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Macmillan Childrens Publishing Group

Downhill from Here

Retirement Insecurity in the Age of Inequality

Katherine S. Newman

Metropolitan Books




Rita Lewis never imagined she would find herself addressing a crowd from a podium on the National Mall in Washington, DC, or testifying before a committee of the US Senate.1 She came from a modest midwestern family, a textbook example of twentieth-century blue-collar America. But in a twist of fate, the retirement crisis would make her the public face of a social movement, made up of thousands of Teamster retirees looking to take their crusade to the country’s political leadership.

Rita’s father, Floyd Lanter, drove a tractor trailer out of Cincinnati his whole working life. When Rita was in high school, she had ambitions for college, but she had to abandon them because money was too tight in the family. Next, attracted like many other teenage girls of her generation to the idea of seeing the world, she dreamed of becoming an airline stewardess. But in the 1960s, flight attendants had to be at least five feet two inches tall. She was an inch short. “That was that,” Rita remembered, in her matter-of-fact way.

Instead of flying, at age seventeen she became a receptionist at a trucking company where her father had an “in” with the hiring manager.2 “The guys all took bets that I wouldn’t last even three months,” she chuckles. They underestimated this Teamster’s daughter, who knew a good thing when it happened to her. At a time when the minimum wage was only $1.00 an hour, she was making $2.25. “I loved that job. I really, really did,” she recalls. “I was very good at what I did. It felt like home.”

Rita’s high school sweetheart, Butch Lewis, volunteered to go to Vietnam in the summer of 1967. Within a few months, he was badly wounded, nearly losing his leg to the load of shrapnel embedded in his knee and thigh. He was airlifted to an American military base in Okinawa, then sent to Germany to recuperate. When Butch came back to the United States, he and Rita got married, and she left the workforce once their first child was born. Rita and Butch had long ago decided that it was best for their children if Mom was at home.

Over the course of the next forty years, Butch would endure thirty-two knee operations and three knee replacements. Years of physical therapy never quite calmed the pain from those injuries, and they would continue to plague him in the freezing winters and the humid summers. Still, the most pressing concern when he came home from the war was not his aching leg, but the need to find a job. Floyd Lanter came through once more, connecting Butch to a temporary position as an on-call truck driver. With that experience under his belt, Butch then easily transitioned to a much larger trucking firm, Holland Freight, where he worked from 1974 until the day he retired.

Rita grew to be a “proud … middle class, blue collar woman,” the daughter of a union trucker and the wife of another. Rita’s men were traditional fathers and husbands who took care of their own, asking for no help from anyone. Floyd and Butch were careful about their finances and modest in their lifestyles. Teamster wages were solid as blue-collar jobs went, but in the best of times that meant $60,000 annually—enough to take out a mortgage, run a couple of cars, and, in a good year, take the family to Disneyland. Even that depended on a working wife bringing in some money, which everyone thought of as “extra” but really wasn’t.

Butch and Rita built a good life for themselves, drawing on the security he had with Holland Freight. The company was good to Butch and he, in turn, was loyal to them. He would volunteer to take on extra freight to help generate business. Long before the dawn of cell phones, Butch bought a pager—then a new technology—so that he could pick up extra loads the company booked on the spot. One year, Rita remembers, he brought in $1 million in extra revenue all by himself, which was unheard-of among the rank and file.

From the outside, the Lanter and Lewis families looked a lot like those of the teachers and cops that lived in the neighborhood: homeowners with limited savings, careful about their finances and modest in their lifestyles. Most importantly, they trusted in dependable pensions and union-paid health benefits to the end of their days. The stability and security they enjoyed was the reward for many years of hard and unforgiving work. Unlike teachers, who can depend on the respect of the community and the status that comes with white-collar work, Teamsters are “grunts,” the invisible army we rarely acknowledge that moves the goods we use every day.

Floyd and Butch relished the brotherhood of fellow Teamsters and the protective cloak of the union. Those bonds mattered. Periodic layoffs, the unforgiving cold of the loading docks, the sweltering heat of trailers where they off-loaded their cargo—none of that had to be explained to their buddies in the union. Everyone endured these things for the salaries and retirement accounts that swelled with time on the rig. For someone like Floyd, with a seventh-grade education, that prospect made all the trouble worth it. He was a self-taught man who appreciated every dollar he made.

Between the end of World War II and the mid-1970s—Floyd’s prime working years and the early part of Butch’s time in Cincinnati Local 100—an expanding economy and a growing federal highway system put thousands of trucks on the road. Rising affluence generated insatiable demand. Consumers who had waited through years of shortages demanded furniture and food, refrigerators and air conditioners. Industries had to have spare parts, pipes to lay in the ground, cables to string for telephone wires, and logs to feed the construction industry. A rich America translated directly into steady work for the nation’s Teamsters.

For men with no college education, trucking was a good line of work in many respects. As long as they could get enough hours, the income and retirement benefits were on par with the best of the nation’s factory jobs. True, they suffered through layoffs and callbacks as orders surged and then receded. But that was the lot of most blue-collar workers in the 1960s and ’70s.

Bill Ackerman, a tall, broad-shouldered man from the south side of Milwaukee, is a second-generation Teamster. As a kid, Bill grew up hearing about the strikes of the 1930s, as union truckers fought for wage increases and fair pensions.3 His father started hauling freight in 1954 and stayed with the same firm for thirty-four years until his retirement. Bill followed in his dad’s footsteps and reveled in the same romance of the road. “It’s a freedom that people who work in offices can’t feel and will never appreciate,” he explained. “Your windshield is your office … You’re meeting people everywhere from all different walks of life. And it’s a great opportunity to see this country and get paid for it.”

The stereotypes of truckers as workers with no brains hurt, though. “We’re not given due respect,” Bill complains. “Most people,” he says, believe that “a monkey can do this job.” A trucker is “looked down upon by management as a second-class citizen or lower, uneducated person.” Bill remembers being called a “dock pig” by managers who seemed to feel that making truckers feel worthless was part of their jobs. “You were just wallowing in the mud out there moving freight,” while “supervisors wouldn’t want to get their nice shirts and ties dirty so they wouldn’t even come out on the docks.”

That disdain was heaped on people whose working conditions were backbreaking. Teamsters like Doug Flynn learned to take the punishment. “When you work the dock at two o’clock in the morning and it’s January, February, and there’s no bumpers on the doors, all the wind and the snow is coming in … Ice dripping from your nose gets frozen on your mustache,” Doug recalls. He would work “sixty, seventy hours a week. Every week. And there were times at one company that I would work twenty-eight straight days.” It was what they had to do to provide for their families.

Teamsters on the docks always looked forward to the day when they could get the specialized license for driving a big rig and take to the road. The union bargained on behalf of all of them, but compared to the loading bay, sitting inside the cabin of an eighteen-wheeler was a comfort. Still, it wasn’t easy. “Oh my god, the trucks back then,” Larry Williams, a second-generation Teamster from Cincinnati, remembers.

