Category: Pensions

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Pensions Political Eh-conomy Radio Unions Workers

Neoliberalism restructures work and pensions

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On today’s show, two sociologists talk about aspects of neoliberal restructuring. First, Nicole Aschoff, sociologist, author of The New Prophets of Capital and until very recently managing editor of Jacobin magazine speaks with me about the auto industry, Trump and why globalization shouldn’t be solely blamed for the destruction of good jobs even while it is nevertheless in crisis. Next, Mike McCarthy, assistant professor of sociology at Marquette University in Milwaukee, discusses his recent book Dismantling Solidarity: Capitalist Politics and American Pensions since the New Deal about how the pensions system has been transformed in ways that leave workers more vulnerable.

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Pensions Political Eh-conomy Radio Privatization

Pension tensions and power privatization

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Two guests today: Kevin Skerrett on the changing way pensions function today and Sheila Block the impending privatization of Hydro One in Ontario. Sadly, the two are linked: large pension funds are increasingly active in privatizations. My first guest, Kevin Skerrett, is a pension researcher at the Canadian Union of Public Employees. Don’t let the word pensions scare you off, this is a conversation that gets to the heart of how workers relate to the market and to each other in a changing neoliberal economy. See this article by Kevin and the linked videos of a speaker series for more.

From pensions, the episode moves to privatization with my second guest, Sheila Block. Sheila is the Senior Economist at the Ontario office of the Canadian Centre for Policy Alternatives. We spoke about the impending privatization of Hydro One in Ontario, a cynical and financially senseless sell-off of an important public asset. Sheila’s recent article on the topic is here.

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Canada Pensions Workers

The pension fight: on the picket line or in regulations?

It’s relatively common knowledge that employer-run pensions have been scaled back over the past few decades. I’ve decided to dig some data on pensions for this post to see just how this has taken place in Canada, motivated by a just-released analysis of US pension reform that finds contradictions in how US workers have come to take on more and more of the risk for their retirement income.

First, a bit of background. There are two main kinds of employer-administered pension funds: defined benefit (DB) plans – where retirees receive a set monthly income, or defined benefit – and defined contribution (DC) plans – where retirees receive a variable monthly income dependent on how much they proportionately contributed to the pension plan and how this money was invested. There are also completely individualized retirement savings plans such as the RRSP, but these are essentially individuals investment accounts given preferential tax treatment. However, the link between RRSPs and DC plans is that they generally place investment risk on workers themselves; if whatever financial instrument the money is invested in suffers, retirement income also suffers.

While some employers have eliminated pensions altogether, many have restructured their pension plans. Here’s the Canadian data on registered pension plan membership, plotted as a percentage of employment:

Figure 1. Registered pension plan coverage as a percentage of employment by type of plan (Source: Statistics Canada, CANSIM 280-0008 and 282-0008).
Figure 1. Registered pension plan coverage as a percentage of employment by type of plan (Source: Statistics Canada, CANSIM 280-0008 and 282-0008).
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Inequality Pensions Workers

Pension trade-offs and democratic deficits

Forget houses as a source of secondary income – that’s so 2007. After the latest recession, Americans are increasingly dipping into their retirement savings to fund on-going consumer expenses. Many private 401(k) plans have rules that allow workers to withdraw some amount of saved funds before retirement and such early withdrawals are on the rise.

The individual irrationality of raiding a 401(k) plan fits nicely with the old stereotype of the stupid poor who don’t know how to save; as if this is what separates everyone else from the truly wealthy. We not only lack the human capital for high-skilled, professional or managerial labour – with its attendant high salaries, good benefits, possible stock options, and so on – but this lack of human capital also translates into unfortunate decisions about what to do with incomes and savings. Inequality of resources becomes a question of less capable faculties in more ways than one: worse economic outcomes are compounded by inadequate life-planning, whether you have a pension or not. In short, inequality naturalized.

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Canada Pensions Privatization

The in-and-out trick: Thoughts on Canada Post, CPP and your child’s breakfast

The past few days have not been great for public services in Canada. Canada Post will be phasing out home delivery of mail. Expansion of the Canada Pension Plan was scuttled at the finance ministers’ meeting. In the grand scheme of things, however, these are not extreme cutbacks. It’s not as if Canada Post is to be dismantled completely or our public pension fund to run completely dry. This government has long brought us death by a thousand paper cuts and those from the past days are just a continuation of the strategy.

There is a particular common thread that runs through all such small cutbacks. Corey Robin’s recent article in Jacobin, “Socialism: Converting Hysterical Misery into Ordinary Unhappiness”, helped greatly in seeing and naming it. Let us call it insourcing.

This kind of insourcing refers to taking a collective public service and making it into an individual responsibility. Perhaps James Moore recently summed up the insourcing philosophy best, “Certainly we want to make sure that kids go to school full bellied, but is that always the government’s job to be there to serve people their breakfast?” Serve your own breakfast, get your own mail, don’t wait too long to die.

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Canada Economic theory Pensions

Notes on pensions and risk

Canada’s finance ministers are meeting this weekend and a proposal to expand the CPP is at the top of the agenda. If implemented, this proposal would bolster an important public program at a time when public programs are under attack and the public sector as whole is shrinking. There are many good arguments in favour of strong public pensions, but I want to focus on one not often discussed: revitalized public programs are a counter to forces that aim to make us accustomed to taking on more and more (potentially disastrous) financial risk.

In yesterday’s post, I noted that austerity is not only a strategy to maintain business profitability, but also part of a broader agenda that can be neatly summed up by the phrase, “privatize gains, socialize losses”. From bailouts to public-private partnerships to the outright privatization of public services, the aim of much right-wing economic policy is to allow the private sector to capture economic gains, at the same time ensuring that society absorbs the costs of something going wrong. This removes financial risks from the private sector and distributes them throughout society.

Effecting such an agenda, however, requires more than just the appropriate policies – it also requires a fundamental change in attitudes towards risk. People have to become habituated to taking on ever-greater individual risks, especially in areas where risks were previously low. Pensions are a prime example of a policy area that can impact on attitudes toward risk.

Continue reading “Notes on pensions and risk”