Lack of Sympathy for the Pensioner
Time will tell whether I’m an isolated cold heart or part of a growing swell, but I’m having trouble mustering the sympathy that the preferred storyline implies I should feel for public-sector pensioners. The “human angle” that the Providence Journal tried to emphasize in an article yesterday provides an excellent example:
In fact, [Donald] Cardin, 46, who retired [from the Central Falls fire department] in 2008 after 22 years as a firefighter, needs to work to pay the bills. He formed his own company, D’Amico Painting Contractors, in North Providence. He climbs ladders, scrapes shingles and spreads on new coats of latex because he can’t live on an annual pension of $36,000, which breaks down to $28,800 after taxes.
I have no problem stipulating that anybody who “retires” at 43 should have to continue working in some fashion. At that age, the money that the pensioner receives shouldn’t be more accurately described as “residual income” from a previous job, or somesuch. And Cardin may consider that guaranteed $36,000 “peanuts,” but one must wonder how many of the painters with whom he competes have such a nice cushion, including (it must be noted) his completely free Blue Cross & Blue Shield.
That’s the perspective that ought to dominate during meetings of General Treasurer Gina Raimondo’s pension advisory board. Instead, we get reports of this:
Some panel members questioned whether state and local plans are meeting professional recommendations that retirees should receive anywhere from 65 to 80 percent of their salaries when pensions, Social Security (if applicable) and personal savings are added up.
Alicia H. Munnell, former assistant to the Treasury secretary under President Bill Clinton and head of the Center for Retirement Research at Boston College, said she is worried that people are not in the habit of putting money into savings, and that public pension plans need to take this into account.
By the time one retires, one should have saved enough and paid off enough of their mortgages and so on to scale back on expenditures once they’re no longer employed. In the private sector, with its absence of official retirement ages, readiness is part of what determines whether a worker can stop working. There’s no reason public sector employees should be any different just because they can band together in powerful unions that help elect the people who make decisions about their income.
Moreover, if “people” are not saving enough in general, then it makes little sense to take more money out of their paychecks in order to fund defined benefit pensions for folks retiring well before they’ve truly exhausted their working years. That’s why, when I read such statements as this, I remain unmoved:
“One can debate whether it’s good or bad, fair or unfair policy, but legally it makes no difference,” contended Tarantino. “We’ve read and heard a lot about ‘broken promises,’ and there’s a visceral reaction to that. In the world according to John Tarantino, people should keep their promises.”
Granted, lawyer John Tarantino was laying some sympathetic gauze over his argument that the state should be able to change the terms of existing pensions, but this stuff about “promises” ought to be considered more specifically. When most of the pension “promises” that are strangling our towns, states, and nation were made, I was just beginning to work and not of voting age. I didn’t even live in Rhode Island. Why should I insure public employees against the possibility that they didn’t save enough to retire comfortably in their forties and fifties?