The Labor Movement
Public sector pension funds: Not dead yet
A new report suggests government union benefits won't be bankrupting states, after all
Benita Johnson, recording secretary for the Transport Workers Union, shouts near the State Capitol building during protests against the proposed budget cuts from Wisconsin Governor Scott Walker, in Madison February 25, 2011. The Wisconsin state Assembly early on Friday passed a Republican plan to curb public sector union power, setting up a showdown with Senate Democrats who have fled the state to prevent a vote in that chamber. Tens of thousands of demonstrators from inside and outside the state have converged on Madison in the last two weeks to fight the proposal, which they fear could encourage similar measures in other states and cripple the U.S. labor movement. REUTERS/Darren Hauck (UNITED STATES - Tags: POLITICS CIVIL UNREST BUSINESS)(Credit: © Darren Hauck / Reuters) Remember that awful public sector union pension crisis that was going to bankrupt every state from California to Wisconsin? A little less Armageddon in the coffee, please. Reuters is reporting some interesting details from a new report by the National Conference of Public Employee Retirement Systems.
Public pension funds are experiencing a robust recovery from the historic market downturn of 2008-2009 — reporting strong investment returns, growing assets and funding levels on track to meet obligations,” said the National Conference of Public Employee Retirement Systems.
The group, the largest trade association for public sector pensions, surveyed state and local systems representing 7.6 million people and assets exceeding $900 billion.
It found that over the last year, funds have achieved an annual investment return of 13.5 percent, nearly double the 7.7 percent rate most assume. On average, said NCPERS, pension systems are 76.1 percent funded, meaning they can cover more than three-quarters of liabilities. Typically, pensions are considered fully funded when they surpass 80 percent.
Sure, pension funds aren’t going to register 13.5 percent returns annually on an ongoing basis, and the report goes on to note that the improved performance isn’t happening in a vacuum. There has been some clear retrenchment:
NCPERS found that over the last two years most public pensions have lowered their assumed rates of return, lengthened the period of time to amortize their liabilities, increased employee contributions and raised the retirement age.
But the changed financial outlook does underscore an important point that defenders of public sector unions have been making for several years: Judging the financial prospects of a pension fund in the middle of a historic economic crash is a dumb thing to do. As the economy improves so too will fund performance.
The lesson can be extrapolated to the larger challenges facing the federal government. The best deficit-reducing strategy is a growing economy that generates increased tax revenues. A misguided pivot to austerity, on the other hand, runs the clear risk of inducing slower economic growth, lower tax revenues and higher deficits.
Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21. More Andrew Leonard.
Can unions fight Super PACs?
The AFL-CIO says labor will reshape its political operation. Not all union leaders think it goes far enough
Richard Trumka (Credit: Reuters/Mike Segar) No one was surprised this winter when the AFL-CIO and its major unions endorsed President Obama’s reelection. Despite decades of enrollment decline, the AFL-CIO remains the largest membership organization in progressive politics, and it is a much relied-upon ally in Democratic election campaigns. But faced with a post-Citizens United landscape and armed with hard-fought lessons, AFL-CIO President Richard Trumka is pledging a “big change” in how the federation does politics.
“Before, we used to build everybody else’s structure,” says Trumka, “and now, we’re going to build our own structure.” He says to expect three changes: more focus on door-to-door organizing rather than TV ads; more funds toward building a permanent, independent political infrastructure and less towards candidates’ coffers; and more outreach beyond union households.
Continue Reading CloseJosh Eidelson is a freelance journalist and a contributor at The American Prospect and In These Times. After receiving his MA in Political Science, he worked as a union organizer for five years. More Josh Eidelson.
New video could damage Walker
Exclusive: One of the Wisconsin governor's closest allies says the GOP wanted to "go further" on union-busting
Scott Walker and Jeff Fitzgerald (Credit: AP) Does Scott Walker want to make Wisconsin a right-to-work state? He says no. But his allies are gunning for it.
