Saturday, December 24, 2005

Road to Serfdom

This NY Times article by Stephen Greenhouse on the "pension woes" crisis in the United States really set me off this morning:

Fast-rising pension costs for government employees - the issue that helped set off this week's transit strike in New York City - are a problem confronting cities, counties and states nationwide, causing many budgetary experts to predict a wave of painful fights over efforts to scale back government retirement programs.

Many officials and fiscal experts assert that across the nation government pension plans face a shortfall of hundreds of billions of dollars. From New Jersey to California, government officials say that attempts - either through contract fights, legislation or public referendums - to limit the amount of money that states and cities contribute to pensions are inevitable and overdue. Labor unions, for their part, say that the worries are overblown.

"Every level of government in New York City, New York State and in states across the country face large and growing pension obligations," said E. J. McMahon, a budget expert at the Manhattan Institute, a conservative research group. "If nothing is done to bring pensions under control, all the other headaches that state governments will be facing in the next 20 years on needs like education and health will be enormously worse."


Many government employees and their unions assert that the campaign to trim pensions threatens America's social contract for the middle class: a respectable pension.

Saying that in recent contracts they had sacrificed wage increases or better health benefits for solid pensions, many public employees and their unions assert that governments are betraying their commitments by seeking to now cut pensions. Further, they argue that much of the shortfall in pension financing could be erased by a strong stock market in the next several years.

"A lot of people are exaggerating the size of the problem," said Gerald McEntee of the American Federation of State, County and Municipal Employees, which represents 1.4 million government workers. "Right-wing think tanks and conservative Republicans want to do away with traditional pension plans and replace them with much-cheaper 401(k)'s at the same time they want to give all these tax cuts to the rich."

The fight over public-sector pensions follows a movement to cut private sector pensions. In recent years, corporation after corporation has complained about what they assert are the onerous costs of pensions.

Bethlehem Steel, United Airlines and other companies, saying they could no longer afford it, have stopped paying into their pension plans, forcing the government to step in and absorb billions of dollars in costs. And now Delphi, the giant auto parts company that filed for bankruptcy in October, is threatening to do the same thing.

Meanwhile, some companies, Hewlett Packard among them, have replaced their traditional pension plans with 401(k) plans.

Many courts have ruled that cutting the pensions of current public employees - as opposed to future ones - violates the Constitution, which prohibits governments from breaching contracts. As a result, taxpayers must pay for full pensions promised to government employees.

When private companies go bankrupt and leave badly underfinanced plans, a federal agency, the Pension Benefit Guaranty Corporation, steps in to insure the workers' pensions, although many workers end up getting smaller pensions than their companies had promised. The agency is running a $23 billion deficit this year and many policy makers fear that its liabilities could mushroom if many more large corporations file for bankruptcy and dump their pension obligations on the government.


To control soaring pensions costs, the authority at first demanded raising the retirement age for future employees to 62. Workers can now retire at age 55, after 25 years on the job, and receive pensions equal to half their earnings. They average $55,000 a year, including overtime.

After the union, Local 100 of the Transport Workers Union, resisted that demand, the authority made a new proposal, that future transit workers pay 6 percent of their wages toward their pensions, compared with 2 percent for current workers.

The transportation authority is working closely with Gov. George E. Pataki and Mayor Michael R. Bloomberg, who say it is vital to trim fast-rising pension outlays for state and city workers because they threaten the government's ability to provide education, policing and other basic services. New York City's annual pension outlays are expected to jump to nearly $5 billion in 2008, more than double the level in 2004.

Mayor Bloomberg repeatedly called the strikers greedy. "The public says, 'I don't want to pay more taxes and I don't get these kind of benefits,' " he said yesterday. "You have no idea how many e-mails I got, 'I don't make that kind of money. I don't have those kinds of pension benefits. Why are people striking?' "

But Roger Toussaint, the president of the transit workers' union, said the walkout was aimed at stopping an employer offensive nationwide to cut pensions and other benefits. He said the transportation authority was mimicking corporate America.

"What you have here is a scandalous attempt on the part of the M.T.A. to jump on the bandwagon," he said.

Squeeze, squeeze, squeeze.

More profits for the investment class. Less pension, health care and salary benefits for private sector workers.

Squeeze, squeeze, squeeze.

More tax cuts aimed at the investment class and corporate loopholes aimed at keeping Wall Street happy. Less pension, health care, and salary benefits for public sector workers.

Inflation's up. Health care costs are up. Energy prices are up. Food prices are up. Housing prices are up.

Workers wages are stagnant and benefits are being cut.

The only thing going up for workers is their productivity.

And their debt load.

Squeeze, squeeze, squeeze.

And Mayor Moneybags has the balls to say TWU workers and other public employees shouldn't expect a respectable pension anymore (even though they have often exchanged wage compensation or health care benefts for these pensions) because employees in the private sector no longer receive traditional pension plans?

Come on, Mr. Mayor, don't you think many people realize that greedy rich fuckers like yourself are trying to squeeze everybody in both the public and private sectors out of their pension and health care benefits so you can garner a few more tax breaks and percentage points of profit in your stock portfolio?

And why should it follow that just because private sector employees are exploited by their employers that public employees, though they are ostensibly protected by unions, should follow suit?

Good God, one of the reasons why public employees were able to win pension and health care concessions years ago from government was because they were unionized.

It stands to reason public employees would have an easier time keeping these benefits from being undercut by the investment class because they are protected by their union contracts.

Private employees, on the other hand, are relegated to relying upon the kindness of strangers and the vagaries of the market.

Which is why the Republican Party and their Corporate Overlords have spent the last thirty years in a concerted campaign to tar union workers as lazy, undeserving bums and unions as harmful to business.

Let's face it, the fewer the number of unionized workers, the less compensation that will be paid to middle class and working class employees, and the more money the investment class will make.

Maybe it's time to reintroduce the word "serf" into the American vernacular.

Because that's where all of this is heading. The investment class owns the rest of us, pays us like peasants, and we in turn keep them happy by dutifully working for garbage and purchasing their products.

Ironically, the more the investment class squeezes the working and middle classes, the more the investment class may hurt itself in the future.

The American capitalist system currently is chigging along under the power of the American consumer to purchase a lot of the crap produced by the Multi-Nationals.

Many American consumers are ordinary working and middle class Americans.

But the more Mayor Moneybags and the Corporate Overlords squeeze the middle and working classes of wage compensation and health and pension benefits, the less likely it is that the American consumer can keep propping this piece of shit economy up.

Which means lots of trouble for ALL economic classes in the near future.

Well, the problems for government and non-profits, are that they promised far more benefits than they can deliver. For example, in CA, recently safety officers were given 3% at 50 at retirement. No thought into how in the world this was going to be funded, or the impact to other retirees.

Something will have to change.
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