Who Should Pay Up for Pensions? The Monopolies Must Pay!

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Who Should Pay Up for Pensions? The Monopolies Must Pay!

Pensioners Spirited March: "Pay Up for Pensions!"

Brendan Barber on Pensions at Wales TUC Conference

The Myth of Private Pensions and Other Capitalist Nonsense

The TUC held a "Pay up for pensions" march and rally on Saturday, June 19, in London, ending with a rally in Trafalgar Square. The demonstration was called to draw attention to the growing pensions crisis. In Edinburgh, hundreds marched behind the banners of the Scottish Trades Union Congress and the Scottish Pensioners Federation.

The monopolies want people to believe that "fending for oneself" or the state – any means other than the monopolies and the social product they control – can conjure up funds to sustain pensions. But where does the social value come from to pay for these? The only source of funds is the social product produced by the working class at the point of production but which is under the private control of the monopolies. There is no other source to pay for pensions and other social programmes.

The monopolies must turn over a portion of the social product to meet the claims of the people including the right to live in retirement in the same manner people lived while working. It should be considered criminal fraud for a company to even suggest that it will not meet its contracted social responsibilities to labour.

Pensions Are A Right!

In an admirable turnout, between ten and twenty thousand people, overwhelmingly elderly, marched militantly through Central London from Embankment, past Parliament and Downing Street, to Trafalgar Square on Saturday June 19, determinedly demanding rights for pensioners. The march, organised by the TUC and the National Pensioners Convention, had as its slogan Pay Up For Pensions. It was extremely lively, with four traditional jazz bands and two pipe bands setting the pace and tone, angry and determined yet very festive. Contingents representing many trades unions and pensioners organisations came from all corners of the country, as well as from Scotland, Wales and northern Ireland.

The marchers were welcomed at Trafalgar Square by Brendan Barber, General Secretary of the TUC, who said the demonstration was a wake-up call to the government and employers on the scandal which includes two million pensioners living below the official poverty line, large numbers of women being denied state pensions, and employers betraying their obligations. He called for unity in campaigning for justice for today’s as well as tomorrow’s pensioners.

He was followed on the platform by the leaders of a number of trades unions including Dave Prentiss of UNISON, Janice Godridge PCS, Derek Simpson AMICUS, Tony Woodley T&G, Jeanie Drake CWU, Kevin Curran GMB, Marge Carey USDAW, Mark Leahy ISTC, as well as Sofia Cox of the Young Workers Association, Rodney Bickerstaffe NPC and veteran trade union leader Jack Jones. All the speakers condemned the big corporations for the robbery of their employees’ pensions funds and the reneging on their agreements. Many condemned a government which could find billions for an illegal and unjust war yet claim it could not afford to ensure a dignified and secure life for those on both state and private pensions. Some pointed out the total inadequacy of the government’s new Compensation Fund. Many details were given of the serious and scandalous plight of many pensioners, 22,000 of whom die annually of the cold, and the three women speakers put particular emphasis on the continued discrimination and gross inequality suffered by women pensioners, less than 10% of whom qualify for a full state pension compared with 92% of men.

Calls were given for restoration of index and earnings linked occupational pensions, for outlawing raids on pensions funds, for an end to means testing, and for a properly funded national insurance scheme giving full state pensions to all by right.

Speaking on April 29, 2004, at the Wales TUC Conference in Llandudno, ahead of the pensions rally and march on 19 June, Brendan Barber, TUC General Secretary, said:

"Today I issue a solemn challenge to all the political parties. Face up to Britain’s growing pensions crisis. Recognise that radical action is required.

"Stop tiptoeing around the issue. Stop brushing it under the Westminster carpets. Stop drowning it in Whitehall jargon.

"I call it a crisis after careful thought. It’s not a word I use lightly. So let me say why.

"There’s a crisis in occupational pensions. Thousands of workers who were made a pensions promise have had it broken. Some in the most desperate way possible - as we know from the story of the ASW workers, UEF workers, and workers at Mayflower, Dexion and Kalamazoo.

"The government’s proposed Pensions Protection Fund is a victory for union campaigning. But it does not yet help those who have lost out already when their employers have gone bust.

"Many of them did not even have a choice about joining their employer’s scheme. Many of them are coming up for what they thought would be a secure retirement, only to find they have nothing. This is a campaign we can still win. Let us all today pledge ourselves to put even more pressure on ministers.

"These are the worst victims of the occupational pensions crisis, but they are not the only ones.

"Huge numbers have been hit by employers’ creeping withdrawal from providing good pensions. Existing workers may have their rights protected, but new employees are getting a far worse deal. Not only are employers cutting the amount they contribute to pensions, but they are also making their staff bear the risk of investment ups and downs as they end any link to earnings.

