Pensions

Discover The Network Out To Crush Our Public Workers

Dave Johnson — Wed, 09 Feb 2011 11:11:33 -0500

It is difficult to read, watch or listen to the news without hearing that public employees are paid too much and get “lucrative” pensions and this is “bankrupting” your state, county or city. Public officials are "in bed" with "union bosses" and state and local government; taxpayer dollars are wasted to pay for people who don’t do much work but live the good life. "Reports" and "studies" confirm this.

People hear the same story over and over and over and over, seemingly coming from everywhere: public employees have it good, with extravagant pay and "lavish" or "plush" pensions, while taxpayers are taking it in the shorts. Public-employee pensions are "bankrupting" the state/county/city. "Unfunded liabilities" are "out of control" and it is time to do something about it before it is too late.

This is part of a broad, nationwide attack on public employees and their unions, and through them, on government and democracy itself.

A few weeks ago I wrote about the nature of this constant attack in a post, Conservatives Claim Unions Caused NY Snow Jam.

After the record-breaking snowstorm in New York in late-December, the media ran with a story claiming that the reason the snow was not cleared was because of a slowdown by unions. My post showed the progression of the story from one conservative outlet to another, until it reached the mass media. I wrote,

The right's propaganda machine begins with a simple narrative, repeats it endlessly, and then ties current events to the narrative to drive the point home. The corporate/conservative right are currently working a narrative that public employees and their unions are the reason for state and local budget problems. This is repeated endlessly, and every current event that hits the news is then used to support the claim. This is how an untruth becomes "conventional wisdom."

. . . The story claims the unions did this to protest budget cuts. Of course the obvious cause of the snow mess was that budget cuts caused the problem because there were not enough people employed to clear the snow.

"Noise Machine"

The way the right's "noise machine" works is that a story gets started somewhere and is amplified by the right-wing media machine that includes FOX, Limbaugh and scores more talk-radio hosts, blogs, newspapers and magazines. And in this case, of course the story is being spread by ... FOX, Limbaugh and scores more talk-radio hosts, blogs, newspapers and magazines. The idea is to create enough "noise" that the mainstream press picks up the story.

It Was A Hoax

In fact, the recent “union snow slowdown” turned out to be a hoax. But it fit an ongoing narrative, so it was used to help drive the anti-public-employee-union point. And it was repeated endlessly, everywhere. Laura Flanders, writing at The Nation, Setting the Story Straight on Snow 'Slowdown',

The freshman councilman, who has Tea Party support, now says that workers “were subtly informed there was no need to rush” while clearing snow, rather than explicitly told to slow it down.

A Distraction From The Real Problems

These state pension reform campaigns across the country come at a time when so many states are in a terrible budget squeeze and are looking for solutions. This storyline diverts public attention from the real culprits. Of course, the obvious solution is to ask the wealthy to pay their fair share, and to cut back on tax breaks, subsidies and “incentive programs” for corporations. The campaign attempts to distract voters from the obvious and lead them to different conclusions, including:

1) Don’t raise state taxes, cut public employee pensions instead.
2) Public employee unions are strangling us and keeping the budget high.

The story also diverts the public from asking where all that pension money went. Right when people should be blaming the financial industry and the financial crisis they caused for state pension shortfalls, up come these studies and PR tactics blaming public employee pensions and unions.

The fact that this is happening in several states, from organizations linked in many ways, with similar language, similar tactics, quoting the same “studies”, from organizations with similar boards, etc. suggests this is a coordinated strategy, designed to have the appearance of popular uprising.

In One State

This is a brief look at one small part of a state "pension reform" campaign that is occurring in California.

Here is the smallest of examples of the daily barrage of the anti-public-employee campaign: two letters to editor on one day in a recent San Jose Mercury News

Pension overhaul must be part of any tax deal

Labor groups such as Service Employees International Union and the California Labor Federation are threatening lawmakers who refuse to support a ballot initiative to raise or extend certain taxes with a negative ad campaign. They further warn that if new and higher taxes are not approved, K-12 education programs will face further cuts. I find it interesting how they move the focus of the debate from the real problem, public sector pension programs. These pension programs, not our present tax structure, are robbing our children of educational funds. All Californians, whether Democrat, Republican or independent, would be foolish to vote for any increase or new tax until public sector pensions are replaced with contributory 401(k) plans for new employees.

Big pensions help California? Really?

[A person's] claim that "California public retirees put back $2 into the economy for every $1 they receive in pensions" should come as welcome news to taxpayers fuming over the state's hundreds of billions of dollars of unfunded pension liabilities (Letters, Feb. 3). Beyond showing immense gratitude for this bountiful effect on our economy, taxpayers need to go further, and mandate that all public retirees be given a minimum pension of, say, $1 million annually. All this extra money sloshing around our economy will solve our woes in short order, and will have the added benefit of eliminating the need for public employees to "pension spike" their final year of employment.

Most newspapers around the country likely have similar letters on almost any given day.

A bigger example of the campaign, closer to its source, came in a January 18, 2011 LA times op-ed, Pension reform or else, that talks of “retirement scandals” in which a fire chief gets a $200,000 pension, and tuition increases that will go to cover “pension debt.” It also scares readers about huge pension obligations, attempting to make people think that public employees enjoy lucrative pensions while the rest of us receive very little.

A tip-off that helps us understand the agenda underlying this op-ed comes when the author declares: “Although the public employee union bosses will fight to retain them, financially unsustainable pension benefits must end.” Whenever you hear someone refer to "union bosses" you know something is going on under the surface. From the op-ed,

Taxpayers are often shocked to learn that they are paying 100% of the cost of pension and retiree healthcare benefits for many public employees. When employees must contribute their own money toward their retirement, they generally opt for benefits they can afford, and if workers are given the opportunity to opt out of retiree healthcare benefits, many will continue to work until they are covered by Medicare. Delaying retirement just five years would, on average, cut pension costs in half.

