A country with money is sort of like a mule with a spinning wheel, no one knows how they got it and damned if they know what to do with it. In the case of Saudi Arabia, everyone knows how they got it, but that second part still seems kinda true.
I bring this up because Saudi Arabia has been trying to up its manufacturing base and shift towards electrification as, likely, a hedge against the future decrease in oil demand. Can the Kingdom really pull it off? That’s the question that this Morning Dump shall raise.
One group that couldn’t pull it off is used car retailer Vroom, which is going to get out of the used car business. You know who isn’t going out of business? Škoda. Yes, we’re going to have Śkoda news.
And then let’s let Shawn Fain chat for a bit because we haven’t checked in with the union’s drive to unionize every automaker with a plant in America. He’s got thoughts!
Saudi Arabia’s EV Dreams Are, Uh, Hard To Make Happen
Saudi Arabia is an interesting case. The country is rich in oil wealth, but the long-term sustainability of oil wealth is somewhat in question as we may be a few years away from peak fossil fuel consumption. That’s challenge #1. I suppose challenge #2 is that OPEC’s attempt to discourage production in the United States has been a flop, and its OPEC+ partners Russia and Iran are producing more oil.
Concurrently with its continued oil refining, the Kingdom of Saudi Arabia is also trying to be a leader in electric cars. There’s that roughly $10 billion the Public Investment Fund of Saudi Arabia (PIF) has put into EV-maker Lucid. That’s not nothing. At the same time, Saudi Arabia has tried to boost its own homegrown EV industry.
That’s been a little tougher, as Reuters reports:
The Public Investment Fund (PIF), Saudi Arabia’s $700 billion sovereign wealth fund, has a goal to produce 500,000 EVs annually by 2030, up from a target of 150,000 in 2026.
Yet by December, the kingdom’s sole auto factory, opened in September 2023, had reassembled around 800 vehicles, based on kits supplied from Arizona.
Saudi Arabia has failed in the past to attract automotive manufacturing.
Japan’s Toyota declined a deal in 2019, citing high labour costs, a lack of local suppliers, and a small local market.
Building cars is hard, even if you have untold billions of dollars at your disposal. Saudi Arabia has long lacked a domestic pool of talent, with foreign workers making up as much as 70% of the workforce. There are signs of improvement with more women entering the workforce and unemployment dropping among highly educated Saudis.
Still, it’s a lot of work to build a market for domestic cars in a country that doesn’t have a huge population and a lot of workers. The Foxconn-PIF joint venture is supposed to start selling a car next year but hasn’t even built a factory.
For some reason Andy Palmer, formerly of Nissan and Aston Martin, gets quoted a lot in these articles and he’s got a great line:
“Money can solve almost anything, but it’s going to be a lot more than everybody initially thinks,” he said.
Ain’t that the truth?
Vroom Is Ending Used Car Business
Online car retailer Vroom joins Shift in going out of business as borrowing money just got more expensive and used car dealers rely on the ability to borrow money.
Here’s the company’s press release, which I shall quote from:
Under the Value Maximization Plan approved by Vroom’s Board of Directors, the Company is suspending transactions through vroom.com, planning to sell its current used vehicle inventory through wholesale channels, halting purchases of additional vehicles, and executing a reduction-in-force commensurate with its reduced operations.
Thomas Shortt, the Company’s Chief Executive Officer, said “As we previously disclosed, we intended to raise additional capital to fund our operations and support the extension of our vehicle floorplan facility beyond its current expiration date of March 31, 2024. Despite significant efforts to do so, we ultimately were unable to raise the necessary capital in the current market. Obviously, we are very disappointed with this outcome. Two years ago, we set out to build a well-oiled machine, improve unit economics and dramatically improve our customer experience and I believe we achieved those goals. I want to thank our dedicated Vroommates, customers and business partners, as well as our Board of Directors and investors, all of whom have supported us over the years.”
Vroomates. Excuse me while I wipe globules of upchucked oatmeal off of my laptop.
