Monday, May 15, 2006

Change in the Air for Retirees

In Gen Debt I looked at evidence that the 60 year old American model of retirement--65, gold watch, and out--is fading, replaced by longer years of work and more uncertainty. The implications for all Americans, including Gendebt-ers are multifold: as caretakers, workers competing for jobs held by older and more experienced workers, and eventually retirees ourselves. Lots on this, if contradictory, in the papers lately.

The NY Times ran a Sunday story saying more people are planning to work part time after "retirement." "There are, of course, broad social and economic reasons for the emphasis on continuing work — notably, the decline in availability of traditional pension plans and health benefits, and the need for older workers to provide for themselves over a lengthening lifespan." Yet the LA Times has a study by McKinsey&Co showing "American workers, who face growing financial pressure to stay in the workforce, are far more likely to be forced into an early retirement than many expect, according to a study being released today." Reasons include health crises and downsizing, where older workers are eliminated first.

So people want to work longer but they may not be able to? This is kind of like the increased contingency for young workers. IF you're comfortable and self-supporting, it looks like flexibility and freedom. If you're struggling, it looks like a cold cruel world.

1 comment:

quiviran said...

Just finished your book a few minutes ago. You are right on target in your assessment of your genrations conditions. I have two sons, 25 and 31, and you've talked about both of them.

As a retiree (I retired at 59 and turned 62 this year), I must say these are not new issues. I'm an engineer who worked for a major aircraft manufacturer. It has been a fact for some time that if you loose your job as an engineer after age 50 you have almost no hope of ever working as an engineer again, certainly not with stability. I was in a state of constant tension for the last 15 years of work, worried if some decision would be made at corporate HQ that would put my division out of business. Sucky work environments are not reserved for the young.

I think we are seeing the effects of a situation that started taking hold in 1973. Dr Ravi Batra, in "The Myth of Free Trade," described the beginnings of the current decline of the US middle classes and increase of economic stratification. And we are all victims of the Political Golden Rule "Whoever has the gold, makes the rules". It's wrong, but it's true.

Keep up the good work. More focus on the issues is needed. I don't think the issues are entirely generational. I think it is more top 5% vs the rest of us (and not even all of the top 5%). But I won't argue that your generation will be left holding the bag a lot longer than mine if we don't get this fixed.