The public sector union workers thought they had it made. They worked for years and pensions were established so that when they retired they would get a retirement check. There is nothing inherently wrong with that but as with anything government and union, problems have arisen.
During the boom times unions made deals with politicians about how much of YOUR money they should get (notice YOU are not part of the negotiations) and they made some nice deals. In many of these unions the workers pay little (if anything at all) into their retirement and the government contributes a lot to the fund.
This money has been invested in order to grow but when the economy went bad the funds lost lots of money. Couple this with the usual mismanagement associated with unions and government and a problem emerges.
The funds do not have enough in them to meet obligations. As such many governments are trying to reduce benefit payout or are trying to require workers to pay more toward their pensions (Heaven forbid).
The recent ruling in Detroit’s bankruptcy as well as threats in Illinois have many government workers worried. The pension funds are NOT protected from the bankruptcy.
In Illinois strong consideration is being given to reducing benefits to solve the problem.
I can understand why the workers are upset. They worked all those years and their unions negotiated something for them. Now that is being threatened. People plan on living on certain amounts when they retire and when that is taken away or changed it causes problems. While I understand their plight I also know they cared little about the taxpayer when they were supporting (and demanding) the things the unions negotiated for.
I can put it this way. These folks are concerned that they are being shafted of their money.
I as a taxpayer feel the same way because my money pays them and I did not have a seat at the table.
What does make me laugh is how many of these workers and their union reps act as if they are only asking for what the rest of the workers in America get. Really? Many folks in the private sector do not have retirement plans and those that have them do not have ones as generous as those in the public sector.
But, but, public sector workers accept a lower pay for what they do in order to get a better retirement. That is the claim they make:
…For generations, public employees accepted modest wages for the promise of a secure retirement. Bloomberg
The article is focused on teachers and there is a lot of discussion about how they worked hard for years for less money and paid for things out of their pockets and took care of children so I will focus on teachers.
I will not address the lack of quality education and the low performance of children. Just on the claim that they accept less money for a better retirement.
In Illinois, the place the article discusses, the average salary for a teacher starting out is $36,636 and the overall average is $64,509. Information from teacher portal indicates that Illinois has the fourth highest teacher salary in the nation. It is hard to get an hourly wage because teachers are off in the summer and I do not know what the work hours are for them. But, a regular 40 hour a week job would equate to $17.61/hour to start and $31.01/hour as an overall average.
How many private sector jobs start at those rates? Seventy percent of American wage earners are in the lowest three quintiles of workers and the average income for the middle quintile is $34,738 with a lower average for the other two. So the claim that public sector workers accept less in salary to have a better retirement is smoke and mirrors. The teachers have more time off, receive great health benefits, and have a great retirement plan and receive a salary that puts them in the upper fourth quintile. They have it much better than those in the private sector.
Plus, you need an act of Congress to fire them. In the private sector the boss can fire you without all the hassle.
By the way, Rahm Emanuel’s Chicago is in the worst shape pension fund wise and his teachers in that city average $74,839/year (2009).
There are problems all the way around. Too many people on welfare, too much taxpayer money spent on great public sector benefits and not enough folks working. Add the corruption that is always involved and money flow becomes a problem.
These places are having trouble and they are not particularly happy with the Democrats who courted their votes for decades and paid them off because those Dems are suddenly screwing them over.
As for Republicans, Scott Walker turned a deficit into a surplus and union employees were not fired and only took a small hit.
It sucks for these folks but now maybe they know how taxpayers have felt over the years.
After all, it starts out as OUR money…
Never surrender, never submit.