"But there are even more invisible victims. Fewer people now work for companies or organisations that provide any kind of occupational pension. New companies and smaller companies are much less likely to provide a pension. People doing jobs that would have carried a pension a generation ago, now don’t get one. And they probably don’t even realise they are missing out.

"Yet bigger long-established companies have also hit many. We’ve heard a lot lately about off-shoring, but for years British companies have been contracting out - on-shoring if you like. Once upon a time the canteen staff and the cleaners could have been pension scheme members too. Now they are not even direct employees. And of course most that have been hit by this are the lower paid, the part time, mainly female support staff.

"So with some honourable exceptions employers have been in slow steady retreat from paying their share. What about the state?

"When Lloyd George introduced the first pension it provided huge relief to Britain’s elderly. Labour’s post war welfare state added to that. But politicians of all parties are now trying to reduce the state’s responsibility. Both major parties say they want the state to provide only a third of the support the retired get - down from the half they get at the moment. That means there’s a crisis in state pensions in my book.

"Of course this government has done much to help pensioners - particularly the poorest. I salute them for this, as I do the union campaigns that have pressed them to do this and more. Yet means tested benefits and credits, however well they are packaged and promoted, will still miss many. Neither major party will give a cast iron guarantee that pensions will be permanently linked to earnings once again so that everyone can have a decent platform on which to build.

"So as employers and the state retreat the onus is falling on the individual - each and everyone of us has to make up the pensions gap.

"Trade unionists readily accept that individual employees should play their part. We have always been happy to make our contribution to a good pension scheme. Indeed many of us have negotiated increased contributions to defend our pensions in the recent difficult climate.

"But we cannot bear the whole burden. Think about a youngster starting work in the next few years. They may well have a student loan to pay off. They face sky-high property prices. They might be thinking about starting a family. Are we really saying they have to bear the whole cost of their pension too? Where are they expected to find the cash for that?

"And that adds up to a pensions crisis for almost everyone at work - except perhaps for those directors that have hung on to their own exceeding generous pensions, even while cutting those for the rest of their workforce.

"Dealing with the pensions crisis is not going to be easy. It’s no wonder that politicians are running away from the hard decisions we need. Voters, we read again this week, are fed up with the political games they think politicians play. They do not think that politics has any relevance to their lives.

"We know that is wrong, but if there is one issue that directly connects with most people’s lives it is pensions. But as ever trade unions stand ready to be helpful. We’re going to help them concentrate their minds. That’s why we have called our ‘pay up for pensions’ march and rally on June 19 this year.

"We’ve got the full support of the National Pensioners Convention. I know you will want to join me in congratulating both Jack Jones and now Rodney Bickerstaffe for their role in putting the case for Britain’s pensioners.

"But to make that march and rally the real wake up call that Britain’s politicians need we are going to need each and everyone of you here to today to make a pledge to build the numbers. Go back to your union branch, to your workplace, to your community and start to build the support.

"We know this is a top issue for people at work. It’s not just an issue for those of us who like going to meetings and conferences. Everyone’s worried about retirement.

"Our job is to stop them feeling powerless on their own. Our job is to show that working together we can secure a fair new pensions settlement where employers, government and - yes employees too - all play a fair part in providing a decent pension for all.

"So let us now pledge ourselves to make the rally a huge success."

an article by K.C. Adams, which appeared in the daily on-line newspaper of the Communist Party of Canada (Marxist-Leninist), The Marxist-Leninist, in July 2003

There are two certainties in retirement – retirees (and their spouses) will eventually die; and, companies and their private pension plans will eventually collapse. It is a kind of unsettling race to see which will happen first.

Retirees with private pension plans are often reduced to hoping they will die before their plan collapses.

Pensions are by nature a social phenomenon. Private ownership of the productive forces and the refusal of governments to assume their social responsibilities create this incongruous situation where a private pension fund is supposed to sustain a social need.

Private pension funds remain viable if newly created surplus value flows into the fund replacing payments to retirees. If surplus value stops flowing into the pension fund even though it is still supporting retirees, the plan will soon collapse. Pensions and other social programmes can only be maintained if labour, actively working at the point of production, keeps generating social value. 

Is this possible under the capitalist system where bankruptcy and destruction of the productive forces are essential to its renewal as a system?

