Pension debate heats to a boil

Two remarkable articles in the NYT about the dreary and critical subject of public pensions, including those of teachers.

The first begins with the YouTubed confrontation between teacher and Governor in New Jersey, but provides a very balanced and nuanced view of the issue:

Across the nation, a rising irritation with public employee unions is palpable, as a wounded economy has blown gaping holes in state, city and town budgets, and revealed that some public pension funds dangle perilously close to bankruptcy. In California, New York, Michigan and New Jersey, states where public unions wield much power and the culture historically tends to be pro-labor, even longtime liberal political leaders have demanded concessions — wage freezes, benefit cuts and tougher work rules.

It is an angry conversation.

The second takes that anger and examines how it is both given voice and exploited in the current partisan political dogfight:

Republican lawmakers in Indiana, Maine, Missouri and seven other states plan to introduce legislation that would bar private sector unions from forcing workers they represent to pay dues or fees, reducing the flow of funds into union treasuries. In Ohio, the new Republican governor, following the precedent of many other states, wants to ban strikes by public school teachers. […]

In the 2010 elections, Republicans emerged with seven more governor’s mansions and won control of the legislature in 26 states, up from 14. That swing has put unions more on the defensive than they have been in decades.

But it is not only Republicans who are seeking to rein in unions. In addition to Mr. Cuomo, California’s new Democratic governor, Jerry Brown, is promising to review the benefits received by government workers in his state, which faces a more than $20 billion budget shortfall over the next 18 months.

What’s clear here is twofold: this issue is going to get hotter and will be at a boil for some time, and there are no easy answers — even the draconian measures headed to a hearing in some states will do little to mitigate a looming crises that already has trillions of dollars in underfunded pensions.

This issue is currently viewed though a bifurcated lens: public employees vs. private employees.  But I think that is just the first round — what will eventually happen (and the rumbles have begun) is an increasing divide between public employees who have received or are close to retirement, and those just starting their careers.  As I’ve argued previously, if you are just beginning your teaching career, you have pretty much zero chance at receiving the same benefits as your senior peers. Zero.

I don’t have much of an answer here – and neither does anyone else. Where ever else one is on the political spectrum, one can no longer be against the idea of pension reform. The only question is what form it will eventually take, and how long until it can no longer be avoided.

Personally, I think teachers and other public employees would be better served trying to get out in front of the issue than waiting for it to be decided for them.  I’m deeply partial to the belief that the present inadequacy of teacher salaries is, in some part, a result of a compensation system weighted too heavily to retirement. Cuts to pension benefits are now unavoidable. There is probably still a chance of negotiating something in return. However at some point in the not-to-distant future, that chance will be gone.

The only clear outcome is that this will not end for a long while, and it will certainly not end well.

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