by Buddy Magor
The economy is picking up steam. State, city and county employees have willingly accepted millions upon millions of dollars in cuts to their pensions. California’s largest pension fund has recouped every single investment penny it lost from the Great Recession.
So I thought perhaps California police officers, teachers, firefighters, and other public employees could finally exhale. I hoped we could finally enjoy relief from daily attacks for the modest pensions we count on for retirement security.
Unfortunately, that’s not the case. Far from it.
For more than five years, pensions have been used by critics as the scapegoat for all of government’s budget problems. But now that the California Public Employees’ Retirement System (CalPERS) and other pension systems are healthy and yielding double-digit returns, they’re not getting an equal share of positive attention.
In fact, the same wealthy and extremist factions who categorically have attacked public employees are regrouping, poised to step up the battle on our retirement security. Texas hedge fund manager John Arnold, a billionaire who began his climb to the 1 percent at Enron, is leading the charge, offering support and funding to anti-pension soldiers in California.
These same folks failed to collect the needed signatures and support for a statewide ballot measure containing illegal and radical pension changes, and California lawmakers enacted sweeping pension changes a few short months ago. Still, they are hinting they may try yet again to dupe voters into slashing pensions even more.
Public workers have saved taxpayers hundreds of millions of dollars by agreeing to concessions in more than 300 California counties, cities, and local districts. These savings have been achieved at the bargaining table, not in the pages of newspapers. We have foregone raises, accepted pink slips, and dealt with increased workloads using fewer resources. We have faced unemployment, organizational reshuffling, and, in some cases, local bankruptcy charges.
The statewide pension changes approved by lawmakers in the fall have eliminated many of the headline-grabbing problems with pensions. The fact remains that 98 percent of retirees earn far less than pension critics would like the public to believe. The vast majority earn $30,000 or less.
Critics continue to assert that the retirement system is somehow dragging down the entire state government. How do they explain a 12.2 percent return on investments in 2012 or an 8 percent average return over the past 20 years despite the recession? Today, CalPERS is back to pre-recession strength. It has earned back the $97 billion it lost during the recession, and then some. Meanwhile, the California State Teachers’ Retirement System (CalSTRS) portfolio returned 13.45 percent for calendar year 2012.
We have sacrificed to do our part, all while listening to right-wing politicians and Wall Street insiders claim that we are the root of the state’s fiscal problems. Ironically, now that the stock market is booming again, Wall Street executives continue to get richer while working-class people do not.
I don’t begrudge anyone the salary he or she has negotiated or earned, but a study that came out last year from the Economic Policy Institute found that CEOs saw their pay — salaries, bonuses, benefits, etc. — increase by 725 percent since 1978. That’s in stark contrast with average American workers. In fact, it’s 127 times more than what the average worker saw during the same period even though, I’d guess, we’ve all been working harder and faster since then.
We’ve worked through this recession, experiencing the worst of it, while Wall Street sat back on its hands, doing nothing. And we’re painted to be the bad guys?
It’s actually the opposite.
Meanwhile, pension critics, including San Jose Mayor Chuck Reed, are telling only half of the story about pension changes. Shrinking benefits for public workers is bad for the economy, will force more Californians to turn to other taxpayer-funded social services, and will result in untold short-term costs with no guarantee of saving taxpayers in the long run. This is beginning to play out in places that have passed so-called pension reform. In Reed’s San Jose, the city was forced to scramble for new police recruits as officers fled because of politically motivated pay and benefit cuts.
I sincerely hope that those with considerable means for change, such as John Arnold, would focus their efforts on the real problems our nation faces and leave those who serve alone to carry out our duty.