With Boeing apparently dead set on provoking a strike by its engineers and technical workers, it's important to emphasize what's really at stake for SPEEA's 22,950 members: A secure and comfortable retirement.
Boeing's "last best offer" would replace SPEEA's defined benefit pension plan with a 401K for new hires. "Welcome to the 21st century," you might shrug. Free market: Yay! But writing in USA Today, economist Duncan Black (better known to some as the blogger Atrios) argues that the 401K experiment is proving to be a disaster:
Over the past few decades, employees fortunate enough to have employer-based retirement benefits have been shifted from defined benefit plans to defined contribution plans. We are now seeing the results of that grand experiment, and they are frightening. Recent and near-retirees, the first major cohort of the 401(k) era, do not have nearly enough in retirement savings to even come close to maintaining their current lifestyles.
Frankly, that's an optimistic way of putting it. Let me be alarmist for a moment, because the fact is the numbers are truly alarming. We should be worried that large numbers of people nearing retirement will be unable to keep their homes or continue to pay their rent.
According to recent data, the median household retirement account for workers age 55 to 64 is just $120,000—enough to provide "only a trivial supplement to Social Security," Black warns. And that's for those people who even have a retirement account; about a third of households do not. Heretically, Black calls for an immediate 20 percent increase in Social Security benefits in order to stave off the economic misery looming for millions of retiring Baby Boomers. It's well worth the read.
The point is, despite all the promised free market magic, defined contribution plans are proving a poor alternative to the traditional defined benefit plans they replace. At least for the workers. Which is why SPEEA members would be crazy to cave on this one crucial point.