SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
#MassiveFail

Monday, Mar 17, 2014

* Greg Hinz looks at organized labor’s failures

Unions kicked off the season by impotently watching as dozens of their Springfield allies abandoned ship and voted for a tough pension reform law that now needs only the final approval of the Illinois Supreme Court. More recently, they’ve spent nearly $4 million on what (unless all the polls are wrong) was a failed bid to prevent the virulently anti-labor Bruce Rauner from becoming the GOP nominee for governor. And when lawmakers return to Springfield after the March 18 elections, item one on the agenda is more pension cuts, this time for city and Chicago Public Schools workers.

“It’s really awful what’s happened,” concedes one top labor honcho, speaking privately. “I just don’t know right now if this movement has the capacity to build the next movement.”

I don’t know either. But even if it knocks off a couple of unfriendly lawmakers on March 18, Illinois’ labor movement risks becoming a chapter in the history books—right next to the one on Jimmy Hoffa. The question is: What should the movement do?

Part of the solution, I suspect, is putting someone in charge of the notoriously fractious labor “movement.” Someone who can act decisively.

That’s what was wrong with the multimillion-dollar TV blitz against Mr. Rauner. It started too late with too little, lacked focus and suffered from an identity crisis over whether to concentrate on taking out Mr. Rauner or electing someone else. The labor chiefs never quite figured out the answers. So, in consensus fashion, they did a little of this and a little of that—ineffectively. And now there’s less money available for November.

I wrote a long addendum to Greg’s piece, and then decided to save it for subscribers. So… discuss among yourselves.

- Posted by Rich Miller        


65 Comments
  1. - Pensioner - Monday, Mar 17, 14 @ 10:48 am:

    ===that now needs only the final approval of the Illinois Supreme Court.===

    Only?


  2. - wordslinger - Monday, Mar 17, 14 @ 10:49 am:

    Everyone was slow to react to Rauner. He outhustled everyone.


  3. - Upon Further Review - Monday, Mar 17, 14 @ 10:51 am:

    I have never understood why in Illinois that the teachers’ unions are split (IFT and IEA). I am guessing it is geographical. In other states, the teachers’ unions merged together.


  4. - Anonymous - Monday, Mar 17, 14 @ 10:52 am:

    Same story for Labor since the 1970’s. They let private sector jobs go overseas and now letting their public union jobs get robbed of their pensions.

    There are to many egos and inadequate leaders amongst the unions. They need to reunite and build out a strategy to stay relevant in the 21st Century. Unfortunately, this will never happen because nothing in the past 40 years says it will change.


  5. - OneMan - Monday, Mar 17, 14 @ 10:52 am:

    I really thought the money quote was this

    An example: One union chief I spoke with recently defended union opposition to pension cuts for public-sector workers. “My members would rather pay 2 percent more in income taxes than have their pension cut 10 percent,” he groused. “It’s a no-brainer!”
    Totally lost on him was another no-brainer: Private-sector employees whose pensions vanished years ago are sick of watching many public workers retire in their 50s and then double their pensions within a few years because of overly generous inflation adjustments. They’re not about to raise their income taxes to pay for more, and increasingly will vote against officials who do.

    Like it or not, that message is working IMHO and is going to continue to work. It may not be fair, you may not like it but it is going to work. The idea that you are going to have to increase state revenues to pay someones pension when most people saw that ship sail a long time ago is going to be difficult at best.

    Also I have to say at least campaigning, he is better than any other newcomer I have ever seen.


  6. - March Madness - Monday, Mar 17, 14 @ 10:57 am:

    Besides the governor’s race, the unions have gone “all in” in a few different legislative races. Unless they pull through for their endorsed candidates tomorrow, the unions look to be the biggest losers of the primary season.


  7. - Not Rich - Monday, Mar 17, 14 @ 10:58 am:

    forget about public perception, the unions have an internal struggle that will only deepen. You have the old line trade unions fighting with the AFSME and SEIU’s of the world, and those two factions can not agree on much. This inner struggle prevented them from mounting a coordinated attack against Brucie .01%, and that will haunt them into November.


  8. - Jim'e' - Monday, Mar 17, 14 @ 10:59 am:

    The 3% compounding was a greedy get for the unions 25 years ago. Its a shame that it has taken the legilsature this long to figure that out. What the unions should do is to find a compromise that staves the potential extermination of defined benefit programs. In other words, look at pension programs in other states and scale down the tier 1 benefits today. Of course, they could wait for the Supreme Court to rule in their favor only to see the State go bankrupt.


  9. - Pot calling kettle - Monday, Mar 17, 14 @ 11:00 am:

    My hypothesis: the Unions were planning to go all out for Rutherford beginning in late January…but when the caca hit the air mover that ruined everything. Dan had the money, he had laid the groundwork, he had positioned himself to be union friendly. It was all falling into place, until it didn’t. Rutherford would have made a decent pick for Labor in the General as well; and backing him would have been a great way to send a message to some Dems that seem to take Labor’s support for granted.

    Just a thought, but I think some set plans were disrupted by the collapse of Rutherford’s campaign.


  10. - In the Middle - Monday, Mar 17, 14 @ 11:01 am:

    I was thinking the same thing as Pensioner…. only?

    Hinz writes as if the Supremes stand ready to pass the thing.


  11. - Raising Kane - Monday, Mar 17, 14 @ 11:04 am:

    Spot on Pot calling kettle….spot on!


  12. - Phineas J. Whoopee - Monday, Mar 17, 14 @ 11:07 am:

    One would think the election was a month ago and people were commenting on the results. Maybe we should let the voters vote and then analyze.

    Also, the unions need to walk a fine line in the GOP primary. The backlash could exceed the benefit if done improperly.


  13. - Rich Miller - Monday, Mar 17, 14 @ 11:08 am:

    ===My hypothesis: the Unions were planning to go all out for Rutherford===

    Some were, yes.


