A View From The Left -Pension Robbery-Bosses to Workers: Slave Away, Drop Dead

Workers Vanguard No. 1072	7 August 2015

Pension Robbery-Bosses to Workers: Slave Away, Drop Dead

 

Last December, Congress and the Obama administration launched a stealth attack on pensions of workers covered by multiemployer plans in industries like mining, trucking and construction by passing and signing into law the Multiemployer Pension Reform Act (MPRA). The MPRA is a “reform” in the same sense that the guillotine reformed executions previously carried out by the rather more extended process of drawing and quartering. This measure came into being without a whisper of debate as an amendment to the omnibus budget legislation rushed through to provide the monies necessary to run the government.

The MPRA allows the bosses not just to whack the pensions of active workers but to decrease the pensions of retirees, an option that was blocked by existing legislation until the act was passed. It is estimated that 10 percent of multiemployer plans, covering about one million workers, are facing insolvency. The Treasury Department recently appointed a hatchet man, Kenneth Feinberg, to oversee the MPRA’s implementation, supposedly to block unwarranted employer attempts to curtail pensions, but more to the point, investing him with the power to slash benefits if cutbacks are rejected by workers and retirees.

In recent months, egregiously underfunded public employee retirement systems in several states, most notably Illinois and Pennsylvania, have been targeted for benefit slashing. Democrats and Republicans alike have sought ways to get around existing legislative roadblocks to such attacks. As the pension rollbacks in bankrupted Detroit demonstrate, in the absence of any meaningful social struggle by workers and retirees, the road to such cutbacks by the capitalist rulers will be cleared in one manner or another. Not surprisingly, given the scent of blood in the water, calls for the “reform” of Social Security have recently resurfaced, including the raising of the retirement age. With only 18 percent of private-sector workers covered by plans that guarantee specified benefits upon retirement (down from 35 percent in the early 1990s), state/government pensions, like Social Security itself, are the last major repository of such plans.

In Pennsylvania, the Republican-dominated state senate, with all-out support from many Democratic mayors throughout the state, recently passed a bill to end defined-benefit coverage for state workers by forcing them into 401(k) defined-contribution plans. Democratic governor Tom Wolf recently vetoed this rollback, preferring alternative strategies to screw the workers. The anarchic capitalist system is incapable of providing financial security for its subjects who face increasing immiseration in direct relation to the increasing wealth of the ruling class that owns the productive property. In the short run, however, the difference between defined-benefit and defined-contribution plans is significant. A defined-benefit plan pays out a guaranteed monthly amount, normally dependent on wages earned, upon retirement; a defined-contribution plan puts the onus on the individual, specifying what you must put into the fund, with generally lower payouts and no guarantee of anything upon retirement.

For decades now, American workers have been subjected to cutbacks to pension and health benefits. Indeed, such benefits are under similar attack in virtually every industrial society, especially of late Canada and Britain. Today in Greece, the dominant imperialist powers of the European Union (i.e., Germany and France) are committed to enforcing pension and other cutbacks that challenge the very capacity of people there to survive. In the 1980s, the union officialdom in the U.S. and Britain set the stage for the anti-labor offensive, signaling their prostration to their respective capitalist rulers by abandoning the PATCO air traffic controllers strike here as that union was being destroyed by Ronald Reagan and by sabotaging the militant British miners strike. Subsequently, the scope and intensity of these assaults were further fueled by the explosion of bourgeois triumphalism in the aftermath of the 1991-92 counterrevolution in the Soviet Union, disarming workers in the face of capitalist reaction.

In this country, the first major assault on pensions in the post-World War II period occurred in the early 1960s, the heyday of American capitalism, when thousands of auto workers found themselves without pensions after Studebaker went belly up. A decade later, the federal government launched the Pension Benefit Guarantee Corporation (PBGC) with the aim of covering pensions in the private sector that vanished when a corporation went bankrupt. With the financial bubbles and subsequent recessions in recent decades leading up to the massive 2008 economic implosion, countless pension plans evaporated (and IRAs and 401(k)s tanked with the market). As a result, it is now projected that the PBGC will run out of funds to cover abandoned pensions in the next decade. Meanwhile, lawmakers only pretended to put money into state-provided pensions, so that there are now almost one trillion dollars in unfunded obligations to workers covered by these plans.

