The usefulness of unions and the pension paradox

If someone wants to make a pitch about the glories of unionism to me, I'll listen.

That was the quasi-challenge Bobblehead recently threw out on Churchill’s Cigar. In a somewhat egoistic rant, he not only questioned the right and usefulness of public sector employees (like himself) to unionize, but the idea of unionism in general. He bowed to and recognized the hard fought gains of eight-hour days, 40-hour workweeks, paid sick and vacation days, basic benefits, and the minimum wage, but then asked, “what are [unions] doing for me now?”

Well, for one: fighting to maintain, in the face of ever strengthening efforts to dismantle them, those hard fought gains of eight-hour days, 40-hour workweeks, paid sick and vacation days, basic benies, and a living wage. Also sanitary and safe working conditions, breaks, access to bathrooms, and generally every other comfort afforded to someone not working in a sweatshop making Nikes or disassembling outdated computers and cell phones.

If someone is in dire need of a “holiday in Cambodia” to cure his ungratefulness, it is Bobblehead.

Now, his gripe about generous public pensions and Social Security (i.e., old people welfare) are sensible and, for the most part, mirror my thoughts as I begin to appreciate the impending fiscal implosion at the hands of Baby Boomer retirement dreams. But I’ll make a case for unionism first.

Community solidarity, whether it is among trade workers or citizens of an entire country, is extremely useful and beneficial in efforts to champion rights and better living conditions. Power in numbers, baby. Would Bobblehead question the usefulness of the National Woman’s Party and its organized efforts supporting women’s suffrage? How about the usefulness of unionization by the Gdańsk Shipyard workers? Does he think Lech Wałęsa or Alice Paul could have achieved the same results by themselves, working alone? The same principles of association and unity that gave women the right to vote and slowly toppled totalitarianism in Poland, theoretically, apply at the micro level — inside offices, corporations, and factories — giving employees great influence when dealing with management, especially when it is at its most tyrannous.

As an independent contractor, I am one man with one voice; I have no co-workers to support me, no federation of editorial assistants to lean on, and no power to battle any abuses…technically speaking. My situation is extraordinary; I have incredible leverage because, frankly, my knowledge and experience is essential (without me, the editorial process at both of my journals would grind to a halt). I also have very understanding and empathetic bosses who have blessed me with a great opportunity; I am grateful for that every day because there are many independent contractors who live and die by whatever they can get, be it good or bad, like abandoned and starving dogs rummaging through garbage. Without any kind of trade brotherhood, they are on their own and need to lower themselves to whatever indignities the free market demands. There are also millions of workers worldwide who cannot even enjoy the most basic union-gained benefits or protection that Bobblehead does. They are usually employed by modern day Scrooges who gladly withhold whatever employee luxuries they can to cut costs and improve the bottom line. If given the opportunity, I am sure many employers would excitedly adopt an antebellum industrial model — aka, slavery — to achieve ultimate cost-effectiveness. (Of course, who, then, could buy the crap they need to sell?) Excuse me for ranting, but such are the perils of unrestrained global capitalism, which, I think, makes the usefulness of unionism self-evident.

As for public sector unionization: do state workers not deserve the same basic benefits gained by unionized private sector employees? Do they not deserve the same right to organize and protect themselves? Is it all right if an all-powerful Terry Branstad snaps his fingers and Bobblehead’s job goes POOF!?

Of course, there can also be stupidity, inefficiency, and unsustainability in numbers. And that’s where I think Bobblehead’s rightful gripe should fall: unrealistic pensions and union support of them.

Eight-hour workdays, 40-hour workweeks, and paid leave are one thing. Pensions are another. As Bobblehead has, I feel, rightfully pointed out in our conversations on his porch, America’s public pension system was established almost 80 years ago with the assumption that only a small number of individuals would need it for a short period; it was meant to keep the elderly from eating cat food after they could no longer work for a living. Social Security was never intended to sustain millions of Baby Boomers all intent on traveling the world, living in gated communities with golf courses, and playing the slots for 20 or 30 years. It was never meant to subsidize a burgeoning assisted care or nursing home industry for the sake of busy offspring.

The same, I suppose, goes for state-run pension systems run on an employee-employer contribution system. According to the handy Simply IPERS special edition Summer 2010 newsletter I received (I knew it would come in handy), public employers in Iowa will contribute 8.07 percent of each workers salary effective July 1, 2011. (Pensions are still dizzying for me. Is the employee contribution taken from each paycheck and employer allowances taken from general funding? Is IPERS a pool of funding, much like Social Security?) Yearly employer contribution ranges from $1,357.20 for minimum wage to $21,315 at the $245,000 salary ceiling. For a state employee making $30,000, the employer contribution is exactly $2,421. Individually, I suppose it’s a sprinkle droplet in the bucket, but spread out among IPERS’s 300,000 current and former employees and the costs get ugly. According to the DMR, the current contribution system can only guarantee 81 percent of its future “promised” benefits.

Like I said, I don’t fully understand pension systems. The only thing I do understand are IRA’s. They seem simple enough (though I forgot the difference between a regular IRA and a Roth IRA). You contribute your own money, however much you want, and interest accrues. You collect the money (minus whatever taxes that have been assessed) when you retire. An IRA is like a savings account for retirement, and I set up two after returning to Iowa.

Is that the solution to our pension paradox? The privatization or individualization of retirement? Federal or state-run IRA systems, which give citizens the opportunity to have money taken out of their paychecks and deposited for safekeeping? Every man for himself? Trying to solve this problem is almost like opening a Pandora’s box, and it leads to discussions about our tax system, expectations of retirement, and the way the elderly are essentially orphaned at nursing homes instead of being cared for by family. (Of course, who has the time or means to care for a 95-year-old with dementia or Alzheimer’s?) Don’t our state employees deserve something for the service they gave the state, something similar to and competitive with what can be (but not always is) offered in the private sector?

The livelihood of millions of people are at stake, and it is a union’s job to fight for its members. However, I do not think questioning the usefulness of unions is the right thing to do. Questioning the wisdom of preserving and fighting for an unsustainable pension system is. There are probably better battles.