How did Americans learn the value of being paid in retirement?

If you’re an American, you’ve almost certainly heard of Social Security. But you probably haven’t heard of its predecessor, the Townsend Plan, advanced by a Long Beach, California doctor named Francis Townsend.

Social Security—and the ways we think about work, aging, and retirement—owe much to the Townsend Plan and its California roots. Its history is worth revisiting today, as a premonition of politics in an aging world.

The idea behind the Townsend Plan, drafted in 1933, was for the federal government to give $200 a month ($400 for couples) to every American over age 60. It spawned a variant in California, too: the “Ham and Eggs” movement, which would give adults over age 50 $30 every Thursday ($120 per month) from the state. Those sums were enough to support middle-class living in the Great Depression.

Both the federal and California plans were conditioned on recipients not working, thus leaving scarce Depression-era jobs available to the young. The Townsendites’ slogan was “Youth for Work; Age for Leisure.” And even though the Townsend Plan was never adopted and the Ham and Eggs initiative failed, their larger ideas would triumph.

That these ideas were born in California was no accident. In the early 20th century, California was a place where oldsters came to retire in the sunshine—so much so that that the state had a disproportionate share of the nation’s elderly population. Long Beach, where Dr. Townsend practiced medicine, was a beach town with a warm climate that attracted a substantial number of older people.

Older voters then, as today, were more likely to turn out for causes and candidates than young people, which is why California became a leader in catering to them. Even before the Great Depression, California had developed a system of “outdoor relief,” welfare-like payments to indigent elderly residents in their homes as an alternative to placement in poorhouses, which were common in the late 19th century.

Townsend’s movement soon outgrew its local origins. In the 1930s, Townsend Clubs sprouted up across the country, all funneling dues and other revenue to a headquarters in Washington, D.C. As the movement expanded, publicity around it did, too. This provided an opening for grifters to take advantage of elderly people, who thought they had money coming in.

The national plan also had a structural vulnerability. The $200-per-month was to be financed by a tax that would have funneled something like one third of the national income to those over 60. It was essentially a major intergenerational transfer payment, from younger taxpayers to older ones.

The radical nature of such a transfer drew opposition, but it also provided a political opening for President Franklin D. Roosevelt, who was trying to get his much more modest Social Security plan through Congress.

Social Security was not inspired by the Townsend Plan, but it was part of the New Deal’s larger idea of taking the raw edges off capitalism through government intervention. Social Security was designed to look like some of the relatively few private pension plans of the era, with its trust fund and mix of employee and employer contributions. It was also a rather decisive shift in American politics toward the creation of a federal safety net that would include not just an old-page pension, but also unemployment insurance and federal welfare payments.

Social Security passed in 1935, and the Townsend Plan failed. But the first Social Security checks would not go out until 1940. And in California, with its elderly demographic, there were calls for more generous old-age pensions, and sooner.

Robert Noble, a local radio personality in Los Angeles, came up with a state-level plan that seemingly did away with the nasty cost-and-tax element that had sunk Townsend. The state would create a kind of currency to fund a version of “Ham and Eggs” that became known as “Thirty-Thursday,” or $30 payments to those over 50 every Thursday.

With Thirty-Thursday, oldsters would appear to get their pensions at no cost! (As is the case with today’s cryptocurrencies, creating value out of nothing has had a strong appeal in California.) This, of course, was not true. But radio listeners in the 1930s were prone to believing what came out of their receiving sets. The fact that Ham and Eggs was being touted on the radio also gave the idea credibility. Colorful promoters and con men quickly realized that they could make money soliciting elderly supporters of Ham and Eggs for “donations” to the pensions cause.

A Ham and Eggs initiative was placed on the statewide ballot in 1938.  Despite its questionable dependence on state currency creation, the Ham and Eggs initiative might well have passed had its sponsors not been involved in other shady affairs—Los Angeles police corruption, a car bombing, the recall of the mayor of Los Angeles, and a forgery connected to a scheme to build a radio station in Mexico. These sidelines of the initiative’s supporters got sufficiently bad PR to sink the measure; it got 45% of the vote. Another Ham and Eggs initiative in 1939 did even worse.