The author is identified as “Marcia Fritz ... a certified public accountant and president of the California Foundation for Fiscal Responsibility, a nonprofit organization dedicated to advancing pension reform in the state.” While Fritz’s organization is named “California Foundation for Fiscal Responsibility” (CFFR) their website is actually named California Pension Reform.

CFFR’s Board of Directors, includes Jack Dean, Vice President.

Following Threads

Jack Dean's name is on this page as a link. If you click the link it takes you to the website of an organization named Pension Tsunami, "a project of the California Public Policy Center." From the website,

The oncoming wave of pension debt is even bigger than it seems. The purpose of this website is to provide an overview of the multiple pension crises that are about to drown America's taxpayers. Our primary focus is on California, but we also track other states, corporate pensions, social security and international trends. PensionTsunami.com is a project of the California Public Policy Center.

Who Is CPPC?

So just what is this California Public Policy Center? From their website:

The mission of the California Public Policy Center is to promote the gathering of reliable and accurate information about the impact unions have on the local, state, and national level, to inform the public about such impact, and to carry on other charitable and educational activities associated with this goal, as allowed by law.

Ah, it's about unions, not pensions. Aside from Pension Tsunami, CPPC also administers: UNIONWATCH

UnionWatch was established in 2010 as a project of the California Public Policy Center to conduct research and provide information resources to voters, members of the press, educators and policymakers on the impact of unions on government budgets, government accountability, the economy and the democratic process. While UnionWatch endeavors to report and analyze national and international impacts of unions, the emphasis is on the impact of public sector unions, especially in California.

Interestingly, the site declares that "UnionWatch is a Nonpartisan Effort." We'll see.

The CPPC Board of Directors includes Mark W. Bucher, Esq., who also founded the Education Alliance,

a group dedicated to assisting school board candidates who are independent of education unions, as well as authoring, qualifying, and chairing the 1998 Proposition 226, which would have required unions to receive permission to use their members’ dues for political purposes.

Bucher also oversaw the qualification of the 2000 Proposition 38, a school choice initiative, and currently serves as the treasurer of the Orange County Republican Party and the Orange County Lincoln Club.

A bit of time on The Google also finds that Bucher is on the Board of Family Action Pac which launched an anti-union ballot initiative: Here is the summary, which provides a pretty good description of what this initiative will accomplish, if passed:

Makes Illegal the Use of Public Employee Wage Deductions for Political Activities.

Amends the California Constitution to make it illegal to deduct from wages or earnings of a public employee any amount that will be used for political activities as defined. Prohibits any membership organization that receives public employee wage deductions from using those funds for any political activities ...

Also on the Board is Robert W. Loewen, President of the Republican Lincoln Club of Orange County author/editor of "The Confederate and Neo-Confederate Reader".

Anti-union, vouchers, Republican Party and neo-confederates. And just three guys. Where does pension reform fit in this mix? Pension Tsunami and UnionWatch -- according to the website this is all the California Public Policy Center does. Not a lot of "public policy" going on at this "public policy center." Interesting.

Exploring further, one group of links at the Pension Tsunami website is a list of "think tanks" they want readers to visit:

PensionTsumani: THINK TANKS

Bluegrass Institute for Public Policy Solutions

Calvert Institute

Cato Institute

Claremont Institute

Commonwealth Foundation (PA)

Empire Center for New York State Policy

Heartland Institute

Illinois Policy Institute

Independent Institute

Ludwig von Mises Institute

Manhattan Institute

National Center for Policy Analysis

Pacific Research Institute

Pensions Institute [UK]

Pew Charitable Trusts

Reason Foundation

RetirementReform.org

Rio Grande Foundation

Rockefeller Fiscal Studies

Sierra Environmental Studies Foundation

The Free Enterprise Nation

Yankee Institute

Exploring The Links

It is worth exploring some of these related “Public Policy Institutes.” Let's pull some threads and see what we find.

The Bluegrass Institute for Public Policy Solutions, in Kentucky, describes itself as a “free-market think tank.”

The Bluegrass Institute runs Freedom Kentucky which has a section on Public Pensions where you can find into "related to pension reform, Pension Reform Legislation, the teachers retirement system, and much more..."

The Calvert Institute (for Public Policy) is in Maryland, describing itself as a, “public policy research institution committed to generating new ideas based on the principles of free enterprise, limited government and personal responsibility.”

Just a few things from their website:

G. Liebmann, "Pensions Dig Us Deeper into Debt", Baltimore Examiner, 2008-09-28
Editorial, Pair of Think Tanks Issue Warning on Pensions, Baltimore Sun, 2008-10-30
J. Malarkey, Market Worsens Public Pension Crunch, Baltimore Examiner, 2008-10-31
Hit and Run Politics: Baltimore City and Maryland State Pensions: A Short History, George W. Liebmann 2010-09-30

The Cato Institute, "dedicated to the principles of individual liberty, limited government, free markets and peace," warns regularly about The Increasing Burden of Government Employees on Taxpayers and Public Sector Unions and the Rising Costs of Employee Compensation.

The Claremont Institute says public employees are Neither Civil Nor Servants,

Will a deep recession, mounting fiscal crises, and new revelations of gross abuse finally lead citizens to say "Enough!" to unionized public employees who have amassed power and benefits at the expense of the common good?

The Commonwealth Foundation, in Pennsylvania. Their website says they work to, "demonstrate the societal benefits of individual liberty, free enterprise, and limited, accountable government so that key decision makers in Pennsylvania embrace them."

The Commonwealth Foundation discusses Union Pension Bailout & Generational Theft and warns that "Pennsylvania's largest public pension plans ... are severely underfunded."

