New book sounds alarm about retirement insecurity in America

New book sounds alarm about retirement insecurity in America

By David Brandolph

In her new book, Downhill from Here—Retirement Insecurity in the Age of Inequality, Katherine S. Newman compellingly relates the story of the American retirement experience by diving into the individual and heart-wrenching sagas of a diverse group of workers and retirees. She profiles blue-collar retired truck drivers, highly paid white-collar airline pilots, professionals working in the private sector for the telephone company and in the public sector for the city of Detroit, among others. What all these retirees have in common, she says, is that they were led to believe that their continued commitment to their work would bring retirement security—promises that have vanished.

Newman, a sociology professor and interim chancellor of the University of Massachusetts Boston, credits the Pension Rights Center as one of the organizations she turned to find the diversity of people she interviewed. She notes that the Center introduced her to Rita Lewis, who is featured in the book, and a great many others who are quoted (although their names have been changed). Rita is the widow of retired truck driver Butch Lewis, who helped lead a successful fight to stop the Central States Pension Plan from cutting their benefits. Newman writes that legislation introduced into Congress to stop pension cuts was fittingly entitled “the Butch Lewis Act.”

PRC also steered Newman to the Association of Bell Tel Retirees, who helped her locate white-collar workers caught up in the demise of the “Yellow Pages,” once considered to be an American institution. In 2006, Verizon, which emerged in the aftermath of the divestiture of the Bell Companies, spun off its Yellow Pages division into a new company, removing $9.5 billion in pension-related debt from its books. Within 28 months, the new company filed for bankruptcy, leaving retirees with diminished retirement and health benefits.

Newman paints a vivid picture of the political, economic, and structural forces that have expanded class inequality and led to a downhill trajectory for retirement security. She notes that before corporate and public employers began shifting the risks of retirement saving and investing to their workers, many retirees took comfort in the security offered by their pensions. Now a growing number of these retirees have discovered that pension promises can be broken overnight and their retirement security shattered. They are finding that retirement can be a ticket to a reality of stress and uncertainty. She reports that “elder poverty, a problem we thought was resolved during Roosevelt’s New Deal, is again rearing its head.”

The book also makes the point that many retirees are doing well by exploring areas of the U.S. where the American dream of a secure retirement is being fulfilled. Newman writes about Ogden, Utah, where the wealth gap among citizens is narrow, and Las Vegas, where the “Culinary Workers Union has seen to it that even the lowest-paid workers have solid pensions, on top of other benefits that make the glittering gambling city a beacon of retirement security.”

Although much of her book highlights the inadequacy and inequality of our retirement system, Newman concludes her book on an optimistic note. She points to policies in Denmark, the Netherlands and Australia, which provide decent retirement income to many of their retired citizens, as models to emulate and suggests that if Americans have the will they can reverse current trends and achieve needed reforms. As New York University Law Professor Cynthia Estlund suggested in her Washington Post review of Newman’s book, “perhaps commitment from well-grounded and lucid chronicles like Newman’s can help to build the sense of urgency and shared purpose that will be needed to turn the tide.” Pensioners and policymakers alike should take the time to read this very readable and important book.