Americaâ€™s private pension system is now in crisis. Over the past few years, American taxpayers have been put at risk of assuming tens of billions of dollars of pension liabilities from once profitable companies. Hundreds of thousands of retired steelworkers and airline employees have seen health-care benefits that were promised to them by their employers vanish. General Motors, the countryâ€™s largest automaker, is between forty and fifty billion dollars behind in the money it needs to fulfill its health-care and pension promises.
This crisis is sometimes portrayed as the result of corporate Americaâ€™s excessive generosity in making promises to its workers. But when it comes to retirement, health, disability, and unemployment benefits there is nothing exceptional about the United States: it is average among industrialized countriesâ€”more generous than Australia, Canada, Ireland, and Italy, just behind Finland and the United Kingdom, and on a par with the Netherlands and Denmark.
The difference is that in most countries the government, or large groups of companies, provides pensions and health insurance.