Commonwealth Foundation Directors:

Board Chair Michael W. Gleba.
Treasurer of The Carthage Foundation (Scaife)
Executive Vice President of The Sarah Scaife Foundation
Board Member, Allegheny Institute for Public Policy

Mr. Matthew J. Brouillette (President & CEO):
On an advisory committee for the New York City-based Atlantic Legal Foundation.

T. William Boxx is the Chairman and Chief Executive Officer of the Phillip M. McKenna Foundation.

Frederick W. Anton III, Pma Capital Corp

Glen Meakem | Conservative Talk Show Host

Staff:
Charles F. Mitchell is Vice President and COO of the Commonwealth Foundation for Public Policy Alternatives. ... Previously, he was a program officer at the Foundation for Individual Rights in Education and an intern at the Heritage Foundation. Charles is a graduate of the Charles G. Koch Charitable Foundation's Associate Program, the Mackinac Center's Leadership Conference, and the Claremont Institute's Publius Fellows Program.

The Empire Center for New York State Policy is a project of the Manhattan Institute for Policy Research. The Empire Center warns that "New York’s Exploding Pension Costs" are "threatening to divert scarce resources from other essential public services in the midst of a fiscal crisis."

Empire's parent, the Manhattan Institute for Policy Research is “shaping American political culture and developing ideas that foster economic choice and individual responsibility.” If you visit Manhattan Institute you will learn How Public Unions Took Taxpayers Hostage, that Public Workers Feel No Pain In Recession, N.Y. Public Workers Thrived Amid Misery, Obama Puts Public Sector Employees Ahead of Private Sector, A Cautionary Tale About California's Budget-Busting Public-Sector Unions and much, much more!

Chairman of the Board Paul E. Singer, founder and CEO of hedge fund Elliott Management Corporation.

Vice Chairman Michael J. Fedak. On National Council of The American Enterprise Institute (which asks Public-Pension Deficits: How Big? Can They Ever Be Paid?)

Roger Hertog, chairman of the board of Alliance Captial Management Corporation (valued at about $100 billion)

Charles H. Brunie, also a Trustee of the Hudson Institute, an “organization dedicated to innovative research and analysis that promotes global security, prosperity, and freedom.” (Note: The Hudson Institute warns about Union Pensions at Risk as well as Decrying the Union Pension Bailout Bill.)

Charles H. Brunie started Oppenheimer Capital in 1969

The rest of the board is largely hedge fund, capital management, securities, etc...

The Heartland Institute, "free-market solutions to social and economic problems," offers a handy guide to The State Public Pension Crisis: A 50-State Report Card.

The Illinois Policy Institute is “dedicated to supporting free market principles and liberty-based public policy initiatives for a better Illinois.“ The IPI warns us that "Illinois faces a staggering $83 billion in unfunded public pension liabilities" and their blog wants to know "Will You Bail Out Pensions?"

Board:

Bill Becker co-founded The Maine Heritage Policy Center, an “organization whose mission is to formulate and promote conservative public policies based on the principles of free enterprise; limited, constitutional government; individual freedom; and traditional American values–all for the purpose of providing public policy solutions that benefit the people of Maine.” (Note: the Maine Heritage Policy Center warns us about "The Cost of Doing Nothing: Maine’s Pension Payments are Crowding Out Other Spending."

Steve Brown of Code Hennessy & Simmons (“CHS”), a Chicago-based private equity firm.

 Terry T. Campo served as National Chairman of the Young Republicans from 1989 to 1991.

John Tillman, CEO serves on the boards of the Sam Adams Alliance and Sam Adams Foundation. Prior to his time with Sam Adams, he served as president and director of Americans for Limited Government. (ALG Urges Congress to Reject $100 Billion Handout to Public Employee Unions.)

Dick Weiss is a Core Equity senior portfolio manager at Wells Capital Management.

The Free Enterprise Nation too a Pension road trip: From Montana to Prichard, Alabama

The Yankee Institute is a “free market think tank” in Connecticut with a financial-services-industry-heavy board that warns that the $100K Pensions Club Includes 299 State Retirees. (FYI it is largely university chancellors, deans, professors, med school instructors.)

“Government workers receive compensation and benefit packages that are much more generous than those available to private sector workers,” said Fergus Cullen, Executive Director of the Yankee Institute for Public Policy.

The Pacific Research Institute has a mission to “champion freedom, opportunity, and personal responsibility for all individuals by advancing free-market policy solutions.”

The Director of PRI's Journalism Center wrote a book called, "Plunder: How Public Employee Unions are Raiding Treasuries, Controlling our Lives and Bankrupting the Nation."

The Reason Foundation writes about Public Employees vs. the Public Will and warns Public Employee Unions Are Sinking California.

RetirementReform.org Clicks through to National Center for Pollicy Analysis page on Common Sense Retirement Policy which advocates "reform" for Social Security. But never fear, NCPA elsewhere warns about "Unfunded Liabilities of State and Local Government Employee Retirement Benefit Plans" and says PUBLIC EMPLOYEE PENSIONS ARE A TICKING TIME BOMB

NCPA's Board includes a number of people from the financial industry, private equity, holding companies, etc.

The Rio Grande Foundation "is a research institute dedicated to increasing liberty and prosperity for all of New Mexico's citizens. We do this by informing New Mexicans of the importance of individual freedom, limited government, and economic opportunity." They warn, New Mexico's Government Pension Problem: 3rd Worst in the Nation.

Cookie-Cutter Think Tanks

This is all from pulling the threads just a little bit that come from just one op-ed on pension reform. I didn’t go into the funding of these organizations or look at what else they are doing, other associations, etc. These are just a few of the network of conservative "institutes," etc. around the country. Just a very few. (Here is a list of 185 organizations purporting to be conservative state think tanks, a list of 40 conservative national organizations with state networks and a list of 306 organizations purporting to be conservative national think tanks and 65 conservative "family policy" organizations. There are other lists with other criteria.)

