Strikes Today for the Children of Tomorrow

The strikes on November 30th are about many things, which lurk behind the superficial reason for action which is the failure to agree a new deal on pensions. In part, they are about whether working conditions in the public sector should be held to the same standard as in the private sector, where things such as salary-related pension schemes have long since been abandoned. In part, they are about the wealth gap between the 1% of executives on huge six figure pensions and the 99% of the rest. In part, they are about the cutting of the public sector in order to resolve a crisis created by the financial industry.

But to myself, having just returned from a picket to protest against changes to our Universities Superannuation Scheme, the fight is primarily about intergenerational justice. It is important to remember that many of those on the picket lines will not be badly affected by pension changes. Certainly everyone will have to contribute more salary as the cost of a longer age of living - and most of the unions, including our own UCU, have accepted this in their negotiations. But this aside, those already established in pensions will be largely unaffected. Those employees who are already in USS will still keep their gold-standard, final-salary link. Those in public sector pension schemes who are within ten years of retirement will still retire at the same age, with pensions at the same level as they are currently.

Our local union leader is already part-retired. He has pointed out that because his pension is linked to the higher rate of inflation, and is final-salary, then within seven years (assuming inflation stays around 5%) he will be "earning" as much through his pension as a junior lecturer just entering the profession will receive in salary (assuming that wages stay flat). What he is fighting for, then, is not to protect his own pension, but the rights of younger workers. In particular, he is fighting for the right to link pensions to final salary rather than career-average earnings. Why does this matter so much to younger members? If they have long and sustained careers, won't they still be well-rewarded in such a scheme? Well consider this. If a young woman enters the profession today, she might want to take a career break so she can have children. Such a break will dramatically affect her career average earnings. Younger women will have to face choices that women of an earlier generation had fought successfully to resolve, or so we thought.

Those of that baby boomer generation, like our local union leader, have lived through a post-war world rich in state entitlements and private sector growth: a free NHS, a public university education, rising house prices, a bulging stock market. For the generation under thirty, when they reach retirement, none of these things will exist to the same degree.

Many of the government's attacks on the deficit have been assaults on the young: the removal of EMA, scrapping youth unemployment schemes, tuition fees, and now the removal of gold-standard pensions. The government has claimed that cutting the deficit through changes like this is necessary in order to keep interest rates down, which in turn suppress mortgages and thus improves household income and overall welfare. This is fine, if you have a mortgage. But the average age of a first time buyer is rising steadily, now standing at around 38. Those under 30 face increasing rental costs, not decreasing mortgage costs. The government would argue, though, that long-term they too will see the rewards. But consider this. My parents bought their first house for around £10 000. They now live in a house worth £250 000. If someone around the age of 30 manages to buy an average house today, at £160 000, they would need to have that house become worth £4 million by the time they retire in order to realise an equivalent boom to that enjoyed by the older generation.

By the time they reach retirement, then, today's young can expect to be asset poor and, now, pension poor as well. They are bearing the burden of cutting the cost of the deficit now, and they will not live to see the rewards tomorrow. To those parents grumbling about having to sort out childcare because schools are closed, remember this: it primarily for these children of tomorrow that we are taking a stand today.

Labels: pension, Politics, strike, UCU

0 Comments:

<< Home