PBS Frontline Special Highlights Nation’s Retirement Crisis

by Tula Connell, May 15, 2006

We’ve all seen them—frail, elderly people at the local burger joint, gingerly cleaning tables or mopping floors. Or maybe behind the counter of a chain drugstore, counting change.

With each encounter of a senior citizen working at a just-above-the-minimum-wage job, I want to turn my head in shame. Sickened that in the world’s wealthiest, most powerful nation, we willingly stand by as those who raised us and taught us and cared for us are forced to work through their final years in hard, low-paying jobs because they have no pensions, and Social Security and Medicare can’t cover the medical bills and rent.

For an increasing number of older Americans, scraping for survival comes after spending years or a lifetime of work at a company where their pension was guaranteed—until the company went bankrupt, taking their pension with it.

Tomorrow night, journalist Hedrick Smith addresses the nation’s growing retirement crisis in a PBS Frontline special, Can You Afford to Retire? The report airs at 9 p.m. EST (check your local listings).

We’ve noted here how corporate bankruptcies no longer are signs of a failed business. Instead, corporations are filing for bankruptcy as a business strategy to make more money—jettisoning pension plans on their way to Chapter 11 and throwing off long-term commitments they made to America’s working families.  

In an interview with AFL-CIO senior staff writer James Parks, Smith outlined the shift in pension responsibilities from employers to employees:

Since the mid-1970s, corporations have shifted much of the responsibility for pensions to employees. A recent U.S. Department of Labor study said in the 1970s employers paid 89 percent of the cost of retirement and employees 11 percent. In 2000, employees paid 51 percent and employers 49 percent. Now, people are having to pay for themselves, and it’s a horrendous situation.

Smith, a longtime New York Times correspondent and author of numerous books, including The Power Game: How Washington Works and The Media and the Gulf War: The Press and Democracy in Wartime, expressed shock at how ill-prepared most workers are for funding their retirements.

One of the things that disturbed me most in reporting this story is how little people know about how much money they’re going to need for retirement. If you make $50,000 a year, experts are saying you have to have eight to 10 times that amount of money—$400,000—in order to cover yourself for the 18 or so years you’re likely to live in retirement. Most people are happy if they save $100,000, but they are going to need multiples of that, or else they will be living on Social Security, which will mean a steep drop in pay.

Of course, if you make just over minimum wage at a place like Wal-Mart, you can’t get by now on what you make now, let alone retire.

For the full AFL-CIO interview with Smith, click here.

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