Five Reasons Why Pension Reform Is a TERRIBLE Idea.

San Jose Mayor Chuck Reed

Nation watches as San Jose voters dismantle benefits for public employees

As California goes, so goes the nation Pension Reform
— author unknown

As a conservative friend of liberal blogger Justin Rosario asked, “Why should public sector jobs be better than private sector jobs?” San Jose voters apparently asked the same question, while casting their ballots for Mayor Chuck Reed’s Measure B, which drastically reduces benefits for our public employees. The question we REALLY should be asking is, “Why have private sector jobs gotten so much worse?” Within many of our living memories, the majority of U.S. workers enjoyed secure employment and generous benefits, including pensions or 401K matching, medical/visual/dental, paid holidays, and vacation time. We forget that back when today’s retiring police, fire fighters, teachers, and other public employees launched their careers, they sacrificed the significantly higher wages then offered by the private sector to follow their calling to serve.

Now that the proverbial chickens have come home to roost after 30 years of gutting our economy with deregulation, supply-side economics, union-busting, and off-shoring, we bitterly resent the few workers who still possess a measure of economic security. Instead of voting against generous benefits for the people we rely upon to keep our City’s infrastructure up and running, we should be advocating more generous benefits for all workers, and for policies that require China, India, and other developing nations (to whom our companies outsource jobs) to rise to OUR standard of living, rather than continuing to lower ours to theirs. We cannot even hope to compete against corrupt, exploitative nations that do not conform to U.S. standards and rule of law.

When my family and I moved to Willow Glen last year, we were attracted to this community’s livability, cohesiveness, creative vitality, diversity, amenities, good schools, thoughtful urban planning policies, and robust local job base. Thanks to abundant Silicon Valley tech jobs, the recession has not hit this community as hard as the rest of California — and the U.S. in general. I greatly admire my neighbors and fellow parents for their activism in the community, general neighborliness, support for law enforcement, emergency responders, and our schools. But, having lived in a rural area in Sonoma County that was devastated by the recession (and often struggles to begin with) I find the budget deficits of our new home in comparatively fortunate San Jose, and Mayor Reed’s call for budget cuts, to be utterly terrifying. I also feel disappointed in my fellow citizens, because San Jose seemed too progressive to vote for something so vile and evil.

Aside from my liberal biases, here are five logical, pragmatic, and business-friendly reasons why Mayor Reed’s ” pension reform ” is the WRONG way to go about balancing our budget:

