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The economic future is bleaker Editor’s note for post-Boom generations As I grow older, I reflect more on the past and on the edge of town. Many of the companies where Dana Heupel worry more about the future, not just for myself but our parents worked were locally owned, and whether for my grandchildren, whose ages range from 2 through good will or simply good business, they months to 10 years. helped support their communities in ways other than And because Illinois Issues is based at a university, wages. I witness an ever-changing stream of young men and That era truly was characterized by hope. Hope women flowing through the campus and our offices. that children would end up better educated and I can’t help but think how different the world is for better off than their parents. Hope that parents could them than it was for me — gulp — 40 years ago. improve their own situations through hard work. Despite the youthful exuberance of Baby Boomers And for the most part, it worked. It’s not that people who wanted to make the world a better place for our didn’t struggle; they did. But in general, the hope and children and now our grandchildren, I don’t believe belief was that the struggle would produce something we have. better. The last thing I want to write is a reminiscence of I was the current college students’ age in the late “the good old days.” For one thing, they weren’t 1960s and early 1970s. There was enormous turmoil always good, especially for minorities or women or over Vietnam and civil rights and the women’s foreign immigrants. Racism, sexism and xenophobia movement. But as the war wound down and those were more prevalent everywhere, not just in the movements began to make real inroads, hope and South. We were embroiled in a war that nobody opportunities still existed in the minds of most of my understood — most of all, the soldiers whose generational compadres and me. We still were able to patriotism bound them to follow our leaders, even find decent jobs and buy houses and raise children. when they were led into a small, seemingly Our situation really wasn’t much different from that insignificant country that had endured decades of of our parents, except many of us were indeed better civil war. Their mission was to stop the spread of educated and eventually likely to be a little better off. Communism in the jungles of Vietnam. They Nearly every decent job had good health insurance, couldn’t. In the end, it didn’t matter much, anyway. and most employees still had pensions. What did matter, though, was how that war, along The erosion began in the 1980s, although it didn’t with a petty burglary at the Watergate Hotel that seem that way at first. Companies began offering resulted in the resignation of a president and the 401(k) plans as a supplement to their defined-benefit imprisonment of many of his top staff, left a pensions. At least that’s the way it was sold. A typical generation disillusioned and distrustful of authority employer’s 401(k) match was one-half of the — especially of the government. Maybe that’s why the employee contribution up to, say, 10 percent of the subsequent years unfolded as they did. Maybe not. employee’s salary. So if you contributed 6 percent of I was my grandchildren’s age in the 1950s and early your salary to a 401(k), the company would put in 3 1960s. America was basking in its post-World War II percent. At retirement, you could expect a pension, glow, and the manufacturing sector spawned by the plus the proceeds of your 401(k) investments plus war industries was booming. There was a broad Social Security. Altogether, it would provide for a middle class: Most fathers — and sometimes mothers comfortable post-work lifestyle. — could find jobs that paid enough to buy a home HMOs emerged at about the same time. Much and raise a family. I didn’t know anybody who was simpler than filling out forms for health insurance considered enormously rich; I also didn’t know companies and then paying 20 percent of whatever anyone who was crushingly poor. The doctors and medical service was provided. As long as your doctor lawyers and bankers in the small Midwestern town joined the health maintenance organization, you just where I grew up lived well enough to have nice plopped down an inexpensive co-pay, and that houses and well-built automobiles and modest covered you all the way through, say, heart surgery. summer lake cottages, and they didn’t worry about At least that was the way it was sold. being able to afford to send their children to college. Pensions and health benefits. Few really thought But they didn’t live in palaces in gated communities much about them then. They were part of most http://illinoisissues.uis.edu/ 1 Illinois Issues 1 April 2013 3 employment packages. Employers that didn’t offer insurance costs for employers and employees alike Editor’s note them often found