Tuesday, August 31,2010

The New Class War Is The Same As The Old Class War

By Sen. Diane Savino; a Democrat representing parts of Brooklyn and Staten Island, is chair of the Senate Civil Service Committee.

              There is a class war brewing between the haves and the have-nots. According to a recent column in the New York Times, the "haves" are public-sector employees who enjoy "cadillac pensions" and the "have-nots" are those in the private sector who don’t. In recent months, right-wing think tanks and elected officials have been beating the drum that the decent wages and benefits that public employees enjoy are the cause of our economic woes.         News sources frequently cite accounts of those scamming the system by earning two pensions or skirting overtime rules. The perception is that most public employees retire with $100,000 pensions, Page when 1 the truth is the average pension is $33,000 a year.

                Earlier this year, Massachusetts Senator Scott Brown railed against public workers’ “lavish pay and benefits,” even though, when education and experience are considered, they earn on average slightly less than their private counterparts. The GOP’s own political platform rejects any state bailout unless the “wages and pensions of public sector employees are brought into line.” With a 10-percent unemployment rate and a desperate workforce who have seen dwindling wages and benefits, one would think that public anger would be directed at those that caused this mess to begin with. But, in an expert sleight of hand, Wall Street executives are enjoying millions in bonuses, while we are being asked to direct our anger at the “greedy” sanitation workers and cops. Public employees have become a convenient scapegoat to those who would rather distract from the fact that corporations are enjoying record profits yet are not creating any new jobs. Attacks on labor are nothing new, however: with anxiety about the recession, it is easier than ever to direct anger against those who have struggled to maintain some semblance of middle-class life—all at the “taxpayer’s expense.”

               Americans are suffering “pension envy.”   This is not to dismiss the challenges that states face as they struggle to meet financial obligations in light of stark budget shortfalls. In New York, government pension contributions have sharply risen, and alarmists warn the system will soon go bankrupt unless we trim benefits. The truth is, of course, New York’s pension system is solvent and fully funded.  While it’s true that contributions have risen, it is because, for years, city and state governments relied on high-performing pension funds to pay for their share of contributions. In fact, in 2000, New York’s share dropped to zero. Public employees, however, continued to pay into the system.  The greed which led to the collapse of Wall Street also led to the diminution of those investment returns, thus forcing higher government funding. This is not the fault of public employees.

               The reality is, good pensions and retirement security are good for the economy. The vast majority of public-sector retirees remain in New York. They pay taxes, buy products and support local businesses.     The retirement systems of our state are huge investors in private companies. Where would these private-sector jobs be without these investments?

Ultimately, however, this is not about pensions, it is about a concerted effort to pit working families against one another. After all, when corporations are wringing as much productivity as possible from their workforce while slashing pay and benefits, public-sector workers with decent wages and retirement security are a glaring example of what is possible when workers organize.

             There is indeed a war going on, but the real war is against the middle class. Rather than envying public-sector benefits, we should be demanding the same for the entire workforce.