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'General Motors, Sears and Toys R Us: Layoffs Across America Highlight Our Shredding Financial Safety Net' (nbcnews.com)
New submitter Bruce Henry shares a story: Today's aging workforce faces an uncertain future. The announcement this week that General Motors will lay off 15 percent of its salaried workforce and shutter multiple plants in North America was a sobering reminder of how far the American worker has fallen. Unlike most large private sector corporations today, thousands of employees at GM still enjoy some union benefits. The company has reportedly set aside $2 billion for layoffs and buyouts. It's not much, but it's something -- many workers, if they are laid off en masse, will be far less lucky. Some older Americans are lucky enough to have been grandfathered into generous pension plans and others hope social security and personal savings will be enough to sustain themselves. But for millions of younger people, the outlook is bleaker -- an ever-diminishing social safety net, with retirement dependent almost entirely on how well they manage savings. Two-thirds of millennials have nothing saved for retirement.
The private sector pension as we once knew it is all but dead. Public sector pensions, meanwhile, are under attack at the state level. "Companies don't offer pensions anymore. Social security, when it was established, was meant to be one leg of a stool," says Gerald Friedman, an economist at the University of Massachusetts at Amherst. "One leg would be the private pension through employment, a second leg personal savings, and a third leg social security. Social security is now the only source of income of a lot elderly have." What, if anything, are our politicians doing about this? Progressives rail against President Donald Trump, but real retirement security has not been a big enough part of the conversation on either side of the political spectrum. Millions of Americans are in danger of entering their final decades unable to afford ballooning medical bills and cost-of-living expenses. This is a huge problem, and one that liberals in particular should have capitalized on this election cycle.
The private sector pension as we once knew it is all but dead. Public sector pensions, meanwhile, are under attack at the state level. "Companies don't offer pensions anymore. Social security, when it was established, was meant to be one leg of a stool," says Gerald Friedman, an economist at the University of Massachusetts at Amherst. "One leg would be the private pension through employment, a second leg personal savings, and a third leg social security. Social security is now the only source of income of a lot elderly have." What, if anything, are our politicians doing about this? Progressives rail against President Donald Trump, but real retirement security has not been a big enough part of the conversation on either side of the political spectrum. Millions of Americans are in danger of entering their final decades unable to afford ballooning medical bills and cost-of-living expenses. This is a huge problem, and one that liberals in particular should have capitalized on this election cycle.
FTA: with retirement dependent almost entirely on how well they manage savings. Two-thirds of millennials have nothing saved for retirement..... Social security, when it was established, was meant to be one leg of a stool," says Gerald Friedman, an economist at the University of Massachusetts at Amherst. "One leg would be the private pension through employment, a second leg personal savings, and a third leg social security. Social security is now the only source of income of a lot elderly have."
Everyone is completely bereft of personal responsibility? In the richest country in the history of the world, people can not be held responsible for their own future? They can be excused because they have to have the latest big-screen LED and Iphone? Fun fact: A high school student working less that 20 hours a week at minimum wage makes more than 90% of the rest of humanity.
As someone who has not been responsible with 401k savings, I can attest that it is not the rest of the country that is responsible for my retirement, and I do not care to hand more power over to clueless politicians and bureaucrats, which they will just use to garner more power. History has clearly shown they will badly mishandle any money that are given. Thank you, but no. Keep your so-called social security. I'll worry about me and mine.
Aah, change is good. -- Rafiki
Yeah, but it ain't easy. -- Simba
It is interesting to watch people that are one minor accident or treatable chronic disease away from having to face reality.
What do people do when they don't have the money they need?
They turn to crime. Then they get arrested and put in jail, where tax money pays for all of their needs. Also, higher crime rates creates a whole hosts of costs that ultimately come out of your pocket, including more tax money for law enforcement and higher insurance premiums in the impacted industries.
They aren't going to conveniently just lay down and die, so, you, as the tax payer, will pay for their needs one way or the other.
We are in a situation where the jobs that pay are in short supply, and the jobs that are available do not pay enough for people to both live on and save for retirement. This is great for the people at the top, who get way more money than they would have if they had to cover the costs of pensions and livable wages...but it is a nightmare for everyone else (and no, it is NOT POSSIBLE for everyone to be at the top).
So, your dismissive attitude will only allow the problem to get worse, and you will be impacted by the consequences, one way or another.
The companies may blame this on trade wars, but lets be real here:
Toys-R-US was going under, regardless of what the political climate did. They needed to change with the times, because people buy cool stuff from Kickstarters, OK stuff from Amazon, and cheap stuff from Wally World. They needed to morph into a Sharper Image like store rather than compete with the wholesalers.
