Public sector retirement meltdown: Coming soon to a state near you

Last week I wrote a long post about America’s coming retirement crisis. Part of the article examined the alarming status of many public sector pension funds, and I quoted from a Business Insider piece reporting that 11 state pension funds that are projected to run out of money within the next decade or so and that the public may be on the hook legally to fulfill those obligations.

Still more

Pension obligations are not the only looming bills. For example, public entities in New York have promised future retirees some $200 billion in health care benefits and have failed to set aside a penny to pay for it, according to a study released by the Empire Center for New York State Policy summarized by Mary Williams Walsh in the New York Times (link here):

The cities, counties and authorities of New York have promised more than $200 billion worth of health benefits to their retirees while setting aside almost nothing, putting the public work force on a collision course with the taxpayers who are expected to foot the bill.

…The daunting size of the health care obligation raises the possibility that localities will be forced at some point to choose between paying their retirees’ medical costs and paying the investors who hold their bonds. Government officials aim to satisfy both groups, and have even made painful cuts in local services when necessary to keep up with both sets of payments.

Bracing choices

In other words, many states have not stored away enough money to cover what they have promised to public sector retirees. Here are among the possible consequences:

1. Raise taxes to meet public retiree obligations. This may mean that individuals who are struggling to save and provide for their own retirement needs may be hit with a higher tax bill.

2. Cut state services to meet public retiree obligations. In other words, the general public will receive less in state services — including education, public safety, and social services — and there will be fewer public jobs available for the next generation of workers.

3. Reduce public retiree obligations. This may be achieved by forcing givebacks (and, where necessary, amending state constitutions that require states to pay pensions owed). Of course, generating sufficient political will to do so will be accompanied by the media demonization of public workers, including teachers, firefighters, and other essential personnel, who bargained in good faith for these benefits when the economic picture was rosier. The state and local officials who agreed to these benefits and who have been raiding public pension funds to pay for other expenses likely will not be so vilified.

Obligations to current and future public employee retirees are going to be a huge political and economic issue in the years to come, and the picture is getting uglier by the moment. Will public officials act now to soften the inevitable conflicts? I doubt it: When faced with an array of unpleasant choices that can be bequeathed to one’s successors, the natural political reaction is to put the concern on the shelf. It will require bold, even career-endangering leadership to soften the impact of what is to come.

When Boomers retire (or try to): America’s coming train wreck

Do I have it completely wrong, or is most of America ignoring the coming economic and social train wreck that will occur when millions of Baby Boomers realize they do not have sufficient resources to fund a relatively comfortable retirement?

I’ve been trying to connect the dots, and the emerging picture of the Boomer retirement crisis frightens me:

Reality 1: A cool million may not be enough

What’s your number?

This question is bandied about often among those who are within imagining distance of retirement age. In essence, it refers to the nest egg that one should have in order to live a relatively comfortable retirement.

Conventional wisdom has been that one million dollars should be a target goal, but today’s investment advisers are saying that isn’t enough. As reported in March by Joe Mont for TheStreet (link here):

That target may be easy to remember, but it falls short of the true cost of what’s required for post-career comfort. Longer life spans, the threat of inflation and the uncertain future of Social Security benefits make this long-touted savings advice inadequate for most, advisers say.

Reality 2: Most folks aren’t even close to saving a million anyway

Most Americans are neither close to saving a million dollars nor on a reasonable track toward doing so.

Even before the Great Recession, researchers were voicing grave concerns about the financial readiness of the Baby Boomer generation for retirement. When the bottom fell out of the economy, retirement accounts of millions of Americans took a savage beating, with many workers losing a quarter, half, or even more of their savings. Those who bailed out of the market at that point lost out on the partial recovery that followed.

Google phrases such as “retirement savings statistics” and “Boomer retirement savings” and you’ll get a blizzard of facts and figures from multiple sources documenting the crisis. Here’s a very random sampling:

From Money 101:

Most Americans think that they’ll be able to retire comfortably, but most aren’t saving nearly enough to meet that goal. Sixty-eight percent of workers are confident that they will have adequate funds for a comfortable retirement. And yet, more than half of those workers have saved less than $25,000 for retirement. Only 20% of Americans have saved $100,000 or more. Only 10% of Americans have amassed retirement savings of $200,000.