Still, the Ham and Eggers, the Townsendites, and other elderly groups remained a force in state politics for years. They played a role, for example, in 1942 in electing Earl Warren—later chief justice of the U.S. Supreme Court—to the governorship of California. But after World War II, the elderly lost their power, as California’s demographic profile shifted younger, as returning veterans and others settled in California and the baby boom got underway. The pension advocates’ last gasp was a successful ballot initiative in 1948 to raise California’s old age assistance payments to the highest level of any state in the U.S.

The battle of the Townsendites predicted the politics of aging and pensions today. France is already embroiled in strikes and protests over raising the official retirement age. Due to low birth rates, Japan and South Korea are facing shrinking populations. India recently passed China as the world’s most populous country because of aging China’s low-birth rates.

In these countries and our own, tensions are rising over how to divide the economic pie between the young and working population, and the retired elderly. In the U.S., some Congressional Republicans talk of using the debt ceiling negotiations to cut “entitlements.” When they use that word, they are talking about programs designed for older people who don’t work, such as Medicare—and that compromise version of the Townsend Plan that we call Social Security.

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It would provide health insurance, naturally, and a retirement plan, sick leave, and injured worker and unemployment compensation. And it would be equitable and portable: A person working part time for a number of different companies would have access to robust benefits that travel with them from job to job.

The good news is that there is a way to design just that sort of safety net. The bad news is that the digital platform companies keep missing opportunities to make it a reality, even as the need for a true safety net for gig workers grows.

An explosion in app- and web-based businesses has left millions of US workers on shaky ground—turned into freelancers, temps, and contractors, even when they’re employed full-time or doing professional work. U.S. businesses increasingly maximize profits by hiring so-called “independent contractors” instead of regular W-2 employees, thus evading having to contribute to health benefits, Social Security, Medicare, unemployment, injured workers compensation, lunch breaks, paid sick days, and vacation leave, which regularly employed workers are legally entitled to.

Taking advantage of this “independent contractor loophole” lowers a company’s labor costs by about 30 percent, but leaves workers in a lurch and threatens to eviscerate the national employer-based safety net by stranding more workers without benefits. It’s well past time to construct a new kind of safety net that allows workers with multiple employers to get the support they need.

The latest missed opportunity came in California, home state of Uber and Lyft, where these multi-billion-dollar companies refused to negotiate seriously with the California state legislature over establishing good working conditions for their drivers, including a robust benefits plan. So the legislature passed California Assembly Bill 5 (AB5), the most progressive labor law enacted in the U.S. in decades, over the objections of the ride-hailing companies. That prompted Uber, Lyft and DoorDash to spend more than $200 million, a record amount of money on a ballot initiative, Proposition 22, that purported to help workers but mainly enacted rules that will allow the companies to wriggle out of complying with AB5, as well as recent adverse court decisions.

Companies like Uber and Lyft are well aware of proposals to build better benefits systems. Following the publication of my book, Raw Deal: How the “Uber Economy” and Runaway Capitalism Are Screwing American Workers in 2015, I was asked to meet with high-level executives at both ride-sharing firms. A central part of the discussions was my proposal for an “Individual Security Account,” a portable safety net for drivers and for other types of freelance workers.

My idea was that each worker would have a mandatory, government-regulated Individual Security Account, and that any business that hires a worker would contribute an amount pro-rated to the number of hours worked for that business. The worker would then use those funds to pay for safety net needs such as health care, Social Security, sick leave, injured worker and unemployment compensation. Instead of pitting flexibility against security—making a gig worker choose between the work they want and the benefits they need—a portable safety net based on this kind of an “hours bank” system would allow for both.

Such a system would be a significant advance for the U.S., which lags other major nations in providing health care and other social supports. In effect, such a system would modernize the old New Deal support system, which over decades created a system of federal and state supports based on a worker’s employment for a specific employer. Employers became the administrative agent for this comprehensive system, both contributing their fair share into the various social insurance funds for each worker and deducting each worker’s share from their paycheck. This was not a government handout; it was earned benefits paid for by both the employee and their employer.

