Corporations Will Likely Follow Patriot to Ax Retirees
Friday, May 31, 2013
CHARLESTON, W.Va. – Observers of corporate bankruptcies say the ruling in the Patriot Coal case will open the door to other corporations that want to shed retiree obligations.
In a controversial decision Wednesday, a bankruptcy judge in Missouri ruled that the coal company could slash health and pension benefits as it restructures.
Economist Teresa Ghilarducci says Patriot has been especially aggressive about using the bankruptcy process to break the retiree parts of employee contracts, but it's not just Patriot.
"In fact there are many bankruptcy situations in which it seems that the primary reason the troubled company is going all the way to bankruptcy is in order to shed those obligations," she says.
The decision could allow Patriot to eliminate healthcare benefits for more than 20,000 retired miners and family members.
Patriot Coal says it has to slash costs to remain viable. The United Mine Workers says the company planned to abandon the retirees from the day it was founded in 2007.
The Patriot retirees could end up in a public healthcare trust administered by the mineworkers union. The federal government's Pension Benefits Guarantee Corporation has absorbed the pensions of other bankrupt companies. Both have been under-funded.
Sean O'Leary, policy analyst with the West Virginia Center On Budget & Policy, says retirees might end up having to depend on Social Security, Medicare and Medicaid – all part of a shift of costs from the company to taxpayers.
"A shift from what was a private business providing a pension to people on public services,” he points out. “And the end result of that creates a great deal of strain on our public services."
O'Leary adds the background to this story is a falling number of good paying industrial jobs and a decline in union membership. He says that tilts contract negotiations, and legal fights, in favor of the corporations.
"Fewer and fewer employees covered by unions,” he says, “that not only are there fewer companies offering those benefits, but it's possible for those who have those benefits to have those taken away. That could be a scary thing for a state like West Virginia."
get more stories like this via email
Since its inception, Earth Day has been an occasion to advocate for a cleaner planet - but in 2022, climate change is bringing a higher level of …
Health and Wellness
While many Americans have resumed normal lives after the past two years, the COVID pandemic has not gone away, especially if you have a pre-existing …
An initiative that would repeal Washington's capital-gains tax on the state's richest residents is struggling to gain traction. Initiative No…
Oregonians are casting their ballots for Tuesday's primary election. One issue affecting many voters is access to child care. Courtney Helstein…
Gov. Tom Wolf, lawmakers and community leaders are calling on the General Assembly to pass legislation that would send checks of up to $2,000 to …
About half of Latinos either lost a job or had their wages cut during the pandemic,according to a recent survey from Pew. Now, AARP is offering a …
During the first year of the global pandemic, medical consumers in Colorado received more than one million low-value healthcare services - diagnostic …
May is mental health awareness month. As part of that, groups in Idaho are using HOPE Week to help kids in crisis and reduce the state's worrying …