Learning and Fighting For Your Rights
By Tom Crofton
The Commoner Call (5/1/17)
Collective bargaining is the device that allows workers to join together to improve the return from the investment of their labor. Most anti-union efforts are intentional attempts to splinter worker solidarity to allow a stratification of wages and benefits for the benefit of the employer. By paying off a few lead workers well and treating the rest as replaceable commodities allows employers to set up hierarchies and create systems of secrecy and top-down authority that discourages worker innovation in exchange for short-term paper profits.
As a 40+ year veteran of the construction workforce – both union and non-union – I have seen how the tactic of exploiting the myth of “individual freedom” in the workplace; calling up the myth of the cowboy riding the range free of society’s constraint, is a ruse that pushes “merit” over solidarity and community. Of course, if merit was truly rewarded, we would see nothing but the best at the highest rungs of industry, business, and government. The “Peter Principle” has blown that scam apart.
While young workers are always interested in the wage piece of a new contract – “getting more on the check” – older workers are more concerned about benefits. The largest pieces of the benefit pie are pensions and health.
The protection of pension
In the early 1900’s workers toiled until they dropped or were too hobbled to function. Poor houses and poor farms were often disgusting hovels, and the extended family was the support system for most. The family farm was in good times a fine place to “retire”, as long as the younger generation was able to keep the cycle going and the droughts, bugs, commodity prices and railroads cooperated. The descent into the “Dust Bowl” era of Great Depression ripped apart the fabric of rural society. The move to the cities and the squalor of the slums as described in Upton Sinclair’s “The Jungle” fractured the extended family and tribal circle of life, accelerating the need to create the safety net of a benefit system. Ironically, the recent development of farms into corporate entities has brought the need for complete benefit packages back to the country, as the small diversified farms have become specialized industrial enterprises with employees having no land, and no extended family living together for support. Since the crashing commodity prices of the 1980’s, most farm families have needed a job in town to provide the benefits that the farm could not provide, leading to further consolidation of small farms into large industrial operations.
Roosevelt’s New Deal sought to save capitalism from itself. A basic lesson many business people, and most republicans have forgotten, is that healthy consumers are needed to buy the products and services produced. Beyond physical health and buying power, workers need the mental security that a comfortable retirement offers. A system needs to be in place to allow them to continue as consumers rather than become a drag on the economy when their working days are over. Social Security was created to provide a base retirement for all workers. It was never intended to be something to be passed on in a will to heirs like investments. It has been one of the most successful programs ever created. Simple logical adjustments to inflation can make it last forever. It is not now, and never has been an entitlement. Workers pay into the system and expect to draw it back. In Richland County, WI, 42% of citizens over 65 have Social Security as their only income. The monthly checks for these people average less than $1000 per month. Try living on that. How about just getting rid of it?
These are our people. They need what we have, and hope to hang on to ourselves. We need to see that their vision of freedom and individuality has value, and we need to find ways to transition our economy to a sustainable one where their work can be compensated with the whole range of wages, benefits, and working conditions all people deserve.
The New Deal also created the National Labor Relations Board (NLRB) and supported the creation of unions. The push back from business was hard and fast, reversing many new laws and employee rights and protections. That attack on families has continued right up to now with Rep. Paul Ryan working hard to wreck what little is left. Some on the nihilist left may wish the New Deal never happened. Society was ready to explode and revolution was months away.
What really saved the economic system, and working people through the trickle down system, was the economic boom of WWII. The drafting of workers as soldiers and need for tremendous industrial output strengthened the hand of those working the factories. The new unions developed the power to organize and bargain. Employers, flush with government cash, competed with each other for workers. Wages were high for country folks moving to the big city (including many African Americans). Additional incentives were needed and pensions were developed to fill the gap.
Pensions are actually a bargain for employers. Small regular amounts put away for 20 years grow into large amounts. Managing these funds efficiently and professionally can average out the life spans of large pools of workers for even greater effect. Federal laws were passed protecting these funds from raids by big business. These retirement plans were not entitlements. They were deferred wages. The most recent example of this confusion was Act 10 in Wisconsin. The public employees were accused of getting fat of the taxpayers with better benefits than private employees. In reality, they were educated people who understood pensions and health were as important as wages. They also knew when they signed up for their careers that the public sector did not provide chances for great wage windfalls or bonuses but would supply a comfortable living and retirement so they could concentrate on their work for the people. They reluctantly used their annual increases to pay for escalating health and pension costs as markets conspired to extract value from their assets. The divide-and-conquer strategy was based designed to split the people who had never bargained together from the ones who had.
Pensions can be divided into two classes:
- The Defined Benefit Plan is the “gold standard” of retirement plans. For every dollar contributed a defined return is guaranteed. Most of these plans pay–out for the life of the member. By accepting a reduced monthly check, they also can pay–out for the life of the spouse. Federal regulations have been eroded to make these plans less rock solid than when created and the fight to maintain them needs to be strengthened. Big Finance decided in the 70’s that these large plans were fruits to be pilfered and the stock market could offer “freedom” for workers to build their own retirements and cash in on the boom times.
- The Defined Contribution Plan, including 401(k) and Roth IRA plans are the result. These guarantee that you contribute but guarantee nothing in return. They are set up to create fees for the administrators and require workers to be savvy in the stock market to take advantage of the opportunities there .. when and if they exist. They also can lose half their value when the market crashes, such as in 2008. Retirees take a double hit when the rebound takes years because the earning power of compounding gains is lost forever. The decline of traditional pensions is the most crippling result of the attack on unions. The transition to gambling in the stock market by individuals instead of managers of large portfolios is a bait-n-switch strategy brought to the American workers by Wall Street. This classic ploy appeals once again to the myth of the rugged individual who can make his own decisions. The employers who push them also get off easy with matching funds of a few thousand dollars a year (or less) compared to a $10,000 or, greater contribution to a collectively bargained Defined Benefit Plan.
Playing hanky-panky with your security
Further hanky panky has been played with Defined Contribution plans in scandals like Enron’s theft of its employees’ retirement funds. Other schemes such as ESOPS (Employee Stock Ownership Plans) have been used by corporate raiders, where employee retirement savings are diverted to finance a leveraged takeover of their company, which is then gutted and put in bankruptcy.
The political implications of the pension piece are especially compelling in rural America. The “Red” parts of the map have the highest percentage of range riding free spirits and the lowest wages, benefits, and conditions. The transition from small diversified family farms into large agri-business is directly connected to the farm community’s unwillingness to develop a collective bargaining approach to its relationship with big commodity firms. The over production of commodities, supported by Earl Butz style “get big or get out” led to family members getting jobs in town and then selling out as prices crashed. The resulting increased production (with questionable quality as more chemicals have been introduced) as industrial methods have been applied (a fleet of double-sized tractors need half as many drivers) has created a large pool of rural industrial workers with no pension or health care. Many do have the modern avatar of the horse: the “coal rolling”, diesel powered, fat tire pickup truck that generally travels around empty over the blacktopped stripes of rural America.
But these are our people. They need what we have, and hope to hang on to ourselves. We need to see that their vision of freedom and individuality has value, and we need to find ways to transition our economy to a sustainable one where their work can be compensated with the whole range of wages, benefits, and working conditions all people deserve. Pensions mean grabbing the golden ring on the workers’ carousel. We all need them.