Over the last 30 years or so, it has gradually become an article of faith that pensions are bound to go the way of the dinosaur. Waves upon waves of mergers and layoffs across corporate America have convinced us that employers no longer have an obligation to the long-term welfare of their employees. And we have been told time and again that 401(k)s are the best answer to individual retirement.
Americans will soon be rethinking these notions.
I have a vision of ten to fifteen years from now, when the President will deliver an address to the nation about a critical social and economic issue. His "fireside" chat will alert the citizenry that he has asked the Congress to consider emergency legislation to provide financial relief to the large number of elderly citizens who are living in shantytowns and hobo villages along the highways, byways and railways of America because they no longer can afford a roof over their heads.
This scenario harkens back to the horrendous images of the Great Depression.
Retirement income security has been eroding for more than two decades without any apparent alarm coming from our nation's capitol and its political leaders. In fact, retirement income security has not been a high priority since the passage of the Employee Retirement Income Security Act of 1974, commonly referred to as ERISA, which was passed to address the problem of under-funded corporate pensions.
We have such a crisis now -- the airline industry is but one example -- but almost nobody is talking about it.
But the demographics of our nation dictate that we must deal with this potentially staggering issue. Over the next 25 years, the Baby Boomer generation will be leaving the workforce in mega-numbers. This demographic shift will have profound implications for the world of work, leisure, health care delivery, housing, lifestyles as well as redefining the notion of "retirement." This shift has received some media attention, but nothing that comes close to recognizing just how significant it will be.
The data tell us that over 50% of the 77 million Boomers are ill-prepared economically to have a decent retirement. Older Americans breaking their prescription pills in half to prolong their use and skipping meals are only minor portents of what could become the "land of the living dead." Layer on the debt-ridden cadre of Generation X, 61 million of whom are hard-pressed to save for retirement, and it is plain to see why the "fireside" chat will be an imperative for our nation.
If retirement income security and the health care crisis, which are joined at the hip, are not dealt with soon, our nation will experience severe economic consequences we haven't seen in quite a while.