  1. Pension reform reduces our city’s competitiveness for recruiting quality personnel: Less than a month later, we’re already seeing the negative effects of Measure B. Actually, we’re a total laughing stock amongst public agencies. In the wake of mass resignations from the San Jose Police Department following the passage of Measure B and resulting shortages of trained law enforcement personnel, the SJPD recruiting sergeant emailed other police departments across the country encouraging them to spread the word about our new job openings. Steve James, president of the Long Beach, CA Police Association responded via email, “To be very candid with you, there is no way in good conscience that I could recommend your department to anyone at this time due solely to the efforts of your mayor and other elected officials to decimate the pay and benefit structure you currently enjoy.” San Jose has long proudly boasted of being “the safest city in America.” Let’s see how long THAT lasts. Gee, long hours and risking my life on a daily basis for reduced pay and sucky benefits? Oh yeah, gimme some o’ dat.
  2. Pension reform and other cost-cutting measures will erode San Jose’s quality of life, and (eventually) local real estate values: Despite continued foreclosures and sagging home values elsewhere, the real estate market here in Willow Glen and other San Jose neighborhoods remains sizzling hot because home buyers are attracted to our various and enviable quality of life indicators, including (as previously-mentioned): Public safety, timely emergency response, good schools, parks and recreation facilities and programs, friendly neighborhoods, public transportation, pedestrian/bike/scooter/skateboard friendliness, well-kept roads and sidewalks, abundant jobs, and intelligent urban planning. Unfortunately, these standards will be difficult to maintain if we continue demoralizing our public employees and de-funding services. Neighbors have recently expressed concerns about police responsiveness, as well as the reduced hours of our wonderful public libraries. At the rate we’re going, it’s only going to get worse. How can a city whose home buyers steadily bid up the prices of $500K “starter homes” POSSIBLY be unable to afford its pension obligations?
  3. Pension reform sets a VERY BAD example: Measure B was widely covered by the national media, because of its potential for setting precedents for the rest of our country. If a comparatively vibrant and affluent city like ours thinks it can’t afford to maintain a decent level of public services and employee compensation, I shudder to think about what will happen everywhere else. As some business maven of old once said, “It takes money to make money.” Hasn’t the past 30 years of budget cuts taught us that austerity only makes things WORSE?! Despite the occasional scandal, the public sector is highly efficient and already runs on a shoe-string. If we expect functional public services — and when push comes to shove, most of us do — then we need to be willing to pay for them. Thanks to Proposition 13 (which bases property tax rates on the original purchase price), long-time residential and business property owners do not pay their fair share of property taxes, and this is part of why San Jose — and most of California — runs deficits despite our state’s comparative wealth. Expecting younger generations to pay disproportionately exorbitant taxes for fewer services, when they are fewer in numbers and generally  less prosperous, is disgustingly unfair and discriminatory. Since Federal and State taxes are often disbursed for local services, we need to lobby for tax policies that ensure that the wealthy pay their fair share (I’m not talking about “soaking the rich,” I just think it’s fair for the more fortunate among us to pay the same percentage of their income and assets as the rest of us pay, since they, too, benefit from tax-funded public infrastructure and services). In the meantime, we should seriously consider raising local taxes to maintain acceptable levels of public infrastructure and services. (self-disclosure: we are currently renters, but assume that we will indirectly pay for any property tax increases via raised rents). I also strongly oppose tiered benefit structures (for all unions) in which younger workers/recent hires receive inferior benefits, because they foster inter-generational resentments and are flat-out discriminatory. What kind of message are we sending to our young people when we tell them we don’t give a crap about them?
  4. Pissing off our public employees makes NO SENSE, plus, we should keep our promises:  These workers accepted lower earnings throughout much of their careers in exchange for their excellent benefits packages, plus the warm, fuzzy feelings one gets from public service (many silents and boomers were genuinely idealistic and rejected the corporate world). So-called “pension reforms” are, in reality, an offensive breach of contract, and I don’t blame San Jose’s unions for suing the City (the defense of which will cost our city a bundle of money that could be better spent). By voting for Measure B, we are demoralizing the people who keep us safe, teach our children, drive our buses, run our libraries, process our paperwork, and maintain our parks, roads, and public spaces. How can we even look these folks in the eye, after effectively telling them that they’re blood-sucking leeches whose contributions to the well-being of our communities are worthless to us. If we can’t trust our local, state, and federal governments to keep its promises, then who CAN we trust? Seriously, anti-government, privatization proponents need to think things through and seriously consider whether they would REALLY want private sector, corporate entities to provide our law enforcement, emergency response, education, and other public services … or worse yet … not have these services at all.
  5. By accelerating our “race to the bottom,” we endanger ourselves, our futures, and everything we care about:  By de-funding public employers, we further reduce private employers’ incentive to compete for employees with better wages and benefits. Do we seriously want to continue on this road of making the Good Old U. S. of A. more and more like our third-world competitors? If so, let’s keep on voting to destroy our own government, so we can experience the joys of living in a dysfunctional, post-apocalyptic “Mad Max” world, because that’s where we’re headed. How could anyone in their right mind POSSIBLY consider widely-despised private sector companies like AT&T, Walmart, and Comcast to provide better value for our dollars — in terms of efficiency, transparency, cost-effectiveness, responsiveness, customer service, and accountability — than the public institutions we support through our taxes and our votes? Face it … American workers cannot possibly compete with their counterparts in India’s Bangalore or China’s Guandong Province. When President Barack Obama asked Steve Jobs why he can’t bring Apple’s manufacturing jobs home, back in January, Jobs flatly responded, “Those jobs aren’t coming back,” because Apple and other U.S. companies (which now consider themselves to be “multinational” rather than “American”) can basically force workers to accept squalid third-world working conditions that are illegal in this country (well, that’s not what he actually said, but it was clearly the underlying subtext). If the governments of developing nations like China and India had to play by OUR rules — including transparency, openness, worker safety, minimum wages, health insurance, intellectual property laws, environmental protections, etc. — outsourcing jobs wouldn’t be nearly as profitable, and more middle-class jobs would stay in the U.S. The wages and pensions we pay to our public service employees have also played a major part in keeping the effects of the recession from being even WORSE than they are now, because their continued purchasing power has helped keep the economy afloat. In the midst of a fragile economic recovery, this is NOT a good time for cities to cut benefits and lay off more people.

Over the past three decades, Silicon Valley — and its leaders, regardless of political affiliations — has served as a shining beacon for the amazing possibilities and benefits of technology and progress for improving our quality of life and advancing our society, despite the general decline of other industries and the American middle class. Alas, too many of us have forgotten that the technological advances we enjoy today — along with the big stock option pay-outs which enable a small number of us (not me) to afford those fabulous million dollar homes with hardwood floors, sub-zero refrigerators, and granite counters here in Willow Glen — were originally researched, nurtured, and funded by government agencies. Our collective financial, civil, and intellectual contributions to “Big Government” lifted multitudes from poverty, promoted American ascendancy, and made this country the envy of the world during the latter half of the 20th century. Maintaining moral, technological, intellectual, creative, and economic leadership as a region — and as a nation — requires investments in research, development, and infrastructure that cannot be adequately provided by the private sector.  The current dysfunctional state of our health care system, and uneven outcomes of the once-lauded for-profit charter schools (as reported by Rand Corporation) prove this in spades. Governments are much better at delivering investments and services that benefit society as a whole and foster economic competitiveness, but which do not generate the short-term profits required for our businesses to profit and stay competitive.

Featured image: City of San Jose.

About the Author

Elisabeth Parker

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Elisabeth Parker is a writer, editor. mom, news and politics junkie, and recovering web designer.