Although there has been an outpouring of appreciation and gratitude for essential workers during the pandemic, we need to go further and ensure the financial stability of these workers during their working years and at retirement.
Without a financially secure future, low-wage workers remain stuck between a rock and a hard place, having to choose between using their income to try to make ends meet or choosing to save at least some money (and not nearly enough) for retirement. The only alternatives they have are to live and retire into poverty or to continue to work through retirement. What can we do to ensure that low-wage workers do not retire into poverty? First of all, I strongly believe that knowledge is power. Be informed and educated of the history of policies and question why things are the way they are. More often than not, the answer will have to do with this country’s history with race. Being educated about the ways we as a society uphold and perpetuate inequalities is crucial to dismantling those systems of oppression embedded in all of our institutions. Second, we need to be involved in advocating for the reform of policies that have disadvantaged and created inequality for low-wage workers. This includes abolishing tipped minimum wage, establishing a living wage, strengthening labor and union laws, and providing a pathway to citizenship to undocumented workers. We need to change the systems that keep poor people poor. We need to put pressure on our state and federal representatives to hold high profit companies accountable, including large private employers of low-wage service, restaurant, retail, manufacturing workers, and mandate that they contribute to the retirement accounts of the workers who produce their profits.
I come from a family and community of hard-working, agricultural workers including farmworkers, day laborers, and warehouse workers. They have taught me everything I know about hard work. They have also taught me about injustice and inequality. I don’t know a single person in my community who has stopped working in retirement because they need to keep working to stay afloat. These folks continue to work out of necessity, even after their bodies have failed after decades of physical labor. They deserve better. They deserve dignity in retirement. We must do better for the people who keep this country running.
By Project Manager, Patricia Avila-Garcia, for HOP’s series of monthly staff blog posts.