I started in ’67 and never drove my first truck with power steering until probably 1980 … And you’d go back up to the dock with a trailer and these things steer so hard you’d have to stand up and put two arms around [the steering wheel] to crank the thing so you can get it into the dock …

You’d never get heat out of these early trucks. The only time you’d ever get any heat at all is when you’d run the expressway. You’ve got to run the truck and … raise the temperature up in the engine to get any heat. And the windshield wipers! They had air[-driven] windshield wipers and they’d go flip, flip, flip! Oh my god it was horrible.

Out on the road, Teamsters lived off NoDoz caffeine pills to stay awake, ate in cheap diners with lousy food, lifted heavy cargo on and off their big rigs, and twisted their torsos to steer unwieldy trucks. Back injuries and knee pain were part of the job description. Working-class boys would start as soon as they scored a driver’s license, and many put in three decades on the job before they turned fifty. But it was not unusual for them to hang it up shortly thereafter. Physically, they were spent. Floyd Lanter was done by the age of sixty-two, and that was a long career for a Teamster.

Those long years took a toll on the drivers and on their wives. Especially before cell phones, Teamsters’ families worried about the safety of their loved ones out on the road. Larissa Kammerer, whose husband, Tim, was a member of an Ohio local, remembers those nights alone all too well. “You can’t imagine what it’s like when someone you love goes out in a blizzard, and they’re driving miles and miles away and you can’t reach them.”

Teamsters tended to keep their problems to themselves. But women like Larissa Kammerer and Rita Lewis knew very well how hard their fathers and husbands were working. “Driving a truck is a challenging task, mentally and physically,” Rita explains.

You have your bosses to contend with, sometimes your coworkers. You’ve got the traffic. You have to pass your DOT test. If your blood pressure’s too high, or you have a health issue, you can be redlined, which means you can’t work. You have to make sure that the freight gets there on time. You’re out there in all kind of weather. Battling all kind of elements, all kind of pressure coming at them all the time. And being physically fit was imperative.

Rita thought Teamsters deserved more respect, more money, more of everything for enduring these working conditions. Instead, the pressures they faced on the job were compounded by fears of layoffs, wage cuts, and bankruptcies.

And if the job was hard on the white working class, trucking life was that much more difficult for African American and Latino Teamsters. Where white workers found fellowship and support within the union, black workers discovered they were second-class members of the brotherhood, unwanted competitors for whatever opportunities there were. In many a coffee shop and motel along the interstate, minority drivers were not welcome. This came as little surprise to African American truckers in the South, where the legacies of Jim Crow had barely faded. Hostility in the North was more surprising, but sadly still fairly common.

Kevin Staples is an African American who grew up thirty miles outside of Milwaukee. When Kevin was a teenager, his family began tumbling down the economic ladder. By his junior year in high school, his father had lost his small business, and his mother had been forced back into the labor market after many years as a housewife. She landed a job with a manufacturing company, where she worked for the next thirty years.

With that somewhat rocky past in mind, Kevin was looking for security when he graduated from high school and leaned on the advice of a buddy who passed along a tip: a nearby trucking company was looking for reliable workers. He put in an application, but curiously never heard from the firm. Other people, young white men he knew, got those calls instead. So Kevin tried the company again. When they told him that they weren’t hiring, he pursued a discrimination suit and, to his surprise, won the case. But that would be “the beginning of me being blackballed in the industry. No freight company would touch me,” he recalls.

“I was discriminated against in this industry by my own people who were supposed to represent me in the union,” Kevin laments. “This very industry that was supposed to … help people find jobs and get fair treatment, was also the one that allowed employers to just slam the door in your face.” He wouldn’t break into the freight business until 1993, when he linked up with a business agent who sympathized with his situation.

Barry Barkley, another African American truck driver, had much the same experience. At meetings of the Local 100 retirees, Barry is often one of only a handful of black men in a crowd of several hundred. He graduated from an integrated public high school in Cincinnati, trained in a vocational program as an auto mechanic, and then put those skills to use in the Marine Corps in the early 1960s. With the service behind him, Barry found a part-time job at GE in Cincinnati and enrolled in a local university in hopes of improving his chances for better wages. But when he dropped out of college to seek full-time work, he hit a wall almost instantly. Application after application was declined or ignored.

“In 1971, a black man could not get a union job in the city of Cincinnati,” Barry recalls, a scowl crossing his face. “I don’t care what kind of experience he had … Civil rights laws were enacted in ’64, ’65, but the government did not [start to] enforce them ’til late ’60s or early ’70s. That’s when you started seeing black guys get jobs.” And when Barry did finally find his way into the trucking industry, he discovered how hard it was for a black man to navigate social conditions on the road. “We couldn’t go into a lot of restaurants on the interstates,” he says. Police pulled him over all the time, especially at truck stops. White truck drivers would refuse to work beside him on long hauls because they would have had to share sleeping quarters.

Whether black or white, truckers had hard jobs and got little respect. Yes, there was fellowship among the Teamsters, especially the long-haul partners who spent days on end in one another’s company. And true, the wages were good, especially for men whose education tended to stop with high school and perhaps some military experience. But the day-to-day experience of trucking was grueling, and it took its toll on workers’ health. “Teamsters or truck drivers really don’t have a very long lifespan,” Larry Williams notes in a matter-of-fact way. “Most of them don’t eat right, they smoke, they drink. And it’s a very dangerous job. I don’t know how many people I’ve seen killed through thirty years. So you don’t know how many years you’ve got. My father”—a Teamster—“only made it to sixty-six.”

With this grim prospect hanging out there, truckers like Peter Farber saw their pensions as a reward they had earned and the main reason for the sacrifices they had made over many years in unforgiving jobs. Peter’s craggy face shows the toll his work has taken on his health. “Teamsters give the majority of their life to … their families and to their employers,” he says. And a lot of them don’t make it. “The manual labor jobs kill ’em before they get there. I know some that retired on Monday and by Friday the next week were dead. It ain’t right. It ain’t right.”

What made it worth it, then? Rita likens it to a college student pursuing a degree. The Teamster’s “skill is driving that truck, and their degree is that pension that was waiting for them at the end of their life,” she says. “That’s what they worked forty years for: that pension.”

For Teamsters, as for many military men, the overriding goal was getting to retirement in one piece. And the pension dangled out there in the future as the reason to pull through another day on the loading dock and contend with another chronic ailment. Most wanted nothing more than to retire as early as they possibly could while protecting their income and their families.

The pension was the main reason for enduring the hardships of the job and giving up so much time with their loved ones, Tim Kammerer explains. On Ohio primary day, his “I voted” sticker plastered to the pocket of his leather motorcycle jacket, Tim thinks of what a good working-class American wants out of his job. “The main thing for me was that pension. I knew I couldn’t save up myself,” he says. “I always looked out there and I thought, well, when I get my thirty years…”

DEREGULATION AND ITS CONSEQUENCESBeginning in the 1980s, the kind of security that pensions offered became less and less certain. Deregulation would be the beginning of its end.

