UNION WORKERS SHOULD
SUPPORT SOCIAL SECURITY PRIVATIZATION
by Michael Tanner
Introduction
Union leaders have been among the most vocal opponents
of privatizing Social Security. Their opposition is some-
thing of a mystery, because union workers would be among
those who would gain the most if Social security were trans-
formed to a system of individually owned, privately invested
accounts.
The irony is that union bosses have become the last
die-hard defenders of Social Security, because unions were
among the program's original opponents. In fact, Samuel
Gompers, the father of the American labor movement, called
the concept of government-provided social insurance, "in its
essence undemocratic."1 More important, by opposing privat-
ization and supporting such traditional Social Security
fixes as tax increases and benefit cuts, union leaders are
sacrificing the best interests of American workers.
A privatized Social Security system, in which workers
are allowed to divert their payroll taxes to individually
owned, privately invested accounts, similar to individual
retirement accounts (IRA) or 401(k) plans, would provide
workers with better and more secur retirement benefits,
would give them a greater voice in corporate management and
a sense of ownership and participation in the American
economy, and would avoid painful tax hikes or an increase in
the retirement age.
Better Retirement Benefits
The average union worker earns approximately $33,200 a
year.2
If that worker is 35 years old, upon retirement at
age 67, Social Security promises to pay the worker $1,559 a
month. That, however, is only a promise. Social Security
currently cannot pay for between one-quarter and one-third
of the benefits that have been promised. Nevertheless,
assuming that the worker receives everything that is prom-
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Michael Tanner is director of health and welfare studies at
the Cato Institute and the director of the Institute's
Project on Social Security Privatization.