There’s one economist who’s been beating the drum for an economic fix that is the opposite of what many are suggesting.

James K. Galbraith, the Lloyd M. Bentsen Jr. Chair in Government/Business Relations and professor of government at the University of Texas at Austin, wants tp kick older employees out of the workforce, not at 65, but more like 58 or 59.

“We should move as many older workers as we can out of the labor force,” he maintained, and allow them to collect Social Security early. With more Baby Boomers out of the way, he added, there will be more jobs for younger workers.

This, he told me after Obama’s jobs plan was announced, would help the economy and lower the unemployment rate.

He admitted his idea goes against conventional wisdom right now. But he doesn’t care. (more…)

I got bad news this week. My kids’ long-time dentist passed away. But what made the news even more tragic was he retired earlier this year and died a few months after that.

He was in his 80s but felt, for what ever reason, that he had to keep working.

Unfortunately, many of us may be following a similar work route. I got two reports this week from two different organizations and the news is bad for individuals who don’t want to work until they drop dead. (more…)

The U.S. workforce is getting older. We all knew it was going to happen. We’ve all been writing and reading about it for years.

So why the hell is no one ready for it?

This week, the business team at MSNBC.com unveils a series of stories about how the workforce is graying, and more Americans are going to work past age 65 because most aren’t able to afford retirement.

From MSNBC.com’s John Schoen:

With their nest eggs in tatters, the stock market in the doldrums and time running out, many older Americans are resigning themselves to Plan C: simply working much later in life.

I wrote a piece due out later this week uncovering what Corporate America has done to prepare for the onslaught of mature employees. The answer: not much.

During my research I got the feeling that most employers, employees and even senior citizen advocates think an increase in older workers at the office, factory, or warehouse, is going to have little impact on the workplace. “65 is the new 55,” was pretty much the mentality.

But unfortunately folks, it’s going to take more than a couple of butt and face lifts to help aging workers punch the clock the way they did in their 30s and 40s. From office jobs to jobs in hospital wards, changes are going to have to be made to accommodate the growing number of employees who are also in their golden years. (I don’t know about you guys, but my back is already going and I haven’t even hit 50.)

On the flip side, is thinking a 50-plus worker can’t pull their weight. Lots of job seekers write me about how they think they were bypassed for gigs just because of their age even though they could handle the workload just fine. If they can handle the work, they should get the job.

We’re just going to have to get used to old people, whether they make use uncomfortable or not.

One of the first emails I got after I put out word that I was working on the mature worker story was from Dr. Payman Simoni, a Beverly Hills cosmetic surgeon:

THE SIMONI “WIDE AWAKE” FACE LIFT: Can be done in 1 hour.

This is how our society views our elders. With little respect.

Instead of holding up individuals as they age, we have and will continue to tear them down. Instead of seeing the wrinkles and gray hair as a sign they’ve lived a rich life and can teach us something, we view aging with contempt. Instead of using their knowledge and experience for the betterment of society, we have already begun to cast them aside to a virtual workplace wasteland, if we hire or keep them on at all.

The discrimination charges filed by workers 55 and older is skyrocketing, according to the Equal Employment Opportunity Commission, and there is little sign that things will get better for mature employees, especially in this economic environment.

It’s time for employers and employees to realize what a valuable resource they have in older workers; and it’s also time for workers as they age to respect themselves and stop making excuses for growing old.

When I covered GM and Chrysler auto plants more than a decade ago I found that lots of workers had lots of great ideas.

Since they were on the front lines they often had some key insights on how to improve efficiencies or tweak certain products to make them better. But alas, few managers listened. Even when the new management buzz words were “team building” and “employee empowerment”, for the most part it was same old same old. “Workers should be seen, not heard.”

Well, recent events at financially strapped Chrysler have thrust the autoworkers at the company into management’s shoes.