From 20somethingfinance.com:

According to the Employee Benefits Research Institute’s 2009 Retirement Confidence Survey, 53% of workers in the U.S. have less than $25,000 in total savings and investments. The typical American household (headed by a 43 year old) has just over $18,000 in savings! That’s a scary number.

From David Ignatius of the Washington Post:

Okay, for households headed by persons between the ages of 55 and 64, the median value of all retirement accounts was just $100,000. [Financial analyst Patrick] Purcell noted that for a 65-year-old man retiring last month, that $100,000 would buy an annuity that would pay a paltry $700 a month for life, based on current interest rates.

Don’t stop there. Look at dozens of other sources and you’ll see the litany of alarming facts and figures goes on and on.

Reality 3: Many public sector workers are sitting on a crumbling foundation

Public sector pension funds — the main source of retirement funding for public sector workers in education, social services, and public safety — are in bad to terrible shape in many states. For example, Gus Lubin, writing for The Business Insider, identifies 11 state pension funds that are projected to run out of money within the next decade or so (link here):

Here’s a shocker: The most immediate state pension crises aren’t in New York or California. They’re in Middle America.

When it comes to state pensions in the most trouble, do places like New Hampshire come to mind? Probably not, unless you live there, and maybe not even then.

Once those funds run dry, the public may be on the hook to fulfill those obligations. Lubin’s article includes the projected percentage of annual state revenues that will be required to make the pension payments once the funds are empty. The numbers are stunning, running from 17 to 54 percent.

Reality 4: Compared to pensions and retirement savings, the Social Security system looks pretty viable

As I discussed in a previous article, the crush of Baby Boomers hurdling towards retirement means that considerable strain will be put on America’s Social Security system. Two years ago, the Social Security Administration advised that by 2019 it will be “paying more in benefits than we collect in taxes,” and by 2041 it will have sufficient funds “to pay only about 78 cents for each dollar of scheduled benefits.”

Even with this anticipated shortfall, however, Social Security remains one of America’s most stable benefit programs — despite the rush of misleading, apocalyptic claims that the system is on the brink of going under. As Jane Slaughter of Labor Notes observed, the projected funding gap can be addressed fairly and cleanly by raising the income cap on payroll taxes. Currently the top 6 percent of income earners pay FICA only on the first $106,800 of their income. By removing the cap, the Social Security fund will be able to pay full benefits for everyone and rebuild its surplus.

It must be emphasized that Social Security alone does not meet the normal retirement income needs of most Americans. However, with a relatively modest fix it will continue to be the safety net that saves many from sinking into poverty.

Reality 5: It’s not just about the retiree wannabes

If older workers cannot afford to retire, then entry-level work opportunities for younger workers are likely to be curtailed. When a bad economy and/or lack of retirement readiness forces older workers to remain in or return to the workforce, the result may be a “face-off” between the young and the old for precious employment opportunities. In addition, during the coming decades, it is a demographic reality that fewer workers will be paying taxes to support public programs and retirement benefits.

(For more on this topic, see my short article, The Looming 21st Century Generation Gap: Economic Challenges Facing Younger Workers, which can be downloaded without charge, here.)

Reality 6: We must start acting now, before panic ensues

It appears we have about 10 to 15 years to respond pro-actively to the coming retirement disaster. After that, panic will ensue, thus increasing the risk that bad personal and public policy decisions will become the norm.

The landscape of responses is littered with landmines. Take, for example, the seemingly no-brainer goal of getting Americans to save more money for retirement. Great idea, right?! But here’s the potentially huge catch: If most Americans begin stashing away dramatically larger shares of their income for retirement, then less money will be fueling the retail market economy, contributing to tax revenues (remember, a lot of retirement plan options are tax-exempt), and donated to charitable causes.

I don’t claim to have all the answers, but at least two points are clear. First, ensuring Social Security’s long-term viability is a bedrock necessity. Second, providing quality, affordable healthcare for all will be even more important as the population ages.

Beyond that, there is no quick fix, perhaps only a loose-parts approach of partial measures that will cushion, but not wholly prevent, the coming pain. Regardless, the sooner we begin acknowledging the crisis, the more likely it is that millions of people will be spared abject poverty and lonely struggle in their later years.

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For more links to useful articles, see my January 2011 post, “The press discovers the coming Boomer retirement crisis.”