During Jimmy Carter’s presidency, and continuing with even more devotion under Ronald Reagan, deregulation became America’s guiding economic policy. As an advisor to the Interstate Commerce Commission at the time puts it, Democrats and Republicans alike led a “crusade for significant deregulation of major industries—broadcasting, banking, telecommunications, oil and gas, air, rail, bus, and trucking. That movement was coupled with deregulation in less-industry-specific areas such as antitrust enforcement and environmental, safety, and health standards.”4

The connection between this 1980s policy change and today’s retirement debacle is now clear enough: the competition that deregulation engendered put pressure on firms to cut their costs, which ultimately included contributions to retirement accounts. Some firms simply stopped paying in altogether, even when they were legally required to do so. Others raided pension funds in order to improve their balance sheets. Many cut their unionized workers and picked up cheaper labor. All the way around, deregulation put downward pressure on America’s blue-collar workers, and wobbling pensions were among its results.5

The Motor Carrier Act, passed by Congress in 1980 and signed into law by Jimmy Carter, removed requirements for entry into the trucking business, paving the way for the proliferation of nonunion truck driving, increased competition, and wage cuts.6 The legislation greatly weakened the power of the Interstate Commerce Commission, which had been established in the 1880s to regulate the railroad industry and was placed in charge of regulating trucking in 1935. The agency was terminated altogether in 1995.7 Meanwhile, a number of US Supreme Court cases overturned state regulations on truck lengths, permitting larger, heavier trucks to move across state lines.8

Government deregulation, the expansion of the interstate highway system, a wave of corporate mergers, and the promotion of intermodal transport all combined to increase the coordinated movement of goods.9 Thanks to the interstate system, it became possible to move goods five hundred miles overnight by truck. Suppliers could ship their goods at any hour of the day.10 The highway system became an immense rolling warehouse.11

Deregulation encouraged the entry of hundreds of new carriers, many of them nonunion.12 The big losers in the deregulation sweepstakes were the unionized drivers. In 1997, a study found, the “median union member earned $44,000 annually, 26% more than non-union-members.”13 It did not take long before the wages of the organized workers took a tumble. Deregulation reduced their hourly earnings by approximately 28.6 percent.

Even very experienced Teamsters, who had carried union cards for decades, had to contend with increasing turmoil. Their jobs became more uncertain as the unionized firms they worked for faced increasing competition from the nonunion carriers. Larry Williams, one of Butch Lewis’s fellow members in Cincinnati’s Local 100, worked for thirteen different trucking companies from 1967 to 2002, all union. Only two of them are still in business today, and even those surviving companies have had to periodically lay people off when there weren’t enough contracts to go around.

Divisions between union and nonunion truckers played out on the ground as trucking companies began to employ “wildcat” truckers, former farmers who were firmly independent and anti-union. “Unimpeded by union organizers or government regulators, these ‘asphalt cowboys’ began piloting ever larger tractor-trailers down federally funded highways,” writes historian Shane Hamilton. “Trucking firms became the primary movers of the nation’s farm products and foodstuffs, setting the stage for a ‘free market’ revolution in the postwar countryside.” The deregulation of trucking, he argues, contributed to the low-wage, low-price “Walmart economy” of the 1980s onward.14

Reagan’s all-out war on striking air traffic controllers in 1981 was a signal that unions were in trouble across all industries. Companies that were subject to collective bargaining found it hard to compete with nonunion shops that paid less and could lay off workers on a moment’s notice. Steel mills, auto plants, and the rest of the nation’s manufacturing firms packed up and deserted the Midwest and the East Coast, heading for the Southeast and the South—to the right-to-work states where wages were lower and “flexible” labor policies meant management had the upper hand. Nationwide, unemployment zoomed above 10 percent in the first two years of the Reagan administration. With millions on the unemployment lines, workers who still had jobs found that their power to press for wage increases or preserve their benefits was drastically reduced.

As high-wage blue-collar workers with expensive benefits, Teamsters were exactly the kind of employees at risk in this business climate. Companies like Holland Freight, where Butch Lewis worked, began to sweat. Management turned to workers and asked them to swallow wage cuts to help the company weather the storm. In return, truckers were promised more generous retirement packages. “If you sacrifice now,” they were told, “you will see that reward later.”

Butch and his coworkers gave back 15 percent of their annual pay to help Holland Freight stay afloat. That was no small amount of money for the Lewises. But Butch and Rita figured it was in their best interest for Butch to have a job to hold on to. Besides, those givebacks were putting cash in the bank for the day when Butch could hang up his keys and settle down in his easy chair.

For many years, the Lewises were confident that this tradeoff was worth it. They thought of Holland Freight as family. When someone close to you runs into trouble, you are supposed to pitch in and help. That’s what the Lewises were doing. But they weren’t fools. They didn’t give up a portion of Butch’s wages so that his employer could make more money. Their sacrifice was a matter of enlightened self-interest: they expected to see the reward on the back end, in retirement.

They had reason to believe that this quid pro quo model was realistic, because they had seen it in action before. And indeed, as business conditions deteriorated, the leadership at Holland Freight did what they could to protect their drivers. They kept them on the job rather than lay them off, as less loyal firms did. They steered Butch toward overtime so he could recoup wage losses. They tried to support loyal Teamster families by hiring drivers’ sons (and daughters like Rita) when they could.

Yet a decade after Reagan’s first inauguration, the consequences of deregulation were only getting worse. By the 1990s, givebacks from workers were no longer enough to keep companies from losing money. Waves of company failures began to crash into the rust-belt towns where the trucking industry employed thousands of men like Butch Lewis. Small firms went down first; they couldn’t compete with the bigger players, who started taking over their businesses. Some companies tried to stay alive by discounting their prices, but for many the end was unavoidable. Multiple bankruptcies swept the trucking industry.15

THE CENTRAL STATES PENSION FUNDCollective bargaining agreements have established multiemployer pension plans in many industries in which employees frequently move among firms. They enable workers to switch jobs while keeping constant access to their pensions, to which assorted employers contribute.16 But when many companies within an industry stop making their required contributions, or go bankrupt altogether, multiemployer plans run into trouble.

The problem was particularly acute in the trucking industry. Some four hundred thousand Teamsters in the Midwest and on the East Coast received their retirement benefits through the Central States Pension Fund, one of the largest multiemployer funds in the country.17 The employers that participated in Central States banded together in the 1950s to pool their investment power and moderate their risks.18 But even as more and more pensioners came to depend on Central States, fewer participating firms were left to support it.

Other industries are facing a similar predicament. Somewhere between one hundred fifty and two hundred plans, covering 1.5 million American workers and retirees, could run out of money in the next twenty years. (The Central States Pension Fund and the United Mine Workers, another behemoth multiemployer pension player, account for about one-third of those affected.)19 Forbes magazine has noted that multiemployer plans have assets of approximately $450 billion, but liabilities in excess of $600 billion.20 The math is not favorable.

