Magazine article USA TODAY

A Bad Deal for Union Workers

Magazine article USA TODAY

A Bad Deal for Union Workers

Article excerpt

American workers who belong to unions will receive far less retirement income from Social Security than if they invested their payroll taxes in stocks and government bonds, according to a study by The Heritage Foundation, Washington, D.C. Even though union members would benefit from Social Security privatization, union officials unequivocally are opposed to personal retirement accounts. For example, the AFL-CIO Executive Council released a statement in August, 1998, saying that "private accounts should never be substituted for the core defined benefits the system currently provides." This is despite the fact that many Social Security privatization proposals would be structured to raise retirement incomes while guaranteeing a minimum benefit equal to that offered under the existing system.

Heritage analysts examined Social Security's rate of return for workers in Various heavily unionized professions--mining, construction, manufacturing, public utilities, transportation, communications, public administration, teaching, truck driving, hotels, law enforcement, and fire fighting. In each case, they found that workers could retire with as much as several hundred thousand dollars more if allowed to invest their Social Security taxes in a portfolio divided evenly between stocks and U. …

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