Dec 9, 2013
Federal bankruptcy judge Steven Rhodes hadn’t even finished uttering his ruling in Detroit’s bankruptcy case, when politicians across the country started cheering. Judge Rhodes ruled on December 5 that Detroit’s city worker pensions were fair game in its bankruptcy, and all these politicians are jumping to get their hands on workers’ retirement money.
The state of Illinois, on the very same day as the Detroit ruling, made significant cuts to its state worker pensions, citing its debt as the reason for the cuts. On that same day, the press speculated that city bankruptcies already underway in California would be opened up to pension cuts.
Cities like Detroit and states like Illinois may be under water. But it certainly is not due to pension debt. What they’re saying about pension debt is a lie repeated by the media.
The attack on pensions is part of the continuing attack on the working class and its standard of living. It is another way that the capitalist class is seeking to have us pay for the crisis they created.
The pattern has been repeated across the country: cities and states have funneled billions to corporations through tax breaks and other “incentives.” To keep paying out those tax breaks, they have systematically underfunded their employee pension funds.
While giving away tax money, city officials floated crazy financial deals to cover operating expenses. These Wall Street deals culminated in huge balloon payments, just like the sub-prime mortgages that left so many homes under water. This doubled, quadrupled the debt.
And now that the pension funds have been underfunded, the politicians’ response is not to stop the tax breaks that caused it – but to take from the workers.
But these pensions are not gifts given to the worker by the employer – they are part of the workers’ pay. They are deferred payment – less money now, in return for guaranteed payment after retirement.
And if these pensions are cut, EVERY worker has taken a pay cut, young or old. After all, officials are not proposing to return pensions dollars to our wages! Officials are flat out saying they’d rather leave workers destitute in their retirement than stop handing billions to the corporations.
The attack on pensions has been building for years, moving from private employers to public, and back again. Every attack in one sector is picked up by employers in other sectors. So you can be sure that this latest attack won’t stop here. Every pension, every retirement fund is in danger. Notice has been served.
But we don’t have to accept it.
If they want to tear up our contracts – we have a few demands of our own. EVERY worker needs and deserves a guaranteed retirement income that they can live well on.
One study concludes that public pensions are underfunded by 46 billion dollars annually – while tax breaks to corporations amount to 80 billion dollars annually. If these tax breaks were just cut in half, it would wipe out the pension shortfalls.
Sound like a pipe dream? Why? They have the money – they’ve just been choosing to use it to shore up the profits of corporations and Wall Street.
But workers have a lot of power we haven’t yet used. Workers make the cities run – every city in the country. We can use that power to protect current pensions and to ensure a decent life for the generations behind us.