Pensions

Even Democrats Are Hating on Public-Sector Unions These Days

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What's that old saying? "Things that can't go on forever won't."

Politico reports "Public employee unions under fire again: And not just from Republicans." It turns out that higher-than-market compensation packages for state and local workers are putting the Cobra Clutch on budgets like Sgt. Slaughter used to put on wrestlers in the WWF.

Democratic politicians have sometimes clashed with public-employee unions over pensions that are squeezing state budgets. Here, too, Illinois features prominently, because nowhere does the state pension problem weigh more heavily. The state's Democratic attorney general, Lisa Madigan, is arguing in court for emergency powers to trim state pension benefits.

"As expenditures on benefits increase," writes Daniel DiSalvo, senior fellow at the Manhattan Institute, a conservative nonprofit, in his 2015 book "Public Union Power and Its Consequences," these expenditures "'crowd out' government spending on parks, education, public safety and other services on which the poor and middle class rely. In short, government costs more but does less." Such pressures are felt by Republicans and Democrats alike — indeed, so much so that some Democrats now openly pronounce themselves anti-union. In his book, DiSalvo quotes San Jose Mayor Chuck Reed, a Democrat who's clashed with public-employee unions, saying, "There's a difference between being liberal and progressive and being a union Democrat."

Read the whole thing.

Pew

This is simply the endgame of a process that swung into high gear a result of the financial crisis. The simple but rarely acknowledged fact is that public-sector workers make a lot more money and take home a lot more in benefits than do their professional counterparts in the private sector (and note, we're talking apples to apples here, such as public-school versus private-school teachers).

For instance, back in 2010, I reported on a study that found Ohio state workers made 34 percent more than their analogues in the private sector; in Michigan the differential was 47 percent. USA Today looked at federal employees and found that they took home about 45 percent more than people doing the same jobs in the private sector. That old argument about public-sectors workers gaining job security and decent benefits in exchange for less compensation hasn't been true for a very long time.

Much of the pay gap comes in the form of retirement benefits for pensions. Politicians can be extremely generous to current workers by promising them spectacular and guaranteed payouts that will be covered by future taxpayers. But those days are ending. Again and again—and certainly in states such as Illinois and cities such as Detroit—those promissory notes are coming due and there's just no way they can be cashed. The defined-benefit model, in which workers are guaranteed higher-than-market returns, early retirement ages, and in some cases higher annual pay than what they earned on the job, are over.

It comes down to a simple question in which there is no easy answer: Who exactly is going to take the haircut? Will it be the taxpayers, who are stuck with ridiculous promises made by yesteryear's politicians (who were often in the pocket of public-sector unions)? Will it be public-sector pensioners, who are understandably enraged at cuts to their retirement payouts? Certainly, it will be new public-sector workers, who will not get much lower pay and benefits than folks hired 10 and 20 years ago. The worst possible outcome is the sort that played out in places such as Vallejo, California a few years back. The city was going bust in large measure due to ridiculous public-sector compensation levels. A slate of candidates ran for city council on a reform platform in which they promised to take the city into bankruptcy and rewrite labor contracts if the courts allowed it. That all happened and then…the new councilmembers blinked and did nothing.

The situation is dire but not (yet) hopeless. Cities, counties, and states that take the issue seriously and address existing and future funding gaps and switch to defined-contribution plans can actually create a situation that makes future economic growth more likely. For in-depth policy work on pension reform, check out Reason Foundation's studies and articles on the topic.

For a collection of articles and videos on how to fix pensions and more, check out our special landing page on "The New Old Age."

Watch "3 Reason to Fix Public-Sector Pensions NOW"

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  1. Ha ha and ha.

  2. Damn. Now I am in no way regretting my decision to stay out of that pension program.

  3. Wake me when they stop taking money from and funneling money to teachers unions.

    1. Why would teachers unions be the ones you focus on?

      1. Because there are somewhere between three and four times as many teachers as cops sucking on the public teat?

  4. They’re tired of paying for some other asshole’s vote buying, mostly because it’s affecting their vote buying

  5. Judas Priest on a pony!

  6. Boy, you couldn’t fix an election if your brother was the governor.

  7. We have so many bubbles/overpromises that are coming due to pop soon. Education, public sector pensions, housing again maybe, always social security, you name it. Oh joy.

    1. And student loan debt.

  8. Chuck Reed is a remarkable mayor. Not only is he a Democrat taking on the unenviable task of going up against the local firefighters union, he’s doing it in a city where all the council members are union puppets.

  9. In Illinois while the Democrats in the state legislature publicly hate Rauner, they’re secretly hoping that he takes the public sector union down a peg or two. Basically, they want the rich Republican to do their dirty work.

  10. Who exactly is going to take the haircut?

    The taxpayer. The answer is always the taxpayer.

