Due to the politics of money, beginning early in the 1980s, during the Reagan era, there was a rapid shift away from private sector employer-based defined benefit pensions to employee-controlled personal retirement accounts.
Under President Reagan [1981 – 1989] this trend in the private sector was helped along by the Republican Party that controlled the Senate from 1981 to 1987 giving President Reagan the leverage he needed to shift private sector pension money to the stock market and other risky investments—another part of the Reagan plan besides adding two trillion dollars to the national debt by cutting taxes on the wealthy, raising them on the working class by cutting deductions and spending more.
In fact, “Since 1982 and the Ronald Reagan economic program, profit expectations of American corporations have skyrocketed, and right behind have been the costs of health care, the cost of housing, the cost of military programs, the cost of banking, and the cost of many other products and services.” Source: The Agonist
In 1980, approximately 92 percent of private retirement saving contributions went to employer-based plans; 64 percent of these contributions were to defined benefit pension plans [similar to the public pension plans of today].
Then by 1999, [thanks to President Reagan and the Republican majority in the Senate while he was president] about 88 percent of private sector contributions went into defined contribution plans, the vast majority of personal retirement accounts being set up as 401(k)s and Individual Retirement Accounts (IRA).
However, the Public Sector did not follow this risky path to retirement. The Public Sector stayed with employer-based defined benefit pension plans such as the one I’m in with CalSTRS.
It helped that the union membership rate for public sector workers (36.2 percent) was substantially higher than the rate for private sector workers (6.9 percent).
To understand the numbers better and why the media focuses its Yellow Journalism circus act to attract the biggest mob, in November 2011, the Bureau of Labor Statistics reported that there were 20,404,000 public sector employees [2,000,000 work for the federal government—the rest work for the states or local county or city governments] and about 128,000,000 private sector employees.
Those numbers help explain why the Associated Press ran Public retirement ages come under greater scrutiny by Don Thompson.
If you published a newspaper, a magazine, ran a TV news network, hosted a conservative talk show, or wrote a popular conservative Blog, which audience would you focus on to boost advertising rates? As I said, it’s all in the numbers.
A. 20 million
B. 128 million
Continued on December 17, 2011 in The Private-Sector, Jealousy-Misery Media Factor – Part 3 or return to Part 1
Lloyd Lofthouse is the award-winning author of The Concubine Saga. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.
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