End of Pensions Coming

    Last week, I speculated that the decision by IBM to stop providing its employees with a defined benefit pension plan was perhaps a sign that the end was near for real pensions. After all, IBM is not an ailing company and has the third-largest pension plan in America.

    Today, Mary Williams Walsh has a front--page story in The New York Times speculating the very same sad state of affairs. You may remember that another rich and powerful company, Verizon, announced more than one month ago that it was ending its pension for its manager. The most damning quote in the story is this: "With Verizon, we're talking about a company at the top of its game," said Karen Friedman, director of policy studies for the Pension Rights Center, an advocacy group in Washington. "They have a huge profit. Their C.E.O. has given himself a huge compensation package. And then they're saying, 'In order to compete, sorry, we have to freeze the pensions.' If companies freeze the pensions, what are employees left with?"

    I do quibble with Walsh's story (she generally does some of the best reporting on the attacks on pensions)--she traces the decline of the defined-benefit pension plan but does not tie the decline of unionization as the reason for the loss of real pensions.

    And that brings us to the question: what is the response of either the labor movement or the Democratic Party to the end of real pensions? I see no outcry on the part of the Dems. And, other than press releases, what does the labor movement propose as a way of combating the decline of defined-benefit pensions?

Comments

[Bill Pearson]

I know people get tired of my continued attacks on the biz union model(and the leadership controlling it). It's just as we watch the last vestiges of what was once a grand old movement be dismantled, i can't help but wonder how the boys can sit there and do so little.

Having come from the inside, i saw the trappings of being "one of them." It is painful to see so many good union leaders neutered by a system that rewards their silence and mandates they shut their mouths and tout the party line.

Wake up guys; your asses are being handed to you and yet you cling to the fallacy that we are doing anything meaningful. People wonder why a handful of us old diehards have gone to the reformers side; the reality is, that appears to be the last hope there is for rebuilding what was. Failing that, we will be stuck starting from scratch: an alternative that is not all that attractive, but may be the only choice by the time our "partners" are done with us.

[don]

I'm retired at&t and was bamboozled by the cash
balance scheme. at&t has a lawsuit. I even received
a letter saying there was a settlement a few months
ago. But no money.
Now the companies are getting rid of pensions.
That's there way of clearing the pension problem.
The fatcats are making more and more and we
supposed to accept it. I could go on and on...

[spencer]

You act like we live in an isolated universe where either the workers get the money or the executives do. Wake up -- it's all a connected economic ecosphere. The long-term effect of unions has been to cripple, then kill, some of our greatest companies, as the realities of competition set in.

It's like parasites on an animal that keep getting bigger and more numerous. Eventually the animal just can't take it any more and keels over.. then all the parasites are out of luck. If the animal could shed some of the parasites they could all keep going on together.

[donald]

wow. i'd agree with that last statement if you replaced "unions" as the parasites with the word "upper management" or "business consultants", etc. though who am I to judge, maybe people who get their professional training from watered-down self-help manuals on faux-zen or fake economics really do earn their keep. gotta have some spreading around money in those bangkok getaways, designer drugs and child prostitutes get expensive after all.