Thursday, January 9, 2014

Obama Administration Stays Quiet as Boeing Strikes Major Blow to Pensions

Mike Elk
In These Times
 
(Stephen Brashear/Getty Images)
A Boeing employee works on the wing of a Boeing 777 jet in Everett, Wash.  On Friday, yet another nail was put in the coffin of the defined-benefit pension in America. According to the Economic Policy Institute (EPI), the percentage of U.S. private-sector retirement plans with defined benefits fell by half between 1989 and 2010, from 42 to only 22 percent. Yet this type of plan is much preferred by unions and worker advocates over defined-contribution plans such 401(k)s, because if a company makes bad investment decisions, workers’ retirement benefits don’t suffer.

Boeing is one of the few remaining major corporations in the United States that still offers defined-benefit pensions. But on Friday, 30,000 union Boeing workers in Washington state voted to give up the pensions for new hires and to let the company freeze the plans for all workers in 2016.

“I don’t see a way forward on pensions. I don't see what it is that we can do,” says Ross Eisenbrey, vice president of EPI, which advocates for low- and middle-income workers. “Retirement security right now is wishful thinking.”

The vote by members of the International Association of Machinists (IAM) Lodge 751 came after Boeing threatened to move production of the 777X jet line, along with potentially thousands of jobs, out of Washington state unless workers agreed to the contract. The workers voted down a similar contract in November, but Boeing refused to budge—even though the company is doing well, with over $400 billion dollars in back orders and a program to buy back more than $10 billion in its own stock.

In December, the international stepped in and forced the local, which opposed the deal, to hold another vote. In a bid to keep their jobs, the workers voted 51-to-49 percent on Friday to ratify the slightly revised contract, which ends defined-benefit pensions and bans workers from striking for eight years.

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