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Karen Lewis. Pensions in the era of robber barons.

December 14, 2013



Chicago Sun-Times

- Karen Lewis

Legislators make laws to benefit all of us, but I was surprised and repulsed by the sight of Illinois legislative leaders congratulating themselves after voting for deep cuts in public worker pensions earlier this month. Imagine watching hunters, guns still smoking, as they congratulate each other over their kill. Imagine you’re the endangered creature they just shot!

Of course, some people are pleased by this vote. The wealthy and media pundits claim that the public retirement system is “in crisis” and needs to be fixed. By fixed, they mean slashed. Because governments have avoided contributing to pension programs for years, the system was $100 billion underfunded. So they cut $160 billion? One reporter concluded, “[the bill] is as good as Illinois is going to get — something that virtually every major business group in the state recognizes from the Civic Committee of the Commercial Club to the Illinois Manufacturers Association.” The most honest headline was the title of a Chicago Sun-Times story: “Pension Vote Pleases Wall Street.”

It is ironic when wealthy local politicos like Bruce Rauner — he owns nine homes, made $53 million last year, and plans to buy his way into the governor’s mansion — have the audacity to suggest that public workers are a privileged class. Supposedly, we get too much (I’d trade retirement plans with any one of them!) However, few reports explore the impact on the one group with the most to lose — state workers, downstate teachers, and the other victims of this law. Imagine a typical retired teacher living on the average pension — $40,000 a year. In her first five years of retirement, she will lose almost $10,000. Will she sell her car? Can she afford to visit her grandchildren this holiday season? Near the end of her life, when inflation strips most of the value from her pension, will she make hard choices between medicine and food?

This retirement security cut reveals deeply troubling political and moral values held by our elites and the politicians who do their bidding. We live in an era of robber barons and ruling class hubris.

Hedge fund billionaire Ken Griffin cheers as Chicago Mayor Rahm Emanuel closes 50 public schools to save money. Former Motorola executive Tim Cawley controls the Chicago Public Schools’ budget and justifies laying off 3,000 school staff by blaming their pensions. Gov. Pat Quinn cuts home heating assistance, domestic violence prevention, and child care services by blaming retired public servants.

There are real solutions to the budget crisis and we should consider them: demand wealthy residents pay their fair share of taxes, close corporate tax loopholes, and return the CPS portion of the city’s tax-increment financing surplus to the schools. If Illinois had an income tax structure like Minnesota’s, we could support schools at the level recommended by our state’s Education Funding Advisory Board — with an increase of more than $3,000 per student. An Illinois corporate tax loophole bill proposed last spring would generate hundreds of millions of dollars for public services. Note: California passed an income tax increase last year to fund education, and now the state has a $2.4 billion surplus — the first in 10 years.

Is anyone else concerned about signs that our society is rapidly regressing toward the late 1880s? Every day the news is worse. The very day our Legislature slashed benefits for retirees it also promoted tax breaks for Archer Daniels Midland Co. and Office Depot.

Recently, a group funded by the billionaire Koch brothers and others gave the Illinois Policy Institute a $30,000 grant for a campaign to make a progressive income tax politically toxic, according to documents published by the British newspaper The Guardian. This year they hope to work with Mayor Emanuel to cut pensions for workers in Chicago.

Well-funded public schools, public housing, public-sector retirement security, and Social Security are all on the menu. But beware — in the big-game sport of politics, the hunters can also become the hunted. The deeper the attacks go, the wider and more determined comes the resistance.

Karen GJ Lewis is president of the Chicago Teachers Union

13 Comments leave one →
  1. Vanthony permalink
    December 14, 2013 6:06 pm

    Couldn’t agree more. Very interesting how low paid workers are picketing for living wages while the richest are busy stealing from workers. I wonder how history will judge this. It shows that hard won battles in every arena (voter’s rights, women’s rights, minority rights, etc) have to constantly be guarded. Nothing is forever. I don’t think unlimited money from undisclosed contributors is helping.

  2. December 14, 2013 6:25 pm

    That’s okay, next week they’ll be lecturing you about the sanctity of contracts.

  3. jim duszak permalink
    December 14, 2013 6:42 pm

    Well researched and well stated Karen. I miss working with you.

  4. Anonymous permalink
    December 15, 2013 12:48 am

    Karen Lewis is one smart cookie I wish we had her running the IEA

  5. Ann permalink
    December 15, 2013 5:53 am

    Karen Lewis for mayor or governor!

  6. December 15, 2013 7:45 am

    Public workers ARE the middle class. That’s the middle class that Wall Street and that ilk don’t mind harming in the name of PROFITS. More greed. It won’t end until the middle class stands up and says loud and clear, “We’ve had enough!”.

  7. BMMB permalink
    December 15, 2013 8:00 am

    “Is anyone else concerned about signs that our society is rapidly regressing toward the late 1880s? ”
    ABSO-FRICKIN-LUTELY! For years I have been seeing our decline toward that type of thing and I’m just wondering what kind of ultimate catastrophe(Triangle Shirtwaist Factory Fire?) it will take to make enough people angry enough to finally say ‘ENOUGH!’. Of course, commenting on this site is just preaching to the choir. I had high hopes during Occupy Wall Street and all the organized marches that were happening but it didn’t help that media didn’t give us much play and when they did they drastically downsized numbers that showed up. Broadcasting responsibly might have given incentive to those who weren’t already getting involved….. I don’t know. Also, mayors colluding via party calls to wipe out Occupy didn’t help either. I just know that I am so ready for some ass kickin’ and I assume the rest of you are also(I’m not advocating violence, but I know one particular mayor whose ass I’d like to personally kick. It’s a nice fantasy.).

    • Anon permalink
      December 15, 2013 9:48 am

      Speaking of the Triangle Shirtwaist Factory Fire, history is sort of repeating itself. Every few months, we hear reports of similar disasters overseas in garment factories. The modern day Robber Barons don’t care.

    • December 15, 2013 9:55 am

      As to your last sentence, BMMB, get in line!

  8. Neal permalink
    December 15, 2013 7:28 pm

    Rauner MUST be stopped!!!!!!!!!!!

  9. frank permalink
    December 16, 2013 11:28 am

    Considering Illinois teachers hardly contributed a penny to their pensions compared to workers who contribute to Soc. Sec plus 401k accounts. Soc Sec doesn’t even come close to the measly $40,000 the worker you mention in your story. You compare this worker to millionaires why don’t you compare them to the average worker? The teacher pension is looking pretty damn good.

    • Fred Klonsky permalink*
      December 16, 2013 11:36 am

      You make this stuff up. Illinois teachers contribute 9.4% of their salary to the Teacher Retirement System. That compares to roughly 5% that employees in the private sector contribute to Social Security. You also make up the fact that only employees in the private sector pay into 401K accounts. The teachers’ pension “looks good” because we pay more into it and do not receive Social Security. But since it has been 60% unfunded by the state’s politicians, it isn’t really good if we don’t get what was promised contractually and constitutionally.Those like myself who worked in the private sector and paid into Social Security as well have our Social Security benefits significantly reduced.

      Making stuff up doesn’t help your argument. It makes you sound like you’re stupid or a liar.

  10. Dario permalink
    December 17, 2013 2:16 pm

    Frank is both stupid and a liar…it’s no wonder that our society is in such a mess when yahoos like Frank are out there making fools of themselves when they speak and don’t really know what they are saying!

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