Is Cutting Benefits For Public Workers Actually Wage Theft? Reframing the Right's Attacks On Unions

Compensation for work performed is not guaranteed in the United States, even with significant worker protections in place, thanks to the actions of unscrupulous employers. Employers may withhold overtime pay owed, pay less than minimum wage, renege on benefits contracts, and engage in other activities that labor activists label as wage theft; in all of these cases, an employee works as agreed, and does not receive payment or other forms of compensation in return.

"Wage theft" sounds more aggressive, and flashy, than terms like "withholding compensation," which is exactly why organizers started popularizing the term in pushes like the Retail Action Project's attempt to recover unpaid overtime for workers at clothing retailer Mystique and advocacy work on behalf of vulnerable immigrant laborers.

The wage theft meme spearheaded by private sector unions represents a significant rhetorical victory on the part of the left to capture public attention. Paired with hard action in the form of pushes for regulatory compliance with overtime, minimum wage and other laws pertaining to employee compensation, it has also created positive changes for workers. Justin Molito, an organizer with the Writer's Guild of America East (WGAE), a private sector union that has worked extensively on this issue, says “It's important to call it what it is, which is wage theft. When somebody robs a bank, they call it theft.”

There are direct tie-ins with this meme and the current pensions crisis for beseiged public employees, if union organizers, workers and the public are ready to go there. By reframing the debate on the pensions crisis to emphasize that proposals to cut pensions amount to wage theft, the tone of the debate changes, as does the approach to resolving the situation.

The attack on public employees in the United States ramped into high gear in Wisconsin earlier this year, but the underpinnings were laid in an endless series of features, mainly in the conservative media, fingering public employees for everything that is wrong with America. Public employees have been public enemy number one for well over a decade, as ample newspaper archives attest.

Many of these stories twisted facts or outright lied but it didn't matter; readers still absorbed and repeated the erroneous information, and conservatives rode the rising ride of public sentiment against public employees all the way through a series of unionbusting attempts across the nation. The protest upsurge in Wisconsin notwithstanding, popular sentiments repeat myths about public employees living high on the fat of the land, sucking up tax dollars and taking advantage of unreasonably generous benefits like paid vacation time and pensions.

The public sector is one of the few places where such benefits are still routine. Rather than expressing outrage about the fact that people like teachers, firefighters and social workers receive such profligate benefits as time off from work, members of the general public should be asking why benefits in the private sector are dwindling (with the exception of those at a few large corporations). 

The growing pensions crisis highlights the role of anti-public employee rhetoric in public sentiment and resulting policy. In numerous states, pension funds are running dangerously low, with some set to run out as soon as 2017. The pensions crisis has dominated the news in states like California, where the media is eager to blame public employees, and their unions, for the problem; if only those pesky public employees would take their licks with the rest of us, the state could be solvent!

The pensions crisis was created by the states, which clearly anticipated their looming unfunded liabilities and failed to act, perhaps under the assumption that by the time the crisis became a serious problem, the public could be successfully turned against public employees, and wouldn't protest proposals to cut pensions and increase employee contributions to pension funds. The recent decision on the part of the US Postal Service to stop paying into its pension fund to meet budget shortfalls was received with hardly a ripple, for instance. The federal government made the problem even worse by borrowing against its pension funds, and many of the states did the same, but this is rarely reported in scaremongering stories about how public employee pensions are driving the nation into insolvency.

Federal pensions are retirement benefits provided to public employees as part of the terms of employment. They are funded jointly through government and employee contributions, which means that, yes, public employees are paying into pension funds and receive benefits statements informing them about the kinds of benefits they can expect during retirement. Public employees work with the expectation that they will receive retirement benefits, and plan accordingly. Many don't receive Social Security benefits and rely on their pensions as a source of retirement income.

Living on a federal pension is far from glamorous. In California, California Public Employees Retirement System members receive, on average, 50 percent or less of their peak pay in retirement. Former public employees are not out buying yachts and luxury homes on their benefits payments. In two-income households where one employee was in the private sector with no retirement benefits and the other was a public employee, the pension may barely stretch to cover the needs of both partners.

The media is fond of reporting and exaggerating exceptions like unusually high retirement pensions for the very small minority of public employees who made substantial salaries during their time in government service and sometimes benefited from flukes in pension structure. These exceptions become the rule in the eyes of the public, who assume that the retired mail carrier down the street must be hiding a fortune in the bank.

The media frames public employees as greedy, selfish monsters more interested in raking in money than in supporting America. Some news reports include outright lies that bely basic facts, like that public employees actually make less than private sector workers. The media sets up an oppositional relationship between average citizens and federal workers and encourages members of the general public to join the war on public employees. 

This has set the stage for a series of proposals to address the pensions crisis, including suggestions to increase employee contributions as well as cut pension benefits, a practice that turns out to be entirely legal. States are already cutting pension payments and proposals for more cuts to pensions and benefits are springing up like mushrooms after a spring rain.

Discussions about benefits cuts do not label them as what they really are: Wage theft. Public employees pay contributions out of their salaries into pension funds. They earned that money, they have documentation to prove they earned it, and their employers took it from them as part of the terms of an employment agreement that included pension benefits at retirement. When that money is not made available at the time of retirement, it is not simply a betrayal of a "promise." It is an active renege on a contractual agreement, and it is an example of wage theft.

What appears to be working for the private sector in terms of organizing to combat wage theft may not be as effective for public employee unions, however. Tim Tharp, also with WGAE, discussed the heavy reliance on traditional organizing techniques as part of the wage theft campaign, particularly reliance on regulatory frameworks to enforce worker rights. Pension cuts are technically legal, which makes them much harder to fight.

One option for public sector unions, says Tharp, may be turning to lawyers prepared to drill down through regulations and union contracts to determine whether it's possible to take the matter to court, an option that such unions are no doubt considering. That would be much easier to do with public support, which requires changing the way members of the public think about public sector unions, pensions, and benefits.

Media reporting on the pensions crisis discusses “broken promises” to public employees, but a pension is not a promise, it is a legal obligation. Failing to accurately define public employee pensions, and what cuts really mean, results in a lack of understanding among the general public about what pensions are and how they work. This creates a situation where sentiment against public employees generates support, or at least acceptance, of pension cuts, because people do not understand what is actually happening. Wage theft is something that has the potential to affect all employees, and tolerating it creates a slippery slope and makes it that much easier for the next step. Social Security cuts, for example, are also on the table.

Attacks on public employees are centered on the unions that advocate for them. Unionbusting measures are in the works in a number of states, at a time when public employees need unions more than ever. Union organizing is the only way to effectively combat issues like systemic pension cuts, because public employees do not have enough clout on their own to challenge losses to their benefits. Members of the public teeming with outrage as a result of poor media reporting might not see much to worry about here, but they should be concerned about what it means for them, even if they don't care about public employees.

Assaults on public employee unions are dangerous for all workers. These unions are a keystone of the labor movement and play a critical role in fighting for worker protections. The same protections accorded to public employees were once available to many more employees, before anti-union sentiment weakened private sector unions and made it more difficult for them to advocate for their members, and companies took advantage of the lack of union protections for other workers to flagrantly violate the law. The general public should be concerned about the implications for all workers, but the media narrative has effectively assured members of the public that they have nothing to worry about with the slew of attacks on public employees.

Justin Molito points out that the net effect of pension cuts is that “state workers are subsidizing corporate tax breaks...that's the most sinister part about it.” As states run out of money because they fail to collect corporate taxes, they turn to their own employees to make up the shortfall. Raids on state employee pension funds are not going to be the end of the line when it comes to desperate attempts to address looming budget problems.

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