Downhill from Here: Retirement Insecurity in the Age of Inequality

by Katherine S. Newman

A sharp examination of the looming financial catastrophe of retirement in America.As millions of Baby Boomers reach their golden years, the state of retirement in America is little short of a disaster. Nearly half the households with people aged 55 and older have no retirement savings at all. The real estate crash wiped out much of the home equity that millions were counting on to support their retirement. And the typical Social Security check covers less than 40% of pre-retirement wages—a number projected to drop to under 28% within two decades. Old-age poverty, a problem we thought was solved by the New Deal, is poised for a resurgence.With dramatic statistics and vivid portraits, acclaimed sociologist Katherine S. Newman shows that the American retirement crisis touches us all, cutting across class lines and generational divides. White-collar managers have seen retirement benefits vanish; Teamsters have had their pensions cut in half; bankrupt cities like Detroit have walked away from their commitments to municipal workers. And for Generation X, the prospects are even a fifth of them expect to never be able to retire. Only the vaunted “one percent” can face retirement without fear.Other countries are confronting similar demographic challenges, yet they have not abandoned their social contract with seniors. Downhill From Here makes it clear that America, too, can—and must—do better.

Genres: Nonfiction, Economics, Sociology, Audiobook

326 pages, Kindle Edition

Published January 29, 2019

About the author

Katherine Newman is Professor of Sociology and James Knapp Dean of the Krieger School of Arts and Sciences at Johns Hopkins University. Author of several books on middle class economic instability, urban poverty, and the sociology of inequality, she previously taught at the University of California (Berkeley), Columbia, Harvard, and Princeton.

Reviews

[Elizabeth · Rating 3 out of 5]

Downhill From Here, written by Katherine Newman, most famous for the outstanding (though now extremely outdated) No Shame In My Game, is a nonfiction/"popular sociology" book about the increasing financial perils faced by retired Americans.

It does a good job of painting the grim life many current retirees face, highlighting, in particular, the way former Detroit municipal, United Airlines, and Verizon employees have suffered due to employer/city bankruptcy and/or corporate buyouts and subsequent restructuring, but the material presented on the even grimmer retirement future of Generation X is scant, and there is nothing presented on the abyss millennials are facing at all.

Indeed, anyone with a passing interest in their own retirement, or future retirement, is not going to find anything new here--it is, I think, common knowledge that older Americans can no longer hope for pensions (those largely disappeared with my grandparents' generation), can often no longer save enough for retirement, and even if they do, must hope that they have no serious health problems and expect that they may receive, at most, minimal social security benefits (the current funding of social security is precarious, as there is not enough money to fund it and the easy solution* shows no signs of being implemented,

As a picture of the all too familiar face of impoverished senior citizens is painted, Downhill From Here tries to address future retirees but offers up a sliver of information about the basically nonexistent retirement possibilities for Generation X, and doesn't discuss how millennials, who are facing a retirement laden with likely no social security at all and college loan repayments, seem to have the best grip on retirement savings of all (the millennials I know who save for their retirement do it, as far as I can tell, extremely aggressively (and kudos to them for being so, so smart about it!))

Downhill From Here is a bit drier than one expects to find in a popular sociology book, and the lack of interest and information on the retirement prospects of Generation X, as well as the total exclusion of Millennials, is disappointing. Those who really need to read Downhill From Here (those who insist that older Americans don't have it that bad) are unlikely to read it, and for readers like me, who are concerned about the future and are aware of the immense challenges, there is simply nothing new.

Overall, Downhill From Here presents a sad, true, and all too familiar portrait of how retirement has shifted into a landscape where those over 65 now frequently work in low-paying jobs fulltime simply to afford things like housing, food, healthcare, etc.

In short, there is no retirement anymore unless you are wealthy.

(* An easy way to fund social security would be to close the loophole that exempts the extremely wealthy from paying more than a certain amount in taxes to social security, etc.)

