The American Dream : American Airlines Bankruptcy

  The Star-Telegram has an interesting story on the American Airlines Bankruptcy. 

 

“When AMR Corp. announced its plan Wednesday to terminate all four of its employee pension plans, it joined a long line of U.S. employers that have abandoned what was long seen as a birthright of American workers.

In 1980, 84 percent of Americans working for large or midsize private employers were eligible for a traditional pension, known as a defined benefit plan because it promises to pay a specific benefit based on earnings and years of service. By 2010, that was down to 30 percent, according to the Employee Benefit Research Institute, a not-for-profit research organization in Washington, D.C…”

 

Read more here: http://www.star-telegram.com/2012/02/01/3705574/amr-wants-to-terminate-all-four.html#storylink=cpy

 

  Back when I was young…  A long long time ago… I worked as a welder for a corporation (Hess Trucks).  We made trucks that carried beer, soft drinks and stuff like that.  It was sometime in the 60s I think.  It was a union job of course.  We were UAW members.  The pay was good.  I enjoyed the work.  I did take off my hard hat one time when I was welding under a truck and the workers on top were pounding with sledgehammers and a c-clamp came loose and came down and hit me in the head.  Yes, that is how I became a Democrat.  Hit in the head by a hammer.
  I was in my early 20s then.  The company hired in about five guys and they looked old to me. Very old men.  They all came to work at the same time and all had worked at another company before.  The company they had worked at went out of business.  All of these old guys had been a year or two from retirement age and they all had worked for the company most if not all of their lives.  They lost their company pensions.  They ended up with zero for all those years of work.  They would, of course, get Social Security.

  I remember thinking at the time that it was not right that a person could work for a company and then have them just cancel the pension and say get lost. 
  It looks like after all these years this sort of thing is still happening.
  Thank God for Social Security.
  But we need government regulation in this area and in a lot of areas.  That is one of the reasons for government.

Comments

[Dick Williams]

That is interesting -- only 30% of companies still have pension programs and the number is dropping day by day. Big breach of faith and contract with a major employer like an airline just says we're ending that benefit.

The other factor is that fewer and fewer people stay with a company long enough to receive a pension even if the company still has a program. So company pensions are not coming back and more will bow to "competitive pressures" and just opt out when they have a chance such as in bankruptcy. 401ks are rebuilding some but everybody needs to recall 1987 and 2008 when stocks tanked and 401ks and IRA tanked along with the stock market.