On May 29, a bankruptcy court judge in St. Louis ruled that Patriot had the right to tear up its union contrasts to slash wages and benefits, and even as she already allowed them to hand out millions of dollars to rewards their executives.
The UMWA tried to negotiate. The Patriot representatives walked away. The UMWA threatened to strike. Patriot came back to the table.
All the drama is deeply personal and terribly stressful to the thousands of coal miners, retirees, spouses, and other dependents looking to protect promises made to them in exchange for a life of hard work in one of the most dangerous jobs in America.
However, the real danger in the long term may not be limited to those in the coal fields, but for the middle class as a whole.
In 1946, the federal government intervened in negotiations between the coal industry and the UMWA and supported a promise to provide health benefits to retired miners and encourages the creation of pension benefits as well. The result was the UMWA Health & Retirment Funds, which was one of the first (and at the time, probably the largest) organizations to administer multi-employer benefit trusts.
At the center of The Funds is a defined benefit pension and retiree health insurance. Combined with Social Security and Medicare, these benefits gave coal miners a sense of retirement security, especially as the health effects of a lifetime of coal mining wore down their bodies.
After a generation of change in the coal industry, where union membership has been shrinking in favor of nonunion shops that pay better wages with fewer benefits to attract younger workers, there are just a handful of union-affiliated coal companies left. Patriot is one of them.
Whether Patriot and the UMWA work out an agreement, it is probably in both of their interests that Patriot continues. If not, the bankruptcy proceedings could point to further turmoil in the coal industry and further erode that defined benefit pension the UMWA offers.
The defined benefit pension is rapidly disappearing in favor of the more portable but riskier defined contribution system (think IRAs and 401K's) that often fails to provide the same level of benefits.
I believe America needs more defined benefit pension options, not fewer. Yet, Patriot's bankruptcy can threaten one of the few big plans left. And Republicans in Congress want to "privatize Social Security," which is to say they want to eliminate the only defined benefit pension everyone gets, Social Security, in favor of the riskier choice of private accounts.
We are giving up retirement security, the security of our future, for short-term gains and long-term societal trends. It's counter-productive. For many folks, such as those in the coal fields, their standard of living is not very high as their incomes are quite low. Security is all they've got.
Why are we trying to take that away from them?
The middle-class deserves better.