As you follow these threads you discover layer upon layer of corporate/conservative front groups, masking their activities and funders with more layers of front groups. They all have similar mission statements, have similar people on their Boards with similar backgrounds, cover the same issues the same way, and even use remarkably similar language. They seem to be not just connected but interconnected. The sheer number of these similar "think tanks" make it appear that there must be a machine somewhere that stamps these things from a template. That machine is named “Scaife/Coors/Koch…” (Please read also and spend some time here.)

These corporate/conservative organizations are very good at manipulating the media and public opinion -- it is their purpose. Their "experts" are well paid and always available to talk to reporters, appear on TV and radio shows and write articles and opinion pieces for newspapers, blogs and for their network of similar organizations. Their "reports' and "studies" reach the conclusions that fit the strategy, and are crafted to sound just right. And there are so many of them! The result is development of "conventional wisdom" about what is going on in our society. This is why that conventional wisdom more and more reflects the corporate/conservative line. And right now the corporate conservative line is that we should think that public employees and their unions are responsible for state and local budget shortfalls.

Part II looks at some of the "studies" and "reports" and pulls more threads.

Pension Envy

Dave Johnson — Tue, 11 Jan 2011 08:10:56 -0500

Since the 80s many employers have stopped offering health care, pensions and other benefits to their employees. Many are also cutting pay and hours, while increasing the workload. So more and more people are hurting. As more and more of us fall further and further behind, corporate/conservative propagandists use resentment to drive anti-union feelings. They tell people to oppose unions, saying, "Why should they have it so good?" The real question you should ask is, "Why should we have it so bad?"

The New Yorker's James Surowiecki, in "State of the Unions," examines why "public support for labor has fallen to historic lows."

More than seventy per cent of those surveyed in a 1937 Gallup poll said they favored unions.

Seventy-five years later, in the wake of another economic crisis, things couldn’t be more different. ... In the recent midterm elections, voters in several states passed initiatives making it harder for unions to organize. Across the country, governors and mayors wrestling with budget shortfalls are blaming public-sector unions for the problems. And in polls public support for labor has fallen to historic lows.

. . . In 2009, for the first time ever, support for unions in the Gallup poll dipped below fifty per cent. A 2010 Pew Research poll offered even worse numbers, with just forty-one per cent of respondents saying they had a favorable view of unions, the lowest level of support in the history of that poll.

Surowiecki suspects that the gap between workers in and out of unions is the reason,

Union workers, on average, get paid more than their non-unionized counterparts—most estimates put the difference at around fifteen per cent—and that wage premium widens during recessions. Similarly, union workers often still have defined-benefit pensions, which sets them apart from all those Americans who watched their retirement accounts get ravaged by the financial crisis. That’s given rise to what Olivia Mitchell, an economics professor at Wharton, calls “pension envy.”

This resentment is most evident in the backlash against public-sector workers (who now make up a majority of union members).

The problem is that working people feel increasingly powerless, and this weakens support for the very institutions that would, in better circumstances, come to their assistance: government and unions. Normally you would think that when people see that workers who are in unions have it better they would reach a simple and obvious conclusion: they should JOIN A UNION! DUH! But circumstances in our economy today lead people to the wrong conclusions.

Today they see people who try to organize unions fired. They see whistleblowers persecuted. They see fellow employees lose their jobs for calling in sick or taking time off to care for a family member. They see people lose jobs for just reaching "a certain age." Many are even afraid to take vacations using time they have earned. And they don't see any way to do anything about it. Unions are unable to organize and workers are told facilities will close or their jobs will be moved overseas. Government inadequately enforces its own laws, or blatantly favors the wealthy and powerful. People don't feel that elections make any difference. So workers don't see any help on the horizon.

Crabs In A Bucket

Meanwhile many public employees still have unions, so as a result they in many cases have pensions, health care plans and dignity on the job. People look at that and the temptation toward "crab mentality" is strong. The corporate/conservative anti-union propagandists see an opportunity to set working people against each other and strike at support for unions:

Crab mentality, sometimes referred to as crabs in the bucket, describes a way of thinking best described by the phrase "if I can't have it, neither should you." The metaphor refers to a pot of crabs. Individually, the crabs could easily escape from the pot, but instead, they grab at each other in a useless "king of the hill" competition (or sabotage) which prevents any from escaping and ensures their collective demise. The analogy in human behavior is that of a group that will attempt to "pull down" (negate or diminish the importance of) any member who achieves success beyond the others, out of jealousy, conspiracy or competitive feelings.

This term is broadly associated with short-sighted, non-constructive thinking rather than a unified, long-term, constructive mentality. It is also often used colloquially in reference to individuals or communities attempting to "escape" a so-called "underprivileged life", but kept from doing so by others attempting to ride upon their coat-tails or those who simply resent their success.

The other day in Understanding The Attacks On Public Employees,

What do we see if we look around at the state of the economy? Stocks are soaring, corporate profits are way up, Wall Street gets trillions in bailouts and pays millions upon millions in bonuses. But regular people are having a hard time making ends meet and unemployment is still through the roof. Instead of programs to create jobs, stop foreclosures and rebuild our crumbling infrastructure the government passes more tax cuts for the rich. A few Wall Street and big-corporate types are getting very rich (richer) at the expense of the rest of us. If you are sitting pretty on Wall Street, you probably don't want people thinking about these contrasts too much.

“Look Over There!”

How do you get regular people to “look over there” with all of that going on? Simple: launch a big campaign to blame the librarians, firefighters and other public sector workers for the hard times. “Don’t blame US,” Wall Street says, “Look over there!” Blame the economy's victims for economic crimes. And, do you know what? This is a strategy that is proven to work every time.