This nicely overlaps with my media-is-dying story because these fancy startups are basically trying to take an established business and make it seem smarter by talking about “digital services” and “AI-powered analytics” as if there aren’t just basic market forces at play here. This results in startup companies across the spectrum trying to buy scale only to find out that, oops, scale isn’t that valuable if it’s built on an asset with a wildly shifting value.
These companies all temporarily worked because of the ZIRP environment that let them finance car purchases cheaply while supply constraints meant that demand was up. Now neither of those things is true.
As Automotive News points out:
Vroom reported a net loss of $82.9 million for the third quarter, which ended Sept. 30. That was more than both the $51.1 million loss it reported for the same period in 2022 and the $66.3 million loss it reported in the second quarter. Total revenue fell 31 percent to $235.6 million.
If you couldn’t make money selling used cars in 2022 you don’t deserve to be in the money-making business.
Škoooooooodaaaaaaa
Our favorite automaker (ok, my favorite automaker) Škoda produced over 880,000 vehicles in 2023. That’s a lot of vehicles. You might be asking yourself, as a fellow Škodet (that’s what I call Škoda fans), “Does that mean Škoda is growing?” Yes, yes it is.
Additionally, the company produces a bunch of battery systems and other drive units for Volkswagen MEB vehicles.
Here’s what Andreas Dick, Škoda Auto Board Member for Production and Logistics, has to say:
“Over the past year, we have produced more than 888,000 Škoda vehicles globally, demonstrating our ability to adapt quickly and flexibly to a dynamically changing and geopolitically challenging environment. This achievement reflects our commitment to our customers, our brand, and the Group. Our recent new market entries and the addition of local manufacturing facilities are key steps in expanding our global production capacities. I would like to thank all my colleagues for their great commitment and teamwork.”
India! Vietnam! Kazakhstan! The sun never sets on the Škoda Empire, other than that small slice between Western Africa and Vietnam.
UAW Pres Shawn Fain: The Federal Government Should Cover Pensions
United Auto Workers President Shawn Fain, riding high after historic contracts, has some ideas for how to plan for the retirement of his members in the event that the corporations falter.
“Either the Big Three guarantee retirement security for workers who give their lives to these companies or an even bigger player does: the federal government.”
That’s what Fain told the National Community Action Program Conference in Washington, D.C. yesterday according to The Detroit News. I’m not exactly sure how that would work, but since the UAW hasn’t endorsed anyone yet for President it’s an interesting bargaining chip.
Fain also talked about the upcoming elections a bit more:
“They try to divide us nationally by nationality,” Fain said. “Right now, we have millions of people being told that the biggest threat to their livelihood is migrants coming over the border. The threat we face at the border isn’t from the migrants. It’s from the billionaires and the politicians getting working people to point the finger at one another, when in reality, we’re all on the same side of the war against the working class.”
This perspective shouldn’t be that shocking as Fain is a member of the somewhat resurgent Christian Left, which looks to bring a bit more Sermon on the Mount back to progressive discourse. He frequently quotes or alludes to scripture in his messaging.
I suppose this shouldn’t be a surprise as unions in this country have shifted their views on immigration over the last ten years, but it definitely feels new.
What I’m Listening To While Writing TMD
Will Butler + Sister Squares had a little self-titled debut last year. Will’s an old pal, so please check it out.
The Big Question
Let’s see: Religion, politics, Saudi Arabia, unions, electric cars. I trust our commenters to be able to handle a provocative TMD and so I’m going to ask a provacative question: Why is Skoda the best Volkswagen Group brand?
I’ve got a lot of respect for Shawn Fain and now I have a little bit more.
The one thing that people in the Middle East can agree on is that work is beneath them and for other people. At least the Saudis produce oil, unlike that other country in the region that relies on US welfare and gives nothing in return except for foreign entanglements.