  14. - gesquire - Monday, Mar 17, 14 @ 11:11 am:

    Rich congratulations on becoming a contributing writer for Crain’s. I read the Hinz article this weekend. I’m interested in hearing your response. Hinz asks what’s labors next move. Well, they made it. They appealed the blantenly unconstitutional pension legislation. He should be asking what’s the legislature going to do when everyone finds out that they can’t take pensions benefits away from retired people.


  15. - Hey There - Monday, Mar 17, 14 @ 11:11 am:

    I agree with “Not Rich” except on one point and I think it will be crucial. I do not think organized labors’ internal rivalries and struggles will hurt them in November. I fully expect those rivalries to disappear (or at least be papered over for a few months) if Rauner wins tomorrow. I speak with union members and union leadership frequently–including those in the trades and those in the service sector and teaching ranks. Rauner is the ONLY GOP candidate who unites them all behind Quinn. As much as some of them hate Quinn–or at least don’t trust or like him–they are scared to death of Rauner and his rhetoric.


  16. - Grandson of Man - Monday, Mar 17, 14 @ 11:14 am:

    Unions have made mistakes in the short run, and those may really haunt them. However, there is also the bigger picture. The GOP is more and more becoming a party of the super wealthy, as we can see via Rauner’s candidacy and all the super PAC money being poured into campaigns all over the country.

    Demographics are changing, as Republicans are more and more aligned with the interests of the super-wealthy. Millenials are more in favor of an activist government than the preceding generations, and they’re more liberal. Unions should also look to the future and plan to attract today’s and tomorrow’s younger voters.


  17. - Bibe - Monday, Mar 17, 14 @ 11:15 am:

    I don’t think the inability of Republicans to unite behind a moderate candidate that can win the general election should be called a failure on the part of labor. If the unions have gotten behind Dillard too late to stop Rauner, it seems to me that it will really be the Republicans that lose out when Quinn beats him in November. Not the unions.


  18. - Ghost - Monday, Mar 17, 14 @ 11:16 am:

    the Unions long standing strenght has been its ground game during elections.

    The money to campaigns help, but many campaigns suffer on the gorund, and that support from the unions tends to help witn elections.

    officials who have developed their own ground game need less from the union; and theunions own ground game has fractured in places and is not nearly as strong (but it still is strong in many places).

    The union(s) need to build their base and ground games back up, particuraly donw state. Sure that cant give free beers for votes, but they can still get boots on the ground and drive bus loads of members to the polls.

    And yes they need one voice to make final decisions. They are fractured like the GOP, and infighting keeps them down. The Chai tea liberals need to let the moderate voices have more control.


  19. - Sunshine - Monday, Mar 17, 14 @ 11:19 am:

    Personally I do not feel there is a place for unions in any public sector jobs. Merit Comp employees were not given the generous raises of union members and Merit Comp received no raises the entire time Blagojevich was in office.

    Now nearly 95% of the state workers are union, getting overly generous pay and retirement benefits. Given the chance to join, why not?

    When it stops it will be painful, but it must stop. Not sure if I would trust the three career politicians running to make meaningful changes. Perhaps Rauner can and will help Illinois resolve it’s financial quandary?


  20. - Rahm'sMiddleFinger - Monday, Mar 17, 14 @ 11:22 am:

    Jorge Ramirez, the head of the Chicago Federation of Labor, is the person to lead labor out of the wilderness. He has done an excellent job of bringing unions together while they are under assault. AFSCME still holds too much power and really can’t see the forest through the trees. Henry Bayer can yell and scream all he wants, but it’s certainly not helping his members.


  21. - B A Kingbreaker! - Monday, Mar 17, 14 @ 11:33 am:

    As an AFSCME and IMRF member who had his pension stolen by the corrupt Chicago machine, liberal politicians, union liberal political agenda,irrelevant Republicans and media puppets, I’m voting against the incumbent governor in the Democrat primary. Anyone who has a government pension who crosses over is a fool unless it’s the other way around to get rid of the governor who signed the pension theft bill. If Quinn wins he’s going to steal the Chicago and suburban teacher, fire and police pensions and claim his primary victory was a mandate for the greater good (taking money the rich want (67% tax is the beginning) from the worker’s driving them into further into poverty.) Madigan and Cullerton…will have to act like Democrats when Rauner wins or loose their power.


  22. - OneMan - Monday, Mar 17, 14 @ 11:42 am:

    . If the unions have gotten behind Dillard too late to stop Rauner, it seems to me that it will really be the Republicans that lose out when Quinn beats him in November. Not the unions.

    Well lets take that statement as fact, that Quinn is going to beat Rauner.

    Even then, this is going to be a losing proposition for unions. You could argue (not that hard actually) that the second worse guy for union on the ballot from either party for Governor is Pat Quinn.

    So Quinn is no exactly a great guy to have in office anyway. Do you think a re-elected Quinn is going to go easier on pensions and unions than he has now? Do you think the unions could trust him now even if he has a change of heart.

    Pat Quinn wants to be governor to do populist stuff, not to fund pensions properly, no one runs for office to fund pensions. He wants to cut ribbons, fight crime, create high speed rail, that sort of stuff and if he has to cut pensions to free up money to do it so be it, unions or no.

    The fact they may end up with sucks and sucks a little bit less for unions running against each other doesn’t do the unions any favors.


  23. - Rich Miller - Monday, Mar 17, 14 @ 11:43 am:

    It’s times like this when I really miss “Bill.”


  24. - Friedman - Monday, Mar 17, 14 @ 11:45 am:

    Whatever happens, the die is cast. Eventually AFSCME will lose it’s death grip on Springfield. Privatization has been an ongoing stealth solution.


