Monitor breakfast with AFL-CIO President Trumka -- public pension cuts
Before the Great Recession, you probably did not pay much attention to the retirement benefits that public employees get. I didn鈥檛.
But now we鈥檙e hearing stories in the media such as the one about New York who are retiring in their 40s on $100,000 pensions (more than their highest salaries). Or about California, where payments to the biggest state pension fund have skyrocketed while spending on education has been cut.
It makes a person dream of belonging to a public employee union 鈥� if their benefits will hold up, that is. States and local government can no longer afford their promises of full salaries or retiring long before private-sector workers. The Pew Center for the States calculates that states face a $1 trillion shortfall in their funds for retiree benefits.
All over the country now, states and municipalities are revisiting public pension benefits, mostly for new workers, but in some cases, for current employees.
That context was the subject of my question to the Monitor鈥檚 breakfast guest today 鈥� Richard Trumka, president of the labor union umbrella group, the AFL-CIO. I asked him whether it would be harder for organized labor to hold on to benefits because of the difference between what their public employees get and what nongovernment workers get.
鈥淚鈥檓 a little amazed that you would say that,鈥� he answered. And then he began to talk about what鈥檚 happened with CEO salaries: 鈥淭hey are so far out of touch with the rest of the world.鈥� Meanwhile, he went on: 鈥淥ur wages are less now than they were 30 years ago. Our benefits are lower than they were 20-some years ago.鈥�
Do you pull people down because they earn more than you do? he asked. No, you try to raise others up. 鈥淥ur position is everybody ought to retire with a minimum of 70 percent of their take-home pay.鈥�
If only.
The CEO comparison is certainly true. So is the need to lift all boats. And I and many other people would love to retire on 70 percent of our salaries.
But the germane comparison is what public employees get vs. what everyone else gets, i.e., what the market鈥檚 paying. That鈥檚 what matters to budget cutters at a time of fiscal belt tightening.
Public employee unions should not expect much sympathy from hurting taxpayers, either. In this fight, they鈥檙e on their own.