Transitioning to a benefits structure that isn’t tied to a single employer would be a major shift for the U.S.; fortunately, we already have a working model that can be adapted. “Multiemployer plans,” often overseen by labor unions, collect benefits contributions from more than one employer, operating like an insurance plan by pooling risk and taking advantage of economies of scale to distribute benefits to member workers.

Crucially, multiemployer plans allow mobile workers to earn and retain benefits even as they change employers or jobs, avoiding interruptions in coverage. The Screen Actors Guild, the Service Employees International Union, and the Teamsters all manage these kinds of plans, which are well-suited to serve carpenters, plumbers, and other tradespeople who work for multiple businesses throughout the year. Many actors and directors also are covered by such plans. The Individual Security Account, as I envisioned it, would fill in the gap when there is no labor union to coordinate contributions.

President Barack Obama endorsed my idea in his 2016 State of the Union address. Around the same time, 40 business, government, labor and NGO leaders—including the co-founders of Lyft, Logan Green and John Zimmer—signed a statement of principles calling for a portable safety net as a foundation for the future of work in the 21st-century economy. Uber CEO Dara Khosrowshahi also called for enacting a portable safety net plan. In New York, companies set up a Black Car Fund that collects a 2.5 percent passenger fee on every Uber and Lyft trip to provide ride-share drivers with an injured worker compensation benefit.

So it seemed like we had the makings of a win-win solution. But in 2017, when legislative bills were introduced for portable safety nets in the states of Washington, New York, and New Jersey, Uber and Lyft came to the bargaining table with state legislators offering less than pocket change (more like pocket lint). Rather than contributing 20 percent of a worker’s wages—the bare minimum necessary to fund an adequate safety net according to federal actuarial tables that track US worker benefits—Uber and Lyft offered to contribute 2.5 percent. And they wanted contributions to be voluntary. Labor unions and their legislative allies understandably rejected this meager offer. In all three states negotiations collapsed, and the legislation died.

When legislation was proposed in California, Uber and Lyft once again countered with a paltry portable benefits package. Without a serious offer from the ride hail companies, the California legislature overwhelmingly passed AB5, which attempted to solve the problem by reclassifying drivers as employees rather than independent contractors. That law went into effect on January 1, 2020, but Uber and Lyft refused to implement it, leading to multiple lawsuits by the Attorney General of California and other California agencies, and legal judgments against the ride hail companies.

One study found that if their California drivers had been classified as employees rather than contractors these last five years, Uber and Lyft would have paid more than $400 million into the state unemployment insurance fund alone. Instead, California taxpayers have had to foot the bill for the significant wage and benefit gaps created by these companies and their crummy gig jobs. For example, since drivers’ wages are so low (after deducting their expenses), many can’t afford health care premiums and end up in hospital emergency rooms. The public purse ends up paying for that.

Why can’t these multibillion-dollar companies, rich enough to spend hundreds of millions of dollars on a ruinous ballot measure, do better by their workers?

The answer is that Uber and Lyft are in huge financial trouble. They continue to lose billions of dollars every year. Profit margins are inherently low in the taxi business, and their predatory business model subsidizes more than half the cost of every ride in a bid to boost market share and undercut competition. Traditional taxi companies and livery drivers have been pushed to the edge of bankruptcy, and airport shuttle companies have been driven out of business.

Public transportation has suffered, too. Even before the COVID pandemic, public transit ridership in most major cities had declined, as commuters opted for the 50 percent company-subsidized Uber and Lyft rides over the mass ridership experience. One of the most ambitious studies of ridesharing impacts, conducted by researchers at the University of California, Davis’ Institute of Transportation Studies, found that ridesharing results in a dramatic rise in the number of trips made and miles driven in automobiles, as well as a pronounced reduction in the use of mass transit. The study found that if ride-hailing had not been an option for users, approximately 61 percent of trips would not have been made at all, or would have been accomplished via transit, bike, or foot. Add that to the “dead heading” miles that passenger-less Uber and Lyfts are racking up, and the researchers conclude that ride-hailing is boosting Vehicle Miles Traveled (VMT) in cities. All of that contributes greatly to increases in traffic congestion and carbon emissions.

