Name: Pension Panic Fueled by Anti-Worker Politics? - Shadowproof
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Pension Panic Fueled by Anti-Worker Politics? - Shadowproof

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Pew Center on the StatesIt’s a common refrain in local papers: State faces pension funding crisis! Retiree benefits out of control! Public pensions bog down taxpayers!&nbsp;&nbsp;seem to&nbsp;&nbsp;like a&nbsp;, a dark reminder of Big Government’s tyrannical profligacy.Should we panic? Well, according to a&nbsp;, 61 cities face a collective fiscal retirement burden of more than $210 billion, in part because consistent underfunding of benefits leaves yawning gaps in long-term cost projections. The report surveyed all U.S. cities with populations over 500,000, along with the most populous city in each state. Some cities are doing better than others in maintaining funds, but gaps persist, according to Pew’s estimates for fiscal years 2007-2010, especially in municipalities where local governments have lacked the “fiscal discipline” to keep up&nbsp;pension fund contributions—a situation&nbsp;&nbsp;by the Great Recession.But different political actors have different motives for expressing&nbsp;. In some cases,&nbsp;&nbsp;have inflated public concern.Sometimes, politicians frame cost-cutting proposals as if “generous” benefits themselves are the problem, as opposed to officials failing to uphold the&nbsp;commitments they’ve made&nbsp;to&nbsp;civil servants.In New Jersey, brazenly conservative Governor Chris Christie&nbsp;&nbsp;that ostensibly shore up pensions by shifting costs onto beneficiaries, increasing employee contributions and freezing vital cost-of-living adjustments. But the long-term liabilities remained unresolved. Shortly after Christie trumpeted his pension fix, the&nbsp;New Jersey Star Ledger&nbsp;noted&nbsp;that&nbsp;liabilities would spike again after&nbsp;the&nbsp;stopgap measures petered out, warning, “because the state won’t be making full pension payments, the gap will swell again to $58 billion by 2019, according to the state’s estimates.”While such fixes may be temporary, they threaten to bring lasting pain for labor. After lawmakers approved benefit reform legislation in 2011, the Communications Workers of America&nbsp;&nbsp;as “anti-worker and anti-union” because it not only attacked benefits, but contained provisions that eroded unions’ collective bargaining rights, potentially undermining their leverage in future contract talks.Proposals by far-right groups such as Americans for Tax Reform, however, make Christie’s scheme look modest. Some pension alarmists have put a&nbsp;nuclear option&nbsp;on the table. Delicately ignoring the global chaos unleashed by financial markets in recent years, conservative groups have seized precisely this moment of crisis to&nbsp;&nbsp;as a fix for troubled public benefits systems.In Louisiana, pension troubles have&nbsp;prompted Governor Bobby Jindal&nbsp;to move toward dismantling&nbsp;altogether&nbsp;defined-benefit pensions (which provide stable long-term income in retirement) in favor of a&nbsp;. According to one actuarial analysis by the Louisiana State Employees Retirement System,&nbsp;,&nbsp;because eligibility restrictions would make the plan fail to meet a “Social Security equivalency test.” Since the current system of benefits effectively serves as a replacement for Social Security, a new scheme that falls short of that could ultimately heap extra costs on the state.Other states,&nbsp;, along with&nbsp;, have explored or implemented 401(k)-style restructuring schemes to replace traditional pensions.The Pew report does not explicitly endorse 401(k)-type plans as a blanket solution but flags it as one potential reform idea. At the same time, Pew researchers point out that healthcare costs, not pensions, could pose an even larger fiscal burden. That healthcare funding “cliff” raises a broader debate about the role of the state and employers (which are one and the same&nbsp;in the case of civil servants) in providing for workers’ and retirees’ health.The bottom line is that pension reform can be a political Trojan horse. The reaction to pension crunches reflects political priorities that are often hostile to workers. Across the country, governments have opted to protect their&nbsp;&nbsp;on&nbsp;at the expense of their commitments to&nbsp;future retirees and unions, who have seen benefits frozen or sharply cut.&nbsp;by&nbsp;progressive economists&nbsp;show that public-sector benefits&nbsp;tend to&nbsp;offset relatively low wages, so the overall compensation package is fair and by no means lavish, as right-wingers like Christie&nbsp;.Monique Morrissey, an economist at the labor-oriented&nbsp;,&nbsp;takes a different approach than anti-government politicians. In some cases, she acknowledges, state budget problems may require cuts or force renegotiations in benefit plans. But&nbsp;in her opinion,&nbsp;completely abandoning defined-benefit pensions (which are, on balance,&nbsp;) is pennywise and pound foolish. “With very few exceptions, all of the cities and states where there are severe problems, it’s because the politicians for many years have neglected to make the pension payments. And this really doesn’t have much to do with the pensions or the public sector workers,” she tells Working In These Times. “It doesn’t reflect the pensions being too lavish or being expensive or being unaffordable or anything to do with that. What it reflects is simply that this is one way of getting around balanced budget rules. And certainly some of these cities that are flagged as having problems are chronic offenders.”Meanwhile, pensions are&nbsp;&nbsp;and politicians are&nbsp;&nbsp;toward civil servants&nbsp;who have managed to hold onto&nbsp;a modicum of hard-earned retirement security.Instead of&nbsp;dismantling&nbsp;public sector benefits,&nbsp;local governments might address budget deficits by, say, making&nbsp;the tax system more progressive. As with many of the cries of “crisis” coming from the right,&nbsp;the&nbsp;obsession over public pension “unsustainability” too often takes a real problem&nbsp;of&nbsp;governments failing to uphold public promises and spins it into a&nbsp;false&nbsp;problem&nbsp;of&nbsp;workers supposedly demanding too much.Shadowproof is a financially independent news organization. All of our funding comes from small donations made by readers like you.We use your donations to hire freelance writers and cover our operating costs. Monthly membership subscriptions give us the stability we need to make plans while ensuring our organization does not depend on grants or major funders. If you like what you read, support our writers with a donation today.&nbsp;

Pew Center on the StatesIt’s a common refrain in local papers: State faces pension funding crisis! Retiree benefits out of control! Public pensions bog down taxpayers!&nbsp;&nbsp;seem to&nbsp;&nbsp;like a&nbsp;, a dark reminder of Big Government’s tyrannical profligacy.Should we panic? Well, according to a&nbsp;, 61 cities face a collective fiscal retirement burden of more than $210 billion, in part because consistent underfunding of benefits leaves yawning gaps in long-term cost projections. The report surveyed all U.S. cities with populations over 500,000, along with the most populous...

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Michelle Chen

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