Of Death and Pensions and the Blue Model Blues. By the Via Meadia Staff.

Blue Model Blues: Of Death and Pensions. By the Via Meadia Staff. The American Interest, November 6, 2015.

Rising morbidity and mortality in midlife among white non-Hispanic Americans in the 21st century. By Anne Case and Angus Deaton. PNAS, published online November 2, 2015.

Death Rates Rising for Middle-Aged White Americans, Study Finds. By Gina Kolata. New York Times, November 2, 2015.

Middle-Aged White Americans Are Dying of Despair. By Olga Khazan. The Atlantic, November 4, 2015.

The Crisis of the American Working Class. By Ben Domenech. The Federalist, November 4, 2015.

Now White People Are Dying From Our Terrible Economic Policies, Too. By Michelle Chen. The Nation, November 6, 2015.

The Dying of the Whites. By Ross Douthat. New York Times, November 7, 2015.

Study: Deaths rates rising in middle-aged whites. By Mike Stobbe. AP. AOL, November 3, 2015.

Bill Maher and Anthony Weiner Suggest Reagan Economic Policies and Conservatives Are to Blame for Increase in Suicides. By Ian Hanchett. Breitbart, November 6, 2015. YouTube.

Beyond Blue: The Twenty-first Century Retirement Model Is Coming into Focus. By Walter Russell Mead. The American Interest, October 16, 2015.


Via Meadia Staff:

The economists Anne Case and Angus Deaton—authors of a groundbreaking new study showing that middle aged whites without college degrees are dying at far faster rates in America than in other developed countries—were generally cautious about attributing causality to their widely discussed findings. However, as the Atlantic’s write-up highlights, they did speculate about whether America’s ongoing shift from defined-benefit pensions to a defined-contribution retirement model has something to do with the apparent agony of the white working class:

The United States has moved primarily to defined-contribution pension plans with associated stock market risk, whereas, in Europe, defined-benefit pensions are still the norm. Future financial insecurity may weigh more heavily on US workers, if they perceive stock market risk harder to manage than earnings risk, or if they have contributed inadequately to defined-contribution plans.

We don’t claim to know what did or didn’t cause the shocking uptick in mortality that Case and Deaton demonstrate, but we think it would be a grave mistake to read the paper and conclude that a return to the defined-benefit pension model is the answer to America’s social ills. This system was sustainable in midcentury “blue model” America, but it is not suited to the realities of the American economy today, for two reasons that Walter Russell Mead articulated in an essay last month.

First, defined-benefit pension programs strongly favor long-term workers. In the heyday of this retirement model, a worker’s pension size was determined by the number of years he spent at a company, and he needed to stay for a certain number of years to be eligible for any retirement benefits at all. The reality of the 21st-century American economy, where even the most established companies are under intense pressure from globalization and technological innovation, is that workers need to have the flexibility to move from one job to another. This is much more difficult under a defined-benefit system.

Second, defined-benefit pension plans are only as strong as the companies that guarantee them. This might have been tolerable in blue model America, where a handful of giant, stable companies dominated each industry, and it might still be tolerable in European countries, which a gigantic regulatory state blocks or slows American-style creative destruction. But in a post-blue American economy at the forefront of global innovation where companies rise and fall at the blink of an eye, a defined-benefit pension system is a risky bet, and could cause many people to lose everything.

None of this means that the shift away from defined-benefit pensions has not been painful for many workers—it has. And as the post-blue economy takes shape, companies and policymakers must think about ways to make the transition easier. Among the changes that should be considered: auto-enroll programs, where companies automatically deduct from employees’ paychecks and place money in 401(k)s; an increased focus on financial education in public education, so that workers can invest retirement plans more effectively; and more intelligent regulation of the part of the financial service industry that deals with 401(k) plans.

The decline of the post-blue economy has created its share of challenges, including greater financial insecurity among less-skilled workers. But the right answer is not to double down on a system that is on its way out, but to develop new institutions and policies that will allow Americans to thrive in the twenty-first century.


Chen:

The rising mortality rate, according to the study, paralleled “self-reported declines in health, mental health, and ability to conduct activities of daily living, and increases in chronic pain and inability to work.” But the trends differed by education level, as those with a high school–level education or less experienced worse outcomes than the college-educated.

This twist in America’s demography of death speaks to a societal malaise: The economic decline began well before the latest recession, but coincides with the economic dislocation that accompanied corporate globalization and “free trade” policies. Then the late 1990s brought a withering of the welfare system, leaving many older Americans facing an economic cliff after the financial collapse and debt crisis.