Certainly for the approximately 20 percent of city-based adults who have used Uber and Lyft’s subsidized rides (most of them younger, college-educated, better-off Americans, who use the services twice as much as less-educated, lower income people), this transportation option has been helpful. But for the vast majority who ride on the bus or drive personal vehicles stuck in Uber-congested traffic, ride-hailing’s legacy has been decidedly negative.

With Prop 22, the companies have now legislated into existence another miserly version of a portable safety net, along with a face-saving attempt at a minimum wage. For example, the value of Proposition 22’s offered health benefit has been estimated at about $1.20 an hour—well below the $4 to $6 value of benefits mandated for employees under state and federal laws. And many drivers would not be able to afford their share of the offered health care premiums, which would range from 20 to 60 percent.

Proposition 22 also appears to offer to drivers a new hourly minimum wage of at least $16.80 per hour. But if you read the fine print, a complex formula will be used in which only “engaged hours” (when the driver has a passenger in the car) will be counted as hours worked when calculating the minimum wage. All the downtime waiting for the next fare, or disinfecting cars between rides, or driving back from a remote drop-off location, will not be counted as hours worked.

A driver might put in 10 hours in a shift but only have a passenger for five of those hours. If the driver earns $100 in that shift, that would amount to only $10 per hour—less than California’s legal minimum wage of $12 per hour. Yet the Prop 22 formula will calculate that wage as $20 per hour.

A study by the University of California-Berkeley’s Labor Center found that, under Prop 22, many drivers could earn as little as $5.64 an hour, not even half of California’s minimum wage.

None of Prop 22’s offerings come close to what drivers would receive if voters had rejected the initiative and drivers had remained regular employees instead of independent contractors (and the companies had complied with AB5). Even worse, Proposition 22, if it survives likely court challenges, will lock in these serf-like conditions, since it will require an unprecedented seven-eights vote by the state legislature to change it.

Uber and Lyft are their own worst enemies. They entered the taxi business 10 years ago, breaking every law in the books, motivated by the Silicon Valley philosophy of “move fast and break things.” Well they broke it, and now they can’t figure out how to fix it. The CEOs talk a good game, saying they are “ready to do their part.” But they are hamstrung by their own unprofitable business model, which has also turned out to be bad for many of their drivers, for traffic congestion, for the environment, and for transportation. How much longer can society afford to allow this business model to continues?

The post Can Society Afford to Hail a Ride in a Post-Prop 22 World? appeared first on Zócalo Public Square.

The conversation, which streamed on Twitter Live earlier today, explored how Americans’ lack of generosity and empathy for vulnerable citizens has led to a failing public health system, systemic inequalities, and lack of public resources in multicultural communities. Greenlee and Porter broke down the many ways the New Deal’s programs excluded nonwhite Americans from benefits reserved for white people, and the political strategies behind its architecture. They also considered the policies that cut the welfare system in favor of fueling mass incarceration, the attacks on the Affordable Care Act, and the fundamental shift it would take for America to expand the social safety net to include benefits like childcare and paid sick leave.

Drawing attention to the key COVID-19 relief measures set to expire at the end of July, Porter warned of “an immense spike in poverty, deprivation, and destitution” if Congress does not act to renew these measures. “The institutional failures that are produced by this racial hostility are really, really getting in the way of us dealing with this pandemic and getting our society and our economy back on its feet,” he said.

“Quoted” with Eduardo Porter:

The rhetoric around welfare starts revolving around ‘welfare queens’ who are corrupt and undeserving, about single moms who are just taking a check from the government and not taking a job. All that stuff is happening at the same time as this parallel discourse about our streets being under siege, again by people of color mostly. And so the criminal justice system becomes the tool to manage our society. It seems to me like a very, kind of like a crazy conclusion to take—let’s defund the things that improve people’s wellbeing, and fund this thing that locks them away because they’re dangerous.

Watch the full conversation below:

Zócalo Live: How Has Racism Shaped the American Economy? with @portereduardo and @CynthiaGreenlee https://t.co/I5SEZkt9hS

— Zócalo Public Square (@ThePublicSquare) July 21, 2020

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This month, we marked the 80th anniversary of the establishment of the most enduring policy success of the Great Depression, the program that reduced poverty for millions of older Americans.

