The Looming Retirement Crisis

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By Al Mumm

Along with the inequality in income in this country, which is becoming a bigger and bigger issue, as it should, we all need to be aware of the coming retirement crisis. Several things have caused this crisis. The conning of defined benefit pension plans being replaced with defined contribution plans—401(k)—is a disaster that seems to have sneaked up on us; however, we all should have seen it coming. Increasingly, corporate America has discontinued the pension plans worked so hard for in the 1930s, ’40s, ’50s, and ’60s by the labor movement. Remember the three-legged stool CWA and AFL-CIO always talked about for retirement? One leg a pension, another leg Social Security, and the third leg personal savings, including 401(k)s. More and more, the leg of pension is being kicked out from under workers. The dispute between the machinist union and Boeing in Seattle is a perfect example of this. The Seattle Local first rejected their contract because it eliminated the pension for future employees and replaced it with a 401(k). The machinist union at the national level urged the membership to rethink the rejection in light of extortion by Boeing, which threatened to move the work on the new Boeing airliner out of Washington to one of many states who offered incentives for them to come—incentives that included no union. If you paid attention to the recent news, the membership approved the new substandard contract 51 percent to 49 percent. It is a sad day, as Boeing is an extremely profitable company and greed and blackmail were their methods to achieve their evil objective.

In many states and city and count government, public sector employees (police, fire fighters, and city and county employees) are not under Social Security, and their pension from the government entity they work for is their only retirement income other than personal savings. Now some government officials say they want to replace the traditional pension with a 401(k) (and the mayor of Omaha, Nebraska, is one of them). This is not only foolish, it is downright criminal. To put their entire retirement (remember, they get no Social Security) at the mercy of a volatile stock market is cruel at the very least. Many elected official do this in the name of cutting taxes, but remember, they seldom mention what services and things like bargained-for pensions will be cut to pay for tax cuts. Sometimes cutting taxes is not responsible governing. Couple this with the unrelenting attacks on Social Security, Medicare, Medicaid, and health care, and the future of retirement looks bleak. Thing like this are happening in similar fashion throughout the industrialized world.

What can we do to fight this? Continue to support your union and unionism in general to combat this unrelenting attack on workers and retirees; write, call, and email your elected representatives to make them aware of this looming disaster and urge them to support defined benefit pension plans and improve Social Security, Medicare, and Medicaid; support candidates who support workers’ and retirees’ rights; write to your local newspapers’ op-ed sections; and talk about this with your family and friends. Americans must fight together to beat back this attack on retirement before we get to the point of people having to retire in abject poverty while the 1 percent of the population gets wealthier! No one else will do it for us.

Immigration in Nebraska