  11. OT: Illinois man freed after 29 years in prison. A DNA test showed that he had no link to the rape and murder he was convicted of.

    I was surprised to see this in the article:

    “This is difficult for all parties including the victim’s family, but I cannot and will not let a wrongful conviction stand,” Cook County State’s Attorney Anita Alvarez said in a statement.

    1. She’ll be primary’d at the earliest opportunity with that attitude.

      1. Soft. On. Crime.

  12. I believe that real, meaningful pension reform will have to come from liberal/progressive regions. Democrats and the media are so pre-conditioned to shut their brains off if a Republican (or anyone from any other party) tries it, that they attack it on general principle.

    But if a Democrat realizes it’s a problem, then they’ll do something about it.

    I used to work with a guy like that– let him believe it’s HIS idea, then everything will go smoothly. Otherwise, he fights you tooth-and-nail.

    1. my old boss

    2. Ya but what happens when you cutoff a bunch of gorilla juice-head starship troopers?

      I look forward to when they go full highway robber

    3. At the risk of going all libertarian moment, it seems to me that both Dems and Reps are on collision courses with reality. With many standard socon positions becoming ever less popular and Dems running cities and states into the ground as a result of give-aways to unions and the resulting decay in the lives of everyone else you’d think that eventually something will have to give for both of them

      I guess the questions are whether the parties will actually fracture due to these pressures or just undergo some kind of transformation, and if change can come before Doom settles upon the land.

  13. The public sector union pension funds are run like the fucking Sopranos. However, instead of bullets to the temples and goddamn hammers on the elbows these motherfuckers use establishment polish to make it seem OK that no one needs to realize a single fucking thing about how tax-payer money is spent on these worthless cretans.

  14. OT: Federal court rebukes unconstitutional behavior by an agency of the state of Alabama.

    Unfortunately, the agency in question is a university campus which tried to block prolife speech, so don’t expect a whole lot of concern-trolling about Alabama interfering with federal court decisions:

    http://www.washingtonpost.com/…..amendment/

    1. The federal court opinion:

      (from Google Scholar)

      http://ow.ly/IUBs4

    2. So the university is resisting the court’s decision?

      1. If they had testicles, they would. But they don’t and they won’t. A fact which greatly helps the prolife side.

        Fortunately, Roy Moore and the probate judges have functioning balls.

        1. So the two situations have a critical difference, don’t they? One you conveniently elided.

          1. What would be the relevant difference?

            1. What’s common is for government actors to do something that is later declared by a federal court to be unconstitutional.

              What’s less common is for those actors to keep on keeping on doing that something AFTER the court has declared it unconstitutional.

              1. You mean like the federal Sedition Act, proclaimed constitutional by the federal courts but denounced as unconstitutional by the state of Virginia and Kentucky?

                Or the Fugitive Slave Act of 1850, proclaimed constitutional by the federal courts but denounced as unconstitutional by the Wisconsin Supreme Court?

                1. Double down on that derp, Eddie. You either dishonestly or stupidly held the university case up as the equivalent as what Moore is doing, and when called on it you want to do some quasi-Godwinning on a different matter.

                  1. Whether what Alabama is doing is part of a noble tradition like the Kentucky Resolutions or not, what they are doing is not like what was going on with that university. Your holding it up as such was dishonest or stupid.

                    1. The university backed down because it knew it was wrong.

                      Is that the difference you were referring to?

                    2. You asked why the press was making a big deal of one and not the other, and I’ve explained why. It’s the continued defiance after the court ruling. You’re not so retarded that you can’t see that that IS a difference that might matter to some people, right?

                  2. The state of Wisconsin did *exactly* what you denounced: they “[kept] on keeping on doing that something AFTER the court has declared it unconstitutional.”

                    In their case, they kept on insisting on a fugitive slave’s right to freedom despite what the federal courts said.

                    Come on, answer the question: Did the state of Wisconsin do the right or the wrong thing?

                    1. You’re changing the subject. You initially held up the university situation as analogous to what Moore is doing. That’s wrong for the reason I gave.

                      But being a fanatic you just went to ‘they’re not the same maybe, but what Moore is doing is AWESOME like other AWESOME historical stands!’

                      Maybe it is, maybe it isn’t (it isn’t btw), but whatever it’s not like the university case as you suggested.

                    2. Right, because the university slunk away like a bitch, with its tail between its legs – the course of action you recommended for Moore and the probate judges.

                    3. You’re crazy, you know.

                      You: Hey, everyone’s making a fuss about Alabama officials denying those marriage licenses, but where’s the fuss over what this university did?

                      Me: Well, in the first case the state had a policy and the court ruled it unconstitutional but the officials keep following the policy. In the first the state just had a policy that the court struck down, and they stopped.