But all that came two years after a retired doctor in Long Beach looked out his window one morning in 1933.

Since leaving the practice of medicine, Francis Townsend had become a not-very-successful, quite eccentric entrepreneur.

His next career was inspired when he looked out his window and watched three older women rummage through a trash can, searching for food beneath his window.

The sight enraged him. So he wrote a letter to the editor of the Long Beach Press-Telegram recounting the episode and his reaction to it.

“A torrent of invectives tore out of me, the big blast of bitterness that had been building in me for years,” he wrote. “I swore, I ranted, and I let my voice bellow with a wild hatred I had for things as they are.” He told the paper that at that moment, he had vowed to his wife that he would shout, “‘Until the whole country hears.’”

Townsend’s letter went on to condemn the ravages of the Depression and the cruelty of elder poverty. And then he made a fateful suggestion: The country should establish a new national retirement program that would both stimulate the economy and eliminate poverty for older Americans.

It was not surprising that such a suggestion would come from California, which had doubled its older population between 1920 and 1930. And it was appropriate that the idea emerged from Long Beach, where a third of the population was elderly.

In his book Endangered Dreams, California historian Kevin Starr described “the Long Beach elderly” of that time as “living on fixed incomes in simple cottages”:

[T]he majority of them folks from Iowa and elsewhere in the Midwest had come to Southern California to enjoy a simple life of church going, potluck suppers and checkers in the park …The Depression destroyed their plans as pension trusts shrank, or, in some cases, as they went under entirely … Fully 50 percent of the elderly in America were in need of some form of outside aid if they were to make it through the slump.

I know this history because I am a Southern California organizer and a policy wonk who has worked on issues impacting seniors in this country for over 30 years. This month, I am proud to be participating in events celebrating Social Security’s 80th birthday.

The program’s humble beginnings, with that letter, are a marvel. But the program is even more so. That rate of elder poverty has since dropped from 50 percent to nearly single digits. Life expectancy has gone way up. Americans can expect to age with dignity.

Over the decades, Social Security has grown beyond Dr. Townsend’s visions to cover disabled workers, as well as surviving spouses and children. And for all the criticism from skeptics about the program’s finances, reports show that Social Security is solvent and will be able to pay full benefits for a very long time. Today, it has a surplus of more than $2 trillion.

The history of Social Security itself suggests that bold changes in the program—perhaps even including its expansion in a time of government budget cuts—may be more viable than cynics assume.

What’s most remarkable about Townsend’s letter is the breathtaking speed of what happened next. The doctor received such an outpouring of support and shared outrage that he devised what he called the Townsend Plan.

Townsend laid out his plan in a series of additional letters to the newspaper. The substance was simple. He called for a $200 pension to everyone over the age of 60, funded by a 2 percent sales tax on all business transactions. Recipients, who had to be fully retired and without a significant criminal record, would be required to spend every cent of these monthly allotments. At the time, $200 a month was sufficient for a middle-class lifestyle. Thus the plan would be a major step in bringing people over 60 out of poverty while stimulating the national economy.

Less than four months after the letter to the editor’s publication, in January 1934, Townsend and a colleague incorporated an entity called Old Age Revolving Pensions, Limited. Eight months later, the first Townsend Club, an entity to support the plan, was organized in Huntington Park, California. By January 1935, a half million Americans had joined Townsend Clubs across the country, generating $1 million in dues and donations. That same year, Townsend made the cover of Time magazine. And a newly elected congressman from Los Angeles introduced legislation to implement the Townsend Plan.

There was more than one movement that pressured the Roosevelt Administration to create the program. And the president had been clear as far as back as 1932 that a program of social insurance for seniors was one of his goals. But history is clear that the Townsend movement was a key force in making it happen.

The passage of Social Security did not end Townsend’s movement for retirement security. Ultimately, over 2.1 million people joined more than 7,000 Townsend Clubs throughout the country. The vibrancy of the movement was so strong that in 1936 the clubs delivered petitions to Congress with 10 million signatures to back higher benefits for Social Security.