In the case of Central States, there is a further complication: as far back as the Kennedy administration, the International Brotherhood of Teamsters was accused of collusion with organized crime. Both JFK and his brother Bobby, the attorney general, were critical of the Teamsters, convinced they were extorting from the firms they organized. Pensions were particularly ripe for abuse and corruption. Accordingly, the federal government moved in to oversee the Teamsters both as a union (supervising its elections and overseeing its expenditures and organizing practices) and as a financial concern. Teamster brothers were furious over the open, sneering disrespect for their leader, the larger-than-life Jimmy Hoffa Sr.21 In 1989, management of the Central States Pension Fund was taken away from the union and placed under the authority of the Treasury Department.22

The Treasury didn’t actually manage the Central States pension fund itself. The department turned over those responsibilities to Wall Street titans Goldman Sachs and Northern Trust, two of the biggest money managers in the world. These companies would be in charge of making investment decisions and reporting back to the federal government. With managers like these, how could Central States go wrong? Butch and Rita Lewis were concerned, but also confident that their precious pension was at least in capable hands.

For decades, Central States was indeed rock solid. Even in the era of deregulation, it stood for financial security. While member firms started to wobble in the 1980s, the fund was still able to provide secure retirement benefits to retirees. This was a bit misleading, however: the money was there only because high returns in the stock market during that period swelled the pension coffers. The fund’s promises to retirees depended on sustaining this trajectory. During the roaring stock markets of the Clinton presidency, that rosy future appeared entirely reasonable—until it didn’t. Suddenly, Central States itself was on the verge of going broke.

The final backstop for troubled pension plans is the Pension Benefit Guaranty Corporation (PBGC), a federal agency created by the 1974 Employee Retirement Income Security Act (ERISA). Pension plans are required to pay premiums to the PBGC, which provides insurance in case a company goes bankrupt and its pension accounts are underfunded. The PBGC pays full pensions for most workers they cover, up to a cap of approximately $60,000 a year.23 Workers in single-employer plans whose benefits exceed that cap, however, stand to lose money if the agency takes over their pensions.

In 2015, the PBGC paid for monthly retirement benefits, up to that guaranteed maximum, for nearly 826,000 retirees in 4,800 single-employer and multiemployer pension plans that could no longer pay promised benefits. Including those who have not yet retired, the PBGC is responsible for the current and future pensions of about 1.5 million people.

For most workers covered by troubled multiemployer plans, the maximum payout from the PBGC (especially if they take early retirement) is significantly less than what they would have received if their firms had stood by their obligations. Josh Gotbaum, who served as director of the PBGC from 2010 to 2014, explains that this discrepancy has historical roots: “When the multiemployer program was set up in 1980, folks didn’t think PBGC insurance would be necessary, because the other employers would take up the slack if one employer went bankrupt. They hadn’t considered the possibility of whole industries going into distress.”

Gotbaum comes from a storied family of labor stalwarts; his father, Victor Gotbaum, was the legendary leader of District Council 37 of the American Federation of State, County and Municipal Employees, the largest union in New York City. Before being named the head of PBGC, Gotbaum worked with unions in distress situations as an investment banker and investor. His perch at the PBGC gave him a unique perspective on the nation’s largest private pension systems, and his account of how the Central States Pension Fund got into trouble is instructive for the way it pinpoints the assumptions behind the fund’s debacle. Somehow, the people in charge of its finances came to believe that what goes up in the stock market will not come down.

In the 1990s, Gotbaum notes, most pension plans in the country were fully funded; some were even overfunded. The economy was doing well, firms were contributing what they had contractually promised, and the stock market was exceptionally strong. Indeed, it easily outpaced the returns that actuaries had used to determine companies’ required contributions to the pension funds and retirees’ benefits from them. “The Central States pension fund was listening to its actuaries,” Gotbaum recalls, “and saying, okay, for each dollar you put in under the Teamsters contract, we’ll give you so many cents’ retirement benefits when [they] retire after thirty years.” Looking at these forecasts, Central States and other pension systems like it increased benefit levels. But the stock market reached a peak in 2000, and the tech bubble burst in 2001. Suddenly, investment returns fell far below the actuaries’ estimates. Pension funds turned from being well funded to being woefully underfunded.

Gotbaum surmises that the actuaries at the Central States pension plan knew they were in trouble after the stock market decline of 2001. “But they thought it was a manageable level of trouble,” he says. However, in 2008–9, the stock market truly cratered, and actuaries knew for sure they had a catastrophe on their hands. After they had predicted steady growth, assets plunged by 25 to 30 percent. The losses were the largest the economy had witnessed since the days of the Great Depression. And they took the Central States Pension Fund down.

There are many culprits to blame for the benefit retractions Rita and Butch Lewis were notified about in 2015. From Josh Gotbaum’s perspective, the most important of them was the Great Recession itself. “Anybody who says that this [disaster] wasn’t primarily caused by ’08–’09 is entirely kidding themselves,” he says. “This was largely a consequence of the meltdown.”

The question became: Who is going to make up the shortfall? It wasn’t the actuaries. It wasn’t the Wall Street firms that had managed the pension funds, making large investments of Teamster funds in bonds tied to junk mortgages, among other assets. It wasn’t the trucking companies that had disappeared into bankruptcy, leaving behind “orphan” pension plans that Central States still had to pay out. The only parties remaining were the owners and current employees of the remaining firms in the multiemployer plans—and the retirees themselves. It was Butch Lewis who would have to pay.

“CRITICAL AND DECLINING STATUS”Before 2014, federal law safeguarded the rights of retirees in multiemployer pension plans via ERISA, which set minimum standards for most voluntarily established pension and health plans in the private sector.24 The law requires employers offering retirement benefits to fully fund them and keep their hands out of the pension till. It sets fiduciary obligations for managers and enables all those covered to submit grievances and appeals. Workers can sue if the fund managers default on their responsibilities. Moreover, workers covered by ERISA are assured access to information about the health of their pensions.25

But in December 2014, new legislation undercut those guarantees. The law, known as the Multiemployer Pension Reform Act (MPRA), reflected the conclusions of a committee housed and funded by the American Federation of Labor’s National Building Trades Council. This committee included both labor and business interests, and it was concerned about “living” companies having to shoulder the costs of pensions for “orphan” employees of firms that had gone bankrupt.26 Its influential report, “Solutions Not Bailouts,” offered the MPRA as a solution.

The bill was passed as part of the two-thousand-page omnibus federal budget, with most members of Congress unaware of its provisions. It enabled pension fund managers to ask for drastic cuts in benefits if a plan was deemed to be in “critical and declining status”—in lay language, going broke.27 Financially troubled plans were defined as those unable to pay 100 percent of benefits within fifteen (or, in some cases, twenty) years. For such plans, trustees would decide how to make cuts, which could vary depending on the age of retirees and the extent of the shortfall.28

The Central States plan, which is only 53 percent funded, is one of the plans in hot water.29 Thomas Nyhan, the executive director of Central States, calculated that the fund would be bankrupt by 2026 if it had to meet its full obligations to its retirees.30 In that case, current workers paying into the plan right now would be left with nothing when they retire. To avoid that scenario, Nyhan applied to the Treasury Department in 2015 for permission to enact severe cuts on pensions going to existing retirees. While he waited for Treasury approval, 273,000 Central States beneficiaries were notified of impending reductions in their benefits.

