Late last week while having my morning coffee I listened to an interesting news item aired on NPR. It briefly reported that the Boeing Company and its machinists agreed that if Boeing manufactured its latest model aircraft in the Seattle area, the machinists would give the company significant wage and benefit concessions.
One of the issues was whether or not the workers would switch their retirement program from a traditional “fixed benefit plan to a “fixed contribution plan” aka 401K plans, where the retirement benefit is not fixed, but variable and a function of how well the financial markets perform.
This will limit future retirement liability for the company and save it a bunch of money over the long haul.
For future retirees, however, it isn’t so good. Depending on the vagaries of the financial markets, they could do well or they could end their days as poor as “church mice” even though they will have done nothing wrong.
Looking back over the years, we have seen a boom-bust cycle on Wall Street that has been horrible for investors while being great for Wall Street professionals.
To put it bluntly, investing is risky business, best left to professionals. PBS’ Frontline did a great program on the riskiness associated with investing retirement programs in the stock market.
The deal was made, however, modifying the existing machinists’ labor contract at a time that the union could not strike if the deal was rejected. Hardly a level playing field. The machinist union recommended a thumbs down vote, but deal passed nonetheless by a narrow margin.
On the face of it, the deal appears to be a good one. The jobs stay in Seattle and the workers get less wages/benefits. The wave of the future. The company significantly reduces its labor costs, which improves its bottom line. An improved bottom line equals higher salaries for management, especially top level, and a higher stock value for the stock holders.
I don’t think it is so hot for the workers, however. The short term is rosy, that is if Boeing doesn’t renege down the road, but the long term isn’t so good.
The employee retirement plan is much less secure. Investing retirement plans in the stock market where it is subject to unscrupulous management and the ups and downs inherent in the market has proven to be very risky and is controvercial.
This corporate practice of threatening job loss if concessions are not forth coming has been going on for decades now. It guarantees corporate cost savings at the expense of American workers. It also contributes to the rampant income disparity that plagues America today and it has had a devastating effect on the working class.
It is no secret that the rich have gotten richer as the poor have gotten poorer as a result of this highly unethical practice. Look at Detroit. Once the symbol of American prosperity, it is now bankrupt.
Clearly our “free market” economy is failing. Measures must be taken to curb the corporate ability to shop jobs all around the world at a whim. Just as corporations are treated as persons politically, they must be required to pledge their alliegance to the United States, just as ordinary citizens are.
As far as I am concerned, when a company sends their manufacturing overseas, its management should be required to surrender their passports at the border and find a new home country.
What is the end game here? Wall Street has run amok, jobs have gone overseas and a growing number of American workers cannot find a job that pays a living wage. The inevitable result is that when the working class cannot spend on consumer goods, the economy is going to collapse and our country will continue its relentless decline.
I am now nearly 71 years old and I have watched as our nation has squandered its wealth. When I was 20 years old, anyone could vacation in Europe on $50 a day. Now $50 won’t buy dinner at a good restaurant in Europe, or here, for that matter.
So every time I learn that an iconic corporation like Boeing or IBM has reduced its employee pay package, I see it as another nail in the coffin that will be America if we continue along the path we are on.
Somehow the people of this country must find a way to convince the powerful elites who run things to change direction and reverse this downward economic spiral or we will find ourselves a third world country.
Unfortunately we cannot look to government for relief. Wall Street, corporate America and wealthy individuals rule.
It is obvious that elected officials are only interested in campaign contributions. The more you contribute, the more influence you can buy.
David Browning
Peachtree City, Ga.