A “marketplace” for worker dignity: Why bad employers and managers should be shown the door

Diehard devotees of free market economics are fond of characterizing virtually every human endeavor as a transaction. While understanding economic principles is a necessary staple of modern life, I believe that such extreme thinking drains us of our humanity.

But okay, I’ll play

Nevertheless, let’s play along for a few minutes and frame the experience of work in market terms:

First, let’s characterize each act of workplace bullying, discrimination, and harassment as a transaction. Second, let’s further suppose that every legitimate complaint or lawsuit in response to worker abuse is an attempt to recover rent or payment for engaging in that abusive transaction, i.e., the “price tag” for taking someone’s dignity at work. That price tag may reflect lost wages, severe stress, emotional distress, and interference with one’s ability to work.

Shouldn’t it follow that employers and managers who continually treat their workers poorly and pay out damages in litigation are among the marketplace’s failures in terms of employment practices? Furthermore, isn’t it logical for us to replace them with better performers?

How about “creative destruction” of bad employers?

In the cold hard world of economic markets, little thought is devoted to the human costs of business creation or dissolution and employee hiring, treatment, and termination. It’s all part of the process of “creative destruction” so enthusiastically embraced by those who see the world as one big marketplace.

Well, maybe it’s time for a new — or at least complementary — bottom line. Maybe it’s time to show the door to bad employers and managers on grounds that they are failures in the marketplace of human dignity. Now that’s the kind of creative destruction that will lead to healthier workplaces.

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This post is offered in conjunction with Freedom from Workplace Bullies Week.

Websites of the Week: Freelancers Union and YES! magazine

If you’ve been following this blog in recent weeks, you may have picked up on my sense that we need to find new ways of working and living in an age of uncertainty and economic turmoil. Two great sources to encourage our thinking and action are the Freelancers Union and YES! magazine.

Freelancers Union

The Freelancers Union (link here) is an advocacy and support organization for America’s 42 million independent workers, who represent roughly 30 percent of the workforce. These include “freelancers, consultants, independent contractors, temps, part-timers, contingent employees, and the self-employed.”

The Freelancers Union is committed to providing “mutual support and community” and to supporting social entrepreneurship. It also endorse changes in the law that will enable independent workers to succeed. (For more on this, see my post summarizing founder Sara Horowitz’s three-part policy agenda to help freelancers.)

Spend a bit of time lurking around the Freelancers Union website. You may find some helpful information for your own career — or perhaps envision yourself doing independent work with more support than you imagined was available. Membership is free.

YES! magazine

YES! (link here) “reframes the biggest problems of our time in terms of their solutions.” Its articles “outline a path forward with in-depth analysis, tools for citizen engagement, and stories about real people working for a better world.”

What I like about YES! is its hopeful balance. It acknowledges the darkness and attempts to light a candle.

Its website is jampacked with good stuff, including a full archive of articles, freely accessible. For now they’re also offering an online special subscription rate of $17 for one year (4 issues).

Recently I highlighted a series of articles in the current issue of YES! on building resilient communities. This is a prime example of the kind of creative thinking presented in the magazine and its website.

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I must admit that I have not thought through the full implications of the ideas offered by these resources in terms of work and workplaces. After all, I can hardly claim to be a freelancer, having worked in institutional settings for all of my career. And I have a lot to learn when it comes to the resilient practices favored by YES! magazine. But I cannot help but feel that we are going to have to adapt and innovate in response to the challenges facing us, and these two entities are prime among those that will help to show us the way.

Prisons as jobs programs

According to the latest federal jobs report (see Bloomberg news analysis, here), the American economy shed tens of thousands of public school teaching positions last month, casualties of shrinking state and local budgets.

But at least we have one growth industry that promises a continuous supply of new jobs: Building and staffing prisons. If we need any more evidence of the insanity prompted and enabled by the Great Recession, we can stop here and take a long look.

Berlin, New Hampshire

Kathy McCormack of the Associated Press (here, via Yahoo) reports on how the tiny city of Berlin, New Hampshire, is welcoming a new federal medium-security prison as a source of jobs and a spur to the local economy. Even though the prison isn’t scheduled to open until next summer, the construction work already is providing business:

“There are some people within the community that still don’t like the federal prison, that don’t think it’s going to do anything for us,” said Diana Nelson, who works at the Berlin office of the state Department of Employment Security.

