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"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 the true nature of what is taking place. They describe pensions as if they were a present from the boss, a boon, a bonus. The conclusion: not paying the promised 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 subminimum wage 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 packet.

The financial compensation portion of the labor negotiation is central to the reaching of agreement and it has two portions: "How Much?" and "How Apportioned?". Almost without exception the employer's primary concern is with the first portion, "How much (or, preferably, how little) is it going to take to make 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 apportionment. To 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 often 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 of workers' savings, their capital. And seeing it in that fashion has important political and legal implications. A judge who blithely "preserves" the company from bankruptcy by stealing from its workers is engaging in the moral equivalent of "destroying the village to save it." A few examples may clarify my argument:

ONE: When the Federal Deposit Insurance Corporation (FDIC) was established to 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 AND a 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 to 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 pay 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 more (and found the only way to get it was to quit and move to another job) led to 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, where 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 of the 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 money in your checking account vs. money in your savings account -- with a time delay 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 Bargaining Agreement, 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 was a Defined Contribution. Under the former I would make a contribution (a percent of my salary) and the employer would guarantee me a pension with a formula based on salary, length of employment and age. How much would it cost the employer? 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. With the TIAA-CREF Defined CONTRIBUTION my share was the same percent of salary as 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 my 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 to put more $$$ into THEIR pension funds. They agreed to substitute delayed compensation -- from wages to pensions --of monies earned. But it was (and is) 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. Indeed, 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, they have no expectation that their delayed compensation will yield a profit (except where they accept a 401K type investment in their or some employer's business 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, Citizens 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 blackmail them into taking lower wages.

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