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Archive for the ‘retirement’ Category

Oh Great, More CEOs Telling Us We Need to Cut Social Security and Medicare Benefits

Friday, January 18th, 2013

Jackie TortoraAs if we didn’t already have enough on our plates (having to fend off attacks from the “Fix the Debt” CEOs), now there’s another group of CEOs, the Business Roundtable, telling us we need to “modernize,” a.k.a. cut, Social Security and Medicare benefits by raising the eligibility ages and reducing cost-of-living adjustments (COLAs). How helpful. 

R.J. Eskow took on the Business Roundtable in his latest blog, How Extreme Is the Business Roundtable? Check Out Its Attack on the Elderly.

Yesterday, Gary Loveman, CEO of Caesars Entertainment Corp. and head of the Roundtable’s “health and retirement committee,” told Politico that “[a]ny effort to address the country’s fiscal problems has to have as a centerpiece reform of its principal entitlement programs.”

Added Loveman: “None of us [CEOs]—very few of us—are ideologically driven. We’re pragmatists….”

“I am encouraged by how relatively easy these remedies really are,” said Loveman. “… (and) they have a tremendously sanguine effect on the government’s fiscal health.”

That’s true. It is pretty easy. Just kick in a few rich people’s doors, seize their belongings…oh, wait. That’s the other extremist scenario. Loveman’s is the one where people who have paid for Social Security and Medicare coverage throughout their working lives must give some of their benefits up—for him and his friends.

These CEOs are the same people cutting back on pensions and retiree health benefits. Now they want working people to have even more economic insecurity in retirement by cutting the few benefits that keep seniors afloat. 

Raising the Social Security retirement age is especially damaging. Not only is it a benefit cut, workers 55 and older have the longest bouts of unemployment. The average time unemployed is nearly a year (51.3 weeks, compared to 34.3 weeks for workers younger than 55).  

Eskow points out that 8.9% of American seniors already live in poverty, while 5.4% are on the edge. The average Social Security recipient collects $1,164 per month.

Anyone who claims they can cut those benefits by 3%—and use those meager benefits to end elder poverty—is selling snake oil.

Snake oil indeed. There’s nothing more cynical than calling devastating cuts to vital lifelines “modernization proposals.” Working people know the difference. 

This post was originally posted on AFL-CIO on 1/17/2013. Reprinted with Permission.

About the Author: Jackie Tortora is the blog editor and social media manager at the AFL-CIO. Interviewing union musicians was her introduction to the labor movement. Her first job after graduating college was in Syracuse, New York, where she wrote and edited the International Musician, the monthly magazine for the American Federation of Musicians (AFM). Protecting Social Security and Medicare from benefit cuts brought me to Washington, D.C., where she spent two years as a new media coordinator at the National Committee to Preserve Social Security and Medicare. She came to the AFL-CIO in the summer of 2012, just in time to re-elect President Barack Obama. When she’s not tweeting about America’s unions, it’s likely she’s watching Syracuse basketball and football. 

Just When You Thought the Hostess Story Couldn't Get Worse...

Thursday, December 13th, 2012

Kenneth Quinnell

Money that was intended for employee pensions was used by Hostess Brands management to cover operating expenses and workers were never compensated for the lost payment, Yahoo News reports. An undetermined amount of money that Bakery, Confectionery, Tobacco Workers and Grain Miller (BCTGM) members were supposed to receive as part of their contract with the company was used to keep the company running after mismanagement led to significant losses and eventual bankruptcy. 

This was during the same time period that Hostess began paying out massive bonuses to executives. BCTGM learned that the then-Hostess CEO was to be awarded a 300% raise, and at least nine other top executives were to receive raises ranging between 35% and 80%.

The process of taking the pension money was quite simple for Hostess:

For example, John Jordan, the local union financial officer for [BCTGM] Local 334 in Biddeford, Maine, said workers at a Hostess factory in Biddeford agreed to plow 28 cents of their 30-cents-an-hour wage increase in November 2010 into the pension plan.

Hostess was supposed to take the additional 28 cents an hour and contribute it to the workers’ pension plan.

Employees never saw that 28 cents. In July 2011, Hostess stopped making pension contributions and used the money to run the business. Employees never received the pension funds and the compensation Hostess promised the workers was not made up in wages, either.

In all likelihood, the tactic doesn’t violate federal law because the money didn’t get paid to employees first, but went directly to the pension fund. Lawyers call the situation “betrayal without remedy” and it’s unlikely the money can be recovered.

Hostess CEO Gregory Rayburn’s response ranged from understatement to “it’s not my fault.”