So the corporate/conservatives pit people against each other, hoping to provoke the behavior of crabs in a bucket, instead of reaching the correct conclusion: stand together and join a union and fight for your rights and a share of the pie and you can have it better.

STOP THE LIES!

This video directs people to a STOP THE LIES website where you can sign up to add your voice, download a fact sheet and find other resources.

Ten Holiday Attacks On Public Employees

Dave Johnson — Tue, 28 Dec 2010 14:04:35 -0500

If you haven't already noticed, there is a corporate/conservative campaign underway to convince the public that public employees are living high on the taxpayer's dime and should have their pay and pensions cut back. Even during the holidays this attack does not let up.

Background: The Reagan Revolution ended most "defined-benefit" (they pay you) pensions for working people in the private sector, replacing them with "defined-contribution" (you pay Wall Street) pensions. Now with the Great Recession employers have cracked down and private-sector workers are afraid and not willing to risk their jobs by speaking out about abuses. With private workers sector out under control, conservatives are targeting public employee pay and pensions. They are driving resentment of government employees by casting them as overpaid and receiving good benefits at a time when everyone else is under the corporate thumb. Private-sector employees have made sacrifices, so now government employees should, too, they say.

When you see this kind of coordinated campaign from the right (and "mainstreamed" by corporate media) you know it is part of a larger strategic plan. The larger plan is to weaken public-employee unions, including teacher's unions.

Here is how conservatives turn a strategic narrative into "conventional wisdom" through repetition. Phony conservative think tank "studies" show there is a "crisis," that pensions are "gold-plated," etc. This campaign claims the crisis is in government employee pension funds. They also claim public employees are very highly paid compared to the private sector. Then they explain how the "average voter" is affected. This time the claim is high state property and income taxes or an impending "crisis" that cold force states to go bankrupt. When specifically attacking teacher's unions the claim is that schools are not educating kids because teacher unions block reform.

The news stories follow a conservative template almost word-for-word. You will see phrases like: "Lavish" or "luxurious" or "back-breaking" and "gold-plated" government pensions. You'll hear that "Taxpayers shoulder the burden" of pensions.

For perspective: Congress just passed tax cuts for the rich along with a huge cut in the estate tax, Wall Street bonuses are up, corporate profits are the highest ever, the top 1% are taking home a higher percentage of all income, and sales of luxury items are breaking records.

Here are ten holiday-season media attacks on public employees:

George Will, Don't let states like California seek federal bailouts on pensions

The nation's menu of crises caused by governmental malpractice may soon include states coming to Congress as mendicants, seeking relief from the consequences of their choices. ...

... under bankruptcy, judges could rewrite union contracts or give states powers to do so, thereby reducing existing pension obligations.

Newsday, Reeling in public workers' pensions, insurance,

Civil servants have long prized these benefits as the payoff for a career yoked to lower-paying jobs, but their rapidly rising cost has led to growing resentment in an economy that has forced a relentless tide of layoffs and givebacks in the private-sector workforce. Defined-benefit pensions are disappearing from the private sector. Retiree health coverage is almost unheard of. On Long Island, even the average private-sector wage has fallen behind government pay ...

Wall Street Journal, Pensions Push Taxes Higher,

Cities across the nation are raising property taxes, largely citing rising pension and health-care costs for their employees and retirees.

Ocean County (NJ) Examiner: Public pensions getting deeper into the red,

While New Jersey can lessen regulatory loads on business, lowering tax rates is difficult as this exacerbates pension deficit problems. The obvious solution is long term and entails lowering government worker pension and benefit packages. ... Public sector unions have demonstrated an unwillingness to forego past agreements in the interest of promoting fiscally sound policies.

San Diego Union Tribune: Government pay practices must change,

At a time when there’s rising fury over public employees’ generous pensions, the report used official U.S. Bureau of Labor Statistics’ data to show there’s one more big area where the taxpayer-funded public sector is thriving at a time of private-sector misery.

Here's why property taxes are soaring ...,

The crisis in state pensions is cascading into a property-tax crisis.

Cities across the nation are raising property taxes, largely to cover rising pension and health-care costs for their employees and retirees.

Washington Examiner: America's public pension crisis has tragic consequences,

The biggest obstacle to preventing what happened in Pritchard from happening nationwide might be the public employees themselves. Public union leaders simply refuse to believe America is out of money.

Milwaukee, Walker, Barrett seek checks on unions

Walker, who has tangled with Milwaukee County unions as county executive, is gearing up for a clash with state workers, seeking wage and benefit cuts and threatening legislation to weaken or eliminate state unions' bargaining rights if they won't agree to concessions.

Chicago Sun-Times, ‘Sucking the system dry’,

Jim Tobin, president of National Taxpayers United of Illinois, held a news conference at the St. Charles Public Library to discuss what he called a threat to every Illinois taxpayer.

... Tobin also released names of retired Kane County government employees who are receiving what he called “lavish, gold-plated pensions.”

Snyder to start with attack on public-sector spending,

Private-sector companies and workers have made many sacrifices, he said, "and we all need to share in this. So it's now the public sector coming into more alignment with what the private sector has already done."

Pressure On Wages As Well As Jobs

Dave Johnson — Thu, 01 Apr 2010 14:39:48 -0400

Our economy is not structured to produce enough jobs. Tomorrow's jobs report is expected to show as many as 200,000 jobs created in March, but a lot of that is temporary Census hires, and even 200,000 jobs created is still 2-300,000 fewer jobs than number of new entrants into the job market each month! So even a "good" report of 200,000 will be just another "economy still getting worse more slowly" story.

We need jobs, jobs, jobs and jobs, and we need them to pay people enough.

