There was a time when punching the clock meant you could purchase a home, provide for your family, and spend your golden years comfortably with a pension — a guaranteed, employer-funded retirement plan for the rest of your life.

That dream has long since vanished (and we don’t hear the phrase “golden years” anymore, either). In its place, workers across American industry have experienced wage stagnation, or seen their jobs outsourced. Meanwhile, the US economy only benefits a select few, and makes the struggle real for everyone else.One could blame any number of reasons for this notorious decline, but each argument stems from the same dynamic: a growth slowdown in the 1970s, when factories were pumping out more than the market could handle, and the private sector was no longer eager to pour money into new production.

Turning Back the Clock

At the end of World War II, American manufacturing kicked off a surge in productivity. This period of economic growth primarily advantaged white families, while much of Europe was still recovering from the financial and physical toll of the war. At the time, a kind of informal agreement emerged between corporations and workforces: So long as employees didn’t interfere in business operations, management would ensure steady wage increases.

This arrangement fostered a relatively depoliticized working class aligned with large labor unions. Still, it was worker-led organizing and direct action that helped secure gains like consistent raises and the typical 40-hour workweek — achievements that improved the standard of living for working families nationwide and might not have materialized without such pressure.

Then, the So-Called Golden Age of Capitalism Came to a Close

By the 1970s, American businesses faced new international competition, driven largely by forces of globalization, as less industrialized nations advanced technologically. With profit margins thinning, the US government was compelled to encourage investment from the private sector. Essentially, whatever got in capital’s way had to go. That meant easing up on tariffs, lessening union power, and weakening labor laws.

Corporations started rolling back many of the hard-won gains achieved by workers on the factory floor. The system began to fracture, and the truce that once existed between employers and workers unraveled. The handshake deal embraced by boardrooms to maintain industrial stability started to fade away.

In this new era, American businesses maintained profit margins while the nation witnessed a significant decline in manufacturing. By the 1990s, large swaths of production jobs were outsourced abroad, and companies moved operations to Mexico. The positions that stayed within the country were often restructured into smaller, non-unionized labor forces, mostly sprinkled throughout the Midwest and Southern regions.

Beneath these broader economic shifts was a structural challenge embedded in the pension itself. As medical innovations extended life expectancy, employers were on the hook for providing guaranteed income over longer and longer retirements. The cost of maintaining these plans surged; the investment risk sat squarely with the company. For many, the burden became unsustainable. So even beyond globalization and weakening unions, businesses had a practical reason to walk away.

Pensions Were Simply Too Expensive to Keep Alive

Workers could no longer rely on their employers to provide pensions. Instead, they were furnished with retirement-benefit packages that required them to become self-educated (and self-funded) in financial markets, and to increase their knowhow in order to navigate the promise of financial stability.

Enter: the defined contribution 401(k) plan.

Once an arcane legal loophole designed specifically as a tax shelter for C-suite executives, the 401(k) became popularized in the 1980s and 1990s as a new way for America’s middle class to find wealth on their own. It didn’t matter however many decades one may have spent in a specific trade. Whether sitting behind a desk or sweating on the factory floor, employees were now expected to contribute voluntarily from their paychecks, make complex investment decisions, and shoulder the full burden of securing a dignified retirement.

The 401(k) was rarely ever marketed as such a demanding product. Just keep contributing and don’t look at it was the widespread (albeit not ill-intentioned) mantra — as if it were so easy. Certainly millions of workers have succeeded in building abundant retirement funds through consistent and steadfast contributions, but for the majority of the workforce, the experience has been inadequate and cruel. A recent U.S. Census Bureau survey found that in 2020, the median employee contribution to retirement accounts was less than $3,600, while the median account value hovered around $30,000.

Most wage-earning Americans are not equipped to handle the many demands that the 401(k) system places on them. “Most humans can’t arrange to save the right amount,” wrote economist Teresa Ghilarducci, who has studied the retirement crisis practically her entire working life, “invest the right way, avoid leakage, and distribute the money to last a lifetime.” The data speaks for itself: By 1970, approximately 45% of private-sector workers had some form of guaranteed pension. Today, that figure has dropped to just 15% with access to such a plan. At the same time, only 37.5% of the workforce actively contributes to 401(k)s.

There Was a Time When Being a Worker Also Meant Being an Owner

The responsibility for long-term financial security has shifted from employer to individual, forcing workers to fend for themselves in managing retirement planning. It wasn’t always this way, as older generations might recall a time when pensions were the norm. Those plans fostered a sense of ownership and loyalty to their employers; workers felt invested in the company’s success because the company, in return, was invested in their futures.

This sentiment is admittedly a little Disneyfied, but it was once very much a reality for working Americans. Today, the idea of spending decades with a single employer who also ensures your retirement is a virtual fantasy. Ironically, what was once considered a trap is now darkly romanticized. There’s a meme of The Simpsons’s Mr. Burns that occasionally makes the rounds in which Springfield’s local tyrant is posing next to a sign that reads, “Don't Forget. You're Here Forever” — a symbol of corporate servitude that, in today’s precarious labor market, feels like a joke many would happily trade flexibility for, if it meant that kind of certainty.

Now that retirement has been reduced to a solo project, what fills the gap once covered by pensions? Could technical innovations eventually help us navigate the challenge, or will Americans continue working longer and call it “freedom”? Either way, the distant concept of the golden years feels less like a destination than an improvisation.