Corporate America has spent forty years shifting the risk of retirement from the boardroom to the breakroom. A news story marveling over an employer that actually puts money into its workers’ 401(k) accounts without requiring them to match it doesn’t tell you how generous that company is. It tells you how low the bar has fallen for everyone else.
Costco makes the headlines because it does something radical by the standards of the modern American economy: it pays its people enough to actually save. It contributes 4 percent of pay automatically, rising to 9 percent for workers with 25 years of service. The Journal highlights a Costco cashier who built a million-dollar nest egg—a story we covered last week. It’s a testament to what a working person can achieve when their employer treats retirement as a partnership rather than a lottery ticket.
But look at the company Costco keeps on the list of top-tier matches. Boeing. Visa. Mastercard. These are firms that compete for specialized talent through benefits benchmarking, as the source article itself notes—and they benchmark against an $86 billion defense backlog and a tax on nearly every financial transaction in the country. The Fortunate Sons of the boardroom designed a system where the house always wins.
The Wall Street Journal piece is a useful catalog of exceptions. For every Costco cashier, there are a dozen workers whose employers offer nothing at all. Half of private-sector workers in this country lack any workplace retirement plan, as MSI documented in June. The states are scrambling to fill the gap because Washington decided decades ago that pensions were too expensive for the bottom line and workers could fend for themselves.
The generation that built the welfare state gave long-service workers a pension—a guaranteed monthly check for the rest of your life, no stock-market returns required. The generation that dismantled it gave them the 401(k): a tax-advantaged gamble that depends on your financial literacy, your ability to save on a wage that hasn’t kept up with productivity, and the stock market’s willingness to cooperate. I came out of the Army in 2006 into an economy still selling itself as a going concern, until the crash the following year proved otherwise. The men I served with came home to a system designed to transfer risk from the people who own the companies to the people who run them.
Take Ford and General Motors, for example. Both companies now give unionized workers a 10 percent nonelective contribution as their retirement plan—a number that was bumped up from 6.4 percent in the 2023 contract negotiations and framed as a wage gain. What the press release doesn’t say is that both automakers killed off the defined-benefit pension for new hires two decades ago. A 10 percent deposit into a 401(k) looks generous until you learn it replaced a guaranteed retirement income that cost the company far more to maintain. That is the beating heart of the great risk transfer: a loss of security, repackaged as an entitlement.
The Secure 2.0 Act’s innovation—letting employers match student-loan payments into retirement accounts—is a bandage on a bullet wound. A generation drowns in education debt so it can qualify for the middle-class jobs that no longer offer a pension. Now the company will match your debt payments into a retirement account. It is an ingenious way to make a structural failure of our political economy look like a thoughtful benefit.
And the most damning evidence that the 401(k) model is the problem, not the solution? Stewart’s Shops, a regional gas-and-ice-cream chain in Vermont and upstate New York, has no 401(k) at all. It operates an employee stock ownership plan instead. In the past five years, workers have seen retirement contributions of 17 percent on average. Over 200 cashiers have become millionaires through stock ownership alone. The alternative to a broken 401(k) model already exists. It is called giving workers a direct stake in the businesses that employ them. Corporate America simply refuses to adopt it, because employee ownership distributes the upside the boardroom wants to keep.
A Costco cashier with a million-dollar 401(k) is a wonderful human story. The system that makes that story a headline is a scandal. Until we stop treating retirement security as a personal responsibility and start treating it as a public good, most Americans will keep losing the gamble that corporate America already won. Corporate America has no intention of letting that change.