“But I’ve seen this project since Day 1, and I saw what just the construction workers coming in have done for the local economy — they’re buying cars, eating in the restaurants, Dunkin’ Donuts,” she said. “It’s little stuff, but they’re here and they’re spending money.”

The prison itself will provide about 200 new jobs to New Hampshire workers, adds McCormack. Designated to house mostly drug and weapons offenders, it will infuse an estimated $38 million annually into the local economy, which has been hard hit by sharp declines in manufacturing work.

Not-so-hidden agendas

Berlin is just one example of this growth industry. Another prominent trend is the emergence of privately-run prison management companies, which typically deliver both senior managers and security personnel, while promising a cost savings in terms of public expenditures.

If you’re smelling a hidden agenda, you sniffed right. Investigating for DiversityInc magazine, Sam Ali, Luke Visconti and Barbara Frankel report on the private-sector prison industry and its implications for immigration and civil rights (link here):

In this exposé of America’s prison system, DiversityInc examines the rapid growth of privately run prison operators and what is fast becoming the next dark chapter in the ever-expanding prison industrial complex: immigrant detention. What are the racial implications? And why has anti-immigration sentiment helped private prisons make a fortune?

…Critics say that human-rights violations and physical and sexual abuse of inmates flourish in privately run prisons and detention centers because they are closed to outside scrutiny, allowing guards and officials to act with impunity.

America’s devotion to imprisonment

America is known around the world for harsh sentencing laws that result in one of the highest incarceration rates among western nations. But don’t just take the word of this self-confessed liberal. Instead, listen to the solidly conservative Economist magazine, which consistently has criticized American rates of imprisonment, such as in this July piece, “Too many laws, too many prisoners“:

Justice is harsher in America than in any other rich country. Between 2.3m and 2.4m Americans are behind bars, roughly one in every 100 adults. If those on parole or probation are included, one adult in 31 is under “correctional” supervision. As a proportion of its total population, America incarcerates five times more people than Britain, nine times more than Germany and 12 times more than Japan. Overcrowding is the norm. Federal prisons house 60% more inmates than they were designed for. State lock-ups are only slightly less stuffed.

We’ve got it backwards

At a time when our infrastructure is severely in need of repair, we’re handing over tax dollars to private companies to lock up more people. We’re laying off schoolteachers and hiring more prison guards.  And how ironic: Over time, fewer jobs and less funding for schools will fuel the need for more prisons. Talk about misdirected priorities…

Can communal responses to tough times lead us to better lives?

Earlier this week, I posted an entry suggesting that we may be heading into an era of material scarcity, marked by steady high rates of unemployment and limited supplies of necessary goods. Those who subscribe to this scenario (and I believe it is more likely than a miraculous new age of prosperity) are left either to ponder a bleak future of isolating, paralyzing want and fear, or to envision how we can thrive on a more human level.

As my friends in the labor movement like to say, we can either hang together or hang separately. Here are some ideas toward promoting the former.

Building resilient communities

The current issue of Yes! magazine devotes a package of articles to the theme of building resilient communities. As Sarah van Gelder writes in her introduction:

How do you navigate an unsteady economy, a future without cheap oil, and unimaginable changes in the climate?  Here are ways to learn skills for self-reliance, build lasting communities, and take care of the important things in life, whether good times or hard times come our way.

To create that resilient future, Yes! tells us to “build practical skills,” “live within local means,” and “imagine, adapt, create.”

It’s a great collection of articles, and I’m enjoying spending time with the issue. Go here for the online edition.

Lawyers getting into the act

Our legal system is set up more for corporations than for cooperation. As a counterpoint, Yes! also has posted an excellent article by attorney Janelle Orsi, detailing the emerging need for lawyers who can practice “cooperation law,” helping people to navigate the legal system in setting up community and communal entities that support the sharing of resources (article link here).

It’s a visionary piece for members of the legal profession — so thought-provoking that I look forward to sharing it with students in my public interest law seminar next spring.  Here’s how Orsi explains her subject:

What do you call a lawyer who helps people share, cooperate, barter, foster local economies, and build sustainable communities?

That sounds like the beginning of a lawyer joke, but actually, it’s the beginning of a new field of law practice. Very soon, every community will need a specialist in this yet-to-be-named area: Community transactional law? Sustainable economies law? Cooperation law?

Personally, I tend to call it sharing law.

