The Guardian September 10, 2003


The global attack on pensions

by Wadi'h Halabi

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 
counter-revolutionary 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 
cancelling 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 unionised 
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.

US 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 unionised 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.

Currency devalutations

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.

Conditions declining

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 (USA) fully supports the struggles of US steel, airline 
and all union and non-union 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, labour's defence of economic security for all must extend 
to the international arena.

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People's Weekly World, http://www@pww.org

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