[David Wineberg · Rating 4 out of 5]

The United States ranks 17th (of 30) in provision for retirement, at about the level of Colombia or Chile. This scandal leaves millions upon millions scrambling to have enough food or meet monthly overhead. But the book Downhill From Here isn’t really about that. It’s mostly about people who contributed to pension funds all their working lives, only to have the pensions slashed, changed from defined benefit to defined contribution, or just eliminated completely. There are even cases of clawbacks, where employers change the rules and force retirees to pay back what they already received. Katherine Newman has made poverty her specialty, and this latest attempt get out the truth is very sad. It is a depressing read, which devolves to infuriating when it becomes obvious it all can be avoided.

Instead, it gets worse. One third of US retirees have no savings at all. Most Americans are forced to take social security at 62, leaving 60% of their check on the table. And an ever-decreasing minority gets any kind of company pension at all. Newman calls it pension erosion, but that’s like calling WWII a bit of a scrap.

The book breaks into chapters of method of pension destruction:
-There is bankruptcy, as in the city of Detroit, where civil servants simply lost their contributions and most of their pensions to Wall Street finagling and skimming. Blacks in particular, looked on the civil service as their ticket out of poverty and precarity. They, of course, suffered the most, as their homes became worthless too.
-There is corporate malfeasance, such as Verizon spinning off its Yellow Pages into its own company, which declared bankruptcy less than two years later, crippling the retirements of everyone (below a certain level). This allowed Verizon to avoid paying these (former) employees their pensions. The deviousness is shocking, as more companies find ways to raid the pension fund, fail to make contractual contributions, or invent creative ways of not paying out. One worker said “If I had made such a suggestion, I would have been terminated on the spot.” But when it comes from the top, it’s sound management.
-There is government–forced restructuring, as in deregulating trucking and airlines, where competition suddenly mushroomed into a race to the bottom, forcing employers out of providing pensions. At first, employees were asked to make the sacrifice of lower wages, which they would recoup in a solid retirement plan. Then the plan collapsed – double jeopardy.
-There is the precarity of the right-to-work states, where hours, wages and benefits are minimal, and state governments are stingy – even with (free) federal money. It all adds up to a sad litany of suffering , as Newman profiles people from coast to coast, from all walks of middle class life. What most have in common is an inability to make ends meet just living day to day. When they can retire at all.

-Verizon comes in for particular criticism for its extraordinary callousness towards it employees. They thought they had careers for life, working at the phone company. Instead, they found Verizon transferring them all over its territory for what turned out to be just a two month stint. Not enough to settle in. Then they’d be sent back, only to be transferred out again – for another couple of months. Eventually, people quit this torture, and forfeited their pensions. Verizon avoided paying and got to hire cheaper labor.
-United Airlines employees became ashamed of what became of their company. They actually bought it out of bankruptcy. But it screwed them anyway.
-The gig economy, outsourcing, and perma-temps all contribute to an inability to put away savings, to provide for retirement, or have any kind of job security.
-The forced decline of unions leaves workers with low pay, no benefits and no recourse. Management has a free hand, and clearly relishes it.

The chapter on welfare is also very disturbing. Government, the final backstop and the bargain everyone makes in living in a cohesive nation, fails to help. Worse, it is actually behind much of the damage. And it doesn’t support the people it damages. Newman talks to people who receive ten dollars a month in food stamps, and whose states put all kinds of bureaucratic barriers in the way of applying for anything at all. They make their lives miserable for being clients of the state.

Again and again, Newman narrates stories of people who worked and planned al their lives to live carefully within their means. They sacrificed during their working years, in order not to be destitute in their retirement years.

Of course, it doesn’t have to be this way. Newman examines the top three pension-providing countries, Denmark, the Netherlands, and Australia, which all have remarkably different systems and approaches. But they do have one thing in common: citizens do not worry about poverty or healthcare in retirement. Being a citizen has its rewards as well as sacrifices. Not so in the USA.

