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Force Corporations to Focus on the Family
Published on Monday, July 18, 2005 by the Baltimore Sun
Force Corporations to Focus on the Family
by Steven K. Wisensale
 
Anthropologist Joseph Campbell once provided us with a wonderfully concise history of Western civilization.

In the early years, he said, the church steeple was the tallest structure in the community because religion mattered most. As government grew in size and importance, the steeple was dwarfed by the capital dome or the town hall tower. More recently, both the steeple and the dome have been dwarfed by the corporate skyscraper as business has become the driving force in Western civilization.

Today, more than half of the 100 biggest economies in the world are not countries but corporations. Many politicians assure us that the dominance of such gigantic firms represents a new ownership society, which will empower the millions of people who work in corporate America or invest in its stock. But it's difficult to imagine how an ownership society based on privatizing Social Security and other government insurance programs can work while private pension programs are collapsing and working people's traditional job protections are being slashed.

An example is the recent decision by a bankruptcy court to allow United Airlines to terminate its pension plans. United's four pension plans cover 14,100 pilots, 36,100 ground employees, 28,600 flight attendants and 42,700 managers and administrators, for a total of 121,500 workers.

But the impact of losing one's full pension goes far beyond individuals. It affects not only the worker's spouse but also the adult children who have made their own work and family decisions on the expectation that their parents would be financially independent and self-supporting. Therefore, assuming that on average at least three people are related to each United employee and are counting on the pension to some degree, the total number affected by the collapse exceeds 360,000. And the United layoffs are just the beginning.

The media may tell us how much the pilots, flight attendants and baggage handlers will lose, but didn't any of them ever marry or create families? How will United's pension collapse impact the families who will be directly affected? And in light of the debate about privatizing Social Security, will the newly proposed ownership society prevent such disasters in the future, or merely serve as an enabler for more to occur?

In 1987, President Ronald Reagan issued an executive order requiring government agencies to file family impact statements before implementing any decisions that affect families. Government agencies were instructed to "identify proposed regulatory and statutory provisions that may have significant potential negative impact on the family's well-being and provide adequate rationale on why such a proposal should be submitted."

Mr. Reagan's order originally was tied to the assumption that government was the main threat to family stability and family values. It assumed that only government policies, not corporate decisions, could harm families. But for years, corporations have been getting off the hook for their share of responsibility for the well-being of America's families. The time for change is upon us.

That said, Congress should act on two fronts.

First, it should move forward on pension reform legislation, such as the Pension Protection Act that was introduced in the House last month. It would require employers to meet a 100 percent funding target for their pension plans in five to seven years and raise the premiums companies are required to pay the federal Pension Benefits Guarantee Corp. from $19.50 per year per employee to $30 or higher, if needed.

Also included should be stricter rules on companies terminating pension programs and limitations on executive compensation arrangements, or so-called golden parachutes, if a company's pension program is underfunded below a designated threshold.

Second, Congress should adopt a family impact statement that applies to corporate America. Patterned after the environmental impact statement, it would have to be filed by any company that shuts down, files for bankruptcy, downsizes or declares its pension program underfunded.

Whether it is a matter of underfunded pensions or outsourcing of jobs, more CEOs and policy-makers need to view these issues through a family lens with one guiding question always in mind: Does this corporate action strengthen or erode the stability of the family?

Steven K. Wisensale is a senior scholar at the Council on Contemporary Families and a professor of public policy in the School of Family Studies at the University of Connecticut.

Copyright 2005 Baltimore Sun

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