Attack on pensions is hurting Florida
By Michelle Rehwinkel Vasilinda (Op-Ed)
The saga of Florida’s public employees is an important chapter in the larger story of the American middle class.
The Florida Retirement System bust being discussed by both chambers of the Legislature is a bad omen. The middle class that created Florida’s retirement communities came from an era of private and public defined-benefit plans. When I visit my aunt and uncle in The Villages, I wonder who will take their place. I wonder too, if there will be a new generation of those willing to take on the difficult and seemingly thankless tasks of public service.
Government employees are well-educated, well-trained, lawyers, doctors, engineers and scientists who could have taken jobs with higher salaries. Law enforcement and firefighters protect, defend, and serve as they put their lives on the line every day. Teachers and professors educate our children and deserve our gratitude for their commitment to our future. Some employees take pride in supporting well the work of others and should be valued and honored. [EXPAND Read more]
There was a time when government service afforded a good and honorable living with a strong and dependable retirement. Government workers were admired for their steadfastness, dedication and ability to pay their bills and contribute to our nation’s economy. Unfortunately, times have changed.
In recent years, public servants have been maligned each legislative session. No raises, the winnowing of their ranks, heavy workloads, pay cuts, and attacks on retirement are the new norm.
To truly understand the latest insult to Floridians who serve the public, know this: Florida pays its employees far less and has far fewer, per capita, than any other state. In fact, an alarming number of full-time state employees qualify for food stamps. Either Florida taxpayers are getting a great deal or they are unjust in paying these workers who serve them so well, so little.
Our nation’s middle class has been hollowed out in part because of the use of pension monies to shore up the profits of private-sector corporations. I recommend “Retirement Heist” by Pulitzer Prize-winning Wall Street Journal reporter Ellen E. Schultz. With each page, read how the decline of the American middle class began in the 1980s in the private sector with pension raids and recognize an emerging blueprint for continuing decline through public-sector pension busting. The 3-percent pension contribution that served to cut already diminishing salaries and shore up the bottom line of the state budget is a recent example. If the more draconian changes to the FRS being proposed this session become law, government employees in their “golden years” will not be able to keep a roof over their heads without government subsidies or charity.
The proposals, especially by the Florida House, in all probability would destabilize the defined-benefit plan. The system will be less self-sustaining and increasingly dependent on cash infusions. If this trend continues, the money to support present defined-benefit retirees might just be regarded as a “political inconvenience” to future legislators and become one more broken promise. In addition, new hires will not be able to save enough, via a 401(k) style plan, or be able to replicate the long-term investment strategy of the managers of the defined-benefit plan to avoid the vagaries of the market.
Let’s get one thing straight: Retirement benefits are part of compensation. It’s part of the deal that any employee strikes in taking a job. Right now, each Floridian pays just $37 dollars per year for all the services provided by state employees. That is far below the national average of $74 dollars per year. We also have 112 employees for every 10,000 people. The national average is 213 per 10,000.
The number of employees and retirees in the Florida Retirement System is almost a million. That’s about 1 in 19 Floridians. If, however, you consider that each one of those Floridians has at least one other person who relies on them for partial financial support, we could conservatively estimate that the number of Floridians vitally interested in the fundamental fairness of the FRS numbers about 2 million. It’s not just public servants who are at risk from this so-called FRS reform. Florida’s economy depends on its public employees, who represent a large portion — though a dwindling portion of Florida’s buying and voting power.
Restoring “trust in government” is a stated priority of this year’s legislative leadership. Public sector employees and retirees will have no reason to trust a way of governing that undermines the social contract, fails to fulfill obligations and undervalues the good, honest, hard work of citizens who chose service before profit.
Pension-busting is not a common-sense approach to strengthening Florida’s economy. Hard-working, tax-paying public-service workers will suffer from even more financial stress as they worry about a stock market that is impossible for them to predict. Florida’s present pension system is one of the strongest plans in the nation. Let’s leave it that way. [/EXPAND]