There are things even the US government could do, such as forcing companies to put retirement plans beyond their own reach, assuring payouts. Lifting the extraordinarily low maximum for social security taxes would make the whole system solvent (according to economist Paul Krugman). Lowering the eligibility age for Medicare to 55 would bridge a huge, expensive gap that laid-off middle-aged workers face when they are unable to find new work - because of their age. Even the city of Las Vegas has lessons for the country, as the gambling industry protects its own investment by investing in the wellbeing of its employees.

Sadly, the political will is not there. America is all about everyone for themselves. Being American confers no thanks for a life of hard work. Any help via labor protection laws or income supplements is classified as Socialism, un-American and out of the question. Newman says a lot of states are mean. She singles out Louisiana in particular. But it’s much more than that. It’s a mean, nasty country for 99% of its people.

The book suffers from a depressing sameness. Everyone has a similar story, it seems. Hard work and, sacrifice, to have a worry-free retirement. Then betrayal. And no recourse. Only the sources of the betrayal are different. There is a hopelessness to it in the American political context. Unfortunately, Downhill From Here is a truth that needs this kind of exposure.

David Wineberg

[Alex Kudera · Rating 3 out of 5]

The book is fundamentally sound, but it does not say anything original about the topic. Anyone who opens a newspaper knows that fixed-income pensions are disappearing, 401k/403bs are insufficient for most savers, and millions of others can only dream of retirement. The writer is a chancellor in a university system which presumably means she is past tenure and safely ensconced in the affluent world of upper-level academic administration. How she can write a book like this while choosing the life she has chosen says something ultimately horrifying about the human condition, and what we will do or how we will rationalize to protect and advance our own interests and save ourselves from the fate of millions surrounding us.

There is nothing in this book that is prescient or creative enough that a reasonably well read person would say--"Hey, this is why tenured professors are paid so much more than adjuncts and other contract workers!" In fact, it is as if she has observed what everyone from Paul Krugman to his kitchen sink has been draining or droning on about for decades and decided to do a book to add a line to her C.V. I believe she is in the Massachusetts system where other researches have shown that the median African-American has next-to-no net wealth and regular employees of established liberal arts colleges such as Hampshire are due to lose their jobs. There is no shame, apparently, in capitalist American academia, and anyone who has participated in departmental meetings in the humanities can attest to the fact that the tenured professors often see themselves as victims. Nomadland is but one example of a better book related to this topic.

[Diane Hernandez · Rating 4 out of 5]

The prospect of a comfortable retirement has, unfortunately, become an increasingly elusive dream and it is Downhill from Here.

In 2017, less than half of US employers provided a company-sponsored retirement plan. Even employees who thought they were covered have lost their retirement to bankruptcy and recent changes in the law allowing companies to renege on their agreements. Employees must increasing rely on their own 401(k) investments and the uncertain future of social security.

While Downhill from Here does look at how other countries deal with retirement, there are no non-socialist solutions presented in the book. Also, the book only skims over how much worse the retirement prospects are for generation Y, millenials and older Generation X employees. Between no pensions and ballooning student debt, the author could write an entire book focusing on them.

Working for county government, many of the takeaways described in the book have already been done to us. We have a two-tier retirement system. We were forced to pay more of the employer’s share for the same benefit about ten years ago. However, I’m just greatful we have a pension at all.

Downhill from Here explores an important subject. It is recommended reading for those within 5-15 years from retirement. 4 stars.

Thanks to Metropolitan Books and NetGalley for a copy in exchange for an honest review.

[Karen Ng · Rating 4 out of 5]

The money one could put away for retirement is directly related to the job one held in his lifetime. As the majority of Americans age and retire, the problems of inequality and the gap between haves and have nots also magnifest in this area. For example, the lifetime earnings of CEOs, which was never affected as much by the economy as a regular worker, could be hoarded by the individual and not being taxed or used by the US economy ( for education, SS, healthcare, etc until he reaches retirement age... And even then, he could continue to keep it in his family for the n generation to come and never had to contribute it to better the world for anyone else... Such an unfair system.