Townsend himself saw his plan as more than a retirement or stimulus. He wanted to organize and inspire the country to collective action. In an April 1935 letter to the Townsend Clubs, he outlined their primary goal–”enactment of the Townsend Plan into law”—then added, “The secondary purpose of Townsend clubs is a desperate fight to continue the democratic spirit and form of government in these United States.”

This mix—of urgency for passage in the now, and a long-term commitment to vibrant democracy—was the most profound feature of this movement led by a doctor from Long Beach. It is why Townsend succeeded. The Long Beach origins of Social Security are a reminder that grassroots organizing, for all its difficulties and challenges, is both possible and imperative if you want to change the world outside your window.

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And so, though I’m not rich or famous, as a retired California state worker I’m reasonably secure. I get a modest but safe state pension which, coupled with Social Security and a veteran’s disability check, gives me about 70 percent of what I made while working. That keeps food on the table and the wolves away from my door. I also get good health care coverage through a comprehensive Kaiser Medicare Advantage plan coupled with state paid supplemental benefits.

You may have heard that the retirement costs of workers like me are a fiscal problem for the state and the country. They are not. The real problem is the opposite: I’m becoming a rarity.

Fewer and fewer workers can expect or aspire to the modest retirement I have. The number of people receiving secure pensions has been in decline for at least 30 years; the number of pension plans of any sort today is just a quarter of what the number was in 1984.

Retirement security declined sharply in the Great Recession, in 2008 and just after, when Americans on the verge of retirement—ages 55 to 64—lost a third of their net worth. Younger boomers lost even more. Today, over 23 million Americans who are 60 and older are economically insecure, living at or below 250 percent of the federal poverty level. Five years ago, only one in five private sector workers enjoyed the sort of traditional defined benefit pension plan that supported our parents and grandparents for as long as they lived. Today, as companies eliminate such plans even more rapidly, the number is down to one in seven.

The outlook for the future is even bleaker. Back in 1991, half of all American workers planned to retire before they reached the age of 65. Today, that number is 23 percent.

In 2008, the US Government Accountability office reported that half of all companies that still have the old, secure defined benefit pension plans are freezing them and forcing newer employees into much less secure defined contribution plans. The GAO predicted that the remaining secure private sector pensions would be gone within a few years. And then there’s Social Security, which makes up about 38 percent of total income for the elderly, and for 1 in 3 retirees, it is their only income source.

Moreover, the Social Security fund will be exhausted within decades. After that time, contemporaneous money paid into the fund will be enough to pay only about 75 percent of benefits. As Social Security’s most recent annual report warns, the window for making changes to stabilize the fund is small and closing soon. All this spells a cold, hard old age for our children and grandchildren.

The reality of that cataclysm hit home to me not long ago when I was waited on at a fast food place by a sweet old lady maybe ten years older than I am. I imagine her pay was not much above minimum wage, say $8 an hour. (Maybe I’m wrong and she owned the franchise, but she looked frail and arthritic and hardly appeared to be the boss.) Those are poverty line wages and I would shudder to think that my fellow Boomer retirees are headed for a similar existence.

Public employees have not been spared from the attack on retirement security. The pensions of those of us who served the public are increasingly at risk. Recent polls show that here in my state of California, many people, alarmed by supposedly common $100,000 pensions, now believe that public pensions are too large and that those pensions threaten the solvency of state government.

In reality, 98 percent of public retirees barely get by on modest pensions. Half get less than $1,500 a month and many—teachers and public safety workers among them – do not even receive Social Security.

One would think that private sector workers, having seen their own pensions trashed, would stand at the barricades along with public workers to protect public pensions, if only to rebuild support for secure pensions as a whole. Instead, antipathy toward public workers seems on the rise.

Who’s hurt? Minorities, for one. African Americans are 30 percent more likely to be public employees than any other race. So, let public pensions shrink and African Americans will be disproportionately affected. The same will almost certainly be true for Latinos, whose retirement savings are about half those of non-Latino whites.