It's not just trade pressures that are keeping job growth from occurring, but trade pressures are a very big and very immediate part of the problem. Fixing the trade imbalances will be a great start and will give us a small bit of breathing room in which we will hopefully address larger structural problems.

Those trade pressures are not just destroying jobs, they are destroying wages and benefits, too. It's the way of the world; a business owner can't help but look at the legacy wages that built up and up and up during the competitive good times, and wonder why they're still paying those high wages during the bad times. If you have a company full of people making $80,000 or $100,000 and you see people accepting work in similar positions for $40,000 you are going to wonder how to reduce the amount you are paying people. One way is to make them work more for the same pay.

In yesterday's Washington Post, Holding back job growth? Workers' awesome output,

One of the great surprises of the economic downturn that began 27 months ago is this: Businesses are producing only 3 percent fewer goods and services than they were at the end of 2007, yet Americans are working nearly 10 percent fewer hours because of a mix of layoffs and cutbacks in the workweek.

That means high-level gains in productivity -- which in the long run is the key to a higher standard of living but in the short run contributes to sky-high unemployment. So long as employers can squeeze dramatically higher output from every worker, they won't need to hire again despite the growing economy.

[. . .] Fearful of losing their jobs, people seem to have become more willing to stretch themselves to the limit to get more done in any given hour of work. And they have been tolerant of furloughs and cutbacks in hours, which in better times would drive them to find a new employer. This has given companies the leeway to cut back without the fear of losing valuable employees for good.

It's not "awesome output" it is workers being squeezed to death. And it's the way our system is designed.

In Fixing Jobs: Normal Isn’t An Option I wrote that the way our current system is structured employers have every incentive to figure out how to eliminate your job or at least cut your pay,

The core of what needs to be restructured is that we have a system where people with power and wealth benefit when they figure out how to cause other people to receive lower pay and benefits -- or just lose their jobs. The incentives come down to this: if someone can figure out how to cut your pay and benefits or just get rid of you (“eliminate your position”) they get to pocket what you were making, and you get nothing. If you don't own the company you're out of luck.

Returning to "normal" is not an option now and it just isn't going to happen. We have hit the wall of the old economic paradigm. We need to start looking at new models for a sustainable, people-friendly economy that works for all of us, not just a lucky few.

Greece-ing The Skids Against Public Pensions

Roger Tauss — Fri, 26 Mar 2010 10:30:09 -0400

Say what you will about leaders in the American Right, you have to admire their focus. They sit around with loaded shotguns waiting for a target of opportunity to appear. And, unlike Dick Cheney, they rarely miss.

The latest clay pigeon to cross their field of vision is the financial crisis in Greece. The target, however, is not Greece but public sector pensions in the U.S.

At first blush it passes their superficial makes-sense-at-first-glance test: Union demonstrations in Greece have called attention to its lucrative pension system (though the crux of Greece’s problem is private sector debt). From there it’s an easy pivot to “underfunded public-sector pensions” that “threaten the financial future of many cities and states.”

It’s all over the right-wing blogosphere, the subject of editorials in the Wall Street Journal and a constant topic of the ideologues/shills on CNBC. It was also the cover story of the March 15 Barron’s, under the title “The $2 Trillion Hole.”

Typical of these attacks, the article was mostly spin (“the lush pensions”), unsubstantiated claims (“most public employees…can count on pensions equal to 75% to 90% of their pay”) and a handful of anecdotes (the $100,000 a year California pensioner replacing the Welfare Mom driving a Cadillac).

Of course, it’s a lot easier to hit your target when it doesn’t shoot back. Of the 66 comments to the Barron’s article posted online, not one rebuttal tore into the obvious contradiction in the argument: The threat doesn’t come from the pensions themselves but from the extent to which they haven’t been funded in a timely manner.

In fact, according to Barron’s own numbers, 75 percent of all states meet the federal standard applied to corporate pensions (at least 80 percent funded). And the others are an indictment not of the benefit, but of the extent to which these 13 states used money promised to the pension funds for other purposes.

Barron’s cites New Jersey’s woefully underfunded pension as an example. They mention the contribution shortfalls under former Gov. Jon Corzine, but neglect to mention the main culprit—a raid on the pension fund by ex-Gov. Christine Todd Whitman in the 1990s to fund cuts in the property tax.

There are many good arguments why public sector employees deserve these pensions—they don’t receive Social Security, they paid for them with below-standard wages, etc. But remember the lesson the right learned long ago: When you’re explaining, you’re losing.

In the arena of political debate, the best answer to an attack is always to turn it back on the attacker. And the best language is always the language of the attacker:

Does the word responsibility mean anything to you?
Whatever happened to paying your bills? Honoring your obligations?
Oh! It’s immoral to deny contractual bonuses to AIG officers who nearly destroyed the economy, but perfectly all right to break your agreement with government workers (or General Motors employees, for that matter)???

Young Workers--Hit Hard, Hitting Back

Liz Shuler — Thu, 10 Dec 2009 11:16:52 -0500

As the newly elected secretary-treasurer of the AFL-CIO, I traveled the country this fall, talking with workers and hearing their concerns. The economic crisis is causing a lot of pain. So many people have no jobs, no health care—and many are losing their homes. And as I looked into the faces of young workers, the reality hit home that these young people are part of the first generation in recent history likely to be worse off than their parents.

This is a tragedy.

The AFL-CIO and our community affiliate, Working America, recently surveyed young workers—and I'm not talking about 17- and 18-year-olds. I'm talking about 18- to 34-year-olds. In the past 10 years, young workers have suffered disproportionately from the downturn in the economy:

One in three young workers is worried about being able to find a job—let alone a full-time job with benefits.
Only 31 percent make enough money to cover their bills and put some aside—that is 22 percentage points worse than it was 10 years ago.
Nearly half worry about having more debt than they can handle.
One in three still lives at home with parents.