                      You: But isn’t the first case just like the Fugitive Slave Law resistance!!!!

                      You’ve moved those goalpost so far they’ll have to kick field goals in the Marianas Trench!

            2. Don’t want to answer? I understand.

              https://www.youtube.com/watch?v=FJ_Mt7Zm5hM

              1. Did you really wait for four minutes and pull a ‘so you don’t want to answer!’?

                Pathetic Eddie

                1. Come on, Bo, answer my challenge – do you support or oppose what Wisconsin did to defy the Fugitive Slave Act of 1850?

                  You *did* learn about that incident, didn’t you, as part of your education?

                  1. Pathetic.

                    1. You know, Bo, I’m not what you’d call the most popular poster on H&R. I’ve been called all sorts of names.

                      So what accounts for the fact that you’re *less* popular than I am? You’re the purist libertarian, while I’m the clerico-fascist theocrat.

                      One would think you’d have a natural advantage.

                      Yet you keep getting denounced in far worse terms than me.

                      Why is that?

                    2. Because this place is lousy with conservatives. I’ve explained that before.

                    3. Name some names! Who are these conservatives?

                    4. Hold on a minute, you haven’t explained whether Wisconsin, in its defiance of the federal courts re the Fugitive Slave Act, came within the terms of your denunciation on state authorities which “keep on keeping on doing that something AFTER the court has declared it unconstitutional.”

                      Come on, grasp either one horn of the dilemma, or the other! Either way, you’ll get impaled.

                      So I don’t expect you to give a straight answer.

                    5. And for the second time, answer my question about Wisconsin: Did that state do right to resist the Fugitive Slave Act even if that meant continuing its defiance “AFTER the [federal] court has declared it unconstitutional.”

                    6. Wow, you *are* a chickenshit. You repeatedly ask *me* questions and then repeat the questions even after I repeatedly answer them.

                      You can’t answer two simple questions: (a) Did Wisconsin act rightly or wrongly in resisting the Fugitive Slave Act, and (b) who are those sinister conservatives on H&R?

                    7. For the second time: Name those conservatives!

                    8. Wow, I sure called it – I said you were too chickenshit to give a straight answer to my questions. And you are.

                    9. Now I have an important piece of information for future reference. To get you to shut up, all I have to do is ask you to give a straight answer to a relevant question.

                    10. Look at you go! Wow, you are literally crapping your pants over this Alabama thing. Gay marriage is settling in, Eddie. You’ve should get some gloves for all the pearl clutching in your future.

                    11. Quit squirming, Bo, and answer my questions.

                    12. No, they’re irrelevant to your initial inapt analogy.

                    13. Answer the questions!

                      (a) Did Wisconsin act rightly or wrongly in resisting the Fugitive Slave Act, and (b) who are those sinister conservatives on H&R?

                    14. Dance, monkey, dance!

                      Me: Those cases are different, one involves continuing a practice after a court has declared it unconstitutional, the other doesn’t.

                      You: Answer me this then, should officials have followed Dred Scott!!!

                    15. Holy shit, Wisconsin’s defiance had nothing to do with Dred Scott, are you retarded? (You don’t have to answer *that* question, I respect your Fifth Amendment privilege)

                    16. This is awesome.

                    17. Indeed it is, but you still haven’t answered my questions:

                      (a) Did Wisconsin act rightly or wrongly in resisting the Fugitive Slave Act, and

                      (b) who are those sinister conservatives on H&R?

                    18. Crap those pants Eddie, crap ’em good.

                    19. I’ll consider it, but only after you answer these simple questions:

                      (a) Did Wisconsin act rightly or wrongly in resisting the Fugitive Slave Act, and

                      (b) who are those sinister conservatives on H&R?

                    20. Well, I expected I couldn’t get a straight answer out of you.

                      But I bet you’ll go back to repeating your retarded questions and pretending I haven’t answered, when I have.

                    21. Why would I give a straight answer to someone who won’t admit the inaptness of their opening comment?

                    22. OK, stipulate my opening comment was inapt.

                      So answer the questions:

                      (a) Did Wisconsin act rightly or wrongly in resisting the Fugitive Slave Act, and

                      (b) who are those sinister conservatives on H&R?

                    23. “stipulate my opening comment was inapt.”

                      Was that so hard?

                      a. Rightly, but illegally.

                      b. You, John, RC Dean, Immaculate Trouser, Winston, Papaya SF. All have said they don’t consider themselves libertarians because they agree with conservatives on important areas libertarians traditionally break with the right.

                    24. See, I’ve no interest in debating natural law vs. positive law tonight. For every case where defiance of positive law seems morally right there are cases where defying it seems morally wrong. For every Kentucky Resolution I can match with a Cherokee Relocation, for every Wisconsin resisting the Fugitive Slave Law I can match with a Massive Resistance.

