This week, the Joint Select Committee on the Solvency of Multiemployer Plans is holding a hearing with academics and other parties with a direct interest in the multiemployer plan system. This hearing follows a field hearing in Ohio on July 13, which focused on current workers and retirees. While these are important groups to hear from, the fact is that all of us actually have an interest in the multiemployer system, whether direct or otherwise.
That’s because the struggles of the system could have a broad impact on businesses and jobs, as highlighted in a recent report from the U.S. Chamber. For employers that participate in plans, the impact is direct - high contribution rates make it difficult to provide competitive wages and benefits. Moreover, withdrawal liability and the threat of plan bankruptcies create credit risks for employers that can negatively impact lines of credit and prevent re-investment in the business.
The U.S. Chamber represents the employer voice; however, we are keenly aware that all parties are inextricably connected in this scenario. In addition to the impact on employers, active workers are seeing fewer and fewer benefit accruals and, in some cases, reduced wages. And some retirees are already experiencing reduced benefits payments. As the crisis grows, the impact could be felt beyond the multiemployer system through less consumer spending, decreased tax revenues, and possible increased reliance on social programs.
Solutions will not be easy, but they are necessary to address the looming crisis that, if left unchecked, will ultimately affect us all.