  25. - Jeanne Dough - Monday, Mar 17, 14 @ 11:46 am:

    One reason unions have lost some clout is because current workers are a generation or two removed from the struggles that brought about some of the standing contracts. This is not said with disdain for younger workers; it is simply that poor working conditions and unfair contracts put fire in the belly.

    In my later years it became increasingly difficult to find people to serve in union leadership positions. Members hadn’t lived through the strikes and near strikes that allowed them to take a personal day to sign a bank loan or to keep their teaching jobs through pregnancy. And experienced members didn’t do a very good job of nurturing them. The pension issue has provided a wake-up call.


  26. - Mouthy - Monday, Mar 17, 14 @ 11:48 am:

    “public workers retire in their 50s and then double their pensions within a few years because of overly generous inflation adjustments.”
    I retired 3 and a half years ago and so far my net COLA increases total 7%. Depending on how the insurance lawsuit pans out that could go down to 5% or up to 9%. A few years? Sure….


  27. - Timmeh - Monday, Mar 17, 14 @ 11:48 am:

    As Pot+Kettle said, backing Rutherford makes sense.

    I would have liked to see the unions push a message that said that “unions help Downstate” and “unions are a part of the GOP”. I don’t know the exact statistics, but there’s many GOP voters who are in unions. Pushing the message that if you hurt unions, you hurt your local economy and you hurt other Illinoisians should have been the play. It probably wouldn’t have defeated Rauner. But it would have cut away at Rauner’s support, helped in other races, and helped boost the union image among GOP voters.


  28. - Jan Bradley retired worker - Monday, Mar 17, 14 @ 11:49 am:

    Excuse me Rahm’s middle finger..Henry Bayer may scream when he needs to but he is the elected voice of this union. I assure you the membership votes on our direction and we stand as one. As far having too much power? You sound a little jealous


  29. - PERPLEXED - Monday, Mar 17, 14 @ 11:49 am:

    “…The 3% compounding was a greedy get for the unions 25 years ago…”

    All along while the “dot com” folks cashed in those 12%-15% returns…Yep, pretty greedy that 3% was!

    “….Of course, they could wait for the Supreme Court to rule in their favor only to see the State go bankrupt….”

    Then what, we will sell Illinois to China? What actually happens when a State CAN’T go bankrupt?


  30. - Ghost - Monday, Mar 17, 14 @ 11:57 am:

    === Personally I do not feel there is a place for unions in any public sector jobs. Merit Comp employees were not given the generous raises of union members and Merit Comp received no raises the entire time Blagojevich was in office.===

    Thats like hating your neighbor because they got a better price for the same car then you did.

    If you think union pay and benefits are too high, the problem with the increases to union members is the executive branches decision to agree to those increases.

    I have a compromise for all. Treat all State employees like Google and Apple in terms of pay and benefits. Then we will be no better off then the private sector.


  31. - truthteller - Monday, Mar 17, 14 @ 11:59 am:

    It’s a good thing private sector employers are not demanding the sacrifice of their employees’ first-born. Then Hinz would want public sector employers to follow suit.
    Shouldn’t we be trying to figure out how everyone can regain the retirement security that was attained post WWII , rather than seeking equalization for everyone at the bottom?
    Is the share of wealth going to profits rather than to employees’ compensation immutable?


  32. - Irish - Monday, Mar 17, 14 @ 12:00 pm:

    I think the problem we are seeing is that

    #1.) Unions have not done a good job defending the position of public sector workers. I think the reason for this is that while it is okay for an Electrician or an Operating Engineer to make loads of money and have a good pension it is not okay for a public sector person to make a decent wage or have a good pension. Taxpayers get indignant when public SERVANTS prosper. “I am paying their wages” is the hue and cry. Well, what do you think your doing as you drive through the construction zone past all that equipment and all those workers from private contractors doing work on public roads?

    #2.) Career politicians spent money the state didn’t have and when the bill came due they took the money that should have gone into employee pensions and used it. They were more concerned with being re-elected than acting responsibly. When the day of reckoning arrived they threw the public union employees under the bus to divert attention away from their own malfeasance. They did a very good job of demonizing the public union employees even though the public sector employee unions are the ones who brought them to the dance.

    #3.) “Connected” high level union bosses and others used their influence and connections to garner themselves obscene pensions that they did not deserve. some did this with the help of the very same people who are the unions biggest critics today. Those pensions became the “standard” for all state employees pensions and further stirred the hatred and jealousy of the common taxpaying voter.

    4.) Main stream media did a very good job of painting the public sector employees as the root of everything that is wrong with the state budget. They only reported enough facts to make the union employees look bad but never a full disclosure of the whole story. Like loudmouths inciting a crowd to hang a vagrant in an old western they continued their rhetoric until the damage was done. With the vagrant swinging from the tree branch they finally began to speak of the real reasons, the missed payments, but those reports were on page thirty.

    Kinda funny that the projection for the Illinois Budget is just as dire today, maybe even more so than before, and The Salvation Pension Reform Passed. What, no sunshine and birds singing? The cloud is still hanging over us? Who’d a thought?

    And finally as has been the case in this state in the last four gubernatorial elections at least, the two parties have not been able to put a capable candidate on the general election ballot. One begins to wonder if the Land of Lincoln is bereft of candidates that are capable and uncorrupted.


  33. - Hit or Miss - Monday, Mar 17, 14 @ 12:18 pm:

    == a tough pension reform law that now needs only the final approval of the Illinois Supreme Court.==

    Anything is possible but I am not convinced that the court will approve the pension plan as passed by the GA. Only time will tell.


