What is "Impossible" about winning Early Retirement?
by Jon Flanders
VP LL IAM 1145
The circulation by IAM District 19 to all locals the text of the proposals to change the Railroad Retirement system is a welcome development. Discussion of the 55/30, spousal benefit proposals is stirring up interest and support among railroad workers across the country.
Not so welcome is the assertion by President Reynolds that "Your review of the enclosed analysis will reflect that Proposals No.1 and 2 would place an impossible financial burden on the Railroad Retirement Funds:"
In fact, the analysis states about the 55/30 proposal that...."The cost of the additional benefits over a 75 year projected period may fully be offset by an additional (7.2% increase in Tier 2 in payroll taxes."
If we add the cost of the spousal benefits we have a total cost, according to the labor member of the RRB, of 7.8 percent.
Whipping out my calculator, I discover that this comes to roughly 56 dollars a week, at my current rate. So how would this cost be paid?
According to BMWE President Mac Fleming ....."This could be done by having the railroads pay the full 7.8%, the employees pay the 7.8% or some split contribution of the 7.8% paid." I vote that the railroads pick up the full 7.8%. All in favor? Sounds like a good bargaining position to me!
Now just for the sake of argument, in the event that our "Fighting Machinists" and the other railroad labor unions have to settle for something less than a complete victory, how much might a fall back position cost us?
Currently the railroads pay into Tier Two at a rate of 16.1%, while we pay 4.9%. If we maintain this ratio for the extra 7.8%, according to my rough calculations, we would pay about $17 dollars a week more. Would this be more than most people could tolerate, if they could retire with 30 years in, or at 55? Not according to most people I have talked to.
All of these calculations leaves aside the question of removing the yearly cap on contributions, something that discriminates against the majority of rail workers who do not make enough to go over the limit. Those who earn under the limit pay a higher percentage of their income for Railroad Retirement than the upper income group.Most machinists are in this category.
Former IAM President George Kourpias advocates eliminating the cap for Social Security, in his role as a member of the Presidential Commission. If this is good for Social Security, why isn't it good for Railroad Retirement? Why shouldn't management pay the same percentage of their income into the fund as us less well paid contributors must? Did making such a change enter into the calculations of the 7.8% figure we have been given by Labor Member Speakman? If it didn't, how much lower would the 55/30 Tier Two tax increase be with this cap removed?
And while I am asking questions, what is Employment Assumption II on which the dire looking no-Tier-Two-tax-increase tables appended to the D19 documents are based? Much of the doomy prophecy purveyed in Washington about Social Security is based on questionably negative economic forcasting. For more insight on this subject see the Social Security article on economist Doug Henwood's web site at http://www.panix.com/~dhenwood/LBO_home.html
Now many of us must be wondering why there is such resistance by some of our leaders to fighting for a better retirement program. Haven't the railroads made bales of money over the last few years? Isn't it time to go on the offensive around our just demands? Isn't it true that other workers in the transportation industry have already bettered 55/30? UPS Teamsters can retire at 52 with $3000 a month!
I think part of the problem lies with the current bi-partisan position of our so-called "friends" in Washington. It goes without saying that the railroad corporations do not wish to part with any of their profits.
Both Democrats and Republicans are busy wringing their hands about a "crisis" in Social Security. The fact that this crisis is largely bogus matters not at all. Wall Street eyes the money stream into Social Security, and presses the politicians to let them get their hands on a portion of it.
As part of the solution to the Social Security "crisis", politicians of both parties are floating the idea of raising the retirement age to 70. People are living "too long." If this longevity is wrecking Social Security, then it will also be true for Railroad Retirement. How can these politicians comfortably support lowering the retirement age for railroad workers, while calling on the rest of the population to work longer? Union leaders that contest the governing "group think" in Washington will not be welcome. Early retirement for railroad workers? Impossible!
Impossible, unless we organize a serious campaign that does not shrink from challenging the current trends in Washington. We must let the chips fall where they may. If our "friends" can't support us in this, what kind of friends are they? If they are not our friends, perhaps we had better begin building our own political organization, one that does not fear defending our interests.
The fight for 55/30 and spousal benefits is eminently just, justifiable and financially feasible. What is needed is the fighting spirit to organize a campaign nationally. We need our leaders to get behind this and lead. The support is there in the ranks.
In taking up this challenge, we will both be fighting for ourselves and in the process strike a blow in the struggle to save the gains all workers made with the Social Security system.
These are goals worth fighting for. Working people outside our industry can be won to our side. How many of them think retiring at 70 is a good idea? They will welcome a challenge to the Wall Street campaign to undermine the hard won benefits of working people. Together we can win. Nothing is "impossible."