“Many state and local governments have made the mistake of courting the votes of public employees by fattening salaries and benefits, all the time imagining that pension-fund investments could only go up,” the tirade warns us. With tales of “lavish retirements for relatively youthful public servants” illustrating the “ugly…issue of public-employee pay and benefits,” the jeremiad estimated that state governments are anywhere from $1 trillion to $3 trillion short of their public pension commitments.
This end-of-days screed did not appear at PensionTsunami.com, nor was it printed in folio, stapled together, and handed out at a Tea Party. It’s a cover story published this summer in Time magazine.
The word is out. It is now mainstream opinion that public employee salaries, benefits, and pensions are crippling state governments from coast to coast. When a group of comedians performed a “2010 Public Employee of the Year Awards” sketch-wherein lumpen freeloaders compete at Harrah’s in Atlantic City for the title of “Surliest and Least Cooperative State Employee” and so on-the performers were not the after-dinner entertainment at FreedomFest but the Not Ready For Prime Time venerables of Saturday Night Live. The sketch died. The rage lives on.
In 2009, the Gallup research group reported that for the first time in 70 years of polling, a majority of Americans opposed labor unions. An April Pew study showed that favorable ratings for unions had plummeted from 58 percent in 2007 to 40 percent in 2010. In the same month, the Republican research group Resurgent Republic found more than two-thirds opposition to current levels of compensation for government employees.
This discontent is not the sort of generalized outrage that stops short of a willingness to shed blood. Rasmussen Reports in July noted that 69 percent of its respondents would not be willing to pay more taxes in order to avoid layoffs of state workers. A mere 19 percent were willing. (This is particularly surprising because just three months earlier, Rasmussen had found higher support for public-sector unions, at 53 percent, than for private-sector unions, at 49 percent.) At the National Education Association’s July confab in New Orleans, NEA President Dennis Van Roekel declared that “our members face the most anti-educator, anti-union, anti-student environment that I have ever experienced.”
Yet none of the hullabaloo has amounted to a hill of beans against the taxpayer-funded power and advantages public workers have amassed. Those remain in place, and it is getting harder than ever to challenge them. When a handful of San Franciscans including the City by the Bay’s public defender mounted a ballot measure that would require city employees to increase contributions to their own retirement accounts, the unions went from coffee break to hot action in mere moments. Local labor leaders urged Speaker of the House Nancy Pelosi (D-Calif.) to yank federal business contracts from one of the initiative’s backers, while a city supervisor tried to cut more than a million dollars from the public defender’s budget.
In those places where reforms to taxpayer pension commitments have been succeeding, it is usually because the stakes are so small. Michigan is trying to encourage education burnouts to retire by allowing teachers to increase the multiplier that determines the size of their pension, while requiring teachers to contribute more toward their retiree medical benefits. But under pressure from the Michigan Education Association, the state has also placed charter school teachers into its troubled defined benefit plan, and it failed to make a permanent reduction in benefits for new hires. The result, as Jack McHugh noted at his Michigan Capital Confidential blog, is that costs may actually increase under the reform.
California Gov. Arnold Schwarzenegger has done somewhat better, extracting small but real compromises from a handful of public employee unions in recent contract negotiations. And in New Jersey, which has the highest property taxes in the country and a deficit that tops $11 billion, Gov. Chris Christie has become an improbable folk hero for his implacable campaign against the state’s teachers union. For his pains, Christie has endured a level of personal vituperation (aimed mainly at his fat physique) that seems uncivil even in a state never known for its warmth or charm.
Perhaps these small struggles are part of a glass-half-full story, though none of the reforms come close to plugging even half of the gaping commitments states have made to public workers. But there’s another reason to worry at the federal level.
In 21 states, collective bargaining by public employees is either banned or somewhat restricted. If the massive tribute governments pay to their employees is to be reduced, more states will need to follow this lead. But those 21 holdout states would be forced by the federal government to grant public workers collective bargaining rights under the Public Safety Employer-Employee Cooperation Act, a bill long sought by labor that as of this writing looks likely to pass the Senate with bipartisan support.
Grassroots uprisings have a way of petering out before they actually change anything. It’s heartening that everybody’s grandmother is now aware of the public pension problem and that we can joke darkly about the long lobbying arm of public employees. But while power politics yields immediate results, a realignment of public opinion can take a generation to have an effect. And the states are broke now.