[Jen Juenke · Rating 5 out of 5]

I was shocked at the level of crookedness that has existed in companies in regards to the pension funds.
I loved that the author covered blue collar, white collar, and professional careers in her study of pension funds and or retirement accounts.
I read through the stories of the Teamsters, airline employees, city employees, and the yellow Pages employees with shock, awe (that they can overcome) and outrage for them.
This book is a needed wake up call for anyone who still has a pension.
The very last few pages include what other countries are doing to combat elder poverty.
This book should be mandatory reading for every single baby boomer nearing retirement!

[Tim Johnson · Rating 4 out of 5]

The other day I tripped over a three year old. As I lay there on the ground dazed and trying to collect myself, this child knelt down and said “Watch your back old timer. I’m coming for you.”

I’ve been telling people for years, these little kids may look innocent but they are just waiting for their moment. If you’re their parent, they’ll put you in a home. If you have a job they want, they’ll knock you off for it.

The truth of the matter is that Downhill from Here provides a frightening glimpse of a place nobody wants to find themselves: on the brink of retirement with no pensions, no personal savings, very little or declining social support, and no healthcare. The book describes a perfect storm scenario: disappearing defined-benefit pensions, longer lifespans, rising inequality, lack of personal savings, and cyclical recessions that put the squeeze on those who do have savings. Many of these people find themselves forced back into work because they can’t afford to retire or into taking government assistance because they are physically unable to work.

There’s plenty of blame to go around.

Many of the individuals interviewed made some poor life choices, ignored red flags, failed to develop themselves. Granted. But they were lulled into a false sense of security because they were promised something.

Perhaps the unions were to blame for pushing pay and benefit packages that were unsustainable. This argument is harder to make when CEOs start raiding pensions to make the company financials more attractive to investors. Those same CEOs often have reputations for maintaining “golden parachutes” that seem to be independent of company performance. It is equally hard to justify when it’s a highly profitable company gutting pensions and jettisoning people who had been previously been loyal as if they were simply debris instead of humans.

And then, there’s the politicians: passing laws with no idea what’s hidden in the details, rebranding Social Security as some type of entitlement as opposed to something that’s earned, and constantly dipping into the coffers to cover whatever. And in the case of a few Detroit Mayors, knowingly investing pension funds in default swaps.

It’s a problem with economical, generational, political, and social ramifications.

Here’s my advice based on what I read in Downhill from Here:
There’s no expectation of staying in the same job for 30 years anymore. Make sure you’re building and maintaining a network and upgrading your skill set constantly.
Learn everything you can about investing and get in the game. It’s better if you can automate it and eliminate the emotional aspects but do something! Nobody is going to do it for you.
Keep your eyes and ears open for opportunities and threats.
At the national level we could really use an individual retirement account the follows each one of us from job to job that gives employers and employees no choice but to contribute and firewall it so the politicians can’t ever touch it.

Probably the best advice in the book is this: “responsible parents must now make sure their children understand that there is no safe haven, no protection. ‘The children coming up now, should have alternate plans of how they’re going to get through life. They aren’t going to have the same advantages we’ve had. They’re not going to have people watching out for their pensions and watching out for their healthcare.you have to sit down and train these children now how to take care of themselves.’ We are all on our own” (p.107).

Or you can look that three year old in the eye and tell them to get used to that bedroom at their parents’ house because you ain’t retiring til 103.

[Tifnie · Rating 4 out of 5]

I should also choose "tragic" as a bookshelf.

This book was not only depressing but it makes you mad as all get out! Downhill From Here is about corporate stealing of hard earned money from American citizens!

Downhill from here explores Bell Company in the '60s and '70s prior to the Telecommunications Act of 1996. Stable company, a place you start and end your career with, paying into a pension plan that is supposed to support you when you retire. Bell Co then breaks off into AT&T which later becomes Verizon. Verizon now has $9.5 BILLION in pension-related debt. So what do they do?! Derisk 41,000 pensions. They create a (bogus) company called Idearc and then transfer $9.5 BILLION over to Idearc. Shortly thereafter, Idearc shows signs of insolvency and in 28 months it was bankrupt taking with it $9.5 BILLION in pension-related debt. Verizon can't pay the retirement pensions that thousands paid into, expecting to retire on. In fact, Verizon is current in a lawsuit regarding this move. (Google it)

Shockingly - as if that isn't enough, 85 other companies have followed suit, worth over $100 BILLION in pensions.

