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December 16, 2003

GOP Assault on Union Pensions

Read this article to understand how deep the GOP assault on unions and retired workers is-- even at the expense of taxpayers and any respect for private contracts.

The proposed law: The basic story is that United Parcel Service (UPS) has lobbied the GOP to eliminate the company's union contract obligation to support the multi-employer pension system in the trucking industry. Instead, UPS would only be responsible for its own workers and if any other companies failed or went bankrupt, the US government would be responsible for paying those pensions-- at a reduced pension level, of course, for those unlucky workers.

Undermining private pensions: Which undercuts the whole point of multiemployer funds. Unions long ago recognized that single-employer pension funds are risky, since if a particular company fails, the workers may lose everything in bankruptcy. While the US government now partially insures workers pensions in that case, it's not as generous as the original pension

The government insures pensions in case an employer defaults, but its coverage is limited, and the limits for multiemployer pensions are exceptionally low just $12,900 a year for a worker who is 65 when his or her pension plan fails.
So pooling the risk across multiple companies is the whole point-- a private contractual solution to assure pension safety for retiress.

Bailing out campaign contributors: But the GOP doesn't like private contracts that hurt its campaign contributors:

UPS had the nation's largest corporate political action committee in the last election cycle, with $4.7 million in receipts and $3.6 million in disbursements.
The 1997 UPS Strike: What is worth emphasizing is how much this law delivers a contract victory to UPS that they could not win at the bargaining table. Many people may remember the massive Teamster strike at UPS back in 1997-- considered by many one of the most important strikes and union victories of the 1990s.
During contract negotiations in 1997, U.P.S. proposed paying its obligations and pulling out of the Teamster plans, so it could set up its own single-employer pension fund for the 120,000 Teamsters on its payroll. U.P.S. promised it would treat these Teamsters well, sweetening their benefits. But the union rejected that idea then sweetened the benefits of all 460,000 Teamsters in the Central States plan to the level U.P.S. had intended to give its own employees, company officials say.
Why Union Pensions Thrive: Think about it-- the last few years has seen massive looting and bankruptcy of retiree benefits by employer-controlled pensions. Yet in this same period, because workers controlled their own pension system, not only UPS workers but the whole unionized trucking industry has seen their pension benefits increase.

Make no mistake-- this proposed law is intended to be the death of union-controlled pension funds. All risk-sharing among different companies would be eliminated, leaving workers dependent on the financial success of their own company for survival.

If Bush has not completely pissed off Jimmy Hoffa Jr. yet, this issue will probably turn the Teamsters into a mass anti-GOP political machine.

Posted by Nathan at December 16, 2003 09:10 AM