Smart Bombs: Retirement benefit flies away

My response to the Machinists union at Boeing turning down the latest contract offer is a mixture of empathy, frustration and fear.

The critical component of the deal was the union surrendering its defined benefit pension plan. That’s the rapidly disappearing benefit where workers can count on a monthly check upon retirement. Boeing would still have defined contribution plans, such as 401(k)s, which are cheaper for employers.

Anyone who has a defined benefit plan knows what a comfort they are. Anyone who’s lost one knows the sense of dread that sets in. This newspaper had a traditional pension but froze it and replaced it with a matching contribution to the existing 401(k) offering. This kind of change has occurred at businesses with regularity, and now Boeing wants to do it.

I can understand the Machinists union’s desire to cling tightly to a sure thing in retirement. It’s a benefit that has historically served Americans well. A New American Foundation report puts this into historical perspective:

“In 1980, approximately 40 percent of private sector workers were covered by a pension with a guaranteed payout, and about 80 percent of employees in medium-size and large companies had such plans in 1985, according to data from the Labor Department. In 2006, only about 15 percent of private sector workers had guaranteed payout pensions, including 32 percent at medium and large organizations. In the public sector, a higher percentage of workers still are covered by guaranteed payout pensions, but the number of public sector workers has declined dramatically in recent years, accelerating as a result of the Great Recession.”

In addition, only 11.3 percent of private sector workers are currently in unions – the lowest proportion in nearly 100 years – which has contributed to the decline in middle-class pay and benefits.

So the traditional pensions that were a staple of American retirement have largely gone by the wayside in the private sector, which helps inform the complaints about the government versions. This dreary, race-to-the-bottom question is familiar: “If I lost mine, why do they have one?”

What Boeing machinists want is what many Americans had 30 years ago. Job security, solid middle-class wages that kept pace with inflation and retirement benefits that allowed workers to glide into a comfortable retirement. But I fear they may have taken one stand too many, which would be even worse for them and have a ripple effect across the state if Boeing moves those jobs elsewhere.

Like employer-provided health care, 401(k)s came about as an accident of history. They began as corporate tax shelters, and politicians decided everyone should benefit. So taxes were deferred on money set aside for retirement. However, they were not conceived as replacements for pensions, and they are ill-suited for the task. The vast majority of Americans nearing retirement have less than $100,000 saved. Many of those with fatter accounts had more money to set aside in the first place, and they would’ve been fine without the tax break.

So the gap between the rich and the rest widens, and workers like the Boeing machinists risk their jobs for an important benefit. What’s the answer? I sure don’t know, but it all points to an economy that is lowering the standard of living for most Americans.

Aim to please. The Gonzaga gun confiscation controversy has a simple lesson: Want students to store guns in their rooms? Then open a university that allows it.

The private sector will provide. Isn’t that the mantra of capitalistic society? This goes for housing anywhere. If there is enough demand for gun-friendly digs, build it. You don’t need to be Don Draper to see the marketing possibilities. Name the apartment complex Whispering Shotgun or Cold Dead Villas. Build a shooting range instead of a clubhouse or pool. Say you’re National Rifle Association-approved. Hang a sign in the office: “We accept checks, but no background checks!”

Renters with dog-eared copies of “More Guns, Less Crime” will beat down the door. Finally, a place they can feel safe.