Common security clubs

In the midst of the 2008 meltdown, a group of educators and organizers who foresaw the longer-term effects of the Great Recession developed the idea of “common security clubs” comprised of friends and neighbors committed to helping one another through these rough times. From their website, here is how they describe a common security club:

A place to come together to increase our personal security in a rapidly changing world by:

• Courageously facing our economic and ecological challenges, learning together about root causes.
• Building relationships that strengthen our security and undertaking concrete steps for mutual aid and shared action.
• Rediscovering the abundance of what we have and recognizing the possibility of a better future.
• Seeing ourselves as part of a larger effort to create a fair and healthy economy that works for everyone.

For more about common security clubs and how to start one, go here.

Ideas are percolating

This is just a sampling of the kind of hopeful, even exciting “next generation” thinking and action developing in response to the challenges we face. Even if you’re not convinced that a next Dark Age is around the corner, consider taking a look at some of these writings to get a sense of how humanity can remain humane even when we’re not living in a land of plenty.

Are we staring at a long-term era of scarcity?

In a piece for the Jan.-Feb. 2010 issue of The Futurist (membership magazine of the World Future Society), Stephen Aguilar-Millan, Ann Feeney, Amy Oberg, and Elizabeth Rudd painted a bracing view of economic life between now and 2050:

The world economy will experience scarcities of natural resources from now until the middle of the twenty-first century, when a post-scarcity world becomes a reality….The world between 2010 and 2050 is likely to be characterized by scarcities: a scarcity of credit, a scarcity of food, a scarcity of energy, a scarcity of water, and a scarcity of mineral resources.

Similarly, consider this excerpt from a piece by Don Peck in the March issue of The Atlantic, which I included in a previous post (link here) about the effects of the Great Recession:

The Great Recession may be over, but this era of high joblessness is probably just beginning. Before it ends, it will likely change the life course and character of a generation of young adults. It will leave an indelible imprint on many blue-collar men. It could cripple marriage as an institution in many communities. It may already be plunging many inner cities into a despair not seen for decades. Ultimately, it is likely to warp our politics, our culture, and the character of our society for years to come.

Our challenge

If these bleak forecasts turn out to be accurate (or even close), then we are looking at a long-term period of difficult times. This will not be easy for generations who have lived during an age of material excess, fueled by easy credit and a belief that economic prosperity is our birthright.

Our challenge will be to find ways to live good and meaningful lives in an era of scarcity. It will require revisiting the values that led us to this mess and reorienting our lives and lifestyles so that we are less about stuff and more about humanity. Instructive on these points are the words of my late friend and pioneering adult educator John Ohliger (1926-2004), which appeared in a 1981 issue of his newsletter Second Thoughts:

My picture is of a future where we live more relaxed and more modest lives with an abundance of unmeasurable and infinitely available non-material (or better, trans-material) resources. All the travail and pressure we’re going through right now may be paving the way for that future. This future could be one where we will have a choice of “goodies”; not ones requiring scarce energy, minerals, or dollars; or ones permitting some people to get rich while others go hungry, but choices that we create with our own hearts and heads and hands among people we know and care for.

World of work

Obviously this will have a profound impact on the world of work. In the U.S., we’re already seeing this with persistently high unemployment rates and extended periods of joblessness. It is quite possible we have not hit rock bottom.

And yet, we live in a world where so much remains to be done. It’s not as if our needs for food, housing, goods, and services have suddenly disappeared. It’s not as if our lives are as enriched as they could be by music, words, and art. And it’s not as if all of our sick and elderly are receiving proper care, all of our bridges, tunnels, and roadways are sturdy and safe, and all of our kids are learning and growing at school.

So, is there a better time than now for our creativity, entrepreneurship, and enterprise — informed and inspired by a healthy dose of humanity — to rise up and shape our future, lest we be limited by forces we let control us?

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The article in The Futurist, “The Post-Scarcity World of 2050,” is available online to World Future Society members.

I am working with John Ohliger’s wife, Chris Wagner, to revive Second Thoughts as a blog. To read the initial posts, go here.

When academic workplaces crumble, consider the impact on staff

Recently I wrote that American higher education may be in for an ugly day of reckoning, thanks largely to spiraling tuition and unmanageable levels of student indebtedness. While the experiences of students and faculty amidst these financial challenges are drawing plenty of attention, we’re not hearing a lot about the fate of staff within these institutions. For a snapshot example, let’s take a look at the University of California.