GM... well, the Buick Envision is a Chinese import, so are a number of their Cadillac models. Their cars have been anemic and lackluster for a while, and they have tossed technologies which could have been useful, such as hybrid pickup trucks and SUVs. They were losing money because their sedans were lackluster compared to the competition, and they didn't really innovate. So, they used the trade stuff as an excuse to shutter plants to focus on gas guzzling SUVs, which means come the next gas crunch, they will be back in Congress begging for another cash infusion, when the public is buying plug in hybrids or all electric cars from Toyota.
Both of those companies would be on the ropes no matter who is POTUS.
This "just be good" philosophy doesn't scale. If everyone had a PhD and A-plus GPA, there would not be enough positions for their talent. PhD's would end up mopping restrooms, with many unemployed.
Or are you a social Darwinist who believes the unproductive/lazy should be allowed to just wither & die so that we breed more productive humans?
Even if you hold this view, many would turn to a life of crime and/or riots out of desperation, making for a nasty society.
We are on the crest of a typical economic cycle. A recession is almost certain within a few years.
Table-ized A.I.
If you want to retire comfortably, you need to make the most of your productive years. Not hope for a last minute bail out.
to your advice I would add, live a solo life, never have kids, never suffer a major illness and never trust the finance industry. any one of those mistakes and all your hard won savings vanishes.
GM is highly dependent on sales in China, which imports 13 billion dollars of cars from the US. GM also operates plants and joint ventures in China too. So to the degree that sanctions inflict economic pain on China, US companies and their workers will suffer along with the Chinese. This can affect even workers who are working on products sold in the US. As a company's resources contract, they direct those resources away from projects that are less profitable in the short term.
Now you could argue that we'd have been better off never getting into a trade relationship with China. That would be non-orthodox from an economic point of view, but you could make the case. But even if that were true, that doesn't mean you're better off disrupting that relationship. In business what you can accomplish from where you are is what matters, not where you could have been if things had been different.
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As I understand it; Bain Capital came in and loaded ToysR Us down with debt, paid themselves, and sold off the husk.
A colleague from Germany was visiting our office recently. He was quite perplexed as to why on a lunch walk we all were discussing the stock market. Basically everyone has to be both investor and worker here. Over there there is a reasonable pension system and people focus on their jobs.
It is also clear from various lunch walks with well educated co-workers that steady investing is beyond the grasp of many otherwise smart and rational people. Some want to have "my guy" handle their stuff (cue Berny Madoff flashbacks), others have been on the sidelines waiting for prices to be "right" while insisting they are not timing the market (they are). It is saddening that this is where we expect most folks to draw their retirement from.
So while I don't suggest there should not be a system with zero responsibility, the current system is akin tossing baby seals into a shark tank and wishing them the best. I would like to see an expansion of social security to help fill the gap that has widened into a chasm between what people need and what they have to retire at a reasonable age.
The only financial safety net you need is competence.
Oh bullshit. I'm a highly competent person and I've had to rely on unemployment payments in the past to get by. My mother suffered from and eventually died from ALS. She was a high level director at one of the big accounting firm but guess what? The fact that she was highly competent didn't mean shit to ALS. Eventually she needed to rely on the social safety net including social security disability before she passed. Many people find themselves in difficult circumstances for reasons beyond their control and they need help. To say the reason for their status is that they lack competence is beyond insulting.
You have to be a special breed of idiot to think that you are so "competent" that you will never need help. Maybe you'll be lucky. Many others aren't.
We currently have move openings than people looking for work.
You think people are magically qualified for any available job? Just because my company needs a skilled machinist doesn't mean one is available. There ALWAYS are jobs that go unfilled because the skillsets of people looking for work never perfectly matches the skillsets needed by people doing the hiring.
From "This Day On Slashdot":
2005, Canada moves to keep skilled workers: https://it.slashdot.org/story/...
200, Election results certified: https://slashdot.org/story/00/...
Slashdot has always had stories about issues that affect nerds, like employment and politics.
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SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
Or are you a social Darwinist who believes the unproductive/lazy should be allowed to just wither & die so that we breed more productive humans?
Trust fund babies disprove that approach. If you want to ensure that the next generation is productive then greatly limit inheritance and eliminate trust funds.
In the past, a single house hold earner could provide for a family. Now it takes two.
What's changed? THAT'S what we need to look at. ...
Increased consumer materialism.