Young workers are living the effects of a 30-year campaign to create a low-wage workforce. It has succeeded.

For decades, the far right led an anti-government, anti-investment, feed-the-rich-and-starve-the-poor drive that gave us an era of deregulation, privatization and job exporting.

At the same time, corporations and government attacked unions and workers' freedom to form unions and bargain for decent wages and benefits. When unions are strong, paychecks grow and workers have benefits like health care and pensions.

When unions are under attack, paychecks shrink. Pensions vanish. Health care becomes the emergency room.

What's left is not working for young people—or for any of us. It will take a broadly shared sense of wartime urgency to replace today's low-wage economy with a high-wage, high-skills economy. The first step must be immediate action to address the nation's jobs crisis, with five essential steps:

Extend the lifeline for jobless workers.
Rebuild America's schools, roads and energy systems and invest in green technology and green jobs.
Increase aid to state and local governments to maintain vital services.
Fund jobs in our communities.
Put TARP funds to work for Main Street with job-creating loans to small businesses.

We took these initiatives to the White House Summit on Jobs on Dec. 3 and are pushing Congress to take action now. The first reports from the Jobs Summit are encouraging, and we look forward to working with the Obama administration and Congress to carry on this momentum.

It's time to rebuild an economy that works—an economy based on prosperity, an economy we can be proud to pass on to our children and their children. And we need young people to lead the way. That survey I mentioned earlier shows they are ready.

Young workers have a whole new level of civic engagement, with the surge of new voters in the 2008 election.
They are well-informed and following government and policy news.
They believe in collective action and understand the power of having a union.
They have hope for the future and the vision of a savvy, diverse movement to bring about progressive change.

We're planning a major summit for young workers after the first of the year to bring all our ideas and voices together. When crises hit, it's young people who drive change.

Martin Luther King Jr. was 26 when he led the Montgomery bus boycott. At 25, César Chávez was registering Mexican Americans to vote. Walter Reuther headed strikes demanding GM recognize its workers' rights starting when he was 30. Elizabeth Cady Stanton was 33 when she drafted the declaration of women's rights.

Young people are being hard in this jobs crisis. But I believe they provide much of the fuel we need to get out of it.

This is cross-posted from the Huffington Post.

CEOs Get Bailed Out. Workers Get Sold Out

Tula Connell — Fri, 26 Sep 2008 12:11:32 -0400

Before she became the first female Labor secretary in 1933, Frances Perkins had seen firsthand the tragedy of Manhattan’s 1911 Triangle Shirtwaist fire. Locked in by their employer, 146 mostly young girls died when they couldn’t escape the burning building where they toiled in sweatshop labor. Later, as the New York industrial commissioner, Perkins held employers accountable for workplace safety and health, expanding factory investigations and championing other pro-worker laws, like unemployment insurance.

Now, imagine if Elaine Chao had been there instead. Rather than improved job safety legislation, Chao likely would have pushed laws forbidding workers to challenge employers for unsafe working conditions, fair pay or anything that would cost greedy employers a dime.

In fact, Chao, the nation’s current Labor secretary, once again has taken the side of Big Business against working people. As Congress debates whether and to what extent to approve the corporate financial dictatorship proposed by U.S. Treasury Secretary Henry Paulson, Chao, on Wednesday, said Congress must pass the bailout “quickly and cleanly.”

Cleanly as in giving Paulson, a political appointee with no accountability, powers so sweeping even the president couldn’t override his decisions.

Quickly, as in making sure the Wall Street CEOs, whose greed outpaced their brains and created the current debacle, get away with golden parachutes and massive bonuses.

(We at the AFL-CIO strongly oppose giving Paulson a blank check on the bailout. More info here and here. You also can tell Congress “No Blank Check for Wall Street” by clicking here.)

Fittingly, Chao was speaking to reporters at an event in posh Fairfield County, Conn., famous for its expensive houses and site of many hedge funds and other financial service companies. She also took the opportunity to dodge a question about whether she favored extending the unemployment insurance time frame, saying Congress already had extended it this year.

(Let’s see…Chao’s Labor Department reported on Wednesday there were 1,772 mass layoffs initiated in August, the most since September 2005, in the aftermath of Hurricane Katrina. And two weeks ago, Chao’s Labor Department reported unemployment worsened from 5.7 percent to 6.1 percent, a figure that economist Jared Bernstein noted in Sunday’s FDL Book Salon is more like 10.7 percent when underemployment is factored in. But I digress. Why would rising unemployment have anything to do with a need to extend unemployment insurance?)

At the same time that Chao was carrying out her role as a Bush-Paulson puppet, a Senate Judiciary Committee hearing examining pay discrimination heard from Lilly Ledbetter. After years of working at an Alabama Goodyear Tire & Rubber Co. plant, Ledbetter discovered she was being paid less than the lowest-paid man doing the same work.

But although a jury awarded her $3.8 million, Goodyear appealed to the U.S. Supreme Court. The Bush-packed Supreme Court essentially said “tough luck,” and Ledbetter now not only is out tens of thousands of dollars in income, but her Social Security and pension are smaller as well.

As Christy at Firedoglake pointed out a few days ago:

Even worse for all of us, the Ledbetter decision has now been cited in hundreds of cases nationwide to justify disparate treatment based on race, gender, age, disability and other reasons to pay someone less or treat them differently because these cases have been jimmied into an analogous argument to what Lilly faced in her claim. The SCOTUS decision effectively undercut decades of precedent on equality in one, fell swoop in favor of companies who want to justify internal discrimination.

Now, let’s imagine Frances Perkins was our current Labor secretary. It’s a safe bet that rather than backing massive CEO pay bailouts while making the rounds in a wealthy New York bedroom community, Perkins would be in those Senate hearings.