In a new video, the speaker of the Wisconsin Assembly says his caucus wanted to pass a right-to-work bill last year. The video, shot on March 27 of this year by a Democratic Party tracker, who provided the footage to Salon, captures Speaker Jeff Fitzgerald talking at a bar with a reporter from the Milwaukee Journal-Sentinel.
The reporter asks Fitzgerald whether he was surprised when Walker described his plans to attack public workers’ collective bargaining. “No, it wasn’t a shock to me …” responds Fitzgerald. “My caucus wanted to go further. I had people in my caucus that was, you know, were wondering if we were going to do Right to Work in this state. So to tell you the truth, the collective bargaining, to me, I thought was more of a middle ground if you can believe that.”
Continue Reading CloseJosh Eidelson is a freelance journalist and a contributor at The American Prospect and In These Times. After receiving his MA in Political Science, he worked as a union organizer for five years. More Josh Eidelson.
“I’m not Scott Walker”
State Republicans are terrified of pushing anti-union legislation -- and becoming targets like Wisconsin's governor
Gov. Scott Walker (Credit: Reuters/Darren Hauck) Labor has taken a beating. While private companies squeeze and lock out workers, resurgent right-wingers have pushed anti-union bills in statehouses around the country. But after a seemingly relentless national assault provoked dramatic pushback in Wisconsin and elsewhere, some Republicans are … relenting.
Take Minnesota. 2010’s red wave flipped both the state House and Senate, putting Republicans in unified control of the Legislature for the first time in 38 years. In January 2011, just after they took office and just before an uprising erupted in neighboring Wisconsin, Minnesota Republicans introduced Right to Work – a bill to defund unions by banning contracts that require workers represented by them to pay for representation. To get around newly elected Democratic Gov. Mark Dayton, Republicans proposed Right to Work as a constitutional amendment, requiring approval from the voters, but not the governor.
Continue Reading CloseJosh Eidelson is a freelance journalist and a contributor at The American Prospect and In These Times. After receiving his MA in Political Science, he worked as a union organizer for five years. More Josh Eidelson.
May Day’s radical history
The date of Occupy's strike has ties to the eight-hour day movement, immigrant workers and American anarchism
This 1886 engraving depicts the Haymarket affair. (Credit: Wikipedia) American general strikes—or rather, American calls for general strikes, like the one Occupy Los Angeles issued last December that has been endorsed by over 150 general assemblies—are tinged with nostalgia.
The last real general strike in this country, which is to say, the last general strike that shut down a city, was in Oakland, Calif. in 1946—though journalist John Nichols has suggested that what we saw in Madison, Wisconsin last year was a sort of general strike. When we call a general strike, or talk of one, we refer not to a current mode of organizing; we refer back, implicitly or explicitly, to some of the most militant moments in American working-class history. People posting on the Occupy strike blog How I Strike have suggested that next week’s May Day is highly symbolic. As we think about and develop new ways of “general striking,” we also reconnect with a past we’ve mostly forgotten.
Jacob Remes teaches history and public affairs at Empire State College, SUNY’s college for adult learners. More Jacob Remes.
Minimum-wage misconceptions
Contrary to right-wing propaganda, decent pay for workers helps the economy and boosts job creation
(Credit: sarken / CC BY 2.0) Sen. Tom Harkin, Democrat of Iowa, has introduced a bill to raise the federal minimum wage to $9.80 from its present level of $7.25. Polls are showing many voters in favor, though they are confused about what it would mean for the job market. The truth is that a move would be good for a slow economy and have a positive impact on the job crisis. Naturally, this has led to the usual cries of opposition, largely based on the notion that raising the minimum wage hurts the very people it is supposed to help. Typical of this view is a letter to the New York Times from Michael Saltsman, a fellow at the Employment Policies Institute, a business-backed nonprofit research group (surprise!).
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