The End of "Good" Jobs?

NOTE NEW TIME -- we'll be meeting at 6pm, not 5pm.

Fifty years ago, a "good" job meant a secure lifetime career in a large corporation, with high pay and generous company-provided benefits. “Good” jobs were plentiful, and many people without college educations earned high wages and benefits doing routine clerical or manufacturing work.

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A major problem, however, was that company-provided pension and health insurance plans tied the worker to the company and severely limited his/her opportunity to leave one employer for another.

Pensions were tied to years of service, so employees had to stay with the company for a decade or more before they were “vested” (eligible for any pension at all). Moreover, anyone leaving the company before several decades of service was faced with an inadequate pension. In the movie "Sully", about the pilot who landed his plane in the Hudson, some people were arguing that he had made the wrong decision, and he feared that if the commission came to that conclusion, he could be dismissed, after 40 years, in his '60's, with a loss of his pension. For that matter, anything could go wrong those last few years of your career: a brain tumor might make you lose your judgment, make an unwanted sexual advance in the workplace, and wham! -- you're out, 1 year before retirement, with no pension!

Employer-provided health insurance was chosen by the company’s management, and employees had little choice over coverage. Many companies provided little if any coverage for dental, mental health, or prescription drug costs. As health care became more expensive, most companies reduced their costs by decreasing benefits and/or shifting insurance costs to employees. Moreover, company-provided insurance didn’t cover pre-existing conditions, so employees who developed health issues couldn’t change companies without losing coverage.

Additional problems with employer sponsored health care were:

• Companies are legally allowed to impose their religious beliefs on the contraception offered by the health plan. Birth control that is convenient (and therefore effective) is not cheap, though it is much cheaper than unwanted children.

• Companies will skimp on embarrassing health conditions, knowing that the affected employees will be too embarrassed to complain about it in the workplace.

• Many companies will make job offers without making the details of the health plan available to the employee who is trying to make a decision about whether to take the job, some even declaring the health plan "confidential". A marketplace does not function well without information. And it can be very awkward for a prospective hire to ask, during an interview "I think I may be pregnant. Does your health plan cover abortions?" or "Will your health plan cover my therapy?".

• Health insurance companies will typically tell an employer anything they want to know about any employee's health. A CEO I was talking to told me about one time he changed the company's health plan, and he had HR look up and inform all employees impacted by the change. I was shocked to learn that the insurance company just handed that information over to the company without hesitation. Ideally, so long as your health is not affecting your work, your health information should be confidential from your employer.

• Bundling health insurance with your job often makes it necessary to take a worse job to get better insurance, or worse insurance to get a better job. If the two are not bundled, the employee can make the best choice of both.

One badly-needed and obvious reform that was not made with Obamacare is that costs of insurance premiums paid by individuals, unlike those paid by employers, are not tax-deductible, leaving the marketplace with a tremendous incentive to keep health insurance tied to employment. If that tax change had been made, many employers would start giving employees the chance to opt-out of the employer's health plan and use the money they save to buy insurance from Obamacare, which would help keep Obamacare away from a "death spiral".

Today, technology and global competition have changed the nature of work and organizations. Most companies no longer provide secure lifetime jobs, high pay for routine work, or generous pensions. Health insurance continues, but often at a much lower level. The good news is that most employees are no longer “locked in” to their companies to provide for their retirement or health care. They can much more readily change jobs when they choose without jeopardizing their retirement or health coverage. At the same time, much of the responsibility for retirement saving and health insurance has been shifted from the company to the employee.

Most large companies have replaced “defined benefit” pensions with “defined contribution” plans which require individual employees to allocate their retirement funds among several or more investment options. "Defined contribution" retirement plans such as 401K’s and IRA’s also require employees to make their own investment choices. Unlike many company retirement plans, 401K’s and IRA’s are owned by the individual and not dependent the employer.

Although many individuals can and do make intelligent investment choices about their retirement portfolios, many others do not. Too many people have no idea how to allocate these portfolios, and many others lack the means or the discipline to put aside any funds for retirement or even a rainy day fund. When the stock market crashed in 2008, many employees who were near retirement age had all their retirement portfolios invested in stocks and not bonds, so suddenly they couldn't afford to retire on time.

Recent legislation in health insurance has also made changing jobs easier. Pre-existing conditions must be covered, so job changers with health issues no longer face loss of coverage. If Obamacare succeeds, it will provide health insurance options for employees of small companies. In spite of these changes, many employees remain either inadequately insured or lack health insurance.

A recent New York Times opinion piece, Can You Have a Good Life if You Don’t Have a Good Job? (http://www.nytimes.com/2016/09/18/opinion/sunday/can-you-have-a-good-life-if-you-dont-have-a-good-job.html?emc=edit_th_20160917&nl=todaysheadlines&nlid=35100310&_r=0) details the various government transfer payments which redistribute income from middle-class and wealthy individuals to low-wage workers. Most of the bottom 50% of workers pay basically no income tax, and many receive additional income through the Earned Income Credit. Other transfer payment programs include Medicare and Obamacare for health costs, Section 8 housing subsidies, and food stamps. On average, low-income earners pay less into social security than they receive and are subsidized by higher earners.

In spite of these and other transfer payments, many employees have low incomes, little or no retirement savings, and minimal if any health insurance. What are the roles of government, organizations, and individuals themselves in addressing these issues?