Take This Job…

My condo building is peopled for the most part by liberal Baby Boomers interested in the world around them, and on a recent balmy afternoon a group of us sat chatting as neighbors do at one of the picnic tables beneath the towering redwoods around us. One of the topics of the hour was defined pensions. The general tone was relief; everybody present had been too far into their respective careers to lose their pensions when they were axed en masse in the late ‘80s and ‘90s. It was like we dodged a bullet, not a bullet meant for us but rather for those coming up behind us. 

Defined pensions in private companies have been gone so long now they seem oddly quaint, a long-ago relic long dead and gone like poodle skirts or Polaroid cameras. We shed no tears that afternoon for the unlucky youngsters beginning their careers these brutal days, though to a person we noted this great injustice. But times are tough these days, our financial futures uncertain, and as human beings we naturally focus first on ourselves, whatever our private professions or beliefs. 

I saw an example of this principle first hand when my late girlfriend’s husband, an investigator for the DA in a California coastal county, took a survey around the time of his retirement (at 50) about whether he and his soon-to-retire brothers in blue would consider a pension reduction so that young officers coming up could get something, too. Nobody raised a hand. Today, 25 years into his retirement, his defined pension is equivalent to his working salary (complete with COLA) and he gets Social Security to boot. He’s far richer as a county retiree than he ever was as a fulltime working stiff. Employees in private industries can only dream of such largesse.

Then-President Ronald Reagan’s wide-ranging attacks on social services and taxes in general set the national tone for passage of the Revenue Act of 1978, signed improbably into law by his predecessor Jimmy Carter. The new law, which took a few years to be widely adopted, created the financial tax instrument referred to today by its technical name: 401(k). Today 401(k)s have almost entirely replaced defined pensions in private companies. The forces that coalesced into this far-reaching tax law were many, and which one you believe depends on your personal world view. Two former colleagues recalled recently that this law marked the beginning of the end of Corporate America’s long-standing social contract with its employees: i.e., employer loyalty. More likely in my view is that the Reagan-era pro-business period that ultimately spawned the 401(k) was actually designed to boost corporate earnings by dumping those pesky pensions, but was cynically sold (to mostly high-paid white-collar employees) as a way to shield a portion of their earnings from taxes. I knew we were in trouble back then when the newest, youngest employees at my corporation in the late ‘80s started hanging framed portraits of Reagan in their offices. It was go-go-go all the time, everybody was gonna get rich! The stock market was booming, soon to enrich beyond all imagining the CEO compensation linked to it. On the flip side, in retrospect, it was also both a critical first step toward the death of the defined pension and the accelerator of income inequality, which has skyrocketed ever since. 

From the 1940s until 1987, the number of American workers covered by defined pensions grew from 4 million to 40 million. But by the late 1980s, 401(k) plans, much cheaper and less complicated to manage for employers, began to replace defined pensions. Today, according to the federal Bureau of Labor Statistics, just 15% of private industry workers have defined benefit plans, compared with 86% of state and local government workers. 

Many of us unfondly recall the August 12, 1986 press conference when President Reagan declared that “The nine most terrifying words in the English language are ‘I’m from the Government, and I’m here to help.’” In retrospect the irony is chilling: Reagan’s tax cuts and other policies skewed to the rich laid the groundwork for the rise of the One Percent—and every one of those perks for the wealthy was created by the same government that Reagan so famously and endlessly maligned. (I’ve often wondered why anti-government types work so hard to become part of it.) In an eerie twist, Reagan adopted the slogan “Make America Great Again” in his 1980 presidential campaign, nearly 40 years before Donald Trump abbreviated it and had it printed on red baseball caps. Both men were charismatic presidents with fanatically loyal followings: the first MAGA president dismantled the egalitarian New Deal taxation system that created the middle class and the second one tried to steal a presidential election. Great again, indeed. 

