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Category: pensions

Detroit firefighters and police face pension cuts with no safety net. Not even Social Security.

Posted on by Laura Clawson
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Laura ClawsonLosing a pension you’ve worked years to earn is a nightmare scenario, one that can change a comfortable, secure retirement into one filled with worries and penny-pinching as Social Security goes from being part of your retirement income to all of it. For public workers in many places, including firefighters and police in Detroit, it’s a doomsday scenario, because they don’t get Social Security at all.

About 30 percent of public employees nationwide aren’t covered by Social Security; government workers weren’t covered by the program at its inception and while many have been moved under its umbrella over the years, some cities, towns, and states continue to run pension plans that don’t include Social Security. Detroit’s firefighters and police are in that group:

Of the nearly 21,000 city retirees now collecting pensions, 9,017 retired police officers, firefighters or their surviving spouses don’t get Social Security, or about 44 percent of all city pensioners.

For those who have worked in other jobs for long enough to qualify for Social Security, those benefits are reduced by a percentage of their Detroit pension. That’s not a lavish pension, by the way: The average annual police pension in Detroit is $30,000, compared with $58,000 in Los Angeles, $47,000 in Dallas, and $42,000 in Kansas City. And public workers’ pensions, unlike the pensions of many private sector workers, aren’t insured by the federal Pension Benefit Guaranty Corporation, meaning if they lose their Detroit pensions, that’s it, there’s no safety net to catch them.

What we’re talking about here are workers who spent decades earning less than they might have elsewhere in exchange for the promise of a secure—though not lavish—retirement. And now they face the very real threat of being left with a small fraction of what they earned and need to live on. They kept their promises to the city of Detroit. It must keep its promises to them.

This article originally posted on Daily Kos Labor on August 12, 2013.  Reprinted with permission. 

About the Author:  Laura Clawson is the labor editor at Daily Kos


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Banking On Bankruptcy: Emails Suggest Negotiations With Detroit Retirees Were Designed To Fail

Posted on by Alan Pyke
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Even before one of their own was appointed emergency manager of the city, lawyers who were consulting with Michigan officials over the winter believed Detroit should move into bankruptcy proceedings that would free the city to walk away from its commitments to retirees. Emails between Kevyn Orr — now Detroit’s emergency manager but at the time an attorney for the law firm Jones Day — and his colleagues show the lawyers believed moving directly to bankruptcy would be better for the city than going through a serious negotiating process.

In one email, an assistant to Gov. Rick Snyder (R) promises to set a meeting between Orr and someone “who is not FOIAble,” suggesting an intent to evade transparency laws. In another, Jones Day lawyers suggest to Orr that elevating Detroit’s bankruptcy in national media coverage would “give you cover and options on the back end to make up for lost time there.” Orr rejected that suggestion as unhelpful. Jones Day continues to represent Detroit in the proceedings, which could take a year or longer.

The messages made public thusfar show Jones Day attorneys defining bankruptcy as inevitable in their own words.

“It seems that the ideal scenario would be that Snyder and Bing both agree that the best option is simply to go through an orderly Chapter 9 [bankruptcy],” one Jones Day attorney writes to Orr in the emails. “Appointing an Emergency Manager, whose ability to actually do anything is questionable given the looming political and legal fights, would only serve to kick the can down the wrong path and unreasonably delay any meaningful resolution of Detroit’s problems.” Defining bankruptcy as the only route to a “meaningful resolution of Detroit’s problems” casts further doubt on the intent of the negotiations that followed Orr’s appointment in March, but a spokesman for Orr called those doubts “absurd.”

The emails were released in response to a Freedom of Information Act request by Robert Davis, a local labor activist with a troubled history. Davis faces federal corruption charges over school board funds that were spent on an advertising campaign. When the charges were filed in 2012,Davis called them politically motivated and said he is innocent.

One January exchange shows Orr reluctant to take on the emergency manager job, and concerned that the law empowering Gov. Rick Snyder (R) to appoint such officials “is a clear end-around the prior initiative that was rejected by the voters in November.” One January 31, Orr wrote that the entire emergency manager system “appears to merely adopts [sic] the conditions necessary for a chapter 9 filing.”

