The bashing of the middle class continues

Eons ago, Americans went to work for a company, spent their entire work career with said company, and then was rewarded for that loyalty with a pension to live off when retired.  Those days are gone, long gone.  Now, we have workers who think 10 years with one employer is too long.  Likewise, that lack of loyalty to a single employer disappeared along with the old-school pension for the most part.

Pensions are still around, but not like they used to be.  Pensions usually come with jobs where collective bargaining agreements still exist and unions help negotiate benefits for the workers.

“In 2013 there were 14.5 million members in the U.S., compared with 17.7 million in 1983. In 2013, the percentage of workers belonging to a union was 11.3%, compared to 20.1% in 1983. The rate for the private sector was 6.7%, and for the public sector 35.3%.”–Wikipedia “Labor unions in the United States”

In the current $1 Trillion spending bill that’s floating through Congress, there’s a neat little nugget encapsulated in that legislation that hasn’t been much discussed by the MSM.  If that spending bill passes, one of the riders attached will allow cuts to benefits already promised to workers.  It’s being described as a way to help the funding issues with pensions, which are reportedly vastly underfunded.

The measure ostensibly aims to stave off insolvency for multi-employer plans facing financial problems, largely by allowing them to cut retiree benefits to save money, well in advance of insolvency. Helping these plans survive is a laudable goal — as many as 200 of the 1,400 such plans in existence may face financial problems over the next 20 years.

But as Ken Paff, national organizer of Teamsters for a Democratic Union, asserts: “The process stinks.” The deal was worked out in secret and invested with a bogus urgency: There’s absolutely no reason it needs to be passed this week, much less attached to an omnibus budget bill that has to be enacted before Congress leaves for vacation this week. “To attach this to a budget bill is a dirty trick,” Paff says.

The actual language of the 161-page pension measure wasn’t made public until Tuesday night; at midday Wednesday, pension advocates were still working their way through it. But it’s already clear that some descriptions of the provisions provided to reporters Tuesday by its drafters, Reps. John Kline (R-Minn.) and California’s George Miller (D-Martinez), were flagrantly misleading.–LA Times

The LA Times piece goes on to mention that the “protections” that were supposedly included for retired workers really isn’t much protection at all considering that you have to be 80 years old in order to be fully protected from the cuts.  Those who are at least 75 can still have up to 80% of the maximum allowable amount cut from their pension.

This likely won’t cause much alarm for many people because not many people have their retirements set up in pensions.  Most people have a 401k plan now.

Even those with a 401k plan should pay attention to the cuts being made here as well.  Recently, Radio Shack announced they were ending matching contributions to their employee 401k plans, and I don’t think this will be an isolated case.  Employers are cutting costs to maximize profits, and unfortunately for today’s worker, we’re nothing but a cost on the company’s P&L statement.

I see nothing more but more chipping away at the columns that support the middle class.  Some people like to play the blame game and suggest one party is responsible, but as this legislation shows, they both contribute to the demise of the middle class.

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2 thoughts on “The bashing of the middle class continues

  1. Pensions are gone the way of the dodo bird. The real crime is that companies were allowed to promise pensions without funding them, for decades. That was done so they could show bigger profits and now the chickens have come home to roost. (I believe this really got going in the 1960’s but I don’t remember for sure).

    And of course, millions of workers chose to forego wages and benefits, for the promise of those pensions. They played the game under the rules of the day, not realizing the game was rigged, all along.

    I was discussing this a few years back with somebody and they told me they weren’t worried about it because their pension was covered by the Pension Benefit Guaranty Corporation. They were unaware that at that time, General Motors alone had more unfunded pension liabilities than the entire PBGC fund contained. That didn’t even count the thousands of other companies with unfunded liabilities. It’s all a giant shell game and like any good shell game, none of the shells actually have a pea under them.

    Everybody just has to hope they die before they’re the one who gets left with no money.

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    • No argument on the underfunding of pensions. If any one of us did such a thing, we’d be locked away in jail for fraud. Heads of companies do it and get rewarded bonuses and stocks. At the same time this is going on with pensions and such, politicians are still trying to gut Social Security.

      Most Americans are going to work their lives away and not have a boot to piss in when they retire because they’re relying on the honesty and integrity of people who don’t really give a damn about them.

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