Now to the list of people who are abusing my retirement prospects we can add the greedy CEOs. Verizon announced today that it will no longer be contributing to the defined-benefit pension plans for about 50,000 management employees to save money. Why are they doing this? Apparently the reason is a changing world:
“This restructuring reflects the realities of our changing world. Companies today, including many we compete with, are not adopting defined benefit pension plans or subsidized retiree medical benefits,” Ivan G. Seidenberg, Verizon’s chairman and chief executive, said in a statement.
Translation: If the people we are competing against don’t have to care about their employees why should we? You have to love the joy and warm fuzzy that gives you during this holiday season of giving. This is just another piece in the ever evolving puzzle of capitalistic greed and dwindling compassion. The market is biting us consumers and employees in the behind here. There is no incentive for Verizon to continue to take on a major cost and generous offer when their competitors are not. On one hand you can’t really blame Verizon. I am sure if you polled the workers and asked them would they rather keep their jobs for twenty years or lose their job after having 7 years of top notch benefits they would reluctantly pick keeping their jobs. So Verizon, in jettisoning what little remains of benefits for workers in the company is showing some perverse compassion because it may be saving jobs.
This is the position the American worker is in today. The greatest leverage that companies have, our well-being, is of such amazing bargaining power that we as workers are forced to increasingly concede important ground just to save our jobs. Is there a better case for unionization? We are sacraficing insurance, retirement, and in some cases even over-time pay just to keep our jobs! I had an interesting experience today that actually ties nicely into all of this. I had a job interview with a huge mulit-national company and on the way out the person who interviewed me was talking about the various companies that had bought and sold this particular division. He talked about how he, and his entire division, nearly lost all of their jobs to Singapore. I am willing to bet that they stayed here in Massachusetts only through concessions. This gentleman was just so happy to still have a good job with a company that I am willing to bet he would sacrafice a lot of the benefits he gets just to keep that job.
This is not how it should be. I should not have to worry about retirement at 25. We created Social Security during the Great Depression because we needed that safety net, workers needed protection. We have seen elder poverty on the decline ever since. Unfortunately it is rearing its ugly head again and will continue to do as companies move in the direction of Verizon. I don’t want the government to be funding my retirement, I should be planning for that in the years to come, but I do think that millions of workers will need greater protections than myself. We need government to be a catalyst for figuring out how to solve this problem. We need to unite the greatest minds in our country to both fix Social Security, or create an entirely new way, and to figure out how to get people to plan for retirement earlier. This is our obligation to one another as citizens of this country.
Cross posted at Mass Revolution Now!
Social Security is just about the most financially sound government program we’ve got. Claims that it’s in imminent danger are utter bunk meant to scare people into accepting its destruction – though fortunately that hasn’t quite worked yet. Yes, there is a huge problem with our federal budget as a whole, but Social Security is one of the biggest bright spots.
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While the rest of our budget is running massive deficits with no end in sight, Social Security is running massive surpluses and projected to continue to do so for decades to come – which is well beyond our ability to forsee how the numbers will actually turn out.
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Unfortunately, instead of saving up that money for the future, we’re having to spend those surpluses right now, to prop up the rest of the government. Why? Primarily because of Bush’s irresponsible tax cuts, and the war on Iraq. Withdraw from Iraq, cancel the tax cuts, and shazzam! Yes we’ll still have some budget problems, but they’re entirely tractable without those twin albatrosses.
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It’s a tricky game, trying to make projections 75 years into the future. We know that Social Security is better than healthy for the next couple of decades. We don’t know for sure what will happen after that. That’s why in the 1980s, the Reagan Commission made a tweak: they increased payroll taxes to build up a trust fund. See, in the past, Social Security actually has been in deficit sometimes. The sky didn’t fall. The government didn’t stop paying benefits. Social Security benefits are a government obligation, whether the program is currently in surplus or deficit. It’s just a matter of priorities, and of sound fiscal management.