Orr’s assessment of the emergency manager process reinforces retiree advocates’ arguments that Orr’s actions once appointed were not good-faith negotiations with city employees, but an effort to check necessary boxes prior to filing for bankruptcy. In June, when Orr issued a proposal to retirees and bondholders in lieu of declaring bankruptcy, analysts wrote that the proposal appeared designed to be unpalatable, paving the way for the bankruptcy filing. Orr and Snyder have made clear that the bankruptcy resolution will include some cuts to retiree benefits, which are about $1,600 per month for most of the city’s 21,000 pensioners. “They made me some promises, and I made them some promises,” 76-year-old retired police sergeant William Shine told the New York Times. “I kept my promises. They’re not going to keep theirs.”

Some legal hurdles may prevent the city from reneging on pension promises in bankruptcy, but the outlook is uncertain.

This article originally posted on ThinkProgress on July 23, 2013.  Reprinted with permission. 

About the Author:  Alan Pyke is the Deputy Economic Policy Editor for ThinkProgress.org. Before coming to ThinkProgress, he was a blogger and researcher with a focus on economic policy and political advertising at Media Matters for America, American Bridge 21st Century Foundation, and PoliticalCorrection.org.


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Strong Grassroots Actions Block Mass. Pension Scheme

Posted on by Mike Hall
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Image: Mike HallUnion members in Swampscott, Mass., this week showed just how grassroots democracy works when a coalition of unions from the North Shore Labor Council mobilized to turn back an attack on public employees’ health care and retirement security.

First a little background. In the Bay State, municipal employees’ health and retirement benefits, while negotiated on a local level, are part of a state-administered system. However, a Massachusetts “Home Rule Petition” law allows cities and towns to seek exemption from certain state laws and regulations.

In February, Swampscott’s Board of Selectmen voted 3-2 to seek a Home Rule Petition to cut town workers’ pensions by moving from the state system’s defined-benefit plan to a self-administered defined-contribution plan, and to change health care benefits. But a Home Rule Petition must be approved at a Town Meeting. In Swampscott, a town of about 14,000, that meant approximately 250 voter-elected Town Meeting members had to give the OK.

That’s when union members went to work to convince Town Meeting members that not only would the changes proposed for the teachers, firefighters, police officers, librarians and other public employees hurt the workers, it would save no money and be a major financial risk for Swampscott.

With a few months before the May 6 Town Meeting, unions and the labor council mapped out a mobilization strategy that included leafleting and neighborhood door knocking by union members, spotlighting the danger of the Home Rule Petition scheme. Postcards to each union member in town urged them to get in touch with their Town Meeting member—more than likely a neighbor or friend—to vote against the cuts to health care and retirement.

On May 6, the hard work paid off when the Home Rule Petition was defeated by better than a 3-to-1 margin.

The unions that carried the campaign to victory included AFSCME, Fire Fighters (IAFF), MassCOPS (an IUPA affiliate) and NEA.

This article was originally posted on the AFL-CIO on May 10, 2013. Reprinted with Permission.

About the Author: Mike Hall is a former West Virginia newspaper reporter, staff writer for the United Mine Workers Journal and managing editor of the Seafarers Log. He came to the AFL-CIO in 1989 and have written for several federation publications, focusing on legislation and politics, especially grassroots mobilization and workplace safety.


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Just When You Thought the Hostess Story Couldn’t Get Worse…

Posted on by Kenneth Quinnell
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Kenneth Quinnell

Money that was intended for employee pensions was used by Hostess Brands management to cover operating expenses and workers were never compensated for the lost payment, Yahoo News reports. An undetermined amount of money that Bakery, Confectionery, Tobacco Workers and Grain Miller (BCTGM) members were supposed to receive as part of their contract with the company was used to keep the company running after mismanagement led to significant losses and eventual bankruptcy. 

This was during the same time period that Hostess began paying out massive bonuses to executives. BCTGM learned that the then-Hostess CEO was to be awarded a 300% raise, and at least nine other top executives were to receive raises ranging between 35% and 80%.

