Pensions and the workers’ struggle on the international level

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By Carlos Borrero

The current wave of attacks on public pensions is an international phenomenon.  Just as in Puerto Rico, workers throughout the world are being forced to defend their right to a dignified retirement as capitalist governments use a combination of criminal swindling and cynical pretexts (e.g. public debt crises) in their efforts to renege on obligations.

Retirement plans in general and public pensions in particular are funded by the ‘deferred wages’ of the working class.  In other words, the portion of workers’ wages held back and deposited into funds that are then invested in financial instruments such as bonds is the true source of retirement funding.  This is true even of the so-called ‘employer’ contributions.  As such, retirement plans are not a benevolent gift given by the capitalists.  The appropriation and control of these deferred wages by the capitalists represents an increasingly important part of the class struggle between workers and capitalists within both the private and public sectors.  The continued attempts to reduce pensions, particularly those that have ‘defined benefits’, and in some cases completely eliminate retirement plans, increasingly forces the working class into an immediate fight to take direct control over this portion of its wages.

One of the most sinister aspects of this struggle involves the claim that the current massive underfunding of public pensions – it is estimated that there is a $7 trillion shortfall in federal, state and local pensions within the United States alone – warrants so-called reforms that reduce benefits for retired workers.  This cynical argument, which ignores the illegal practices of many governments that deliberately channel money away from pension funds, is made at a time when government policies have facilitated the massive transfer of wealth to the capitalists resulting in historic levels of social inequality.  It is a testament to the intellectual dishonesty and moral bankruptcy of the spokespersons of capitalism that such bogus claims can be made in an attempt to dupe the working masses.

Recent examples of municipal workers from Detroit, Michigan and Stockton, California as well as the state of New Jersey show that the capitalist courts are complicit in the attacks against workers’ pensions.  In these cases the very same courts that consistently uphold the sanctity of ‘contractual rights’ for the capitalists have been more than willing to violate the rights of workers by ruling that provisions that ptotect retiree benefits can be voided in order to reduce pensions.   It should be recalled that the ruling in Detroit by Judge Steven Rhodes, who was later contracted as an advisor to Alejandro García Padilla, served as an important precedent for what will surely be similar rulings that cut public pensions.  As such, the working class will have to develop increasingly radical tactics if it is to stem the tide of attacks against pensions.

A fundamental programmatic demand of communists is that the welfare of retired workers and their families be a socially guaranteed responsibility of the State.  However, the State to which we refer to is not the current one that functions in the interests of the capitalists but rather a workers’ State that defends the dignified existence of retired workers against capitalist greed.