The national attack on pensions for US workers has surged from Detroit to Chicago. These two cities are setting precedents that will be used to attack pensions across the country.
Pensions are deferred wages and thus belong to workers. In the Detroit bankruptcy, the judge ruled that public worker pensions are merely a contractual agreement, no different than any other “bill” that the bankrupt city owes. This sets the precedent for converting pensions as property of the working class into the property of the banks.
Immediately following Detroit, Illinois reduced future pensions benefits by 43 percent, a $160 billion cut over the next three decades. However the City of Chicago, and Chicago Public Schools, are each soon required by the State Constitution to make separate payments of about $600 million to city worker and teacher pension funds.
Like governments everywhere, the city claims that it doesn’t have the money and that pensions will mean cuts in basic services as well as increases in property taxes. Like governments everywhere, Chicago refused to contribute to pensions over the years and borrowed against them, running the pension funds deeper into debt.
Chicago and other cities could easily cover pension expenses by raising taxes on corporations and cutting corporate subsidies. Corporations doubled their profits and cut their tax burden by half in the last decade. Each year states and cities spend about $80 billion in corporate subsidies. If you count money lost to offshore tax loopholes, corporations receive $120 billion a year directly from taxes. This is more than enough to pay for pensions.
But that’s not how capitalism works. Driven by the economic law of capitalism to make maximum profit, corporations are simply not going to provide pensions for workers they do not need. Historically, the pension system was established in the era of Industrial production in order to create a stable workforce. Pensions were part of the “social contract” that also guaranteed a modest amount of health care, public education, a social safety net and Social Security.
The Industrial Era is over. Production is increasingly handled by robots and software in the new Electronic Era. Traditional jobs that can sustain a family are vanishing. Temp jobs are the largest sector of jobs that are expanding. Capitalism today—organized by a merger of corporations with the state—is aggressively redesigning society for their own benefit. This necessity is behind the all-out assault on pensions, both for public and corporate workers. US pension funds currently have about $9 trillion in assets. Stealing this will boost capitalist profits, big time.
The attack on pensions means that the capitalist system will not support anyone who gets old. After working for more than 40 years, you are on your own. Public workers and Bill Gates are all free to buy all the support and health care they need! The problem for the public workers is they won’t have Gates’ money. In your “Golden Years”, you better have the gold!
The pension attack is a naked exercise of its political power by the ruling class. A new society, without corporate property, where the livelihood of every human being is guaranteed, is the only solution. The first step is building unity of the working class in the struggle for our common survival.