The process of taking the pension money was quite simple for Hostess:

For example, John Jordan, the local union financial officer for [BCTGM] Local 334 in Biddeford, Maine, said workers at a Hostess factory in Biddeford agreed to plow 28 cents of their 30-cents-an-hour wage increase in November 2010 into the pension plan.

Hostess was supposed to take the additional 28 cents an hour and contribute it to the workers’ pension plan.

Employees never saw that 28 cents. In July 2011, Hostess stopped making pension contributions and used the money to run the business. Employees never received the pension funds and the compensation Hostess promised the workers was not made up in wages, either.

In all likelihood, the tactic doesn’t violate federal law because the money didn’t get paid to employees first, but went directly to the pension fund. Lawyers call the situation “betrayal without remedy” and it’s unlikely the money can be recovered.

Hostess CEO Gregory Rayburn’s response ranged from understatement to “it’s not my fault.”

Gregory Rayburn, Hostess’s chief executive officer, said in an interview it is “terrible” that employee wages earmarked for the pension were steered elsewhere by the company.

“I think it’s like a lot of things in this case,” he added. “It’s not a good situation to have.”

Mr. Rayburn became chief executive in March and learned about the issue shortly before the company shut down, he said. “Whatever the circumstances were, whatever those decisions were, I wasn’t there,” he said.

Rayburn’s predecessor at Hostess, Brian Driscoll, refused to comment.

The end of pension contributions by the company was a key reason for the BCTGM strike:

Halted pension contributions were a major factor in the bakers union’s refusal to make a deal with the company. After a U.S. bankruptcy judge granted Hostess’s request to impose a new contract, the union’s employees went on strike. Hostess then moved to liquidate the company.

“The company’s cessation of making pension contributions was a critical component of the bakers’ decision” to walk off the job, said Jeffrey Freund of Bredhoff & Kaiser PLLC, a lawyer for the union.

“If they had continued to fund the pension, I think we’d still be working there today,” said Craig Davis, a 44-year-old forklift operator who loaded trucks with Twinkies, cupcakes and sweet rolls at an Emporia, Kan., bakery, for nearly 22 years.

The amount of employee compensation lost by the company is not known, but the numbers are staggering:

In five months before this past January’s bankruptcy filing, the company missed payments to the main baker pension fund totaling $22.1 million, Mr. Freund said.

After that, forgone pension payments added up at a rate of $3 million to $4 million a month until Hostess formally rejected its contracts with the union. The figures include company contributions and employee wages that were earmarked for the pension, according to Mr. Freund.

This post was originally posted on AFL-CIO on December 11, 2012. Reprinted with Permission.

About the Author: Kenneth Quinnell is a senior writer for AFL-CIO, and a former precinct committeeman in the Leon County Democratic Party. He is a former vice chair of the Florida Democratic Party’s Legislative Liaison Committee, and during the 2010 election, through the primary, Kenneth Quinnell worked for the Kendrick Meek campaign. He has written for Think Progress, AFSCME and for OurFuture.org on Social Security.


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Where Did All Our Pensions Go?

Posted on by Jackie Tortora
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A total of 84,350 pension plans have vanished since 1985. This figure shocked Pulitzer Prize-winning authors Donald L. Barlett and James W. Steele, who just released their latest book, “The Betrayal of the American Dream.” Their chapter on retirement chronicles the heist of the American dream’s secure retirement by the financial elite and is a very important section of the book, says Steele, who spoke with the AFL-CIO about the retirement crisis. Steele says there is another number we should pay attention to: $17,686. That’s the median value of 401(k) accounts in 2011. For most working people, the amount in their 401(k) account would pay them less than $80 a month for life.

“What’s happening with retirement is almost parallel to what you see happening in other parts of the economy,” says Steele.

The elite has its agenda to eliminate pensions with the shift to 401(k)s, which cost companies less. Now, there’s a revenue stream for Wall Street and an obligation shift to people with little or no experience understanding how to deal with their own retirement issues….This is typical of all the other things the economy elite has been doing for decades with deregulation, unrestricted free trade and tax cuts—these things are all related.

