What a Severe Recession
Means to Boomer Pastors
We do not know yet if we are
tumbling into the abyss of a severe recession but it sure looks like it some
days. Last week the Tuesday Column focused on how a severe recession might
affect the church. This week we turn our attention to individuals—particularly
to Boomer Pastors. I am fortunate to have two Christian economists (they like
to say they are “Economists who are Christians”) as friends so I did a
brain-drain interview and from my notes I’ll try to piece together what pastors
(especially boomer pastors) might expect.
What boomer[1]
pastors can expect
1. Staying put.
A severe recession usually
means pastors stay put longer. Fewer boomer pastors will resign before they
have another job (called “the first law of wing walking” [Don’t let go of your
hold until you’ve got another hold]). In times of trial more people stay put.
There will be even fewer ‘openings” than we are used to, with more ministers
seeking those fewer openings. Many boomers will “ride it out” to retirement
where they are. Indeed, the collapse of housing values have already sealed the
fate of many older boomers—they no longer believe they can afford to sell their
house. So, when they do finally retire, it will likely be in the same town they
lived in the last ten years (watch out successors!)
2. Anger and grumbling.
A severe recession puts a big
squeeze on people. When people are squeezed dark stuff sometimes comes out—if
they have dark stuff inside. Boomer pastors who have been accustomed to cheery
smiley-faced optimism will face growing anger and grumbling from their people.
The leeks of
3. Retiring later.
Last Friday one boomer
minister in his 60’s checked his retirement funds to discover this: “I’ve been careful for two decades to save
every penny I could for retirement and had it all invested aggressively in the
market. One year ago I was able to retire and count on my pension & Soc.
Sec. totaling $1000 a week—that’s more than I make now as a minister! Today I
checked and it is down to $500 a week and falling. I now have to work at least
another seven years and save like crazy to get back there. Rats!” While
most ministers don’t have this kind of money in their retirement savings, many
saw a 40-50% decline in the last nine months in what they had. This is
especially true of boomers who had such high hope that they invested with
bright attitudes. Boomers will probably have to retire later than they thought,
hoping their health (and productivity) holds out.
3. Higher taxes.
All of us are going to pay
higher taxes. Virtually no politician is telling us the truth about this.
Americans prefer that our politicians tell us they will reduce our taxes, increase
national defense spending, invest in alternative fuels, prop up failing
businesses on Wall street and increase the services from government while
reducing the national debt. It can’t be done. Somebody has to pay and we can no
longer send the bill to our grandkids. Even if we reduce services and eliminate
all waste in the federal and state governments combined we will still pay more
taxes in the future—for past spending on wars and for future entitlements we’ve
promised ourselves. There isn’t even enough money among the rich and
corporations to stick them with the bill while we ordinary people enjoy more
tax breaks. The bill for our consumptive debt-funded lifestyle is coming due
sooner than we thought. We will face increased income taxes, increased Social
Security taxes (which especially hits ministers), increased fees from local and
state government, and on top of all that we may have new taxes like a VAT
(Value Added Tax) or some other kind of consumption tax. Higher taxes will make it harder for boomers
to catch up on funding their retirement savings. Some boomers will never be able to retire—dying in the
saddle while paying taxes through the nose.
4. Get out of debt
Wise boomers will wipe out
any remaining consumer debt ASAP. A boomer pastor with credit card debt should
start drastic measures to pay it off as soon as they can. In a severe recession
cash is king and debt is the enemy.
5. Expect lower raises—even lower salaries.
If 10% of the laity lose
their jobs it will be hard to convince the board that the pastor should get an
increase. When times get tough the laity usually expects their pastor to
sacrifice too. If the recession is really severe some pastors will even take a
reduction in pay along with their entire staff.
6. Time to save
In spite of higher taxes and
reduced income this is the time to save. Right now we only see the early signs
of the precipice. If we indeed go over this time will be the seven years of
plenty that we wish we’d used to save up for the lean years ahead. Save now.
7. Lower
government benefits.
Boomers have expected Social
Security to “be there” in their retirement. It will probably be there, but the
benefits will not grow like they have in the past. When working people are out
of work or just scraping by they won’t put up with retired people draining the
federal treasury to support their happyland retirement. Social Security may no
longer be available for you at 65 if you continue working (as it never should
have been). You may not be able to collect until you are 69, or 70 or even
later when they “reform social security.” The Social Security COLAs will be
lower in the future so it won’t go up as much as health care costs and Medicare
premiums may soar. All of us will get less health care for more dollars in the future.
When you are 79 you may not be able to expect a free heart transplant as an
entitlement in the future. The “sacred trust” of these payments will continue
but it will be more safety net than sacred boondoggle.
8. Living on less.
American life was once driven
by production—we made things and sent
them all around the world for people to buy. In the last few decades it has
been driven by consumption—collecting
things. As we switches from a producing nation to a consuming one we have been
lucky enough that other nations (like
9. End of the booming atmosphere.
Once the economy bottoms out
it will eventually grow again, but probably at a slower rate. The booming days
we boomers expected are over. In a shrinking (or even slow-growth) environment
it will be harder to “sell” our latest greatest “expanding our borders” dreams.
The Prayer of Jabez approach is
strangely out of touch with suffering workers out of a job in a town with 22%
unemployment.
10. Time to develop new sermons.
Boomer pastors who linger
around an extra 7-10 years will get a chance to develop plenty of fresh new
sermons. We preach differently in a land of want than we do in a land of
plenty. Happily there are plenty of
passages in the Bible for us to use—even if we seldom used them during the
booming years when we were stretching forth our tent cords. Some of us will have
to function more as priests than CEOs. Comforting and encouragement and
“hanging on” may find better traction than big vision, tremendous dreams and
the magic of thinking big sermons.
People will be hurting and we may be hurting right along with them. We can
become hurting people ministering to a hurting people.
11. Opportunity to model.
The good news is that a
serious and extended fiscal tailspin will give us an opportunity to model how
Christians view such things. After all, “It’s
only money.” Here is our chance to refuse to be alarmed at falling
pensions, rising taxes, reduced benefits and downsized lifestyle. So what? If
we lose 100% of our pension savings and Social Security completely collapses,
so what? If our taxes double in the coming decade and we get nothing back for
it except a receipt for paying off the debt on the profligate lifestyle of the
last few decades, so what? If we can’t buy a new car or new computer or new
cell phone and we can’t afford to take that vacation to Hawaii, so what? None
of things really matter. Our life here is like one giant Monopoly
game—everything goes back in the box at the end. If we do indeed face the
difficulties of a severe recession—or even a deep depression—so what? Our hope
is in the LORD, and we can model that our trust is not in pensions, armies and
stock markets but God alone! When the squeeze is on, they’ll get to see what’s
really inside.
So what do you
think?
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