The letters started appearing in Teamster mailboxes throughout the Midwest in November. Rita and Butch stared at theirs in disbelief and called the union, hoping to learn they had misunderstood. No, they were told, the letter was accurate: if Nyhan’s application to the Treasury Department was approved, 50 percent of Butch’s pension would disappear. Teamsters whose benefits were coming from orphan firms had it worse: they would be hit with 70 percent pension cuts.

Leon Barnett, retired from a southwest Ohio local, exploded when his letter arrived. Clearly he was expected to go back out to work, because no one could survive on the benefits that would be left. “I’ll be sixty-nine years old in June,” he said, shaking his head.

Where do I go to get a job? Maybe as a greeter at Walmart? I don’t think I could stand on my feet for eight hours at a time. I’ve got arthritis in my clutch foot, from, you know, driving a truck. Arthritis in my hands from changing gears and stuff. So … Who’s going to hire me at sixty-nine years old?

Peter Farber agrees. When his letter arrived, all he could think was that no hiring manager would take him on. And even if a manager were kind enough or rash enough to give him a second look, it would barely make a difference. His physical stamina was so low he couldn’t imagine being able to work anyway.

I’ve got back injuries that are so bad that I have to take pain pills all the time. I’ve got nerve damage in both arms, in both legs, I’ve got nerves pressing against bone. Growth in the back of my neck that gives me migraine headaches. I lost my vision while driving across [Interstate] 275. The whole right side of the vision is gone.

I passed out the other day on steps, wrenched my knees, turned my ankle … I can’t go back to work. If I do, I’ll end up dead … So what do I do? I’ve got to live on something.

Peter had no answer to this question. If his pension was gutted, he would be stuck. Thousands of retirees across the Midwest faced the same quandary.31

DISTRIBUTING THE BLAMEThe arrival of the warning letters sent a wave of anger and recrimination through the Teamster retiree community. In union halls and taverns, living rooms and church basements, the conversation alternated between despair and fury. Teamsters, their wives, their leaders, and eventually the politicians they turned to for help searched for someone to blame for the looming disaster. They wanted to find a way to get the cuts reversed.

There were many targets for their outrage. Rita Lewis argued that a sinister effort to undermine the union movement, one that went back decades, was surfacing again. “There’s been an attack on organized labor for forty years,” she insisted. “Reagan started it when he wanted to do away with unions.” No one in the Treasury Department was looking out for them, she argues, because they wanted the unions and their benefit packages to fail. Those in power are not going to shed any tears when the little people, the Rita and Butch Lewises of this world, get the short end of the stick.

Rita is still bitter about the government taking over the pension funds years ago, based on what she sees as phony corruption charges aimed at Jimmy Hoffa Sr. “They took our pension out of our hands,” she says. “If we would’ve handled it on our own, we [might have] mismanaged it. I would’ve said that’s our fault. But they took it from us.” And once they had it, Rita wonders, how could they have let the funds be so poorly managed? Isn’t this what experts in the Treasury Department were supposed to know how to do?

Rita and her compatriots don’t buy the idea that the pension losses merely reflected gyrations in the market that no human being could be blamed for. They have a hard time believing that innocent, well-intended actions could have produced such a catastrophe. Instead, retirees reason, there had to be sinister motives at work on the part of the well-heeled and powerful. Perhaps it was even a conspiracy. “When these losses were coming in, why didn’t [government officials] say something?” Rita asks. The answer seems clear enough to her: they had something to hide.

Teamster fury also focuses on the big Wall Street firms that were given the responsibility by the Treasury Department to manage pension investments. As losses mounted during the Great Recession, Teamsters watched with growing anxiety. How could people who were supposedly the best investors in the world lose all that money? In the absence of any credible explanation, class resentment, always latent, began to rear its head. In the truckers’ opinion, those rich elites with their fancy educations, their bloated salaries, and their Fifth Avenue mansions could not be expected to care about the blue-collar workers whose money they held in trust. And why should they? As Rita points out, bankers made fistfuls of money even when the accounts they managed were losing millions. Paid by the transaction rather than by results, fund managers suffered no consequences when the pension dollars evaporated. Indeed, from 2005 to 2009, Goldman Sachs and Northern Trust charged Central States $41 million in fees while wrecking the pension fund.

Wall Street fat cats live in a different universe, Rita insists. They know nothing about what it means to depend on a pension you’ve spent decades earning only to see it disappear. The luxuries that investment bankers enjoy come from the sweat of people they will never meet. “How much money do you need before enough is enough?” she asks.

Do you need five houses? Do you need six? How many yachts do you need? How many cars do you need? [The] money that you have built your life around wasn’t really yours. You didn’t work for it. You took it from someone, a vulnerable segment of the population with no way to go back and rebuild their lives.

Those luxuries stand in stark contrast to all the sacrifices that Teamsters made in order to earn their pensions. Larissa Kammerer, one of the more vocal trucker spouses standing alongside Rita Lewis, notes that her husband Tim lost out on years of family time.

Every Sunday he worked. Every Sunday! We didn’t even have Friday night together, we didn’t have Sunday afternoon together. I mean, for almost thirty years, we’re talking no holidays.

We didn’t complain. It was … his job, and it was worth it because, at the end … I told Tim, I said that … You guys have your pension … And literally, it was promised all the time … Every function we went to and stuff. That’s why you didn’t take raises. That’s why you agreed to work on holidays. And that’s why you worked every Sunday. Because you can rely on this pension. It’s always going to be there for you when you’re going to need it.

Tim Kammerer agrees. He had kept his side of the bargain, giving up irreplaceable moments with his family. That this could be swept aside so callously has convinced Tim that there is no such thing as commitment any more. Ordinary people, the bedrock of the nation, cannot rely on anything. “If I gave somebody a promise myself, I always did what I promised them that I would do,” he says. “And I just feel now that places that make promises, it doesn’t mean anything. It’s just gone. You cannot trust anyone that tells you anything anymore because they’ll change it.”

Perhaps surprisingly, for many retired Teamsters the list of untrustworthy institutions includes the unions themselves. Once upon a time they were on the side of the working man, but their leadership today is viewed by many in the rank and file as overly compliant, possibly even treasonous. While the legendary Jimmy Hoffa Sr. is remembered with respect, his son, Jimmy Hoffa Jr., the current president of the AFL-CIO, is regarded with suspicion. He was initially sympathetic to the request to cut benefits that the Central States Pension Fund sent to the Treasury, a position that stunned retirees who could not believe he was advocating against them.

In truth, all union leaders were caught in a vise, with retirees on one side and active workers—who want to ensure that some pension money is left for them in the more distant future—on the other. But this nuance was not persuasive to the retirees. As they saw it, Hoffa Jr. had only one responsibility: to fight for everyone. Eventually he came around to this view himself, becoming a critic of the MPRA and a somewhat reluctant crusader against the Central States plan to cut benefits.