Nonetheless, the narrative of rising death rates among middle-aged whites should be viewed in a context of racial differences across many health measures; blacks in general still suffer higher mortality rates and poorer health outcomes than whites, for example. So this is racial inequality emerging in the negative direction. “The narrowing of the black white mortality gap could be thought of as leveling down,” says researcher Angus Deaton via e-mail. The study isn’t meant to suggest “tension or competition,” he stresses, but to show a more nuanced view of how economic insecurity and social distress interact.

These socioeconomic factors converge against the backdrop of a shattered American Dream: In their analysis of the results, Deaton and co-author Anne Case write that since economic growth has sputtered since the 1970s, “with widening income inequality, many of the baby-boom generation are the first to find, in midlife, that they will not be better off than were their parents.”

How does this figure into the public discourse on race and health? Rising white midlife death isn’t so much a counterpoint to the narrative of racial segregation as it is a revelation about the long-term costs of structural inequality. As the “middle class” hollows out, whites who started life under more promising circumstances—when a high-school graduate could land a job for life on the assembly line—are finally seeing the floor fall out under them too. Arguably, they may have had a harder landing than the groups always stuck at the bottom; could drugs be a distressed response to that collective class trauma? Many have dropped out of the workforce. Displaced middle-aged manufacturing workers have watched old factories shutter and neighborhoods subsequently deteriorate in the aftermath of mass foreclosures.

Economic hardship among whites is most acutely reflected in rural regions where joblessness and social distress run rampant, youth flee to seek better prospects elsewhere, and poverty has risen faster than in cities.

. . . .

But heroin overdoses may be a symptom of another social pathology. The 15-year death spike among middle-aged whites tracks the slow bleed of neoliberalism: the massive offshoring of manufacturing jobs, financial booms and busts, corporate deregulation. All these statistics suggest  the need for government-sponsored social supports is growing just as the government is rolling back welfare (Bill Clinton’s neoliberal welfare reform agenda was imposed shortly before the white midlife death patterns appeared), healthcare, and education resources (including workforce investment programs that were designed to aid dislocated older workers). The same generation has suffered from the collapse of institutions that once helped anchor the working class: active unions or just common workplaces in factory towns.

This aspect of public health may get lost in the statistics: the community cohesion that gives life meaning. Before these people lost their health or succumbed to despair, many may have lost something more vital: a sense of connection to the wider world. The downward leveling of society, with health crises penetrating a relatively privileged group, reveals a different kind of connection: the interwoven hardships in the fraying social fabric—a shared fate we only see when the seams come undone.

Khazan:

The reasons for the increased death rate are not the usual things that kill Americans, like diabetes and heart disease. Rather, it’s suicide, alcohol and drug poisonings, and alcohol-related liver disease.

The least-educated are worst off: All-cause mortality among middle-aged Americans with a high-school degree or less increased by 134 deaths per 100,000 people between 1999 and 2013, but there was little change in mortality for people with some college. The death rate for the college-educated fell slightly.

. . . .

Obviously, no one can be blamed for his own addiction or depression. But the causes of death this study highlights are the kinds of things—drinking, doping, suicide—that people who feel good about their lives don’t tend to do.

So, what’s eating less-educated Boomers?

One persuasive explanation, and one the researchers put forth, is financial strain. Jobs in fields like manufacturing and construction, which were historically filled by people without college degrees, have been evaporating quickly over the past 15 years. As I’ve written previously, less-educated people are more likely to be unemployed and to make less, so they struggle to afford things like therapy, gym memberships, and recreation that isn’t drugs. Without jobs, they may lack the social networks and sense of purpose that have shown to reduce mortality.

Nearly half of Americans in their 40s and 50s don’t have enough money saved for retirement to live as they’re accustomed to, even if they work until they’re 65. All of this is crashing down on Boomers, who were raised on the promise of the American Dream.

As Deaton and his co-author, his wife and fellow Princeton economist Anne Case, put it, “After the productivity slowdown in the early 1970s, and with widening income inequality, many of the baby-boom generation are the first to find, in midlife, that they will not be better off than were their parents.”

Deaton and Case note that middle-aged people in other countries also faced dire financial straits, especially during the 2009 recession. Yet they’re not dying like American 50-somethings are. One difference is that in those countries, comfortable pensions for retirees are guaranteed, so the prospect of an impoverished retirement might not loom as large in Europe as it does here.

“The U.S. has moved primarily to defined-contribution pension plans with associated stock market risk, whereas, in Europe, defined-benefit pensions are still the norm,” Deaton and Case write. “Future financial insecurity may weigh more heavily on U.S. workers.”

Tragically, that weight seems to be crushing these Americans before they can even retire.