NFIB: President Misdiagnoses the Savings Rate Problem

Date: January 26, 2016

Jack Mozloom, 202-406-4450 or 609-462-5610 (cell)

New NFIB research suggests
that America’s low savings rate has little to do with access to workplace plans

Washington, D.C. (January 26, 2016) – America’s notoriously
low savings rate may be a problem, but private sector businesses aren’t causing
it, said the National Federation of
Independent Business (NFIB)
in response to another package of mandates and
inducements introduced by President Obama yesterday. 

“Businesses that offer retirement plans do so as a way to
attract and retain good employees. They’re doing that now without mandates and tax credits,” said NFIB Research Director Holly Wade. “Businesses that don’t offer retirement plans
either can’t handle the administrative headaches, don’t have the resources or
their employees would rather have more take-home pay.”

President Obama yesterday previewed his new initiative for
reporters. It seeks to create more
opportunities for American workers to save for retirement.  Included in the package will be tax credits
for businesses that offer plans and a mandate that employers who offer
retirement benefits include part-time workers as well. 

A nationwide
survey released last week
by the National
Federation of Independent Business (NFIB)
finds that fewer than 40 percent
of small business owners offer retirement plans and among them, only about half
say that all of their workers are participating. That doesn’t square with the President’s
go-to explanation for most problems, which is that businesses aren’t doing
enough for workers.

“The combination of these initiatives will cause more
aggravation for employers in an already over regulated small business
environment,” said Wade.

“Many small businesses have a handful of full-time
employees and a larger part-time workforce,” she continued. “If they’re forced by
the government to offer retirement benefits to everyone, some may very well
discontinue the plan altogether.  That
would be a classic unintended consequence.”

Wade said that like many of the President’s ideas, this one
attempts to improve conditions for workers without improving conditions for
their employers.

“A much better way to elevate employees is to create an
economic climate that allows businesses to prosper,” she continued.  “That means lower, flatter taxes and fewer
impediments to running a business.”

The NFIB research can be found here:  https://www.nfib.com/foundations/research-foundation/topics/labor-employees/  

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