Upholding Social Security: Labor targets Schwab

SAN FRANCISCO — The labor movement and community organizations took on the financial institutions backing Social Security privatization as they held noontime demonstrations Jan. 26 in San Francisco and Boston to protest Charles Schwab and Co.’s leading role in trying to open up the system to Wall Street. Demonstrators in the two cities carried signs saying, “Don’t Pick Our Pockets to Line Yours!” They handed out fliers calling Schwab’s backing for the privatization scheme a conflict of interest, and urged people to send Schwab a message on the AFL-CIO website, www.aflcio.org.

Some 100 Boston participants braved freezing weather and a ferocious snowstorm to protest in front of Schwab’s headquarters before and again after visiting the office to deliver a letter addressed to Charles Schwab, demanding the discount brokerage giant drop its support for privatizing Social Security. Demonstrators were joined by Massachusetts Secretary of State William Galvin.

In a statement circulated in San Francisco as well as Boston, Galvin called the administration’s plan to introduce personal investment accounts in place of Social Security “a dangerous experiment with our nation’s safety net for working men and women.” Observing that, as secretary of state, he has brought actions against financial services firms for having one set of rules for insiders and another set for others, Galvin added, “Pushing our citizens to trade their future financial security for the risks of the marketplace and the fees that come with it is a great injustice. We need to fix Social Security, not destroy it.”

Among other speakers were Rich Rogers, head of the Greater Boston Labor Council, and Kathleen Casavant, secretary-treasurer of the Massachusetts AFL-CIO. In a telephone interview, Casavant said the Massachusetts labor federation would continue to work with the national AFL-CIO around targeting financial institutions in the Boston area. Also involved, she said, are the AARP, Massachusetts Senior Citizens Council, Older Women’s League and others.

In San Francisco, among speakers were California Labor Federation Campaign Director Susan Sachen, San Francisco Labor Council Executive Director Tim Paulson, Howard Wallace of Senior Action Network, and Howard Cassini of the Gray Panthers.

Schwab is one of the world’s biggest discount brokers and managers of 401(k) retirement accounts. Its profits dropped 64 percent in the last quarter of 2004, and financial commentators have noted that the firm could be bailed out by fees it would derive from privatization of Social Security.

In a related development, the AFL-CIO said last week that two Social Security Administration workers told a Senate committee the Bush administration has instructed SSA employees to tell people Social Security is in crisis and that private investment accounts are the solution.

“Previously, our employees had shared information with the public about Social Security’s financial condition but had never been encouraged to support any particular ‘reform proposal,’” said Steve Kofahl, president of AFGE Local 3937 and regional vice president of the National Social Security Council, an AFGE affiliate which represents workers at SSA.

Debbie Fredericksen, executive vice president of the National Social Security Council, said using SSA resources to advocate political positions is wrong and compromises the integrity and credibility of the Social Security Administration. “The credibility problem becomes even more acute when SSA employees are directed to make political statements that are untrue or exaggerated,” she added.

mbechtel@pww.org