Poor Chileans labor past retirement

[Rose Siding]

snip>

Already five years past the legal retirement age for women in Chile, Moya, 65, continues to toil as a medical technician for patients with AIDS, tuberculosis, and other infectious diseases, though her immune system is weak from radiation therapy for breast cancer. She desperately wants to retire but can't, she said, because her private pension would be less than 30 percent of her $1,738 monthly salary. She would no longer be able to afford quality health insurance to cover chemotherapy and prescriptions.

Her 71-year-old husband, who has leukemia, is still working as an accountant at the University of Santiago, because his pension would be only 20 percent of his $2,127 monthly salary.

''I think we have done our duty and should be allowed to rest after working for 40 years," Moya said, tears streaming down her face.

At a time when President Bush has made overhauling Social Security a central objective of his second administration, he and other proponents of privatization have held out Chile, the first in the world to privatize pensions in 1981, as a role model.

http://www.boston.com/news/world/latinamerica/articles/2005/02/28/poor_chileans_labor_past_retirement/

[shoelace414]

1. It annoys me that

Chili and British failures aren't widely reported.

liberal media my ass.

[Warren Stupidity]

2. great article!

This should get kicked. The chilean 'experiment' is the blueprint for what they want to do to us.

[bluestateguy]

3. Was the Chilean system voluntary?

Did people have the option of staying in the government run system?

[Warren Stupidity]

7. yes and no, its complicated (and corrupt). read the link.

It is interesting stuff. Note the 'fueled the capital markets' line that is sort of tossed in. Here is the thing: the boomers are going to exert a steady downward pressure on the 'capital markets' as they withdraw their 401ks and IRAs to pay for their retirement. This means something like 30 years of a stagnant stock market. Ugh. How is Wall Street going to keep itself in beemers and mini-mansions?

More on the fueled the capital markets:
"For those who contribute, private funds have yielded high rates of return, an average of 10.3 percent a year, said Arthur, the minister of Labor and Social Security under the military regime. Deducting fund managers' commissions, the real profitability of net deposits was 6.3 percent, according to economist Manuel Riesco, author of the study by the Center for Alternative Development."

The Globe article falls into dishonesty here fail to take into account the 'starting from zero' effect where the private accounts were used in 1981 to forcibly jumpstart a failed chilean capital market. In reality the 'real profitiability' over the long term is estimated at 2-5%, which is in fact comparable to our paygo system, only our system has little risk while privatized systems have lots of risk. What has little risk in a private system is Wall Street: the brokers will have a 'baked in' risk free revenue source - us.

[still_one]

4. didn't they use the chile model as a selling point

[Warpy]

5. They did, and they still do

what happened in Chile is that the service charges (15% per year) ate up much of the principal that people were setting aside into those accounts.

The rich did all right, since they could well afford it.

People of ordinary means and the poor got totally screwed.

This is exactly what Bush wants for us.

Bush retirement: Don't get old

Bush health care: Shut up and die

[yellowcanine]

6. Milton Freedman advised Pinochet on how to set up the private accounts.

Sounds like it is working just ducky - of as the WSJ would say - "aren't they just lucky duckies that their pensions are so small that they will probably qualify for all kinds of government assistance? Oh, there is no government assistance? Never mind.

Maggie Thatcher's little experiment with private accounts is pretty much a bust in Britain as well.

[SoCalDem]

8. This is what awaits the US elders.. But I AM a bit surprised

that they are earning $3865 a month.. That actually seems quite high. Chile's economy must have really rebounded..