Friday, July 9, 2010

Right Wing Agenda Attacks State Workers, Tax Payers Alike

Over the course of the last few months, state workers and their pension system has come under attack from the right wing.

George Lightbourn, a former state worker himself, writing for WPRI (Wingers Promoting Republican Ideals) has been on the war path to demolish the state's current pension system.

Scott Walker has also used the issue as a talking point in his perpetual run for governor, saying that state workers need to contribute their "fair share" into the pension system. (The Democrats have been having a field day highlighting all of the hypocrisies in Walker's stance.)

Not coincidentally, both WPRI and Walker's campaign have been greatly benefited by the neoconservative Bradley Foundation.

AFSCME, predictably, has not been sitting idle while these forces having been taking potshots at them. They have been doing their research and have come up with a treatise is which pretty cut and dried about why the Bradley Foundation's drones have been attacking them and how wrong-headed those attacks really are.

The paper first describes the difference between a defined benefit system, such as the state enjoys, and a defined contribution system, which many employers have been foisting on their workers to enhance their own profits. They also give a good narrative on the events, including the long, ongoing attack on the workers in both the public and private sectors.

Then they get into the meat of why the right's attack on the pension system is rather irresponsible and reckless:
Lightbourn and Walker disregard the fact that any effort to reduce the employer-paid cost of the WRS would have to be negotiated at the bargaining table, where the principle of quid pro quo holds. It is worth noting that candidate Walker has stated publicly that he would look at any legal option he had to force unionized workers to pay for their benefits if they refused to negotiate. Harsh words.

Lightbourn, Walker and their ilk are not alone in calling for dismantling public employee pensions and the WRS. They are part of a deliberate, nationwide effort to shift risk and responsibility for retirement security from employer to employee. Some of the same forces involved in weakening public worker pensions tried, unsuccessfully, to privatize Social Security just a few years ago. AFSCME, along with other unions, fiercely resisted efforts to hand Social Security off to private interests.

Those advocating for WRS privatization also seek to weaken labor unions and bolster right-wing candidates who would dismantle these modest benefits, and our collective bargaining rights that workers who came before us worked so hard to establish. Undercutting the WRS would pave the way for moving toward a 401 K/DC system that would enrich investment firms at the expense of working people and average taxpayers.

The backers of dismantling pension systems were successful some years ago in implementing a new nationwide rule for accounting for post retirement employee benefits. That rule, known as Government Accounting Standards Board (GASB) 45 requires pension liabilities to be stated as if they were all due tomorrow. GASB 45 has exposed pre-existing problems in other states’ pension systems, thus making them more susceptible to changes that do not benefit workers. These same pension liability accounting rules were largely responsible for decimating many private sector pension systems, leaving countless workers facing an uncertain future.

Those who say that public employee pensions are too generous and deserve to be reduced are misguided. They fail to look at total compensation, which is what the Center for State and Local Government Excellence did in a recent study. Conducted by two University of Wisconsin-Milwaukee professors, the study found that wages and salaries of public employees are lower than those for private sector employees with comparable work experience and education.

Employees of state and local government earn an average of 11% and 12% less, respectively, than comparable private sector employees, the study found. It is no surprise that benefits tend to make up a slightly larger share of compensation for public employees. Traditionally, public employees have given up higher pay in exchange for better benefits at the bargaining table But even after accounting for the value of benefits, the study found that public employees earn less than private sector counterparts. On average, total compensation is 6.8% lower for state employees and 7.4% lower for local employees than for comparable private sector employees.

Ultimately, cutting public employee pensions would provide minimal relief to the growing state deficit, and it’s the wrong approach to fixing Wisconsin’s state and local government funding problems. The sour economy caused state and local government revenues to decline, creating a crisis that can’t be fixed and would actually be made worse by weakening the WRS or cutting our pensions. Even before the economic downturn, Wisconsin was facing a revenue shortage driven largely by the tax breaks that the rich and powerful enjoy at the expense of solid government services and working people, who are paying more than their fair share of the cost of services. Recently, the Institute for Wisconsin’s Future, a progressive think tank, published a report entitled “Wisconsin’s $1.2 Billion Tax Gap”, which charges that some $1.2 billion in taxes is not collected each year because of holes in the tax code and clever tax breaks that cost us all. If the WPRI is looking for a solution to Wisconsin’s fiscal woes, it might consider examining the Swiss-cheese like consistency in Wisconsin’s tax laws that let many off scot-free.
The paper ends with the union urging its members to become politically involved and not to underestimate the threats against their pensions.

I am fully aware that many people will dismiss the union's position and their statements simply based on the fact that it is coming from the union. And yes, their motivation is self-interest and preserving the best deal they can for their workers.

But the motivation of self-interest is also applicable to those who are attacking the pension system.

The difference is that the unions are painfully cogent of the fact that they also have to balance the interest of the state and the tax payers to be able to be successful in their mission. The same cannot be said for the right wingers.


  1. "the motivation of self-interest is...applicable to those who are"...defending the taxpayer funded pension system.

  2. Do people really come here and read Liebenthal's crap?