Tuesday, August 05, 2008

Again, Pensions are the New 3rd Rail

Oh no! State Retirees are getting a $120 boost to their pensions - in addition to the $360 yearly addition they were getting (because, clearly, that covered the cost of inflation /sarcasm off).

My first question: Do we really need another editorial on how bad and evil pensions are for state workers?

Are they generous? At face value, yes, but consider this fact:
state workers and teachers are not eligible for Social Security.
Once you calculate for that weird quirk in Massachusetts, a typical state worker's pension isn't nearly as generous as it sounds. In fact, it's not even better than someone who collects social security, if that person also invested in a 401(k) program for most of their working life. Furthermore, people who get pensions pay into them - quite a lot every year, at that (and they aren't eligible for social security, even when they had jobs in the private sector for years of their life, paying into the S.S. system). With all that considered, pardon me if I think this constant fixation on pensions in this state is poison. Heaven forbid someone be relatively comfortable in their retirement!

But this is the real kicker:
Public employee pensions have unfortunately become a popular bete noire for limited-government types, who have seized upon some recent high-profile abuses to paint deserving retirees with the same broad brush.
Does the Globe not realize or get that it's one of the prime sources in stoking this flame? Remember the old saying, "If it bleeds, it leads?" Well, in the Boston Globe, it's basically, "If it's about a pension, give it attention." The Globe shouldn't stoop so low as to blame this poisonous problem on just the limited-government types: the Paper of Record is far more to blame than any Mass member of the CLT or their brethren. It's the Globe that's spent cheap ink for their hundreds of cheap pension headlines, usually absurd in magnitude, with no real importance to the people of this Commonwealth. Are the editors really going to blame limited-government types in the very same editorial that they're guilty as charged? Really?


Quriltai said...

Ryan...the Social Security thing is not a Massachusetts quirk, but a federal law put on the books under Reagan, known as the "Windfall Elimination Provision".

Ryan Adams said...

Sab, in most other states teachers can get SS, from what I know... Mass did opt out around that period, but from what I know we can opt back in. Regardless, it doesn't change the fact that complaining about pensions in the range that typical state workers get is silly given the fact that they don't get SS. It's about a wash, when all things are considered.

amy said...

ryan, I must agree with the Globe much as it pains me. You might want to do some further research and find out what the cost of living increases have been for social security recipients -- a sham! The increases in Medicare premiums can't exceed the COLA, so it's essentially nonexistent. And let's not lump teachers and other state workers together as you have done. Aren't these non-contributory guaranteed pensions for older workers and teachers? Didn't the more recently hired workers have to make contributions? And let's not assume all private sector employees are able to contribute to 401Ks. Not all employers offer 401Ks, and not all employees are able to earn enough to contribute. We'll allow you some leeway because of your youth, but this bill was wrong to be approved in the dead of night, but then it's an election year, so gravy rules! State pensions need a thorough study and re-consideration.

Anonymous said...

It's a highly visible group, there's seldom anything written when a good job is dutifully performed well over a number of years. In the public's mind (partly because of the press's influence) the average state worker is equated with the guys who were recently highlighted that worked for the MassPike. The two sign hangers that made over 100,000 a year. And their boss called them highly skilled in the paper.

Ryan Adams said...

Amy - you have a point in 'lumping' which is something I tried not to do, by saying 'typical state worker' yet invariably do out of habit (because, when it comes to public workers, I'm usually talking about teachers).

That said, the 'typical' state worker isn't pulling in a whole, huge heck of an amount, so we're not talking massively massive pensions here. It's more in line with the compensation private sector employees get, when looking at the life of benefits and salary. Yes, the pensions are a bit better than ss, but only because public employees pay more into them and suffer through smaller wages most of their careers. There's a payoff.

Also, I've never been kind to the notion that just because one group of people has it bad - in this case, Social Security cost of living adjustments - then the other group should have it bad too. That's a tear-us-down approach to government, being content so long as no one has it better. No thanks. I'd rather take the other approach - which is to try to make sure we're making things better for everyone.

Lastly, my point - that pensions are the new third rail in Mass politics - is made only because of the attention these stories get compared to the actual costs they carry. In most pension stories, we get front page news about how someone got a promotion toward the end of their career that will give them a nice bump on their pensions. What, are we supposed to keep older workers at bottom barrel positions? Are we not supposed to reward expertise and years of hard work? Apparently, that's what the Globe thinks, with each new story. Hence, the new third rail. This is only the latest, where a big stink is being raised by increasing pensions $120 dollars for the average state worker. In these days of $4/gallon gas and $4 bread and milk, $120 is conservative.

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