In the old days, when people retired, 30 or 40 years of service to a company was often rewarded with a gold watch. Today it’s more likely to be a gold alarm clock, so those employees can get right back to work.
Our nation’s seniors are working longer than ever as Americans’ retirement dreams evaporate, according to the new book, “Downhill From Here: Retirement Insecurity in the Age of Inequality,” by Katherine S. Newman (Metropolitan Books), out Tuesday.
“Between 1977 and 2007, the number of employees over the age of retirement increased by 101 percent,” writes Newman, noting that “the number of workers 75 and older saw an even more dramatic uptick of 172 percent.”
One primary reason for the increase is the decline of defined-benefit pensions that guarantee a certain amount each year, often replaced with less reliable plans such as 401(k)s — or their elimination altogether.
“Nearly half of all private-sector employees in the United States — some 58 million people — had no company-sponsored retirement plan in 2018,” writes Newman, who also notes that “half the defined-benefit plans in the United States vanished in a period of just 10 years.”
Newman places the crisis’ origins in the late 1970s and early 1980s, when “deregulation became America’s guiding economic policy.”
Deregulation led to increased competition, and firms were pressured to cut costs. Many used this as an excuse to stop funding employee pensions.
But the retirement crisis has affected workers in both public and private sectors, and not always from companies or municipalities in financial danger.
Newman tells the story of Ohio-based Vietnam War veteran Butch Lewis, who drove a truck for Holland Freight from 1974 until his retirement in 2014.
Lewis built a comfortable living for himself and his family on a modest truck driver’s salary. As a Teamster, his pension plan was administered by the Central States Pension Fund, “one of the largest multi-employer funds in the country.” But the fund was tied to the stock market, and the recessions of 2001 and 2008 cratered the fund.
When Holland Freight asked its workers to accept wage cuts in 2010, Lewis and his fellow truckers voted to give back 15 percent in exchange for more generous retirement packages.
He retired in 2014, ready to enjoy a quiet life after four decades of physically demanding work. But the following year, he was informed that managers of his pension fund were seeking permission from the Treasury Department to cut his benefits by 50 percent, after incurring losses during the recessions of 2001 and 2008.
In all, 273,000 Teamsters would be affected.
Lewis rallied other Teamsters and led protests in Washington, DC.
But between injuries suffered in Vietnam and 40 years of driving a truck, he was hurting.
While his blood pressure was normal in his first year following retirement, it rose from the stress of dealing with the pension issue and he suffered a minor stroke in 2015.
In December of that year, in DC to campaign for the Teamsters, he began having dizzy spells. On New Year’s Eve, Lewis died of a stroke at age 64.
Several days after his death, his wife, Rita, received a ring in the mail that Butch was going to surprise her with for their anniversary. She “catches her breath” every time she looks at it.
The pension battle “killed him,” Rita tells Newman in the book.
(Though the pension cuts were rejected by the Treasury, Forbes reported that the fund is expected to be insolvent by 2025 unless drastic action is taken — meaning cuts are likely on the way, after all.)
Teamsters and blue-collar workers are hardly alone in their pain, as corporate employees are being similarly victimized.
Lisa and John Hannigan were lifelong Bell employees, salespeople for the Yellow Pages, who counted on their long-promised retirement benefits. But after the communications industry was deregulated in the ’90s, the company eventually became Verizon. And Verizon, financially successful by any measure, decided to turn employee benefits into corporate profits.
Verizon spun off the Yellow Pages into a new company called Idearc in 2006. When Idearc declared bankruptcy within just 28 months of its founding, the Hannigans had their long-promised health-care coverage and life insurance eliminated.
“With that one move, Verizon removed $9.5 billion in pension-related debt from its books,” Newman writes.
Idearc “is one of those ‘here today, gone tomorrow’ entities that many former employees believe was created just for bankruptcy. This would be a blow to any family, but to John Hannigan, who suffers the aftereffects of a [stroke], it is particularly destabilizing,” writes Newman.
The expense of his medications, which is high, isn’t all that bothers him. It’s “the about-face, the betrayal of the social contract.”
“They said they were going to take care of [me] for the rest of my life,” Hannigan says in the book. “They just lied. Totally lied.”
And as the death of pensions spreads across the nation, municipal employees aren’t immune either.
When the city of Detroit declared bankruptcy in 2014, not only were employees told to expect pension cuts up to 30 percent, but retirees who had already received substantial benefits were forced to pay them back.
Susan Day, who had spent her career in the city’s engineering office, was forced to pay the city over $115,000. In addition, she was informed that her remaining pension might only be funded until 2023.
‘They said they were going to take care of [me] for the rest of my life….They just lied. Totally lied.’
“If I live longer than 2023, what am I going to do?” Day asks in the book. “There’s no guarantee this pension plan isn’t going to collapse anyway.”
While Detroit may seem like an especially dire and unusual case, it is not. Harrisburg, Pa., sought bankruptcy in 2011, and Puerto Rico followed suit in 2017. Dallas, despite having one of the fastest growing economies in the country, almost faced bankruptcy due to the collapse of its pension system in 2016, and both Chicago and New York City face enormous debt burdens for the same reason.
With pension destruction forcing the country’s seniors back into the labor market, Newman writes about one area that seems to have circumvented the problem.
Ogden, Utah, has the narrowest income gap in the US, with “60 percent of its population in the middle class.” As a result, Newman writes, “Ogden is a community where people are more likely to . . . be able to retire comfortably.”
This is due in part to reliable federal employment, as the Air Force and the Internal Revenue Service are both local employers.
But the area’s prosperity and concern for retirees are also partly due to civic unity brought about by the Mormon Church, which combines a belief in self-reliance with the neighborly ethos that “all the world’s people deserve care.”
Between government pensions that have largely survived and a strong network of volunteer organizations, Ogden’s retirees have ample opportunities to keep busy and help others, as well as easily accessible resources should they need help themselves.
Ogden retirees Louise and Randy Nathanson exemplify the good fortune of the area’s elderly. Over the course of his career, Randy worked for the IRS, the Air Force and a local railroad, receiving assistance from the church when he was between jobs. The couple also experienced the community’s generosity when they lost a son to cancer in the 1990s.
Now, with several 401(k)s and Louise’s teacher pension, the couple is enjoying a comfortable retirement and spends much of their time volunteering.
“Retirees get to both mentor someone younger and have someone looking out for them as they age, especially if they are infirm or living alone,” writes Newman.
Louise visits several people a month, secure in the knowledge that the same assistance will be there for her if she needs it.
“If they’re sick, I will help them. I will take them a meal,” she says in the book.
“I have had many acts of service given to me, especially though the death and sickness of our son. Once you’ve had that, you never forget that feeling. You’ll never miss an opportunity to help somebody else.”
Ogden’s retirement ecosystem is hardly flawless. While assistance is offered to non-Mormons, they often do not receive the same level of help as members of the church.
Having said that, Ogden offers one solid lesson for everyone on how to retire during tough times.
“Ogden is a relatively inexpensive place to live,” Newman wrote in an e-mail to The Post. “There are many parts of the country outside of Utah where that is the case.”
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