Yup, we wanted more stuff. Oh, sure, there's also been some added income inequality quite recently, but the 1950s was a long time ago. We want each kid to have his own room. We want each adult to have a car. We take color TV, an electric refrigerator, a dishwasher, and a washing machine for granted. Back when "single house hold earner could provide for a family" those were all considered luxuries to be aspired to. And it's not like this is frivolous stuff, but we have raised our expectations and there's a cost to that.
Anyway, which do you (you the generic slashdot reader, not sycodon specifically) have control over: the unfair income distribution in the US, or the amount that you. personally, save? Which can you personally fix, and which can you only shout about on the internet? Not that you have to pick one, of course, do both! But shouting "life is unfair" on the internet is not a retirement plan. It is really easy, though, and doesn't require sacrifice to make it happen, so it's a distraction from the hard thing you know you need to do. We humans like our distractions.
Socialism: a lie told by totalitarians and believed by fools.
In the past, a single house hold earner could provide for a family. Now it takes two.
Median household income in the US is around $44K per year. Given that most people manage to get by just fine obviously that is more than enough to provide for a family. No it won't by you a house in Beverly Hills but it's plenty enough to put food on the table and take care of necessities.
Government regulations and their impact on manufacturers.
I work in manufacturing and have made my career there. Your argument that government regulations have much to do with the problems in manufacturing highlights the fact that you don't know much about the economics of manufacturing. Manufacturing is doing just fine in the US. The US manufacturing sector is worth about $3 TRILLION annually which by itself would be among the 6 largest economies in the world. What has changed in the US is that wages have risen to among the highest in the world so all the labor intensive manufacturing left for places with low labor costs. Capital intensive manufacturing has remained because the US has the lowest cost of capital in the world. Government regulations are if anything helping by keeping cost of capital low.
The only major problem US manufacturing has right now is we have an idiot president (and cronies) who think that raising the cost of everything we buy is somehow going to magically going to benefit us. Tariffs will solve no problem that currently exists in manufacturing. They will not bring manufacturing jobs to the US (actually the opposite is what will happen) and they will not force China to play nice.
What really gets me, was around 2004-2006 Ford, Chrysler and GM cut development in their smaller car lines, and went into Trucks and SUV's. Then Gas Prices Skyrocketed and a Recession hit. So companies like Toyota and Honda were doing much better because they had small fuel efficient cars ready in their pipeline. It took years for the big 3 to get a good car lineup. However once again Americans want the big ones again. So they are not making small cars.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
The beginning of the end of Toys R Us was the leveraged buyout (because the company was sitting on assets, had very little debt, but had hit on a couple slow quarters in sales). Bain Capital took the company, realigned the board with their players and reshuffled the executive team. They then sold off the assets, leased them back, borrowed money to the hilt and paid off the loans they took to make the leveraged buyout. And paid themselves a lot of money because they were so brilliant. What was left was a company that might have been able to change with the market and find some way to compete with Amazon, who is cleaning house in the toy bizz right now. Instead, with sales dropping every quarter as people are buying online because they don't have time to go shopping anymore, and the company already hocked to the gills and borrowing the limit of what it can, there was nothing left with which to change strategy and compete. In the end, the Bain-led board and executives took the company into bankruptcy, closed out the last of the assets and paid themselves yet again for doing such a good job destroying the company. Maybe they can make even more selling off the brand name...
The big advantage of representative democracy isn't that it consistently elects good governments. It's that it eventually gets rid of unusually bad ones. The main problem with this is cynicism and apathy -- people getting so used to bad government that they can't even entertain the thought of one being a little bit better.
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my mom is one of these people. She is a hardcore trump fan and my parents both worked for 40+ years each and thought they had saved for a comfortably for retirement. Well my mom has gotten a serious medical condition and it is a real possibility that all they saved over the course of their lives could be wiped out and they will go bankrupt having to pay the medical bills that the greedy private health insurance is fighting paying at every turn. Helping your neighbor is very American, but I have no idea how conservatives with this "I got mine" attitude is benefiting my mom now that they did everything right and are about thrown out on the street for being medically bankrupt.
Or, GM passenger cars are terrible and buyers go a different way.
Yes, there are more SUVs being sold. "Crossovers" are just tall station wagons on bigger tires. However, Toyota and Honda still sell a metric fuckload of Camrys, Corollas and Civics to the point of them being in the top 10 vehicles sold including SUVs and light-duty trucks like the Ford F-Series, Chevy Silverado, and Dodge Ram.
Clearly Toyota and Honda know something that eludes GM - like how to build a car that isn't a pile of shit after 40,000 miles.
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