“In the ’50s, ’60s and ’70s, the amount of workers with access to pensions was significantly rising,” says Steele. “We fully underestimated the speed in which the downturn would occu, and how Congress went along and encouraged it.”

Barlett and Steele write that the shift from defined-benefit pension plans to 401(k)s began in the 1980s. Companies realized 401(k)s would substantially reduce corporate costs. Workers were told that pensions no longer made sense and were outdated since people moved around from job to job. The 401(k) was marketed as more “portable.”

Steele says 401(k)s were engineered by corporations as another way for the wealthy executives to set aside money. They were never intended to be a principal retirement plan, only a supplement.

“Once corporate America got on to this, the idea took root,” says Steele. “The entire obligation shifted to the employees.”

Congress ignored the concerns raised by trade unions and other pension rights organizations. And the consequences are dire for middle- and lower-income workers.

“This is so typical of what has been happening over the last two to three decades,” says Steele. “This is the slow, steady erosion of economic security Americans had (or thought they had)….Now economic pundits, corporate folks and Wall Street people are saying people just have to work longer, in part because retirement plans now in place will not provide much security to people as they get older.”

Barlett and Steele feature stories of average people who did everything right (saved, worked hard) but are still living on the edge of poverty because of policies that enhance the rich at the expense of everyone else.

Over and over again, people thought they had something good. They were working hard and then, through no fault of their own, lost it all. Most people we talked to in the book are employed.

People thought it was something they had done to lose their job or benefits….They didn’t realize it was part of a broader pattern. There are great swaths of working people who are affected and we think it’s our fault. For most of these people, it’s not their fault, it’s just the way policy has been organized. Systematically dismantling pensions and retirement is the perfect example.

With the decline of pensions, it’s even more important to strengthen, not cut, Social Security benefits. Although the country dodged a bullet in 2005, when Bush’s plan for Social Security privatization fizzled, Steele says we still need to be vigilant to protect our benefits from the Wall Street casino.

Don and I make this point that the 2008 recession wouldn’t look a whole lot different from the Great Depression if we didn’t have Social Security and Medicare because there was no safety net then.

The economic elite, says Steele, attack Social Security because it’s a large pool of money for Wall Street to play with.

Nobody should kid themselves that they’re not going to come back and try to implement some parts of that [privatization]….The amount of money at stake is too good and that’s all they care about—access to that money, not American workers.

You can purchase “The Betrayal of the American Dream,” on Amazon.com and Barnesandnoble.com.

This post originally appeared in AFL-CIO Now on October 7, 2012. Reprinted with permission.

About the Author: Jackie Tortora recently joined the AFL-CIO as the blog/social Media editor. Before that, she was a Social Security and Medicare advocate for a national seniors’ organization.


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Support Grows for Striking Verizon Workers’ Fight for Middle-Class Jobs

Posted on by Mike Hall
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Image: Mike HallThe huge crowd outside the Verizon Center in downtown Washington, D.C., Saturday wasn’t there for a basketball game or concert. They came to tell Verizon to stop its attack on middle-class jobs.

The Verizon Center demonstration and dozens and dozens of other actions at Verizon worksites and Verizon Wireless stores are part of the growing support for the 45,000 Communications Workers of America (CWA) and Electrical Workers (IBEW) members forced on strike by Verizon Aug. 6.

Photo credit: Scott ReynoldsThe company, with $32.5 billion in revenue in the past three years, is demanding $1 billion in concessions from workers, which amounts to $20,000 per Verizon worker per year. While talks resumed last week, those demands remain on the table. Says CWA Communications Director Candice Johnson:

If wealthy companies like Verizon can continue to cut working families’ pay and benefits, we will never have an economic recovery in this country. This is a fight for all middle-class working families.

Verizon’s demands include outsourcing jobs overseas, gutting pension security, eliminating benefits for workers injured on the job, eliminating job security, slashing paid sick leave and raising health care costs.

