Nothing in life is certain — except death and taxes.
Whether you are taking a break at work, sitting around with friends in the dog days of summer, or in the line-up at the grocery store, who hasn’t heard this popular saying drift into the conversation?
Wikipedia claims the “death and taxes” is an idiom which goes back three centuries. One early source is a book called “A political history of the devil,” written by Daniel Defoe in the baby years of capitalism.
Nobody ever says “Nothing is certain except death and pensions.” Surely, however, all workers expect some retirement before death. Maybe “Death and pensions” doesn’t have the same ring. Or perhaps pensions have been around for a much shorter time than taxes.
Universal pensions in Canada have existed for about fifty years. Not a “gift,” they result from hard-fought struggles by working people. Nevertheless, the reliability of pensions to keep the elderly out of poverty is still far from certain. Today, for many seniors their meagre pensions are actually a ‘passport to poverty’.
According to the Canadian Association of Retired People, poverty among those over 65 has more than doubled in the last ten years. Across the country, over half a million seniors – one in nine – live in poverty. This includes 30 percent of single seniors, particularly women.
These numbers are expected to only get bigger. The Trudeau Liberals’ latest pension reforms, as the Communist Party recently pointed out, do almost nothing to substantially help pensioners today and are little more than an attempt to delay the ticking time bomb of public pressure. So while death and taxes remain certain, the ability of millions to even retire is very much in doubt.
The Canadian pension system is usually divided into three pillars: personal savings, private pensions, and public or state pension plans. A quick look at the facts shows that while these pillars work quite well to support the bosses, they are structurally unsound for working folks.
First, consider savings. Do you save? If your answer is “no,” or “not much,” you are among the majority. According to the Canadian Payroll Association, about half of Canadians would have difficulty paying their bills if their pay cheque was just one week late. Wages are stagnant and personal debt is at record levels, driven ever higher by high housing costs.
If your answer is “yes” to saving, you have probably asked: what is the motivation to save? Even if people are able to squirrel-away some wages, the governments of big business have responded to the economic crisis with monetary policy deliberately forcing interest rates to rock bottom or “ultra-low” levels – even zero in Europe and Japan – so there is incentive to spend, not save.
Some neo-liberal boosters claim there is no crisis in pensions because of rising house prices. However, the price of condos and cute little bungalows into which seniors will “downsize” has also soared. Then there is the reality that all bubbles burst (housing prices in Canada dropped by 30 percent in the early ‘90s) and home owners will be left holding the bag.
As a 2016 study by the Broadbent Institute showed, even when accounting for their total net worth, only 28 percent of Canadian seniors without employer pensions have even five years’ worth of retirement income saved to keep them out of poverty.
Pensions and Scams
About half of workers aged 55 to 65 actually have a private pension plan. But the Canadian Labour Congress recently revealed that over 65 percent of the employed workforce, about 11 million people, have no form of workplace pension plan. Those who do, mainly unionized employees, have had their plans used as blackmail and ransom in collective bargaining.
Postal workers, currently in bitter negotiations, are an example of an employer trying to force changes in the pension plan from Defined Benefits to Defined Contributions. Most plans – about 75 percent overall, and 95 percent in the private sector – have now been created as, or converted to, the rackets known as Defined Contribution plans, in which the worker, not the employer, carries all the risk while receiving smaller benefits. Your retirement savings can evaporate, depending on the whims of financial markets, or if the company declares bankruptcy. Retired workers therefore either live poorer lives, or keep working – sometimes until past 70.
That is exactly what is happening according to an article by the Globe and Mail this August entitled “Employees working longer after shift to defined contribution pension plans”.
With scarce savings and few quality private pension plans, the overwhelming majority of workers face a looming crisis with old age. Millions have great expectations for the third pillar, public pensions, which will be the topic of the second article in this series.
The situation described here is basically, as Canadian journalist Earle Beattie wrote back in the 1980s, a billion dollar swindle. All their life, working people are told that they should be able to retire, yet when they get there, individual seniors are confronted with insurmountable circumstances which they did not create. Apparently they are no longer deserving of support.
Simone de Beauvoir once said that capitalist society “treats the old as outcasts. The aged do not form a body with any economic strength whatsoever and they have not possible way of enforcing their rights: and it is to the interest of the exploiting class to destroy the solidarity between the workers and the unproductive old so that there is no one at all to protect them […and they are] condemned to poverty, decrepitude, wretchedness and despair.” These are the crimes committed by the boss class against the elderly, and all those who toil by hand or brain.
Socialists understand the need to overcome this strategic Achilles heel. All working people have the fundamental right to retire with dignity. Wide-ranging pension reform needs to be included in any comprehensive project for a people’s alternative, including immediate and substantial increases to benefits to a livable level and reduction of the pension age.
After all, retirement is a collective, not an individual, responsibility. Retirement is not a private affair of future savings for when you get old, but a collective problem for today. Nor should pension plans be marketable goods. Retirement funds are not casino chips for the big insurance firms to gamble with. The elderly and all workers deserve more certainty than just death and taxes.
Part Two in our next issue looks at how the class solidarity succeeded in pushing government and business to build public pensions, which are now under attack.