The Service Employees International Union (SEIU) represents nearly 1.9 million workers in the U.S. and Canada, most working in hospitals, home care, nursing homes, public services, and property services. SEIU Local 1021 covers Northern California from the Bay Area to the Oregon border, and the union pegs its membership at around 60,000, with about 1,200 members in Mendocino County. Missouri native Patrick Hickey, who lives in Ukiah, has been Local 1021’s field representative for “six or seven years” and told me during a recent phone interview that Mendo is an especially challenging environment for the union and its members, who he said in some classifications are paid “10-15% below market” and “have not had a cost-of-living [COLA] increase since 2013.” Turnover, he added is “30% annually, and in some areas employees quit after 3 or 4 months.”

Hickey said that efforts to engage with the county have been frustrating. “We’ve been in negotiations for six months,” he said. “Every year they overestimate revenues and underestimate actual costs.” He added that even though the union is challenging the county’s claim of a 7% fiscal deficit, he has received none of the essential data he’s requested. “The county is in such disarray that we haven’t gotten financials for the past 5 months,” he said. “Without that critical data it’s impossible to recruit new employees.” He told me that how the county counts its vacancies is also suspect. “Instead of saying, “We have a vacancy problem,” now they say “We just changed the definition of a vacancy official.” Bait-and-switch scheme, anyone? Hickey said that pensions are also under pressure, and that employees hired since 2013 now pay half of their pension costs out of their own pockets. 

“There’s no majority vision on the board to move the county forward,” Hickey said. “They shrug their shoulders instead of saying here’s a strategic plan for the future.” He added that the local is also working to increase its membership (currently around 70%), which has declined since 2018 when the pro-business U.S. Supreme Court ruled that non-union employees cannot be forced to pay union dues as a condition of employment.

As I sit writing this in the predawn hour, workers at the “big three” auto makers—General Motors (GM), Ford, and Stellantis (formerly Chrysler)—are on strike, the first time ever that all three have joined forces for higher pay and greater job security. Defined pensions are back on the table, and from news coverage represent a nettlesome sticking point in ongoing negotiations, though more equitable employee compensation is right up there, too. General Motors CEO Mary Barra, who is the highest-paid chief executive among the big three, earned nearly $29 million in 2022 and has become a kind of sacrificial media lamb in defending the status quo that enabled her to earn, according to Security and Exchange Commission filings, 362 times the median GM employee’s pay. (In 1965 CEOs typically earned 20 times the typical worker’s pay.) Barra spoke recently on camera to a CNN reporter, who astonishingly actually asked her a direct question she couldn’t wriggle out of: “Do you think it’s fair that you earn 362 times more than your employees?” Looking momentarily startled (and no doubt realizing that a simple “yes” would not do in this case), Barra hesitated a beat before replying, with a straight face, that “92% of her compensation is based on “company performance:” that’s corporate speak for stock price. At almost $29 million a year, she had walked naively into a trap; cutting employee costs is (and has been) one way that companies have increased stock prices on the backs of their employees. United Auto Workers (UAW) President Shawn Fain recently said that a newly hired worker earning $16.50 an hour at GM’s Ohio battery plant, “…would have to work full time for 16 years to earn what Mary Barra makes in a single week.”

On the less quantifiable side, impoverishing the industrial workers who built this country is just wrong. Have we no respect? Though I voted for Hillary Clinton (after holding my nose and repeating a relaxing mantra), I never forgave her for her belittling dismissal of coal miners when she said in a 2016 town hall discussion on energy policy in Ohio that “We’re going to put a lot of coal miners and coal companies out of business.” According to later news coverage Clinton said she considered this “gaffe” to be one of the greatest regrets of her presidential campaign. She even devoted a chapter in her book What Happened to explaining away the comment, which has stuck to her like Gorilla glue nevertheless. Sometimes the words that slip out… 

After graduating from Berkeley my first news job was in Charleston, West Virginia, where I reported on the United Mine Workers of America (UMWA) for several years. The coal that fueled this nation’s growth was mined at enormous human cost to the miners who toiled in the deep mines of Appalachia. The bloody organizing battles that created the UMWA are both legendary and still a cautionary tale for the futures of American workers.

As SEIU’s Patrick Hickey put it, “People put their lives on the line to create these organizations.”