Downhill from Here: Retirement Insecurity in the Age of Inequality

Newman, who wrote about the working poor in No Shame in My Game, turns in this compassionate study to the erosion of that formerly reliable social safety net: the pension. Newman profiles workers who spent their careers sacrificing higher salaries or glamorous jobs for the security they believed came with union or government employment, only to find the rug pulled out from under them when their pensions were revealed to be underfunded. Retirement-age people, many ill equipped to find a job in a competitive market, make up the fastest-growing segment of the labor force, according to Newman. Meanwhile, younger workers are frequently not offered the retirement benefits their parents and grandparents enjoyed—not because of foreign competition or market downturns but because resources are being diverted to shareholders—causing intergenerational resentment. Newman finds that countries faring better than the United States in postretirement well-being—Denmark, the Netherlands, and Australia among them—have mandatory government pensions (and, in Australia’s case, a mandatory retirement savings program). She concludes by emphatically advocating for Paul Krugman’s solution to future Social Security insolvency—eliminate the cap on income subject to payroll taxes. Newman’s reportage moves gracefully between pension instability’s effects upon individual lives and the societal consequences. This is an empathetic and revealing investigation. (Jan.)