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powered by Illinois Policy Institute
Who’s afraid of the big, bad unions?
Scott Reeder     |     August 22, 2012     |      Labor

SPRINGFIELD – Unionized state workers shouted down a governor last week who they helped elect just two years earlier.

The protestors at Governor’s Day at the Illinois State Fair injected plenty of heat – but not much light – into the ongoing debate over pension reform.

The state retirement systems are underfunded to the tune of at least $83 billion. Actually, that official number understates the problem because it is based on rosy investment projections rather than more realistic ones.

Various proposals are being considered for rectifying the situation.

But the union contribution to the mix last week was a lot of shouting.

Many things have contributed to the pension mess: politicians skipping payments, investments underperforming, an economy on the skids.

But the biggest reason for the shortfall is political: politicians pandering to unions.

Over the decades, public employee unions representing teachers, state workers, university staff and others have flexed their political muscle and gotten increasingly more generous promises.

Politicians made those pension promises knowing they would be out of office by the time the bills came due.

And the union bosses negotiating the deals were well aware of this dynamic, too.

Legendary 20th century union leader John L. Lewis once was asked what organized labor wanted, his response was simple: “More.”

Lewis is buried in Springfield, but his spirit is very much alive in the Statehouse.

Decade after decade, the unions have pushed for more – without regard for how it would eventually be paid for. After all, their job is to advocate for their members.

And the pensions are generous.

I know few people able to retire in their 50s at three-fourths of their final salary — other than government workers. And that pension grows, compounding on itself each year.

For example, a worker who retired in 1993 earning $53,333 today can expect to collect $72,244 today in pension benefits. And that number continues to grow.

Less than one-fifth of private sector workers receive pensions. Most people rely on 401ks, IRAs or similar plans. No one guarantees us a certain level of retirement income. We are on our own.

Those of us in the private sector are now being asked to carry the freight not only for our own retirements but for that of the government worker.

But the standard response of government workers goes like this: “We faithfully contributed toward our pensions – every paycheck. It was the state Legislature that skipped payments – not us. It’s not our responsibility to solve this problem. “

It’s a tired saw.

After all, taxpayers can say the same thing: “We faithfully paid our taxes – every paycheck. It was the state Legislature that skipped pension payments – not us. It’s not our responsibility to solve this problem either.”

And those taxpayers saw their state income taxes go up 67 percent last year almost entirely to cover state pensions.

Both Republican and Democratic leaders say the system needs to be reformed, but have failed to agree on a solution.

The pension crisis is something unions can’t just shout away.

 

 

image credit: AP Photo/Seth Perlman

 
 
Scott Reeder    |    

Scott Reeder serves as Journalist in Residence for the Illinois Policy Institute. Scott joined the Institute as a journalist after more than 25 years of covering local and state government. He made a national name for himself investigating teacher tenure in Illinois and the lack of accountability in the teacher certification process.

Scott previously served as a national managing editor for the Franklin Center for Government and Public Integrity, where he worked to establish a national network of statehouse bureaus. Prior to his time with Franklin, he ran an Illinois statehouse bureau for 10 years providing customized statehouse coverage for newspapers in five Illinois communities.

Among the journalism awards he has captured are the Investigative Reporters and Editors Freedom of the Information Award, the Clark Mollenhoff Award for Excellence in Investigative Reporting and the John Aubuchon Freedom of Information Award, which is the highest honor of Capitolbeat, a national association of statehouse journalists.

He received his bachelor’s in journalism from Iowa State University and holds a master’s degree in public affairs reporting from the University of Illinois at Springfield. He and his wife, Joan, reside near Springfield and have three daughters: Grace, Anna and Caitlin.

 
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