The steel industry in the US has undergone massive bankruptcy and restructuring. Most of the former monopolies have disappeared in the last few years and new ones emerged without the "burden" (sometimes called "legacy") of the social costs of the previous companies' private pensions, healthcare provisions or former wages and working conditions of the steelworkers. The finance capital that originally owned the US steel monopolies and the finance capital that now owns the "restructured" ones might even be partially the same. Certainly some capitalists holding stock, debt and other security have been paid only a percentage per dollar. The biggest burden has been borne by the steelworkers and steel communities that have been put into a deep dark hole with many retirees and laid-off workers in serious difficulties. That is how the capitalist system renews itself or rather how it refuses to undergo genuine renewal and move towards social ownership and build a modern nation worthy of its people.

Now the steel industry in Canada is in a funk as it points to their new competitors from the US shorn of most of their debt and "legacy" obligations to labour. That is what we want to look like, the Canadian steel industry declares, without losing any of our own capital they quickly add. Stelco and other Canadian steel monopolies want the new lower wages, worse working conditions and no pension or healthcare obligations ("legacy") of their class brothers in the United States. Stelco wants to continue competing in the global marketplace, in particular in the US, by going through a sort of bankruptcy and destruction of its productive forces without losing any of its own capital. The only way to accomplish such a feat is to pass the burden onto the working class, forcing it to make concessions on wages, working conditions and private pensions and by having governments in Canada give Stelco all kinds of concessions and subsidies to sustain its private ownership of the productive forces and better compete in the global marketplace.

However, as said previously, bankruptcy is an essential feature of the capitalist system. The capitalist system renews itself through bankruptcy and destruction of the productive forces and the steel monopolies are hard pressed to avoid their fate. Of course every capitalist is terrified at losing even some of their wealth and position and demand the working class assume the burden of the steel sector's economic problems and save the monopolies and even the entire capitalist system from collapse.

What should the working class think of these demands? Should they make wage, pension and other concessions to save their particular monopoly from bankruptcy? Stelco and many other monopolies are facing the ravages of capitalist contradictions stemming from high productivity, falling profit margins, massive investment per worker employed, large debts compared with revenue, constant aggressive global competition, uneven development of capitalism with new competitors emerging that have no old obligations, loss of demand and markets as poverty increases and economic crises flow one into another. Taking money from workers' paycheques and pensions and worsening their working conditions will not solve any of the serious underlying problems facing the Canadian steel monopolies.

Should the working class not be looking at other ways than concessions to save the industry and their livelihoods? If Stelco and other Canadian steel monopolies want to save their capital or a good portion of it, they must relinquish control of the nation's steel industry. The working class and government must come forward with a plan to build a national steel industry that serves the Canadian economy and trades abroad only bilaterally with those that need Canadian steel. Conversely, buying steel from abroad would only be done bilaterally to fill gaps in national production. The Canadian steel industry is already monopolised and prices are set globally. National prices for steel under a reorganised system would not be difficult to determine on the basis of price of production in Canada – cost of production plus an average profit. A renewed national steel enterprise could initially be a national monopoly that organises as best it can a relative harmony between production and consumption. 

Canada has had many imperfect models of these government-run companies serving nation building but most now have been privatised and destroyed or seriously weakened in the modern era of free trade, corruption and wrecking of the national fabric. Some examples that have made a big contribution in building the country in the past are Canadian National Railway, the CBC, the provincial Hydro companies, the Canadian Wheat Board, water and sewer systems, the urban transit systems, Air Canada, Canada Post, the steel mill at Cape Breton, etc.

Equity and securities owned by individuals in Stelco and other steel monopolies could be converted into government securities such as long-term Canada bonds. A federal financial commission, set up like a bankruptcy court, could verify the legitimacy of steel equity and debts and set an amount and percentage per dollar of all outstanding steel equity and debt that could then be converted into government securities. Capitalists are mainly motivated by profits so they can take their former steel capital after it has been converted into Canadian securities, sell it and gamble it on the stock markets or wherever they see fit leaving steel-making to those who are truly motivated to build the Canadian nation as a place worthy of all its residents.

For the working class to entertain the idea of saving Stelco or other monopolies through wage, pension and working concessions is to believe in fairytales. That road for the working class will end up in disaster for itself and will not renew the Canadian national steel industry nor set it on a path to serve nation building and the social well being of Canadians. The finance capitalists who hold equity and debt in the steel industry are driven by the profit motive. We will not quibble with that but it does not lead to the renewal of an independent Canadian steel industry that serves nation building. The country would be better served if those finance capitalists holding steel equity and debt would quietly leave the industry and make their money elsewhere. They must concede ownership of the industry if it is to be renewed. They must make concessions and relinquish control of the Canadian steel industry, as they would be forced to anyway in a bankruptcy case, and allow nation builders to really fashion a national steel industry worthy of Canadian steelworkers and other working Canadians. The steel industry could then make an essential positive contribution to the whole country – a contribution to its own economic development and the economy as a whole, to the well-being and security of its own workers, and to the social needs of all Canadians.