  34. - Stormy - Monday, Mar 17, 14 @ 12:22 pm:

    About time Big Labor’s clout today was exposed as the phony bully in the political playground. Gone are the old two-fisted, cigar chomping, meat and potatoes leaders whose members would drop their tools, walk off the job, man the trenches and raise hell at the slightest call to arms from their representatives they delighted in calling “boss”.
    Few are left who can recall the massive wave of union workers, local upon local, banners waving, bagpipes blaring as the horde of laughing, singing and chanting marchers stormed along Madison street 1960 behind Democratic party hopeful John F. Kennedy and a beaming Mayor Daley from the Loop to the old Chicago Stadium for an historic rally.
    At the time labor unions were at their zenith. Loyalty was not just a slogan. In Chicago, labor union representatives were on virtually every board, agency and commission from the Board of Education, to the CTA, McCormick Place, the park district, police boards, tollway commissions, not to mention charities, enlightened civic and business organizations.
    Today, few people can name the president of the AFL-CIO much less local union heads who replaced local old timers like Joe Germano of the steelworkers, Ray Schoessling, Louis Peick and Sandy O’Brien from the Teamsters, Steve Bailey, the plumbers leader, Peter Fosco of the laborers, Chicago Teachers’ Bob Healy, Ray Pasnick, outspoken board of education member from the steelworkers union, Ed Hanley from the hotel workers, the musicians’ Jimmy Petrillo, Al Soudan of the electrical workers and Jim Hill of the Chiago bus drivers, Who can name President Obama’s secretary of labor?
    Democrats take organized labor for granted and would prefer they send in their checks but keep their endorsements to themselves and their members. Carpel tunnel syndrome is becoming a problem for some union treasurers.
    Most Republicans still delight in using the perjoractive “union bosses” failing to understand and recognize that virtually all the economic and quality of life legislation enacted by Democrats over Republican opposition has resulted in making many union members Republicans especially in the suburbs.
    An old pal from the labor days once remarked to me about the current crop of labor chiefs, “They are so removed from working they think manual labor is a Spanish band leader!”


  35. - Tom S. - Monday, Mar 17, 14 @ 12:31 pm:

    Let’s wait to see the results of the contested Dem statehouse primaries before we completely buy Hinz’s premise. If Mitchell, Berrios, and Andrade all win, that’s big trouble. Losing Dem primaries will leave a deep scar.

    I think the union leaders have been acting like politicians who are afraid to tell their constituents something they don’t want to hear. The union leadership pushed for unaffordable benefit expansions (like the 3% compounded COLA) and frequently lobbied for skipped pension payments to avoid budget cuts. They should’ve attoned for their past mistakes and shortsightedness, leveled with their membership, and worked on a real compromise. SB 2404 was too little too late. And even if the Supremes throw the whole thing out, that might be a short term victory. A massive tax increase to make pension payments isn’t going to win the hearts and minds of too many voters.

    Their unwillingness to act pragmatically might really, really hurt them.


  36. - olddog - Monday, Mar 17, 14 @ 12:33 pm:

    @ B A Kingbreaker! — If you ask for a “Democrat” ballot when you go to vote “against the incumbent governor in the Democrat primary,” don’t be surprised if people look at you funny — you may want to at least learn the party’s real name before you go to the polls.

    To the question — if the unions can unite behind a message that’s speaks to the best interest of middle-class voters who aren’t in a bargaining unit, they they might have a voice in November. If not, outside corporate money is going to decide the election here like it has in Wisconsin, Indiana, Ohio and North Carolina.


  37. - Noy Noy - Monday, Mar 17, 14 @ 12:41 pm:

    The title of “Laughingstock of Illinois Politics” will be shifted from the ILGOP to IL Public Sector Unions in very short order.


  38. - john - Monday, Mar 17, 14 @ 12:56 pm:

    The attack on public sector unions is detailed and systematic. The “organized right wing, pro-business republicans” decided a few years ago to target the public sector unions. Pensions, healthcare, overtime, union bargaining rights, wages are all parts of this fight. Partly, this is an ideological battle; but mostly it is because the public sector unions are the backbone of the Democratic party. See this chart http://www.republicreport.org/2014/unions-koch/. The GOP has a distinct money advantage, but without the AFSCME, SEIU, and NEA money the Democrats have almost no fighting chance. It’s a systematic fight by the “right wing, pro-business Republicans” aimed directly at the financial strength of their Democratic opposition.


  39. - Grandson of Man - Monday, Mar 17, 14 @ 1:01 pm:

    “Now nearly 95% of the state workers are union, getting overly generous pay and retirement benefits.”

    Let us not also forget that many CEO’s and equity people are making humongous money during this struggling economy. Of what economic value are those huge salaries and benefits? Rauner and others have been making tens of millions of dollars a year during this sluggish economy. Why haven’t these immense earnings by those at the top propelled us into prosperity?

    Also, what economic value do they provide that matches their massive pay increases? Is a CEO’s job a hundred or more times more valuable to a company today than it was in the 1950s and 1960s? I think not.

    “A massive tax increase to make pension payments isn’t going to win the hearts and minds of too many voters.”

    A few polls I looked at show strong support for a progressive income tax. There are only one or two polls on this in Illinois, but there appears to strong support. The progressive tax campaign is ongoing.


  40. - OneMan - Monday, Mar 17, 14 @ 1:09 pm:

    Irish, I think you are kind of right on the nose there and it kind of ties into what Hinz said.

    It seems that some union leaders are completely unable to understand why the public might be saying enough is enough…

    You might not like the perception, but I think the first step in countering it is understanding where it comes from.


  41. - OneMan - Monday, Mar 17, 14 @ 1:16 pm:

    I guess I understand why you are perplexed

    All along while the “dot com” folks cashed in those 12%-15% returns…Yep, pretty greedy that 3% was!

    Because first off, using the.com boom to compare returns to is like complaining that NIU doesn’t play basketball as well as Duke…

    Worked for a .com during the boom and yep got a couple of nice raises while it lasted, had some nice stock paper on value while it lasted. But for the most part, we realized that it wasn’t going to last and didn’t make life decisions based off of those returns.

