Pension cuts show that the “gains” of labor unions for workers were always unsustainable promises.
Pension cuts show that most of the promises that workers have been led to rely on were false and unenforceable. Not only are public unions a problem, but people in the private sector are being hit as well. The whole point of the “defined benefit” plans was to get defined benefits. Unions and the media never pointed to the fine print that said the definition could be changed.
CBS News reports, “Another blow for heartland workers: Slashed pensions.”
February was a bad month for Larry Burruel and thousands of other retired Ohio iron workers. His monthly take-home pension was cut by more than half from $3,700 to $1,600.
Things have been rough in the Rust Belt, but this was a particularly powerful punch in the pocketbook for Burruel, who started in the trade at 19 and worked 36 years before opting for early retirement to make way for younger workers. Unfortunately, this sagging industry doesn’t have enough younger workers to pay for retirees like Burruel, whose pension plan is in what the U.S. Treasury Department calls “critical and declining status.”
Burruel and the 400,000 members of his Central States Pension Fund are the canaries in the coal mine as far as pension cutbacks go. At least 50 Midwestern pension plans — mostly the kind jointly administered by trustees for a labor union and a group of employers — are in this decrepit condition. Several plan sponsors have already applied to the Treasury Department to cut back retirees’ allotments.
The article admits that it is a nationwide crisis.
Unfortunately, this is only a glimpse into the future awaiting at least a million pensioners in the Rust Belt and elsewhere. The New York State Conference of Teamsters applied for cutbacks then withdrew its application, but it plans to reapply, said pension rights advocate Leavelle. In the meantime, several states’ public pension funds are running dry, including Illinois, New Jersey and Connecticut.
“This is going to hit everyone,” predicted Overstreet, “public employees, too.”
Of course, as a basic collectivist arrangement, the pension cuts force people to fight each other. Some groups get cut more severely than others.
“We are pitted against each other,” said [Pat] Overstreet. “Those who worked the hardest and made the most are going to get hit the worst.”