Friday, January 17, 2014

ARE ALL RECIPIENTS OF PUBLIC PENSIONS CROOKS AND PARASITES?

NOTE:  This is Phronesis’s first guest commentary.  It was written by Tom Kando, emeritus Professor of Sociology at California State University Sacramento.  Tom writes about public pensions, which have recently come under attack in the United States.  Our hope is that quest commentaries will inspire reader comments and, ideally, debate.  Tom writes a blog, which can be found at:    http://european-americanblog.blogspot.com/.  His website is:  http://www.tomkando.com/.



  clip_image002by  Tom Kando

It’s open season on (public) pensioners. The moronic consensus is that municipalities and states are going belly up because they over-committed to paying out fat pensions to their employees. Detroit is ground zero. The bankruptcy judge there has decided that the city does NOT have to honor its contracts with its retired employees. These folks will have to line up along with everyone else owed money by Detroit, i.e. probably get practically nothing. These are people whose average pension income, were it honored, would be $18,000 per year! Woopty doo!

Attacking public pensioners used to be what the rich did, the private sector capitalists, the Republican Right. But in our lemming-like society, when a message is repeated often enough, sooner or later it becomes a bandwagon. Today, those who spout off the refrain that “unless public entitlements/pensions are reined in, we are headed for Armageddon,” (or something like that) include not only “centrist Republicans” (this is an oxymoron, come to think of it), such as the Sacramento Bee’s Dan Walters, but also people who are still viewed as reasonably liberal: For example that paper’s Dan Morain. This message is repeated over and over again by all of the media, not just Fox News. Is it any wonder that the opinions expressed in the locker room at my health club unanimously ape this narrative?


We hear that California cities that have gone bankrupt, such as Vallejo, Stockton and San Bernardino, have no choice but to follow in the footsteps of Detroit and forsake their retired employees. California’s two massive public retirement systems PERS and STERS are said to be in deep doo-doo, unless the State (= the tax payer) bails them out, because they committed to overly generous future pensions in the past. San Jose’s government is seen as enlightened because it is about to balance its budget by reneging on some of its pension obligations.

This piling on public employees and their retirement is particularly immoral because it is voiced so often by (1) the wealthy and (2) people who are themselves double, triple and even quadruple beneficiaries of public retirement benefits!

For one thing, having pensioners (in Detroit and other bankrupt entities) line up alongside investors in the hope that they’ll get back some (10%?) of what is owed to them is absurd: When you invest in bonds or anything else, you knowingly take the risk. You know that you may come out ahead, or not. On the other hand, a pension is a legal contract, an agreement to exchange a defined contribution for a defined benefit.

And by the way, all these arguments are generic: everything that is said in the attacks on public pensions, and in their defense, can also be said about Social Security. 

Take me as an example: For several decades, money was taken out of my monthly paychecks for Social Security and for my PERS retirement. This added up to hundreds upon hundreds of withholdings which, by the end of my career, amounted to thousands of dollars every month. My after-tax take-home income was close to half of my gross. The benefits which I collect today are, to a very large extent, MY OWN MONEY.

I know, I know, public pension systems also MATCH their employees’ contributions (often 1:1), so the money which retirees get back after retirement is not all theirs...that is, if they live long enough. Of course, some people croak fairly soon after they retire, so they are the patsies. 

And then there are the invidious distinctions many people make between different categories of public retirees. Recently someone argued with me that veterans are more entitled to public pensions than teachers are. Others feel that peace officers and fire fighters are also more meritorious than other public employees.

So the emerging consensus is that most public employees are parasites, especially after they retire. Not infrequently in recent years, the people whom I have heard clamor most vociferously against public benefits, most sanctimoniously about “individual responsibility,” are triple-dipping retirees who get, in addition to their private investments, social security AND a state, federal or municipal pension! These people live on six-figure pensions, but they begrudge the average $1500 monthly pension promised to Detroit employees, or the average $2,000 promised to members of PERS. What double-talking hypocrisy, what obscenity!

© Tom Kando 2013













1 comment:

  1. I am a public employee in the Information Technology sector. Like most skilled jobs requiring expensive degrees and credentials, we are significantly underpaid when compared to our private sector counterparts (cue another vociferous round of accusations and denials).

    Seldom noticed or remembered is that most of us accept this relatively lower pay largely in exchange for the promise of a pension in the future. The common perception is that we're giving up salary today (in addition to the contributions I also make, as noted) for a more comfortable retirement tomorrow. But if the backside of that deal is reneged upon... then I supposed we're just getting screwed.

    ReplyDelete

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