The union way up America

From the Los Angeles Times
Opinion The union way up America, and its faltering economy, need unions to
restore prosperity to the middle class.
By Robert B. Reich
January 26, 2009

Why is this recession so deep, and what can be done to reverse it?

Hint: Go back about 50 years, when America's middle class was expanding and the economy was soaring. Paychecks were big enough to allow us to buy all the goods and services we produced. It was a virtuous circle. Good pay meant more purchases, and more purchases meant more jobs.

At the center of this virtuous circle were unions. In 1955, more than a third of working Americans belonged to one. Unions gave them the bargaining leverage they needed to get the paychecks that kept the economy going. So many Americans were unionized that wage agreements spilled over to nonunionized workplaces as well. Employers knew they had to match union wages to compete for workers and to recruit the best ones.

Fast forward to a new century. Now, fewer than 8% of private-sector workers are unionized. Corporate opponents argue that Americans no longer want unions. But public opinion surveys, such as a comprehensive poll that Peter D. Hart Research Associates conducted in 2006, suggest that a majority of workers would like to have a union to bargain for better wages, benefits and working conditions. So there must be some other reason for this dramatic decline.

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Social Security Strong as Ever

by Joel Wendland

John McCain and the Republicans like to say that Social Security needs to be privatized because its on its last legs. McCain even recently insisted that workers paying into the system to fund retirement benefits for seniors – how the system has worked for the last 73 years – is an "absolute disgrace" that has to be fixed.

But McCain either lied to his audience or he is confused about how Social Security works and how well it is working.

According to new data released by the Congressional Budget Office, Social Security Trust Fund surpluses will continue for the next 41 years, and at current economic growth rates, the ongoing revenues into the program will pay at least 81% of the existing retirement and disability benefits for 75 years. And the reason this projection isn't longer is because the CBO won't project farther into the future.

These projections are improvements over past projections.

The CBO report, “future Social Security beneficiaries will receive larger benefits in retirement … than current beneficiaries do, even after adjustments have been made for inflation.”

In other words, McCain's specific claim that Social Security won't be here for my generations' retirement is simply false (unless he or his survivors succeed in killing the program).

In addition to providing higher Social Security benefits than what are promised now, even with no changes to the program, according to a policy memo from the Economic Policy Institute, "The trust fund will cushion the large baby boom retirement, as it was designed to do, but most benefits will continue to be funded by direct transfers from workers to retirees, as they are now."

But if you're still worried about it, why not lift or end the income cap on contributions to the Social security system. Right now, people who earn more than roughly $100,000 do not pay Social Security payroll taxes on the income over that amount. But they get full benefits when they retire or pass the retirement age: like John McCain, who currently gets almost $2,000 a month.

Barack Obama is talking about raising this cap to help ensure the program's future financial stability.

Right now, the earnings cap is pegged to income averages and rises on its as earnings rise, which of course, means that George W. Bush and previous presidents have presided over tax increases since 1982. But is this system fair?

I say completely eliminate the cap to make the system fair. For once, let's have a "flat tax" on Social Security contributions.