The U.S. economy is the world’s largest economy, annually producing more than a ten trillion dollar gross-national-product and backed by military firepower so great some European commercial rivals now call the U.S. a “hyperpower.” One might suppose, then, that U.S. corporations’ promises to provide secure pensions to their workforces should be as good as money in a sound bank. But that supposition is just that—a supposition, and an increasingly doubtful one at that. Today’s reality is that the funding of even some major corporate pension funds, perhaps more than have been revealed, is not so secure, even as corporate America seeks ways to reduce the reserves backing up their pension obligations to corporate America’s workers.

In part, this has come about because the stock market bubble has partially collapsed, reducing the market value of pension funds’ stake in the stock market. Moreover, the government’s attempts to bolster the stock market by way of lowering interest rates has, in turn, reduced pension funds’ income from bonds, essentially corporate and government IOU’s, also reducing pension’s financial underpinning.

In order to reduce their pension reserves, corporate America is using a variety of stratagems, arcane methods, legalisms and political string pulling, according to a report written for the New York Times (June 22). A chief stratagem involves arguing that mortality tables—that is current actuarial assumptions about how long a retired worker might collect a pension—don’t reflect the makeup of a specific firm’s workforce. In all the cases cited by the Times, companies are arguing that their workers will die sooner than projected by customary actuarial tables; therefore it’s safe and prudent to reduce their reserves, or reduce or even halt reserve contributions.

Of course, corporations have several ways to use the money that otherwise would be used to back up future pensions. One, pass it on to their stockholders, perhaps causing the firm’s stock to rise; two, use it to expand, or perhaps invest in labor-saving machinery or processes; or three, to put the money in the corporation’s rainy day account.

The Caterpillar Corporation is lobbying Congress, explaining that, “Companies cannot commit to building new plants and launching new research projects or hiring new employees if that cash is needed to fund pensions.” In other words, corporate pension contributions are partly holding back the long-awaited expansion of the economy. In truth, however, the main thing, as always, is to reduce corporate labor costs, which fall as pension reserves are allowed to fall.

“Billions of dollars are at issue,” reported the Times; and some analysts are worried that as reserves are allowed to fall, taxpayers may have to pony up what the fed’s self-funding pension insurance agency doesn’t pay to keep pensioners, monthly checks coming, in full and on time. As it is, that agency, the Pension Benefit Guaranty Corp, “is working with a $7.1 billion pension debt that it took on from bankrupt steel companies last year. The steel companies alone nearly wiped out the agency’s entire surplus.” Furthermore, the agency in some instances only pays a fraction of the pension that a bankrupt firm may have negotiated with its unionized workforce.

That corporate America seeks to slip out from its promised pension obligations is no surprise. Since international business competition became more heated during the 1970’s, corporations worldwide have seen the rate of profit decline. In turn U.S. companies have imposed massive concessions on their workers, unionized or not. To date corporate America and higher taxes have cut workers’ share of the gross domestic product. If workers today received the same share they once did, their paychecks and benefit packages would be worth hundreds of billions of dollars more than they now get.

If there’s a surprise in all this, it’s that major unions are joining the corporations in their quest to reduce the pension trust reserves. “The United Auto Workers are backing a bill that would allow blue-collar companies to pay less into their pension funds than those which employ mostly white-collar workers. The reason? Blue-collar workers tend to die younger,” writes labor analyst Jane Slaughter (Labor Notes, June). The UAW president has defended the union’s pairing with the corporate executive suite. But Slaughter notes that the Times speculated that the UAW chieftain “was looking to save the [auto] companies money in order to help pay for wage hikes in contract bargaining this summer.”

Slaughter quotes the view of a former president of a UAW-GM Flint local union, retiree Dave Yettaw, who said, “A real union would not be advocating for lower contributions to the members’ pension funds. A real union would say: let us find out why our members are dying so young.” Yettaw advocates passing on the full benefits to surviving spouses, or winning a reduction in the number of years of work required to earn a full pension. Yettaw adds, “During the 1990s the UAW was silent when the pension fund profits averaged 15 percent a year and the money was invested in Asia and Europe rather than future pensions.”

Greyhound workers’ experience should be a warning to all workers and unions. The Times wrote that Greyhound workers lost a seven-week 1983 strike. The firm subsequently closed the pension plan to new workers, and stopped making contributions for current workers. Following a 1990-93 strike Greyhound froze benefits, and said that if the plan needed more money the workers would have to take it from their paychecks. When Congress moved to shore up pensions by requiring that plans use a standard mortality table, Greyhound won an exemption, sponsored by New York Democrat, Representative Charles Rangel. Now, once again Greyhound workers pensions are under attack as a consequence of the stock market’s sell-off. Some 800 Greyhound workers, still short of the 30 years needed for a full pension, such as it now is, may not earn another dime of pension money, no matter how much longer they work for Greyhound.

Other companies are looking at the Greyhound case, but from a different angle than Greyhound workers. The companies are seeking to get the same deal, or equivalent legislative relief for themselves. But a former economist for the federal pension agency warned the Times that, “Constituents [corporations] want relief right now, and it’s tempting for Congress to give out all these benefits [to corporations]. But if you tell all these people they don’t have to put money into these plans. The problem is, down the road, somebody else is going to be asked to pay for it.” Those people include would-be pensioners, as the Greyhound experience makes clear.