Retirement Under Capitalism

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Sometimes small statistics can have huge implications. The U.S. Bureau of Labor statistics recently reported that the age at which U.S. workers retire has risen for the first time in 100 years. According to the report, in the mid-1980s, 18 percent of people in their late 60s still had jobs; today, it is 29 percent. Millions of U.S. workers can no longer look forward to the “Golden Years” of guaranteed Social Security, Medicare health insurance and employer pensions. One in four baby boomers surveyed said they would likely never be able to retire – in other words, they will “work until they drop”. For those that do want to retire, the age at which they can do so is also being systematically raised. Workers born in 1960 or later must wait until age 67, rather than 65, to get their full Social Security benefits. There is talk of raising it further to 70.

The mainstream media took scant notice of this, and for good reason; it’s a huge indicator of deeper processes that are destroying the standard of living of workers in the United States and internationally. A quick look into why workers are delaying retirement – if they have the “luxury” of retiring at all – points a condemning finger at the current state of international capitalism, while at the same time warning younger workers of the even worse conditions they’ll certainly face under the auspices of the capitalist system.

The rise in the retirement age is an inevitable outcome of the ongoing pattern of attacks on wages, benefits, and Social Security; indeed, this is only the beginning. Politicians across the globe are beyond impatient in their explanations of the “economic necessity” of destroying their countries’ often-meager social safety nets. When it comes to Social Security, capitalist governments everywhere rabidly agree that the system must be “reformed”, i.e., destroyed. Because past workers’ struggles in different countries had varying levels of success, the age that one receives retirement benefits fluctuates as well. What remains consistent is the determination of the ruling class to drastically raise the recipient age.

In Germany the government is demanding that the beneficiary age be raised by two years, from 65 to 67, whereas in France, where workers have been particularly militant in past struggles, the government aims to push through an increase from age 60 to 65. In both countries, large protest movements temporarily deflected the attacks; but talk amongst the profit-mongers leaves no doubt that future assaults are already in the works in order to remain “competitive on the global arena”. Japan and Italy have already raised the pension age from 60 to 65.

In the U.S., the intentionally-faulty accounting methods used to inflate the Social Security issue into a full-blown “crisis”, was the first propagandistic step toward destroying what little remains of the social safety net. Contrary to those who say there is no way to continue funding the program, there is far more wealth produced and far more people producing it than when Social Security was first set up in the 1930s, a concession wrenched from the ruling class as the result of mass pressure from below and the danger of revolution. So even if there is a shortage in the Social Security fund, a minor shift in government expenditures from, say, military contracts, could easily cover any deficit. This supposed crisis is merely a pretext for the privatization of the entire Social Security system.

The motive behind this privatization effort has been explained in depth by various corporate-sponsored think tanks, whose studies about the effects of raising the Social Security recipient age promised spectacular economic benefits – the business moguls frothed at the mouth in anticipation. They found that raising the recipient age drastically increases the size of the work force (thus lowering wages in general while raising profits). It also showed that when the recipient age rises, less money has to be paid out, meaning, many who paid into Social Security their whole lives receive nothing. Most importantly, the large pools of Social Security cash could be used by investors on Wall Street to keep corporate America afloat, while at the same time boosting their own salaries in the form of broker fees – all at the risk and expense of the working class.

This “Chilean Model” of using public Social Security funds for private speculation is seen as a necessary component of capitalism’s future, even though it has already had a disastrous effect on the working class in South America (it took the dictator Pinochet and the help of U.S.-trained economists to implement the program in Chile). Connecting a person’s retirement security – through “private savings accounts” – with the unpredictable nature of the stock market, is a disaster waiting to happen.

Corporations have also been privatizing their pension plans for years, by converting them into the now ubiquitous 401(k) savings accounts. The 401(k) was the answer to the pension obligations that employers found burdensome to their profit-margins. According to the American Benefits Council, 50 percent of pension plans in the U.S. have been lost in the last ten years. Both the financial obligation and investment risk was shifted to the working class, who found out the hard way what the new system had in store for them. After years of hoopla over the successes that the 401(k) was having amid a rising stock market, illusions were shattered when the bubble exploded, taking with it the lifetime savings of hundreds of thousands who were heavily invested in 401(k). This is just a hint of what a privatized Social Security system would mean.

The incredible lack of foresight it takes to think up such crazy adventures regardless of the social consequences is not an accident, but the logical conclusion of a system that relies exclusively on rising profit-rates for its existence. When the international system of trade starts to stagnate and profit-rates begin to fall, the desperation of the ruling class rises. Their schemes to offset shrinking profits always falls on the shoulders of the working class, whose labor produces society’s wealth, and whose standard of living is looked at by the bosses in the same way a vulture sees road kill.

Because the international capitalist system is in a protracted decline, the employing class in all countries has resorted to the above tactics to try and recoup their losses. There is still much to be retaken from the workers, since profit-rates are expected to continue their decline and someone will be forced to compensate. Capitalism’s inability to increase – or even maintain – the standard of living of the majority of its population is its biggest indictment, and the main cause behind the workers’ movements in Latin America that are now heading in the direction of socialism. This is an indication of where the workers’ movement in the U.S. is headed in the future, since the crisis of world capitalism ignores national boundaries. “Never-ending social progress” under capitalism has been proven a myth.

At the bottom of the Social Security and retirement issue is an essential question: will the world’s resources be used to benefit those that actually create the wealth, and to protect and help those who most need it? Or will wealth remain in the hands of whoever is most capable of exploiting, taking, or hoarding it?

To be sure, the takers and hoarders are the ones making this decision for the rest of us. For them it’s a matter of being “realistic” about basic economic questions, i.e. how best to increase short-term profits under their guidance and privilege.

The current situation is exposing the inhumanity of our social-system for all to see, making the demand to bring these institutions under public democratic control for the benefit of everybody all the more urgent – before millions more have to endure a suffering justified by economic “practicality”.

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