Finally comes the issue of OPEB, Other Post-Employment Benefits, principally health care. Here is where my own greatest concern lies. While my pension is secure for the foreseeable future, my health care coverage could be revoked at any time. It is at the mercy of our elected leaders and the voters. Like most public employers in the US, California does not set aside money in advance to cover health care for its retirees. It is pay as you go. The state budget has recovered from the awful effects of the Great Recession, but nothing says that we won’t face another similar fiscal mess. If so, non-guaranteed costs like retiree health benefits could be among the first things tossed overboard. National estimates of unfunded public retiree health costs run from $1.2 trillion to $2 trillion.

This January, in a unanimous decision, the US Supreme Court threw out previous dicta guaranteeing vested lifetime health benefits for retirees and sent the issue back to a lower court to determine how or even if such a lifetime guarantee should apply. Few private employers provide such coverage and the decision is likely to end even that. Public sector workers may fare little better. Here in California some state workers with sufficient service credit at retirement now receive full employer paid health coverage. Because of the Supreme Court’s action, such continued coverage is likely to be a significant bargaining issue in future contract negotiations.

A piece in the San Francisco Chronicle notes that the Affordable Care Act may be the savior of retiree health benefits. Governments could simply eliminate their retirees’ health benefits and instead give them a subsidy to buy health coverage under Obamacare, thus turning a program to ensure all Americans have health coverage into a bailout for strapped or fiscally irresponsible governments. Detroit, as part of its bankruptcy plan, will stop providing health care to retirees not yet eligible for Medicare, the Chronicle noted, and instead give them each a stipend to buy insurance in the Obamacare exchange. Other cash-poor governments will likely follow suit.

My own pension is probably not at risk. The California Public Employees Retirement fund is solvent and well-managed. I’m old enough for Medicare and the small additional amount the state pays for my Medicare supplement is affordable for it. But I fear greatly for those coming after me. I certainly do not want, in my senior years, to have to see oldsters from Gen X and beyond (my kids included) flipping burgers to supplement their meager retirement savings. Or worse, facing what Shakespeare described: mere oblivion, sans teeth, sans eyes, sans taste, sans everything. And, he might have added, sans health care and pension, too.

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Of course, as bleary-eyed boomer women now know, having it all is a crock. It means having no sleep, having no life, scheduling a Pap smear during lunch, carving out family time over a carb-free dinner, and scrubbing the toilet before bed. Instead of the equal partners we were supposed to become, we morphed into überwomen—women and a half—working around the clock. Clearly, we were too tired to notice that Ms. Gurley Brown didn’t even have kids. She did, however, have a driver and an assistant and a housekeeper. Her hair colorist came to her.

No one from the feminist era offered the slightest road map for an elegant retirement. Like all women in publishing, Helen Gurley Brown “retired” the way a terrified sky-diver jumps: pushed out by eager youngsters behind her. (Officially, she never retired at all and was on Hearst’s payroll until the day she died at 90.) Helen Thomas of the White House Press Corps abruptly, uh, retired when she blurted out her personal opinion on Israel. (She, too, was near 90.) When I did a Google search for “Famous women who have retired,” the top link was a story about 27-year-old actress Amanda Bynes, whose career derailed after she was arrested for allegedly tossing a bong out her high-rise window. I found no proud female retiree accepting her gold watch and golf club headcovers after a lifetime of worthwhile employment.

As I approach the traditional age of retirement—not 90, by the way—it occurs to me that I can’t think of a single female role model who retired the way I would want to … or even the way she wanted to. In fact, the whole notion of retirement itself feels vaguely shameful. In my circles, the “R” word is rarely spoken out loud. One retired friend has “reinvented herself” as a mah-jongg player. Another is now “freelance.” Without role models showing us how to retire gracefully, we’ve simply plucked the word from our vocabulary. Most often-used euphemism: “giving back.”

So where does this leave us working boomer women? Leaning in until we fall on our wrinkled faces? Probably. Perhaps because we were dead-tired, we women failed to stop the changes that now imperil the very financial independence we sought. Company-supported pensions are a shambles, 401k plans are about as stable as a subprime mortgage, and Social Insecurity may soon be the norm. As the number of centenarians is expected to double, perhaps even septuple, by 2020, we’re finally waking up to the reality that most of those hundred-year-old hotties will be us. According to the Employee Benefit Research Institute, most women erroneously believe they’ll need less than $250,000 saved for a comfortable retirement. Add up the years between 65 and 100, sprinkle in healthcare and inflation, and it’s easy to see why that’s nowhere near enough.

