(This article appeared in the print version of News-Gazette, Sunday, April 15, 2012. It is a response to an editorial in the News-Gazette the previous week which attacked public sector unions)
Recent editorials in the News-Gazette have suggested that public employee pensions are draining state coffers, and must be cut. On Sunday, April 8, the News-Gazette published a long piece by William McGurn attacking public sector unions. This spate of activity in our local paper is part of a national campaign directed against people who work for our municipal, state, and federal governments. A wave of coordinated arguments, from sources like the Wall Street Journal and Fox News, and funded primarily by wealthy, anti-union businessmen, paints a picture of public employees as overpaid and inefficient, ”unfairly” cushioned by their powerful unions from the economic collapse that has ruined so many Americans’ lives. Public sector retirees are depicted as parasites, living a life of luxury, while many Americans are struggling just to make ends meet.
This disinformation aims to arouse resentment against public employees among ordinary Americans, and thereby destroy public sector unions. Major corporations have spent the last few decades undermining unions in the private sector. Now these corporate forces, buttressed by political front men like Wisconsin Governor Scott Walker, are attacking public sector unions–among the few remaining organizations able to stand up to the rich and powerful.
While it is true that federal, state, and many local governments face large and potentially dangerous budget deficits, where do those deficits really come from? The mantra from Fox News, the Wall Street Journal and News-Gazette editorials blames “big government spending.” As a counter, they have only one solution: cut spending and lower taxes.
These recommendations contradict economic reality. Most reputable economists agree that the leading cause of budget crises is decreasing tax revenue. In the short term, this decrease is due to the economic recession. The roots of this recession lie in the increasing inequality in our economy, highlighted by tax cuts for the wealthy which mean less revenue for government. From 2001-08 55% of all tax cuts went to the wealthiest 10% of the population. These tax cuts freed up more money, not for job creation or production, but for investment in financial markets– leading to debacles like the home mortgage crisis. We’re barely emerging from that storm of unemployment and foreclosures. The tax base of states and municipalities has suffered, as have their investments. Meanwhile, banks and corporations are sitting on mountains of cash, not hiring, not lending and not investing. Public sector unions are nowhere to be found in the roots of this crisis.
Yet right wing think tanks continue to call for more of the same free market polices – leading to further erosion of the tax base. This extreme ideological position implies that lower wages and poverty will help the US economy grow. Right wing pundits want to ignore the importance of public services like education, Medicare, social security and unemployment benefits to the welfare of large sectors of the population.
Historically and today, unions have defended ordinary people by fighting for better working conditions, a decent work week (including the weekend), equal pay for equal work, and the rights of ordinary citizens to education, health care and social services. The gains public sector workers have made have strengthened underpaid groups like women and African Americans. Today public sector unions are continuing this tradition by supporting the move to raise the minimum wage to $9.80 by 2014. Such an increment, according to the Economic Policy Institute, would lift pay for more than 28 million Americans, increase our Gross Domestic Product by $25 billion and create some 100,000 full-time jobs. These are policies that will re-charge the economy, while dismantling public sector unions or cutting worker benefits will damage it.
Matched by education, public sector workers actually earn less than their private sector counter-parts. Are their pensions golden? Many public workers (including Illinois workers) do not qualify for Social Security. So their small pensions (70% of these averaging below $30,000 in 2010) are the only thing standing between them and the kind of old-age poverty Social Security was designed to prevent. Lest we forget, in Illinois public sector workers have contributed to their pensions from the day they started work, but the state has not held up its end.
Does anyone really believe that the people who currently teach our children, police our streets, fight our fires, repair our roads, take care of the disabled and elderly, shovel our snow, and deliver our mail — and all the retirees who have done so in the past — are really the cause of the current budget deficits? Will making public sector workers poorer and voiceless really solve the country’s financial problems? It doesn’t make sense and it is not right to attack our neighbors, parents, children and fellow citizens. It’s not working in Greece, Ireland, Spain or Portugal — and it won’t work here.
Rather, we need to support the public sector and services and the workers who provide those services. Like all workers, they deserve a living wage with benefits, not a deregulated work place where the employers have all the power.
James Barrett
For the University of Illinois, Champaign-Urbana Campus Labor Coalition
(James Barrett is Professor of History at UIUC)
Campus Faculty Association 
(1) This article needs some links which demonstrate the following sentences and explain the amounts of federal revenue shortfalls suggested: “Most reputable economists agree that the leading cause of budget crises is decreasing tax revenue. In the short term, this decrease is due to the economic recession. The roots of this recession lie in the increasing inequality in our economy, highlighted by tax cuts for the wealthy which mean less revenue for government. From 2001-08 55% of all tax cuts went to the wealthiest 10% of the population. ”
(2) The tax cuts discussed are federal tax cuts. The public employee pensions under discussion are state and municipal, the funding of which are not affected by federal tax cuts.
(3) The discussion of the small size of many state pensions does not consider how many of those pensions are small because of workers’ having only a partial career under state employment, which means that some may also be getting Social Security.
(4) “Does anyone really believe that the people who currently teach our children, police our streets, fight our fires, repair our roads, take care of the disabled and elderly, shovel our snow, and deliver our mail — and all the retirees who have done so in the past — are really the cause of the current budget deficits? ” No , but their pensions may well be. Over past 25 years, companies in airline, auto and steel industries have cut cut pensions–often when the corresponding companies have sought bankruptcy protection. Some state and municipal public sector pensions may suffer a similar fate. Many pension plans were designed for lower life expectancies.
About point #1 — We’ll look for a link. We are referencing both state and federal shortfalls. Federal aid to states in various forms has also declined, because of budget contractions; the stimulus funding has ended.
About point #2 — see above: state funds generally are affected byfederal shortfalls, as was widely predicted for the past few years. States are also asked to pick up more of the federal government doesn’t do — in health care and cash aid programs to the very poor, for example.
About point #3: not clear what your point is. Yes, many people will rely partially on pensions from Illinois, and partly on pensions from work elsewhere. So? You seem to be implying that this is either dishonest or some form of rip-off. Pensions are part of a total compensation package, they are contractual, and thus earned.
About point #4: We disagree. Companies have sought bankruptcy protection as a way to cut pensions to avoid paying them — not because they were necessarily huge.(And taxpayers have picked up the tab for these pension defaults.) Witness American Airlines right now. Are the private pension burdens too large, or have the companies been mismangaged through restructuring to pull out cash?
As of today (4/19/2012) it’s estimated that 50% of the US population is poor or near poor (living at or below 150% of the poverty line.) What will this statistic look like if states like illinois default on pension obligations?