    Also another huge difference is, unless you had money in a couple of VC funds or were on of the shareholders (I was, want to buy some worthless stock) my rate of pay didn’t come from your pocket, I wasn’t promised anything by that company that they couldn’t afford that you are on the hook for now. I also went to work for them realized they could go away at anytime and I didn’t even have a guarantee my last paycheck would clear.


  42. - Soccermom - Monday, Mar 17, 14 @ 1:36 pm:

    “…The 3% compounding was a greedy get for the unions 25 years ago…”

    “All along while the “dot com” folks cashed in those 12%-15% returns…Yep, pretty greedy that 3% was!”

    This is what’s wrong with the way the unions have messaged this. The vast majority of people in Illinois whose taxes are paying for pensions had absolutely nothing to do with those “dot com” gains.

    Yes, there are some people out there who make lots more money than a state government employee, and some of those people don’t work nearly as hard. But there are many, many people who make less and who work in tougher environments. Those are the folks to whom you need to make your case, and I don’t think you’ve done it.


  43. - The Dude Abides - Monday, Mar 17, 14 @ 1:51 pm:

    @pensioner, my thoughts exactly.


  44. - RNUG - Monday, Mar 17, 14 @ 1:56 pm:

    - Irish - Monday, Mar 17, 14 @ 12:00 pm:

    Very good summarizaion.


  45. - The Dude Abides - Monday, Mar 17, 14 @ 2:03 pm:

    @Tom S, You can’t be serious. So according to you the major problem wasn’t state government for years spending more money than was coming in and using the pension system to make up the difference. Instead it was the Union’s fault for negotciating contracts that were too generous that they somehow managed to get state officials to go along with.


  46. - Irish - Monday, Mar 17, 14 @ 2:19 pm:

    Oneman - RNUG

    Thanks.


  47. - RNUG - Monday, Mar 17, 14 @ 2:24 pm:

    I’m not going to address whether or not the actual government salaries are too high or too low. Everyone will have an opinion on that. My opinion is that quite a few of the lower titles are over paid and that a lot of the higher and licensed or technical titles are underpaid. You can disagree with my opinion. I’m just going to address the AAI portion.

    For everyone saying the 3% AAI is overly generous, it almost exactly tracks the long term CPI statistics kept by the feds. It just looks generous today because of the Fed’s cheap money policy the last number of years.

    Since the feds started calculating the CPI (1913) and over the last 40 some years, the number has averaged either 2.9% or 3.1% depending on which period you pick. You can cherry pick shorter periods to get almost any number you want, both higher and lower but when you talk about pensions, you need to think long term.

    It’s pretty obvious the people in the General Assembly who came up with the fixed 3% AAI studied their inflation history. In fact, when the 3% was passed, it wasn’t that long after a high inflationary period (1974 to 1982 CPI-U ranged between 5.8% to 13.5%) and the State was looking to get a bargain by locking in the 3% number.


  48. - Frightful Mary - Monday, Mar 17, 14 @ 2:33 pm:

    As Henry Bayer has sewn, so shall he and his members reap. His only friend is Kirk Dillard. He needs to work real hard to get on the good side of Pat Quinn and Mike Madigan fast.


  49. - Pensioner - Monday, Mar 17, 14 @ 2:37 pm:

    ===why the public might be saying enough is enough…===

    They are saying what the right wing bought and paid for. Ahem, Rauner Koch bros. “free speech” dollars. Simply sad and pathetic.


  50. - G'Kar - Monday, Mar 17, 14 @ 2:38 pm:

    Pot made my comment about Rutherford and Irish did a great job analyzing the situation.

    But, there is a question I have. Iirc, Rich posted a survey a year or year and a half ago (I *think* it was done by the Paul Simon Institute) that showed strong public support for Public Employee’s pensions. Has there been a poll lately to show how much, if at all, that support has eroded?


  51. - OneMan - Monday, Mar 17, 14 @ 2:53 pm:

    They are saying what the right wing bought and paid for. Ahem, Rauner Koch bros. “free speech” dollars. Simply sad and pathetic.

    Yes, because obviously any viewpoint different than your own is purchased and paid-for. No logical person could ever view anything any differently than you unless it was because others made them come to that conclusion….

    You know complaining about the Kochs’ is just as silly as complaining about ‘union bosses’….


  52. - OneMan - Monday, Mar 17, 14 @ 3:23 pm:

    Also regardless if people came to these thoughts via their own independent revelation for some Koch brother came to their home used a mind-ray on them, it is the perception you need to deal with.

    Complaining about the Koch brothers isn’t going to change that one whit…. So the unions can spend their time screaming about the Koch Brothers (fat lot of good it did them in Wisconsin) or they can work to change the perception.

    Repeating the narrative about the whom and the why vs trying to change things is about as effective as the Illinois GOP complaining about Mike Madigan , it might make you feel better but it doesn’t change anything.

    That’s the sad part, Michigan is now a right to work state and what I see from the labor movement is complaining about rich guys. No one ever won jack by complaining.


  53. - Rufus - Monday, Mar 17, 14 @ 3:25 pm:

    Irish
    Succinct, accurate, and well written.


  54. - CapnCrunch - Monday, Mar 17, 14 @ 3:27 pm:

    “They are saying what the right wing bought and paid for………Simply sad and pathetic.”

    Do you have to be “right wing” to understand the explosive nature of compound interest? It is not the provision of a 3% COLA that is the problem, it is providing the funds to satisfy it as time passes. If the ISC tosses the pension reform law it will be very interesting to watch candidates campaign for an income tax increase to pay for retirees’ pensions growing 3% a year.


  55. - G'Kar - Monday, Mar 17, 14 @ 4:04 pm:

    I can’t speak of the other systems, but as a SURS member I have been contributing part of every paycheck to fund my AAI.


