Cross-posted at No Bebop.

Harold Meyerson says this is a crap Labor Day for actual laborers in today’s Washington Post, and he’s right, go read the whole thing.

He hits upon one issue that I don’t think is getting nearly enough recognition — the eroding position of older workers and new retirees. Once upon a time, older Americans worked until they couldn’t pick up a shovel anymore, then they fell back on whatever savings they might have had or the largesse of their children, such as it might have been. Those without children were shit out of luck unless some non-profit old folks home was willing to take them in.

Then along came Social Security, providing some subsistence income to those older folks and in some cases actually encouraging people to retire and open up jobs to younger workers. (Yes folks, Social Security isn’t just a pension and disability program, it’s also a jobs program.) As the economy bounced back from the depths of the 1930s to the heights of the 1950s and early 60s, the rate of elderly people in poverty went from twice that of working-age people to half their rate. At the same time, more and more older workers not only retired, but began retiring early. This was due not only to Social Security but to the defined-benefit pensions that were a feature of most jobs above that of discount store associate.

But in recent years, defined-benefit pensions began to give way to 401k’s, which are basically IRAs into which employers contribute — as long as workers sign up for them and kick in money of their own. Unlike defined-benefit pensions, which pay you from retirement to the grave, the 401k pays only until you exhaust it.

The 401k used to be a bonus perk. In my last job I had a defined-benefit pension and a 401k, which used to be the custom. Then my company was bought out by a larger one and it eliminated the defined-benefit pension entirely and cut its contributions to the 401k. And at the height of the stock market crash, the company cut its already token 401k contributions in half yet again. That’s the current trend, by the way; a not-insignificant number of folks are having their employers’ 401k contributions cut or even eliminated entirely.

This bodes ill for a majority of workers’ futures, and I’m not even addressing the companies that went bankrupt and spent their workers’ 401k’s on golden parachutes for the insiders. (There are laws requiring the maintenance of pensions even by companies filing Chapter 7 liquidation plans, but 401k’s aren’t pensions.) But when you look at losses recorded in the 401k statements of the last quarter of ‘08 and the first quarter of ‘09, you would not be surprised to discover, as Meyerson did in his column, that a third of Americans in the second half of their 60s are staying on the job, compared to 4 percent of the denizens of that socialist hellhole called France.

But you can see the trend here. Post-65 workers staying on the job cuts down on the opportunities for younger workers and exacerbates high unemployment numbers. They’re staying on the job because even with Social Security and whatever savings and partial pensions they have, they don’t think they can maintain their lifestyles even after economizing. There are going to be a lot more Baby Boomers depending on Social Security for the vast majority of their support, which means that the number of folks retiring at 62 is going to drop sharply and a lot of folks are going to blow past 65 (soon to be 66) on to 70 in order to maximize that benefit.

The only thing mitigating that situation will be the continuing job loss trend in which more post-55 workers are put on the street involuntarily, and those 62 and older will be forced to apply for SS benefits when they can’t find a job in the current economy. But for the under-65 group, that doesn’t help them with health insurance. They can pay the subsidized COBRA rate for 18 months, but after that they go naked unless they can afford one of those individual AARP policies or are bad off enough to go on Medicaid. (Yet another reason for universal health care.)

Does this sound like a demographic that is going to be available to help jump-start the consumer economy? Not to me either. Keep in mind that the crappy economy is hammering state budgets, and the state level is where a lot of retiree benefits, from cut-rate mass transit tickets to prescription drug subsidies, get funded. Those benefits could be severely proscribed or eliminated if the economy doesn’t bounce back and people don’t start getting called back to work.

Given this situation, we’re looking at a continuing decline in the living standards of retirees even after the economy bounces back, whenever that may be. And given the power of the elderly vote, government is going to be called upon to do something about that. So when you hear your brand-name Beltway centrists bloviating about “doing something about Social Security and Medicare,” feel free to laugh out loud — these folks have no idea of the shitstorm that’s about to descend upon us even after the economy recovers.

Oh, lest anybody accuse me of overlooking anything, I’d like to point out one more thing that’s going to exacerbate this trend I just described. Something like 25 percent of current workers who are eligible for a 401k haven’t even signed up for them. Which means they’ve essentially given back to their employer whatever amount of money might have been contributed to their retirement otherwise. That is just rank individual cluelessness, of course. Nevertheless, I’ll bet some of you reading this might fall into this category — or at least know someone who does. Consider this a warning to rectify this situation at the earliest possible opportunity. Those of you who have changed jobs without checking on your pension/401k status — go track down those employers and find out where your money went, and get it back. (You may have to open an IRA somewhere when you do this to avoid having to pay back taxes on the money.) Unless you’re looking forward to supplementing your retirement diet with cat food.