CWA filed unfair labor practice charges against Verizon Aug. 12 with the National Labor Relations Board (NLRB), charging the company with refusal to bargain in good faith.

Union workers and community allies are joining striking CWA and IBEW members on the picket lines. Barbara Smith of CWA Local 1109 In Brooklyn, N.Y., told Labor Notes that when Verizon Wireless pickets are up:

pedestrians stop and thank us because they understand that this fight is about more than Verizon.

While Verizon is demanding that workers take home less, it paid its top five executives more than $258 million over the past four years, including $80.8 million for its former CEO Ivan Seidenberg. Friday night, more than 500 CWA, IBEW members and their allies held a candlelight vigil outside Seidenberg’ West Nyack, N.Y., home.

They carried a coffin to symbolize the death of the middle class. CWA Local 1101 member Ron Canterino, told reporters:

The middle class is dying here, and we’re here to be together as one class, one people—whether it’s union or nonunion working people.

Here are some other actions you can take to support the strikers:

  • Find a local picket line to support here.
  • Download leaflets here.
  • “Like” the strikers on Facebook here and change your Facebook and/or Twitter profile picture in solidarity here.
  • Click here to demand that Verizon CEO Lowell McAdam value employees’ work and share his corporation’s success with those who make it possible.
  • Click here for a list of picket sites in the New York and New Jersey area. `
  • Click here to sign and Tweet an act.ly petition demanding Verizon drop its outrageous concessionary demands.
  • To Tweet about the strike, use the hashtag #verizonstrike and feel free to direct to @VZLaborfacts.

This blog originally appeared in AFL-CIO Blog on August 15, 2011. Reprinted with permission.

About the Author: Mike Hall is a former West Virginia newspaper reporter, staff writer for the United Mine Workers Journal and managing editor of the Seafarers Log. He has written for several federation publications, focusing on legislation and politics, especially grassroots mobilization and workplace safety. When his collar was still blue, he carried union cards from the Oil, Chemical and Atomic Workers, American Flint Glass Workers and Teamsters for jobs in a chemical plant, a mining equipment manufacturing plant and a warehouse. He has also worked as roadie for a small-time country-rock band, sold his blood plasma and played an occasional game of poker to help pay the rent.


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More Salvos in the False “Class War” on Public Pensions

Posted on by Amy Traub
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amytraub4Repeat something often enough and it becomes, if not true, at least a solid bit of conventional wisdom. Consider Ron Lieber’s column in Saturday’s New York Times, which neatly recycles an editorial the Wall Street Journal ran back in March. The issue: the pensions that guarantee public employees a middle-class standard of living in retirement have become more difficult for cities and states to afford. This, according to Lieber and the chorus of conservatives singing the same tune, means a “class war” pitting sanitation workers who deferred compensation so that they could retire with dignity against “have-not” taxpayers who would like some retirement security of their own. Lieber even knows the outcome: public workers should to get ready for many more states and municipalities to engage in “rare acts of courage” and break their promises to pensioners.

Jonathan Cohn at the New Republic asks the obvious question “to what extent is the problem that retirement benefits for everybody else have become too stingy?”

It’s a point I’ve been making as well:

One out of three working Americans has no retirement savings to rely on beyond Social Security, many others have saved very little, especially now that the value of their homes has been destroyed. When it’s public pensions that are falling short, it’s very visible. When it’s the private savings of millions of individual households, it’s easy to overlook. But when we start to hear that it has become “too expensive” to provide teachers and police officers with a decent retirement, we know no one else has a chance at retirement security either.

Former Colorado Governor Richard Lamm, quoted in Lieber’s article, takes the point to its logical conclusion, arguing that “the New Deal is demographically obsolete.” Translation: we’d all better get used to the new normal of low pay, few benefits, and no retirement, sooner rather than later. After all, demographics are inexorable. Resistance is futile.

As Paul Krugman points out in today’s Times, the same air of inevitability hangs over the provision of critical state and city services. Cities and states are broke, the argument goes, there’s nothing we can do. We can neither keep streetlights on nor let teachers retire. Except that in both cases the argument is false:

We’re told that we have no choice, that basic government functions — essential services that have been provided for generations — are no longer affordable. And it’s true that state and local governments, hit hard by the recession, are cash-strapped. But they wouldn’t be quite as cash-strapped if their politicians were willing to consider at least some tax increases.