  56. - Soccermom - Monday, Mar 17, 14 @ 4:05 pm:

    Here’s the thing: Soccerdad is way more of a hard D than I am, which is saying something. A couple of years ago, I told him I wanted to go to Maine for my birthday, which is conveniently at the height of the fall colors. He told I couldn’t go.

    Not surprisingly, I bristled. So he said: Governor LePage is virulently anti-unions. Now, your mom was a union teacher, like my dad. Thanks to the teachers’ unions, our folks were able to help send us to college. And thanks to the education we received from those university employees, we are now able to hold down good jobs that allow us to go on birthday weekend vacations. No way are we spending any of that money in LePage’s state.”

    I had to agree. It was a good argument — and one I would like to hear more from the public sector unions.

    Here’s another one — Soccerdad took a break from painting the ceiling on Saturday and turned on the tv. Unstoppable, one of his favorite movies, was playing. At dinner Saturday night, he said: “That is the classic Democratic movie. It’s about union workers and government employees trying desperately to save the people from greedy corporate stooges — and it’s true. Why don’t we ever hear that story when people are talking about ‘lazy government workers’ and ‘greedy union members?’”

    Soccerdad is now available for political messaging consulting. Henry Bayer, the ball is in your court.


  57. - Tom S. - Monday, Mar 17, 14 @ 4:22 pm:

    Dude Abides — “So according to you the major problem wasn’t state government for years spending more money than was coming in and using the pension system to make up the difference…” –

    That’s not what I said. Of course, underfunding by the state is the main reason the pensions are screwed up. My point is that the unions’ hands are not clean in that regard…they lobbied in favor of pension holidays because they didn’t want state government to, as you would say, “stop spending more money than was coming in.” That would have resulted in some of their members getting laid off due to budget cuts. Hell, as recently as last May, CTU was lobbying to extend the Chicago teacher’s pension holiday for precisely that reason.

    And after state underfunding, the next biggest cause of pension debt was the 1989 law that established 3 percent compounding COLA for all state retirees — a huge expansion in costs with no extra revenue to pay for it. That was an actuarially insane thing to do and it was supported by the unions.

    I don’t mean to imply the unions share equal blame in this…they don’t deserve anything close to that. But they, like the politicians, have historically embraced short term, easy fixes on budget and pension funding. (Don’t forget, union leaders run for election, too!) They should have been honest about that with their membership and tried to come up with some realistic solutions instead of screaming bloody murder. As tomorrow election results could show, it might have been in their best political interests to have played ball.


  58. - Pensioner - Monday, Mar 17, 14 @ 4:53 pm:

    ===Yes, because obviously any viewpoint different than your own is purchased and paid-for. No logical person could ever view anything any differently than you unless it was because others made them come to that conclusion….===

    Oh please, do you REALLY think Rauner is in the lead because of statesmanlike qualities. DOLLARS paid for his position in the polls. If you think otherwise you are as foolish as you sound.


  59. - Rich Miller - Monday, Mar 17, 14 @ 4:56 pm:

    Pensioner, it’s what he spent those dollars saying. Until you get that you cannot effectively counter him.


  60. - Pensioner - Monday, Mar 17, 14 @ 4:58 pm:

    ===Do you have to be “right wing” to understand the explosive nature of compound interest? It is not the provision of a 3% COLA that is the problem, it is providing the funds to satisfy it as time passes. If the ISC tosses the pension reform law it will be very interesting to watch candidates campaign for an income tax increase to pay for retirees’ pensions growing 3% a year.===

    If you can read English you realize it is LAW, not derived from the Constitution but OF the Constitution. Find another straw man, it is not public employee pensions, which if paid for as required over the years was actuarially sound.


  61. - Carl Nyberg - Monday, Mar 17, 14 @ 5:08 pm:

    When public sector workers allowed Dems to pass NAFTA, it weakened private sector unions.

    Attacking public sector unions and pensions is just the natural progression of things.

    Unions are as unified as they are.

    Building a more perfect union movement isn’t going to fix the concentration of wealth problem.

    Regular citizens need to understand the concentration of wealth problem and then there needs to be the will to address it.


  62. - Pensioner - Monday, Mar 17, 14 @ 5:13 pm:

    ===Pensioner, it’s what he spent those dollars saying. Until you get that you cannot effectively counter him.===

    I get it, unfortunately my side does not have as deep pockets as Rauner’s, and the message has not been clear. The Dem message should have been the decades long decline of the middle class which has produced massive increases in productivity and profit, yet they are not allowed to not share that profit. This race is representative of the .01% trying to get it all. Benefits should not be in a race to the bottom. Public employees are your family, friends, and neighbors. I find this right wing attack on the middle class public sector employees shameful. The unions built the middle class, tearing them down is as shameful.


  63. - OneMan - Monday, Mar 17, 14 @ 6:30 pm:

    If you can read English you realize it is LAW, not derived from the Constitution but OF the Constitution. Find another straw man, it is not public employee pensions, which if paid for as required over the years was actuarially sound.

    IF, that’s your key word there. They weren’t and now we are in a bit of a pickle.

    So what you are basically proposing is going to the Illinois tax payer and saying either

    Well we need to raise your taxes so guaranteed benefits can be paid, because many of those guys we encouraged you to vote for over the years decided to spend money on other stuff.

    or

    Well we are going to raise taxes on people besides you (the TOP, Tax On other People) so guaranteed benefits can be paid, because many of those guys we encouraged you to vote for over the years decided to spend money on other stuff.

    or

    Well we are going to have to spend less on your kids schools and other things so guaranteed benefits can be paid, because many of those guys we encouraged you to vote for over the years decided to spend money on other stuff.

    So you are delivering this message to people who don’t have guaranteed benefits of any sort to speak of (besides perhaps Social Security if it still around when younger people retire.

    People generally are more open to tax increases or even service cuts when they see it serves them some sort of benefit. Sorry but that is the way life works.

    Blame the right wing, blame the Kochs, blame whomever.

