Yesterday New York Times labor reporter Steven Greenhouse (6/16/11) reported on efforts in several states to get public-sector workers to increase contributions to state pension funds–or, to put it more bluntly, to take a pay cut.
Political leaders are claiming this is simply the only thing they can do–and Greenhouse helps them make their case. Right from the start, Greenhouse frames the political shift as “the most definitive sign yet that the era of generous compensation for public-sector employees is ending.” Many studies have shown that public sector compensation isn’t actually all that generous, and such workers might lag slightly behind their private-sector counterparts.
Greenhouse presents the case:
The Pew Center on the States estimates there is a more than $1 trillion funding gap for government workers’ retirement benefits in the 50 states. At the same time, many voters resent that public employee pensions are generally better than their own.
A trillion dollars is a lot of money. But over what period of time? And is that figure correct in the first place? Dean Baker at the Center for Economic and Policy Research wrote a great paper (2/11) explaining the origins of the crisis–which is rooted mostly the housing bubble–and that the estimates of one or two trillion dollars were misleading in at least two ways: Such figures might not fully account for a recovery in stock prices (which would improve the outlook for pension funds, and thus reduce the funding gap), and expressing funding gaps as a dollar figure absent any context is rather useless.
Express the gap as a share of the economy, and things aren’t so alarming. As Baker wrote:
The size of the projected state and local government shortfalls measured as a share of future gross state products appear manageable. The total shortfall for the pension funds is less than 0.2 percent of projected gross state product over the next 30 years for most states. Even in the cases of the states with the largest shortfalls, the gap is less than 0.5 percent of projected state product.
But it’s Greenhouse’s language near the end of the piece that might be the most galling part:
But with tales of six-figure pensions and public employees comfortably retiring in their early 50s, many lawmakers say it is outrageous that some of these workers pay nothing out of pocket toward their pensions.
Six-figure pensions are, as you’d imagine, quite rare. And workers who “pay nothing” for their pensions actually do pay something–they get some of their compensation in the form of a retirement package instead of wages. But these very exceptional cases get a lot of attention, as Dean Baker noted in his critique of Greenhouse’s piece:
The media have been repeating tales circulated by right-wing and business organizations who are attacking public-sector workers and public-sector unions. In fact, the vast majority of public-sector workers do not retiree in their early 50s and do not enjoy especially generous benefits….
If the media had been doing a competent job reporting on this issue, legislators would be hearing tales of 70-year old retirees trying to get by on less than $20,000 a year. (Roughly 30 percent of public sector employees do not get Social Security.)
Journalists are supposed to challenge conventional wisdom and political rhetoric–not reinforce it. McClatchy‘s Kevin Hall wrote an exceptional piece on state pensions on March 6. We’d be having a very different political debate if more reporters were following his lead.
There appears to be no difference in the corpress between “covering” labor, and covering for management, does there?
Yep, I’m one of them. Retiree with state pension. 31 years as a teacher. 2.9% of salary went to pension benefit. 28k per year as retiree. Lucky? Yeah, though my family was eligible for food stamps because of my low salary early in my career. In the future pols will have us teachers on food stamps as retirees, too.
And today I recall NPR’s Morning Edition spending quite a bit of time reviewing a documentary about how beleaguered the NYT is… maybe it needs to just go away. We don’t need it anyway. This week was really great for finding people who are now talking about what they think politically. I actually found heavy duty conservative Christians who didn’t know that corporations are no longer paying taxes. That tells you how great a job Fox news is doing down here in the deep south… BUT, best of all, I found a pocket of folksup in Michigan who are unplugging their tv’s, ditching cable and getting their news on the internet. I sent them to the Alternet because it’s reasonably friendly for beginners (like me:).
