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workers and manual laborers.  Surveys have consistentlyshown

that white-collar workers are more likely to enjoy their

work and are more willing to work beyond age 65.

Therefore, by opposing privatization, union leaders may

be forcing Social Security reforms that will leave their

members at a great disadvantage.

Conclusion

Union workers would be among the people who would

benefit most from the privatization of Social Security.

They would receive far better retirement benefits under a

privatized system, would achieve greater participation in

the economy, would have the opportunity to accumulate real

wealth, and would avoid painful tax hikes or benefit cuts.

Union leaders should abandon their ideological attachment to

Social Security and do what is best for their members--

support Social Security privatization.

Notes

1.  Samuel Gompers, "Not Even Compulsory Benevolence Will

Do," American Federationist 24 (January 1917): 48.

2.  Bureau of Labor Statistics, "Union Members Summary,"

Developments in Labor Management Relations, January 30,

1998.

3.  Niel Gilbert and Neung-Hoo Park, "Privatization, Provi-

sion, and Targeting: Trends and Policy Implications in the

United States," International Social Security Review 49

(January 1996): 22.

4.  Calculations assume a 4 percent rate of return on bonds

and a 7 percent rate of return on stocks.

5.  See, for example, Richard Burkhauser, Douglas Holtz-

Eakin, and Stephin Rhody, "Labor Earnings Mobility and In-

equality in the United States and Germany in the Growth

Years of the 1980's," accepted for publication in Interna-

tional Economic Review; and W. Michael Cox and Richard Alm,

"By Our Own Bootstraps: Economic Opportunity and the Dynam-

ics of Income Distribution," Federal Reserve Bank of Dallas,

1995.

6.  James Smith, "Unequal Wealth and Incentives to Save,"

RAND Corporation, Santa Monica, California, 1995.