Scapegoating Public Employees and Their Pensions

Despite its title, “Public Workers Face Outrage as Budget Crises Grow,” by Michael Powell in the January 1, 2011 New York Times is not a typical public-workers-and-their- pensions bashing piece. It points out that pension fiscal problems have been brought on by states not properly funding them. New Jersey Governor Chris Christie, for example, is refusing to make this year’s required state contribution of $3.1 billion.

These type of pension payment holidays during fiscal crises would be acceptable if they were considered as loans by public employees that need to be paid back during better times. Indeed, public employees could then be seen as heroes who were bailing out state budgets during bad times. But instead they are fodder for self fulfilling prophecies that traditional pensions are not sustainable. No long term pension or retirement savings plan is sustainable if you fail to contribute to it.

The Powell piece provides some balance in its discussion of public employee pensions, including the widespread conservative proposals to replace them with 401(k)s. But it fails to mention the larger context that 401(k)s are sustainable only because they have no guaranteed benefits as do pensions. It also failed to mention that 401(k)s, despite rosy early predictions, have failed to provide adequate retirement incomes. That in turn has created pension envy and resentment that Republicans are playing upon in their scapegoating of public employees.

Unfortunately, the one-sided headline of the article plays into that campaign as indeed have a string of articles and editorials that the Times has been running during the economic crisis. Many readers will just glance at the headline without reading the more more balanced story. The headline will confirm what they think they know, given the dominant media narrative about public employees and their pensions that conservative think tanks have succeeded in implanting.

–James W. Russell

4 thoughts on “Scapegoating Public Employees and Their Pensions

  1. Traditional pensions add some stability to the financial markets since professional managers are less likely to buy and sell in panic as individual investors do. The rush to replace defined benefit pensions with 401(k)s likely contributed to the current economic collapse and will only increase future volatility. And along with Social Security, they add consumer purchasing power in recessions that can moderate the effects of economic downturns. We can continue to fight each other for leftover crumbs or wake up and fight together for a more equitable economy.

    1. If you agree with the basic premises of this blog–opposition to 401(k) type plans, promotion of defined benefit pensions, and defense of Social Security and public employee pension–I’d be happy to consider a guest post that advances our understanding.

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