Thomas Nyhan, the executive director of the Central States Pension Fund, has received especially heavy criticism from the rank and file. They are particularly bitter because Nyhan himself has a nearly $700,000 annual salary and was awarded a $32,000 bonus the year he filed for permission to slash their benefits. From the retirees’ perspective, he forfeited his role as their guardian angel and instead became an instrument of their demise. “I don’t understand why they took—I think it was 6 million dollars or 6.2 million dollars out of our pension fund that’s already failing to pay the legal fees to fight us,” says Leon Barnett with exasperation. “How could they allow that?”

It’s a fair question. What was Nyhan thinking? Doubtless he, like Hoffa Jr., was trying to balance the needs of retirees against those of active workers, and did not believe that there was any hope for massive federal subsidies to correct for the losses that had accrued in the crash of 2008. Given the resources on hand, he thought he was doing his duty. The pensioners saw it as the opposite: Nyhan abrogated his responsibilities and got paid handsomely in the process.

Congressional representatives from union states came in for their share of criticism as well, and with them the entire idea of government as a force for the good. The process by which the MPRA was passed left Rita Lewis incredulous. “They snuck it through at the eleventh hour,” she says, “and a lot of the congressmen and senators said they didn’t even know it was in there, they didn’t read [the legislation].” Leon Barnett shares her outrage. How could people charged with such important responsibilities, whose actions can make such a devastating difference in the lives of retirees, vote without being fully informed? He wishes that the congressmen who voted for the bill would try to “live on our income for a year and see how they could do it. And then talking about cutting our checks 50 percent? There’s no way they could—they don’t have a clue of how to live like we live.”

The MPRA legislation overturned pension protections that had been in place for forty years, making it much easier for financially troubled retirement plans to cut back benefits. For the Teamsters, this showed that laws themselves are not dependable. They can be altered if special interests want them to be. Government is not to be trusted to stand by its own rules.

Because MPRA was cloaked in secrecy, buried in a huge bill whose contents were largely unknown, its passage amplified Teamster suspicions of government in general. Not only are ordinary people unable to depend on their representatives to protect their interests, it seemed, they could not even get help understanding exactly how they were screwed. “The government will not help you,” says Doug Flynn. “You’ve got to find out for yourself. You’ve got to dig. You’ve got to scrape. You got to figure it out on your own.”

THE MORAL DIMENSIONS OF THE CRISISThe pension losses were about more than money. For the truckers, they represented an attack on the legitimacy of their life stories, on the value of supporting their families and country. The Teamsters had never been the beneficiaries of public admiration, particularly as manual labor and union solidarity seemed to fade from the economic scene. Nonetheless, the retirees viewed themselves as part of the “all American” bedrock. Having paid their dues, often first in the military and then in jobs that subjected them to social indignities and physical stress, they saw themselves as honorable if ordinary folk. Retirees who were about to lose so much identified themselves as symbolically worthy, more so than the elites who controlled their fate. As the Teamsters saw it, bankers who push paper around all day and gain financially whether or not they are performing well cannot be seen as “real Americans” in the same way.

All across the rust belt, truckers reacted to the threat as a complete affront. “I am a retiree with just over thirty years of service who may be impacted by this legislation,” Joseph Rossi posted on an online board regarding MPRA. “We as retirees have contributed to society and the government for our entire lives and we are now being thrown under the bus so that well financed companies with armies of lobbyists get what they want … Have we lost the respect for our seniors who aren’t asking for anything but to be treated like they matter or to be treated with dignity and fairly?”

The money involved was a key point of contention, but moral indignation was the more trenchant language. Retirees described themselves as having been betrayed, their families financially violated. Walking the halls of Congress and stopping anyone who would listen, mounting rallies in front of their representatives’ Washington offices and stacking town hall meetings back home, the Teamsters and their families pointed to their experience as evidence of the erosion of fundamental values: sacrifice for the greater good, fidelity to one’s word, and respect for self-reliance.

People who had worked for decades on the strength of the pension promise, who sacrificed wages and vacation time at critical moments to help their firms survive, were supposed to get what they had been promised. It already belonged to them. As Rita puts it, the Teamsters were not asking for any kind of handout. They were not seeking an act of charity. They just wanted what was rightfully theirs.

Critical to this moral stance is the meaning of a promise. Workers pay in; firms agree to reward them after thirty years; banks and investors do their part to make that happen. This social contract unfolds over longer time periods than many marriages or mortgages. The length of the arrangement underscores its essential quality: it is a commitment reinforced with every payroll deduction over an entire working lifetime. That is what the traditional world dictates.

In this brave new world, though, retirees discovered that the promise can evaporate because of a piece of legislation passed without debate, snuck into a gargantuan bill that no one on the floor of Congress even read. So much for lifetime commitments, retirees note. And so much for their faith in American institutions more generally. If this pledge is no longer reliable, they ask, then what pledges are? Social Security? Medicare? Anything? This is the question they raised over the course of months of protests as they took their case to the media, to the public, and to legislators.

On a sunny day in April 2016, two thousand retirees bused into Washington, DC, from all over the country, gathering to denounce the Central States application to the Treasury to cut their pensions. Some had been on the road for forty-eight hours. Teamsters who could barely walk hobbled on their crutches. Their wives lugged old coolers and umbrellas to protect against the rising heat. They raised handmade signs denouncing Congress, with drawings of coffins containing skeletons labeled “Social Security”—the next on the hit list of benefits, they said. Dozens of senators, representatives, and union leaders turned out to address the crowd, assembled on the lawn outside the main office building of the House of Representatives.

Marcy Kaptur, the Democratic congresswoman from the 9th District of Ohio (which stretches from Toledo to Cleveland), took to the microphone to condemn the way MPRA had been foisted on Congress. “You should know,” she told the raucous crowd, “when the decision was made to force your pension cuts, that bill did not come up under regular order.” It had never been given time for debate. “People like me weren’t a part of the deal,” Kaptur continued. “We never had a chance to testify against it, we never had a chance to go before the Rules Committee. The whole thing was off-kilter from the beginning. From the very beginning … Our government of the people, by the people, and for the people was thrown out when it came to your pensions.”

Elizabeth Warren, the firebrand senator from Massachusetts, mounted the podium to the roar of the crowd. “Let’s figure out how we got here,” she told the protesters. The reason why Teamster pensions disappeared, she argued, lay somewhere between naked class conflict and unpunished—indeed, by some lights, rewarded—negligence.

Thanks to Washington bailouts, Wall Street is once again flying high. Corporate profits are up. The stock market is soaring. But the real victims of the financial crash—the millions of workers who lost their jobs, lost their homes, lost their retirement savings because of Wall Street’s reckless greed—those victims haven’t bounced back. Many of them, many, are still in trouble. And now the hard-earned pensions of 270,000 of Wall Street’s victims are on the chopping block.

