public sector employees

Posted: November 21, 2013
By: Clay Cerny

Sarah Lazare, a staff writer at Common Dreams, reports that Detroit’s bankruptcy is not the fault of pension funds.  A report by Demos has found that bank deals, including “swaps,” have put the city in its current hole.  The deals never should have been made given the city’s shaky standing.  It’s almost as if the banks wanted Detroit to go bankrupt, so they could sweep in and clean the carcass.  Another factor fueling the city’s failure was corporate subsidies, which the weak city gave to corporations that are flush with cash.  Given all this, it makes perfect sense to blame pension funds and the workers who will lose all of their pensions.  What’s going on in Detroit is criminal, but as we saw in the Banking Crisis of 2008 and its aftermath, bankers cannot be held responsible for their wrong doing.  They get a bail out.  Detroit gets the shaft.

Posted: June 6, 2013
By: Clay Cerny

Bruce Rauner announced that he is seeking the Republican nomination for Governor of Illinois.  According to the Chicago Sun-Times, Rauner claims he is not “anti-union.”  He then goes on to bash leaders of public sector unions for the state’s pension problems.

Let’s step back and ask why so many public pensions are in trouble.  Over several years, union leaders negotiated with both Republican and Democratic “leaders.”  The constant trade off was better pensions for lower raises.  Politicians from both parties then failed to make regular contributions to the pension fund.  In essence, money that was to go to workers via the pension fund was not paid.

Rather than talk about wage theft, millionaires like Rauner put the blame solely on the unions and the Democrats. Public and private sector unions have made concession after concession over the past three decades to save jobs.  People like Mr. Rauner ignore these compromises.  Instead of calling out mismanagement by public and private sector executives, they pile all blame on workers and unions.

I don’t know how the pension problem in Illinois can be resolved.  However, we should be honest about how it came to be and who is at fault.  Unions are fighting for a negotiated benefit, part of the compensation their workers have every right to expect.  As a business man, Rauner should respect contracts and not use terms like “pay-to-play” unless he also wants to extend that language to sweetheart deals that let corporations avoid millions in tax payments.  We need political leaders who will be honest and fair in calling out corruption.  Politicians may cut public sector pension benefits, but let’s call that action what it is: wage theft.