Friday, February 25, 2011

Pensions

I am concerned that many people who share my progressive political and social philosophies may be allowing their emotional attachments to ideals overcome their intellectual capacity to recognize problems. The stalemate in Wisconsin is a case in point.

Unfunded pensions are problems. I do not understand why it is so hard for my liberal brethren to grasp that simple fact. Moreover, I do not understand why more of us are not asking questions about just why there are "pensions" in the first place, whether taxpayer-supported or corporately-funded.

I'm in favor of a social safety net and an assured stream of income in retirement. That's why I favor Social Security. I am NOT in favor of placing responsibility for an employee's ability to enjoy a lucrative retirement in the hands of the taxpayer. Granted, if employees have been promised a certain level of retirement income, the promises should be met. But, going forward, the promises should not be MADE. They should never have been made in the first place, in my view. Until and unless a mechanism is in place that assures commitments contemplated can be funded without debt financing, they should not be made.

In an ideal world, none of us would have to worry about where the money comes from; it would just be there. This is not an ideal world. We MUST understand that, in our current economic system, there must be means of sustaining revenue streams before committing to their use for the long term.

I remain as liberal as ever, but I think we all need to take off the rose-colored glasses and look at realities. The governor of Wisconsin, as much as I disagree with his call for eliminating collective-bargaining rights, clearly is speaking openly about the 800 pound gorilla we all need to talk about. I hope the conversation continues, with some real communication about how to solve the problem.

2 comments:

TaraDharma said...

Most public employees, in my personal experience, earn sub-standard wages as a trade off for a future pension. At the university where I worked, the pension fund was doing so well because of stock prices, that we had a 15 hiatus from personal contributions to this fund. When stocks tanked, employees were asked to resume a portion of their retirement fund. This seemed reasonable to me, but the unions had a fit. To my way of thinking, the unions were being unrealistic.

Social Security as a safety net just barely covers most people in retirement. If you're lucky enough to work somewhere where you will receive a pension in the future, this is often a great incentive to work there.

So, we either pay public employees more up front, or continue the social contract to cover pensions, whether jointly funded or not.

Low wages in general are the problem here. Greed is another. Refusing to increase taxes while giving corporations giant tax breaks is another.

Springer Kneeblood said...

I haven't seen data to substantiate either side of the debate with respect to whether public employees earn less than workers in the private sector; my gut and experience say some earn too much, some earn too little. But regardless of what they earn, I think a social contract based on what amounts to a certainty of going "upside down" is a bad contract.

I'm fully supportive of requiring every entity to pay its fair share of taxes. But I cannot support unsustainable promises. I look to Social Security as a bare safety net; all of us, me included, should be expected to look out after ourselves, first, and depend on the safety net either to supplement what we have done for ourselves or to protect us from starvation if we haven't or if we encounter tragedies of one sort or another.

Again, I think society has an obligation to look out after people in dire straits. But I think society has no obligation to make up for poor planning, nor does society have an obligation to accumulate debt to such an extent that it crushes the economy.