As the stock market recovered and indeed soared in 2017, one might imagine that those defunct pension plans could be resurrected and many retirees made whole. Yet only once in the last twenty years has a pension plan been restored when a firm came out of bankruptcy: LTV Steel, which had a single-employer plan, did the right thing. There are no other cases of companies returning to workers what they are owed. Multiemployer plans in the hands of the PBGC are already insolvent, and a stock market recovery after such insolvency is moot.32

Warren told the crowd that there were many historical reasons why pensions are in trouble today, especially for truckers. She drew the connection to deregulation and pointed to technological changes that make delivery of goods more efficient and require fewer workers. There have also been recessions that pummeled the economy. “But one fact is beyond dispute,” she cried, pounding on the podium. “The men and women in this pension fund would be a whole lot better off today if Wall Street hadn’t made the reckless bets that tanked our economy … Let’s be clear: You didn’t lose 11 billion dollars in Central States pension funds. Wall Street did.”

And what did the investment bankers do when they controlled the fate of hundreds of thousands of Teamsters? “The Central States story is ugly,” Warren said pointedly. Instead of doing what was best for workers, big financial institutions had invested workers’ savings in subprime mortgages that were practically worthless, since the borrowers were not creditworthy. It was only a matter of time before the whole investment system crashed and burned.

Wall Street destroyed 7 trillion dollars in housing wealth. It killed 8.5 million American jobs. It gutted hundreds of pension funds like Central States, leaving millions of retirees hung out to dry. Now Congress—this Congress—jumped in to help Wall Street. The bankers got a 700 billion dollar bailout. And what did millions of homeowners get? What did workers get? What did retirees get? They got stuck with the bill.

From 2005 to 2009, the senator noted, Goldman Sachs and Northern Trust charged Central States $41 million in fees while the pension funds they managed evaporated.

Retirees stood in the full heat of the Washington, DC, sun and cheered Warren and the other speakers until their throats were raw. Those who didn’t have the energy to stand raised hand-lettered signs up over battered lawn chairs they had dragged all the way from Ohio, Kentucky, Minnesota, and Illinois. The rest chanted, “This is what democracy looks like,” and clapped for their leaders, especially their beloved Rita Lewis. Taking the stage, Rita urged the crowd to follow her into the congressional office building and force their representatives to listen.

CANARIES IN THE COAL MINEThe Teamsters do not intend to go quietly. Rita Lewis insists on accountability. Nyhan and the rest of the Central States management “never expected this pushback,” she told the crowd. “They thought they were gonna steamroll over us. And we were too old, or we were too ignorant, or we were too stupid—yeah. And those are fighting words for me!”

For Rita and her followers, their fate is emblematic of what will confront the rest of the country as pensions are cut and health benefits retracted. The Teamsters are the “canaries in the coal mine,” she says, the everyman representatives of ordinary people being batted around by elites and at the mercy of forces larger than themselves. If people who work this hard and for this long can lose everything, Rita reminds us, then we are all at risk. Unless this attack on retirees is stopped at the outset, that’s what the Central States Pension Fund retirees will represent: the first in a long line of Americans who worked for comfort in their old age but face penury instead.

What do the Teamsters think the country should do about this mess? They are particularly eager to see the enactment of a proposal put forward by 2016 presidential candidate Bernie Sanders. Sanders advocates closing a set of tax loopholes that benefit the wealthy and using the proceeds to shore up Central States and other underfunded multiemployer pension plans. In 2017, Sanders and Kaptur sponsored the Keep Our Pension Promises Act (KOPPA), which would repeal the “benefit suspension” provisions of MPRA and ensure that pensioners continue to get their full benefits.

KOPPA’s most important reform lies in its use of contributions from the general tax coffers to support pension plans that are going bankrupt.33 This would be a fundamental change in the financial structure of the Pension Benefits Guaranty Corporation, which currently is supported only by insurance premiums from member firms. It receives no revenues from taxes, and it cannot access general government funds in the event that it starts to run dry. The moral reasoning behind the proposed change was articulated by both Sanders and Warren: if we used taxpayer dollars to bail out the banks when they were in trouble, we can do the same for the Teamsters and all other workers insured by the PBGC.

The change is important because while struggling pension funds turn to the PBGC for help, the PBGC itself is a vulnerable institution that was never built to withstand a true tidal wave of demands. Indeed, as of 2016, the PBGC’s multiemployer pension system faced a 43 percent chance of insolvency by 2026, and a 93 percent chance of insolvency by 2036, if the current level of participant benefits continues to be paid out.34 Most of this problem is connected to failing multiemployer plans, though single-employer plans are also a worry. The Government Accountability Office reported that “the single-employer program, composed of about 22,200 plans, accounted for $20.6 billion of PBGC’s overall deficit. The multiemployer program, composed of only about 1,400 plans, accounted for about $59 billion.”35

Instead of hoping for KOPPA to pass, some retirees favor an alternative that requires people in multiemployer pension funds to make a $30 monthly contribution to keep the PBGC solvent. Brad Adams, a leader of a Wisconsin Teamsters retirees association, explains the concept:

There’s millions of people in the multiemployer system, and the investment plan would involve all [of them]. That’s one of the most equitable ways to fix it, because it’s such a small amount. It would be approximately twenty to thirty dollars per month per person. Fix the entire pension plan and the PBGC. We’d be bailing out the government too.

Some Teamsters have given up on the idea that they will ever see their losses restored. At this point in the exhausting struggle, all they want is to reclaim a semblance of control over what is left. For these retirees, the goal is simply to get all of the people who intruded into their financial affairs out of the way. As Doug Flynn puts it, “Just give me my money. Just give me what’s left.” The key point for Doug is that his pension was not some abstract investment; it was his property, and he should have the opportunity to “take it back” and be left to his own devices.

But that would not be enough for Rita Lewis. She wants to see the people responsible for this nightmare punished for their sordid deeds. The CEOs of the investment firms made big money from their firms’ bad investments, even as they lost the assets of the hapless Teamsters. They should not be allowed to get away with that, Rita argues. Larry Williams, the second-generation Teamster, agrees: “Wall Street keeps getting away with everything. How many days have all of these Wall Street people been in jail? I can tell you how much: zero!” It is a theme Elizabeth Warren has invoked at every turn: the little guy gets nailed, while those who have power get away with their malfeasance and even reap rewards for it.

Regulators in the Department of Labor who first acted to strip the Teamsters of control over their own pension funds are culprits in this drama as well. It was their responsibility to keep an eye on the Treasury Department, which, in turn, was supposed to exercise “good government” authority by looking out for Teamster pensioners (when their own unions were deemed too freighted with criminals to do so). Labor and Treasury were in charge for a reason: they had the knowledge, skills, and authority to steer these funds properly. It didn’t work out that way.

Of course, government regulators were not themselves managing pension funds. Instead, they were supposed to be looking over the shoulders of an entirely different set of experts: Wall Street money managers. But while Goldman Sachs and Northern Trust are legendary for their prowess at making money grow, the Great Recession showed the world a different side of these institutions: their willingness to take unconscionable risks with other people’s money.

