Let's Stop Pretending that Pensions Don't Matter

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.

Comments

[bgregs]

So why is it that someone can work for a company for decades, and then be told that there's nothing for them, while a senior executive for that same company can walk in the door, work for three or four years, and then be FIRED, and STILL walk away with a $100 million "retirement" package?

[AnacherForester]

Most people who have entered the work force in the last twenty-five years or so have been unable to advance in their field within a single company. Most contemporary corporate executives jump from company to company so frequently that their negotiated exit packages dwarf any reasonable potential future pension. Many of our public servants including elected officials still receive pensions. It's the rest of us who get screwed.

Just as our Senators and Congresspeople have shown limited interest in granting the rest of us the high-quality health benefits we pay for them to receive, they've shown little interest in securing for us retirement benefits equivalent to what we pay for them to receive. It's well past time that they stopped kowtowing to corporate America and start doing what's right not just for themselves and their corporate cronies but for the rest of America too.

-AF
Andrew Sullivan Is A Fraud

[altohone]

In a global system, the lack of pensions is a competetive advantage... reaped by the wealthy not workers.
Our loss not only hurts us, but is also putting downward pressure on the Europeans who will soon be losing their benefits in order for their corporations to be competetive. I heard today on Deutsche Welle that low-wage, no-benefit service sector jobs grew 22% in Germany this year (mostly filled by minorities btw) while high-wage jobs are disappearing. Rather than working toward a world where US workers gain EU level benefits, we are all being pushed toward Chinese level slave wages.

Bush was fond of talking about the "empty lockbox" back when he had a "mandate".

To me, that sounds like their goal is for SS benefits to be cut or the retirement age raised BEFORE the SS Trust is even tapped.
Since taxes were raised to create the trust, and the money used to offset deficits rather than setting it aside, everybody should insist every penny in the trust is repaid to our seniors before benefits are reduced.

Otherwise, we will be complicit in allowing something like $1.6 trillion to have been seized illegally.
The IOU's in the SS Trust must be honored.

[bgregs]

"Rather than working toward a world where US workers gain EU level benefits, we are all being pushed toward Chinese level slave wages."

This sentence is the one of the most accurate descriptions I have ever read on HuffPo! Bravo!

And by the way, that's the problem with the so called "free market"......

[SeriousBlack]

(Note to HuffPost - Have you cut down on the number of words that can be posted - AGAIN?!)

Conclusion:

Well, cut to 40 years later. Am I the only one who is in their 50's or above who is really, truly worried based on the trends of the last 20 years or so, that the United States is not only in a serious decline, but one that is so serious it may not be able to be stopped?

[bgregs]

It will eventually be stopped, I think. My only concern is that it will stop because there is no United States anymore......

[Cathexis]

Nope, you're not the only one, Serious. I'm right there with ya, although only barely "over 50."

Years of incredibly asinine, corporate-serving, cuts to a variety of security nets/options have us poised for disaster of unimaginable magnitude, down the road.

Then again, unless we can find a way to stop hemorrhaging jobs to 3rd-world countries that exploit workers, we'll have an additional crisis with which to deal. Jobs will be harder and harder to find ... jobs currently held will be harder and harder to keep. And people are expected to be saving a portion of their income for 401ks? They'll be prioritizing the money for living expenses ... forget about what happens in a Down market.

As usual, the rightwing extremists, manipulated by the Corporatists, push the risk to the individual and contineu to gather the gains.

Eventually, the only decent job will be as part of private militias guarding the "haves."

[SeriousBlack]

I hate to be pessimistic, but if these issues aren't dealt with, I am afraid that the America of 30 or 40 years from now will be a pretty harsh place. The worst case scenario would be our once rich and powerful and largely middle-class country reduced to little more than what we regard today as many third world countries' standard of living. There will be no such thing as "retirement" or one's "golden years", because every single person will have to work full time (most of them at crappy service jobs) until the day they die, whether that be 60 or 90 years of age.

Growing up in the 1960's and 70's I never thought I would have such a nightmarish view of our country's future; it seemed as if based on the 200 years prior, that we would continue on a steady upward arc of prosperity. And no, not that everyone would be "rich" - merely that our society would be put together and run well enough that there would always be a vibrant, growing middle class in which most people were capable of achieving the "American Dream" via education, diligence and hard work. That dream being such things as owing a house and being able to afford to raise a family, send one's kids to college, and have such basic needs as health care taken care of.

[TexasDem0]

There are many senior executives in corporate America who have padded their personal fortunes by laying off employees by the thousands, sending jobs overseas, and lying to Congress about the need for more H1-B visas. Their obscenely excessive compensation packages, which they claim to believe they deserve, would go a long way relieve this problem.

[krm1255]

Amen. The last 20 years have been an exercise in transferring wealth to a few select individuals who head up companies. And they don't care whether anyone else has a decent retirement.

The boards of directors of big companies are filled with buddies from other companies who abandon their duty to make sure the company is run properly. Obscene compensation packages are rubber-stamped.