Newsday (New York), May 17, 2005, Tuesday

Copyright 2005 Newsday, Inc.
Newsday (New York)

May 17, 2005 Tuesday
ALL EDITIONS

SECTION: OPINION; Pg. A32

HEADLINE: It's not just pensions that we're losing

BYLINE: Marie Cocco

BODY:
We always knew there were no guarantees. Now there are no binding contracts either.
At least, not if the contract is between employer and employee. That is what it comes down to in the United Airlines pension-dumping case. Workers now have no right to expect that in exchange for a lifetime of labor and loyalty they will receive a pension in retirement. Not even when the pension isn't just a promise but part of a union contract into which both parties have entered freely, bargaining away one form of compensation - say, higher wages or better hours - in rough exchange for another.
The media have fixed the story line. Since a federal bankruptcy judge ruled last week that United could walk away from its pension obligations and dump them on the government-backed Pension Benefit Guaranty Corp., the analysis has had all the originality of a high school paper written to fit a teacher's rubric. The United situation, the narrative goes, is typical of problems old-line companies like the airlines and steel industries - and perhaps soon the automakers - are having in making good on their "generous" promises to workers and retirees. The largesse is said to be unaffordable and unwarranted in our leaner-and-meaner marketplace. The coming wave is the 401(k) and the individual health savings account, which shift the risks of old age and ill health off the corporate ledger and into the worker's lap.
The premise behind the plotline is that workers must accept whatever cuts corporate titans choose to impose - wage reductions, pension terminations, health insurance that is ended or eroded through higher co-payments - as the price of holding onto their jobs. We are all Hooverites now.
Has there ever been a time when the field has been tilted so steeply against the average worker? The last gilded age comes to mind. The same culture of corporate entitlement thrives, even as most Americans are told to make do. Median pay and bonuses for the CEOs of our 100 largest companies rose 25 percent last year, according to a recent analysis by USA Today. Pay for rank and file workers went up 2.5 percent.
Back in the 1970s and the 1980s, the decline of manufacturing, with its high-paying jobs and good benefits, was said to be a painful but necessary transition to a healthier new economy that would reward those who could adapt. In the 1990s, Bill Clinton told us that if we "worked hard and played by the rules" he would use the presidency to help us succeed, mostly by advancing education and technology skills.
But technological fluency didn't help thousands of IBM workers who've been laid off. No college diploma shielded them from seeing their guaranteed pensions transformed into less generous "cash balance" plans. Now that even radiologists are at risk of having their jobs shipped offshore, isn't it time to admit that our theory of temporary upheaval as a transition to better times is wrong?
This era is different from others: Nobody can quit.
In past economic transitions, says Kate Bronfenbrenner, a labor scholar at Cornell University, workers retained a measure of power because they could seek other employment, often in the same industry. But where would a United pilot land if he fled the company? Most likely at a low-cost carrier that pays a lower salary, with fewer benefits. Could a billing clerk drive to the office park next door and snag a better job? Not when the competing office workers aren't across the street but across the ocean. "In fact, we don't have a free market," Bronfenbrenner says.
Ordinarily when things get so out of whack, governments step in to tip things back toward balance. Our current government has done the opposite, with economic policies that reward those already blessed. Organized labor might be a ballast, but right now labor is structurally weak and riven by internal bickering.
And so it is up to the middle-aged, middle-class to get off the couch and get organized. Private grousing must end and public activism begin - with union drives or political pressure or whatever holds the best hope for change. Because after all, we've got nothing to lose but the downsizing of our dreams.