May 17, 2009, 09:19 PM ET

America: The Workers' Paradise

When we were rich and Europe was poor, the Europeans worked more. In the 1960s the Germans and English worked more than Americans, now they work close to 1,600 hours per year, while Americans work over 1,900 hours. One reason is because we turned secure pensions into pretzels.

Over the last 30 years defined-benefit pensions have turned into individual-account pensions called defined-contribution plans. Instead of pensions being paid like Social Security, a steady check every month no matter what happens to stock markets, pension income now fluctuates with financial markets.

Before, when depressions struck, the workers who could retire on their pensions and Social Security did and that was a good thing — more jobs were available for young people. But now with defined-contribution plans going south — TIAA-CREF is such a plan — older workers, including professors, are staying on the job or returing to work — making unemployment worse. This destabilizes the economy, clearly an unintended but nasty consequence of the 401(k) revolution. A typical 55-year-old worker will have to work 2 more years to replace 401(k) losses.

It is remarkable that more than 800,00 people over age 55 have found new jobs since the recession started in December 2007 even though 5.7 million people have lost theirs.

As The Chronicle of Higher Education reports, in March of 2009, 37 percent of professors had put off retirement, compared with 28 percent in October 2008. New science Ph.D.‘s complain particularly about not finding university jobs because older professors are, surprisingly, staying put behind the lectern.

The concern is that the young hot scientists will find jobs in Europe. Now wouldn’t that be ironic, the Europeans get our new Ph.D.‘s and the new Ph.D.‘s get more vacations! There is a bright side young physicist!