"Your money or your life" is not a Choice, it's a MUGGING.
A reduced pension is not a "Broken Promise". It's stealing!!!
AS GEORGE ORWELL, AMONG others, has recognized, if we do not call things by
their right name we can not truly understand them.
The Press and the Politicians, even while decrying the loss of pension
benefits to workers, misunderstand, misconstrue and mislead the Public as to
true nature of what is taking place. They describe pensions as if they were
present from the boss, a boon, a bonus. The conclusion: not paying the
pension is sort of shameful, like not leaving a tip. [It is as if that "TIP"
were really nothing more than its etymological origin, just its linguistic
derivation, no more than an acronym for "To Improve Performance".] But the
reality, at least in the USA where employers are permitted to pay a
to tipped workers, is that a TIP is Pay for Services Already Provided. And a
pension is simply postponed wages.
A Pension, as anyone who has ever participated in a labor negotiation
(collective or individual) knows full well, is part and parcel of the wage
The financial compensation portion of the labor negotiation is central to
reaching of agreement and it has two portions: "How Much?" and "How
Apportioned?". Almost without exception the employer's primary concern is
first portion, "How much (or, preferably, how little) is it going to take to
a deal, to get these employees to do the work I want done?" Once the
question of PRICE is agreed upon, there remains some struggle over
the extent that the workers representatives are willing to or prefer to take
some of the wages in the form of delayed compensation, the employer also
prefers to hold on to its cash/capital a little longer. BUT IT (the
compensation package) is all part of WORKERS' WAGES.
Once that is understood it becomes clearer that what is taking place across
America is not a pension "reduction" or "transfer" or "delay" but a TAKING
workers' savings, their capital. And seeing it in that fashion has
political and legal implications. A judge who blithely "preserves" the
from bankruptcy by stealing from its workers is engaging in the moral
equivalent of "destroying the village to save it." A few examples may
ONE: When the Federal Deposit Insurance Corporation (FDIC) was established
assure Americans that THEIR MONEY was safe even when entrusted to a bankers'
hands, not only was a fee charged to the banks so as to insure the funds for
reimbursing the depositor, but a straightforward process was established so
that the individual's PRIVATE CAPITAL in the bankers vaults was guaranteed
fairly simple process for enforcing the law was put in place. Contrariwise,
when the Employee Retirement Income Security Act (ERISA) was established, it
provided assurance for only a fraction of each worker's claim and it FAILED
provide a simple governmental mechanism for a worker to pursue that claim.
TWO: Many major employer pension plans were established as a response to and
way around the World War II salary increase ceilings. The US Government, to
minimize the inflationary impact of wage increases in a wartime tight
labor/goods shortage market imposed ,through the War Labor Board, a cap on
increases. It came to be known as the "Little Steel Formula" and was pegged
at a 15%
maximum increase during WWII. BUT, the pressure from workers who wanted
(and found the only way to get it was to quit and move to another job) led
a formula for avoiding or evading the ceiling. That was to put a portion of
the pay raise into "fringes", most often health insurance and pensions,
the monies did not enter the consumers' pockets immediately and thus had a
lesser impact on inflation. (Toward the end of WWII John L. Lewis, leader
United Mine Workers and CIO, observed that he had negotiated so many fringe
exceptions that he had woven a full blanket of protections for his members.)
The ESSENTIAL differences between wages and fringes may be thought of as
in your checking account vs. money in your savings account -- with a time
for accessing it.
THREE: When I applied in 1976 for a job at Indiana Uiversity of
Pennsylvania, I negotiated, WITHIN the framework of the Collective
for a salary (a step on a fixed schedule) and elected a pension option. I
could accept either of two pensions then on offer: the Pennsylvania State
Employees Retirement System which was a Defined Benefit or TIAA-CREF which
Defined Contribution. Under the former I would make a contribution (a
my salary) and the employer would guarantee me a pension with a formula
on salary, length of employment and age. How much would it cost the
While a rate was established by law, that could vary from time to time SO
LONG AS THE EMPLOYER GUARANTEED THE PENSION PAYMENT BASED UPON THE FORMULA.
the TIAA-CREF Defined CONTRIBUTION my share was the same percent of salary
with the state pension and the moment I earned my paycheck (every two weeks)
that amount went to TIAA-CREF. It no longer belonged to the state, it was
money. For the employer to default on its Defined (i.e. guaranteed) pension
would be theft.
FOUR: In a number of cases, particularly in the airline industry, workers
through their unions have literally agreed to take wage REDUCTIONS in order
put more $$$ into THEIR pension funds. They agreed to substitute delayed
compensation -- from wages to pensions --of monies earned. But it was (and
still workers' wages.
Investors and creditors who give or lend money to a corporation do so with
knowledge and acceptance of the risk -- possibility of Loss or Gain.
the price of the goods or services or dollars provided are a factor of the
degree of risk and the expectation of profit. Workers are not investors,
no expectation that their delayed compensation will yield a profit (except
where they accept a 401K type investment in their or some employer's
whose results they know -- or should have been informed -- may go UP or DOWN
with the market.)
Hurry up please, it's time for Workers, Unions, Politicians, Judges,
and the Media to name the deed for what it is: Bankruptcy with Pension Cuts
is part of the war on workers in which their own monies are used to
them into taking lower wages.