BONNIE ERBE Free-lance economy is a boom for some but a bust for others

Think you're going to retire "fat and happy" with a corporate pension payout delivered as pro-mised? Many Americans need to think again.
As the cost of employee benefits tilt toward Jupiter (i.e., skyward) some major corporations are shedding burdensome costs through bankruptcy.
Others are flat out dropping expensive perquisites that until recently were considered obligatory to lure the best workers.
In fact, even the paid vacation may soon go the way of the typewriter. I call this phenomenon the free-lance or hourly economy. It's alluring and rife with self-enrichment possibilities for financially nimble Americans and high-earners who can aptly avoid the icebergs. But it's a bed of brambles for less-educated folks and low-earners whose personal finance navigation tools never existed or are out of date.
Here come some numbers, so grab your pencils and eyeshades.
According to the global outsourcing and consulting firm, Hewitt, during the past 13 years the percentage of employers offering old-fashioned defined benefit plans has dropped almost by half. That is, companies offering the traditional, "You come work for us for so many years and when you retire at a certain age we give you a pre-determined amount annually for retirement."
Dropping percentage
Hewitt reports in 1990, 83 percent of employers lavished these types of benefits on workers. Last year, that percentage had dropped to 45 percent or less than half.
A pro-union group, the Labor Research Association, claims what defined benefit plans are left are largely the province of unionized workers, or non-union workers who work at heavily unionized companies.
Its Web site states, "Only 14 percent of private-sector nonunion workers are covered by a defined benefit plan, and many of these receive coverage only because they work at companies where large portions of the workforce are unionized. Among private sector union workers, 69 percent are covered by a defined benefit plan, but many of these are concentrated in the shrinking industrial sectors."
To wit, the airline industry, the steel industry and others that are laying off workers a lot faster than they're bringing in new hires.
Not just the defined benefit pension, but also the paid vacation, is apparently on the respirator. The Society for Human Resource Management surveyed 450 companies in 2003 and again this year and found only 68 percent of them now offer paid vacations, down from 87 percent the previous year. That's a precipitous drop in one year and a sign all sorts of perks are on the endangered species list.
Save a lot
What's a worker to do? Three words of advice: prepare, prepare, prepare. That means saving a lot more than we are at present. In fact, it means reversing a serious slide in Americans' collective personal savings habits. According to the Commerce Department's Bureau of Economic Affairs, personal savings as a percentage of disposable personal income -- i.e., the money we have in our possession after paying taxes -- fell to a seasonally adjusted four-tenths of one percent in the third quarter of this year declining from 1.9 percent for the same quarter last year.
America's savings rate has always trailed behind most other industrialized countries. But this year's drop appears, anyway, to be nothing less than a bungee jump off a tall bridge. Lack of self-sufficiency in the savings department would seem to make Americans all the more dependent on corporate largess to dodge poverty in retirement.
Why are companies in such a cost-cutting mode? Most analysts say globalization is increasing competition on wages and benefits. Outsourcing is having an impact as is a feckless stock market. Domestic policy may soon increase pressure on future retirees if the president's as-yet unrevealed plan to partially privatize Social Security becomes law.
X Bonnie Erbe is a TV host. Distributred by Scripps Howard News Service.