TeacherKen, aka our friend Kenneth Bernstein, who often comments here, reflects here on “the great pension scare.”
Ken reflects on a blog post by Paul Krugman, the Nobel-winning economist and regular writer for The New York Times. Krugman says the scare is vastly exaggerated.
The topic is particularly timely because pensions are under attack in several states and in Detroit, following the declaration of bankruptcy by Governor Snyder.
There is something unseemly about the sight of bankers and others, paid more in a year than most teachers earn in ten years, determined to cut the pensions of public servants who collect–in many states–barely $40,000 a year for a lifetime of dedicated, ill-paid service. They seem to be hankering to return us to a century ago, when teachers lived lives of genteel poverty and worked until they died.
Diane Ravitch's blog 
You don’t have to look back to a century ago to see teachers who have “lived lives of genteel poverty and worked until they died.” Many of us who’ve committed our lives to educating America’s children and who have never had union protections are condemned to this destiny right now.
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I think in cases of bankruptcy, pensions should be treated like taxes and student loans, as an obligation you can’t dissolve just because you declare bankruptcy. Just imagine, if governmental units(school district also) can just drop their pension obligations that easily, there will be a rush to do this. Wiping away people’s retirement is not acceptable.
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Paula: as the owner of this blog wrote a while ago on a posting,
“A promise made is a debt unpaid.”
Unless, of course, you’re not a member of the insiders club.
That’s most of us.
Not to fear. The edubullies and their educrat underlings are willing to tough it out: “By trying we can easily endure adversity. Another man’s, I mean.” [Mark Twain]
Don’t agonize, organize.
🙂
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“By trying we can easily endure adversity. Another man’s, I mean.” [Mark Twain]
KrazyTA, your choice of quotations never ceases to amaze, amuse, and/or inspire.
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Read RETIREMENT HEIST. It’s primarily about the demise of private sector pensions, but some of the same lessons apply to public sector pensions as well – basically that they are just irresistible slush funds for the powers that be.
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In cities like Detroit and Jacksonville, Florida, the leaders decided not to pay their obligations to the pension funds for multiple years. Now they claim their is a crisis because they have been caught. They did not pay when they were supposed to – that is not a crisis. That is a crime.
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These people need to be doing prison time, not making policy.
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Same with Illinois. They can’t stand to have money in their pockets, like a 5 year old in a candy store it HAS to be SPENT!
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Teachers have paid billions into the pension funds; every pay period, a portion of their paycheck was deducted and placed in the pension fund for the day they would retire. Now, because of the nonfeasance and malfeasance of the politicians and banksters, the pensions are grossly underfunded and are at risk of going poof. Teachers won’t be working at teaching until they die because they want to fire all the older more expensive teachers. They (the Rheeformers) want to get rid of tenure and LIFO, they want to dump the older teachers.
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I think that you have to remember the Central Falls, R.I. municipal bankruptcy which happened in 2011.
“By the time Central Falls exited bankruptcy, the city had reduced the number of municipal employees from 174 to 118, cut a third of pensions by more than 50 percent and raised property taxes 4 percent. As Theodor Orson, a lawyer for Central Falls’s receiver told the New York Times shortly after the final cuts were announced: “Every stakeholder except the bondholders is suffering here.”
http://www.huffingtonpost.com/adam-toobin/detroit-and-central-falls_b_3623795.html
The point is that the Detroit emergency manager considered pensions as unsecured creditors in his initial proposal and offered them ten cents on the dollar while the secured creditors such as those involved in interest rate swaps i.e. bankers would get 100% based on a 1998 federal law. Central Falls debt was a very small fraction of Detroit’s current debt. They rushed the chapter 9 bankruptcy in the case of Detroit because federal law which considers pensions unsecured credit trumps Michigan state law that puts pension obligations out of bounds for cuts.
Pensions are not an extra benefit but a deferred income part of their compensation package.
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As a NYC public school teacher, I work three jobs just to make my mortgage every month. There is never anything left over. No vacation money. No money to do anything. We haven’t had a raise in four years. My work as a teacher takes up a minimum–MINIMUM!!! of seventy hours a week. I live like a wage slave, with every paycheck pre-spent on bills. Now I get to quiver and quake about when I will be fraudulently fired. I’m going to preemptively sell my house next year, so that when I am fired, I will have one less thing to worry about. This kind of terrorizing of teachers is so immoral, so wicked, that it literally renders me speechless, mouth agape.
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And this is America…. How does President Obama sleep knowing this is how America treats those responsible for educating America’s future? I am speechless with you. He should be as well.
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“And so it goes . . . ” in the words of Kurt Vonnegut.
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Love him. Good author.
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So, Harlan, did you ever apologize for accusing Diane of inciting racial hatred?
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Nope. But you just want to get me in trouble again.
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And don’t forget that in 9 states teachers don’t get social security or only a tiny fraction of it because it’s considered “double dipping,” even if they worked for it and put in for it for years in another field. In addition, we in those states (California being one) do not get any of our spouses social security. California Retired Teachers Association and others are desperately trying to change that.
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That is so appalling that teachers don’t get Social Security (or only a tiny fraction thereof) in certain states. NJ may have its faults but teachers being denied SS is not one of them. Christie has killed off the pension COLA, even for current retirees and constantly rants against the “too rich and too generous” pensions of those evil and greedy teachers. But the banksters and hedge fund managers are saints, they are the job creators (cough, cough), so their taxes must be lowered while the ALEC folks work over time to destroy public sector pensions.
