Pension Dispute at Boeing: Desire for the Return of the Safety Net

In the modern workforce of the private sector, pension plans have become a rarity. According to the Congressional Research Service, the number of actively participating Americans in pension plans decreased from 27 million in 1975 to 12.6 million in 2019. As of March 2023, only 15% of private sector employees had access to such pensions, reports the Bureau of Labor Statistics. Against this backdrop, participation in 401(k) plans, profit-sharing, and similar models has significantly increased – from 11.2 million in 1975 to 85.3 million in 2020. The shift from guaranteed pension payments to self-directed savings and investment plans poses challenges for many Americans. "401(k)s are not the solution; they are a failed attempt for millions," said Karen Friedman of the Pension Rights Center. Boeing has made it clear that reactivating traditional pension plans is unthinkable, as they are financially untenable. Analysts from Bank of America estimate the cost for Boeing at $25 billion over 15 years. This amount seems unacceptable from Wolfe Research's perspective. The ongoing discontent of the union stems from a 2014 contract that froze pensions after Boeing threatened to relocate production. The union insisted that longstanding grievances must be rectified. Other union efforts to restore pension plans have also been unsuccessful so far. However, the IBM case shows that exceptions are possible, although maintaining pension plans remains difficult due to regulatory and financial requirements. Should Boeing make a move in this area, it could have a signaling effect on other negotiations, as expert Copeland notes.