Many contracts between the states and their employees arrange that the state pay part, and the employee pay part, of their eventual retirement benefits. When the states got squeezed because their revenue decreased, due to the Republican-caused recession, they “balanced” their books by telling their employees they couldn’t contribute “this year.” They got away with it, because no one wanted the states to have to cut services. Then some states decided to ignore their contractual agreements altogether, since the stimulus ran out and they were broke again. Now they blame their employees for having a decent pension plan to begin with, (and use the media to exaggerate the benefits, as noted above); pitting some of the poor and the middle class against the rest of us. The whole revenue crisis could be solved by collecting taxes from corporations and the millionaires, but Republican states keep transferring more wealth to the rich from the pockets of the rest of us.
The average CalPERS pension is about $25,000 per year. Half of CalPERS retirees receive $18,000 per year or less in benefits. Unlike the private sector, 40% of CalPERS retirees do not receive Social Security, making their CalPERS pension their sole source of pension income, other than savings.
Seventy-four percent of CalPERS retirees receive $36,000 per year or less. School pensioners in the CalPERS program receive on average $1,192.00 a month.
About 2 percent of the nearly half million CalPERS retirees receive annual pensions of $100,000 or more. Many are retired non-unionized or specialized skilled employees or other high wage earners who worked 30 years or more. Many served in high-level management positions
CalPERS pensioners help stimulate the economy. A study found that pension income to 674,000 CalPERS and CalSTRS retirees generated an economic impact of $21.1 billion to the State’s cities and counties. The economic footprint of retiree spending rivaled that of the hotel and accommodations industry of the State in 2006. In all, California public retirees put back $2 into the economy for every $1 they receive in pensions.
http://www.calpersresponds.com/myths.php/myth-public-pension-benefits-are-excessive
We do not use the word “propaganda” much, unless we are talking about a socialist country like the USSR or Cuba. It’s time we labelled much of what we get as “news” propaganda. Hard-working Americans who are fortunate enough to have a retirement and healthcare actually worked for it. They did not cause the melt-down of the financial system, but are being asked to pay for it by giving up their benefits. The private sector has already been laid waste by policies favoring finance and business, now they are going after the public sector. Maybe public sector employees should call a general strike to show their importance to everyday life. No schools? No firefighters? No police? No food inspectors? We can live without bonuses to bankers.
Mr. Hart: Do you send FAIR’s commentaries to the publications/writers who are the subject/s of your criticism?
I want a new job not yet even thought of.I want to work three days a week, 4 hours a day,no more than 5 months a year.I want full medical and dental and I don’t want to pay for it.I want to retire before Im 30 and I want a pension of 200K a year.I want all of this to be payed for by the scumbag rich(and no I dont give a shit if they worked 14 hours a day for six days a week for 40 years.Gimme your friggin loot.Or as my dad always said when I bemoaned him not giving me his cash that was rightfully mine….HOWS IT FEEL TO WANT?
Look I live in an area where teachers make up to 180 thou and pay near nothing for healthcare and little for their retirement.I know one prof who goes in a 12 does his e mails teaches a class and scoots home.Save it
In my life I never thought anyone else was ever going to care for me.I will work till I die Im sure.A deal is a deal to be sure,even a bad deal.But broke is broke.We are broke.
You’re off the deep end with this one, michael. We’re not broke, for one thing. Sorry. There’s plenty of money. It’s just that the rich are skimming more and more of it off the top and passing less and less of it along in the form of wages or taxes. So, yes, the infrastructure is suffering, but not for lack of money in the system. If there are x number of workers in a given corporation, and the CEO takes home 700 times more of the income generated by the work that everyone does, does that mean he works 700 times harder than anyone else in the company and that the other workers are a bunch of whiners if they want a fairer deal? Who’s pampered here?
Anyway, who decided that college profs are your enemies, michael e? Who told you their life is easy? They just teach a class and then “scoot home?” Really? Does it even matter in your world what they are teaching or whether or not they are bringing anything of value into this world? Who told you they don’t earn their pay? How do you decide that? What’s your job, anyway, that you are so proud of earning your living? How is it that you “care for yourself” without any help? What a claim.
What do you do to make this world a better place to live in? Do you even have a job? It seems to me that you spend an inordinate amount of time listening to talk radio, watching FOX news, then repeating it all back here for our edification. Don’t you have something useful to do?
I do. I’m done here.