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Companies should not be responsible for payments to workers after they stop working. This should be the responsibility of the government - the companies should

Companies should not be responsible for payments to workers after they stop working. This should be the responsibility of the government - the companies should pay in while the person works with them, and when the person leaves, the government takes over all payment.

ShabbyDoo 18y ago
I look to the 401K/403B as one answer that meets your criteria.
dkokelley 18y ago
Why does the government need to pay for them? I understand issues like social security and medicare, but shouldn't the employees have been saving for retirement in the first place? I agree that the company should not be expected to pay for work not done, but these payments are essentially part of the benefits package agreed upon when the employee started working. It was probably unwise for management to agree to those terms, but it's no different than police and firefighters who receive checks into retirement. It's delayed payment for their commitment to the organization.
- catz 18y ago
  > I agree that the company should not be expected to pay for work not done, but these payments are essentially part of the benefits package agreed upon when the employee started working. Those benefits packages were done under extreme coercion from the unions. The management of GM basically just deferred these costs. Things such as pension funds should not be handled by the employee (IMHO). You should get your full salary (with benefits included) and make your own choice what funds you will use for medical aid/retirement. Also - on a side note (of topic), these companies should be allowed to fail. They are easily replaceable and most motor manufacturing already happens in lower cost countries in any way. Aren't there companies that are much more important pillars of the world economy that deserve a bailout more (e.g. AMD).
  - dkokelley 18y ago
    Aren't there companies that are much more important pillars of the world economy that deserve a bailout more (e.g. AMD). Haha. I agree that there are more deserving companies, but I would argue that none of these companies should be bailed out. Take your medicine and be done with it. IMO the bailouts are doing more good than harm.
  - mojonixon 18y ago
    I can't tell if you're joking or not. GM paid dividends up until last year, decades after it was known that they had large health care obligations. Divert a couple years of dividends in keeping their side of the bargain, and GM is in good shape. GM management made a deal they were unwilling to keep. AMD employs 15,000. GM directly employees 240,000 and suppliers employ millions more. These companies are not easily replaceable. If they were, another company would have replaced them by now. Setting up an operation of that magnitude requires decades of experience and huge capital expenditures.
    - catz 18y ago
      > GM paid dividends up until last year, decades after it was known that they had large health care obligations. If you look at the post I said that GM did not take into account their future obligations. Their profits was nothing more than fancy bookkeeping. > GM management made a deal they were unwilling to keep. I agree with you on the point that GM should never have made those lavish packages and kept their salaries in line with the market (or relocated their factories). > These companies are not easily replaceable. If they were, another company would have replaced them by now. There are numerous companies that can replace the big auto companies. Toyota and Honda has been slowly replacing GM is most of the world markets (including the US). If either GM goes into bankruptcy and gets split up/sold off (e.g. Opel gets sold etc...). It would not be a bad thing. > Setting up an operation of that magnitude requires decades of experience and huge capital expenditures. Setting up a car manufacturer is not that