The company filed for bankruptcy yesterday and in a government-backed deal will partner with Italian car maker Fiat. As part of the deal, the United Auto Workers will get a 55 percent stake in the new combined firm and the union will also have a seat on the board.

From the Associated Press today:

After months on government life support, Chrysler is pinning its future on a top-to-bottom reorganization and plans to build cleaner cars through an alliance with Italian automaker Fiat. In return, the federal government agreed to give Chrysler up to $8 billion in additional aid and to back its warranties.

…When Chrysler emerges from bankruptcy, the United Auto Workers union will own 55 percent of the automaker and the U.S. government will own 8 percent. The Canadian and Ontario governments, which are also contributing financing, would share a 2 percent stake.

Lots of people have balked at the UAW’s ownership stake.

This from Wall Street Journal columnist Paul Ingrassia:

Having burdened the Detroit companies for decades with restrictive work rules, enormous health-care obligations and generous retiree benefits, the United Auto Workers union will now end up controlling two of them.

First off, I’m frankly sick of people referring to workers lately as a “burden.” Hello people, employees are the reason these companies can run at all. And, as for work rules and health-care benefits, maybe Ingrassia thinks we should just go back to a slave system where laborers are beaten with whips and allowed to die for lack of medical care.

Clearly managers at Chrysler agreed to UAW contract terms at some point and figured they had the money to cover what they promised. Turns out, they screwed up royally and now the company is at the brink.

Maybe we should give the poor chumps on the assembly line a go at running it.

Fiat management might indeed benefit by having worker representatives in the board room.

In the words of Bananarama, time to start “talking Italian.”

This past week, MSNBC.com published a series on career reinvention in this economy and it made me realize there are a lot of winners and a lot of whiners out there.

With our new series of stories on “Reinventing America,” we intend to shine a spotlight on many of these victims of the downturn who are being forced to find a new path in life, wrote my editor Martin Wolk in launching the package.

The series was kicked off with a great piece by my colleague Allison Linn on how many couples are loosing their jobs at the same time, and some are moving back in with mom and dad:

The lengthy recession is delivering a double blow to some American families, leaving both spouses without a job at the same time. The dual loss of income — and the difficult prospect of finding two new jobs — has some facing deep financial fears, including losing their homes and taking on expensive health care costs without the safety net of an employer’s insurance plan. It also is threatening the stability of some families, who are looking at a future very unlike the one they planned for.

I wrote two stories. One on how Gen Xers were hit by two economic downturns early in their careers, and another on how many individuals have been able to reinvent themselves.

On Gen Xers:

While much has been made of the plight of older baby boomers, in less than a decade many Gen Xers have taken a hard spill off the Internet wave and now have been knocked down again by an ugly recession, one of the worst on record.

On reinvention:

It’s not always a direct route from your present career to a new one. Sometimes you may have to try lots of things in order to find out what’s right for you, and you may also have to swallow your pride and pay some dues along the way.

The final piece this week, and there are more to come, was about the plight of Baby Boomers in this economy, written by one of my favorite business writers John Schoen:

The Me Generation’s twilight years were supposed to be a bookend for the Golden Age of the American Dream they inherited after the country triumphed in World War II. For all but a few, that dream is fast slipping away, as a surge in layoffs and the collapse of the housing and financial markets leave them with few options and little time to recover and rebuild.

As you can imagine, we’ve gotten a ton of feedback from readers on this package, both good and bad. But what I find so interesting so far, is the comments from readers who seem to miss the point, the big point — reinventing yourself is hard but hard work pays off.

Here’s one of the first comments we got:

Re- Inventing ones self, yea right ! im 50 and have had my own business since 84, I dont think there is much hope for a new career or school. how in the hell you going to pay for school and support your family when your homeless and jobless. Bailing out the banks is not helping americans in fact just the opposite, the banks continue and have gotten even worse with their predatory practices, if they hadn’t been bailed out they would be in the same situation as the rest of us instead of sending collections to India calling/ harassing people 20 times a say .

