Sep 30, 2013
In San Jose, California, the third largest city in California, public workers are currently facing drastic cuts in pensions and health care. These cuts were planned out by their Democratic mayor, who placed a referendum on the ballot last year to allow him to reduce benefits. The referendum passed with a 70 per cent approval rate.
The proposed cuts will devastate public workers’ incomes, forcing existing public workers to choose between second tier, 401(k) type benefits or paying significantly more out of pocket to preserve their existing pension. Any new city worker hired will automatically go into the second-tier plan.
One politician said this shouldn’t be happening, that after all, “We’re Silicon Valley, we’re not Detroit.” Silicon Valley, home to Apple, Google, Yahoo, Facebook, Microsoft; home to the largest, most profitable high-tech companies in the world.
No, Silicon Valley is not Detroit, where public worker pensions are being threatened by a contrived bankruptcy; where auto industry magnates and the banks are speaking through Emergency Manager Kevyn Orr to insist on cutting city workers’ benefits. In Detroit, these forces have proposed to freeze the two pension funds at the end of the year; to stop city workers from accumulating any further pension benefits; and to force workers into a 401(k) style plan of lesser value along with any new hire.
If San Jose is not Detroit, it sure does look like Detroit when it comes to attacks on pensions. Why? Quite simply, because it is, like Detroit, targeted by the bourgeoisie as part of a strategic attack to reduce payouts for pensions and other benefits so that income can be used for other things, like debt service to the banks or stadiums.
In Detroit, their strategy is to claim that the city is broke and that there is no choice but to declare bankruptcy. In San Jose, they have a strategy of frightening the public into believing that necessary city services are not obtainable unless pension and other employee benefit costs are drastically decreased. In both cases, they have created lie upon lie to carry out their strategies.
In San Jose, as in Detroit, residents have paid and paid into the public funds. In San Jose, like Detroit, city politicians were allowed to give huge tax breaks and outright gifts to the corporations while underfunding the pension programs. Banks benefitted from predatory loans while cities gave corporations their money. In San Jose, the “capital” of Silicon Valley, the 47 largest high tech companies paid NO taxes on most of their earnings. In Detroit, the auto companies were given million-dollar gifts; Compuware paid $1 for its current location.
It is more convenient for Wall Street to call upon the populations of cities and states to impose cuts on their public workers, if they can, than to go through bankruptcy. In a city like San Jose, they count on a wealthy upper middle class to support their ballot proposals.
But if need be, in cities like Detroit, where the majority of the population is opposed to the pension cuts, they will impose bankruptcy to get what they want.
San Jose and Detroit are two sides of the same coin. And politicians are promising more attacks on pensions to come. There are already at least 10 states where pension fund payments have been systematically withheld and used for other purposes – cheating workers’ pension funds of agreed-to funding. Wall Street think-tanks are already moving to put pension cuts for state and municipal workers up for statewide votes across the country.
Will they get away with this massive attack on public workers? Will they be able to use one section of the population against another to succeed in lowering everyone’s standard of living?
If they succeed at this, no one is safe. The assault on workers’ pensions, which began in the private sector, will spread across the country to take down city and state workers’ pensions and then finally any private business holdouts.
Then again, the result could be very different. Workers across the country are already demonstrating and protesting this latest series of attacks. Organized city and state workers could lead a fight-back that could mobilize the entire working class.
Workers don’t have to accept Emergency Managers or so-called “democratic votes” engineered by the upper class to eliminate workers’ rights. Those that are leading the attack aren’t giving up their retirement rights, and we shouldn’t either!