Can A Worker Get a Break?

Posted on Categories Labor & Employment Law

Boss_button

Cross Posted on: Workplace Prof Blog

Apparently, they should not expect one in 2009 (or maybe not in this lifetime).

MSNBC (via AP) reports:

U.S. workers can expect skimpy raises in their base salaries next year, but top performers may still fatten their paychecks with merit compensation.

A study released Tuesday by Hewitt Associates, a human resources consulting firm, found base pay will rise by 3.8 percent in 2009, marking the seventh consecutive year of flat growth.

One-time performance-based pay, however, is expected to grow by 10.6 percent. That’s down slightly from 10.8 percent this year and 11.8 percent in 2007.

Great. On our way to more pay inequality in this country and to a place where workers will have to wait longer before being able to afford retirement (Yahoo! News via AP):

While the average retirement age remains 63, that standard may soon be going the way of the gold watch — a trend expected to accelerate as baby boomers close in on retirement without sufficient savings.

For 64-year-old John Lee, “retirement” bears a strong resemblance to his full-time working career — full of 40- and 50-hour weeks as an IT technical support specialist. He’s not strapped but likes the extra cash and the feeling of being needed.

But for Melissa Fodor, a retired travel agent who works part-time as a caregiver for the elderly, the extra work “keeps my head above water” and there’s no end in sight to that financial need at age 68.

Although the work is satisfying, she confides that “financially I’m kind of scared most of the time. Because what should happen if my health and my body fail?”

Lower wages on a yearly basis are not the only reason for individuals working longer. The ascendance of consumer driven 401(k) pension plans means that when the market suffers a downturn (like now), workers have less to retire on.

Consider from your own daily experience how many more older people you see these days working at Lowe’s, McDonald’s, etc.

PS

2 thoughts on “Can A Worker Get a Break?”

  1. I don’t see the problem with older people working. Life spans are much greater than they were in 1940 when the normal retirement age was set at 65, and just as importantly, people are much healthier and more youthful at 70 and even 80 than they were years ago. This means folks are living longer, more active, and more expensive retirements. That’s a good thing, but who should pay for it? Why not the retiree?

    Sixty-four-year-old John Lee, above, likes working and likes the income he is earning. What’s the problem with that? Sixty-eight-year-old Melissa Fodor says she needs extra income to “keep her head above water,” but what does that really mean? Does it mean she can’t pay her bills at all, or does it mean she wouldn’t get to do all the things she likes to do now as a retiree?

    I don’t feel bad for older folks I see working at Lowe’s or McDonald’s. It may be that they need the job for the income, but I suspect it’s just as likely they have the job as a way to stay active and maintain a social outlet. Working is keeping them “young.” And if the extra income helps them cover their needs and, more likely, afford some of their “wants,” all the better.

  2. Thanks for the comment, Kevin. I think the crucial distinction is whether the retiree in question has choice. I myself would like to work well into my 80s if possible, but there a lot of people who don’t feel that way and if they have their druthers would prefer to retire somewhere in their 60s. And at the very least, not have to early in the morning at McDonald’s or a late shift at Lowe’s.

    So the question is whether these older workers are being forced to continue to work because of their financial situation. Evidence (in the form of studies) suggest that this is the case.

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