There Is No Pension Crisis
Warnings of looming pension bankruptcy aren’t just overblown. They’re politically dangerous.
Former New Jersey governor Chris Christie delivers his budget address for fiscal year 2015 to the state legislature on February 25, 2014. Jeff Zelevansky / Getty
Nearly seventy million American workers and their families rely on defined-benefit (DB) pension plans for retirement income. In 2011, twenty-eight million worked in state and local government, and another forty million were in the private sector.
They are the lucky ones. About half of the workforce has no pension at all.
Employers are trying to slash compensation, and pension benefits represent one component of this package. Enemies of the working class often couch their attacks on pay in practical terms: a worker hurts her company and herself by expecting a high salary, for example. When it comes to pensions, they argue that the funds are bankrupt, implying that the funds should be closed and the benefits terminated.
This article is for subscribers only. Please login or subscribe to access our full archives and beautiful print and digital magazine starting at just $3 a month.