Bethlehem Steel collapse leaves retired workers scrambling for benefits

Associated Press / SFGate

[earplug]

Would you please fill me in about the social compact you write about. I thought you work, you get paid and your supposed to save for a rainy day.
I'm feeling under minded.
I subscribe to the idea of marry for money. It's a better system then voting for handouts. Kings and Queens have beat mobs in the harsh light of history.

[Electron Wizard]

When the retirees were working, the steel market was very strong, in part because there was no foreign competition. Wages had risen so high that union negotiators started looking at other items to pursue, and began negotiating large retirement benefits. Unfortunately they did not secure the funding up-front, but relied on conditions to remain as they were so that the companys could pay the retirees out of the monthly profits. When conditions changed, the money was not there to pay the benefits.

Who's to blame? Probably the unions for negotiating benefits to be paid from future earnings. Those earnings are unsure at best, and also they were taking away from the future workers.

Could the companies have withstood the demands from the unions? Probably not, as it would be difficult to convince workers not to strike because "things might be different in the future."

I dont't think that taxpayers should bail-out retirees who negotiated pie-in-the-sky benefits. It should only apply to pension funds that are lost due to embezzlement or banking failure or the like. We have a basic safety net, called Social Security.

[Rodney King]

The retirees have nobody to blame but the Unions. It is the Unions that negotiated for lower wages up front in exchange for unfunded future promises.