Trying to figure the way through a 401(k) life

Thomas Friedman’s thoughts on how we’re becoming a 401(k) nation have been kicking around the back of my mind for about a year. His Op-Ed piece described the shift in how retirement plans in the US have largely shifted from pensions to 401(k)s and used that transition to make a point about the changing nature of work.

In a pension plan, a defined input (so many year of work) leads to a defined output (a regular payment that starts upon retirement until the day you die) with the risk assumed by the employer. In a 401(k), there’s still a defined input (regular deposits into a managed investment account) but how much a person gets at the end carries no guarantees and the risk sits squarely with the employee.

Friedman’s insight was that work itself is following that same path. Where once the defined achievements of education and learned skills were enough to guarantee continued employment and a good, middle-class career (at least), that’s not really the case anymore.

The news a some months back that Amgen will be closing its Seattle site this year really drove that point home. It was a reminder that biopharma, like so many other industries, isn’t immune to the implications  of the 401(k) life.

When I decided to go to graduate school and get a PhD, I was not thinking in a strategic way about my future. I liked biology, tested and interviewed well enough to get into graduate school, and decided spending 6 or so years dabbling in molecular plant biology, playing croquet on the lawn in front of my building, slowly increasing my alcohol tolerance (no trivial thing for an Asian with low alcohol dehydrogenase activity), and hanging out near the San Francisco Bay would be a Good Thing.

I had fun. I learned something about homeobox genes in Arabidopsis thaliana, cloned some genes when that was still a thing that could get you a thesis, and over the course of the next twenty years took a circuitous route through a couple of postdocs, a lab manager position and then scientist roles in Genomics at two biopharma companies.

In other words, I was damn lucky.

Lucky because even at the time I was going through graduate school, the nature of research work, like many other kinds of work, was already changing. More jobs were being created in academic and industry research, it’s true, but there were also many more of us getting advanced degrees than there were jobs. Far more. Many of my classmates in graduate school, great scientists, smart people, are no longer doing research. Some by choice, but others not.

The problem has gotten worse. A recent PNAS opinion piece by several notable researchers says  as much, and gives a number of suggestions for things that might, maybe, make things better.

But tweaks and changes won’t change the underlying issue that Friedman points out, which is that even with the best of intentions and good planning (to say nothing of whatever it was I did), the future of work, of my career, of your career, are less predictable than they have ever been. And it’s not likely to get better.

When I look around Seattle, I don’t see an obvious place where the 600+ people whom Amgen will be laying off will land. Some will find positions in other biopharma. Some will move laterally into academic labs, becoming research faculty at places like the Fred Hutchinson Cancer Research Center and the University of Washington. Some will choose to move if they want to continue to do research. Even as Amgen was downsizing in Seattle, it was also announcing plans to expand its presence in Boston and the Bay Area.

So what is a scientist to do? On a deeper level, what is anyone to do?

When you have to put in your defined contribution just to have a probabilistic chance of getting a good job, that’s pressure. In an Economix blog post last year in the New York Times, Laura D’Andrea Tyson from the Haas School of Business at UC Berkeley analyzed the kinds of jobs being gained during the recovery over the past few years and saw troubling signs that in general, primarily low- and high-end jobs were coming back, with not nearly as much growth for jobs in the middle.

Friedman spun a phrase that fits this phenomenon in a recent interview, saying “average is officially over.” He was referring to the influence of technology, connectivity, search, and personal, enabling technologies to change how employers look for people to do work. How they decide whom to hire. How they use these tools to drive greater efficiency. And, also how prospective employees can differentiate themselves, create niches for themselves, make themselves stand out from the crowd. Be above average.

Lake Woebegone aside, that’s a tough proposition for everyone. Kids in school. Young adults entering the workforce. Older adults seeing the rules change right in front of them, feeling the floor sweeping out from under their feet, hoping they can still land upright like the china on a dining room table after a magician has snatched off the tablecloth.

There are a lot of bits of advice that get thrown out. Keep learning. Increase the breadth of your expectations, but not the height. Do what you love but make sure you love a lot of things. I wrote a piece a while ago about how adaptability may be one of the key attributes in employees today, and I think that’s a skill toward which everyone should aspire.

Maybe the most important thing might be changing one’s inner world and adjusting to the reality of a 401(k) life. Understand that your employer will most likely always be searching for ways to increase efficiency and that answer might not include you. I’m trying these things myself while at the same time understanding it might not be enough, I might not guess right or be good enough in the directions I turn. Staying still, though, is not really an option.

Because, when it comes down to it, there aren’t guarantees anymore. I’ll admit I’ve built up a bit of a straw-man argument; guarantees were never there for most workers. But it’s a question of degree and it seems like we have slipped over some boundary.

And so I’m quite in favor of one of the comments Friedman makes at the end of the interview linked above: that countries should recognize the changing nature of work and provide a robust safety net to give people the freedom to keep adapting. I would love to see that happen although I’m not holding my breath. It would require more empathy, more coming together than seems possible given US society right now. A good safety net, however, would help a lot in buffering the effects of the 401(k) life.


2 thoughts on “Trying to figure the way through a 401(k) life

  1. The recent election results seem to make that even less likely. A “robust safety net” means social programs, not the darling of our newer, redder congress. It seems that as we move forward, in some ways we move backward: safety nets seem to be ever more centered around family and close social ties than to governmental or work-administered programs. At least, that is how it seems to me as I age and consider my future.

  2. It’s a hard issue. One of the things that makes the US such an interesting and dynamic place is the feeling that everyone can make it, everyone gets what they work for, everyone has unique talents. This makes for real motivation driving innovative and risk-taking behavior. But the flip side of that is a lack of empathy. I’ve had conversations with a lot of people about things like, for example, obesity, with many saying that it’s all the fault of the people who are overweight. No empathy for situation or environment.
    And that leads to a lack of belief in a safety net, I think. If you’re in trouble it’s your own fault, never mind things like weather, or shifting demographics, or genetics, or just bad luck, or any of the many things that might lead someone to misfortune. I wish I knew how to increase empathy among people. I think it would help a lot.

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