impossible in the market. Over the past years there were 10s of new car manufacturers that started (and some failed). A good example is some Chinese companies such as GWM, Cherry. There is also no reason why existing car manufacturers can not grow to fill the gaps that GM leaves (as they have done for a long time – e.g. Hyundai, Honda, Toyota, etc...). > AMD employs 15,000. GM directly empl Starting a new x86 processor manufacturer would probably be impossible. The x86 is a patent minefield (to which only AMD and Intel have cross licenses to use each other's patents). Setting up a new generation fab can cost more than $5 billion. And if AMD goes Intel will have a monopoly. Both Chrysler, GM and Ford can disappear and there still will not be a monopoly.
- markessien 18y ago
  Look at it this way: If the individual is supposed to personally save for his own retirement, you'll have 20% or so that will not have any money when they retire. So your society, whatever it is, will have an extremely poor and old social class. These are the people who will also have the most problem with health care. When they get sick, the hospitals will not let them die - their medical care will be paid - by the government. Those people will turn to begging, alcohol and create a new class of homeless people. It's nice to want to put responsibility on the individual, but those 20% will make your society an unpleasant place to live in. Are you willing to deal with all this? Retirement has to be be made into an institution that runs on its own. Don't let people work their entire life, and then retire into hell.
  - dkokelley 18y ago
    It's a matter of personal responsibility. Granted, there will be people who A: Don't save, B: Invest their savings foolishly, or C: Fall on hard times and burn through their savings, but guaranteeing a retirement income will push more people into the A and B categories. I believe that society should help people who fall into the C category, either through welfare programs or nonprofit organizations, but it hurts the rest of society when the people who acted responsibly are required to subsidize those who are in the A or B category. My argument is that it hurts society more to pay for the A and B people than it does to let the A and B people take the consequences of their actions. I argue that the more retirement is subsidized, the more people will rely on the subsidies. The only way to make retirement an institution that runs on its own is to make it the responsibility of the individual.
    - drusenko 18y ago
      Why would it be so bad to force people to save a percentage of their income? If you don't, and guarantee benefits for the C category, then there's a perverse incentive: don't save any money your whole life, get bailed out at the end. In any case, those who choose to not save any money for retirement (whether willfully or ignorantly) are a huge burden on society, one that the rest of us who did save will have to pay for. In that sense, examine this solution: we each have a "personal retirement account", with rules set up in such a way that you can only invest the amount of money above what would provide for a minimally sufficient retirement in "riskier" investments, such as the stock market, and you are forced to save 10% of your earnings into this account, which would follow you from job to job. End result: Everybody has a personally accountable retirement benefit that they directly contributed to their whole life -- it's their money that they saved, and their money that they get. You cannot place the minimum amounts at risk, but you are free to choose how to invest anything above the minimum amounts as you wish. Given that we (eventually) eliminate all social security obligations, we can also completely remove that tax, and several others that currently pay for it.
laut 18y ago
Why should the next generation of tax payers be forced to pay for them? People can save money, while they are working. It shouldn't come as a surprise that you get older every day.

