Outten & Golden: Empowering Employees in the Workplace

To Hell With Pensions: Let Them Eat Dog Food

June 29th, 2009 | Jonathan Tasini

The other day, I saw an amazing spectacle: a firefighter responded to a call to a burning building in New York City and, as he was dragging the fire hose to the fire, a crowd of angry people stopped him and said, “Stop. Your pension is too generous so don’t you dare put that fire out”. Absurd, you say? Well, yes–if you mean the intensifying attacks against the pensions people earn.

Yesterday, there was an attack against firefighters’ pensions in the pages of the Daily News:

Even in the midst of a deep economic downturn, New York City taxpayers are paying billions every year to provide city workers with retirement benefits that are extraordinarily generous by any standard.

Since fiscal year 2003, the taxpayer contribution to municipal workers’ pensions has more than tripled – to $6.4 billion in fiscal year 2009. At this rate, in four years, every working-age New Yorker will be putting an average of $1,250 a year into the pension funds of municipal workers.

We cannot keep giving new workers retirement benefits at the current levels.

Take current city firefighters, for example. They are entitled to retire after 20 years of service at half pay, with their overtime included in that calculation. In 2006, the last year for which data are available, the pension benefit for a newly retired firefighter averaged just under $73,000 annually. On top of that, many get another $12,000 every December as a “Christmas bonus” to bring the annual cash total to $85,000 – all of which is exempt from state and local income taxes.

That attack came from someone from the “Citizens Budget Commission”, a self-perpetuating organization which has zero grassroots links and is simply a front run primarily by corporate leaders in New York.

Today, The New York Times carries another attack:

Mayor Michael R. Bloomberg is sounding the alarm over New York City’s pension system these days, calling it “out of control.”

Costs have ballooned, he says, threatening to bankrupt the city. Municipal unions and lawmakers in Albany created the crisis, he suggests, and left the city holding the bag.

But interviews and budget records show that the Bloomberg administration itself is responsible for much of the growth in city pension costs over the last eight years, and has repeatedly missed opportunities to rein in the spending.

Since Mr. Bloomberg took office, city contributions to the pension system have jumped nearly five-fold to $6.3 billion, from $1.4 billion, and they now account for one out of every 10 dollars in the city’s budget.

A major reason: the mayor has given the city’s 300,000 workers generous pay increases, guaranteeing that they retire with bigger pensions, which are typically 50 percent of salary. Such raises force the city to make heftier payments to the pension system now.

So, let’s talk about the real world. The average pension for a transit worker in New York is about $20,000-a year–after a job that very few of the people who attack transit workers’ “generous benefits” would ever take. Other city workers’ pensions are in the low 30s. And firefighters’ pensions average around $70,000.

If you think for a moment about what the cost of living is in New York, that isn’t a lot of money even at the “high” end.

So, what is going on here? In the public sector, the hue and cry over “generous pensions” obscures a major point: the reason city and state governments are facing budget deficits is not because of “generous” pensions. Putting aside the most recent budget shortfalls made worse by the economic crisis, the real problem is that in New York–and in virtually every other state in the country–we’ve allowed the richest people in society to escape paying their fair share.

Last December, I pointed out that New York would easily have billions more in revenue to use for basic services if the wealthiest people in the state paid a fairer share of the dues that should be required in a decent society. It is ironic, indeed, that the very people who escape paying higher taxes are some of the very people who were at the helm–incompetently, one might add–of the financial industry which, with its spectacular collapse, wiped trillions of dollars in wealth held by regular people who believed, in the absence of a real pension, that their 401(k)s would provide a decent retirement.

Indeed, the hammering of pensions in the private sector–where a decent pension is increasingly a thing of the past–is directly related to the ideological assault in the private sector. The “free marketeers” are clever–they can whip up the public’s anger about “generous” public employee benefits by effectively saying to people whose pensions in the private sector are evaporating, “look over there, people, at those overly generous benefits YOU are paying for”. It is the classic Henry Ford strategy about dividing one half of the working class against the other half. And it makes people blind and distracted–and prone to forgetting about the transit worker who gets them to work, the firefighter down the street who their kids look up to and the rest of the army of people who make life run in our society.

As progressives, though, we have to fight this ugly strategy. The answer should not be: someone doesn’t deserve a decent pension because I don’t have one. It should be: everyone deserves a decent pension and, if the very wealthy would stop for a moment from avoiding their responsibility in the public sector (by paying a fair share in dues) and stop the wide-scale looting of the wealth created in the private sector (by ending the enrichment of a handful of CEOs and top executives who reap millions of dollars in pensions benefits while the rest of the workforce gets crumbs), everyone could retire with dignity and respect.

Now, where are our political leaders with that message?

I am curious to hear about stories about the attacks against pensions in other places.

About the Author: Jonathan Tasini is the executive director of Labor Research Association. Tasini ran for the Democratic nomination for the U.S. Senate in New York. For the past 25 years, Jonathan has been a union leader and organizer, a social activist, and a commentator and writer on work, labor and the economy. From 1990 to April 2003, he served as president of the National Writers Union (United Auto Workers Local 1981).He was the lead plaintiff in Tasini vs. The New York Times, the landmark electronic rights case that took on the corporate media’s assault on the rights of thousands of freelance authors.

This article originally appeared in Working Life on June 23, 2009. Re-printed with permission by the author.

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