Public Sector Unions Destroyed Detroit [W:225]

[Zyphlin]

Moderator's Warning:

Some decided not to take note of the warning in post 225. That was unwise, and it'd be unwise for anyone else to continue to put personal jabs and baits into their posts rather than sticking to the topic

 

[rabbitcaebannog]

Not in the public sector.

Yes, in the public sector.

 

[MaggieD]

Yes, in the public sector.

Then that is good news.

 

[rabbitcaebannog]

Thank you for that evidence. Of course, the truth about the pension funding will have no impact at all on the far right who is only using this event to attack working people and pensions which they oppose as a matter of ideology.

Yes, ideology but also the fact they are doing what their particular lobby group wants them to do. They want them to rid the unions of any power (especially in lobbying power). They can work on getting rid of pension later, as it will be easier without any battle when it comes to legislation. No one will represent the worker. It's all about power in one direction. I think they are doing a great job of it but to the absolute detriment of the worker.

 

[rabbitcaebannog]

Then that is good news.

Well of course it is good if you despise unions.

 

[rabbitcaebannog]

I'm not far right. I detest public sector pensions because politicians use the carrot of a sweet pension to get their political support. And you know that's correct. I'm all for paying them right up front what they're worth and putting them in the Social Security system like everyone else. Politicians can't hide salaries in a dark closet. They have to come up with THAT money every two weeks.

Truth be told, public sector pension came about at a time when it was not unusual for businesses in general to have pensions for its workers. Social security was only suppose to be one leg of a three legged stool. Business figured out a way to shift the risk of retirement onto their workers so they got rid of pensions and replaced them with 401ks which are contribution plans instead of a defined plan. Now it is pretty rare to hear of any business to offer defined plans for its workers. They have to depend on social security which conservatives are trying to privatize under the same "It's going bankrupted?" shrills "quick change the system". I digress. Pensions are not bad even though that seems to be the narrative that has taken over front in center.

 

[haymarket]

And, what exactly does that have to do with unions?

I also was wondering the same thing. There is no union connection at all.

 

[haymarket]

Yes, ideology but also the fact they are doing what their particular lobby group wants them to do. They want them to rid the unions of any power (especially in lobbying power). They can work on getting rid of pension later, as it will be easier without any battle when it comes to legislation. No one will represent the worker. It's all about power in one direction. I think they are doing a great job of it but to the absolute detriment of the worker.

I agree. This is simply one plank in a much larger platform to return to the days of the Gilded Age when the worker had no power and was at the mercy of the company who owned government lock stock and barrel and got it to do its ugly bidding. That is why the right hates FDR since he put government on the side of the worker.

 

[haymarket]

I'm not far right. I detest public sector pensions because politicians use the carrot of a sweet pension to get their political support. And you know that's correct. I'm all for paying them right up front what they're worth and putting them in the Social Security system like everyone else. Politicians can't hide salaries in a dark closet. They have to come up with THAT money every two weeks.

Yes, I agree that you are not far right Maggie.

And I paid both into a pension and into Social Security.

 

[MaggieD]

Well of course it is good if you despise unions.

I don't despise unions. I despise public sector unions.

Truth be told, public sector pension came about at a time when it was not unusual for businesses in general to have pensions for its workers. Social security was only suppose to be one leg of a three legged stool. Business figured out a way to shift the risk of retirement onto their workers so they got rid of pensions and replaced them with 401ks which are contribution plans instead of a defined plan. Now it is pretty rare to hear of any business to offer defined plans for its workers. They have to depend on social security which conservatives are trying to privatize under the same "It's going bankrupted?" shrills "quick change the system". I digress. Pensions are not bad even though that seems to be the narrative that has taken over front in center.

Defined benefit pension plans have never been a primary tool of pensions in the private sector. Defined contribution plans were the primary tool. Business is not responsible for your retirement income. You are.

There's only one kind of person defending defined benefit pension plans for the public sector: The people receiving them.

These plans are raping tax-payers. Democrats have used defined benefit plans specifically for the purpose of lining their campaign coffers and insuring their re-election. They are abhorrent.

 

[CalGun]

DETROIT POLICE & FIRE RETIREMENT SYSTEM

FYI a police officer in Detroit receives a defined benefit based solely on his last year or highest year of compensation, and no mention of adding in held off sick/vac time. So if after 20 years they can score a promotion for one year they can boost their retirement well beyond what the city would have set aside for them over a career.

End defined benefit spiking NOW and EVERYWHERE and I'd lock up those criminals that do it.

 

[rabbitcaebannog]

I don't despise unions. I despise public sector unions.



Defined benefit pension plans have never been a primary tool of pensions in the private sector. Defined contribution plans were the primary tool. Business is not responsible for your retirement income. You are.

Define pension plans were not uncommon in the work place around 30 or so years ago. Not anymore. My point was they have been replaced with 401Ks which shift retirement risks from employer to employee. If you enjoy that risk so be it.

