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When Sears Flourished, So Did Workers. At Amazon, It’s More Complicated

nytimes.com

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Re: When Sears Flourished, So Did Workers. At Amazon, It’s More Complicated

#81

Post by Tsubasachan »

chrisseaton wrote: post #23
whoisjuan wrote: post #14

Sears' huge pension liabilities was cited as one of the main reasons that prevented any possible re-structuring that could have saved the company when it was declining and heading to bankruptcy... I mean, let's be realistic here. For how long was Sears in this pitiful state?... Getting all that real estate + semi-established brand was a private equity's wet dream, yet nobody ever contemplated that option. And now tha…

> thankfully the pension benefit guaranty is not funded with tax revenues Who funds it then?

The US has a one trillion budget deficit. Do the math.

Re: When Sears Flourished, So Did Workers. At Amazon, It’s More Complicated

#82

Post by SmellyGeekBoy »

mtgx wrote: post #69
biocomputation wrote: post #38

Earlier quoted context omitted.

Yes, it's just this simple. I don't know why more people can't understand how basic this is.

The better question is - why are so many in such a hurry to defend billionaires?

I don't know, I think it's right to question journalists' motives in an attempt to keep them honest. This works both ways.

Re: When Sears Flourished, So Did Workers. At Amazon, It’s More Complicated

#83

Post by occamrazor »

sgt101 wrote: post #72
Aloha wrote: post #54

Earlier quoted context omitted.

If a company choose to not prefund its pension when times are good, they can't complain about it when times are bad.

Astonishingly in the UK it's actually illegal for companies to do this.

In Switzerland too, with some exceptions for public entities.

Still, many pension fund use very optimistic interest rates in their estimates.

Re: When Sears Flourished, So Did Workers. At Amazon, It’s More Complicated

#84

Post by y4mi »

Tsubasachan wrote: post #79
skookumchuck wrote: post #62

Earlier quoted context omitted.

> in good times Unfunded pension liabilities is how you have good times now and wreck the future.

Which is why you should fund them. A sizable part of my monthly salary is automatically diverted to my pension fund. Mandatory. There used to be a time when old people were poor. Now retirees are the economic engine.

> Now retirees are the economic engine.

There are two sides to that as well, however.

It's not just the few retirees that have a high pension which cause this... It's also the majority of young people not employed in tech getting increasingly shitty wages

Re: When Sears Flourished, So Did Workers. At Amazon, It’s More Complicated

#85

Post by chongli »

xg15 wrote: post #64
whoisjuan wrote: post #14

Sears' huge pension liabilities was cited as one of the main reasons that prevented any possible re-structuring that could have saved the company when it was declining and heading to bankruptcy... I mean, let's be realistic here. For how long was Sears in this pitiful state?... Getting all that real estate + semi-established brand was a private equity's wet dream, yet nobody ever contemplated that option. And now tha…

> Wanna increase salaries and stock grants? Sure, do it. Two quarters later Wall Street will fuck you up because your new shiny compensation model just shaved the company revenue. ... So that 5% of lost revenue is going to cost you 20% or 30% of market value, and now all those stock grants are 30% less valuable. So your great initiative just put you in a negative spiral. This basically, is what people mean when they…

businesses don't seem to have a choice

Sure they do. There are plenty of smart, prudent retirement plans for companies to offer to their employees that don't involve crippling liabilities down the road. Defined contribution pensions, tax free retirement accounts, dollar-for-dollar matching (up to a limit) etc.

Defined benefit pensions were a bad idea born of a "I'll be retired before then so let's kick the can down the road" mentality.

Re: When Sears Flourished, So Did Workers. At Amazon, It’s More Complicated

#86

Post by Mvandenbergh »

whoisjuan wrote: post #14

Sears' huge pension liabilities was cited as one of the main reasons that prevented any possible re-structuring that could have saved the company when it was declining and heading to bankruptcy... I mean, let's be realistic here. For how long was Sears in this pitiful state?... Getting all that real estate + semi-established brand was a private equity's wet dream, yet nobody ever contemplated that option. And now tha…

In many countries, it is illegal to under-fund your pension scheme for a significant length of time which avoids this problem. At any given time you can close the scheme and switch people to DB without a massive liability overhang that you need to close.

Eddie Lampert whined extensively about how hard the pension problem was making things for him. In a sense that is trivially true - extensive liabilities make it harder to run a profitable company - but it wouldn't have been an issue if they had been properly funding their pension liability all-along.

Re: When Sears Flourished, So Did Workers. At Amazon, It’s More Complicated

#87

Post by lotsofpulp »

Tsubasachan wrote: post #79
skookumchuck wrote: post #62

Earlier quoted context omitted.

> in good times Unfunded pension liabilities is how you have good times now and wreck the future.

Which is why you should fund them. A sizable part of my monthly salary is automatically diverted to my pension fund. Mandatory. There used to be a time when old people were poor. Now retirees are the economic engine.

In the US, pension means defined benefit pension plan, which are under the control of the company, not the pensioners. The people benefiting from the pension don’t have any say (or knowledge) properly funding them or investing the funds, and don’t know if they are being taken for a ride.

In my opinion, 401k with low fee target date funds are probably better all around.

Re: When Sears Flourished, So Did Workers. At Amazon, It’s More Complicated

#88

Post by lotsofpulp »

chrisseaton wrote: post #23
whoisjuan wrote: post #14

Sears' huge pension liabilities was cited as one of the main reasons that prevented any possible re-structuring that could have saved the company when it was declining and heading to bankruptcy... I mean, let's be realistic here. For how long was Sears in this pitiful state?... Getting all that real estate + semi-established brand was a private equity's wet dream, yet nobody ever contemplated that option. And now tha…

> thankfully the pension benefit guaranty is not funded with tax revenues Who funds it then?

Technically,the PBGC charges insurance premiums to the pension plans it insured (non taxpayer funded ones). Realistically, ther is no way the PBGC is sufficient to act as a backstop, so it is up to the federal US government to determine how much to pitch in when shit hits the fan.

Re: When Sears Flourished, So Did Workers. At Amazon, It’s More Complicated

#89

Post by kopo »

mruts wrote: post #75
kopo wrote: post #29

Earlier quoted context omitted.

These are "Passive" investors. Wall Street doesn't care about them. Reality reflects it.

That's just not true at all. Everyone's money goes into the same pot. And "passive" investments are essentially just crowd-sourced active investments.

For every dollar passive investors produce in the market active investors produce 22. Who do you think is paid more attention too?

Re: When Sears Flourished, So Did Workers. At Amazon, It’s More Complicated

#90

Post by pnutjam »

skookumchuck wrote: post #62
mlthoughts2018 wrote: post #26

Earlier quoted context omitted.

I don’t necessarily disagree with many of your points, but I think drawing attention to the end of Sears’ lifecycle is an unfair thing. Someday Amazon too will have an end of life, and employees and shareholders will get fucked over then too. The article also draws attention to how workers benefited _in good times_ at Sears, not near the end. And this is where the comparison is most meaningful, where Amazon is more q…

> in good times Unfunded pension liabilities is how you have good times now and wreck the future.

Destroying defined benefits was also a great way to kill wages.

Employee wages should be significantly higher at companies with 401k's, of course they aren't.

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