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The conservative assault on the pensions of state workers is moving forward unabated in 2012, despite widespread information that the case against pensions is based on lies and twisted facts. The Wall Street Journal, among others, is making the claim that state employee pensions are too expensive and lavish and that in times of economic crisis, they have to be cut or eliminated in order to allow state budgets to be balanced.
The claim is obviously nonsense:
The typical AFSCME member — men and women who plow our streets, care for the sick, protect our children, clean our buildings and keep our communities safe — receives a pension of approximately $19,000 a year after a career of public service. The employees have earned and paid for these pensions. Employee contribution rates commonly amount to 3 percent to 10 percent of their paychecks. These contributions, combined with investment earnings, usually account for 75 percent or more of all pension benefit funding.
The economy’s collapse in 2008-2009 took its toll on everyone’s retirement savings. But our nation’s public pension systems, which were fully funded before the crash, continue their robust recovery earning their highest returns in decades in fiscal year 2011. Pensions continue to provide irreplaceable retirement security to millions of Americans who provide public services. Yet, the corporate-backed opponents of pensions are creating a myth that the system is falling apart and that state and local governments are going bankrupt because of the $19,000 pensions sanitation workers are earning.
That is simply not true. According to the Center for Economic and Policy Research, the size of the projected state and local government pension funding shortfalls is manageable. In most states, the total shortfall for the pension funds is less than 0.2 percent of projected gross state product during the next 30 years. Even in states with the largest shortfalls, the gap is less than 0.5 percent of projected state product during that period. And, because pension payments are made over generations of workers, funding can remain stable over long periods, and funding challenges managed over decade long periods, despite short-term economic setbacks. These are facts that the opponents of public pensions simply ignore, as they seek to punish workers for Wall Street’s psychopathic behavior.
What is often left out during these conversations is that pensions are not some kind of bonus given to workers out of the goodness of the taxpayers hearts. Pensions are part of the compensation that workers are offered when they are hired. And in states like Wisconsin, pensions are 100 percent funded by the workers themselves and are not paid for by taxpayers at all:
Gov. Scott Walker says he wants state workers covered by collective bargaining agreements to “contribute more” to their pension and health insurance plans. Accepting Gov. Walker’ s assertions as fact, and failing to check, creates the impression that somehow the workers are getting something extra, a gift from taxpayers. They are not. Out of every dollar that funds Wisconsin’ s pension and health insurance plans for state workers, 100 cents comes from the state workers.
Taking pensions away from workers who paid into them and earned them is theft from the working families of the United States, at a time when those families are at their most vulnerable. And it is theft based on a series of lies that doesn't hold up to even basic scrutiny. And it is theft that wouldn't be even remotely necessary if it weren't for the bad policies of Republicans.