Saturday, January 07, 2006

As Unions Go, So Do Benefits ...

... and unions continue to disappear.

The transition of the United States into the wealthy elite and the rest of us continues. IBM formally announces what Motorola* inadvertently announced around 2 years ago... don't expect to share in the prosperity of the corporation you work for:

"IBM's freeze of its otherwise healthy U.S. pension plan will reverberate through industry not only because it illustrates the erosion of traditional benefit packages, but also because it sharpens the focus on 401(k) plans as a source of retirement security."

Pension freeze by IBM puts focus on 401(k)s

Corporations are getting taxed less and less, at the same time they outsource more and more jobs. Instead of a partnership between worker and corporate management (formal when unions existed, implied after;) the relationship is one between owner and serf.

IBM will point to the 401(k), as do all Republicans, as a better deal than pension plans. Here's the dirty little secret. The major difference between a pension plan and 401(k) is: everyone benefits from a pension plan.

While any worker can have their retirement squandered by a corrupt employer, 401(k) plans are far more likely to be heavily invested in company stock.

Corporations want to reduce its interactions with employees to nothing but a paycheck (except for management, of course. The board will still get serf-unheard-of perks like company-backed mortgages, management-only benefit packages, etc.) Even if you are willing to live with the much higher costs you will occur fighting for your own health care, disability, and retirement plans; you will quickly find that once free of the "burden" of your benefits, corporations will be in no mood to pass the "savings" on to you. No, I'll bet my own meager paycheck that your take home pay will not grow nearly enough to self-finance the same level of benefits.

The BLS has a few statistics that illustrate what Big Business hopes to achieve:

Employee Benefits in Private Industry

% of Employees Covered by Retirement Plan
Union 84
Nonunion 56

So we see loud and clear one reason Republicans hate unions; almost 30% more union employees have a retirement plan of any kind.

% of Employees Covered by Defined benefit (pensions)
Union 70
Nonunion 16

Whoa. The plan that benefits more people, that doesn't punish low wage earners whom can't afford to contribute, is a dying benefit that will be lost when unions are finally wiped out by corporate lobbyists and their laws designed to bring about demise.

% of Employees Covered by Defined benefit (pensions)
Union 48
Nonunion 53

So there you have it. When Big Business finishes off unions and pensions, it won't have to increase retirement plans in any way. One might have hoped that those of us working in states where unions died long ago would see high 401(k) plan offerings to employees. Not the case. Those dollars saved by not having pensions have not increased offerings of 401(k)s to nonunion workers (and don't tell me it that somehow it went to other benefits; the same Republicans who hate unions for their benefits also hate unions for the higher wages they provide over nonunion competitors.)

*When I worked for Motorola, at one point they changed the third-party administrator of their retirement plans. When the new website went live, it came with a startling note at the bottom of the "Pension Benefit Calculator" page. It reminded employees not to trust the pension benefit amount suggested by the calculator, because Motorola would be eliminating its pension plan in 2009.

Of course, many of us were outraged and demanded answers. That note quickly disappeared from the website, and the CEO released a statement that there had been a misunderstanding and there were no current plans to eliminate pensions.

Would anyone like to bet on the likelihood of Motorola having a pension plan after 2009?

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