Josh Gotbaum, the former director of PBGC, believes that the banks knew they were pushing products that were enormously risky, and he thinks they should have been held accountable. Bonuses should have been withheld, and the most egregious offenders should have been fired. The reason that did not happen, he says, is that for the most part, their conduct was entirely legal. “It looks like the only actual crooks were the mortgage company salespeople and their bosses,” he notes. “And most of them got away with it too.”

THE IMPACT OF THE CUTSIn the end, while the bankers prospered, it was the “average Joe”—the working man who thought he could rely on a promise—who was stuck with the hardship. There are thousands of stories testifying to the damage, both financial and emotional, of this abandoned pledge: more than four hundred thousand of them in the industrial Midwest alone. Butch and Rita Lewis were emblematic of the crisis, which is one reason why Butch became something of a patron saint for the Teamsters’ protest movement.

In the face of proposed cuts, Butch rallied hundreds of distressed Teamster brothers. He drove all the way from Ohio to Washington, DC, several times to buttonhole Ohio representatives and implore them to insist that the Treasury Department reject Nyhan’s application to slash Teamster benefits. Logging hundreds of hours all over his home state, Butch attended endless meetings, and became the spokesman for thousands of Teamsters who looked to him to voice their angry opposition to the cuts.

The burdens of leadership and worries about his family’s and his fellow retirees’ finances began to wear on Butch. He kept his physical problems to himself, but Rita knew him well. Something wasn’t right. “The first year when he was retired,” Rita recalls, “his blood pressure was great. No problems. He was happy. And after this [bad news] started to come out, he had a slight stroke in June of 2015 from the stress. Just a minor one.” The stress was causing his blood pressure to rise, and he began to have sleepless nights.

In December 2015, Butch braved the winter snow on one of his many “campaign” trips to the nation’s capital, but in the middle of the journey he began to experience dizzy spells. To Rita, he didn’t confess anything more than general exhaustion. “I’m glad Congress is taking a break for the holidays,” he told her on the phone. On New Year’s Eve, he died of a massive stroke. He was sixty-four years old.

A few days later, the anniversary diamond ring that Butch bought as a holiday surprise for Rita arrived in the mail. She catches her breath every time she looks at that sparkling diamond. The pension battle “killed him,” Rita insists, anger spreading over her face.

Married for more than forty years, Rita suddenly found herself alone and rudderless. It was all she could do to get out of bed in the morning, much less return to work. But within a short time, the financial pressures caused by Butch’s death began to land with full force on his grieving wife. “I’ve taken an emotional hit, I’ve taken a financial hit. That’s not the way it’s supposed to be,” she says.

As Butch’s widow, Rita was entitled to 75 percent of his pension. But if the Treasury Department approved Nyhan’s request to cut the Central States pensions, she stood to receive only a fraction of what she was depending on. She was getting $2,500 a month; that would be cut down to $1,400. After taxes she would be down to $1,000 a month or less. It would not be enough to keep Rita in the house in which she and Butch had lived for decades. That would have to go.

Thousands of Teamster families found themselves in similar straits. Leon and Mary Barnett were among them. Before the cuts, they could scrape by on their combined pensions, as long as they kept their spending in check. They never expected to live in luxury; modest pleasures were enough. Their first fifteen years of retirement passed by without upheavals, but then that dreaded letter from Central States appeared in their mailbox. “Thirty-one years with the same company,” Leon says, shaking his head. “And now they want to cut my pension 50 percent? So what happened to thirty-one years of my life if this happens?” For Leon, the loss was more than financial; it was a sucker punch. His loyalty was worth nothing.36 His family was disposable.

The impending cuts would be hard enough on Leon and Mary, but as with so many blue-collar families experiencing pension losses, that wasn’t the end of it. Working-class families like the Barnetts pull generations close. Even when they live in separate households, their finances and personal support—from babysitting to taking care of the elderly—lace kin together. It takes that kind of “pooling” to manage, especially when incomes are unsteady or illness strikes. They don’t farm out family burdens to government agencies, and they can’t afford to pay for help. It’s all in the family.

That’s how Leon’s pension problem soon became an issue for three generations of Barnetts. Leon and Mary have grandchildren, and a daughter who was diagnosed with multiple sclerosis at the age of twenty-five. “The pension Leon gets is not just for us,” Mary says, twisting a piece of Kleenex in her hand. “We help our kids with it … you never know when some kind of illness is going to take you. And MS has no mercy. It just has no mercy. So we try to help them, all we can.”

If the pension cuts proposed by Central States went through, hundreds of thousands of families would fall into a financial abyss from which many would never emerge. They would lose homes they worked for all their lives. They would find it hard to access health care and suffer further financial trouble as a result. Worry would be their constant companion. And more than a few would suffer early deaths from lack of care and high levels of stress. The men who pass away before their time would leave behind wives who are bitter about their abandonment, just as Rita Lewis is. And the kin who depended on them, from their elders to their grandchildren, would be felled by a vicious chain reaction, multiplying the damage to engulf thousands more.

A TEMPORARY REPRIEVEAgainst all odds, the Central States pension cuts were rejected, at least for the moment. In the summer of 2016, Kenneth Feinberg, the special representative for the Treasury Department charged with reviewing Nyhan’s application, decided that it should be turned down. He ruled that the cuts would not prevent insolvency, that they would not have been equitably distributed among the retirees, and that the fund did not notify participants in a way that was easy to understand.37

Feinberg’s decision was hailed by the Teamster retirees, who saw it as a response to their mobilization. They praised it as evidence that democracy is still viable in the United States. Bill Ackerman spoke for many when he explained that he had “regained some confidence in the justice system.” Even so, he and his fellow Teamsters know very well that this victory is limited. The investment losses are still there, and Central States has only enough money left to cover its obligations for ten more years. It is possible that the oldest of the pensioners will now live out their lives with their payouts intact. But anyone who expects more than a few years of benefits is almost certainly going to suffer dramatic losses unless Congress heeds the call of senators like Sanders and Warren.

If this tale were just about pensions, it would be sad enough. But from the Teamsters’ perspective, the losses feel like attacks on their whole way of life. It is a story about the abandonment of principles, which has led to a collapse of faith in the very idea of America. The temporary reprieve of Feinberg’s decision does not settle the matter, especially because the Teamsters know how close the cuts came to being enacted. Indeed, a number of Teamster locals outside of Central States, such as Local 707 in New York, have already seen dramatic cuts in pensions and health benefits because their pension funds have run dry.

What are the Teamsters left with if the nation’s political class and financial overlords abandon them? Only themselves, their community, their unions, and their families. Teamsters are used to the idea that they have to pull together across generations. They have never been secure enough to stand alone. They have always shared what they have, with retirees placing their pensions in service of their grandchildren’s school bills, their adult children’s medical care, their aunts’ and uncles’ financial needs. Blue-collar workers may not have resources to protect themselves, but when the ship goes down they are all together on deck.

Copyright © 2019 by Katherine S. Newman