Facing America's Other Middle-Class Squeeze

President Obama said in an Oct. 2 speech at Northwestern University that the middle class is squeezed by stagnant wages, slow job growth, and ever-higher college tuition. A recent report shows that U.S. workers also are getting squeezed because they’re being pushed into inadequate retirement plans by the country’s largest employers.

A survey released last month by Towers Watson, the employee benefit consultant, illustrates how rapidly the defined-benefit plan—the traditional pension that guarantees workers an annual income after they retire—has moved from the norm at Fortune 500 companies to all but extinct. In 1998 just more than half offered new hires a defined-benefit plan; by 2013 that had fallen to 7 percent. That trend continues: According to Towers Watson, at least three of the 34 Fortune 500 companies that offered defined-benefit plans to new hires last year won’t do so this year.