By the end of 2008 the recession had us beginning to wonder just how deep and dark this fiscal fallout was going to be, and as we saw almost 20% of companies with 1,000 employees or more reducing or suspending matching contributions to workers’ 401(k) plans, it seemed like it was going to get pretty dark. Two years later many companies, despite that light at the end of the tunnel that is improved business and profits, are reluctant to restore those benefits and some even predict further cuts. Sure the smaller companies fear reinstating the 401(k) match only to have to suspend it again but what is keeping the bigger companies that are back in the black from giving back?
It’s rough out there—we all know this, and today’s statistics from the Labor Department just proved the obvious. Unemployment stayed at 9.5% in July as private sector employers added a measly 71,000 workers but 143,000 temporary census jobs vanished. What goes more unnoticed is how lousy the climate is for the employed among us, as salaries stay stagnant or have even declined by some measures, and young people entering the job market face bleak prospects now and possible depressed wages for the span of their careers. Is this the worse era for the average American worker since the dawn of the Industrial Revolution?
Daniel Gross, senior editor at Newsweek; author of the Contrary Indicator and Moneybox columns for Newsweek and Slate.com
Kevin Hallock, professor & chairman at the Department of Labor Economics at Cornell University & director of the Institute for Compensation Studies