While George W. Bush’s attempt at privatizing Social Security famously failed, private industry has largely been successful at shifting their group pension plans into individual private accounts. These individual accounts are almost always invested in the volatile stock market.
While George W. Bush’s attempt at privatizing Social Security famously failed, private industry has largely been successful at shifting their group pension plans into individual private accounts. In fact, for many people, traditional defined benefit employer-sponsored pensions are something they are not even familiar with. Most of us are used to 401(k), IRA, or other defined contribution plans, if we even have such a plan. These individual accounts (sometimes employers match funds up to a certain amount, many times they don’t contribute anything at all) are almost always invested in the volatile stock market. They essentially absolve companies of any financial risk associated with retirement and firmly place that risk on the back of each individual employee.
Because of the large amount of non-unionized industries, and the class-collaborationist ideology of many union bureaucrats in the industries that are, there have been few attempts to fight this blatant rollback of gains made in the past by the Labor Movement. Many of these individual retirement accounts were legalized, with little to no opposition, in the late 70s as a supplement to existing pension plans. Companies, however, soon realized they could use them to undermine the government-guaranteed benefits provided by pensions. Management set up separate retirement accounts for them, accounts that guaranteed them healthy returns, and shifted rank and file workers into these newly legalized private individual accounts that are subject to the chaos of the stock market, where returns are uncertain at best. By the 1990s, corporations typically paid less than half of what they used to for their employees’ retirement accounts. Since then, it has only gotten worse.
Even if you are one of the few to have kept your traditional pension plan, companies are using the current crisis of Capitalism as an excuse to freeze pension accounts and even steal money from them in order to subsidize their market mishaps. If all else fails, companies simply declare bankruptcy and have their workers, as well as other workers across the country, bail them out with public tax dollars.
Nine of the ten largest pension defaults in history have happened since 2000, leaving the Pension Benefit Guarantee Corporation, which was set up by the government in order to protect retirement benefits against such practices, deeply in debt.
With the Federal government, as well as many individual states and local governments, facing a huge budget crisis, workers with pensions find themselves in the precarious situation of bailing out their old employers with tax dollars in order to keep their promised benefits, while at the same time seeing many of the social programs that benefit the general public defunded to the point of being ineffective and sometimes completely shut down. Big Business and their political servants use this to divide the working class by blaming “greedy union workers” for demanding what is rightfully theirs, and should be the right of all workers.
When issues like this are brought up, by the mainstream press or even by friends and family, it is often assumed that the capitalist class has a role to play in finding a solution. Union leaders have also told us this for years, that we all should get together, sit down at a giant metaphorical table, and find something that works for all. When this happens, the “right” of the corporations to make a profit is never even questioned. Why is this?
When we ask ourselves this question, it becomes clear that Capitalism itself is the problem. Our interests are in direct contradiction with those of our bosses. The capitalist class must make a profit off our labor in order to ensure their economic, social and political power. Obviously, this is an over-simplification of class relations in society, but it is a basic point we can bring up as we explain our ideas on a daily basis. Instead of simply asking for a seat at that table, we need to demand the whole thing. After all, we made it!
Source: Socialist Appeal