Pensions are not viable. They are already destroying states like Illinois with death spirals of increasing taxes and shrinking populations (because people leave so they don’t get financially destroyed paying for the undeserved government “worker” pensions).
If taxing young, diverse people to death to pay for fat old wife-beating white men (who were not responsible enough to save and invest on their own) to screw around with their speed boats is progressive then progressivism is pretty interesting.
Meanwhile, countries like France with generous pensions are cutting them back as quickly as possible because they are unaffordable.
Vroommates was funny…so are Skodets also Skodamates?
Skoda is our favorite because it’s forbidden fruit. If we did get them, we’d be constantly bitching about their VW roots. That’s my best guess. I should also mention that I love Skoda too!
oh…and I like that subtle “I’m buds with a member of Arcade Fire” bit.
Will Butler’s solo work is fantastic though.
I will never be pro-union. But I’ll be damned if I don’t agree with Fain here:
I always thought that the biggest “success” Trump had in 2016 was in pitting the low-middle class against itself. It’s really past time for that to change, but there’s even more people pointing at people just like themselves as the problem.
This is classic Marxism! (the theory of alienation) 🙂
Hey Shawn, I’ve got a better idea. Why don’t the unions provide pensions for their members? Since your well-paid members can’t seem to save for their retirements, use some of the dues to create individual savings accounts. If unions provided a benefit suite (why not healthcare?) and took the quality of their labor seriously, companies would be standing in line to unionize.
I don
t get what is the point of the Skoda discussion, but here we go. As a former Golf and currently Octavia owner… Skoda is not necessarily the best, or cheapest, but typically has bit more room and more equipment compared to similar VW, more optimized/cost cutting where it is hard to see. For some reason it is claimed that the Skoda quality is better, but what does it really mean if the drivetrains are identical (and interiors made of slightly cheaper materials)? Literally better screwed together?s. So their designers understand something. Maybe less german engineer hubris?However, recent Skodas have real buttons on the steering wheel, no capacitive crap, even in the EV
Finally, the RS green is a lovely color. Skodas are typically quite boring appliances, mostly seen wearing dull non-colors, but there are always some real colors available, at least for order.
“Why is Skoda the best Volkswagen Group brand?”
Because it’s what the VW brand used to be. It has no stupid pretentions of being “luxury”. From what I’ve heard, they’re decent cars for a decent price.
Note that I’m in Canada… so I can’t speak to this from recent first hand experience. My only experience with Skoda goes back to the pre-VAG days when they sold the rear engine 120/130/135 and later fwd Favorit for a time in Canada. Back then, they were regarded as the best of the cheap Soviet bloc vehicles.
Allowing the Fed to ‘borrow’ from social security was a significant mistake… what’s the bill on that now? $3T is mind-boggling when you look at it from the perspective that the government is borrowing from its citizens without a guarantee of return.
500,000 EV’s per year? Love the optimism. I’m guessing we’ll see that shortly after work on The Line and Jeddah Tower has wrapped up.
Skoda is the best VW brand because it’s the least expensive. It’s time to bring back the less-expensive cars here. Nissan and Mitsubishi can captive import Renault and Dacia models. Dodge/Chrysler/Jeep can captive import cheap Fiats and Pugs.
Is Fain aware of the Pension Benefit Guaranty Corporation? It’s for when a pension fund fails. Also, pensions are outdated and expensive. More-generous 401k contributions are still cheaper to provide and don’t have the failure problems a pension fund has and can’t be raided when a company goes bankrupt.
Without an ever-increasing stock market, 401ks are expensive and prone to fail at providing financial security for life. The stock market is being artificially inflated by pushing younger workers in to stock market based retirement plans. As the market is saturated with 401k holders and there’s not a huge net inflow of money coming, the early entrants will have already gotten rewarded, and the later ones pay for those benefits without ever receiving equivalent benefit for themselves.
Every new retirement plan starts as a form of Ponzi scheme that benefits the early participants. They’re all prone to eventually trend toward an equilibrium where they become much more expensive, where we all have to actually pay for the benefits received out of the production of the current workers. It’s always just a matter of what form it takes, and who gets rewarded and who gets shorted.