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Count me in on not being able to collect SS. Paid in from age 16 to 38 when I started teaching. Won’t get anything. Hell, I’d be glad to just get back what I put in.
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same here. earning it in my prior careers was a priority. Not a word about “double dipping” was said when Louisiana lied and lied trying to attract alternative teachers with STEM careers into teaching. I love teaching but once I found out all the effort in my prior life was a waste as far as SS was concerned. Was also told since I had a masters degree don’t worry about getting one. I have a MA in Administration but Louisiana won’t count it for pay because I am not an administrator. Tell that to the hundreds of teachers with Leadership masters waiting to be vice-principals…their degrees count for pay.
I would love genteel poverty…right now it is just plain poverty.
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If there was a national pension fund, whose benefits were indexed to the market, and it was kept separate and not raided, pensions would do as well as the market, which seems to be doing well.
Detroit and Chicago have real problems, because I believe the pension funds were raided. Is that Emanuel’s fault, maybe not. Was the stolen pension money spent on schools, or was it spent on some other part of the city budget?
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I don’t think they do have serious problems — Krugman points out that the unfounded liabilities for all pension plans in the US are very small in comparison to the size of the entire US economy. It only stands to reason that Chicago’s and Detroit’s unfounded liabilities are even smaller in comparison to the entire size of the US economy, right? So rest easy!
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Rahm is relatively new to the pension raid game. The state of Illinois has been at it for decades. They have tried to bury their malfeasance in talk about greedy teachers and “shared sacrifice.” As far as I can tell, it is only the teachers that are expected to share: it is our pensions that have been funding Illinois services. Now that the bill has come due, we are supposed to pay it. KrazyTA’s reference is appropriate here:
“By trying we can easily endure adversity. Another man’s, I mean.” [Mark Twain]
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He may be relatively new, but he’s been a fast learner.
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So public employee pension funds are in good shape? We don’t need to worry about underfunding? Pension costs don’t, in fact, take up a meaningful portion of school budgets? Phew, thanks, Dr. Krugman, I won’t give it another thought, then.
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All of this news seems to suggest that a defined contribution program like that at NYU would make sense for teachers. No need to depend on a government’s ability to fulfill its promise, no longer can politicians make promises that others in the future will have to keep.
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2old2tch: your handle belies what you do on this blog, because if I don’t read all your comments I am sure to miss learning something valuable.
Thank you.
🙂
IMHO, the quotes are a reminder of part of what we are fighting for: a cultural heritage—albeit with many imperfections and flaws—that spans thousands of years and wisdom from unlikely sources, men and women from such different eras and places and mindsets that any attempt to condense it all in a few words is impossible.
From those old Greek guys forward there have been oh so many that confronted the strutting know-it-all frauds of their day and put some hefty dents in their armor.
Just consider, for example, how easily this comment attributed to Dorothy Parker [among others] about a novel by Benito Mussolini could just as easily apply to the novelistic RADICAL by Michelle Rhee: “This is not a novel that should be tossed aside lightly. It should be thrown with great force.”
How could Solon [Greek statesman, over 2500 years ago] have nailed EduGeniuses like Bill “98% Satisfactory Teacher Evals” Gates to the wall so presciently? “Rich people without wisdom and learning are but sheep with golden fleeces.”
These words by Helen Keller from many years ago aptly describe the emptiness of the Cagebusting Achievement-Gap Crushing crowd’s empty words and plans: “It is a terrible thing to see and have no vision.”
And the reason for the shameful kerfuffles that have been spun around the owner of this blog? Diane has reminded us of this bit of wisdom several times: “First they ignore you, then they laugh at you, then they fight you, then you win.” [Mahatma Gandhi]
I could be wrong, but I don’t think India is still a colony of the British Empire. In fact, I don’t think there still is a British Empire…
There is a long way yet to go, but the edubullies are starting to lose; they just haven’t got the news yet. Maybe they haven’t got the hang of social media yet…
🙂
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It would be great to see research across the country on districts and how they are securing or NOT SECURING teachers’ pension money. I put in 7 percent mandatory money with each paycheck which goes to my retirement pension and yet I have no idea what would happen to this money if MD went bankrupt or the county where I am employed went bankrupt. I do think that the MD governor is free to spend teacher retirement money contributions for non related state expenses. And I do think the state of Maryland wants to place pension “burden” on individual counties. It is criminal robbery if retirement money is not held in a strictly “for education retirement” purposes account. It is also criminal not to openly disclose all-important retirement information and have transparency as to the whereabouts and growth of the teachers’ collective funds placed in the retirement coffers. At this time every public school teacher in the US is a “Detroit teacher” waiting to happen! These times are so scary … where has Democracy gone????
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Would you feel more comfortable with a defined contribution retirement plan? At NYU, for example, if an employee contributes 5% the school comtributes 10% to a retirement account. It is more of a pay as you go system, and there is no concern about bankruptcy. No issue about vesting, you take the money with you if you change employers or even if you change professions.
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Meanwhile, as public education funding is is cut, and public pensions are under attack, another scheme (this one by major play Goldman Sachs) to rig markets and scam consumers is revealed:
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