This unbearably long article, broken into five parts, tries to put our notions of retirement in an historical perspective. Links to the other parts are at the bottom of the page.
Nearly everyone in America over the age of 40 obsesses about retirement. It is the epilogue of the American Dream. A secure retirement is the end mark of a life well lead, even something of a status symbol. (For the middle-class at least. Retirement has never been a status symbol for poor people, and truly rich people never retire. Look at Warren Buffet. He is like a thousand years old and has so much money he gives most of it away. He isn’t retiring. Of course, he does probably set his own hours.)
But retirement wasn’t always the stuff of sweet daydreams. 150 years ago, almost no one thought of retiring. In fact, the idea of retirement as something we should all aspire to has only been around for about 60 years.
Retirement is a new idea, and for most of its history, it wasn’t popular with older people. Most of our great-grandparents probably hated the very idea of it. Apparently they had more common sense than we do. Retirement was never designed to help older people; it was designed to get rid of them.
There have been five distinct periods in the historical evolution of retirement in America:
- Colonial Times to 1885: The Pre-industrial and Pre-retirement Era
- 1885 to 1929: The Industrial Age Gives Rise to Mandatory Retirement
- 1930 to 1940: The Great Depression Turns Retirement into a Duty
- 1940 to 1975: The Post-War Era and the Selling of Retirement
- 1975 to 2050: The Consequences Pile Up
Over the course of the next five posts, I’ll trace the evolution of retirement through each of these periods.
Colonial Times to 1885: Retirement in Pre-industrial America
In the beginning, there was birth, a very brief childhood, work, and death. In other words: no retirement.
Work was inseparable from life. If you lived, you worked. That was the American Way. In 1850, 77% of men over 65 still worked. People worked as long as they could because not working was viewed as unseemly. If you stopped working, you were probably dead or broken beyond repair.
Most people in pre-industrial America worked in agriculture. On the farm, there was no retirement. If a man got too old to plow the fields, then a son or son-in-law would take over while the older farmer shifted to less demanding chores.
Off the farm, retirement was likewise rarely thought of. Most non-farm businesses were small scale operations. They usually employed only a handful of people. Employers were not large enough or wealthy enough to provide pensions to their workers, but the close personal relationships that usually existed between employee and employer made the idea of forced retirement without a pension unthinkable.
Older workers were accommodated rather than sacked. There were almost no mandatory retirement laws. Only judges in a few states were required to retire at a certain age.
If a man did grow so old that he was no longer able to be productive, he would be expected to withdraw to the support of his family or charity and church. But that decision was generally voluntary. If a man wanted to work or needed to work, his employer and community did their best to accommodate him.
Of course, in the early to mid-1800s, the U.S. was a young country. In 1840, over half the U.S. population were under 20. Roughly 85% was under 30. The average life expectancy was 38. Less than 4% of Americans were over 60. There just were not that many older people.
In America before the Civil War, the elderly were not viewed as negatively as they are today. Older people were valued for their knowledge, the moral guidance they offered, their hard work, and their participation in the building of the country. Even as they slowed down, they remained a respected and integral part of their families and communities. There were no senior citizen jokes in those days.
As a person grew older, his role and place in society might change, but he was not mocked or forced to the sidelines. He remained respected, even venerated. That would soon change.
After the Civil War, the signs of this change grew unmistakable. The nation shifted from a primarily rural, agrarian society to an increasingly urban one transformed by industrialization.
Urban workers, unlike farmers, did not have the support system of the family farm that enabled them to shift to less strenuous tasks as they aged. By the 1880s, manufacturing drove the American economy, and relationships among employers and young and old workers grew strained. Retirement became a tool to deal with those strains.
Note: My primary sources for this series of articles are:
W. Graebner. A History Of Retirement: The Meaning And Function Of An American Institution, 1885 to 1978, New Haven, Connecticut, USA:Yale University Press 1980. 293 pp. ISBN 0-300-03300-1
D. Costa. The Evolution of Retirement: An American Economic History, 1880-1990. Chicago, Illinois USA: University of Chicago Press, 1998. 234 pp. ISBN 978-0-226-11608-2.
The Graebner book is a great read and I highly recommend it to anyone wishing to learn more about this subject. It is 30 years old, but it is still the definitive historical account of Retirement in America. It is currently out of print, but used copies are readily available.
The Costa book is also excellent. It is an economic history and takes a more quantitative approach.