Detroit’s lessons might affect answers on retirement

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Labor, anyone?

I grew up in Haifa, the Red City of Israel, where there were annual May Day parades with red flags and street dancing, speeches and a day off for all. I loved this carnival, though my parents hated unions and all they represented, especially their political power that could, at the drop of a hat, call for strikes in any sector of the economy. A mixed upbringing, to be sure.

As much as my parents despised unions and their leaders, and as much as they strove to succeed as capitalists in a hybrid economy, they treated their company as a large dysfunctional family.

Mom served as matron saint, 5 feet tall with little formal education. She helped the pregnant unmarried secretary and scolded wayward men who cheated on their wives. Yes, these were her employees, but she felt responsible for their well-being.

As for Labor Day in America, most think less of unions than about the picnic. Perhaps we take for granted the benefits from the hard-won battles of yesteryear between labor and capital that the former was able to win: workplace safety, paid vacations and ending child labor. Perhaps we ignore unions because of their anemic political power (less than 9 percent of the private workforce) or caricature them as represented by Jimmy Hoffa.

Every politician in every election, local to national, promotes job creation, though nobody asks if work is a right or privilege. None has referred to microeconomics textbooks where “full employment” is defined as 7 percent unemployment. And while we’re at it, how are we measuring unemployment? What about those who have drifted off unemployment benefits? What about part-timers?

Perhaps we are too busy to think through our views about labor: Should there be unions, altogether? Our K-12 teachers are unionized, yet most don’t look at them like the Teamsters. Do police officers and firefighters use collective bargaining, or as my dear friend calls it, collective begging? What about our men and women in uniform?

Some (teachers, firefighters, police officers) enjoy pensions under various conditions. UCCS professors don’t have pensions; classified staffers do. Why? Should they all have pensions, or should none? What about health insurance?

Recently I was in Detroit with a friend to see what a “bankrupt” municipality looks like. To paraphrase Mark Twain, the news of its demise has been greatly exaggerated. The downtown looks thriving, with some major corporate headquarters intact. Yes, some outlying neighborhoods are boarded up or are being razed with plans for rebuilding, just as in any metropolitan area where urban renewal is an ongoing process.

Detroit’s bankruptcy, like that of GM and Chrysler a few years ago, is partially about underfunded pensions. Should the courts eventually allow the city to shirk its pension liabilities? Do we fundamentally deserve to have pensions, or is this idea outdated? Now that workplaces are for the most part safe (some refineries in Louisiana still emit dangerous chemicals), now that minimum wage is a federal law, is it time to revisit pensions?

If it’s time, let’s separate practical from theoretical. In theory we should ask ourselves if, after years of hard labor, one deserves to retire with benefits. For the military, our national answer is a resounding yes! Depending on variables, pensions flow to military retirees (over 100,000 are residents of our fair city). For the sake of consistency, should that apply to everyone?

It’s argued that men and women in uniform have risked their lives for our nation, and therefore deserve a pension. True, but since 1973 military service is voluntary, and is no different, in this sense, from those serving as teachers, police officers and Utilities employees. Should all receive pensions?

Even when we agree to offer pensions to all employees, can we, practically, afford to do so? The answer is simpler than it sounds. All we need to do is adjust outdated spreadsheets and the formula used to determine retirement benefits. As we live longer and healthier, we should work longer for our benefits; we should also contribute a greater percentage of our current wages (matched by employers) for future benefits.

Otherwise, the system isn’t sustainable, as with Social Security. Change the formula, and you can save the system. Keep it, and it’ll be in a crisis, the kind that becomes an excuse for bankruptcy. If we plan better, we can provide all working citizens an “honorable discharge” from work with benefits commensurate with their contributions to them.

Raphael Sassower is professor of philosophy at UCCS; rsassower@gmail.com See also sassower.blogspot.com.