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(Note discussion of the phony pension fund crisis. SR)
Friday, January 6th, 2006
Juan Gonzalez Hails the New York City Transit Strike as Success; Union
Fought Off City Attempts to Redo Pension Plan
<http://www.democracynow.org/article.pl?sid=06/01/06/1451243>
AMY GOODMAN: In these last few minutes, Juan, I wanted to talk with you
about the results of the New York City transit strike and the significance
of the issue of pension that goes well beyond New York City in this largest
transit system in the country and the workers in it.
JUAN GONZALEZ: Yeah, for a lot of workers now around the country, this is
becoming a major issue. Just reported in The New York Times today on the
front page that I.B.M., which runs one of the largest private pension
systems in the country, it will stop participation by its employees or will
not continue to contribute into its pension fund. It won't eliminate the
pension fund, but it's basically phasing its pension fund out in favor of a
defined contribution or a 401(k) plan for its employees. And across the
country, we're seeing local governments, as well as private companies,
saying, 'We cannot deal with the escalating costs of these pension funds.'
I've been doing a little bit of investigation over the past few weeks as a
result of the transit strike and, by the way, the transit workers were able
to stem the attempts to erode their pension system.
AMY GOODMAN: Do you think that it was a successful strike?
JUAN GONZALEZ: Oh, absolutely. It will prove to be one of the most
successful defensive strikes of a union now in decades in this country. And
they even got a refund from the pension fund. That's going to be worth about
$200 million to their members.
AMY GOODMAN: It's also interesting that the head of the M.T.A., Peter
Kalikow, has now said he never realized what an issue their pension demand,
that the workers would have to go from giving 2% to 6% of their pay into
their pension plan, would be such a lightning rod issue.
JUAN GONZALEZ: Right. Well, see, I think the big problem people don't
understand is these claims of runaway pension costs are bogus, I mean, as
I've been investigating them. There's no more worker benefit that can be
more easily predicted for decades than a pension plan. You pay a certain
amount of money, now, into a plan that will eventually be able to provide
retirement 20-30 years down the line, so that it's a totally predictable
expense for any company or government.
What happened, throughout the 1980s and the 1990s with the stock market
booming as it was, is that companies, as well as local governments, got used
to not paying anything, practically, into pension funds. They reduced their
contributions, because the returns from the market were doing so well. Then
comes the crash of 2000, 2001 and '02, and suddenly, these companies now and
governments are being forced to contribute more than they were in the last
few years. But they got so used to not contributing virtually anything that
they don't want to go back now to beginning to contribute 3% or 4% of an
employee's pay into a pension fund. So they're basically trying to shift to
the workers their failures in the past to properly fund these plans.
AMY GOODMAN: Juan, we only have a minute, but share your stats with us, this
research that you've been doing, comparing what the New York City transit
workers will get in pension compared to others.
JUAN GONZALEZ: Well, suffice to say that the New York City transit workers
are costing the City of New York very little money, in terms of an annual
contribution, compared to other parts of the city workforce, like the Police
Department, the Fire Department. You're talking about multitudes of 20 or 30
times more in costs for pensions around law enforcement or uniformed
services than your average city worker or transit worker. And I'll be doing
more investigation on it over the next week or so, and hopefully will be
able to get a more complete report here on Democracy Now! and in the Daily
News very soon.
AMY GOODMAN: And in this 20 seconds we have left, in terms of the success of
the strike, explain why you think this was a victory for Roger Toussaint and
the Transport Workers Union?
JUAN GONZALEZ: Well, because they were up against a Republican mayor, a
Republican governor and, in effect, if it went to the national level, a
Republican president, and they were able to defend their standard of living,
increase their pay. Yes, they had to end up paying a little bit more into
health insurance, but they also got lifetime coverage for their members, who
are retired, so they got an enhanced health insurance. So, they basically
got a wage increase, they defended their pensions, they got a refund, and
they got expanded health benefits. That's kind of unheard of these days in a
labor contract. And they got a contract on time, whereas most unions have to
wait three or four years to negotiate a contract after it expires.
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