Marin IJ Runs Rare "Marin Voice" Editorial In Support of Public Employees

Marin Voice: 9/19/2014

Good pensions are vital to maintaining the middle class 

By Roland M. Katz

For more than a generation af­ter the Great Depression and World War II, good pensions were a cornerstone of the vibrant mid­dle class in America. The expan­sion of the middle class was the key to our economic vitality and our social stability.

Sadly, for more than two de­cades, as economic inequality has grown to Gilded Age levels, the middle class, not to mention the poor, has been under more and more stress. A significant contrib­utor of that stress has been more insecurity about retirement. That insecurity is a direct result of the decline of decent pensions for far too many of us.

Some now wish to add to that insecurity by diminishing the pensions of some of those who still have them: public workers.

They argue the biggest problem facing state and local government is the cost of pensions for public servants. They are wrong.

The Great Recession, the loss of revenue and income inequal­ity that has been exacerbated by deregulatory policies and a loos­ening of the safety net, are far greater threats to both govern­ment budgets and the economic well-being of our communities.

This is not to say there is not le­gitimate criticism of certain as­pects of public sector pensions. There is. I personally believe that many of the pension enhance­ments of the late ’90s and early 2000s were a mistake. The ’90s was the decade of the greatest growth in the stock market, what Alan Greenspan called irrational exuberance. Taking actions that had long-term consequences based upon the “best” decade the market had was not a good idea. Similarly, taking actions such as drastically reducing the earnings assumption, cutting benefits or, as some argue, eliminating defined-benefit plans altogether, based upon the worst decade the stock market has ever had, the 2000s, would be, to put it politely, misguided.

Much of the current commen­tary on public pensions mischar­acterizes and overstates the fiscal challenges they present to pub­lic agencies. Indeed, the rallying cry of many a critic of public pen­sions, that they are not sustain­able, sums up how the discussion needs to be reframed.

Public pension plans are sus­tainable. What is not sustainable is an economy in which fewer and fewer of us have a secure retire­ment.

Retirees with a good pension are financially independent and put money back into our econ­omy. They are not dependent upon public assistance, their chil­dren or other family members. The irony of those who complain about the cost of pensions to the taxpayer is that we taxpayers pay the price of people not having a good pension.

The argument that public em­ployee pensions are too “gener­ous” because they are “better” is a canard meant to divert people’s attention from one of the real causes of economic insecurity: far too many Americans will not be able to retire with any measure of dignity or security.

The Great Recession drove up pension costs for public employ­ers at the same time budget rev­enues were slammed. This dou­ble- whammy exaggerated the cost of maintaining decent pensions for public workers, and has given those who want to fundamentally change the social compact and who are just fine with the grow­ing economic inequality ammuni­tion for their cause.

A defined benefit pension is a key element of a sustainable mid­dle class. Sadly, as income in­equality has widened, fewer and fewer Americans have a secure re­tirement.

Undermining the security of those who still have a decent pen­sion undercuts sound economic and social policy and will harm our economy. We should be trying to ensure that more of us have a secure retirement, not undermine the security of those who do. 

Roland M. Katz is the executive director of MAPE, the Marin Associa­tion of Public Employees, the larg­est union of Marin County em­ployees. He has worked in the la­bor movement in the Bay Area for more than 35 years, representing public and private-sector work­ers.