It’s not sexy news, but it’s important: IBM recently announced that they will be freezing their pensions for existing employees, following a reform that phased pensions out for new employees.
This is huge. This means that another 113,000 people in the US who thought they were paying their dues toward middle class security, especially in old age, are screwed. This means an average reduction in pension benefits per employee of 12% for 33,000 of IBM’s workers.
How would you like to take a 12% loss in income? Especially when you are facing old age, increased health care costs, increased taxes, and little hope of making money from any other source?
Kmareka.com 
The Bu$h admin spent the early part of last year trying to scare everyone about Social Security. In the meantime, the number of companies dumping their pension obligations has been rising. Last year, it was a couple of major airlines and Delphi Auto Parts. To my mind, this is a bigger story. Per the doctrine of “taking responsibility,” a lot of people went to work for companies that offered pensions, understanding that this would be a significant way to stave off poverty in their old age. And now? Now, after working a lifetime, they’re being told “so sorry. It’s not convenient for us.” These are not people looking for a handout; they’re asking for what they were promised. You know, a contract? A bedrock principle of the rule of law?
In the meantime, executive compensation increased by 15% in 2004 and the percent of corporate profits going to executive compensate doubled between 1993 and 2003, rising from 4.8% to 10.3%. And yet, somehow, corporations can’t afford to provide pensions. This happened while the average worker saw an increase of 2.9%, and median income has fallen every year 2001-2004. This is crony capitalism at its most blatant.
These companies are not merely “pulling the rug out from under retirees.” They are clobbering these hard-working folk upside the head and then rolling them up in the rug for disposal. (It’s like something out of “The Sopranos.”) What’s most disturbing is that such behavior occurs under the ever watchful eyes [insert sarcastic cough] of the most corrupt and self-aggrandizing political administration this side of Gomorrah. What is one to do when the protectors fail to protect? RISE UP!
Klaus, Those statistics are really staggering, especially the one about executive compensation increasing 15% in 2004. Could you site your source on this? It will help all the nay-sayers out there have less to nay-say about.
And David — yes, there does seem to be a need for some rising up. Perhaps a group of IBM employees will get a good lawyer and sue for breach of contract. Unfortunately, without a union, it’s hard to afford lawyers that can go up against the cutthroat Goliath lawyers for a place like Big Blue. But, here’s hoping.
Sorry, should have cited the reference.
I found the stats on exec compensation in the Providence Journal, Dec 17, 2005. It was the paper edition, so I don’t know whether this is available on-line.
Like a spider web, all issues of great import are ultimately connected. See why the hearings on Supreme Court nominee Alito are relevant to workers’ rights. More information is available at http://www.commondreams.org/views06/0111-24.htm
Thanks, David. This Common Dreams article is helpful in terms of putting things together about the Alito nomination and what it means in the context of current events. This sentence stood out for me:
“It is darned near impossible to find a case in which Alito agreed with someone who claimed mistreatment by police, or discrimination on the job, or the improper denial of pension or pay.”
If Alito gets on the supreme court, it sounds like people will have little to no recourse against big business, big medicine, or big brother.
By the by, for future reference, if you could put links more than 200 characters into your posts (about 2 long sentences) this would be good. I amended your post with “more information is available” to make the link go onto the permalink page. The code for my sidebar comments plug-in does not recognize web addresses, so if one shows up there it messes up the display of the sidebar. I’m no code expert, so I have to rely on homemade fixes. (o:
Your “by the by” is duly noted, Kiersten. In the future, when including a web link in my comments, I will make an effort to be longer-winded–a la the majority of our public officials, excepting perhaps Abe Linkin’, whose Gettysburg Address was a mere 10 sentences in length. 😉