‘Redistribution of wealth’ attacks NY workers

The day after he went to Wall Street to say that bankers’ salaries are “rather low,” Gov. David Paterson signed a bill Dec. 10 taking $30 to $50 billion away from the pensions of new state and municipal hires. This is the biggest change to New York’s pension system in 25 years.

Paterson claimed the state’s current fiscal crisis required this new pension scheme, but it won’t save any money for 10 years.

Although the new pension system, called Tier V, does not apply to municipal workers in New York City, billionaire Mayor Michael Bloomberg issued statements supporting it and indicating he wants to apply a similar plan.

New York’s constitution and the state’s Taylor Law have two clauses about pensions that are supposed to affect what politicians and the unions representing public workers can do. The constitution prohibits pensions of current public employees from being “diminished or impaired.” The Taylor Law removes pensions as a subject for collective bargaining between public employers and the unions representing their workers.

As a practical matter, however, politicians do not change pension plans without the unions involved granting their consent. Some major unions representing state workers — the Public Employees Federation and the Civil Service Employees Union — under the threat of major layoffs and reopening their contracts, assented to Paterson’s Tier V. But NYSUT, a large confederation of all the education unions in New York, plus two of its higher education affiliates — the Professional Staff Congress and United University Professions — put up a sharp and stubborn resistance.

The PSC passed a resolution in June, when Paterson’s proposal first surfaced, pointing out that “a reduction in the pension benefits of public employees is part of a larger attempt — that predates the current recession — to redistribute the wealth generated by working people by attacking the benefits of public employees.” It correctly asserted that “pensions are deferred compensation for years of dedicated service to CUNY,” the City University of New York.

The resolution went on to state that “the PSC supports organized labor’s proud tradition of taking a firm stand against the erosion of benefits for working people, rejecting opportunistic attempts to use the current economic recession to continue the redistribution of wealth away from workers.”

While the resolution recognized the right of PEF and the CSEU to bargain for the workers they represent, it opposed terms and conditions being imposed on unions that were not party to the negotiations and strongly asserted that the PSC would reject a Tier V being imposed on workers it would represent after they were hired.

The state Legislature did not impose Tier V on the PSC.

Paterson is not going to wait 10 years for the cuts in workers’ pensions and compensation to start to take effect. He has announced that he is applying an across-the-board 10-percent reduction in state spending. This cut will primarily hit schools and local governments, and also property tax relief. Exactly how it will be carried out is unclear, but added to the cuts already made, it is going to make life harder for public workers and the people they serve.