And one reader mocked Sheila Keahey, the woman I featured in my how-to-reinvent-yourself story, saying, “oh, it’s so easy for her to just do something new.”

Somehow, this reader missed the point.

In 2001, Sheila Keahey was laid off for a second time after 11 years in the financial sector, this time from her job as a financial analyst for a telecommunications firm in Dallas.

She tried substitute teaching and even worked as a sales associate at Neiman Marcus, but she couldn’t find her niche. The full-time retail job wasn’t paying the bills, so she started looking for a temporary position to supplement her income.

In the back of her mind, she had always been interested in health care, so she took a temp job at a local teaching hospital as a senior administrative assistant. There she was exposed to a profession she knew little about: medical coding.

“Here I am with an MBA doing administrative work, but I knew it would be a stepping stone for me,” she says.

Indeed, her step down paid off. Today, Keahey is a medical coder helping to manage health information for Parkland Health & Hospital System in Dallas.

Does Keahey’s story sound easy to you? This woman struggled, had to work two jobs, had to swallow her pride, and had to take a chance on an industry she knew nothing about.

It’s not easy folks. It will take work. I know, hard work and paying dues are out of style. But the Madoffs of the world show any other way is just a big ponzi scheme.

Maybe it’s easier for people to read what they want to read, to convince themselves that it can’t be done. That way you can just sit home and wallow in your anger and disappointment.

But the reality is, we are all masters of our own destinies. We have to stand up and make things happen, and even sometimes fail. I know that’s scary, but it’s the truth.

There is something going on around the globe and it smacks of a worker revolt.

Battered by layoffs and cuts in promised pay and benefits, a growing number of employees are saying “No! You’re not going to treat us like yesterday’s trash any longer.”

A group of workers at the famed Waterford Crystal factory in Kilbarry, Ireland, were told they were out of jobs when the plant shut its door in January. Instead of heading home to cry in their beers, employees stormed the factory gates, overtook the security guards and are now occupying the facility.

From the New York Times today:

Like the employees of the Waterford Crystal factory here, which ceased operating in January, you can go to your workplace, occupy the building and refuse to leave.

“We said, ‘You’re not going to stop people from coming to the place they’ve worked all their lives, where their family worked, and where they have built up the brand themselves,’ ” said Tony Kelly, 51, describing how a crowd of angry employees prevailed on security guards at the headquarters to unlock the front doors and let them in, on Jan. 30.

Sounds familiar? In December, hundreds of workers from Republic Windows & Doors were abruptly fired without notice and without their promised vacation pay.

The employees staged a sit-in at the Chicago plant to protest their former employer’s actions, and to everyone’s surprise, they got were they were owed, and also ended up getting jobs with the new owner.

And this fervor of worker sick-and-tiredness goes beyond just hourly workers.

Retired salaried employees at auto parts manufacturer Delphi, in bankruptcy now, felt they got the shaft when their former employer decided it wanted to cut promised health care coverage to 15,000 of its workers. In response, the retirees formed a coalition to fight for what they’re owed.

A bankruptcy judge has sided with the company but the retirees have appealed the ruling and a decision is expected today, according to HR trade publication
Workforce Management magazine.

It’s unclear whether Delphi’s retirees or the workers in Ireland will win their fight, but these pockets of protest may point to a growing desire among workers to not take cost-cutting measures that destroy employee livelihoods lying down.

What if workers en masse started questioning layoffs, benefit cuts and plant closures? What if they took matter into their own hands?

Right now, things just happen to so many employees. I get endless letters from readers who are beaten down and disgusted.

Is there anything they can do? Some workers are turning to mutiny, not just waiting for the Captain Bligh’s of corporations to suddenly become nice guys and treat them with respect.

Don’t you hate those photos the newspapers run when the stock market tanks? You know, those guys with the bugged out eyes on stock market trading floors.

