The End of Retirement
by Teresa Ghilarducci
At the end of World War II and during the Great Depression, the United States Congress and President transformed and improved the lives of American workers who were too old to work — either because they couldn’t or employers wouldn’t hire them — by passing the Social Security and Old Age Assistance programs and legally establishing labor unions. The existence of pensions and unions that bargained for pensions meant that many non union companies would meet or exceed union pensions to stop their workers from unionizing. Employer pensions supplemented Social Security and because of these institutions the labor force participation rates of men over age 65 fell from 50% to something under 15% by 2000.
The hallmark of a civilized society and growing economy is that both the rich and the poor live longer and that both are entitled to leisure at the end of their working lives. Yet, as pensions eroded because of the 30-year trend of employers substituting traditional pensions with 401(k) type retirement accounts that are voluntary and individually-directed eroded pensions a political rhetoric emerged that people should work longer. The call to raise retirement ages has intensified as the economic crises starting in 2008 slashed retirement account values and national debt and deficits increased.