With people living longer and expecting to live better, the burden of retirees is becoming unmanageable throughout the developed world. The response has often been to preserve, or even enhance, benefits for older generations and those with power, while drastically increasing what must be paid in and reducing what will be available for younger generations. Few in my generation and those after have defined benefit pensions. Most do not even have 401K plans, or if they do have such plans, have been unable to save given their diminished circumstances. The retirement age for Social Security will be 67 for us, not 65, under a broken promise made 25 years ago; candidates are now proposing reduced benefits, or higher taxes, for us – but not for their generation. Yet in the face of this, there are those who feel entitled to work just 20 years, stop working at age 50, and live off the work of others for the rest of their lives. These people have a monopoly of an essential service — mass transit in a major, transit-dependent city — and are prepared to use blackmail to get what they want for themselves at the expense of others. Already entitled to a pension far more generous that others, they have already gone on strike recently and have indicated they will do so again, this time indefinitely.
In Paris, France. For now.
There, railway workers and many others enjoy “special” pensions that most Frenchman, most of whom are less well off, do not get. The current administration is demanding that the special pensions be eliminated, and everyone be treated equitably. The workers are demanding even more special pensions, according to the BBC. A second strike seems inevitable. Thus far, those representing the special pensions have been able to convince some that keeping and enhancing them is in everyone’s interest, because someday everyone will be able to retire younger and younger and perhaps not work at all, if the state can be made to pay. But more and more people are realizing that older generations have bankrupted the state and country, and there will be nothing for them if this continues. So the confrontation is escalating.
According to news site AFP “The last time a government tried to reform the so-called “special” pensions systems was in 1995 when three weeks of strikes and demonstrations forced the government under newly-elected president Jacques Chirac into a humiliating climbdown. But this time ministers say the situation is different, because the climate of opinion has changed — a majority supports the pensions reform — and because Sarkozy clearly spelled out his intentions in his May election manifesto.” Expect the climate to continue to change, no matter what happens this time. It is amazing that the railway workers feel entitled to demand more from those who already have less and are demanding equity.
Meanwhile, the New York State Legislature has passed a 20/50 pension plan for New York City’s transit workers – with no concern where the money will come from – without a single no vote. The same New York State legislature that is now protesting against a fare increase. And Mayor Bloomberg has agreed that New York City’s teachers should be able to retire at age 55 after just 25 years of work. That money can presumably be offset by lower pay for new teachers, and less money for the classroom, in the next contract, when it will be “unfortunately” “unavoidable” due to a recession. Under current state law, pensions are not even permitted to be the subject of collective bargaining. But expect the state legislature to pass it even so.
And in the private sector, you may have heard about the pension benefits the ex-CEOs of firms taking billions in losses are getting. Executives switched some of their pay from stock options to rich pensions after the 2000 bust, when they noticed that after convictions stock options could be taken away but pensions were retained.
It goes on and on and on.