I wish, for once, they’d show a photo of some poor working stiff in their late 50s opening up their 401(k) statement. The poor sap probably wasn’t lucky enough to have a traditional pension so their retirement is riding on the bleeding retirement account being sucked on by the vampire that is the stock market.

This from Bloomberg News:

The 50% drop in the Dow Jones Industrial Average since its October 2007 peak has exposed the shortcomings of the 401(k) as the nation’s primary vehicle for retirement savings. The system, which was examined by a congressional panel Tuesday, leaves workers with limited options and makes them overly dependent on financial markets for their security, critics say.

“These plans were always a weak reed to depend on because so much of the risk falls on the individual,” said Alicia Munnell, director of the Center for Retirement Research at Boston College, who testified at the House Education and Labor Committee hearing.

With the stock market free falling yesterday to levels not seen since 1997, I’m sure many of you are wondering why the heck you still contribute to your 401(k). And let’s face it, fewer employers are contributing to the plans.

But just letting the account die on the vine is probably a bad idea because for many of us, the 401(k), for better or worse, will continue to be our only retirement nest egg, even if it’s mangy.

I decided to ask a financial planner what is the best approach to these accounts during market turmoil.

Raxann Chin-Anguin, is an investment and retirement planning expert who most recently worked for Merrill Lynch as an assistant vice president in the firm’s retirement group.

Here are her thoughts on what you should be doing with your 401(k) right now:

No one likes to have something promised to them then taken back.

Unfortunately, that’s the case for many Americans whose companies are no longer matching their 401(k) contributions.

The growing list of companies forced to discontinue matching employee contributions due to the recession includes: Fedex, Sears, General Motors, Motorola, Eastman Kodak, and Starbucks. But, there is a bright side – the fact that benefits are being cut rather than additional layoffs pales in comparison.

Also, it’s happened before. Companies suspended 401 (k) contributions during economic downturns in the 1980s, 1990s and during the economic slump that followed the terrorist attacks in 2001. Nearly all of them resumed payments once economic conditions improved.

Now that you’ve come to accept that this retirement journey is nothing new, should you still be making contributions to your 401(k)? The simple answer is yes. Although your company no longer provides a match to your retirement dollars doesn’t mean your retirement dreams should be shattered.

With the stock market plummeting, the risks of no longer funding your 401(k) can be more of a setback than you think. The greater risk of not contributing is missing out on cheaper values. The term buy low, sell high does make sense. Think about it. Do you want to buy something high and sell it low? I didn’t think so.

Here are a few things to consider during this time:

Revisit your plan: This is a good time to take a good look at your retirement goals, and assess how much the change would set back your plan. This forces you to look at your current financial situation to determine if you need to save more now, or if you can afford to save more.

Contribute more: If you are able to put away more, then you should. The rule of thumb – the more you put in – the more you get out. Markets are cyclical, meaning you can expect a wave-like trend. Take advantage of the down times. Quite frankly you’ll be getting more for your money because investments are cheaper. What ends up happening is you lower the overall cost on your positions. The market will rebound eventually.

Decide where to invest: Now is also a good time to decide where to invest future contributions. You cannot roll over your 401(k) into an IRA while you’re still employed at that company, so you have no choice but to keep it there. It’s a good practice to first invest in your 401(k) at least up to the match before investing in an IRA. Why give up free dollars. However, without the match, you can fund an IRA instead if you are not satisfied with the investments choices in your plan. If your 401(k) has good investment choices and low fees, you can continue investing there. You are probably in a better position with your 401(k) anyway – when business picks up, your company may resume its matching contribution.

Invest carefully: Don’t make the mistake of investing heavily in your company’s stock with your 401(k) money. This is dangerous since you’ll lose all those shares if your company does go bankrupt. No more than 10% of your portfolio in company stock is considered a safe amount. Your 401(k) funds are only as safe as the investment they are in so choice wisely and diversify. Also, depending on your risk tolerance, select the right mix of stocks vs. bonds that is suitable for you.
Even though it’s a roller-coaster ride in this turbulent time, there is no reason to stop investing for your retirement. Take advantage of your prime working years, and put in as much as you can afford and recharge your 401(k).

