I've written about a few of these examples (comparing them to the disgraceful and greedy bonus policies on Wall Street) and while I don't like the cutbacks, it's also understandable. Cash is again king as banks limit their easy lending policies so businesses are doing what they have to do to maintain enough capital to survive the recession. The upside to this period is that Americans will hopefully step back and take a closer look at the excesses of the credit economy including the obscene glorification of CEOs and increasing gap between those executives and the rest of America.
Taking a short term hit can be tolerated (except for the selfish prima donnas on Wall Street) when there's an expectation of change for the better in the future, but with our four years of mushy middle coming, there's little to suggest any substantial change will be forced on America's corporate culture. People need growth but stability for the sake of their retirement plans but they also need answers to the three decades of falling middle class take home pay.
For workers, the loss of a matching contribution heightens the pain of a retirement account balance shriveling away because of the plunging stocks markets.What better way to work out of this failure then to hire the the conservative free marketers who brought us here in the first place? This is hardly the change any were voting for in November.
“We are taking a beating,” said another FedEx mechanic, Rafael Garcia. “In a year, I lost $60,000 of my 401(k). You can’t make that up.”
To many retirement policy specialists, the lost contributions are one more sign of America’s failure as a society to face up to the graying of the population and the profound economic forces it will unleash.
Traditional pensions are disappearing, and Washington has yet to ensure that Social Security will remain solvent as baby boomers retire and more workers are needed to support each retiree.
The company cutbacks may mean that some employees put less money into their retirement accounts. Even if they do not, the cuts, while temporary, will have a permanent effect by costing many workers years of future compounding on the missed contributions. No one knows how long credit will remain scarce for companies, or whether companies will start making their matching contributions again when credit loosens and business improves.
“We have had a 30-year experiment with requiring workers to be more responsible for saving and investing for their retirement,” said Teresa Ghilarducci, a professor of economics at the New School. “It has been a grand experiment, and it has failed.”