Next is United Airlines. They go bankrupt facing a $10.2 BILLION shortfall in retirement obligations.

Now comes "gray labor". Because corporations STOLE pension money; hard-working citizens who are retirement age can't afford to retire because their pensions are gone or drastically reduced; are re-entering into the work market making less than minimum wage, working less than desirable jobs (think Walmart Greeter) just to tread water. Less us not forget they still have mortgages, home repairs if their home is old, INSURANCE (because those same companies took that away too), and all those other essentials. Nice, huh?!

And now there is talk that Social Security might not be around for when Generation X retires! WTF.

So let me get this straight. If I steal money from a company; I lose my job, I now have a criminal record, maybe even go to jail. But if a company steals money from their employers - the CEO gets a golden parachute and the company keeps on doing business?!

Alrighty.

[David · Rating 2 out of 5]

not a practical how-to about retirement prep, but more of a snapshot of how rough the situation is for a lot of people [deep dives on former employees of Detroit from before its bankruptcy, Verizon from its Ma Bell days, United Airlines from before bankruptcy, people from an extremely poor Louisiana community, etc.], along with a little history as to how we got here.

It's an ok read -- could have given anywhere from 2 to 4 stars i suppose. Just really depends on how obsessed you are with retirement and therefore how much you've already read about it. As a 58-year old with inherited financial conservatism [one generation removed from Great Depression], I am for sure on the high end of interest/concern/familiarity.

If on the other hand you think most people still have defined-benefit pensions that will afford them a living wage when combined with their ample social security checks, or that most people with physically difficult jobs can afford to retire in their mid-50's when those jobs become especially grueling for them, or that most people with 401k/403b accounts have saved enough in them to fund increasingly lengthy retirements, or that health care financing is a piece of cake..............then (a) you need to get out more, and (b) this book is a decent place to start in catching up.

[Cheryl Campbell · Rating 4 out of 5]

While I am an active investor and therefore aware of the fiasco that many states are in (in relation to pensions and the risk profiles of their municipal bonds), I was not nearly as informed about all the broken promises encountered by pension holders. Many have been acutely hurt by the cutbacks, defaults, and change in payout terms by the pension funds. The Verizon story was particularly painful (for the pension holders that had worked at the former Yellow Pages). Living in Florida, I am also well familiar with the story of the "gray hairs" working for extra money to cover out-of-pocket rising medical expenses, or to raise the cash for high premiums prior to the start of their Medicare.

The chapter that was most surprising to me was the chapter on Odgen UT and the influence of the Morman church on creating a social support infrastructure. How incredibly illuminating! There is much to be learned from (1) how the church taps into the learned experiences of members throughout their life to benefit the community, and (2) how the redistribution methods of the warehouses work. I could go on, but to read about all that the church sponsors, in a state that I know is Republican and calls everything redistributive as "socialism" ---- well, I could hardly believe the two could co-exist in one state. A great closing chapter.

[Miguel · Rating 5 out of 5]

Everyone in the US who hopes to grow old gracefully should in theory have a solid financial plan for retirement, but in practice a large portion of elderly either have nothing or are woefully unprepared and essentially become wards of the state through relying solely on social security. But social security only pays so much and as people live longer these elder years are neither golden nor joyous. Compounding this sad state of affairs, employers and organizations are reneging on their promised debts to long term workers, and Downhill from Here does a great job in minutely showing the big picture and offering numerous individual examples of the precariousness of the situation that so many elderly in the US are finding themselves in. The portraits here are both informative and engaging – they help the reader understand the individual costs while also giving insight into the larger problem and in doing so the author is not condescending or judgmental. Underrated.

[Jeff · Rating 4 out of 5]

I'm glad that the wife and I saved wisely and can enjoy a financially stress free retirement. Lots of grim human interest stories here. It must be especially heartbreaking to have your pension disappear and your wages shrunk.

