Early retirement may sound pleasant, but in some cases it can be anything but. With jobs moving to Mexico and overseas at an alarming rate, many baby boomers are finding themselves phased out of their livelihoods and forced to retire before 401k maturation, losing thousands of dollars in penalty fees, taxes, and lost revenues due to retirement guidelines and requirements. On top of losing jobs, those forced into early retirement often lose healthcare coverage, with skyrocketing self-insurance premiums to look forward to as well as pre-existing conditions. Factories deciding to go south of the border are some of the most hard-hitting early retirement flunkies, causing seasoned workers who have steadily built strong 401k portfolios, often including company stock, to be forced to cash in just to survive, unable to gain new employment due to a highly-competitive, disappointing job market, an uncompatible salary range, and/or specilized skills which are non-transferrable. These early retirement casualties are just one of the many expensive losses America has seen lately due to changing attitudes in big business when it refers to employee appreciation.
Recently early retirement became a reality for a hard-working Martinsville, Indiana native. He had dedicated almost twenty years to local Harman Becker, a speaker manufacturer who recently decided to move most of its operations to Mexico. Harman Becker and their business-wise careless decision has devastated many families in the small town of Martinsville, Indiana, who relied on the local factory for generations of stable jobs. One of the most heinous business practices was committed by Harman Becker when it started letting go employees who were two to five years from retirement. Many of these employees, with no other choice due to a poor job market, have experienced forced early retirement due to this company’s decision to move operations and jobs to Mexico.
Harman Becker got special treatment in Martinsville for being one of the town’s largest employers, but they were not loyal to the town that coddled them. Harman Becker was loyal to the all mighty dollar, a lesson likely learned by watching the thoughtless actions of nearby Bloomington RCA and similar businesses who have shipped off manufacturing lines to cheaper labor in Mexico and China without regard to the casualties they leave behind. Many workers knew Harman Becker’s Martinsville community betrayal was imminant. Though granted a ten-year tax abatement in 2005 for a potential expansion to add close to 100 workers, savvy Harman Becker soon decided to eliminate jobs instead. The plant had been downsizing steadily for a few years, but that didn’t lessen the shock and anger at the company many had given their youth to. News of restructuring in January 2007 sent a shockwave through the small community. At the time, it employed about 500 people.
Of course, America is footing some of the bill for Harman Becker’s business decisions. Some displaced workers are now elligible to receive Trade Adjustment Assistance. This program is federal aid which is available for some employees who are out of a job because the company decides to shift production out of the US or due to imports. The Department of Labor’s investigation of Harman Becker decided that the reason the workers were losing their jobs was “related to a shift in production of automotive speakers to a country which is a party to a free trade agreement with the United States. ( News Release 8-3-2007, IWD Available online http://www.in.gov/dwd/newsroom/news_releases/TAA_08-03-07.pdf) . The TAA will help displaced workers for relocation and training as well as possible weekly trade re-adjustments. The older workers have been offered ATAA, which is a 50% wage subsidy or TAA benefits for workers over age 50. Though this will ease some of those forced into early retirement, for many, this is not a liveable wage.
One such worker was extremely disappointed by Harman Becker’s business decisions. “They had us get the lines ready to ship to Mexico and some stuff for other plants that will someday see what we’re seeing now, and the whole time I kept thinking, how am I going to afford to survive? My wife is disabled; my job has disappeared. There’s only Wal-Mart here now. Who’s going to want to hire me? What’s going to happen to this city?”
Another, a young mother told me, “They took my dad’s job and sent it to Mexico. Then, they took mine. He paid off his house, but he can’t afford his meds because the insurance hasn’t kicked in yet. They say the benefits aren’t as good as they were, but he can’t get another job. He’s been trying since January before they told him goodbye.”
Martinsville might possibly become a ghost town, though Harman Becker will possibly maintain a ghost crew in Martinsville for strategic reasons.
One must wonder what the forced early retirement of baby boomers is doing to our stock market, when these workers have no other choice than to sell 401k for much less than they would have received had they been allowed to reach retirement age. Remember, Harman Becker was just one of the many companies guilty of forcing early retirement on workers and leaving an entire community wondering why. 401k penalties, loss of healthcare, and an unsure future is what many baby boomer forced retirees are facing. How can these company owners sleep at night? Now that the trucks will be cleared, it will be much easier for these factories to pack up and tell the American workers and the government bail outs to deal with it.
