The following was originally posted on February 26, 2011. http://wp.me/pFFwq-2y
In all 50 states on Saturday Feb.26, 2011 there will be a great showing of solidarity for the public employees of Wisconsin. As a strong labor supporter and union guy myself, I find it interesting that those that are not involved or associated with a labor union are so quick to judge those of us that are proud to take a stand against the political attacks that are unfair and in most cases are flat-out lies.
I think it would be wise for everyone to do their own research and homework about what is really going on in several states such as Wisconsin, Indiana, Ohio, and to some extent every state in the U.S. Some politicians and media reports have inaccurately stated that unions and organized labor is the reason that state budgets can’t be balanced.
The truth of the matter is that unions didn’t cause the recession that has crippled most state budgets. Unions didn’t cause the meltdown of the housing market. Unions didn’t cause a decline in sales taxes that fund state budgets. Unions didn’t cause the Medicaid crisis. Unions didn’t cause the politicians failure to plan accordingly for rainy days.
What I’m getting at is that we, the members of unions and labor organizations, have become an easy target and scapegoat for politicians to lay blame on the current shortfalls in state budgets and unfunded liabilities when in fact those major issues among others are the real problems.
The pension systems across America have not all of a sudden just sprung up as a new budget item. These pension systems have been around for years and years. You probably never heard about them during the dot com era when everyone was making money hand over fist, but there they were, quietly in the background minding their own business making money. You never heard that most pension systems were 100% funded and in many cases over 100% funded 5 or 10 years ago because at that time…NO ONE CARED! It wasn’t newsworthy to report on such a dry, non-controversial topic. Oh and another thing, no one in the private sector cared because it didn’t concern them what so ever, unless you were a stock broker for the fund that the pension system was invested in.
As time went on, many politicians failed to fund these pensions accurately for a rainy day, and when the recession hit, those funds declined sharply just like every other investment that you and I had from a 401k to a mutual fund, to a high risk tech stock and everything in between. The actuaries and those that were responsible for doing the investing should be the ones responsible and accountable to the states that have unfunded liabilities for pension systems that were once fully funded.
Shouldn’t that money, that was funded with public funds, been in a more secure and nearly risk-free type of investment like bonds? Perhaps, but I’m not an investment professional and I’m just looking at this from my limited common sense perspective. Here in Utah, we were approximately funded at 70%-75% and in better shape than most states. Last year during the legislative session, we, the public employees of Utah, took a beating at the hands of most politicians that may have over-reacted to the current situation the led to changes that may not be the best solution.
We were $5 Billion in the red for the entire public employees pension system. Some groups of that system were still 100% funded such as the firefighters pension fund, meanwhile other groups were lower in their percentage of funding.
Our pension system has been “reformed”. New rules as far as contribution rates, years of service to receive benefits, and distribution percentages will be implemented for new employees starting after July 1, 2011. Meanwhile existing employees will maintain the current retirement system. Some people have compared it to having 2 types of tires the same car.
Now we find ourselves having to defend ourselves against daily political attacks and a barrage of lies and stories. Some people would like union members to feel guilty or bad about the pension and benefits that we were promised. The following is my own personal experience as I once had a job in the private sector and now work as a public employee:
I left a high paying job with excellent benefits to follow the career path to my dream job. As I was offered a job and I looked over the pro’s and con’s of moving into my dream job, I looked closely at every facet of my new career. I knew that I would have much different work schedule. I would take a $7.00/hour pay cut, I would now have to pay a deductible for my health insurance, as well as co-pays, something I didn’t have to do working in the private sector. I would not be getting any stock options like I had at the job I was leaving. I would not be getting any bonuses. I would not be accruing vacation and sick leave as quickly as I had been. I would not be getting as much put into my 401K as I had been accustomed to. Pretty bleak picture, huh?
No way, not in my mind. Most people would probably stick around with that kind of set up. I looked at my situation very closely and thought about every detail. I determined it would be in my best interest to make the switch and here’s why. I knew that the job I was about to take was one of the most respected jobs in the world because of the reputation of public trust, hard work, integrity, credibility, and the list goes on and on. These were traits that I had developed within my life and I felt I would be able to fit right into the job and continue to better myself.
I knew that I would have less of a chance to be laid off than those in the private sector as companies are bought, sold, and downsized every day. I didn’t have to worry about the possibility of having to relocate because my job couldn’t be outsourced to another city or country. I knew that I would have a pension distribution of 50% of my highest 3 years average salary in place after 20 years of “service” because of the risks that my new job would present. I knew that I would love to come to work every single day. Actually I don’t even think of my job as “work”. I can honestly say I believe I have the best job in the world!!! How many people can really say that and believe it day in and day out. Well, I can and so can my fellow 65 co-workers and the thousands of others in this state that do the same job that I’m fortunate enough to have.
We have sacrificed the high paying salaries to do what we truly love doing. We have sacrificed the bonuses, stock options, the larger 401K employer contributions, the no deductible health insurance, etc. We have sacrificed all of that, and more, for the simple promise of a modest pension at the end of an incredible career.
Is that really too much to expect? Is it too much to look forward to a long healthy retirement with my wife. Should I have to apologize for the benefits I receive? Am I completely out of touch with reality? I hope not. I would not expect an accountant at a private sector job to have to make concessions on his salary, 401K contribution or bonus so his employer can balance their operating budget when he has no control over his company’s spending or profits.
I could go on and on about the use of public money and the amount that is spent on salaries and such. We all know that state and municipal funds are to be spent wisely, judiciously, and with the utmost respect for the people that pay their fair share in taxes to fund public services and employees. I don’t argue that for a second. However, in order to attract the most skilled and professional people out there in the job market, we have to remember that money does talk.
Each government entity is run like a business. To think otherwise is foolish and naive. The budget needs to be balanced in the public sector just like it does in the private sector. And in some cases even more so in the public sector since a misuse of public funds can lead to serious criminal and legal problems. I fully understand that taxpayers are in essence “stake holders” of their state and local government and have a vested interest in how their tax dollars are spent. Let’s just make sure that the politicians that we elect are making the right decisions to fix the problems, in the best interest of everyone involved including the employees that are working hard to provide a living for their families.
So as I have tried to explain in the most basic way I know how, the reasons listed above are why I’ll be supporting the workers of Wisconsin on Saturday and for the other hard-working Americans of the middle class just trying to make an honest wage and providing for their families.
Oh, and in case you were wondering, after nearly 7 years of working in the public sector, I am now making the same as what I was when I left my private sector job and I can lay my head down at night knowing I have the best job in the world.