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The US government has agreed to spend $36 billion to help pension funds of union workers, the White House said on Wednesday.
The move comes as Joe Biden, who is expected to sign an executive order soon that would roll back regulations protecting retirement savings, has vowed to make America's costly labour protections more affordable for businesses.
"This agreement represents a significant step forward in working together with employers and workers across America to improve workplace retirement security," said Gary Cohn, the director of the White House National Economic Council.
The deal was announced after President Joe Biden met with union leaders during his visit this week to Detroit, where he spoke about his support for organised labour and what he described as a "once-in-a-lifetime opportunity" for him and others in attendance.
Biden had already committed $1 million earlier this year toward helping employees unionise and create retirement plans at corporations such as Ford Motor Co and General Motors Co. The Biden administration is planning to pump nearly $36 billion into the pension funds of unionised workers, in a bid to avoid a future retirement crisis. The move is designed to keep retirements going strong, even as many baby boomers retire and their savings run dry.
The U.S. The Department of Labor announced Monday that it was joining with other federal agencies to increase employees' retirement benefits by $36 billion over the next nine years. The plan, which will be finalised this spring, will provide an average of $1,200 more per year in pension payments for all unionised workers who are employed by companies that have at least 500 employees and have been members of a union for at least five years.
The move comes as the number of workers covered by pensions has been steadily falling over time — from about 60 percent in 2000 to just under 50 percent today. That trend has worried economists and policymakers who worry that if fewer workers are contributing to their pensions, it could lead to underfunded pension funds that could force city governments or state governments to bail out their plans once they're no longer solvent.
President Joe Biden has decided to take a back seat on the debate stage during the 2020 presidential campaign, but not for long.
The former president announced Friday that he will travel to all 50 states and territories in the next several months to talk about issues facing blue-collar workers, including pension and retirement security. He said it is his “responsibility” to help ensure that Americans are not left behind.
Biden’s announcement came just days after he unveiled his new nonprofit, called “Biden’s Promise.” The organisation will focus on helping Americans make retirement more secure by offering advice and tools on topics such as investing, saving for college and protecting their savings from taxes.
The vice president said he wants to provide “a forum for people across America who work hard every day but struggle with retirement security.” He added that he wants everyone, including union members included, to have access to education on how they can save for retirement in case something happens tomorrow or next year.
The move comes after Mr Joe Biden promised during his election campaign that he would not allow any more American jobs to go overseas while he was in office. The White House said on Thursday that it was considering allowing the Federal Aviation Administration to help Boeing meet its tax obligations.
The move comes after Mr Biden said on Thursday: "When I'm president of the United States, we're going to make sure we are standing up for American jobs." US President Joe Biden's bid to avert a pension fight at Boeing has been met with scepticism by some Democrats.
