Recent commentaries on Wisconsin public pension systems that blame public employee unions for what are perceived as excessive benefits have too often little or no actual knowledge of the facts. It’s time to set things straight.
Over and over, opponents of collective bargaining and critics of the public pension system complain that public employees should be paying their share of retirement contributions. This point became one of the hallmarks of Gov. Scott Walker’s attack on state public employees. The problem with that critique is that the state of Wisconsin contribution to the employee pension share was dictated by the state, not by employee bargaining units.
Take, for example, the State Engineering Association, a state collective bargaining unit representing about 1,100 engineers and technical professionals. In 1983, during bargaining in which I participated for a new contract, the state insisted on paying the employee share of pension contributions. At the time, that share amounted to 5 percent.
The state preferred this approach for two reasons: no actual pay increase for public employees, and the state was able to avoid paying the required Social Security and Medicare on the wages that were not given. A so-called win-win for the state.
Initially, SEA turned down the state out of concern that at some point in time this contribution might become a weapon used against our members. But if you have ever bargained a contract with the state, you realize that you do not really negotiate the amount of compensation, you only negotiate the distribution of the amount. So SEA insisted that the state’s novel retirement payment provision be included as hard language in the contract. That way, we thought, we could in the future protect our members against charges like those lately made by critics of public employees, their unions and the state pension system.
As a result of the state’s pension contribution, we SEA members did have a few more dollars in our pockets. We spent that additional money to keep up with the cost of living; in turn, the state benefited yet again by being able to collect taxes on that money for the goods that we purchased or the interest we earned.
But we lost something else: SEA-represented employees did not receive an actual raise in base pay that would have been compounded over the last 28 years to improve our overall retirement calculation.
In hindsight, SEA’s concern turned out to be correct. Eventually, we thought, the state would take away that compensation adjustment — just as lawmakers now have attempted. Meanwhile, politicians and some news media would blame represented public employees for a pension contribution the state itself had insisted upon in 1983. What we really did not understand, however, was the length that current politicians would go to destroy collective bargaining in their desire to make public employees the villain for their own mismanagement over the years.
It seems those who really know what happened are ignored because the truth does not fit the story line of news media or the agenda of those with the financial resources to control what government does. I know what government did, because I was there.