Right next to Lilly Ledbetter.

(This is a cross-post from the Firedoglake blog.)

Working Harder for Less Mocks the American Dream

Tula Connell — Tue, 16 Sep 2008 16:25:55 -0400

Worsening unemployment. Millions of home foreclosures. Two-income households unable to support families. America's workers are facing economic disasters so severe, even the national media is paying attention.

But the current crisis has long roots. America's working families have been suffering through what is now a generation-long stagnation of wages and rising economic insecurity.

Steps must be taken immediately to shore up our flagging economy and provide much-needed assistance to working families. The AFL-CIO union movement supports an immediate moratorium on home foreclosures and the passage of a second fiscal stimulus package, including extension of unemployment insurance and federal aid to states and cities to prevent further cutbacks of vital public services.

Yet short-term measures will not be enough.

We must restore the balance between workers and their employers to ensure that workers can bargain fairly for an equitable share of our nation's prosperity. Working families have been left behind over the past three decades, as virtually all income gains have gone to the wealthiest Americans.

Between the mid-1940s and mid-1970s, inflation-adjusted wages doubled for most U.S. workers, but between 1979 and 2007, they grew only 7 percent. Since 1979, productivity, or output per hour, has grown 70 percent—10 times as fast as real wages.

As a result, income and wealth are more unequally distributed in the United States than in any other developed country and are more unequal today than at any time since the 1920s. Even more alarming, American intergenerational economic mobility is falling and is already lower than in many European countries.

In a House subcommittee hearing on the economy last week, Rep. Jim McDermott (D-Wash.) summed it up this way:

In short, many Americans are working harder for less. Less income, less job security, less health and pension coverage, less time at home, and less opportunity. Left unchecked, this trend will strike at the very core of the American dream.

Economic Policy Institute (EPI) economist Jared Bernstein describes it this way:

The difficulties facing American workers predated the recession. There may be no more telling statistic…than the fact that the real wage for the median male was lower in 2007 than in 1973.

For the last few decades, [workers] have been losing employer-provided health coverage, or paying more out-of-pocket for premiums, health services, or medications. Their pensions are less secure, and have flipped from majority guaranteed benefit to guaranteed contribution, shifting the risk of an adequate retirement benefit from their employer to themselves and their family.

Correcting this long-term imbalance will require multiple strategies. We need policies that ensure a just global economy. We need a government that provides quality services, adequate public investment and fair taxes. And we need to ensure that when workers seek to join together to improve their wages and access to health care and retirement security, they can do so without employer harassment and intimidation.

In 2007, full-time union workers were paid $863 in median weekly income, compared with $663 for their nonunion counterparts. In March 2007, 78 percent of union workers in the private sector had jobs with employer-provided health insurance, compared with only 49 percent of nonunion workers. Union workers also are more likely to have retirement and short-term disability benefits.

America's workers know union membership helped build the nation's middle class. Some 60 million workers say they would join a union if they could. But the nation's labor laws are broken, letting greedy employers harass and intimidate employees who seek to form a union. In the post-World War II years, our nation's middle class mushroomed because workers from the factory lines to the office steno pool could join together and form unions, enabling them to negotiate for better wages, affordable health care and retirement security. Their purchasing power helped strengthen communities, and their solidarity pushed through such vital policies as job safety standards and Medicare that benefited all working Americans.

But some 92 percent of private-sector employers, when faced with employees who want to join together in a union, force employees to attend closed-door meetings to hear anti-union propaganda, and 75 percent hire outside consultants to run anti-union campaigns. When America's workers are unable to win a voice at work, the American Dream becomes harder and harder to reach.

That's why passage of the Employee Free Choice Act is a top priority for the union movement. The Employee Free Choice Act is a crucial step in moving our nation toward a just economy. It would level the workplace playing field by enabling employees to sign up for a union through a majority verification (card-check) process or labor board election, whichever they choose. It also would provide for mediation and arbitration if management and the union can't work out a contract in 90 days. Because even after workers successfully form a union, in one-third of the instances, employers refuse to negotiate a contract.

Chris Williams, who teaches introductory physics at Pace University in the New York City area, has experienced this firsthand. As an "adjunct faculty" member, Williams couldn't survive on his wages from Pace, where the average pay for teaching a 15-week, three-credit course is just $2,500. So while a tenured professor might earn $100,000 annually, an adjunct in the next classroom with the same qualifications would earn only $15,000 for the equivalent of a full-time workload.

Williams and other adjuncts joined the New York State United Teachers/AFT (NYSUT/AFT) in December 2003. But, once at the bargaining table, Pace dragged its heels, and today, the adjuncts still have no contract. Williams, a strong supporter of the Employee Free Choice Act, puts it this way:

Anything that can speed that process has to be good for workers. It's clear that people need someone to represent them collectively. At the moment, the balance of power is almost completely with the employers. It's long overdue that workers shift the power a little bit in our favor.

The health of the U.S. economy will turn on whether we let corporations get away with paying poverty wages to those responsible for teaching those who, ultimately, will lead our country. And so will the future of our nation.

(Show your support for the Employee Free Choice Act by signing a petition for its passage here. We plan to present 1 million signatures supporting the Employee Free Choice Act to the next Congress and president.)

Workers with Employer-provided Pensions Fall

Armand Biroonak — Tue, 16 Sep 2008 00:00:00 -0400

The number of workers covered by employer-provided pensions fell from 2000 to 2006--despite rising during the 1990s--leaving fewer than half of all workers with pension coverage.

Retirement Pensions No Longer the Norm

Armand Biroonak — Fri, 29 Aug 2008 00:00:00 -0400

Twenty-five years ago, 88 percent of workers who participated in a workplace retirement plan were covered by a defined benefit pension; in 2004, only 37 percent were.