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How Pension Debts Ruined General Motors, Stopped the NYC Subways, Bankrupted San Diego, and Loom as the Next Financial Crisis
Penguin Press
May 2008
On Sale: May 1, 2008
288 pages
ISBN: 1594201676
EAN: 9781594201677
Hardcover
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Non-Fiction
In While America Aged, bestselling author Roger Lowenstein
explains how corporations and governments ran up ruinous
pension and health-care promises to workers—promises that
are now coming due and that will hit America like a tsunami
if nothing is done. Negotiating high benefits means gambling with future
finances—and when the farm gets sold out from underneath
major corporations or public institutions, it affects all of
us, and in ways we might not imagine. With his trademark
narrative panache, Lowenstein unravels the truth about how
pensions work in America and illuminates the impending
crisis. While America Aged is comprised of three fascinating
case studies— each an object lesson and a compelling
historical saga. The first goes back to the early days of
the United Auto Workers and its crusading leader, Walter
Reuther, to tell the story of how pensions and health-care
obligations destroyed the American auto industry, in
particular General Motors. Lowenstein then shifts the scene to New York City to tell
the story of the rise of public pensions and public sector
unions through the vehicle of the Communist-led Transport
Workers Union. Once again, justifiable benefits were
followed by outrageous ones, such as the right to retire at
age fifty. The saga reached a dramatic climax in 2005, when
workers responded to proposed pension cutbacks with a
massive strike that brought New York’s subways and buses to
a screeching halt days before Christmas. In the concluding episode, Lowenstein visits a metropolis
even more reckless in doling out benefits—San Diego.
Desperate not to impose higher taxes, city officials in this
highly conservative enclave cut a series of deals with
unions to short-change the retirement system and use pension
funds to run the city. A massive scandal ensued—two mayors
resigned, officials were indicted, and San Diego lost its
bond rating. Lowenstein warns that the pension wars that
erupted in Detroit, New York City, and San Diego are only
the first. But he also recognizes that workers are entitled
to decent security in their retirement—a critical problem as
the country ages. While America Aged explains how we came to
this crisis, and it also proposes a way out. Arming readers
with knowledge of the consequences of doing nothing, While
America Aged, first and foremost, a call to action.
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