The 401k is currently the most palatable because it is market-based, and that’s where the wealthy and powerful already have their money. Plus there is still a huge pool of workers yet to contribute to the inflow to make it all look appealing, especially for those already invested in the market.
I won’t argue your take on retirements, but the stock market shouldn’t trend towards equilibrium for two reasons.
1) increase in productivity due to technology or better practices.
Distant 2nd) population or market growth for the companies
The stock market should trend upwards slowly reflecting the value of the companies on it if nothing bad happens.
The market doesn’t trend toward equilibrium, but retirement benefit plans of all sorts do.
They start out looking great, giving great returns and benefits for the early participants, but eventually the inflows must pay for both current outflows AND previously paid outflows, and that’s where everyone who gets in late gets screwed and we’re off to invent yet another retirement plan so we don’t have to deal with this one…
Sounds about right, I worked a state job with a pension plan over 15 years and in that short amount of time they made it worse 3 times. The retirement age raised by 5 years, the % return dropped 15% and the years to full attainment went to 33 years.
They also started a shady scheme to boost inflows, they brought in about 1000 H1B visa folks and let them work for 3 years max meaning they contributed to retirement but will never collect any, and every 3 years they bring in a new batch, shameful.
Since no one else is going to do it, I am. Matt, did you maybe mean to type “provocative” twice in the last paragraph? I suspect autocorrect or something got you.
“Proactive” has always bothered me. It seems to have been born from 1990s management consultants. Serious question: What’s the difference between “active” and “proactive”?
There’s “active” and “reactive.” The made-up “proactive” word is baloney.
It’s like TRD Pro. ‘Proactive’ is a higher level in the model range of active.
I kinda get what you’re laying down. The model range would be:
I went to the dealership the other day to look for a ‘Hyperactive’ model. They only had one on the lot, and it was priced at $5K over sticker. Then the salesman starts in on why, for the price, a ‘Proactive’ was a much better deal, and what I really wanted anyway. I got frustrated, and went to look at the regular ‘Active’ model instead. There were tons of them laying around all over the place. No one wants them, because they think they are going to need the extra performance of being ‘Hyperactive’ some of the time.
The base model is the Inactive, though you can also strip that down more with the Lethargic package.
The Reactive is specially tuned for increased turbo lag.
And the Redactive model is the one that’s been recalled…
Calling it right now. This conversation will be COTD.
Reactive – basing your actions on other events in the past
Active – basing your actions on present events
Proactive – basing your actions on predictions of future events
Seems like it has a place in the lexicon…
Lol, dammit. You grot me.
Some questions I have, mostly based on what little I know of the kingdom relayed to me from folks who have lived and worked there many years ago.
What kind of advanced education do those recently employed Saudis have? A degree in say religious history which I heard was what a lot of folks got isn’t going to be much use in auto manufacturing. There is also the question of how *real* that degree is – did someone just pay for the parchment or did somebody actually learn something useful?
How’s the work ethic now? A common complaint I heard was Saudis considered actual work as beneath them. They would only accept a job as a boss, regardless of their actual bossing skills, usually lording over poor, desperate foreigners.
The brain pool also looks pretty shallow. A few years ago I looked up recent Saudi scientific achievements. There weren’t many and even that seemed to be mostly changes to western tech.
With all that I think its going to take a while for them to rebuild their domestic STEM talent pool. It’s not impossible. Arabs were once world leaders of science and medicine. Its going to take quite a shift in culture though. The good news is they already have the transportation infrastructure, lots of energy on tap , plenty of open land to build on and plenty of big money looking for a home. Now they just need the talent and to treat it right, especially LBGTQ folks.
Maybe they can bankroll Toecutter.