Although union membership is at an all time low, I suspect it will rebound in the next few decades as people say "enough is enough." When will the 1%'s realize that all benefit, including them, when we have a well paid middle class.

In addition to stories of individual family's circumstances, the book also contains a lot of law and politics, which can be a bit "dry" at times. Still, the book is well worth reading.

[Brian · Rating 3 out of 5]

DNF. Out of date. The book goes on and on about how difficult boomers had it as pensions dried up at one business or another. All that generation had to do was save regularly in a IRA in index funds and they would have had millions at retirement. Instead many of those who naively depended on a company or city government to save for them and manage all the risk were disappointed when they were let down by people who did not care about them.

People need to take charge of their own retirement. Don’t rely on the government or especially a big corporation, or you may end up disappointed.

[Deborah Stevens · Rating 4 out of 5]

"Here be dragons."

Well, apparently the maps didn't actually say that; nor does this book. But Newman may as well, as she painstakingly researches and presents multiple forces conspiring to create precarity for those seeking to retire in the US.

As a person approaching retirement age but working on a new career, I feel vindicated in doing so. If a bit depressed about the dim prospects for current and prospective retirees.

With thanks to NetGalley and the publisher for the ARC.

[Susan · Rating 5 out of 5]

The author takes an in depth look at the status of retirement in this economy. No longer can people rely on their retirement plans which is creating a great deal of uncertainty and even poverty as more and more people approach retirement age. This is a situation that is growing worse, not better, even for people who have years until retirement. This book provides a fascinating look at this important topic.

[Darnell · Rating 3 out of 5]

Though the writing and use of facts were good, this book has a scope problem: it's about the disappearance of pensions and nothing else. For example, 401(k)s are never analyzed at all, only mentioned as a bad thing replacing pensions. There's barely a nod to home equity used as an investment. I was hoping for analysis of likely future developments and consequences, but the book mostly just described trends that have already happened. Also, too heavy on the case studies for my taste.

[Adam Bricker · Rating 5 out of 5]

This was a difficult book to read in that it provides a bleak view of the future for economic prospects in the US, but it was really just recognizing things we all should see and presenting them in a concise fashion. Exploring retirement "options" for people with varying work histories and lifestyles, this book presents a realistic look at what we can expect in our elder years.

[Marilyn Sue Michel · Rating 4 out of 5]

This is a very detailed, informative book about retirement issues across multiple generations. Some of the chapters devoted to special groups such as the Teamsters might be skimmed or skipped if you have no interest. The situation is bad for many people, and the younger generations are facing trouble as well.

[Jacqueline · Rating 3 out of 5]

Well I certainly understand the source of many people's frustration in the current political climate. This book examines the disappearing retirement income many people might have expected. The future is an economic catastrophe in many respects.

[Rebecca · Rating 4 out of 5]

Probably the scariest book I've read all year, including the murder mysteries.

You can save for retirement your entire working career and have it all taken away from you by some Wall Street sociopath and the judge who indulges him.

Frightening stuff.

[Catherine · Rating 3 out of 5]

Mostly consisted of detailed experiences of individual struggling with retirement. I would have liked to see more investment and policy details that were the root cause of these problems, and more proposals to fix them.

[Karin · Rating 4 out of 5]

Financial inequality in retirement.

[Deborah Stevens · Rating 4 out of 5]

"Here be dragons."

Well, apparently the maps didn't actually say that; nor does this book. But Newman may as well, as she painstakingly researches and presents multiple forces conspiring to create precarity for those seeking to retire in the US.

As a person approaching retirement age but working on a new career, I feel vindicated in doing so. If a bit depressed about the dim prospects for current and prospective retirees.

With thanks to NetGalley and the publisher for the ARC.

[nx74defiant]

This review was written for LibraryThing Early Reviewers.
Rather depressing, but important book.

Pointing out the problem with current retirement situation and the burdens it is placing on people.

The author does try to point out possible solutions. But I don't find it very hopeful