 

[CalGun]

Risk and control. 401ks enable employees to have a measure of control. There should never be a guarantee granted that is dependent on investment returns. So much failure!

Define pension plans were not uncommon in the work place around 30 or so years ago. Not anymore. My point was they have been replaced with 401Ks which shift retirement risks from employer to employee. If you enjoy that risk so be it.

 

[MaggieD]

Define pension plans were not uncommon in the work place around 30 or so years ago. Not anymore. My point was they have been replaced with 401Ks which shift retirement risks from employer to employee. If you enjoy that risk so be it.

I doubt either of us can prove whether or not they were common in the workplace years ago. *shrug* they certainly weren't a problem then. The risk should rest with the employee. Why on EARTH should a company have to provide retirement benefits to its employees? A guy works for a company for 25 years. His employer is supposed to provide for his retirement for the next 30? Where did that notion even come from?

 

[Mach]

Define pension plans were not uncommon in the work place around 30 or so years ago. Not anymore. My point was they have been replaced with 401Ks which shift retirement risks from employer to employee. If you enjoy that risk so be it.

You are mischaracterizing how things work. Pensions shift the majority of the risk to the taxpayers, the majority of which don't see any benefit from backing such investments. 401Ks put the majority of BOTH the risk, AND reward, into the individual who is making the investment, and is in control of the investment, and who has the largest incentive to ensure the investment is appropriate.

Secondarily, pensions also hide much of the true cost of labor from taxpayers, it's a shady way to do business. Most people don't understand that they pay more for a heavily pensioned public teacher for the 30 years they do not work, as compared to the 30 years they do work. A teacher/union/politician can happily use propaganda about "aw look at average teacher salary", meanwhile it doesn't even approach what they are actually being compensated with. If the stock market does bad, how is it even remotely possible for a pension to pay out it's taxpayer-subsidized high percentage return? It cannot, it's got to be based on statistics like everything else. So who makes up the difference if things do go south? The taxpayer? Outrageous!

Save your money any way you like. Stop suggesting that it's appropriate to use government and union coercion to make other pay for those terrible choices that benefit you, at the cost to everyone else.

 

[rabbitcaebannog]

I doubt either of us can prove whether or not they were common in the workplace years ago. *shrug* they certainly weren't a problem then. The risk should rest with the employee. Why on EARTH should a company have to provide retirement benefits to its employees? A guy works for a company for 25 years. His employer is supposed to provide for his retirement for the next 30? Where did that notion even come from?

Yes, they were in the US and many other countries but like here and everywhere else there has been a paradigm shift.
Executive Summary
Traditional DB pension plans are gradually losing their dominance in the
occupational pension systems of many countries; over the past few decades there has been a
gradual shift towards DC pensions and, in some countries, DC plans now account for the
majority of invested assets in private sector occupational pension plans. It is widely
anticipated that recent and prospective regulatory and accounting reforms in the pension
sectors of a number of countries will accelerate the ongoing shift from DB to defined
contribution (DC) plans. In this note we have examined the shift from DB to DC plans with a
view to assessing the implications for asset allocation and risk management. http://www.bis.org/publ/wgpapers/cgfs27broadbent3.pdf

There once was a time when, after 25 or 30 years of working diligently for your employer, you could expect to be rewarded for your loyalty and hard work with a gold watch and a steady stream of checks lasting the length of your retirement. But if current trends continue, those steady checks - which came courtesy of a defined-benefit plan - will soon be a thing of the past. Here we look at what seems to be a gradual shift away from defined-benefit plans and toward defined-contribution plans and suggest ways to ensure that you have a dependable income in your post-work years. The Demise Of The Defined-Benefit Plan

 

[MaggieD]

Yes, they were in the US and many other countries but like here and everywhere else there has been a paradigm shift.
Executive Summary
Traditional DB pension plans are gradually losing their dominance in the
occupational pension systems of many countries; over the past few decades there has been a
gradual shift towards DC pensions and, in some countries, DC plans now account for the
majority of invested assets in private sector occupational pension plans. It is widely
anticipated that recent and prospective regulatory and accounting reforms in the pension
sectors of a number of countries will accelerate the ongoing shift from DB to defined
contribution (DC) plans. In this note we have examined the shift from DB to DC plans with a
view to assessing the implications for asset allocation and risk management. http://www.bis.org/publ/wgpapers/cgfs27broadbent3.pdf

There once was a time when, after 25 or 30 years of working diligently for your employer, you could expect to be rewarded for your loyalty and hard work with a gold watch and a steady stream of checks lasting the length of your retirement. But if current trends continue, those steady checks - which came courtesy of a defined-benefit plan - will soon be a thing of the past. Here we look at what seems to be a gradual shift away from defined-benefit plans and toward defined-contribution plans and suggest ways to ensure that you have a dependable income in your post-work years. The Demise Of The Defined-Benefit Plan

Lord, I hope so. Taxpayers can no longer afford to support public sector workers for 25 or 30 years. People need to realize they are responsible for their own future financial security in retirement and stop spending every nickel they have on big-screen TVs and vacations.