ShabbyDoo 18y ago

I look to the 401K/403B as one answer that meets your criteria.

dkokelley 18y ago

Why does the government need to pay for them? I understand issues like social security and medicare, but shouldn't the employees have been saving for retirement in the first place? I agree that the company should not be expected to pay for work not done, but these payments are essentially part of the benefits package agreed upon when the employee started working. It was probably unwise for management to agree to those terms, but it's no different than police and firefighters who receive checks into retirement. It's delayed payment for their commitment to the organization.

catz 18y ago
> I agree that the company should not be expected to pay for work not done, but these payments are essentially part of the benefits package agreed upon when the employee started working. Those benefits packages were done under extreme coercion from the unions. The management of GM basically just deferred these costs. Things such as pension funds should not be handled by the employee (IMHO). You should get your full salary (with benefits included) and make your own choice what funds you will use for medical aid/retirement. Also - on a side note (of topic), these companies should be allowed to fail. They are easily replaceable and most motor manufacturing already happens in lower cost countries in any way. Aren't there companies that are much more important pillars of the world economy that deserve a bailout more (e.g. AMD).
- dkokelley 18y ago
  Aren't there companies that are much more important pillars of the world economy that deserve a bailout more (e.g. AMD). Haha. I agree that there are more deserving companies, but I would argue that none of these companies should be bailed out. Take your medicine and be done with it. IMO the bailouts are doing more good than harm.
- mojonixon 18y ago
  I can't tell if you're joking or not. GM paid dividends up until last year, decades after it was known that they had large health care obligations. Divert a couple years of dividends in keeping their side of the bargain, and GM is in good shape. GM management made a deal they were unwilling to keep. AMD employs 15,000. GM directly employees 240,000 and suppliers employ millions more. These companies are not easily replaceable. If they were, another company would have replaced them by now. Setting up an operation of that magnitude requires decades of experience and huge capital expenditures.
  - catz 18y ago
    > GM paid dividends up until last year, decades after it was known that they had large health care obligations. If you look at the post I said that GM did not take into account their future obligations. Their profits was nothing more than fancy bookkeeping. > GM management made a deal they were unwilling to keep. I agree with you on the point that GM should never have made those lavish packages and kept their salaries in line with the market (or relocated their factories). > These companies are not easily replaceable. If they were, another company would have replaced them by now. There are numerous companies that can replace the big auto companies. Toyota and Honda has been slowly replacing GM is most of the world markets (including the US). If either GM goes into bankruptcy and gets split up/sold off (e.g. Opel gets sold etc...). It would not be a bad thing. > Setting up an operation of that magnitude requires decades of experience and huge capital expenditures. Setting up a car manufacturer is not that impossible in the market. Over the past years there were 10s of new car manufacturers that started (and some failed). A good example is some Chinese companies such as GWM, Cherry. There is also no reason why existing car manufacturers can not grow to fill the gaps that GM leaves (as they have done for a long time – e.g. Hyundai, Honda, Toyota, etc...). > AMD employs 15,000. GM directly empl Starting a new x86 processor manufacturer would probably be impossible. The x86 is a patent minefield (to which only AMD and Intel have cross licenses to use each other's patents). Setting up a new generation fab can cost more than $5 billion. And if AMD goes Intel will have a monopoly. Both Chrysler, GM and Ford can disappear and there still will not be a monopoly.
markessien 18y ago
Look at it this way: If the individual is supposed to personally save for his own retirement, you'll have 20% or so that will not have any money when they retire. So your society, whatever it is, will have an extremely poor and old social class. These are the people who will also have the most problem with health care. When they get sick, the hospitals will not let them die - their medical care will be paid - by the government. Those people will turn to begging, alcohol and create a new class of homeless people. It's nice to want to put responsibility on the individual, but those 20% will make your society an unpleasant place to live in. Are you willing to deal with all this? Retirement has to be be made into an institution that runs on its own. Don't let people work their entire life, and then retire into hell.
- dkokelley 18y ago
  It's a matter of personal responsibility. Granted, there will be people who A: Don't save, B: Invest their savings foolishly, or C: Fall on hard times and burn through their savings, but guaranteeing a retirement income will push more people into the A and B categories. I believe that society should help people who fall into the C category, either through welfare programs or nonprofit organizations, but it hurts the rest of society when the people who acted responsibly are required to subsidize those who are in the A or B category. My argument is that it hurts society more to pay for the A and B people than it does to let the A and B people take the consequences of their actions. I argue that the more retirement is subsidized, the more people will rely on the subsidies. The only way to make retirement an institution that runs on its own is to make it the responsibility of the individual.
  - drusenko 18y ago
    Why would it be so bad to force people to save a percentage of their income? If you don't, and guarantee benefits for the C category, then there's a perverse incentive: don't save any money your whole life, get bailed out at the end. In any case, those who choose to not save any money for retirement (whether willfully or ignorantly) are a huge burden on society, one that the rest of us who did save will have to pay for. In that sense, examine this solution: we each have a "personal retirement account", with rules set up in such a way that you can only invest the amount of money above what would provide for a minimally sufficient retirement in "riskier" investments, such as the stock market, and you are forced to save 10% of your earnings into this account, which would follow you from job to job. End result: Everybody has a personally accountable retirement benefit that they directly contributed to their whole life -- it's their money that they saved, and their money that they get. You cannot place the minimum amounts at risk, but you are free to choose how to invest anything above the minimum amounts as you wish. Given that we (eventually) eliminate all social security obligations, we can also completely remove that tax, and several others that currently pay for it.

laut 18y ago

Why should the next generation of tax payers be forced to pay for them? People can save money, while they are working. It shouldn't come as a surprise that you get older every day.