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Est. April 5, 2002
May 05, 2016 - Issue 652

Imminent Pension Collapse
A Confirmation of Much
That is Wrong with U.S. Priorities


"In the past several decades, the corporations
which provided some of the best pensions
started to look at the pension funds as another
pile of money that they could milk for the
benefit of the stockholders and the company’s
hierarchy. Many workers have lost pension
benefits, if not their entire retirement benefit,
because of the greed of the corporations."

The pensions of hundreds of thousands of workers represented by the Central States Pension Fund are waiting for the U.S. Treasury Department to give the go-ahead to cut pensions of workers in some 1,500 companies and leave the retirees who will be affected to find the wherewithal to survive on their own.

In the current presidential campaign, there has been little said about this tragedy about to happen in either the debates or in campaign commercials, with the possible exception of the rhetoric of Senator Bernie Sanders of Vermont, the thrust of whose campaign has been to support the 99 percent, “not the billionaires.” Even at that, it is difficult to see a clear picture of the disaster now forming for the estimated 270,000 retirees and workers who are about to be cut off from their incomes and livelihood.

The attitude of the powers that be were clearly expressed by Donald Trump, the apparent nominee of the Republican Party for president of the U.S., when he said that the minimum wage is too high in the U.S. and that a higher minimum wage makes the country less competitive. In so many words, Trump was saying that the people who work for wages should be cut loose to fend for themselves in the cutthroat economy that exists in the richest country in the world.

As millions of workers are fighting to increase the nation’s minimum wage to $15 an hour, Trump and others in the billionaire and centimillionaire class are generally adamantly opposed to any increase in the wage and many of them believe that any minimum is too much for wageworkers. It should come as no surprise then that the middle class is shrinking and the working class and the poor are left out of the picture, altogether. When was that an issue in the presidential primaries to date (Sanders excepted)? What about poverty as an issue, one that looms over the entire economy?

From the 1930s on, for several decades, there was much optimism in working men and women, when they formed unions and could meet face-to-face with their employers to reach an agreement on wages, benefits, working conditions, and especially, pensions. In those days, much of the labor was hard, in manufacturing, factory work, construction, and other work that sapped the strength of those wage earners. When they came to the end of their working lives of some 30 or 40 years, they believed they deserved a rest and an income that provided a dignified life in retirement. That’s why negotiations for good pensions were such an important part of union contract talks, and they provided for the old age of millions of workers.

In the past several decades, however, the corporations which provided some of the best pensions (mainly because they could afford them) started to look at the pension funds as another pile of money that they could milk for the benefit of the stockholders and the company’s hierarchy. Many workers have lost pension benefits, if not their entire retirement benefit, because of the greed of the corporations.

Even with ERISA (Employee Retirement Income Security Act) law that went into effect in the 1970s, workers’ retirement was not secure, although the law did help to some degree. The intervening years were those in which Corporate America fled wholesale to low-wage countries, leaving millions of workers to fend for themselves. And, there was no sanction against the corporations for emptying out the economy of the nation. As long as they were making money, and they were, things seemed to be okay. Some of that money found its way back into the campaign coffers of virtually all of the members of Congress (both houses) and most of the members of state legislatures. Tens of millions of workers found themselves outnumbered by a small band of legislators at every level of government, who have not done much to help those millions of families, which are now in dire need.

It is no wonder, then, that the people in desperate financial and economic need are forcing themselves to believe the nonsense that has been spouted by Republican candidates, during the entire primary season, especially the outlandish claims of Donald Trump, who says he can fix everything, just like he has fixed contracts for his building projects. Not all of his projects have turned out well, but people are not listening to reality, rather, they are listening to the Story of America that is being spun by their potential storyteller-in-chief while on the stump.

If a Democrat is elected, it’s possible that they might take a stab at relieving the retirees of the Central States multi-employer pension fund of some of their burden of debt and struggle. If a Republican is elected, look for more of the same cuts, including those into the programs that feed children and poor families. Don’t look for help from that quarter, since, right at this moment, they are busily attempting to cut food stamps and school lunches for children in need. Considering that, expect nothing for the retirees of Central States.

An example of what’s happening is one retiree, 74-year-old Bill Hendershot, who told CNNMoney that he is expecting a 60 percent cut to his $3,500 monthly pension check. He told CNN that he has applied for part-time work, and has reduced as much of his and his wife’s household budget as possible. The couple’s income comes mainly from his pension and their two Social Security payments each month. They expect to lose a reported $2,104 a month, so life is going to be tough from now on. Multiply that by 270,000 and you have a huge hit to not only personal incomes, but to the economies of the communities in which they live.

We can be sure that the trustees of the fund and the government officials that oversee it will not miss a penny of their pay or benefits and will never miss a meal. This is the direction of the country, though: The 1 percent will continue to take their profits from workers and the poor, will continue their endless war economy and their war on the environment, and most people will be left to find a way to survive. Indeed, poverty is not an accident. Columnist, John Funiciello, is a long-time former newspaper reporter and labor organizer, who lives in the Mohawk Valley of New York State. In addition to labor work, he is organizing family farmers as they struggle to stay on the land under enormous pressure from factory food producers and land developers. Contact Mr. Funiciello and BC.




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Executive Editor:
David A. Love, JD
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Peter Gamble

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