From my perspective, a big culture shift is needed. Too much of a young person’s future is decided by the older generations
My CSB…
For the past 5 years or so I have worked with a lot of very bright young Saudi geophysics students. Men and women. Many of the are the type that could very easily do whatever they wanted to and be good at it.
Then you ask them “what are your plans after you graduate?”
To a person they all give the same answer. A dejected and forlorn…” I am going to work for ARAMCO.”
If you ask “Do you want to?” The answer is some form of ” It is what is expected of me by my family.” ( They are careful to never say “no.”)
I am not saying ARAMCO isn’t a bad job for a geophysicist, but it is definitely not a company known for creativity and innovation.
Saudi parents seem to be very risk averse want their best and brightest to get traditionally secure jobs. This will become more of a problem should the demand for ARAMCO’s main product start to fall.
Unfortunately, the way education works, you need to start your best a brightest into those risky innovative spaces NOW, so by they are already there by the time your main industry starts to shrink.
Sounds like there’s a big glut of geophysics talent for ARAMCO. Not a recipe for traditional job security even under the best circumstances.
“Unfortunately, the way education works, you need to start your best a brightest into those risky innovative spaces NOW, so by they are already there by the time your main industry starts to shrink.”
The problem with those risky, innovative spaces is they don’t necessarily work out either.
These comments all track with my experience. Some serious entitlement going on in that part of the world.
What are these kits from Arizona that the Saudis are using to build cars out of? Can I have one?
I initially read it as “based on kits supplied from Amazon” and was about to search Amazon for a kit car
“Why is Skoda the best Volkswagen Group brand?” Because I’ve never had to work on them unlike VW / Audi’s so I’m blissfully ignorant of any VW “Engineering” that turns something as simple as an oil change into an engine out job…
(obviously exaggerating, but not by much)
Not hypocritical at all. Simply, he’s saying the politicians/billionaires are doing bad stuff and he would like, and will push, them to do good stuff.
No, he’s saying if the automakers won’t provide what’s necessary to retire with dignity, the federal government should. I interpret his statements as saying the Feds should do this generally, not just for autoworkers.
He’s appealing to the significant percentage of the population that has little to no hope of ever socking away enough 401k handouts to hedge funds to ever retire comfortably. I’m not sure where you’re getting this rail comparison. It seems pretty clear to me: either the employer needs to guarantee a comfortable retirement or the feds do. I think it makes a lot more sense for the feds to do it, but he’s rhetorically tying these together in a way that makes sense.
When are peoples mistakes and problems ever going to be their responsibility? Stop looking for suckers to blame and fix.
Government-insured or -backed pensions could be a heck of a thing, but I don’t see that gaining any real traction in our current political environment. And certainly not in just the auto industry. It’d have to be offered across the board (which would likely incentivize companies to offer pensions, necessitating significant oversight of how those pensions are managed) or it would need to be a universal government pension (likely replacing Social Security, which is already struggling).
Of course, given government bailouts of the auto industry, I guess a government rescue of automotive pensions isn’t that wild an idea.
The government does already provide insurance backing for private pension plans through the Pension Benefit Guaranty Corporation, though I think their monthly payment cap, in the event they take over a failed plan, is like $13,000, so if you accrued more than that over your 30-40-50 year career, that’s what you get.
Sort of the same deal as the FDIC and NCUA insuring bank accounts only up to $250,000
That monthly payment cap is tied to a significant chart that adjusts based on the age you start receiving the benefits, as well, and that’s kind of the kicker. If you accrued a significant pension, but the plan failed around the time you were going to start collecting, you’re probably taking a significant hit. That said, it’s a heck of a lot better than losing the whole pension.
Admittedly, having spent my whole career thus far in 401k jobs, I really don’t know what to expect from a pension. All I know is that my 401k taking a hit around retirement age would really hurt and there’s no insurance or backing on that other than the government generally trying to make sure the market keeps growing.
Or make a plan to fix Social Security?
