What I Do
Christy McGill, Art Teacher - Divide Elementary School, Lookout, WV.
Today's retirement security crisis is just one of the many painful consequences of the failed economic policies of the past 30 years—policies of radical deregulation and corporate empowerment.
Using the popular banner of individual freedom, these policies shared the same end purpose—to transfer the hard-won prosperity of the vast majority of us into unearned wealth for the few and the rich.
These policies may have been the product of partisan politics, but their impacts have punished all working people.
Well, it's been a long 30 years, and America's working people have been pretty well tapped out. The result is that we're living through the worst economic decade in living memory—job loss, wage loss, the collapse of the housing and financial markets, enormous growth in inequality and the massive destruction of wealth.
These policies—what I call the corporate agenda—have allowed—and even encouraged—employers to walk away from what until recently had been a broad-based retirement system built by shared responsibility. The result? Today, fewer than 20 percent of private-sector workers have real, defined-benefit plans.
The dirty secret of the attack on public sector workers' retirement security is that it is funded by billionaires—billionaires who don't want to pay their fair share of taxes like investment banker Pete Peterson, and billionaires who hope to silence the voice of public-sector workers like the ultra-conservative Koch Brothers, who have bankrolled the Tea Party movement.
These people will on the one hand tell workers to put 401(k) money in the stock market, and then turn around and say stocks are too risky for pension funds—the very institutions best able to bear the risk and get higher returns. If you assume terrible returns forever, guess what, every plan looks under-funded and irresponsible.
That's why today's meeting is so important. Workers have to learn who wants to take away our retirement security and what their tricks are.
Most of our nation's workers have already been stripped of our retirement security. Only the public sector still has strong defined-benefit density—over 90 percent. But we know those benefits won't survive as an island in an economy with 15 million people out of work and more than half the workforce without any retirement plan at all.
Our retirement system was built on the concept of responsibility shared among government, employers and individuals. However, that system is rapidly being displaced by the illusion that individuals can provide retirement security for themselves, by themselves.
It is an illusion. The recent Wall Street collapse revealed the complete failure of the 401(k) savings plan as an effective retirement vehicle. One recent study found that the average 401(k) participant can't retire until age 73.
And the median 401(k) balance remains far below what's needed to provide for an adequate retirement. At the end of 2009, the median amounted to just $59,381.
In this bleak landscape that passes as the retirement system for all Americans, Social Security stands out as the one pillar of strength. But too many in Washington seem bent on perpetuating the Bush administration's attacks on Social Security.
It's another example of partisan political attacks that will lead to a massive transfer of wealth away from all working people.
Quite frankly, the beauty of the labor movement is that we do the opposite. When we fight and win, we do so in a partisan playing field, but the fruits of our victories are shared by all working people.
The labor movement took on Social Security opponents in the Bush era, and beat them—and we'll do the same in the Obama era.
When people, supposedly attacking the federal deficit, target Social Security, we have to remind the public of this basic fact: Social Security is not contributing to our budget deficit—in fact, the buildup of the Social Security Trust Fund is financing our federal deficit.
And while Social Security faces a funding shortfall over the next 75 years, any actuary could explain that Social Security, funded at 88 percent over most of the next century, is considered a healthy pension plan by every responsible measure. Relatively modest adjustments—without benefit cuts—can address even this long-term issue.
But working families are rightfully anxious about every aspect of their financial security right now—and particularly vulnerable to scare tactics and divisive rhetoric. Even those that don't hold up under scrutiny.
Just about every Republican is attacking Social Security, and even some Democrats have joined in, claiming they're concerned about the program's financial health. But that claim doesn't hold up, and little of the hostility toward Social Security is really about the math. It's about ideology.
It's like the attack on government workers this week in the Wall Street Journal by Minnesota Gov. Tim Pawlenty, who's angling to get the Republican nomination for president in 2012.
Pawlenty basically said public employee unions are immoral. Your members' pensions were in his crosshairs. He wants to kill public employee defined-benefit pension plans, calling them a—quote—"financial albatross for taxpayers."
The centerpiece of Pawlenty's argument is an increasingly common and strident refrain—Why should public employees have security, fair pay and pensions while private employees suffer?
But the answer isn't to knock down public employees by demanding pay cuts and give-backs, but to lift up all workers.
And we need to ask who the attackers like Gov. Pawlenty are talking about anyway? Who are these government workers? We're talking about people who've dedicated their careers to public service.
And far from being a drag on our economy, the fair pay and pensions of public employees contribute mightily to its health.
According to the National Institute on Retirement Security, in 2006 alone, public assistance expenditures would have increased by some $7.3 billion if not for incomes from defined-benefit pension plans.
Let's face it: Few if any pensions are being created, and our fight to protect public employee pensions is much harder when our political opponents—and even some of our friends—attempt to pit those without retirement security against our members' modest retirement benefits.
All Americans—public- and private-sector workers—deserve retirement security. It's not enough to be on the defensive. We have to fight for retirement security for all Americans. It's not a crazy idea. In fact, it was once understood to be part of the American Dream—what all of us deserved if we worked hard and played by the rules.
It is imperative that we in the labor movement look ahead and begin to design a new private retirement system for future generations.
The AFL-CIO has joined with 25 other organizations to promote the "Retirement USA" initiative, which sets out the key principles essential to achieving a universal, secure and adequate retirement for all American workers.
We look to the best of traditional pensions—required employer contributions, money locked in until retirement, pooled professional investment and lifetime payouts—along with the best of 401(k) plans, like portability.
We must build on the achievements of union-sponsored multi-employer funds and state pension systems by combining portability with the security that comes with lifetime monthly benefit payments.
These principles will lead us toward a new system that reflects American values—reward for work, compassion and fairness, foresight and prudent conservative management.
That's what retirement security is supposed to be. It's a legacy worth building.
But we have to be clear: It will take money—real money.
As long as employers pump up their bottom lines by avoiding real contributions to real pension funds, and choose instead fund savings accounts with only a fraction of the money, more working people will return to the day when poverty is the steadfast companion of old age.
But retirement security is not only a moral issue for our country, it is an economic necessity. Low incomes for older workers will mean less consumer power, fewer opportunities for younger workers, and even greater pressure on future federal, state and local budgets.
Our fight to restore retirement security will bring a firestorm of opposition—count on it.
All of the best fights transform our society. They're hard. They take time.
But as working people, we have to stand together for our shared benefit.
So if universal retirement security for all workers is our goal, then we must make it part of our legacy.
We must expand Social Security and defend public sector pension plans.
But we won't be strong for the fight, if we let the Big Banks and Wall Street billionaires pick us apart and conquer us.
They've already started.
We can't allow our opponents to divide us in New York labor. If we do, each of us will be caught defending our own turf, and public employees will to be forced to pay the tab from Wall Street's party.
We need solidarity in the states. If you see an attack on Project Labor Agreements, you need to stand and fight with your private sector brothers and sisters.
And we'll make damn sure that when they come after you, and your pay and benefits, we're standing alongside you as a unified labor movement.
We're all in this together.
And we will get pension security, and jobs and a better way of life -- By standing together. Shoulder-to-shoulder.
And we'll let Wall Street, and anybody else know that an injury to one is an injury to all.
United we stand, but divided we fall.
Thank you, and God bless you.
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