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Gutting Public Pensions

San Jose's Chuck Reed

The millionaires and billionaires who want to gut public sector pensions in California have decided to put off their anti-labor ballot initiatives until after the Roberts Court imposes its “right-to-work” regimen on the whole country this June.

Former San Jose Mayor Chuck Reed, along with the San Diego Republican Carl DeMaio, and their deep-pocketed corporate benefactors have been for years aggressively moving to shred the retirement security of thousands of California’s police officers, firefighters, nurses, health care professionals, state workers, and teachers.

But they’re going to hold their fire for now.

They believe their anti-labor gambit will be more successful in 2018 after their ideological soul mates on the U.S. Supreme Court hobble public sector labor unions when they rule against labor in Friederichs v. California Teachers Association.

They believe their anti-labor gambit will be more successful in 2018 after their ideological soul mates on the U.S. Supreme Court hobble public sector labor unions when they rule against labor in Friederichs v. California Teachers Association.

These models of civic virtue also believe their attack on the retirement security of public sector workers in California is more likely to bear fruit in 2018 because voter turn-out slumps in non-presidential election years.

Reed recently sued the State of California for blocking the wording of his anti-labor propositions. The State of California wanted the language to refer to the actual people whose pensions Reed targets: “teachers, nurses, and peace officers.” Reed subsequently tweaked the wording of his summaries to keep them vague by saying they would only affect people “working in K-12 schools, education, hospitals and police protection.” Said Reed; “It’s not the most positive way to describe the initiative, but at least it meets the legal requirement to be accurate.”

Reed and DeMaio prefer deceptive language to bamboozle just enough California voters into supporting something they probably would shy away from if the wording were more honest.

They play on the fears that arose from the economic insecurity of the Great Recession to put forth a scheme that is sure to set loose the asset strippers, profiteers, speculators, and other “entrepreneurs” to pick apart the public pension systems.

Under the guise of “fiscal conservatism” and a feigned concern for budgets and taxpayers, Reed’s plan could compel the state’s police officers, firefighters, nurses, and teachers to moonlight on the side as Uber drivers, Arbn hosts, or pizza delivery people if they don’t want to retire in poverty.

Year after year, Reed and DeMaio have counted on their deep-pocketed right-wing allies to cough up some serious dough. “We’re in the ballpark of $25 million to run a statewide campaign,” Reed crowed.

Meanwhile, Reed’s millionaire friends aggressively push these initiatives while pretending to be some kind of “citizen driven” campaign. A member of the “Independent Institute,”Lawrence J. McQuillan, in a letter to the Sacramento Bee recently denounced the retirement security of police officers, firefighters, nurses, and teachers as an unfair “class system” that forces “the rest of us” to “pay for these protected government pensions.” McQuillan’s wording should be included in the summaries of the ballot initiatives because it’s more honest and it reveals quite clearly the resentment and bitterness among workers that Reed and his allies are trying to foment.

The modus operandi of Reed and his asset stripper allies is similar to what Governor Scott Walker did in Wisconsin: Pit private and public sector workers against each other whose yearly salaries aren’t that different.

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At a time when the “fire season” in California lasts 365 days a year and the state’s firefighters are risking their lives everyday to try to save the state from burning up. When police officers are working harder than ever trying to keep our overcrowded streets and freeways safe. When nurses and other health care professionals face increased patient demands due to the aging baby boomer population (with the state’s population reaching 40 million). When state workers, including civil servants and child protective services officers, have endured years of austerity and have had their numbers thinned with heavier workloads. And when teachers from Crescent City to San Diego are handed mandates to test and drill the state’s children while dealing with a steady onslaught of vituperation undermining their profession coming from corporate “reformers.” Now there are calls to strip away the pensions of these working people who have dedicated their lives to making California a better and safer place to live?

Reed and Co. willfully ignore the fact that the defined-benefit pension plans for California’s workers are part of the compensation package designed to encourage talented people to dedicate their skills to serving the needs of the state. Retirement plans are part of the incentive structure to lure good people to accept modest salaries to give something back to society. Yet Reed and other asset strippers apparently see little value in the work public sector employees do.

The public should think twice before taking advice on “pension reform” from these sharks. Reed and others like him, if given their way, would privatize public pensions to allow profiteers to rake in the cash managing inferior 401(k)s.

We need to remind Chuck Reed and the asset strippers that California isn’t Wisconsin. Reed and DeMaio think that since their pension-gutting crusade would only apply to future hires current employees won’t oppose them. But I can tell you as an employee of the Great State of California and a labor unionist I’ll be among those fighting against Reed and DeMaio’s ballot initiatives no matter what shape-shifting form they take.

Let’s not forget that the anti-pension initiatives are also designed to drain the coffers of the state’s labor unions, which is why Reed believes he’ll get a better shot after the Supreme Court overturns the 1977 Abood v. Detroit Board of Education this June in the caseFriederichs v. California Teachers Association thereby hamstringing political spending by public sectors unions.

Almost every year California’s labor unions are forced to spend millions of dollars fighting essentially defensive battles against right-wing corporate interests that engage in class warfare and seek to hobble workers’ rights. The money often flows in from Texas and other states with an agenda behind it that is clearly anti-California.

These propositions from millionaires and corporations push the unions back and drain their hard-earned dues money that could have been spent on organizing new members or changes in the law that help workers. These rich guys apparently have nothing better to do with their spare time and money than to beat down public sector workers in California along the same lines that Scott Walker did in Wisconsin.

This June the Supreme Court is certain to embolden Reed by making it harder for public sector unions to defend themselves. Instead of attacking the pensions of hard-working Golden State employees we should be asking the questions: Why is it that the private sector treats its workers so shoddily that it sets them up to retire in poverty? Or: What good will it do for the state to throw thousands of public sector workers into poverty in their old age?

Of all the great social causes — climate change, ending discrimination, protecting the environment, etc. — to which Reed and his merry band of “concerned citizens” could dedicate themselves they choose to fight to reduce the already modest incomes of retired police officers, firefighters, nurses, health care professionals, state and municipal workers, and teachers?

joseph palermo

Many of the rich people who throw money behind these “campaigns” no doubt see it as a good investment. For ideological reasons they want to privatize state and municipal pensions, strip the assets (even the ones that workers have paid into for twenty or thirty years), ruin this modest incentive structure that attracts qualified people into public service, and replace good protected pensions with 401(k)s or similar plans that function at the whim of Wall Street speculators and are vulnerable to blowing up after the next bubble pops. An elite class of financial managers and advisers who charge exorbitant fees, commissions, rents, and compensation are licking their chops over these initiatives so they’re not going away.

Joseph Palermo

Joseph Palermo

Whether the economy is weak, strong, or somewhere in between, you can be sure that Reed and the boys will be back in 2018 selling the same snake oil argument that adding to the number of impoverished elderly people in California will put us on the path to prosperity.

Joseph Palermo