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And so, the Reagan Commission tweaked the program, resulting in enough money for it to fund itself through 75 years and beyond. And if we weren’t currently relying on the payroll tax to fund general expenditures, that would still be true. It’s cruel and hypocritical of today’s Republicans to even suggest that borrowing from Social Security to pay for their big government for the rich is okay now, but hypothetical borrowing from the general fund to pay for Social Security benefits in the future is not okay. What they’re suggesting is quite literally stealing from the poor to give to the rich!!
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We have no idea whether Social Security ever will go into deficit at all. That’s based on the most pessimistic of three different government projections for economic growth. The optimistic scenario has Social Security in surplus through the entire 75 years and onward. There are many things we don’t know: How will productivity change? How will the population mix change? How old will people retire? Will we have a new wave of immigration? A new baby boom? Some big change in the kind of economy we have? For 10 or 20 years, we can make good guesses for all those things. For 40? 50? 60? No way. Realistically, Social Security is fine for as long as we can predict well, while other government programs have major structural problems now.
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We need to fix our budget mess. We need to do it very soon. If we do, we’ll be find. If we don’t, we’re screwed, and could face a national financial meltdown worse than Argentina’s. All of this will play out long before Social Security might go into deficit. Pointing at Social Security and saying it is the problem is ludicrous. It’s a conservative scare tactic. Too many of us have been fooled.
all that said, there are some reforms I would support…
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1. A more progressive payroll tax
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Exempt a certain amount at the bottom, say the first $15K of income, from the payroll tax. Make up for it by raising the ceiling to wherever needed to make up the difference. This should be revenue-neutral, and wouldn’t affect Social Security’s financial health directly. It would, however, stimulate the economy in a real way, by reducing the cost of hiring for all jobs, and disproportionately the lower the salary. That targets the tax “credit” directly to where it’s most needed.
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2. Raise the retirement age, a little bit, gradually
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We live longer than when Social Security was instituted. More importantly, studies show the average active, healthy lifespan is about 10 years longer now than it was then. On the other hand, raising the retirement age by only 5 years would cause even the pessimistic economic growth scenario to show Social Security funding itself indefinitely. And we’d still be ahead by 5 years over the generation that Social Security started with.
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The early retirement option should, of course, remain available.
Others have said that Soc. Sec. is fiscally sound. This is plainly untrue. One only needs to do simple math to see the number of retirees versus the number of people paying in to realize that Soc. Sec. faces a tough road. There has been no comparable baby boom to match that of the post-WWII generation. Soc. Sec. has been borrowed against time and time again. Supply versus demand shows that the program is in danger. Soc. Sec. will likely always be around, the real problem is that what I get each month when I retire. It used to be that Soc. Sec. could be counted on as supplemental income, when I retire figures show it will not even cover the electric bill potentially.
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Further I have to say that using the argument that Soc. Sec. is fine delays the reforms it needs. For once government is raising red flags at the appropriate time, BEFORE a program goes into the toilet. If we buy into the notion the Soc. Sec. is solvent now and therefore fine, my generation will lose the safety net that has protected millions of Americans.
I disagree. The “simple math” just shows that it’s going to remain in surplus for as long as we can reasonable rely on simple math to predict. Once you go far enough into the future, you’re predicting future productivity, population trends, and a host of other things, that make the math much more complex and fuzzy. The simple fact is, we have huge budget problems that can doom our entire economy and government if we don’t deal with them ASAP. And if we do deal with them, Social Security is a much simpler, more tractable issue, that we can easily afford to put off any further tweaks to for at least another decade if not three or four. Wasting our energy “fixing” Social Security now, is folly.
http://www.freerepublic.com/focus/f-news/1322231/posts
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is worth reading if you’re interested in the debate around Social Security.
Wow. Thank you. I don’t know how I missed that at the time, but it’s a great history and summary (even though I already knew much of what’s in it). And it definitely underscores the fact that the supposed need to reform social security now, is a contrived right-wing scare tactic. Social Security may need some minor tweaks over the next few decades, or it may not, but we can leave it alone for now.
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However: what the heck is that article doing on freerepublic? It’s so packed with facts most freepers would never allow into their heads!
you must not have been reading BMG at that time! đŸ™‚
I found this blog sometime in February or March, while volunteering on the Schofield campaign.