American workers increasingly on their own

I was reading a story in the Wall Street Journal about baseball pensions, in which this was written:

The Bureau of Labor Statistics reports that at present only about 22% of U.S. workers qualify for or are receiving income under a defined-benefit pension plan. That’s down 50% from 1990. For the great majority of private-sector American workers today, the prospect of earning a pension is about the same as seeing and photographing a live Dodo bird. The median Social Security benefit for men today is roughly $17,000 a year, and less than $13,000 for women.

Meanwhile, the richest of the rich and corporations have been given a huge handout in tax breaks by the fiscally-challenged bankruptcy expert and his merry GOP lemmings; this during a time when the economy had already bestowed largesse upon these privileged groups. Funny how the rich and powerful nowadays are always looking for ways to make themselves even more rich and powerful. Also funny, in a tragic sort of way, is how so many of the bankruptcy expert’s supporters are ignorant of just what little regard he has for them.

The sad reality is that the vast majority of seniors (55 and over) have nowhere near enough money to retire. These individuals were born into a world in which they had a 50-50 chance of having a pension. But this world drastically changed, as corporations eliminated pensions in order to increase their profits and the compensation for those at the top. In pensions’ place came the 401k, in which companies’ costs were drastically chopped and individual employees were left to their own devices. It’s apparent that most people simply were not up to handling this complexity within their retirement accounts. They were and are like deer in headlights.

Almost a third of all seniors have no retirement savings. And the median savings is a woefully deficient $150,000.  But the CEOs of the country have never ever made more than today compared to their average employee. In short, the disparity has never been greater. This ever-increasing wage gap created and fostered by the wealthy has contributed mightily to the lack of adequate retirement savings for the majority of Americans. But there is also another group to blame for this financial catastrophe that is only going to get worse: ourselves.

In general, we hide our heads in the sand when it comes to finances. We refuse to save money. We take on more and more debt. We act like children and let other people decide what’s good for us financially. (I’m  not making this up: a friend said she had a great financial advisor. How do you know, I asked. She said, he didn’t charge her anything! Translation: He was putting her money into funds that paid him a hefty commission, funds that never perform as well as index-based funds. Well, actually, these funds do perform extremely well….for the financial advisor.) As we’re so careful to shop for value at the mall or the grocery store, so few people have any awareness of the many fees present in various mutual funds and ETFs that cripple long-term returns.

It is glaringly obvious that we American workers are increasingly on our own. The traditional fabric of society in which we look out for the other guy is frayed and is being ripped apart even more by the greed of politicians and corporations. Shame on them. But now we know that. Going forward, if we don’t take more control, shame on us.

 

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