Future Uncertain: US Workers and Their Retirements
by Seth Sandronsky
www.dissidentvoice.org
November 8, 2004



 

The results of Election Day are fading, but the US work force continues to face employer attacks. Consider the case of United Airlines. The carrier is seeking to defund its workers’ retirement pensions.

United has been in bankruptcy protection since December 2002. Currently, the airline wishes to end its four pension plans for employees. A judge in federal bankruptcy court will make a ruling.

S/he will deliberate on the airline’s case that its survival depends on liquidating employee pensions. One judge, one vote on the future of many workers. That is the letter of the law.

Turning from the courtroom to the polling place for a moment, many United employees surely voted on Election Day. Apparently, here was a demonstration of their freedom. Yet under American capitalism, they get no vote on the fate of their retirements.

One thing is clear. U.S. electoral politics has its limitations. The legal system crafted to meet the needs of employers at the expense of workers is just one example. The impacts on American society are widespread.

For more information, we turn to Michael Perelman, professor of economics at CSU, Chico, and author of Dead End: The Trap of Individualism in a Corporate Society (Pluto Press, forthcoming). He writes: “Between 1979 and 1997, the share of employees with defined benefit plans—meaning that the plan promised a specific level of support—fell from 87 percent to 50 percent (The State of Working America, 2002). Under defined benefit plans, employers bear the responsibility to provide the promised pensions—a responsibility that they were more than happy to shed.”

Perelman continues: “Today, about 85 percent of private contributions are for defined contribution plans in which individuals decide how much to contribute, how to invest their assets in the plan, and how and when to withdraw money from the plan (Poterba, Venti, and Wise). The level of support that the plan provides for individual workers depends upon their success in investing. These plans appeal to employers because they shift the risk onto the employee. Because appreciation of stock prices helped to fund the defined benefit plans, the collapse of the stock market bubble in 2000 accelerated the transition to the defined contribution plans.”

By definition, financial markets are unstable. They boom and bust.

Moreover, those with the least amount of capital are most at-risk from this trend.

Against that backdrop, President George W. Bush wants to reform the Social Security system with private saving accounts during his second term. He argues that Americans face a dire need for such reform. It is that fear thing all over again.

Economist Dean Baker has a different view. “According to the Social Security trustees' report, the standard basis for Social Security projections, the program could pay all scheduled benefits for almost forty years with no changes whatsoever.” There is no funding problem with Social Security that requires the solution of partial privation.

Yet Bush, speaking for Wall Street and right-wing extremism, is pushing U.S. workers to accept the idea of shifting some of their payroll taxes into defined contribution plans. One example is the 401k plan as the path forward to retirement security. In reality, this option is much more likely to be the road to increasing the flow of funds to the GOP via financial services firms.

They are major donors to the party. The same cozy relations held for the Enron Corporation. Speaking of that failed energy firm, its former employees might tell us a tale or two about their pensions invested in company stock through defined contribution plans.

Enron declared bankruptcy on Dec. 2, 2001. As a result, many workers’ retirements vanished into thin air. The stock they owned become worthless, plus thousands of Enron employees lost their jobs.

Michael Parenti, author and political analyst, has said that the American ruling class wants just one thing—like every other such grouping of private wealth and state power in history. That single thing is everything. Their appetite for more wealth includes workers’ private retirements from companies in bankruptcy protection, and more of the government safety net for the U.S. majority—unless militantly opposed.

A look back to the mass mobilizations in the nation during the 1930s and 1960s is instructive. Both were instrumental in improving people’s living and working standards. Each period serves as an example of how to slow down and ultimately reverse the current trend of right-wing, two-party politics in the U.S. that has increased social inequality since the end of the Vietnam War.

This drift to the right has been propelled by the economics of slow/no growth that followed the exceptional expansion after World War II.

Consequently, today we see investment capital seeking profitable returns flow from industrial production to financial speculation. Here lies a road map to an uncertain future for the U.S. working class, indeed.

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