Penchant for Pensions

Whatever effect last week's auto settlement may have on the U.S. economy, it is bound to accelerate one of the most basic and significant trends in U.S. labor: the move toward higher pensions and earlier retirements. Over the years, an affluent society has given Americans higher wages, a greater life expectancy and increased education to develop their capabilities more fully. Now, more and more of them also want the pot of gold at the end of that rainbow--the opportunity to give up their working days earlier, with sufficient income to support themselves and their families, in order to pursue their own interests at leisure.

Increased Pressure. More than 25 million employees--or about half of all workers in private industry--are now covered by some 34,000 different industrial pension plans, and 2,300,000 retirees are already receiving pensions from industry at a cost of $2.4 billion a year. Among union members, two-thirds have pension plans. Pensions have been a major issue in most contract negotiations this year, and the United Auto Workers' improved pensions give labor added incentive to increase this pressure.

Even before last week's settlement, a 30-year employee making $400 a month in the auto industry could get $210 a month in retirement pay, including his social security (he will now get $254). That is a higher-than-average amount for industry, but it is not so high as that paid by a handful of major companies. The oil companies, in general, are the most generous, and a 30-year man at Standard Oil of Indiana gets $343 a month. At Du Pont he gets $298, at Cities Service $297, at General Electric $266 and at A.T. & T. $224. The most generous major pensioner listed in a recent Government survey was Grumman Aircraft, whose 30-year, $400-a-month retiree can get as much as $415 a month. Among the tightest: the men's clothing industry, in which a man in the same bracket gets only $176.

More Jobs for Teens. As pensions are raised toward more generous levels, labor is making a big push for earlier retirement to go with them. A quarter of this year's new contracts that have granted higher pension benefits also include provision for earlier retirement. The Chrysler-U.A.W. pact encourages workers to retire at 60 instead of 65, even makes retirement possible at 55. In other contracts signed this year, Sinclair Oil, Westinghouse and RCA reduced normal retirement age from 65 to 62. The trucking industry granted retirement at $250 a month after 30 years of service, making it theoretically possible for some teamsters to retire at 47, and Atlantic and Gulf Coast shipping companies agreed to permit pensioned retirement after only 20 years of regular service.

Behind labor's drive for earlier retirement is the desire to create more job security for the younger, low-seniority workers, who are the first to be affected by automation and production cutbacks, and more jobs for the wave of teen-agers now beginning to inundate the labor market. Many experts believe that this drive, coupled with the worker's desire for more leisure in his life, will eventually produce an almost universal retirement age of 60--and perhaps even lower. And in the steadily growing and increasingly automated U.S. society, rising retirement benefits seem inevitable if the growing number of retired oldsters is to have the buying power that is considered so vital to the economy's health.

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