    When it comes down to it, people basically think “If I don’t get that, why should someone else”


  64. - Pensioner - Monday, Mar 17, 14 @ 7:44 pm:

    ===So you are delivering this message to people who don’t have guaranteed benefits of any sort to speak of (besides perhaps Social Security if it still around when younger people retire.===

    They all had the same opportunity for govt employment we all had. Why cry of your lack of initiative 30 years ago? You want guaranteed benies? Unionize.

    ===When it comes down to it, people basically think “If I don’t get that, why should someone else”===

    The Constitution. Get over it.


  65. - CapnCrunch - Monday, Mar 17, 14 @ 9:18 pm:

    Thanks -one man-, your response says it all.


Sorry, comments for this post are now closed.


* Reader comments closed for the weekend
* *** UPDATED *** THIS JUST IN... Judge orders permanent stay on pension law
* Today's number: 10 percent
* Unclear on the concept
* Could be a big day
* Question of the day
* Illinois leaders react to Obama's immigration order
* TrackBill – An Introduction
* Caption contest!
* SUBSCRIBERS ONLY - Today's edition of Capitol Fax (use all CAPS in password)
* Yesterday's blog posts

Support CapitolFax.com
Visit our advertisers...

...............

...............

...............

...............

...............

...............

...............


Search This Blog...

Search the 98th General Assembly By Bill Number
(example: HB0001)

Search the 98th General Assembly By Keyword

          
        * Google’s Nexus 6 Might Be Too Big For Right Now, But Right-Sized For The Future
        * You Should Play: Monster Strike is a delightful mashup of monster battles and pinball
        * HTC Desire Eye Review: Welcome to the (selfie) machine
        * The Week in iPad Cases: Extra storage, ultra rugged, and everything in between
        * Apple's $450 million e-books settlement gets final approval
        * Do you really care about health tracking wearables?
        * Weekend Game Getaway: Kingdom Rush Origins, Soulcalibur Sale

        * This Week's Top Downloads
        * These are the tablets to put on your Black Friday hit list
        * Have Kids Find the “Bargain Price” to Teach Them About Money
        * Technology set journalism free, now new platforms are in control
        * Change to a Better Airline Seat by Asking the Day of a Flight
        * Dress in Bright Clothes to Lull The Winter Blues
        * Re/code on TV: The Return of the Mac, Uber’s Toes and Snapcash

        * With LaRoche on board, Abreu will benefit
        * Sources: White Sox land LaRoche with two-year deal
        * Sources: White Sox land LaRoche with two-year deal
        * Sources: White Sox land LaRoche with two-year deal
        * Abreu will benefit from LaRoche's presence
        * White Sox sign Adam LaRoche to two-year, $25 million deal
        * Sources: White Sox land LaRoche with two-year deal

        ...............


        Main Menu
        Home
        Illinois
        YouTube
        Pundit rankings
        Obama
        Subscriber Content
        Durbin
        Burris
        Blagojevich Trial
        Advertising
        Updated Posts
        Polls

        Archives
        November 2014
        October 2014
        September 2014
        August 2014
        July 2014
        June 2014
        May 2014
        April 2014
        March 2014
        February 2014
        January 2014
        December 2013
        November 2013
        October 2013
        September 2013
        August 2013
        July 2013
        June 2013
        May 2013
        April 2013
        March 2013
        February 2013
        January 2013
        December 2012
        November 2012
        October 2012
        September 2012
        August 2012
        July 2012
        June 2012
        May 2012
        April 2012
        March 2012
        February 2012
        January 2012
        December 2011
        November 2011
        October 2011
        September 2011
        August 2011
        July 2011
        June 2011
        May 2011
        April 2011
        March 2011
        February 2011
        January 2011
        December 2010
        November 2010
        October 2010
        September 2010
        August 2010
        July 2010
        June 2010
        May 2010
        April 2010
        March 2010
        February 2010
        January 2010
        December 2009
        November 2009
        October 2009
        September 2009
        August 2009
        July 2009
        June 2009
        May 2009
        April 2009
        March 2009
        February 2009
        January 2009
        December 2008
        November 2008
        October 2008
        September 2008
        August 2008
        July 2008
        June 2008
        May 2008
        April 2008
        March 2008
        February 2008
        January 2008
        December 2007
        November 2007
        October 2007
        September 2007
        August 2007
        July 2007
        June 2007
        May 2007
        April 2007
        March 2007
        February 2007
        January 2007
        December 2006
        November 2006
        October 2006
        September 2006
        August 2006
        July 2006
        June 2006
        May 2006
        April 2006
        March 2006
        February 2006
        January 2006
        December 2005
        April 2005
        March 2005
        February 2005
        January 2005
        December 2004
        November 2004
        October 2004

        Blog*Spot Archives
        November 2005
        October 2005
        September 2005
        August 2005
        July 2005
        June 2005
        May 2005

        Syndication

        RSS Feed 2.0
        Comments RSS 2.0
        WordPress

        Loading


        * Children's Theater Project Lands $5 Million Sta.....
        * 'Hoops for Peace' tournament aims to curb violence..


