(And, barring those promises not being fulfilled, plenty of people your age and younger have already been working in jobs that qualify them for pensions when they reach a certain age, or have a relative with such a pension with survivorship benefits, and will benefit from them as beneficiaries.)
You should be mad at the Capitalists not the workers.
The problem is, this new wave of retirees - the Baby Boomers - did not have enough children. Their children's generation - the Millennials - can thus charge more for their labor. The Millennials also aren't having enough children.
This means that the people generating the value are taking more of the value for themselves to live on (though not relative to inflation, but that's a different conversation), and there's fewer of them contributing to pensions through various government revenue schemes.
Also, anecdotally, my parents have far more expensive plans for their retirement than my grandparents ever did.
Pensions are not stealing from the future. When done properly, invested prudently, and managed to a fiduciary standard, they are an effective mechanism to invest those worker capital earned at that time into productive investments to provide returns in the future when those workers approach retirement. Through the 401k attempt, we have shown this policy to be a failure. The human cannot be relied on to financially prepare for retirement, this must be done with systems and at scale.
When I say "stealing from the future," I mean where pensions were promised and now they're being marketed as "too expensive" when what would've gone into pensions over the last 40 years was vacuumed up by the very wealthy through management compensation and shareholder returns. I mean sovereign debt that has been issued, to be paid back by future workers who in no way consented to having to work to pay that debt back. I mean infrastructure and climate expenses that will rapidly approach $1T/year in costs, because we did not have the will to pay for these things today.
Capitalism stole from the future, and it will never be enough. Someone is going to be left holding the bag, and everyone is going to be unhappy the future is not as bright as the past was.
(i am once again asking you to think in systems)
McKinsey: Dependency and depopulation? Confronting the consequences of a new demographic reality - https://www.mckinsey.com/mgi/our-research/dependency-and-dep... - January 15th, 2025
US Treasury Fiscal Data: What is the national debt? - https://fiscaldata.treasury.gov/americas-finance-guide/natio... ($36.22T as of this comment)
Climate change could erase $1.4 trillion in real estate value - https://www.axios.com/2025/02/03/climate-change-insurance-co... - February 3rd, 2025
Climate crisis costs the world 12% in GDP for every 1°C temperature rise - https://www.weforum.org/stories/2024/06/nature-climate-news-... - September 10th, 2024
HN Search: climate change cost - https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...
The cost to fix America’s crumbling infrastructure? Nearly $2.6 trillion, engineers say - https://www.cnn.com/2021/03/30/politics/infrastructure-us-in... - March 30th, 2021
>>42052544 (401k failure citations)
Money paid to a shareholder is money not paid to the person doing the labor and vice-versa.
That's not to say that pension funds are the sole reason that wages haven't kept up with costs over the last 50-ish years, but it doesn't help, particularly when management/the oligarchs are compensated mainly using the same shares that those retirement and pension funds use to generate revenues for the people they cover.
This is one of many ways that folks aged 70+ had it much better than folks in the workforce now, and represents generational inequality that you should not minimize or attribute to "capitalists."
You may, if you like, attribute it to "generosity" by individuals indifferent to "math."
https://www.forbes.com/sites/edwardsiedle/2021/09/03/chicago...
Shouldn't a reasonable business have been investing forward to avoid this problem? IE, you don't use todays dollars, you use yesterdays dollars.
Its seems the flaw is that they lacked sufficient savvy to invest the pensions in a way where it would be able to build upon itself.
If you "calculate the net present value (NPV) of benefits received minus taxes paid for US generations born 1850 to 2090," you find "all generations 1950 to 2050 are net gainers, while many current elderly are losers" [1].
("There are two peaks in net benefits. The first peak was centered on the cohort born in 1908 which experienced the large windfall gains from the start-up of social security but missed much of the windfall losses from the expansion of public education funding. On net, the 1908 cohort received net transfers amounting to 5.7% of lifetime earnings. The second peak in net benefit is centered on the cohorts born in 1993-94 which experienced the positive benefits of the educational expansion funded by previous generations and which are projected to avoid the looming net costs of paying the social security and Medicare implicit debt. On net, these cohorts are forecast to receive net benefits amounting to 5.6% of lifetime earnings.