California Dreamin’ Nightmare

The financial meltdown confronting the State of California is having a profound effect on the University of California system. Budget cuts and tuition hikes are the norm, and many are rightly concerned that one of the nation’s, nay, world’s, best public university systems has seen its best days.

Somewhat lost in this upheaval, however, are the job security and working conditions of staff in the UC system. If you want a sense of how the crisis affects these workers, take a look at this blog post by Michael Meranze and accompanying comments from Remaking the University (link here):

As the many comments by staff members to the post Did I miss Something? make clear, the task force on pensions and UCOF are only one strand of the ongoing restructuring of UC.  In multiple departments and offices, especially at Berkeley, staff jobs are being eliminated and downsized while faculty are away, and the attempt to cut costs on the basic organization and staffing of the campuses are taking their toll on members of staff and their ability to perform their jobs.

The Bain of their existence

The elimination of staff jobs is being driven by a report from Bain & Co., a huge Boston-based management consulting firm well-known for recommending downsizing as an organizational rescue tactic. Bain was paid $3 million to produce this report, according a detailed analysis by Chris Newfield (link here) posted to Remaking the University.

Bain’s report is part of a larger University initiative called “Operational Excellence,” the very title of which tells us all we need to know about how human beings fit into this picture.

Coming to a university near you?

Those of us who are part of the academic workforce have a stake in what’s going on in California. If Operational Excellence is deemed successful (and keep in mind who does the “deeming”), university executives across the country will continue to retain the Bains of the world to help them cope with the financial messes before them.

These consulting firms are not without value. They rightly have been credited for identifying areas where organizations can cut wasteful spending, and heaven knows there’s a lot of it in our colleges and universities. But all too often they bring a heartless, bloodless approach to downsizing, thus easing the way for management to shed staff jobs — even if other recommendations concerning executive salaries and excesses are ignored.

A neglected constituency

In higher education, staff members often are a neglected constituency. Students have power as consumers with choices. Faculty have power due to tenure and their role in teaching and scholarship. Higher level administrators have power because, well, they’re the ones who hire consultants like Bain — and then have the freedom to pick & choose among suggested cost-cutting measures to ensure the least pain for those on top.

But staff often fall through the cracks, despite their vital role in assisting faculty and administrators and facilitating the mission of a college. (Staff unions can help a lot, but not all schools have them.) Here’s hoping that during this likely shakeout in higher education, staff members will not be singled out for a disproportionate share of the pain.

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Hat tip to Cloudminder for background info on UC staff and the budget crisis.

The New York Times as Chronicler of the Great Recession

When I lived in New York City from 1982 to 1994, I had a love-hate relationship with the New York Times. Oh, how I enjoyed those big, fat Sunday editions, brimming with goodies like the Book Review and the Week in Review. And just buying the paper made me feel like more of a New Yorker, no small thing during the height of my love affair with the Wonder City.

But the paper also started to bug the hell out of me. With its advertisements reeking of conspicuous consumption and its content embracing of the excesses of the 80s and 90s, I stopped reading it every day. (In its place was the amazing New York Newsday, which during its run produced some of the best journalism I’ve seen in a big city newspaper.)

Today, I find the Times is an indispensable source of news and commentary about the Great Recession. Whether it means the paper is simply a reflection of the era, or a conscious shaper of our understanding of it, I’m not sure. But it merits enormous credit for consistent, in-depth coverage of the economic, social, and political conditions of our day.

An honor roll of reporters and columnists

Some ongoing highlights:

• Reporters such as Louis Uchitelle and Michael Luo regularly deliver superb accounts on how the recession is hitting everyday people economically and psychologically.
• Steven Greenhouse, one of America’s last dedicated labor reporters, consistently reports on how workers and labor unions are dealing with the recession.
• Bob Herbert’s op-ed columns about the recession’s on-the-ground impact and the human costs of growing poverty deserve a Pulitzer, plain and simple.
• Paul Krugman brilliantly weaves together economics and the bigger political picture.
• David Leonhardt’s economics column is informative and insightful, blending policy with nitty-gritty reality.
• Ron Lieber’s columns on personal finance often speak to the concerns of middle class folks trying to make ends meet and save for retirement.

