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From Labor Action, Vol. 13 No. 42, 17 October 1949, p. 14.
Transcribed & marked up by Einde O’Callaghan for ETOL.
The House last week passed the first major amendment to the old-age pension provisions of the social-security system since the latter’s enactment in 1935.
HR 6000 extends coverage to some 11 million persons not previously included, and raises benefits by about 70 per cent. It further provides that employers and employees shall continue to pay one per cent until 1950, but on $3,600 of annual income instead of the previous $3,000; and that employer-employee contributions shall rise to 1½ per cent in 1950, 2 per cent in 1951; 2½ per cent in 1960, 3 per cent in 1965 and 3¼ per cent in 1970.
It can hardly be said that even with the proposed increase in benefits the provisions are adequate. For example, under the raised benefit plan, a worker contributing for ten years and earning $200 a month would receive $94 – a substantial increase over the $51 he gets now but still far from what he needs to live. Nor can anything be said in favor of the employee contribution provision.
Biit we have no wish here to belittle the progress made by Congress; if it is inadequate, it is nevertheless welcome and long overdue, especially in its provisions for wider coverage. HR 6000 is progress. While the Senate is not expected to act on it this year, present indications are that it will do so at the next session – unless there are tremendous changes in the labor-capital picture.
And here we come to the nub of the matter. Quite apart from its specific provisions, HR 6000 is mighty interesting. Fourteen years have passed without substantial amendment of the original law, which was passed during the depression period. Repeated demands and arguments for an improvement of the old-age pension system have gone unheeded. All of a sudden – boom! – the House passes the measure after what the New York Times described as an “undramatic” debate. Why?
The answer is clear enough: LABOR’S PENSION DRIVE.
It is as simple as that. We were preparing to give that gs our interpretation, but in the days that have intervened before our publication date we have noticed that just about everyone – from as knowledgeable a capitalist source as the Times to as knowledgeable a Union source as the UAW’s Walter Reuther – has made essentially the same explanation.
Labor is determined to get pensions. Almost every major union has made it a plank in its immediate program. No matter what the arrogance of the employers may be, no matter how emboldened by the comforts of the Taft-Hartley Law, they realize that they cannot withstand the pressure for long. Especially after the steel fact-finding board has held that steel workers are entitled to $100 a month!
In the light of this if is easy to see why Congress, which hod stalled for fourteen years, jumped to act now. Pensions are in the cards; therefore, take the pressure off industry by making it a government responsibility and by making it financed in part by the workers themselves.
The employers as a class recognize what is inevitable, and they would rather not have it come out of their pockets.
Ford is a case in point. The Ford management is well pleased with its contract settlement with the union. It has agreed to pay pensions, with the stipulation that its contribution shall decrease as the government’s increases. No wonder the Ford negotiators were given credit in management circles for being exceptionally wily! From management’s point of view the Ford contract established the important contributory principle – that workers are obliged to contribute either directly or through the operation of the social-security system. And the cost to Ford will be inconsequential.
All together, it is easy to see why Congress acted at this moment. Many people were undoubtedly benefited, but it is not a case of overflowing altruism.
The “undramatic” acceptance of HR 6000 sheds considerable light, also, on the impulses behind the steel industry’s position. These have been set forth in last week’s issue, and need not be repeated here. Where pensions are so obviously in the cards, and where the sum involved represents relatively small potatoes to such titans of profit as the big steel bosses, they cannot be the real stumbling block to negotiation of a contract. (Some small steel bosses, who make profits enough to be sure but who are still not in the big league, have not found the steel union’s terms impossible.) Big Steel is not battling against pensions so much as it is battling against the union as an instrument of labor’s offensive strength.
HR 6000 is progress, but progress in one sphere is no excuse for suspending it in others. Labor is entitled to pensions which are employer-financed and which are adequate for decent living. $100 a month for an aged couple is preposterously low. It is better than nothing, but it is not enough to allow the worker who is discarded because of his age to live in comfortable retirement.
Industry owes its billions to the toils of labor. That is a simple ABC statement. It OWES the aged worker the promise of security.
From where we sit, therefore, employer-financed pension plans are still on the order of business – along with such other economic and social demands as labor has need of now.
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