There are three sets of cohorts which experienced net losses through the transfer systems. Those born before 1880 experienced net losses due to the expansion of the public education system. Those born between 1930 and 1947 also experienced net losses. While these cohorts did receive large windfall gains associated with the start-up periods for Social Security and Medicare, these were more than offset by windfall losses from the expansion of the public education system. Cohorts born after 2060 are expected to incur increasingly large net losses via the public transfer systems as Social Security and Medicare overwhelm the gains through education.")
Then, a competitor disrupts your segment. The competitor is new, and for whatever reason does not have the same legacy pension expense. In order to compete, you must invest. But your pension expense in particular does not allow this.
What does the legacy enterprise do in this situation? In many cases in the 20th century, per Patrick, the business lost relevancy and slowly went bankrupt.
"Millennials are now wealthier than previous generations were at their age" [1] on the back of home-price appreciation [2].
[1] https://www.wsj.com/personal-finance/millennials-personal-fi...
[2] https://www.stlouisfed.org/on-the-economy/2024/feb/millennia...
> By age 30, just 42% of millennials owned homes, compared to 48% of gen Xers and 51% of baby boomers, an analysis of government data by Apartment List found. This gap persists into their early 40s, with the oldest millennials still having a lower rate of ownership than previous generations when they were that age. ...
> But turbulent times may be ahead for millennials. Experts say that the window of improved affordability may have already closed.
> “They bought houses and they are active in the market,” said Lautz of the NAR, “just not at the rate that we should be seeing for this age category.” Housing affordability has declined steadily in 2023, according to the NAR, as has inventory, from 1.9m homes in June 2019 to 1m today. And this year, boomers are once again the largest group of homebuyers, often competing with millennials looking to buy their first home.
> The personal savings rate is now 4.3% compared to an unusually high rate of 33.8% in April 2020. And Experian expects student loan payments – on pause during the pandemic – to resume in October at more than $200 a month on average.
> Matt Kinghorn, a senior demographer at the Indiana Business Research Center at Indiana University, said the increase in home ownership among young adults over the last few years “could potentially be short-lived, driven by those really low mortgage interest rates and a surge in personal savings during the first year of the pandemic”.
https://www.pewresearch.org/short-reads/2024/10/25/a-look-at...
> One commonly used (though also criticized) benchmark for housing affordability is that no more than 30% of household income should go toward housing costs. Households that spend more than that are considered “cost burdened” by the U.S. Department of Housing and Urban Development.
> By that standard, 31.3% of American households were cost burdened in 2023, including 27.1% of households with a mortgage and 49.7% of households that rent, according to 1-year estimates from the Census Bureau’s American Community Survey (ACS). (Many more people own than rent: In the second quarter of 2024, 65.6% of occupied housing units were owned while 34.4% were rented, according to the most recent estimates from the Census Bureau’s Current Population Survey/Housing Vacancy Survey.)
401ks are a terrible on their own. It has thrown everybody for the wolves and tied people's financial wellbeing to the vagaries of the market. But there's still a flipside. Pensions should not be used to provide a level of income to maintain a lifestyle (cue anecdotes of boomers packing up and leaving for florida). Pensions should be to provide a baseline level of financial support for the essentials, perhaps a little above, say like social security but a little more. But they are not that, generally speaking. Retiring at 58 with 80% of wages - or whatever absurdities sometimes occurred - _is_ theft from the young.
This derisks everyone's risk of the usual human failing (lack of financial sophistication, adverse events, etc), while enabling those who want to invest above and beyond a mechanism to do so. Right now, it's Mad Max with some Social Security scraps [2].
[1] https://en.wikipedia.org/wiki/Superannuation_in_Australia
$100 today and $100 is cheaper than $200 today, but not if the alternative is $101 today. Similarly, you might not agree is a good deal if I offer $100 today instead of $200 and leave you the $100 debt. Beneficiaries are not the same as the debt holders.
Lastly, deferred payment is a good deal if I invest the present savings. If I dont, the NPV calculation benefit calculation isn't applicable.
You sense a pension is like insurance (a benefit, paid out because of legal contract) , and this burden by mathematical nexessity is carried unequally. Other people feel like it should be more like a return on prior investment, a burden carried individually.
I think both are complementary fwiw because both by themselves have drawbacks, different moral hazards