CommunityMy FDLSeminal

Congress to Unions: Good Pensions for Me but Not for Thee.

Today’s McClatchy News DC has an article on the Cadillac pensions that Elizabeth Dole and Robin Hayes will soon be receiving as former members of Congress. Both were defeated in their recent bids for re-elections, Hayes by Blue America’s Larry Kissell.

WASHINGTON — When Sen. Elizabeth Dole and Rep. Robin Hayes leave office next month, they won’t leave empty-handed.

The North Carolina Republicans, both multimillionaires and among the richest in Congress, will be eligible immediately for congressional pensions.

Dole, who served a six-year term, is eligible for about $15,000 a year for life. Hayes, who served five two-year terms, would get about $25,500 a year, according to the National Taxpayers Union, a government watchdog group that’s been estimating congressional pensions for years.

Unlike some fixed pensions, the amounts will change with the cost of living adjustment.

That’s a pretty good deal, huh? Now normally, I wouldn’t get too awfully bent out of shape about this and would consider it a cost of doing business. But there’s this trouble in the auto industry that has been in the news lately that comes into play here. Today’s NY Times has an article explaining where the $70 to $77 per hour figure for Big Three autoworkers is derived.

The third category is the cost of benefits for retirees. These are essentially fixed costs that have no relation to how many vehicles the companies make. But they are a real cost, so the companies add them into the mix — dividing those costs by the total hours of the current work force, to get a figure of $15 or so — and end up at roughly $70 an hour.

The crucial point, though, is this $15 isn’t mainly a reflection of how generous the retiree benefits are. It’s a reflection of how many retirees there are. The Big Three built up a huge pool of retirees long before Honda and Toyota opened plants in this country. You’d never know this by looking at the graphic behind Wolf Blitzer on CNN last week, contrasting the “$73/hour” pay of Detroit’s workers with the “up to $48/hour” pay of workers at the Japanese companies.

These retirees make up arguably Detroit’s best case for a bailout. The Big Three and the U.A.W. had the bad luck of helping to create the middle class in a country where individual companies — as opposed to all of society — must shoulder much of the burden of paying for retirement.

Interesting isn’t it how so many of the news folks tend to gloss over the notion that retirees and their pensions are a cost. Those pension costs were negotiated by the Unions in lieu of cash. It is money the retirees earned over their lifetime of employment.

Fortunately, as the Times points out, some folks are aware of this. Today’s Boston Globe also highlights part of the problem.

WASHINGTON – With Democratic congressional leaders and White House officials agreeing yesterday on $15 billion in emergency loans to US automakers, one of the most vociferous foes is Senator Richard Shelby, an Alabama Republican who says the Big Three automakers "can’t compete" and who has threatened a filibuster to stop the deal.

Shelby’s position is not merely that of a fiscal conservative. His home state has provided millions of dollars in taxpayer subsidies to lure Honda, Hyundai, and Mercedes-Benz to build huge plants there. Indeed, some critics believe that without the incentives from Alabama – and similar tax breaks given by a number of other states to a dozen foreign automakers – the Detroit companies would not need a federal bailout.

The foreign-based automakers have received relatively little attention during the debate over the auto bailout bill because they have not asked for money from Con gress. Yet their role is immense: In 2007, for the first time, foreign firms produced a majority of cars sold in the United States. While Detroit’s auto industry is shutting plants and slashing union jobs, the foreign-based auto companies have been booming, particularly in the South, with new nonunion plants slated to open in Tennessee and Georgia.

Now readers at FDL and emptywheel have been aware of this information almost from the beginning, thanks to Marcy’s many, many, many posts on this. (Note: this is just a small sample of her work.)

So what we have, is Congresspeople with wonderful, lifelong pensions that increase with the cost-of-living as well as generous retirement health plans who think it’s a very very very bad thing for actual workers who are retired to receive anything near what they receive. Congresspeople who seem to be actively working to break the unions. Congresspeople who seem to think that it should be illegal for Unions to negotiate higher salaries and benefits for their members than non-union workers receive (why else is Richard Shelby so continually harping on the "hourly wage difference between Big Three auto-workers and the non-union workers" in his state?)

Why do the Republicans hate workers? Why do the Republicans want to tell workers they can’t earn a living wage? Why do the Republicans hate Americans?

Previous post

Obama Calls on Blagojevich to Resign

Next post

Nanny State? Fran Drescher Looks at NY Senate Seat



Small town Kentucky country boy lived all over the country. Currently in Ruskin, FL