No one said this would be easy but with a plan and a disciplined approach you may see retirement after all with or without your company’s contributions.

If you have any career or money questions just email them to me at telleve@gmail.com.

Is Joe Biden the middle class’ Santa Claus?

The vice president-to-be is being pegged by the incoming Obama administration as the savior of working people everywhere. He will head a new government group that will have bolstering the middle class as its top priority.

In a statement released yesterday Biden says:

“Our charge is to look at existing and future policies across the board and use a yardstick to measure how they are impacting the working and middle-class families. President-elect Obama and I know the economic health of working families has eroded, and we intend to turn that around.”

The initiative, named the White House Task Force on Working Families, will be headed by Biden and will include help from the secretaries of Labor, Education, Health and Human Services and Commerce. The goals of the group:

* Expanding education and lifelong training opportunities
* Improving work and family balance
* Restoring labor standards, including workplace safety
* Helping to protect middle-class and working-family incomes
* Protecting retirement security

Big guns. Big plans. But will the incoming administration be able to turn the tide for so many hard-working Americans?

I’m in the Christmas spirit this morning so my gut answer right now is, maybe.

The rank and file in this country have seen their earnings stagnate in the last decade; they’ve seen their nest eggs and pensions dwindle; and they’ve been asked to work harder and harder.

And, with this recession, you better believe it is the middle class getting the screws put to them.

I’ve written before in this blog about how employers are squeezing employee pay and benefits. The New York Times reports on this today with a story on how “More Companies Cut Labor Cost Without Layoff.” And now we hear that more firms are asking workers to put in ridiculous hours because people are just not shopping enough. There’s a story about this in the Wall Street Journal today title “Retailers Look to Capture Night Owls.”

No one has really cared about the working stiffs behind the news stories and numbers. Indeed, the WSJ story doesn’t even mention the toll these hours put on the workers.

So, back to Biden-o-Claus. I’m too old to think a task force, or any special government group can really make a major difference. But it is a step in the right direction. At least somebody’s noticed that there haven’t been a lot of work-place presents under the Christmas trees of middle-class Americans.

Time for some ho, ho hoing, no?

Maybe if Treasury Secretary Henry Paulson had been a former CEO of General Motors instead of a former CEO of financial powerhouse Goldman Sachs, this tale of two bailouts would be playing out differently.

There seems to be little sympathy in this country for the U.S. auto industry right now.

“Let the sick patient die already,” seems to be the refrain among politicians, pundits and economists. The big three automakers want bailout money just like their banking counterparts but the bar seems to have been set way higher for the Motor City than it was for Wall Street.

“They’re a dinosaur,” Richard Shelby, senator from Alabama, told Tom Brokaw on “Meet the Press” on Sunday, about why the auto industry should be allowed to fail. And an analysis in the Wall Street Journal on Saturday titled “Just Say No to Detroit” by renowned economist David Yermack suggests: “We would do better to set this money on fire rather than using it to keep these dying firms on life support.”

Strong words for an industry that has in many ways created the middle class in this country.

Clearly, the auto industry has made some bad mistakes in the past 20 years, most notably, not moving fast enough to compete with foreign auto makers who made better cars.

But the banking sector — that almost everyone acknowledges created its own disaster because of greed that led to the subprime mess the whole country is now suffering from — got better treatment when it put its hand out for billions of dollars in taxpayer money.

When the $700 billion bailout was proposed, few went after the fat paychecks or retirement plans of the mortgage brokers or financial traders who helped navigate the mess. And CEOs — well they had to keep the millions they already pocketed and get the money they were promised because they had contracts with the companies they ran.

On the flip side, it seems to be open season on the compensation of middle class auto workers, with many suggesting union contracts should be renogotiated and payments slashed for existing workers if a bailout were to happen.

