Yikes

There is a pension show-down as part of the local contract negotiations at Boeing.

Take one aspect of the Boeing showdown, the pensions. For decades Boeing has given its line workers a decent retirement benefit. It pays out about $90 a month for every year worked at the company, so that someone with 30 years of service would get $2,700 a month when they’re done at age 65.

Add Social Security to that and you’ve cobbled together a comfortable but hardly posh old age for sheet-metal workers, riveters and others who build the nation’s planes.

Boeing wants to cancel those pensions and put in much weaker 401(k) plans. There’s little doubt this will happen, sooner or later. Because if it doesn’t, Boeing can use pension-free laborers in South Carolina to do the same work.

It’s a race to the bottom. Or rather, a slog to an era when workers will be more reliant on Social Security than ever.

So what’s most galling is that Boeing’s CEO is out pushing to cut back on the nation’s retirement plan as well.

In recent years Boeing CEO Jim McNerney has headed the Business Roundtable, a lobbying group of top U.S. corporations. Earlier this year that group called for raising the eligibility age for Social Security to 70 years old, as well as crimping back on the benefits (by reducing the index of inflation used to calculate payouts.)

“We are going to need our employees to work longer just to fill the needs that we have in the work force,” said a Roundtable suit, helpfully explaining why all Americans should willingly retire later, for less.

I don't necessarily want to comment on the merits; Megan McArdle does a good job of presenting the pro-contract side and it was pretty well thought out.  So what I find odd in this constellation of issues is that traditional approaches to recruiting workers are being dismissed.  The CEO of a major companies is puzzled about how to incent workers not to retire at 65.  In my strange quadrant of the gamma sector, we have this thing called "wages" which are often linked to "benefits".  It's a strange paradox, but consenting adults gladly take on employment in exchange for the good and services that they can acquire with these "wages".   

Now it is true that wages have to be higher when the decision isn't "work or starve".  But that is probably a feature and not a bug -- we would like older adults who are less capable to have the option to retire.  There are many options for expanding the workforce.  Immigration for example, started now, would have wonderful effects in about twenty years.  There are a lot of young people who arrived as children and have grown up in the United States who might be willing to help bolster the labor reserve, if there really is this kind of epic crisis underway. 

h/t: Eric Loomis (who I initially thought might be making this up)