With Governor Walker suspending his presidential campaign, many of us in Wisconsin have been asking ourselves, what will be next on his agenda? My guess? Messing with public employee retirement and pensions. According to Molly Beck, “Republican lawmakers are laying the groundwork for changes to state workers’ pensions that could reduce the monthly payouts and raise the age at which they could retire. One bill expected to be introduced this month would change the way pension payments are calculated for state workers in five years — payments would be determined by averaging workers’ top five years of pay instead of the top three. Under a second bill, the minimum age at which a state worker currently under the age of 40 could retire would be 57 instead of 55. Public safety workers could retire at 52 instead of 50. The measures are sponsored by Sen. Duey Stroebel, R-Saukville, who said both moves would ensure future solvency of the state’s already solvent pension system.”
Here’s the thing. As the article goes on to note, Wisconsin has the most solvent pension system in the country. Yes. You heard that correctly. As Jason Stein points out, “In 2000, more than half of the states in the nation had enough money set aside to cover their pension payments. Since then, the failure of many states to set enough money aside to cover their obligations has been exacerbated by investment losses during the recession. Now, the Pew study found only Wisconsin’s system is fully funded – the national average is currently 75% for state systems.To make up the gap, the other 49 states will have to set aside more tax dollars, cut future benefits or raise contribution rates for current employees, or resort to legally questionable strategies to siphon away cost of living adjustments for current retirees. ‘It’s pretty clear that the Wisconsin retirement system is a model for the nation in terms of its long-term health,’ said Jim Palmer, who serves as both the chairman of the Wisconsin Coalition of Annuitants, a group representing retirees and workers in the state pension system, and as the executive director of the Wisconsin Professional Police Association.'” In 2012, the Pew Research Center cited that “In 2010, only Wisconsin had fully funded its pension plan and 34 states were below the 80 percent threshold.” So, whereas this is a problem in other states, in Wisconsin, it’s just, well, not.
Those in our legislature are yet again trying to fix a “problem” that need not be solved. Because there is no problem. Public sector employee pensions are not bankrupting this state, nor have they ever. And didn’t we just solve our current budget “crisis” by signing a right-to-work law, needlessly turning away millions of dollars in federal food aid to our state’s poorest residents, refusing federal funding to expand Medicaid, diverting state school funding from public schools to private ones, cutting funding to the UW- System, and, well, you get the picture. I really thought we were done with the whole “let’s find more ways to pit private sector workers against public sector workers by pointing out benefits private sector workers don’t have, while taking away benefits from public sector workers to, well, just make their lives more difficult” thing.
This is about ideology, not policy, and again finding ways to yet again attack public sector workers for benefits they bargained for and were negotiated for. As I pointed out in my last blog, “‘The pension is deferred compensation, and is 100% funded by money earned by the person benefiting. It’s not a freebie. And employer-subsidized health insurance actually is a standard benefit for employees of big companies. The level of total compensation for educators is quite a bit less than those with comparable education, training, and credentials receive in the private sector. And employees of private corporations don’t have to dip into their own pocket for supplies they need do their job like educators.’ In addition, as another wonderful friend pointed out, ‘Many private sector employees also benefit from matched contributions to a retirement account, bonuses, and paid vacation time.‘ Facts!”
The more we take away from public sector workers, the less likely we will get people to go into those fields. From the article stated above, it is policies like the one proposed regarding retirement and pensions that will only further discourage people from pursuing professions in law enforcement, education, and other public sector jobs.
So to, once again, shed some light on how pensions actually work, let’s look at the work of David Cay Johnston, American investigative journalist and author who focuses on economics and tax issues, and was the winner of the 2001 Pulitzer Prize for Beat Reporting.
Myth: your taxpayer dollars are funding public worker pension plans
As Johnston notes, the media has perpetuated the falsehood by framing pensions as “contributions.” He states, “News reports routinely refer to contributions to pension plans by industry and government. Journalists perpetuate this misunderstanding by accepting the language politicians and others use without checking the facts, as when Gov. Scott Walker of Wisconsin said four years ago that he wanted state workers to “contribute more” to their pensions so taxpayers could contribute less. Using the term ‘contribution’ creates the false impression that pensions are a gift and therefore optional. There are no taxpayer contributions to public worker pension plans. All the money in these plans — except for investment earnings — is compensation that workers have earned.”
Not convinced? Take Robert Reich’s argument: (Chancellor’s Professor of Public Policy at the University of California at Berkeley and Senior Fellow at the Blum Center for Developing Economies): “Here’s another whopper. Republicans say public-sector pensions are crippling the nation. They say politicians have given in to the demands of public unions who want only to fatten their members’ retirement benefits without the public noticing. They charge that public-employee pensions obligations are out of control . . . . Yes, there’s cause for concern about unfunded pension liabilities in future years. They’re way too big. But it’s much the same in the private sector. The main reason for underfunded pensions in both public and private sectors is investment losses that occurred during the Great Recession. Before then, public pension funds had an average of 86 percent of all the assets they needed to pay future benefits – better than many private pension plans. The solution is no less to slash public pensions than it is to slash private ones. It’s for all employers to fully fund their pension plans.”
And again, these underfunded pensions Reich discusses have nothing to do with Wisconsin. As I stated above, Wisconsin does not have a pension problem. Period, end of story. As Democratic State Sen. Jon Erpenbach notes, “other states are facing payout issues because their legislatures and governors borrow from it — something that’s illegal in Wisconsin — and fail to repay it. He advised Republicans to drop the issue. ‘(WRS) works. It absolutely works in the state of Wisconsin, and when the Legislature starts screwing around with it or governors start screwing around with it, that’s when we begin to have a problem,’ he said. ‘We should just leave it alone. It works right now, it’s worked in the past and will work in the future.'”
In sum, and to quote Johnston, “George Orwell taught us that words matter and that political language is often shrouded in euphemism. Calculated mislabelings, such as when earnings are called contributions and taxes are called matching money, reflect a politics of deceit. They are economic cousins of the three slogans made famous in George Orwell’s novel ‘1984’: ‘War is peace. Freedom is slavery. Ignorance is strength.'” Framing is everything. Language matters. Words matter. And when we become educated as to how the system works, how language works, and how framing works, we might begin to put a dent into the misleading information surrounding the pensions of public sector workers. Until then, we will continue to fight over what we don’t have, see public workers as the “haves” and private sector workers as the “have nots,” and instead of working together for better benefits, job security, healthcare, and a way of life, we will spite each other and continue to vote for those legislators who use the rhetorical device of divide and conquer to get reelected leaving all of us worse off and even more divided. So I ask, dear readers and those who may stumble across this: stop giving into this device. Stop believing the narratives. Enough with the “haves” and the “have nots.” Taking away benefits from public sector workers won’t make the lives of private sector workers better. It will get politicians elected, but if you really want a better quality of life, I suggest you turn inward and ask yourself what kind of life you want to live. One filled with spite and envy, or one where we work together to lift each other up and where we vote for politicians who want the best for all workers, all lives, and who will fight on behalf of what’s best for each and every citizen of Wisconsin.