The cruel irony, for me, is the fact that my one real role model—my mother—worked as a bookkeeper all her life to help our family make ends meet. She “retired” when her male boss did. In her 60s, she was handed a check for $5,000 and thanked profusely for her 25 years of service to the company. Unable to find another full-time job, divorced from my father, my mom did the only thing she could. She lived into her 87th year on a retirement plan that consisted of Social Security and my sister and me.

Hopefully, my legacy will be different. When my time comes, I plan to reinvent myself as a freelancer who gives back as much as I can. In short, I’ll retire when I’m 100.

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Legislation signed last fall by Governor Jerry Brown would establish a retirement account for all workers at firms that have five or more employees and don’t already provide a retirement savings plan. The reason for the legislation, known as the California Secure Choice Retirement Savings Program, is that more than 6 million private sector workers in California lack access to an employer-sponsored retirement plan. Some of these workers may be saving on their own, but many aren’t saving at all—greatly increasing the risk that they’ll spend their retirement in poverty.

Consequently, a full third of California’s near-retirees are expected to rely almost exclusively on Social Security benefits in their old age. Seniors in this position are more likely to turn to adult children for support or seek out assistance from other safety net programs. Social Security is a crucial program that has reduced the poverty rate among the elderly dramatically; still, its benefits were never designed to be the sole source of income for our parents and grandparents.

This year, the new retirement plan will be subject to a market analysis to assess its feasibility as a self-sustaining program and to evaluate the specifics of its design. If all goes according to plan, by 2014, those 6 million Californians could slowly but surely get on the path towards being able to retire in dignity at a reasonable age.

An important feature of California Secure Choice is that workers are supposed to be automatically enrolled in the program. The idea is that people will save more if inertia works in their favor. Automatic enrollment, in tandem with default contributions, spares workers from taking the initiative to sign up, fill out paperwork, or make investment decisions. The new plan will take 3 percent of each paycheck.

Many conservatives in California have condemned the plan as intrusive and costly. But, while the plan isn’t perfect, it’s necessary. Many of the attacks on it are based not on its real faults but on misunderstandings of what it would do.

The primary misunderstanding is about the plan’s funding. Some Californians fear that the program will become just the latest burden on taxpayers, much like the state pension funds CalPERS and CalSTRS, which are notoriously underfunded. But California Secure Choice is designed to impose no new costs on the state. Unlike the state’s traditional pension programs, the new plan is set up so workers’ account balances derive entirely from their own contributions, and a guaranteed rate of return will be backed by private insurance. Using private insurance means that, should the fund lose money, neither the state nor participating employers will have to pay up. The tradeoff is that the return on workers’ contributions will likely be modest, since it will be offset by the cost of insurance, but workers are protected against losing money, and taxpayers won’t be on the hook if the fund’s investments underperform.

Now to the real problem: While 3 percent contributions are a great start, a contribution level this low over an entire career—particularly for lower-wage workers—is unlikely to yield a substantial nest egg.

So what can be done? One policy that could strengthen the program is “automatic escalation,” or an automatic increase of the percentage of income workers contribute each year or with each pay raise. These incremental increases help workers save more without even realizing it.

Another possibility would be to limit the option of a guaranteed rate of return to older workers—those who can least afford to take a risk—while permitting younger participants to make riskier investments that could result in higher returns. This approach would also cut insurance costs.

Of course, retirement savings are only one piece of the financial security puzzle. Last year, Americans took out $70 billion from their retirement accounts in early withdrawals, mostly just to pay for everyday expenses. Since families need savings both for the present and the future, another kind of automatic savings plan—workplace emergency savings programs—could help workers save for short-term purposes.

Whatever approach we take, however, automatic savings plans like the California Secure Choice Retirement Savings Program should be part of the picture.  They have the potential to democratize retirement and give all Californians a supplement to Social Security. A secure retirement shouldn’t be a privilege of the wealthy.

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