 

[rabbitcaebannog]

You are mischaracterizing how things work. Pensions shift the majority of the risk to the taxpayers, the majority of which don't see any benefit from backing such investments. 401Ks put the majority of BOTH the risk, AND reward, into the individual who is making the investment, and is in control of the investment, and who has the largest incentive to ensure the investment is appropriate.

Secondarily, pensions also hide much of the true cost of labor from taxpayers, it's a shady way to do business. Most people don't understand that they pay more for a heavily pensioned public teacher for the 30 years they do not work, as compared to the 30 years they do work. A teacher/union/politician can happily use propaganda about "aw look at average teacher salary", meanwhile it doesn't even approach what they are actually being compensated with. If the stock market does bad, how is it even remotely possible for a pension to pay out it's taxpayer-subsidized high percentage return? It cannot, it's got to be based on statistics like everything else. So who makes up the difference if things do go south? The taxpayer? Outrageous!

Save your money any way you like. Stop suggesting that it's appropriate to use government and union coercion to make other pay for those terrible choices that benefit you, at the cost to everyone else.

In other countries that have gone the route of the contribution plan, the government, as in taxpayer, had to supplement plenty when the market went bust and so did those plans.

 

[rabbitcaebannog]

Lord, I hope so. Taxpayers can no longer afford to support public sector workers for 25 or 30 years. People need to realize they are responsible for their own future financial security in retirement and stop spending every nickel they have on big-screen TVs and vacations.

I'm talking private workers not public. And, you are incorrect on your assumption that taxpayers are not on the hook when contribution plans go bust in the bad economy.

 

[Utility Man]

Guess people forget that fluctuating/high gas prices had a serious effect on US auto makers/sales, not to mention the crashed economy(uncertainty)and a war.

Too bad the government gave huge incentives/tax breaks to SUV buyers(gas guzzlers), otherwise the free market(Detroit) may have been better prepared for the transition to more fuel efficient vehicles.

Seems like the tax breaks(money saved)paid to fuel those SUVs, almost as if the government was handing those tax dollars directly to the good ole oil companies.

Gee , I Wonder if there was oil men(and women)in the White House while that happened.

 

[MaggieD]

I'm talking private workers not public. And, you are incorrect on your assumption that taxpayers are not on the hook when contribution plans go bust in the bad economy.

I have no problem with private sector pensions. I don't care what a private company promises its employees. If they're stupid enough to promise more than they can afford, the marketplace will take care of them.

As for taxpayers being on the hook for the private sector? I agree with you, they are. But the PBGC (Pension Benefit Guaranty Corporation) -- an arm of the Federal government -- slices and dices those promised benefits to the quick. (Which I think is unfortunate, by the way.)

 

[rabbitcaebannog]

I have no problem with private sector pensions. I don't care what a private company promises its employees. If they're stupid enough to promise more than they can afford, the marketplace will take care of them.

As for taxpayers being on the hook for the private sector? I agree with you, they are. But the PBGC (Pension Benefit Guaranty Corporation) -- an arm of the Federal government -- slices and dices those promised benefits to the quick. (Which I think is unfortunate, by the way.)

I was actually referring to other countries who have gone the way of privatizing their pension and offering contribution style benefits.

 

[MaggieD]

I was actually referring to other countries who have gone the way of privatizing their pension and offering contribution style benefits.

Then we've been talking past each other, Rabbit. I'm not familiar with what other countries are doing. I figure we have enough of our own problems here. Ha!

 

[rabbitcaebannog]

Then we've been talking past each other, Rabbit. I'm not familiar with what other countries are doing. I figure we have enough of our own problems here. Ha!

Yes I agree, we do have enough of our problems here. I was just mentioning that other countries have already privatized their social security and when the market crashed, taxpayers were on the hook to pay what was lost because people retire. Also, as a side note, governments are finding that the taxpayers are on the hook for those who did not save enough on those contribution plans. So, it is a bit of a red herring to say contribution plans are better than defined plans because tax payers are not on the hook for anything.

 

[MaggieD]

So, it is a bit of a red herring to say contribution plans are better than defined plans because tax payers are not on the hook for anything.

Yes, I see where we might have gone off track. I'm not saying that defined benefit plans are bad because taxpayers are on the hook. I'm saying they're bad because politicians (in the public sector) have used those sweet deals to buy union allegiance in order to get their little butts re-elected. And the taxpayers are on the hook for them. And more -- taxpayers can't afford them. Why else would some states' constitutions firmly say that public sector pensions can never be touched? Seems crystal clear to me.