Krugman’s point about how we got here is equally true of the debate around public employees and their pensions:

It’s the logical consequence of three decades of antigovernment rhetoric, rhetoric that has convinced many voters that a dollar collected in taxes is always a dollar wasted, that the public sector can’t do anything right.

Unfortunately, Lieber’s column effectively adds to that rhetoric.

About the Author: Amy Traub is the Director of Research at the Drum Major Institute. A native of the Cleveland area, Amy is a Phi Beta Kappa graduate of the University of Chicago. Before coming to the Drum Major Institute, Amy headed the research department of a major New York City labor union, where her efforts contributed to the resolution of strikes and successful union organizing campaigns by hundreds of working New Yorkers.


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When the Right Goes After Unions, the Unions Had Better Get Going

Posted on by Shirah
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The Hudson Institute, which, as prior unbossed stories have shown, has historically been a shill for the tobacco industry, Monsanto products, and more, is now making a huge push to go after unions . . . Unions and their allies should take this attack seriously.

A recent Hudson Institute “study” on pensions, claims (among other things) that comparing union pensions versus company pensions (a vague division of a complex area) shows that unions underfund pensions for their members but generously fund pensions for their own employees. Holy shades of Central States Pension Fund scandal!

The charges, if taken seriously, could be the sort of thing that leads to indictments or at least investigations or at least calls for investigations. What could be a better way to knock out one of Obama’s supporters and supporters of progressive causes than to tar them with scandal and charges of corruption?

The “study” is strong on its results but fails to peel apart distinctions among pension funds that matter. For example, pensions funds are funded by employers, not unions, but you would never know that from the language used. The “study” also fails to point out that, when unions fund their employees’ pensions funds, the union is acting in the capacity of an employer.

It also fails to disaggregate data and talks about all pension funds related in some way to unions as if they were all the same. That is not the case. They differ in their form and in their roles and industries. For example, the construction industry and other industries as well, such as mining have historically used multi-employer pension and benefit funds – also known as Taft-Hartley funds – whose benefits and payments are negotiated as part of collective bargaining agreements and controlled by trustees who are representatives of the employer or union. Other unions negotiate the benefits to be provided by the employer and do not have a multi-employer fund.

For more on Taft-Hartley funds, here is a clear overview.

Consider that these funds operate in industries, such as construction, that have been under huge stress for a number of years, with job losses that may lead to pension underfunding. Without some clearer explanations, it’s impossible to assess the validity of the results.

Consider also that rather than employers being the white knights here, employer after employer has gone to the PBGC to take over and fund pensions for seriously underfunded pensions.

How did the Hudson Institute miss this bit of recent current events?

Unions need to take these charges seriously. Forbes has gone with the story, and there can be no doubt it will be pushed to the max. And getting digs in with this story will only encourage using this tactic to go after more issues that are on the political agenda now and that matter to us.

Dealing with the Hudson Institute takes more than quips. They are well funded and serious. Their “research” has been used to push bad policy in a number of areas. The study gets in a number of serious attacks on unions that may well be picked up and promote negative views about unions. Here is the study.

It should also be noted that the author of the study seems to have been responsible for issuing study after study in a short time period that are forming the intellectual basis for much of the far Right’s agenda right now. As “studies”, they are likely to be given a great deal of credibility.

Here is what the author was doing over her summer vacation.

* 09/07/2009

Union Bigs Get The Best Deals: A Sour Labor Day Lesson on Pensions

* 09/03/2009

Don’t Buy Unions’ Labor Day Bluster

* 08/27/2009

Obama’s Excessively Optimistic Deficit Projections

* 08/20/2009

Turning Uncle Sam into Peeping Tom

* 08/14/2009

Are Women Paid Less Than Men?

