People Before Profits
Wall Street seeks it. George W. Bush is eyeing it. The managements of Bethlehem Steel and LTV have done it. Those of United and Northwest Airlines are pushing it. Japanese insurers are doing it. France’s government is pressing it and Germany’s is calling for it. Italy’s is flirting with it. The occupation forces in Iraq are implementing it. The counterrevolutionary governments of former Soviet republics have done it. Turkey and Argentina’s masses have already suffered it.
“It” is attacks on workers’ pensions and savings. Companies and governments around the world are cutting, slashing, sometimes even completely canceling contractual pension debts to active and retired workers. “Fixed” interest rates on savings are being slashed. Retirement ages are being raised. Length-of-service requirements are being stretched. Pension funds are being looted, as banks push bum loans or investments on them.
In recent months, the Bush administration and federal courts have worked hand-in-hand with airline management to cut the pensions of unionized employees, in some cases by over 60 percent. Indeed, a condition of federal loan guarantees to airlines has been that employees’ wages and benefits, including pensions, be cut. This is in an ultimately doomed effort to ensure debt service by an industry drowning in “overcapacity.” Just last week, the Labor Department approved a blatant violation of federal pension rules to help Northwest Airlines’ management cover a billion dollar shortfall in employee pension plans.
U.S. steelworkers are also suffering sharp cuts in pension and health benefits. The federal government, through the misnamed “Pension Benefit Guarantee Corporation” (PBGC), has taken over the retirement obligations of several unionized steel companies, slashing pensions and benefits in the process. The PBGC’s own finances are shaky.
In Japan, the government passed a law this year allowing insurance companies to break their interest-rate contracts with policyholders, effectively slashing millions of workers’ savings. In France, the government rammed through pension “reforms” that cut public workers’ pensions, and increase the length of service required to achieve full pensions. In Germany, the government is attempting the same.
Through currency devaluations, pensions in countries, such as Argentina, have been cut to fractions of their original values. By printing money, governments such as Turkey’s have done the same. And hundreds of millions of “informally” employed and self-employed around the world have no pensions at all to rely on.
Perhaps nowhere has capitalism looted old-age guarantees – and the entire population’s wealth – more completely than in former Soviet republics. Since capitalism was restored, pensions have been effectively cut by 90 percent or more, while housing, health care and nursing facilities have been left to crumble.
It was not too long ago that the monopoly media were pushing the myth that social conditions were declining because of world population growth. But then growth declined dramatically. Now the new myth is that the world is getting worse because the population is not growing fast enough, and there are not enough young workers to support the old! This in a world with leaping technology and more than one billion working-age people officially unemployed or severely underemployed. The productive capacity exists to provide full economic security for everyone around the world, from birth through death.
At least the media are getting one thing right – social conditions are declining. But they are declining not because of population changes, but because of capitalism’s incapacity to deal with advances in science and technology. Talk about a social system with no future!
And perhaps no class is more conscious today of the bankrupt future of their social system than the capitalists themselves. So they are seeking old-age security for themselves, in part by targeting the pensions and savings of everyone else.
The Communist Party fully supports the struggles of U.S. steel, airline and all union and nonunion workers to regain the entire retirement benefits once promised them. Mass struggles in Italy, led by unions and workers’ parties, have put a partial brake on efforts to cut pensions. As we have seen, the capitalist attacks on pensions are worldwide. To be most effective, labor’s defense of economic security for all must extend to the international arena.
The author can be reached at pww@pww.org
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