                      My only point in replying was pointing out how inapt your analogy was. It was pretty silly.

                    25. “I’ve no interest in debating natural law vs. posi”tive law tonight”

                      Then why did you bring it up, when I didn’t?

                    26. You finally realized that your refusal to answer questions, when your whole schtick is to demand other people answer *your* questions, wasn’t going to fly.

                      Of course, I would *love* to know what legal principle Wisconsin violated in holding to its Tenth Amendment right to demand fair hearings (a court hearing with a jury) before allowing its inhabitants to be send into slavery – nothing in the Constitution took this right away from Wisconsin; in fact, the Constitution *protected* the right to judicial hearings with juries.

                    27. Still no answer? Well, feel free to corpse-fuck the thread later.

                      Nighty-night.

                    28. I don’t consider myself a “pure” or “purist” libertarian, but I do consider myself an impure libertarian. I lean right in some ways, and am more willing to compromise with the left in other ways than I am “supposed to.”

                    29. Crap ’em good Eddie. Look at the multiple posts in succession, the inability to let go. You’re crapping your paints as to how this Alabama situation is playing out I think I’ll go invest in adult diaper stock!

                    30. If I could crap “paints,” I’d give Sherwin Williams a run for their money!

  15. According to this site North Dakota has a larger per capita state debt than California, so frankly I have trouble with concluding that public sector union friendliness is the cause of state budget woes.

    http://www.governing.com/gov-d…..gures.html

    1. It is in some states and it isn’t in others. I’m sure for New Jersey it’s all of the above.

      1. I imagine it’s like drinking when you’re sick.

        1. Bo, you buying what the site says, without more?

          Hopefully not.

          1. Which site, Reason or Governing?

    2. It looks like ND is more like “the exception that proves the rule.” The other high-debt states look pretty “blue” to me.

      Plus, ND’s total debt is $6.2 billion. CA’s is $612 billion. Per capita notwithstanding, the latter is a much scarier number. I also doubt if ND is saddled with the welfare commitments that CA has, and it’s certainly not the illegal alien magnet we are.

      1. Maybe. I do wonder what is up with North Dakota though.

        1. Not a bad question. Pennsylvania’s pension woes can be tied firmly back to Gov. Tom Ridge (R) and the GOP dominated Assembly in 2003 that obscenely improved the pension calculations for state workers and teachers, then kicked payments for same down the road.

          1. That’s interesting. With ND though, I understand they’ve gone through something of a boom lately. How do you manage that into such a budget shortfall?

      2. I didn’t know you lived in ND, PapayaSF. Was the fracking boom, and hopeful revenue, a cause for the ND government overspending, or did that happen earlier?

        1. No, never even been there. I don’t see how you took my comment to mean that.

          Interestingly ND has a state-owned bank, and is often cited as one of the best-run states, runs budget surpluses, and their debt is very high-quality. I don’t understand how all that jibes with the per-capita debt thing.

      3. I also doubt if ND is saddled with the welfare commitments that CA has, and it’s certainly not the illegal alien magnet *we* are.

        Admit it! You are worse than Brian Williams, claiming to be from North Dakota when you were really shot down by a corpse with an APG in New Orleans.

      4. WA is sadly very blue (but has an awesome libertarian constitution) however our retirement system is well funded, quite solvent

        We reformed the exorbitant LEOFF I system into LEOFF II

  16. But those days are ending., says Nick. Ever optimistic Nick. There will be a police chase when a robber has been driving on the rims of the stolen car for 30 miles out into the dessert, sparks flying out the back. The cops will have given up for lack of overtime pay. Only a small tribe a trailer-park rats will be there to meet the car as it comes to a stop and siphon the remaining gas from the tank. You will know public-sector pension funds run dry when the road war begins.

    1. The question is whether these pols can make significant changes or just modest reforms that kick the can down the road.

    2. I think not. I wish were I wrong, but I just don’t see it. There are two big problems the US has: 1) those crazy Islamists are beheading, crucifying, and enslaving non-believers like it’s 999, and 2) we can’t keep our own house in order.

      Focus on 1.

  17. Where pray tell Bo did I say that I don’t consider myself a libertarian because I agree with conservatives on important areas libertarians traditionally break with the right?

    1. Forget it Winston. It’s TrueScotsmenTown.

  18. Not surprising that IL sucks. My state (the #’s are compelling) has a very solvent well funded LEOFF II cop/firefighter retirement fund

    This is partly because we get REASON(able) but not exorbitant benefits and pay quite a lot into the system

    1. Fuck off slaver

      smooches

      hth

  19. my best friend’s ex-wife makes $65 an hour on the computer . She has been without a job for seven months but last month her check was $13740 just working on the computer for a few hours. try this…………..

    ????? http://www.netpay20.com

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