Who can you depend on for your retirement?

The Hershey company announced today that they were phasing out traditional pensions for enhanced 401(k)s. So I’ll take this opportunity to revisit a Sebastian Mallaby article I missed last week on Social Security:

If today's Democratic leaders were even a little bit awake, they would realize that the case for Social Security reform has grown stronger since the Clinton era. It's not just that the budget outlook has deteriorated or that the squandering of a decade renders a solvency fix more urgent. A new body of research shows how the lack of reform threatens core Democratic constituencies.

Social Security benefits were designed in the 1930s to protect traditional couples. But married couples make up a declining fraction of the adult population, particularly among minorities. Since 1970 the married share of the adult population has dropped by 10 percentage points for whites, 14 percentage points for Hispanics and an astonishing 22 percentage points for African Americans. Because Social Security benefits were not designed to protect singles, these changes in family structure are driving up poverty rates among the old. In the early 1990s, 2.4 percent of married retirees lived below the poverty line, according to the Urban Institute. But fully 21.2 percent of divorced retirees were poor, and the rate among never-marrieds was 16.2 percent.

If Democrats cared about poor women and minorities, they would be clamoring to reform Social Security. But instead they get a childish gratification out of stamping their feet and refusing to discuss the subject. They can't muster the courage to block the suspension of habeas corpus. But when it comes to blocking entitlement reform, the Democrats ride out to battle.

The Democrats cannot hold back the tide of retirement politics any more than they can prevent corporations from moving toward employee-funded retirement accounts. If they cared about Social Security, the Democrats would try to re-tool the program for the 21st century instead of insisting on preserving a system created in the wake of the Great Depression. Without reform, America will inexorably separate into people who can afford to invest in 401(k)s and those who cannot; the magic of compound interest will create income disparities magnitudes worse than any taxation or fiscal policy could design. By then, Social Security will be an afterthought.