PRIVATIZATION: BAD FOR WOMEN

The wingnuts are quite fond of the magical fairy tale that is the privatization of Chile's social security. In fact, there's a nice little puff piece on the op-ed page of the New York Times this morning.

I thought I'd, you know, add a little balance. Handy facts:

1) The Chile plan was imposed by a military dictatorship. Not that it would be a problem here, of course.

2) The plan was careful to exempt members of the military, whose members continue to receive state pensions.

3) Administration costs run 15-20% to as much as 30% on the smallest accounts. Since women are lower paid, it's an extra financial burden.

4) The change to private accounts was driven more by the need to boost Chile's savings rates and develop domestic financial markets than by problems with the state system. That's also what's happening here, no matter what trumped-up reasons the wingnuts give.

5) Chilean women generally receive lower benefits because of time taken off to raise children. The previous system added benefits per child raised; that was lost under the private "gender-neutral" system. And because they live longer, and have a less stable employment history because of raising children, they actually end up with a lot less money than the state-run system. (More of those great family values we hear so much about!)

6) Divorce is also a problem, because now, instead of a divorcing woman having a guaranteed pension, the private account is merely another asset to be negotiated.

Generally speaking, privatization looks like a real loser for women. And that's how the Democratic party needs to sell it.
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