NY Times, March 16, 2001
Stock Slide Sinks Hopes in Industrial City
By PETER T. KILBORN
Susana Raab for The New York Times
YORK, Pa., March 15 � The stock market's shrapnel is spraying all over this
industrial town, just under 200 miles from Wall Street. Like many
Americans, the city's truck drivers and clerks, nurses and assembly line
workers are new and largely accidental participants in a game that was once
played exclusively by men who wore suits.
Starting in the late 1980's and encouraged by tax breaks, the men and women
who work here in the Harley-Davidson plant or at the air-conditioner
factory bought into their employers' 401K retirement plans and watched them
grow and grow year by year. Then a year ago, at the peak of the market's
heady rise, their fantasies of condos in Florida began shriveling, and for
many this week, they collapsed.
Over deep-fried chicken at the R & D Luncheonette downtown on North Duke
Street, Barbara Ruby, 48, said the markets have hammered her 401K and
dashed her hopes of early retirement. "I thought I'd be leaving my job by
the end of the year," said Ms. Ruby, a customer service worker at the York
Water Company. "I want to go do something fun in horticulture, start my own
little business." But the market's slide has left her unsettled. "Now, do I
have to rethink my whole plan?" she asked.
Another customer was Barbara Zinn, 41, an accounts payable clerk at a
communications company. Only within the last year did she and her husband,
a paper company worker, begin investing in 401K plans. She contributes $50
a month and he $130 a week. "I never wanted to start it, and they talked me
into it," Ms. Zinn said. "Ever since, I've always had minuses on the
statements."
During the 1990's, the city of York prospered � helped along by well-paid,
unionized industrial workers, established construction businesses and
flourishing banks and financial services. The city, with a population of
41,000, witnessed a remarkable democratization of the stock market with the
proliferation of 401K plans and other tax-favored investments like
Individual Retirement Accounts.
The 401K plans, particularly, became popular among employers because they
relieved them of providing conventional pensions, which assured retirees of
a steady and predictable check regardless of the stock market's ups and
downs. With deductions from their pay and varying amounts of employer
contributions, workers on 401K plans have assumed most of the risk and
burden of providing for their retirement.
"The manufacturing worker was not even aware of the crash of '87," said
Jack H. Grim, manager of the Janney Montgomery Scott securities office on
East Market Street, York's main commercial artery. "But he's extremely
aware of it today." Many are stunned. "I can see people pulling in their
horns," Mr. Grim said.
Full article: http://www.nytimes.com/2001/03/16/business/16ECON.html
Louis Proyect
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