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.