To that, United Auto Workers President Ron Gettelfinger, told a Detroit TV station over the weekend:

“Let’s go to AIG, Bear Stearns, active and retired workers: Did anybody go in and ask them to give back wages and benefit levels? What about the bond traders? Did anybody ask them? What about the cleaners in the building? Why would the UAW be any different?”

“We made an agreement, and we made major concessions,” he said. “So how can you blame the autoworkers?”

It’s an interesting question.

What do you all think? No matter where you stand on whether we should be bailing out corporations at all, do you think there is a double standard here?

Adding insult to injury, in his Wall Street Journal piece, Yermack — a finance professor at New York University’s Stern School of Business — actually suggests the government should just cut a $10,000 check to the workers instead of trying to bailout GM, Ford and Chrysler.

I’m not sure if Yermack has checked lately but veteran assembly line workers make about $1,200 a week and many own their own homes and are able to send their kids to college. While newer workers entering the industry will make less than that, there are few places in our economy where these people will be able to find equivalent paychecks.

Someone should inform Yermack that his generous $10,000 offer would mean little if these men and women lose their well-paying manufacturing jobs, jobs that are already few and far between in this country.

I know most of you have been watching members of Congress, the president and a host of financial regulators scrambling to figure out how the bail out Wall Street. And many of you are probably wondering — “What the heck does this mean to me, the average working stiff?”

OK, here’s the low down:

1. If you have a retirement plan with your employer, basically a 401(k), and you’re retired or about to retire, this financial mess will hit your investments hard. (This is why getting rid of traditional pensions was a stupid idea.)

2. Collapsing financial firms, including some of the biggest investment houses in our nation, immediately led to job losses and more are on the way.

3. Layoffs in other sectors have also increased, everything from autos to technology, and alas, more tightening is expected.

4. Finding a full time gig right now will be harder because many employers are opting to hire temps instead of taking the plunge and hiring a permanent employee that gets benefits like health care. And if you have health care through your employer, expect to start picking up more of the tab next year.

While most workers will keep there jobs, get ready for a financial squeeze. “Average workers will mostly be feeling the crunch from personal finance concerns and household budgets; within the workplace, employees will likely see decreased bonuses, annual reviews and perks. As employers are trying to cut costs and spend only as necessary, the only employees who are likely to see substantial compensation increases will be the highest performers,” says Michael Jalbert, president of MRINetwork.

And it’s not just Wall Street bankers that will face problems.

“Most workers will care because these problems trickle down hard to the lowest wage earners,” says Michael Hayes, owner of Momentum Specialized Staffing, that specializes in recruiting employees for industrial, clerical and sales. “When capital is tight, sales slow, companies lay people off and this put undue pressure on their household budget. You can see the result with food banks and charities running out of food baskets and money.”

Lynne Eisaguirre, a workplace consultant, offers her tips for dealing with the dive:

1. Hold onto your job! Now is not the time to be changing jobs, unless you have a clearly better option. It is the time to network your heart out by going to industry events, conferences and lunches, meeting people who might help you get your next job or improve your status in your current job.
2. Focus on relationships. When job cuts arrive– as they may with this Wall Street crises– those who survive the layoffs will be those who have clearly understood their boss’ goals and helped he or she achieve them. Studies show people would choose to work with someone more likeable over someone more competent.
3. Turn off the media. It’s easy to panic and be unable to do a good job at work. Limit your media diet and focus on things you can control, such as doing your very best every day in your current job.

And for those workers that aren’t nearing retirement, it’s time to face the reality that we’ll have to be bankrolling our golden years and not necessarily be able to just rely on our employers or the government.

It sucks folks, I know. You come to work everyday, do your best to support yourself, your family, and then whammo! Smart guys that should have known better allowed greed to take over and we’re all paying for it now.

You can be mad. But don’t act like victims. Keeping, searching and doing well at a job all require strength and a positive attitude that tells you — “I’m going to make it.”