A voice for the Times

Yup, the Times still runs pages of ads for stuff most of us can’t afford, its wedding announcements still read like abbreviated bios of the wealthy & connected, and its periodic fashion magazines tout exorbitantly-priced duds that often look plain silly on any normal human being. I see it as a necessary trade-off: The revenue generated by all this helps to pay for the rich coverage in the rest of the paper.

During the two years I have written this blog, I find myself increasingly linking to pieces in the Times. The content is so relevant, and so good, that I have to watch how often I do it.

I tend not to gush over mainstream institutions; I find that they rarely deserve the hype. For me, however, the Times has become the essential chronicler of our times. Forgive the cliche I’m about to invoke, but when newspapers everywhere are facing the realities of the digital economy, it stands as a beacon of journalistic excellence.

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Cross-posted with Second Thoughts, a new blog on adult education, lifelong learning, and positive social change, for which I am a co-host and regular contributor.

Willy Loman, defining success, and the Great Recession

In a thoughtful piece for Newsweek, columnist Julia Baird examines American attitudes toward success and failure against the backdrop of the Great Recession, using the life of Willy Loman — Arthur Miller’s lead character in Death of a Salesman — as a mirror for our times:

Willy is, perhaps, America’s consummate loser, a failure to his family. But if you can bear with me for one moment, imagine he lived in current times, not amid the postwar prosperity of 1949. Sure, his career was ebbing, but Willy kept a job for 38 years, he owned his house—he had just made the last mortgage payment—and had a wife and two children. Today he’d be a survivor.

Baird goes on to link unemployment with our evolving attitudes toward success and failure, noting that the latter was not always “associated with individual identity.”

Finding ourselves, accepting plateaus

In fact, adversity and failure sometimes can force us to dig deep and find our true selves. Baird cites a Harvard commencement speech by J.K. Rowling, who told the graduates that bottoming-out as a financially-strapped single mom prodded her to finish the manuscript that led to the Harry Potter series. Rowling smartly added: “You will never truly know yourself, or the strength of your relationships, until both have been tested by adversity.”

But Baird also implicitly recognizes that adversity won’t turn us all into bestselling authors. Hopefully the recession also teaches us “we can accept plateaus, understand that a life has troughs we can climb out of, and that a long view is the wisest one.”

“I coulda been a contender”

This maddening, perhaps uniquely American mix of boundless possibilities and harsh limitations can be hard to process. Journalist Abby Ellin, in a piece titled “I Coulda Been a Contender” for Psychology Today, examines her own life and career against the crush of personal and external expectations:

We all gauge our own success against that of others, at least in part, and we always compare up. Universal though it is, the negative comparison habit may be amplified by America’s striving spirit: Here, everyone can, and therefore should, make it to the top–or so we think. Those of us who’ve had more opportunities may wind up feeling that much worse.

Reading the rest of Ellin’s article, you sense the author is struggling to accept the lurking wisdom behind her own words. Her advice leads us to no other conclusion:

Every night, write down three to five things you feel proud about from that day. Recording your accomplishments keeps them front and center in your mind, an exercise that helps crowd out negative rumination.

…But back to real struggle

Ellin’s angst is readily identifiable to anyone who understands America’s culture of success — and if you don’t, just hang around a high-prestige college, law school, or business school for a few weeks and you’ll know what I mean.  In any event, this is not really what the psychological costs of the Great Recession are all about. The stakes run much deeper.

As I have written previously here, when reporter Louis Uchitelle began researching his book The Disposable American: Layoffs and Their Consequences (2006), he did not anticipate that he “would be drawn so persistently into the psychiatric aspect of layoffs.”  But he soon understood that the “emotional damage was too palpable to ignore.”  For the suddenly unemployed, “a layoff is an emotional blow from which very few fully recover.”

Uchitelle did his research several years before the meltdown. Today, these personal setbacks are hitting people in virtually every job sector, and cutting across socioeconomic groups. The poor, of course, pay the highest costs. Unemployment and poverty levels are at their highest rates in years.

Heroes

Julia Baird invites us to recast Willy Loman as a survivor, not a failure. I tip my hat to her for questioning how Americans are wired to think about success.

But maybe there is an even more meaningful narrative playing out across the country, one that stands as a rebuke to the borrow-and-bust mentality that led us into this mess. As the destructive power of this recession continues, millions of people are struggling to pay the bills, raise their families, and keep a roof over their heads. The stories of these lives are those of everyday heroes, not mere survivors.