"The harvest of old age," said Cicero, "is the recollection and abundance of blessings previously secured." Cicero wrote of the blessing of serenity achieved by a mellow and philosophical mind. Modern industrial man has a different blessing in view: economic security. And, like Cicero, he feels that it should be "previously secured."
This is easier said than done for two reasons: medical science has made it possible for men to live longer at the same time that high taxes and high prices are making it harder to save a nest egg for old age. Since the turn of the century, 18 years have been added to the average life expectancy at birth, which is now 65.5 years for the white male infant, 71 for the female; the average man (white) now 65 can expect to live to 77.4, the average woman to 79.4. The number of people in the U.S. past 65 years old has increased from 3,000,000 in 1900 to 11,500,000 today. Though total U.S. savings are near their alltime peak ($170 billion), more than a third of all U.S. families are saving nothing at all—and they are mostly families in the lower-income brackets who will need savings most in old age.
The drive for old age security caused two of the biggest strikes of the postwar era. Last fall nearly 500,000 steelworkers were out for more than a month to get a $100 pension. The bitter Chrysler strike, for a $100-a-month pension, ended last fortnight, after 100 days of idleness. The two strikes, costly to both management & labor, had one significant point in common: they were fought over the method of paying for the pension, not over the pension itself. The U.S. is so security-minded that the real question asked about pension plans is no longer "Why?" It is "How?"
Who Started Them?
The history of pensions in the U.S. throws some light on the "how." The first industrial pension plan was set up by the American Express Co. in 1875. It provided company-paid benefits (maximum : $500 a year) for incapacitated workers over 60 whom the company deemed worthy and who had been with the company for 20 years or more. The railroads soon followed; by 1908, railroad retirement plans covered two-thirds of all U.S. railroad workers.
Manufacturers who installed pension plans at the time did so on a highly informal, unilateral basis. "The company," one of the early plans stipulated, "may cancel any pension whenever . . . the pensioner displays a decided lack of appreciation . . . or is guilty of other serious misconduct . . ." By 1929 industrial pension plans covered 1,451,485 workers. Most of the benefits were paid entirely by the employer, and employees contributed nothing; most of the plans were on a pay-as-you-go basis, i.e., the benefits were paid out of current earnings.