In fact, the mechanisms used to disappear the benefits that had been funded by workers, normally by forgoing wage increases in exchange for a better-funded retirement, were simply outright theft. While Wall Street and private employers dipped into pension funds to fuel speculative ventures, state and other government pensions, including Social Security, were similarly looted to fund other projects by politicians who were loath to raise more tax revenues from a populace that from left to right correctly held them in low regard as predators solely devoted to feathering their own nests.

A special dishonorable mention must be given to the trade-union bureaucrats, who couple pious denunciations of the attacks on their members’ wages and benefits with hand-in-glove collaboration with the bosses and government officials in the ongoing anti-labor assault. Thus, it is virtually a ritual that each newly negotiated union contract, normally combining peanut-sized raises with benefit cuts, is crammed down the throats of reluctant union members as the bureaucrats whine: “This is the best we can hope to get.” In that spirit, Teamsters president James P. Hoffa hypocritically denounced the MPRA last month as “devastating for those least able to take such a hit to their living standards” (Detroit News, 15 July).

What Hoffa neglected to mention is that the union reps to the Central States Pension Fund, a combined employer/union board overseeing the pensions of about 275,000 working Teamsters, retirees and surviving spouses, had lobbied intensely for the MPRA bill because the Fund was running out of money. Or that seven years earlier in a sweetheart deal to expand union membership at United Parcel Service, the Teamsters tops had allowed the company to stop paying into that fund with predictable consequences for its liquidity. Recently, the same union bureaucracy began informing Teamsters members that pension cuts could be initiated as early as next year. Outraged union members are currently attempting to mobilize to beat back the pension-slashing attacks. The cutbacks should be scrapped. But it is not promising that a leading role in this effort is being played by Teamsters for a Democratic Union, an opposition grouping within the union notorious for both drafting and then helping implement the 1989 consent decree that led to government control over union elections and finances.

It must be remembered that the union benefits that are now being eaten away piecemeal were made possible by the hard class battles of the 1930s (see the new Spartacist pamphlet Then and Now), battles that were for the most part led by reds imbued with the understanding that workers share no common interests with their bosses. It will require similar battles led by militants so inspired to fend off today’s attacks as well as to replenish the ranks of the trade unions and regain the wages and benefits that make survival possible, not least retirement at full wages. As a start, the labor movement should demand that the federal government insure the full value of both public and private pension funds. Government-provided health care should be universally available at no cost at the point of delivery. In the absence of concerted class struggle, the ruling class will not provide these or any other necessities to the workers whose labor it exploits, much less retirees who add no value to capitalist production.

The unions remain the general organizations of the working class, which workers must defend when they are under attack. However, it must be recognized that the bureaucrats that head the unions today have not the stomach to engage in the battles necessary to advance workers’ class interests. As consummate labor lieutenants of capital, they seek to demonstrate their value to bourgeois rule by enforcing extortion from the working class, notably the gutting of wages and benefits. Recently, the labor tops have signaled their intent not to challenge low-wage standards by seeking to have their members excused from the latest minimum-wage increases.

Union officialdom, with its overwhelming fealty to the capitalist Democrats, has brought disaster on the American working class. It is imperative to replace these labor traitors with a leadership committed to the independence of the working class from all representatives of the class enemy. Leon Trotsky in Trade Unions in the Epoch of Imperialist Decay (1940) charted the way forward:

“Does this mean that in the epoch of imperialism independent trade unions are generally impossible? It would be fundamentally incorrect to pose the question this way. Impossible are the independent or semi-independent reformist trade unions. Wholly possible are revolutionary trade unions that not only are not stockholders of imperialist policy but that set as their task the direct overthrow of the rule of capitalism. In the epoch of imperialist decay the trade unions can be really independent only to the extent they are conscious of being, in addition, the organs of proletarian revolution.”

To this end, it is crucially necessary to forge a party that is revolutionary, proletarian and internationalist.