Public-Employee Unions Gone Wild
|May 3rd, 2012, 01:42 PM||#1 (permalink)|
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Public-Employee Unions Gone Wild
Terry List, a teacher in Saginaw Township, Mich., has a depressing lesson for her students: “I would not recommend to my pupils to become a teacher in Michigan.”
What’s discouraging her? A proposed pension-reform bill in Michigan would derail her plans to retire — at age 47.
After these rapacious reforms, List would have to work another 16 years, to age 63, in order to earn her retiree health-care benefits. “I understand we have to tighten our belts,” she laments, “but we don’t have to use a tourniquet and cut off the blood supply entirely.” Under the reforms, such a tourniquet means she could still retire now and have a guaranteed income for the rest of her life, but she’d have to pay for her own health care until age 65 — like, you know, most Americans.
Ninety percent of public employees in the United States enjoy defined-benefit pension plans, meaning they will receive a guaranteed income, and usually health insurance, until death. These benefits are prohibitively expensive, and more so when they are tied to retirement ages that are atypically low. Given rising life expectancies, we could see a raft of public pensioners spending more years collecting retirement benefits than they spent working their government jobs, and in fact this isn’t uncommon already.
Thanks to the strength of teachers’ unions, the average retirement age for a public-school teacher in America is 59. In California, the oldest age at which some categories of state and local employees can retire is 60, though for most the age is significantly lower. It’s hard to generalize, because some unions have pillaged far more than others. For a sense of how extreme the demands of some can be, one more example will have to suffice.
Until recently, employees of the Massachusetts Bay Transportation Authority enjoyed “23 and out” pensions. No matter when they began their careers, they could collect nearly full pensions after 23 years on the job. (That has been raised to the a punishing figure of 25 years, and now with a minimum age of 55 before they can collect.) Perhaps the most famous member of the organization that negotiated these benefits, the Boston Carmen’s Union, is Patrick Bulger, son of longtime Massachusetts state-senate president Billy Bulger. The younger Bulger retired from the Carmen’s Union at 43 and began collecting an annual pension of $41,000. Plus cost-of-living adjustments. For the rest of his life.
It’s hard to justify such benefits when the rest of America relies on 401(k)s, Social Security, and Medicare, making their effective retirement age, on average, 63 — and soon to rise. Public employees retire still very much in their working years. Even though they’re guaranteed financial security for life, some of them in “retirement” go on to lucrative jobs in the private sector — or, more disturbingly, back in the public sector. Take retired MBTA manager Michael Mulhern, age 48, who now enjoys a $130,000-a-year pension — and earns $225,000 a year as executive director of the MBTA’s retirement fund.
Of course, the case can be made that some public employees — police and firefighters — need and deserve to retire at a relatively earlier age. Public-safety employees were often the first to win generous pensions and lower retirement ages.
The largesse has quickly spread to the unions of other government employees. In Illinois and California, almost one in three state employees are now on “public safety” retirement schedules. Public-safety rules often extend, for instance, to any “law enforcement” employee — including, say, all employees of public defenders’ offices. In New York City, the level of benefits for public-safety workers was soon enough extended to all uniformed employees of the city, so that sanitation workers fall under the same “20 and out” policy as do officers of the NYPD.
Public-Employee Unions Gone Wild - Patrick Brennan - National Review Online