“Pensions use to be an award for surviving long enough in a very dangerous job. It was never meant to be entitlement.”
Actually if you truly believe in a market economy, pension are part of the compensation for labor, not an award for surviving. A person agrees to join a company and accept a compensation package that includes base pay and benefits (health care and pension) in return for labor. The pension is in reality a deferral of current income. Instead of paying the worker a higher base wage, the employer agrees to hold the income and pay it at a later date (in retirement).
In the private sector most defined pension benefit pension plans have been replaced by 401K’s with some or no employer match usually at a much lower cost to the employee. Essentially, by eliminating defined benefit pension plans and increasing the employee paid portion of medical care plans, employers in the US have been reducing compensation. The employee earns less in terms of benefits for doing the same job.
The aggregate result of these actions by individual employers is to lower the standard of living of workers in the private sector. It is truly the consequence of globalization. The elimination of tariffs and quotas over the past 20 years has forced American labor to compete with subsidized and lower cost labor in other parts of the world. The consequence is a declining standard of living. Employers have found it easier to lower compensation by reducing and eliminating benefits instead of lower the wage. Other actions include reducing headcount through outsourcing labor or laying off highly compensated older workers and replacing them with lower cost contract or younger workers.
In some instances employers have canceled pension plans and in the most onerous cases have gone through bankruptcy to shed these pension obligations. In these instances the employee is truly taken advantage of. The employee agreed to provide labor for wages and benefits including deferred wages in the form of pension. If the company is permitted to renege on its pension obligations it has consumed and benefited from the labor of the worker without fully compensating the employee.
At one point in our history when tariffs were higher, employers had to offer benefits such as pensions to attract the best workers. With the US market now open to cheap imports from around the world, private sector employers no longer have to offer generous benefit packages to attract labor in the US. This is also a dimension of capitalism enabled by the shift in government tariff policy.
Are we as a nation better off with the wide open markets and declining standards of living of the current century or higher tariffs and higher compensation structures of most of the second half of the 20th century?
Pensions have been mostly ended in the private sector because they are unaffordable. They exist in public sector because governments have the ability to raise taxes and or print more money to cover the cost of the pension. Nevertheless pensions they are still unaffordable whether public or private.
The private sector for the most part does not receive retirement health benefits nor defined pensions. Thus I see no justification on increasing taxes in order to pay for benefits that the taxpaying private sector does not receive. If the 401K is good enough for the taxpayer then it is good enough for the government worker.
As far as my belief in the market economy, I did not witness one person leave my company when the defined pension was capped and transferred to a 401K. The market has spoken.