The Unions Cry Crocodile Tears About Tier VI

For the past few years, as taxes have been increased and public services have been cut, New York’s public employee unions have protested. We’re on the side of those who rely on public services, they claimed. We are the 99 percent. And now that the retirement benefits of future public employees have also been cut, the unions are protesting again. We are on the side of future public employees, they claim. So where is the money going? Who is getting better off, as most people, and just about all future people, become worse off? Have New York’s state and local taxes been cut? Have public fees, such as transit fares, been cut? Who benefitted? You know the answer.

There are some people who were already richer than other people in a particular way, in how much and how long they get paid while not working. Like the one percent, these people didn’t count their blessings and transfer their concerns to those less well off. Instead, they worked the political system for years and years, and cut political deals with the state legislators they control, to retroactively enhance their pensions over and over. And when they got what they wanted, they hid the cost for years and thereby inflated it.

And now that the bills are due, their bills, they are working to deflect the blame. It’s because New York, with the highest state and local tax burden in the country doesn’t have a $millionaire’s tax, they said. Then one was enacted. It’s because Wall Street stole all the money. But stocks prices are sky high – too high and headed for a fall. All propaganda. All false.

The reason our taxes are high and higher, the reason our public services have been reduced, the reason not only the retirement benefits but also the starting pay for most New York City public employees has been cut compared with those who came before, is because there is no way, absolutely no way, that one can be “retired” one year for each year they worked without doing it at someone else’s expense.

That’s the deal the unions demanded for those cashing in and moving out. And it is not a deal they are willing to sacrifice for others to have. Any place of business where the prices and quality of service reflect that kind of burden is a place of business they would exercise their power of choice not to go to. It would go under.

They are the 99 percent? That is bullshit. The pay of the one percent, the bonus rich, has been inflated not because of trends in the economy or through voluntary interactions in a real free market. It is inflated because of political power, in mutual backscratching deals with their cronies on the boards. And the pensions of the pension rich were inflated the same way. Through deals with their cronies in the state legislature. Deals fraudulently described to those who would be sacrificed to pay for them.

In the case of corporate boards, executive pay consultants are hired to “prove” that those at the top deserve more and more and more. In the case of the state legislature, the unions provide actuaries to “prove” that those with seniority can retire years later and it won’t cost anyone anything. You know what Greg Smith said about Goldman Sachs? Here is the union equivalent. “Mr. Schwartz, a former city actuary, said that he routinely skewed his projections to favor the unions — he called his job “a step above voodoo” — and admitted that he had knowingly overreached on the pension bill by claiming that it cost nothing, either now or in future years. “I got a little bit carried away in my formulation.”

I knew when all those retroactive pension deals were passed that the result would be worse services for New Yorkers, at just about the highest state and local tax burden in the country, and lower pay and benefits for future workers. But so did the unions. Because they do the same thing over and over, with the same results. This isn’t a mistake, it is a strategy. The very conditions they are protesting is exactly what they set out to do. This is exactly what they wanted – more for those cashing in and moving out, and a diminished future for everyone else, including their own future members. Members who have no choice but to pay dues to the unions who sold them out, a substantial share of which is then transferred to the incumbent state legislators who sold them, out via campaign contributions.

This isn’t Tier II. It is Tier VI. Future generations of workers have been made worse off by the public employee unions over and over again, so the retired and those with seniority could grab more for themselves. And public employee pensions are just one example of the values that have driven just about every decision, non-decision and deal for 30 years.

I already knew what the unions are, and what the state legislators are. The surprise is that Mayor Bloomberg, coming in from outside, proved to be no different. “It does not hurt any of our current employees or any of our current retirees, and down the road, if people don’t want to come to work for the city or the state, they don’t have to.” That is pretty much the same attitude taken by a DC37 union rep after that union cut a deal with the Mayor to reduce the starting pay for most city jobs by 15.0%, to pay for a raise for those about to retire. The unions may agree to cut your pay. But they will defend to the death you right to do such a bad job you aren’t worth whatever it is they are paying you. As long as those hired earlier, who are paid more, get to do just as bad a job or worse.

