When you cut through the chase about the economic debate of the future, it really boils down to this: What is the standard we should use in setting the standard for a decent living? Apparently, the New York Times has decided: don't count on decent pensions, don't count on health care, and forget decent wages. All that is just too "generous."
Apparently, we all have to live "Within Our Means", the title a Times editorial this week, which sets forth the living standards we should all expect in the future, in its plea to the poodle-for-the-rich Governor of New York to go after New York State public workers:
Mr. Cuomo's proposed salary freeze for many of the state's 236,000 workers could save at least $200 million next year. Unions are resisting. Freezes are a painful fact of life across the private sector these days. And, thanks to their powerful unions, state workers have gotten raises worth more than 13 percent since 2007.
New York will never get its fiscal house in order unless it deals with employees' extremely generous benefits. By 2013, the average total compensation -- salary, pension contribution and health insurance contribution -- for a state employee will be $102,000.
While private-sector workers pay about 20 percent of the cost of individual health insurance coverage on average, state employees contribute only 10 percent.
Pension benefits are even more out of line. Until 2009, most employees contributed 3 percent to their pensions, but only for the first decade of employment. In 2009 lawmakers required new employees to contribute 3 percent every year, but that contribution is still less than half of what most other states require. New York also has lower retirement ages and higher disability rates than most states and is one of only three in the country to count overtime in calculating pension benefits.
The state must insist on higher contributions by all its workers to pensions and health insurance, a lower ceiling on the amount of overtime counted in pension calculations and wage increases in line with those in the economy at large. [emphasis added]
Let's understand the frame we are being asked to accept here by the editorial page of the Times: the fiscal deficit in New York State was caused by overly generous benefits to public employees and it's time for those people to get real and be like the rest of us... meaning, all those people in the private sector who have gotten nothing in their paychecks.
Let's now do something highly bizarre -- let's actually look at THE FACTS.
First, we need to remind ourselves what happened in New York and in every state in the nation. We have a fiscal deficit for two reasons: the economic depression we are in and the slow but relentless unraveling of a progressive tax system in New York, and across the country. The first is a short-term fact -- that is likely to stretch much longer than we think -- and the second is a 30-year process, aided and abetted by both parties. It has nothing to do with wages and benefits for workers.
Second, what are those generous benefits for state workers? Since 1990 state employee raises have been 18 percent lower than private sector employees.
Generous pensions? James Parrott has the numbers:
The average retiree covered by New York State's employee retirement system receives an annual pension of $17,615, while the average retiree under the police and fire retirement system receives $38,367 in annual pension benefits.
Let's also be clear about another point: pensions are deferred wages. They are not a gift. At some point, through collective bargaining, workers said, "we will put off earning a certain amount now so that we can try to have a modicum of security when we retire".
If you had to live on the pensions Parrott describes without any other source of income, that would put you below the federal poverty line for a family of four -- and let's face it, even if you were on your own that is almost nothing to live on.
So, what is happening here? The idea is simple, from the Times' point of view: people do not deserve to have a standard of living anymore that pays the bills. If private sector workers are getting shafted, then, public workers should get shafted as well.
If private sector workers increasingly do not have unions to bargain decent contracts because of the unrelenting assault on organizer labor in the private sector, well, then, let's not let those workers who do have unions -- especially workers in the public sector -- get wages that are higher... and, during the period the Times' whines about an increase of 13 percent, the consumer price index -- which, in my opinion, underestimates the rise in the real cost of living -- went up 8.1 percent, effectively wiping out two-thirds of the wage hikes for the NY state public workers.
If private sector workers no longer have real pensions -- and are forced to gamble with 401(k)s, and, then, are left destitute when a coterie (not all) of incompetent, greedy Wall Street titans crash the financial system -- then, well, pensions should be cut and eviscerated in the public sector as well.
If private sector workers are forced to pay more for inadequate health care, well, then, let's make the rest of the workforce pay for the same thing -- rather than advocate for a single-payer system that gets rid of the corrupt insurance industry and lifts the costs of health over the backs of workers AND business.
If public sector workers get to retire a bit earlier than people in the private sector, yes, let's join the chorus of all those people demanding that the retirement age be raised for state retirement and social security benefits -- a chorus you only hear from the people like the members of the Times' editorial board who have worked their entire lives in a nice cushy office, with nice chairs and air conditioning, not a 40-year factory job that usually leaves most people with some physical ailments.
Memo to the Times' editorial board: if you are trying to sink the state even lower, you don't have anything to work with -- New York has the greatest divide between rich and poor of all the states.
The solution is much simpler -- if we had a poodle-for-the-rich Governor and a media establishment that was not so intent on letting the richest among us slide by. In New York, we could wipe out fiscal deficits and continue to have decent pensions for people if the wealthiest paid their fair share -- rather than continue to get unconscionable tax cuts. In NY, if the state replaced the existing rate structure (consisting of 5 brackets with rates ranging from 4.0 to 6.85%) with one consisting of 14 brackets with rates ranging from 2.0 to 15.0%, we could bring in $6-7 billion more, and perhaps as high as $11 billion.
Instead, the Times, and the poodle-for-the-rich Governor, want to attack the weakest among us.