themselves with high turnover and climbed in multiples of the rate of inflation, and out- continued lower quality employees because the good ones of-pocket expenses and maximums on coverage for would soon leave for greener pastures. HMOs and other plans ate into salaries that already That’s no longer the case. had been slowly stagnating for 30 years. Maybe unions became too greedy. I knew workers Now, despite an upturn in the stock market, the at a large, unionized truck plant who planned for a jobs that my generation took for granted will be hard strike before contract negotiations had even begun for many current college students to find. Even for — we always strike, I was told. That truck plant is those who do find work, it’s much less likely that now shuttered. Maybe employers got too greedy. Top company-financed retirement or health insurance management salaries soared into the stratosphere, plans — benefits that were automatic when Baby and stockholders — including our own 401(k) Boomers entered the work force — will be part of the managers — demanded nearly impossible short-term package. If those trends continue, the outlook for returns. Maybe it was the emergence of the global jobs and retirement benefits and health insurance for economy. Middle-class American workers couldn’t my grandchildren is even bleaker. compete with their overseas counterparts who were The current battle between state government earning sweatshop wages and were generally happy workers and their employers — elected officials and to get them. taxpayers — over jobs and wages and pensions and Most likely it was a combination of all of those health insurance is among the last in the fight over factors, along with a trickle-down economic theory the future of the middle class. As I listen to the war of that ultimately didn’t trickle and the worst recession words, and especially when I scan reader comments since the Depression. The result was a gradual, at posted on online news stories about those issues, my first almost-imperceptible, decline of that broad impression is that the middle class life that Baby middle class in which I grew up and expected would Boomers once considered almost automatic has never erode. Salaries and pensions and health morphed in today’s minds into some sort of benefits and, most of all, jobs began to disintegrate or “Cadillac” existence. And that instead of public disappear. Employers at first canceled their outrage over that decline, the prevailing sentiment is employees’ defined-benefit pensions, and when schadenfreude: glee over someone else’s misfortune. times got tougher, stopped matching their workers’ And I can’t understand why many more of us aren’t 401(k) investments, which already were losing mad as hell about that. 1 ground as the stock markets tumbled. Health Jim Edgar, senior fellow, Institute of Sylvia Puente, executive director, EX-OFFICIO MEMBERS Advisory Government and Public Affairs, Latino Policy Forum, Chicago. Robert Easter, president, University University of Illinois. of Illinois. Staff Board Kent Redfield, professor emeritus of Robert Gallo, senior state director, political studies, University of Susan Koch, chancellor, University of AARP Illinois. Illinois Springfield. Illinois Springfield. Executive Editor CHAIR Sharon Gist Gilliam, chairperson, Philip J. Rock, attorney, Rock, Fusco Dana Heupel Charles W. Scholz, attorney, Quincy. David Racine, interim executive Chicago Housing Authority. & Associates, LLC, Chicago. director, Center for State Policy and EDITORIAL Statehouse Bureau Chief VICE CHAIR Graham Grady, attorney, Shefsky & John R. Rosales, director of Chicago Leadership, University of Illinois Springfield. Jamey Dunn Cynthia Canary, chair, Ethics Reform Froelich, Chicago. City Colleges, south Chicago Managing Editor Task Force, city of Chicago. campus. Doris B. Holleb, professorial J. Fred Giertz, director and professor, Maureen Foertsch McKinney MEMBERS lecturer, University of Chicago. Tom Ryder, attorney, W. Thomas Institute of Government and Public Columnist MarySue Barrett, president, Ryder, LTD, Springfield. Affairs, University of Illinois. Charles N. Wheeler III Metropolitan Planning Council, Bethany Jaeger, management Associate Editor Dana Heupel, executive editor/ Chicago. consultant, Kerber, Eck and Alysia Tate, Chicago. Beverley Scobell Braeckel, Springfield. director, Center Publications. Graduate Research Assistant Kelly Thompson, executive director, Brian Brady, executive director, Eliot Clay David Kohn, executive director of Ronald McDonald House Charities Mikva Challenge, Chicago. MEMBERS EMERITUS Public Affairs Reporting Intern public affairs, Union League Club of Central Illinois, Springfield. John Carpenter, senior vice of Chicago. (years served on board in parentheses) Meredith Colias president of public policy, Jhatayn “Jay” Travis, program officer, Michael J.

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