Public Workers and Unions Scapegoated in Effort to Scrap State Pensions

[irishbobcat]

Public Workers, Unions Scapegoated in Effort to Scrap State Pensions
Anti-union politicians and pundits are trying to pin the blame for the bad economy on public workers and their pensions, falsely claiming they're the reason that states and cities are at risk of going broke.

Minnesota Gov. Tim Pawlenty and former U.S. House Speaker Newt Gingrich, both potential GOP presidential candidates, are among those fabricating the case against public workers. They want Congress to rewrite bankruptcy laws so that states can escape their pension obligations to current workers and retirees. Even better, they say, would be new laws allowing states to scrap their public workers' contracts entirely.

While states and local governments are facing some $700 billion in unfunded pension liabilities, Pawlenty and others have grossly exaggerated the figures. Economists say the truth is that public pensions account for less than 4 percent of government budgets, and the liabilities are manageable over the next 20 years.

The anti-public worker schemes ignore another critical fact: public employees contribute to their own pensions, something few private sector workers with pensions are required to do. In New Jersey, for instance, public workers pay 5.5 percent of their salary into the pension fund. And for at least 12 of the last 15 years, their payroll deductions have been the only contributions to the plan.

"The public-sector bashers never mention that public workers, on average, contribute 6 percent of their pay to their pension plans and that public employers have skipped their required contributions for years," CWA President Larry Cohen said.

Cohen stressed that all workers need to pay attention, because the hostility isn't directed only at government employees. "Our pensions, our benefits, our pay and our jobs are under attack, by right-wing elected politicians and by most private-sector management across the country," he said. "If we don't stick together, one by one we will all go down."

The bankruptcy scheme is getting ample media coverage but little traction, with some Republicans calling it reckless. That's because a bankrupt state's credit rating would fall and its cost for bonds financing schools, roads and other public projects would soar.

"No state needs to, or wants to declare bankruptcy," California's state treasurer Bill Lockyer told reporters this week. "It would severely injure a state's economy, local businesses, working families, investors and taxpayers."