Fixing and improving Social Security would be great. And a strengthened Social Security could make it possible for Americans to have comfortable retirements without private pensions. Unfortunately, it seems unlikely that we’ll overhaul it in that direction very soon, since 401k matching and pensions are benefits that rich corporate donors want employees to completely rely upon.
You want to improve things for workers, the platform is strong Social Security, single-payer healthcare, and minimum paid leave requirements. Suddenly, employers are going to have to offer competitive wages (and, of course, the direct benefits of such programs). You want to improve things for smaller employers, the platform is much the same. Then they don’t have to figure out how to make healthcare affordable for their 15 employees. But the big donors are big money.
The big doners have bought and paid for many a politician for sure. It’s disgusting how most politicians work for their corporate donors and not “we the people” anymore. Treasonous corporate loving whore describes most politicians these days
I think Saudi Arabia should make an EV Golf
(golf clap)
Really curious what Vroom’s fall means for their subsidiary, Texas Direct Auto, which was a great profitable business (and local alterative to Carmax). They don’t mention it at all and specifically say online business, so I’m wondering if their plan is to retreat to the TDA business and have a Vroom resurgence if the market swings the other way.
Maybe Shortt it?
Saudi Arabia will never have access to the kind of labor needed for large scale domestic automotive production. Despite the quote in the article that “[m]oney can solve almost anything,” there is no amount of money that could build a sufficient skilled labor pool there. What woman, or man who is married to a woman, or any person who doesn’t want to live at risk of being summarily executed by their own government, is going to move to Saudi Arabia for work? Ever?
India is hugely populous, right across the sea, still rather poor, but with a decent enough education system.
Hell for their Muslim population working in KSA is probably preferable to living under Modi. Are the Muslims in India Shia or Shiite?
Most are Sunni. Shia and Shiite are the same thing.
Oopsie.
I do like Halal Guys in Midtown Manhattan. Does that count as penance?
40 virgins await you in heaven. The bad news is most are dudes. The good news is all they want to do is play D&D.
I don’t know but 72 sexually-inexperienced women really doesn’t sound that appealing.
Two words: robots.
Yes, I have friends that have done the Haliburton, Bechtel, etc. world tour. You can make a ton of money at a relatively young age.
The ring came off my pudding can!
How to say you grew up in the 80’s without saying you grew up in the 80’s…
Take my pen knife my good man!
Why should taxpayers be on the hook for a contract dispute between two private parties? If an automaker can’t or won’t pay the pensions it agreed to, that’s not the public’s fault.
As most industrialized nations have realized, not having a class of impoverished elderly folks is good both economically and spiritually.
Perhaps people could take some responsibility for their own future, like planning for retirement?
Right, and the punishment for not doing so, for whatever reason, should be living out your twilight years in poverty.
So no one needs to take any responsibility for their own actions? We’re talking about people with jobs ostensibly promising them pensions. We’re not talking about indigent people; that’s a different case entirely.
You have two options: the little dopamine hit you get from lecturing impoverished elderly folks about their lack of personal responsibility or a universal retirement system that acknowledges that life happens and we’d be better off as a society if people could afford the basic necessities of life even when they can’t work anymore. I know which one you’ll choose. You’re a bootstrap junky!
Too friken bad, medicare and medicaid LTC will pay for them to rot away in some crappy old folks home.
A significant percentage of the population is living paycheck to paycheck, putting money away is not necessarily an option when the rent is due and the kids are hungry.
But not the portion who are promised a pension; these people have pretty good jobs (there aren’t any minimum wage jobs promising pensions).
Even “pretty good” jobs these days barely pay enough to survive on.
Amen to that. My monthly expenses have risen about $1050.00 a months since 2021. My annual raises can’t keep pace. Get a raise, and another expense goes up enough to wipe it out immediately. it’s depressing. The Autopian is thankfully, affordable entertainment.
