Jun 30 2005
Pension Anchor
Pittsburgh Brewing has been struggling since the demise of the steel mills for a variety of reasons. Revived again and again with public support, this time it appears the brewery needs to fish or cut bait. That means dumping the pension program that requires massive contributions relative to cash flow. If you’ve been a regular reader or attended our most recent economics forum, you know this is a trend going on around the country, and is a taxpayer liability that could make the savings and loan bailout of the 1980s seem tiny by comparison.
I thought this local article was a good read because, while it fails to address the extra burdens the heavy pro labor mentality Pittsburgh places on its employers, it summarizes for the PBGC (the regulatory body of pension) a few items of regulatory cost that are contributing to this predicament. The boiler that fails the environmental inspection for emissions is just such an item. Note also the mandatory taxes for unemployment insurance. Of course, PA is particularly unfriendly to its businesses, and the City of Pittsburgh just piles on.
Smaller businesses will always have problems meeting such overhead in comparison to their larger competitors. It should be noted that this is just the type of environment that leaves the Wal-Mart’s and Budweiser’s of the world as the “last man standing”… or rather, the only ones who have the critical mass required to budget the swarms of compliance and legal personnel required to play ball in our inanely over-regulated and politically-dependent environment.
And in the same breath, we have the gal to blame those who are best at playing by those rules instead of blaming ourselves for voting for a system that makes China a better place to do business than the good old U.S. of A.
In many ways I don’t feel too badly for the poorly run and branded operation, and I absolutely do not condone throwing taxpayer money into a bailout for them. But I will miss having the ritualistic pre-game Iron City Beer before each Steelers’s game should the brewery finally go under.
Whatever the case, we can only hope for our nation that the pension system does not collapse as some predict. And as the saying goes, never bet a dollar on hope alone.
