Why Social Security should not be tied to the stock market may not be readily apparent to those for whom the stock market produces income. These people understand the stock market, but they generally do not understand working for wages.
By the same token, hourly wage workers do not understand the stock market. They know people make money from the stock market, but they don’t understand how that money is made.
So why not let workers make money for their retirement in the stock market? Other than the fact that the stock market doesn’t always make money, and people do in fact always get old and need money, here is a point to consider:
The stock market makes its money on the income of corporations. Corporations make their money by hiring people to work, mostly for low salaries and hourly wages. If a corporation can work people overtime without pay, assign double duties, shorten lunch hours, take away break time, avoid worker health and safety issues, work a large force of part-time people with no benefits or health insurance, etc., then the corporation can raise its profit margin. It can pay its CEO more money, and make more money for its stock holders, at least in the short run, as long as the work force doesn’t actually die. It is in the interest of corporations to keep wages and benefits low and profit margins high.
It is in the interest of the worker, of course, to receive an adequate wage and have health coverage, a safe workplace, and a retirement plan. Corporations do not provide these benefits out of their own good hearts. Corporations have no good hearts. To the extent that workers have these benefits, they are due to government regulation of corporate behavior and the few remaining areas of labor in which collective bargaining is still effective.
When George W. Bush says “ownership society,” he means that when Social Security is privatized workers will “own” a part of corporations. They will share the corporate goal — grow corporate profits. Workers (and their elected representatives) would then willingly give up lunch hours and breaks, vote for laws that permit unpaid overtime, cease clamoring for little things like medical insurance, etc., in the interest of making sure their Social Security will be there for them when they retire. It is sort of a Donner Pass thing — workers would eat themselves to keep from starving.
It is not a sustainable model, you say, but sustainable models are not the Bush long suit.
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