Do you know why the unions are actually fine with higher pension contributions and diminished benefits for future employees, despite what they were saying, but desperately opposed to a 401K option? Because they don’t want those future employees to escape. I’m willing to bet that for the first decade those future employees work, the City of New York will not put aside a penny for their future retirement. Instead, fraudulent assumptions will be used to assert the cost of their pensions, net of their own contributions, is zero and less, and all the money will go to the retired and those about to retire. I wouldn’t be surprised if some of the future employees own contributions went instead to pay the benefits of existing retirees.

So go on protesting, you hypocrites. But I know. And I know that you know.

If the public employee unions were really concerned about the 99 percent, and their future members, they are certainly capable of doing something about it. They are in a position to make good. And if I were running the city, I would demand it, publicly demand it.

First off, there should be no raises until New York City’s pension funds get out of the hole. That will take many, many years. While New York State’s pension funds, which also cover public employees in the rest of the state, are among the best funded in the country, New York City’s pension funds are among the worst funded. It should also be noted that New York City taxpayers have also paid more for their employee pensions over the years that taxpayers just about anywhere else in the country, when those elsewhere in the state went several years with just about no pension contributions at all.

Second, to the extent that money becomes available for anything but debts and pensions, it should go first to providing the public services that New York City’s non-rich non-public employee residents, the people who don’t matter, with the services they deserve given the taxes they pay. So the police say they can no longer protect New Yorkers because so much money is going to police pensions we can’t afford police officers? Fine, then no raises until enough officers can be hired to provide that protection. So class sizes are higher in school? Fine, no raises until they are class sizes are back down to where they were, and all the services and programs are restored. No raises until the cuts in transit service are restored. No raises until the libraries are open at least five days per week. No raises until street repaving is restored to the level required to keep the streets from deteriorating. No raises until the transit cuts are reversed. All with no more tax increases.

Third, when the services are restored and money becomes available to increase the pay of New York’s public employees as a group, it should go entirely to those on the wrong end of all the “screw the newbie, flee to Florida” deals before those who benefitted from those deals get an extra dime. I’m not just talking about higher cash wages during their first 20 years of work, adjusted for inflation, for those in Tier IV compared with those who came before. I’m talking about bonuses for those police officers and firefighters forced to come in at a starting pay of just $25,000 per year. And higher pay for those who now have a 25 and out pension plan rather than 20 and out. And higher pay for recent and future hires for all the titles represented by DC37, to make up for the 15 percent cut in starting pay as well as changes in pensions.

I’d go back over every single contract since the start of collective bargaining in NYC, put changes in pension and other non-wage benefits into dollars, adjust all the figures for inflation, and then demand the chance for more recent and future hires to “get even” through higher cash pay. I wouldn’t agree to a single raise for those with seniority for decades if necessary. And all the additional pay for the currently disadvantaged would be paid out in the years before pension eligibility, to ensure that only wages paid while working and not pay while not working would increase.

If the contracts went to arbitration, I would tell the arbitrators – and make this public – that under state labor laws arbitrators have the responsibility to take the public interest into account. Not just the ability to pay and what the workers want. The deals that have been agreed to again and again, cutting starting pay, and cutting work done, in exchange for fiscal relief – are not the only deals that can be cut. It is in the public interest to raise starting pay compared with ending and retirement pay, to at least reverse the net effect of those past deals.

And if the unions won a “everybody treated equal going forward even if some were screwed in the past” deal from an arbitrator, I would make damn sure that every since unionized public employee and every single public service recipients knew exactly how much they had been screwed, and by whom. Make damn sure both the general public and future public employees knew exactly who to blame, and who to get rid of if they want a fair deal for themselves. There is one thing that is an implicit part of every deal in Albany. Those outside the room are always sacrificed and never told the truth.

So don’t believe the hype. The public employee unions may claim that they are re-evaluating their relationships with the incumbent state legislators, but younger generations have already re-evaluated their relationship with the unions. So have most New Yorkers. They don’t like Cuomo and Bloomberg? If I were calling the shots, they’d like it a whole lot less, particularly when all their younger and future members were told exactly what has been done and why.