Gregory Rayburn, Hostess’s chief executive officer, said in an interview it is “terrible” that employee wages earmarked for the pension were steered elsewhere by the company.

“I think it’s like a lot of things in this case,” he added. “It’s not a good situation to have.”

Mr. Rayburn became chief executive in March and learned about the issue shortly before the company shut down, he said. “Whatever the circumstances were, whatever those decisions were, I wasn’t there,” he said.

Rayburn’s predecessor at Hostess, Brian Driscoll, refused to comment.

The end of pension contributions by the company was a key reason for the BCTGM strike:

Halted pension contributions were a major factor in the bakers union’s refusal to make a deal with the company. After a U.S. bankruptcy judge granted Hostess’s request to impose a new contract, the union’s employees went on strike. Hostess then moved to liquidate the company.

“The company’s cessation of making pension contributions was a critical component of the bakers’ decision” to walk off the job, said Jeffrey Freund of Bredhoff & Kaiser PLLC, a lawyer for the union.

“If they had continued to fund the pension, I think we’d still be working there today,” said Craig Davis, a 44-year-old forklift operator who loaded trucks with Twinkies, cupcakes and sweet rolls at an Emporia, Kan., bakery, for nearly 22 years.

The amount of employee compensation lost by the company is not known, but the numbers are staggering:

In five months before this past January’s bankruptcy filing, the company missed payments to the main baker pension fund totaling $22.1 million, Mr. Freund said.

After that, forgone pension payments added up at a rate of $3 million to $4 million a month until Hostess formally rejected its contracts with the union. The figures include company contributions and employee wages that were earmarked for the pension, according to Mr. Freund.

This post was originally posted on AFL-CIO on December 11, 2012. Reprinted with Permission.

About the Author: Kenneth Quinnell is a senior writer for AFL-CIO, and a former precinct committeeman in the Leon County Democratic Party. He is a former vice chair of the Florida Democratic Party’s Legislative Liaison Committee, and during the 2010 election, through the primary, Kenneth Quinnell worked for the Kendrick Meek campaign. He has written for Think Progress, AFSCME and for OurFuture.org on Social Security.

Three Concepts That Need to Be 'Laid Off'

Thursday, February 19th, 2009

It’s time to review three ideas that need to be “let go” in 2009.

1. Credit Checks of Job Applicants. According to the Society of Human Resource Management and Kroll, 43% of employers run credit checks on potential employees, up from 36% in 2004. These checks involve rent, student loans, credit cards and mortgages and can make the difference between someone getting hired or having their application tossed.

In the best of times this is a dubious measurement to use when looking to hire someone. But given the rapidly increasing foreclosure rate, ballooning credit card debt and the general demise of capitalism as we’ve know it, credit checks of job applicants are a joke. A very bad joke.

I’d make an exception for people who handle substantial amounts of money as part of doing their jobs, but for a truck driver, administrative assistant or nurse, this is unnecessary. Personally, I believe that it violates our 4th Amendment right against cruel and unusual punishment and this is coming from a guy with a good credit score.

Let’s stop pouring salt in the wounds of our fellow citizens. Credit checks are wrong in the hiring process and need to be stopped.

2. Bonus Formulas. It seems every day that pigs can fly, at least on Wall Street. One day we hear from the President about $18 billion in bonus payments at companies receiving TARP government bailout bucks. Then the next day the headline is that 700 Merrill Lynch workers

received million dollar bonus payments each.

Clearly this proves that there is a parallel universe, one where pigs party like crazy. I think we need to toss all the old bonus formulas and swap them for calculations that actually don’t reward people when the markets sink by 50%. Is that too much to ask?

I’m all for pay for performance, but Wall Street seems to focus on the wrong “p” in the first part of this sentence at the expense of the second “p.”

3. Retirement. Ouch. Retirement has been pushed back for many of us. Instead of kicking back in our early 60s, many of us will now be working until our 70’s. We’ll have no choice.

We might not have a choice about how long we work, but we do have a choice about where we work. That’s why it’s so important to really focus on what we want to do with our careers, to decide what is meaningful and important to each of us.

And this may be the silver lining of the current mess. That it could push many people into jobs that hold more meaning for them.

As a special guest this week, we’re bringing in the star of the Apprentice, and former high roller, to bid adieu to credit checks, bonus formulas and retirement.

Donald: “You’re fired!”

Rosner: “Thanks Mr. Trump.”

About the Author: Bob Rosner is a best-selling author, award-winning journalist and contributor to On The Money. He has been called “Dilbert with a solution.” Check out the free resources available at workplace911.com. You can contact Bob via bob@workplace911.com.

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