        * Illinois' Rauner tackles full transition agenda
        * Immigrants urged to take advantage of Obama action
        * Door County fish business subject of federal probe
        * Springfield firefighter arrested for wielding gun
        * Pekin man sentenced for dealing deadly heroin
        * Attorney general warns of immigration scams
        * Suspect in 2011 slaying enters guilty plea
        * New study shows impact of military in Illinois
        * Congressman says he still deciding what to do next
        * Judge rules Illinois pension law unconstitutional

        * Attorney general warns of immigration scams
        * State pension changes ruled unconstitutional; appeal to Illinois Supreme Court next
        * State to refund $60 million in retiree health care money
        * State pension changes ruled unconstitutional; appeal to Illinois Supreme Court likely
        * Illinois pension case likely headed to high court
        * Judge: Pension ruling to come Friday
        * Rauner mum on fixes for ‘dire’ state finances, wants Quinn to freeze hiring
        * Rauner mum on fixes for ‘dire’ state finances
        * Judge to hear pension law arguments today

        * AndroGel giving AbbVie performance anxiety
        * Turning the kitchen into a tech hot spot
        * What does Michael Madigan do next?
        * Are Chicago's manufacturing districts vulnerable?
        * United's Smisek back in analysts' good graces


        * University of Chicago’s Dr. Donald F. Steiner, pioneer in diabetes research, dead at 84
        * University of Chicago’s Dr. Donald F. Steiner, pioneer in diabetes research, dead at 84
        * Police: Girl, 10, struck by drunk driver who fled scene
        * Business owners seeking pot shop licenses in Illinois faced lawsuits elsewhere
        * Time for all-new plan on pensions
        * Illinois pension reform law is unconstitutional, judge rules
        * Dr. Lawrence Solomon: Renowned dermatologist, book collector loved a mystery
        * 3 Daley scandals cost Chicago taxpayers over $6 million
        * As prisons swell, Illinois needs wiser policies
        * The Watchdogs: Rahm Emanuel’s silent partner in mayoral campaign: Mike Madigan


        * Mag Mile Lights Festival: 'Nice to start the holiday season'
        * 4 injured in shootings, including 2 teens, on South, Southwest sides
        * Teens address top city issues at annual speech competition
        * Emanuel: 'What the president did was create an opportunity'
        * $900K bail for man accused in fatal East Hyde Park shooting
        * Impaired Divvy bicyclist hit by 2 cars on Lake Shore Drive
        * Tourist robbed at gunpoint near Buckingham Fountain
        * Slain woman was thoughtful colleague, co-workers say
        * 3 charged with gun, drug offenses in Beach Park
        * 3 killed, 5 injured in Chicago shootings


        * Listen to State Week - November 21, 2014
        * State To Refund Retiree Health Care Money
        * Labor unions celebrate judge's ruling against Illinois pension law
        * Judge Finds Reductions In Pension Benefits Unconstitutional
        * Pension Ruling Imminent
        * Hoosiers divided over Obama’s executive action on immigration
        * Illinois Symphony Orchestra Joins The Circus For Holiday Pops
        * School Funding Testimony Taken At Capitol
        * Incoming U of I President Speaks To Springfield Audience
        * To Restore Executive Mansion, Rauner Plans Private Funds


        * Attorney general warns of immigration scams
        * Deckle McLean: Plagiarism comes with a price
        * Charles Krauthammer: The climate pact swindle
        * Quote of the Day: Nov. 22, 2014
        * State pension changes ruled unconstitutional; appeal to Illinois Supreme Court next
        * State to refund $60 million in retiree health care money
        * Mark Lawlor: Input sought from area residents on Grain Belt Express project
        * Esther Cepeda: Pass the ketchup
        * E.J. Dionne: A mission for Jeb Bush
        * Quote of the Day: Friday, Nov. 21, 2014


        * Suspect in 2011 slaying enters guilty plea
        * Yale knocks off SIU men, 53-46
        * Sunday Conversation: Jack Ingram
        * PHOTOS: Christmas parade brings Santa to town
        * One man pronounced in single-vehicle crash on Interstate 280
        * PHOTOS: Arts Council offers ornament classes to kids
        * Realtors raise more than $12,000 for Miracle League
        * Attorney general warns of immigration scams
        * Fall harvest nearly complete in region
        * Head-on crash east of Rantoul injures three


        * Tri-Cities girls basketball roundup
        * Kolbus, Buffalo Grove head in right direction
        * South Elgin overcomes Jacobs
        * Picture this: Prospect's Liva dives to state title
        * Waukegan police searching for gunman

        * Patrick Cannon defense strategy rare but n...
        * Feds fine Jesse Jackson Jr.'s campaign com...
        * Ex-Congressman Jesse Jackson Jr. faces sen...
        * Representative Jan Schakowsky Sends Letter...
        * Rep. candidate pushes to uphold marriage b...
        * Reps. Schakowsky and Waxman Introduce Bill...
        * Statement by Representative Jan Schakowsky...
        * U.S. House Passes Resolution Condemning An...
        * FAA Rejects Call For New O'Hare Noise Stud...
        * Representatives Quigley, Duckworth, Schako...

        * Guest lineups for the Sunday news shows...
        * Conflict mineral law update and the war in......
        * Conflict mineral law update and the war in......
        * Conflict mineral law update and the war in......
        * Conflict mineral law update and the war in......

        * GOP senator: 'Hopefully we'll get a seriou......
        * Algonquin police chief up for U.S. Marshal......
        * Durbin and Kirk make recomendation for U.S......

        * Tribune: 'Vulnerable' cafe makes a stand in a tough part of town
        * Duckworth-Bowlsbey welcome new baby girl
        * WWI-themed Christmas ad goes viral
        * State Rep. Andre Thapedi HR1348 Press ReleaseClir
        * State Rep. Andre Thapedi HR1348 Press Release
        * Going to GRI in Peoria? Find session schedules #ILGRIturns50
        * IAR Government Affairs monitors veto session
        * Coming Thursday: Illinois October Home Sales Report
        * Infographic: October Illinois Housing Snapshot #IARMarketStats
        * Three facts about Illinois October home sales #IARMarketStats


        * Illinois Residents Asked to Put the Tobacco Down - Support the Great American Smokeout – November 20
        * Governor Quinn Statement on President Obama’s Executive Action
        * Governor Quinn Statement on Selection of New University of Illinois President
        * Governor Quinn Statement on Senate Committee Passage of Minimum Wage Legislation
        * Governor Quinn Statement on the Installation of Archbishop Blase Cupich




            Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller