Monday, April 16, 2012

The War on Public-Sector Workers

Firefighters protest outside City Hall Park after marching
across the Brooklyn Bridge in New York on June 3, 2011.
The firefighters, along with City Council members,
gathered to protest New York City Mayor Michael
Bloomberg's budget plan which includes closing
20 fire companies. (Photo: Hiroko Masuike /
The New York Times)
Monday, 16 April 2012 09:23 By Dean Baker, Truthout | News Analysis
Politicians across the country are using heaping doses of the politics of envy to try to arouse the anger of workers. However, their targets are not the corporate CEOs pulling down tens of millions of dollars a year in pay and bonuses. Nor is it the Wall Street crew that got incredibly rich inflating the housing bubble and then took government handouts to stay alive through the bust. The targets of these politicians' wrath are school teachers, firefighters, and other public-sector workers.

They are outraged that many of these workers still earn enough to support a middle-class family. Even more outrageous, many of these workers have traditional defined-benefit pensions that assure them a modicum of comfort in retirement. Having managed to ensure that most workers in the private sector did not benefit much from economic growth over the last three decades, the same upward redistributionist crew is turning their guns on public-sector workers.

There are two major deceptions in their story. First, after working to eliminate traditional pensions in the private sector, they now tell us that getting a pension in the form of a guaranteed benefit is hugely more valuable than having the same money placed in a 401(k)-type defined contribution account. Second, after shoving stock down everyone's throat in the bubble years, they now tell us we cannot expect a very good return from investing pension funds in the market.  READ MORE

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