* 08/13/2009

Obama’s Health Care Bogeyman Is Obama

* 08/10/2009

Real Madrid, a Threat to Anyone

* 08/06/2009

The High Cost of Medical Malpractice

* 08/06/2009

Reduce The High Cost of Medical Malpractice

* 07/30/2009

The Healthcare Bankruptcy Myth

* 07/23/2009

Is America Ready for Single Payer Healthcare?

* 07/16/2009

A Very Unhealthy Health Bill

* 07/14/2009

Minimum Wage Hike Spreads Blue State Unemployment Misery

* 07/09/2009

Obama, Title IX, and Academics?

* 07/09/2009

Gender Equality: From Sports to Math and Science

* 07/03/2009

Getting a Summer Job: Entrepreneurship for Teens

* 07/02/2009

It’s Time to Go Nuclear

* 06/26/2009

What Will The Climate Change Bill Do to Your Job?

* 06/25/2009

Socialized Medicine Through the Eyes of a Recipient

* 06/19/2009

Starting a Trade War with “Buy America”

* 06/18/2009

A VAT Tax Is Not the Answer

* 06/17/2009

Workers Deserve Better Pension Plan

* 06/11/2009

High-Speed Rail: A Big-Ticket Item That Drives Deficits

* 06/11/2009

A Better Way to Fund Roads

* 06/04/2009

We Face Major Healthcare Choices

* 06/04/2009

The Health Insurance Reform Stakes Begin

* 05/28/2009

Obama Should Ditch Deadly CAFE Standards

As for the study on pensions, it says that unions pressure employers into signing onto union benefit and then use the money for other purposes in the tradition of the troubled Teamsters Central State fund, leaving the workers covered by those funds without the benefits promised. It then says to compare that situation with the funds that cover the employees of unions who get nice well funded benefit plans. This sort of charge fits nicely goes after the popular view in Gallup polls on the public’s view of unions through the years that unions do a nice job for their members.

Some of the findings verge on calling for an investigation of unions pension funds for criminal behavior.

That part of the study has now been used in an op-ed for Labor Day.

Union Bigs Get The Best Deals: A Sour Labor Day Lesson on Pensions

From The New York Daily News on September 7, 2009 by Diana Furchtgott-Roth

This Labor Day, unions are once again seeking to recruit new members with promises of higher wages and generous pension benefits. These promises are made despite pension funds’ reports to the U.S. Labor Department showing that collectively bargained pension funds are underfunded when compared with other pensions.

In contrast, pension funds for unions’ own staff and officers have been doing just fine.

In 2006, the latest year for which full data are available, only 17% of union-negotiated plans were fully funded, compared with 35% of nonunion plans.

Under the Pension Protection Act of 2006, funds with less than 80% of assets are in “endangered” status. In 2006, 41% of union funds were “endangered,” compared with 14% of nonunion funds.

Whether it’s best to go after the study directly or to take pieces of it apart and go after the ideas, without naming the source, is a matter of strategy and tactics.

It is important to go after every piece of what is claimed in that study and take them on in as serious a way as they are after unions and other progressive forces in our society.

Forbes may describe the Hudson Institute as “conservative leaning”. What it really is is a shill for the tobacco industry, pesticide use, anything made by Monsanto, and so on. It is funded by hard right groups like Scaife. Its most active activist is Alex A. Avery, Director of Research and Education, Center for Global Food Issues. Given what it is, how could anyone cite anything it says with a straight face. its stock in trade is creating astroturf groups, such as Avery’s Earth Friendly, Farm Friendly.

More on the Hudson Institute and its fellow travelers here.

http://www.sourcewatch.org/index.php?title=Hudson_Institute

http://www.sourcewatch.org/index.php?title=Center_for_Global_Food_Issues

http://www.politicalfriendster.com/showPerson.php?id=565&name=Hudson-Institute

http://www.politicalfriendster.com/showPerson.php?id=3583&name=Dennis-T-Avery

http://www.frontgroups.org/search/node/hudson+institute

This article originally appeared in Unbossed on September 8, 2009. Re-printed with permission from the author.


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To Hell With Pensions: Let Them Eat Dog Food

Posted on by Jonathan Tasini
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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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