Same here. I’m effectively making less money than I was 5 years ago despite getting a 2 – 4% increase every year. Rent finally went up, groceries are through the roof. At least fuel is now back to reasonable prices. In 2019 I was getting my ducks in a row to purchase my first home in a year or two, but then the insanity of the post – 2020 market happened. I saw a path in 2019, but now I’m completely priced out of the market, probably forever. I’m on the wrong side of 40, so time is not on my side.
And when one or one’s spouse gets a disease and treatment eats the savings because we don’t have socialized healthcare, f-’em! (Medical debt being one of the leading reasons for bankruptcy.)
It’s not always a matter of “personal responsibility” (a phrase often uttered by insecure people who were handed opportunities and had family to back them to take risks, but who ignore those lucky head-starts). It is possible to be privileged without also being out of touch.
Don’t put words in my mouth. I never said people who through no fault of their own should be abandoned. But we’re talking about not getting a promised pension – these are people with good jobs, who for the most part can afford to put something away.
I drank milk out of bags as a kid because we couldn’t afford milk in a *carton* . So don’t make assumptions about me.
Fair enough. Apologies for making assumptions.
How is getting a job with a pension not taking responsibility for their own future? If American Funds takes my 401(k) and flushes it down the drain, does that mean I was irresponsible?
I’m being lectured that people are living paycheck to paycheck – so those people also need to bail out someone who failed to get a pension?
Yes, getting a job with a pension is taking some responsibility. But you can’t rely on that – you have to have other plans as well.
People getting promised a pension these days are few and far between – it’s usually for those with pretty good jobs. But somehow this discussion has me banding all no matter their circumstances. I happen to support helping those who need it. But if you were promised a pension, there’s a pretty good chance you were making more than enough to sock some of it away.
Skoda did lose (drop) their contract production deal with GAZ a few years ago, but pulling out of Russia doesn’t seem to be hurting their performance in the slightest
IMHO pensions are just a way for companies to defer paying their employees, and to that end if they can find a way to not pay out your pension they will do so.
Same goes for business deals that pay out later.
Yes, which is why we should just expand social security so that it provides an actual standard of living in retirement above “can afford the fancy cat food”. Get rid of the income cap on contributions and raise the SS tax rate until it can provide for a quality standard of living.
THIS. All this talk about SS becoming insolvent, and the fix is right there. Or I suppose there’s the other option, continuing to raise the retirement age while lowering life expectancy.
Yup, and then the retirement package will be a gun rental and 1 bullet.
I disagree. Social security is supposed to run out before I’m eligible for it, but everyone my age who is working is paying into it yet at current spending they’ll get nothing.
It’s a government mandated pyramid scheme.
That’s only because there’s an arbitrary cap on income subject to SS tax. If it applied to all income (including dividends, capital gains, and billionaires), it would be doing fine.
That is prolly going to happen before too much longer.
If one took the money invested in social security and instead put it the most basic fund I would make a greater ROI. We’ve mandated investing in a fund that normally gives a horrible ROI, factor in that the government regularly pilfers from SS’ coffers and it’s just one more tax we don’t get our money’s worth out of.
One benefit of a universal system is that we wouldn’t have to entrust a casino run by thieves with our retirement money.
Except that you do. Socialized healthcare has this problem. Even if you ban private healthcare in your country rich people just fly to another country for doctor’s appointments.
Yep, or at least don’t operate as if you will get your pension. Same goes for making a business deal where you’ll get paid out long term.
It is better to be paid up front, not to pay up front (from the standard business perspective), hence why businesses do their best to defer payment.
I personally think it’s more cost and time efficient to pay upfront as you minimize the administrative workload, don’t have money tied up where you cannot access it, etc.
Then again I think my time is more valuable than most feel their time is worth.
Basically how it works for a decent portion of Canada. If you’ve in public service, or teaching, you’ve got a pension fund. Everybody else relies on what their employer provides, and they don’t provide pensions. Most common is RRSP matching (AFAIK). If you save for yourself, your company will also contribute each paycheque up to a max.
Edit: I do also pay into Canada Pension… but it’s not sufficient to retire on.