Happy Labor Day! 2019

Happy Labor Day in Illinois 2019

My Latin American friend Ernesto swung his new hybrid Escalade into the driveway the other morning and once again shook his head disapprovingly at my sign in the front yard.

“What is this doing here in open display, my friend?  It makes you both look so…so...very low class.”

Ernesto was chastising my wife and me for keeping a red, white, and blue sign that displayed “Proud Union Home” in front of our house.  Ernesto does not live in an area where such signs would be tolerated, nor would anyone ever likely see one.  There are codes to follow in Ernesto’s gated compounds, and there are the unspoken taboos.

You might remember Ernesto from several posts ago, when he disciplined me on the wrongness of contracts and the rightness of possible Illinois governors:

http://pension-vocabulary.blogspot.com/2013/06/normal-0-false-false-false-en-us-ja-x.html

This Monday, on Labor Day, Ernesto will celebrate with his family and friends, but it is very likely he will NOTcelebrate Labor Day.  Not in the traditional or even the authentic sense. Like the Chicago Tribune, which commemorated Labor Day a couple of years ago with praiseful editorials about the benefits of work for the soul and spirit, most of Ernesto’s people will avoid the real history.  Ignore the real significance.

And the Tribune will pay some lip service to the qualities of work and a day off for workers, and it wouldn’t be unlike the editorial board to make a passing neutral reference to the JANUS decision.  But Collective Bargaining?  Public pensions? Health Benefits? Equal Pay? Contracts as promises?  Workplace Safety? Costs of living? Not likely.  Not with any fondness.  

According to the United States Department of Labor, “the first Monday in September, is a creation of the labor movement and is dedicated to the social and economic achievements of American workers.  It constitutes a yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country” (http://www.dol.gov/laborday/history.htm).  

I think it’s always rewarding and refreshing for Ernesto to visit my “side” of town – not for Ernesto, but for myself.  I learn a lot more…

The origins of Labor Day are obscured by the variety of movements at state levels to recognize the good work of all of us, and eventually those sentiments coalesced into a federal observation of a holiday.  Even as early as 1885, various municipal ordinances were being written to celebrate workers’ contributions.  Oregon was actually the first state to pass a law of such recognition in 1887; however, by 1894 nearly two dozen other states had adopted similar laws recognizing a day to honor workers.  By 1909, the Sunday before the Labor Day Monday was reserved nationally as Labor Sunday, dedicated to the spiritual and educational aspects of the labor movement.  

Many argue about the actual individual responsible for the first Labor Day observance, but make no mistake about it: it was a union member or union official.  Some consider one Matthew McGuire the founder of the holiday across the river in New Jersey, while serving as secretary of the Central Labor Union in New York. Matthew was a machinist and member of Local 244 (International Assoc. of Machinists).

Others ascribe the incentive for the holiday to a Peter McGuire, general secretary of the Brotherhood of Carpenters and later co-founder of the American Federation of Labor. I favor Peter only because of his supposed words defending such a holiday to honor all those “who from rude nature have delved and carved all the grandeur we behold.”  

Ernesto couldn’t have said it better.  Actually, Ernesto would never have said it.  

The first proposals of the holiday outlined a basic form for the observance and celebration, and remnants of that festivity are still observed in many towns and villages. Parades were considered the first order of business, followed by drinking and barbecues.  Children danced their last moments of summer freedom, and neighbors gathered to share a respite from the hard work of building a nation, day-by-day and brick-by-brick.  Of course, it was also a jamboree tailor-made for lengthy speeches by politicians seeking labor’s backing.   

Still is.  Have a wonderful celebration of Labor Day. 

What is Juneteenth Day?

Wednesday, June 19^th is the 154^th Juneteenth Independence Day  

The date celebrates the June 19, 1865, announcement of the loss of the Civil War and the abolition of all slaves in the state of Texas.  This was two and a half years after Lincoln’s Emancipation Proclamation went into effect on January 1^st. 

In Chicago, many events were held on the previous weekend, and a  number of concerts will be held in Hillside and the city.  Customary celebrations, like those held in Texas in the late 1800’s and early 1900’s provided an opportunity for simple freedoms like singing, dancing, and readings from worshipped artists.

Why June 19^th?  It was on that date in 1865 that Union soldiers under the command of General Granger finally washed ashore in Galveston to inform the Texans of what had transpired.  By and large, Texas and its citizens were not impressed.  The limited size of the Union force and the increased numbers of slave-holders fleeing southern states to Texas as the war ravaged their plantations made for little response or acceptance of the news.

Other stories and conspiracy theories, most likely apocryphal, surfaced as reasons for the delay in the announcement for over two years after the President’s Proclamation.  The soldier sent to carry the news to Texas was murdered by those who wanted to prevent such information from reaching the fields.  Plantation owners kept the information from their work force to maintain order and production.  The Union soldiers were complicit in keeping the information from slaves to assure cotton crops were picked before freedom.

In fact, slaves worked and tilled the fields for over two years after they had been acknowledged free men and women in the Capitol.

Despite the Lone Star pushback, after Lee surrendered in April of 1865, it was only a matter of time before the tide of change would sweep across the nation.  Texas Supreme Court decisions in the next decade reaffirmed the status of freedom for those brave African Americans who had cautiously celebrated their liberty in June in the streets of Galveston upon first hearing the news.

Other racial justice organizations will mark the day remembering the horrific history of the slave trade and its everlasting impact on a people and two continents separated by over 5000 nautical miles. 

Over 2 million died while crossing the Middle Passage into America. 

At least as many others perished during the forced transportation across West Africa to the waiting ports.

Estimates of total captives brought to America for slavery run as high as 12 million.

Several hundred captives were chained together below decks in deplorable conditions, suffering cramped contagion and death on the journey.

Insurance brokers provided for coverage in cases of drowning, but not simply deaths.  As a result, some historians visualize the Atlantic sea bottom marking the exact paths of ships with the mountains of bones left from throwing strings of sick or unwanted slaves overboard. Deplorable.

It’s small wonder that Juneteenth will likewise mark the strong, resentful argument for reparations by racial justice organizers like the Black Land and Liberation Initiative.  They and others symbolically revisit the issue by highlighting General William Sherman’s original order in 1865 by recognizing a national day of action.  According to writer Aviana Willis, “In 40 acres across 40 cities black people will take nonviolent direct action to occupy and reclaim spaces such as abandoned schools and empty lots, with the goal of putting these spaces into service of the community.”

(http://inthesetimes.com/article/20249/black-land-and-liberation-forty-acres-mule-juneteenth)

Black Land and Liberation Initiative states it clearly:  “We are people who have been enslaved and dispossessed as a result of the oppressive, exploitative, extractive system of colonialism and white supremacy.  In this system, our labor and its products have been taken from us for generations for the accumulation of wealth by others.”(http://blacklandandliberation.org/)

“We have been taught in school that the source of the policy of “40 acres and a mule” was Union General William T. Sherman’s Special Field Order No. 15, issued on Jan. 16, 1865. (That account is half-right: Sherman prescribed the 40 acres in that Order, but not the mule. The mule would come later.) But what many accounts leave out is

that this idea for massive land redistribution actually was the result of a discussion that Sherman and Secretary of War Edwin M. Stanton held four days before Sherman issued the Order, with 20 leaders of the black community in Savannah, Ga., where Sherman was headquartered following his famous March to the Sea. The meeting was unprecedented in American history.

“Today, we commonly use the phrase “40 acres and a mule,” but few of us have read the Order itself. Three of its parts are relevant here. Section one bears repeating in full: “The islands from Charleston, south, the abandoned rice fields along the rivers for thirty miles back from the sea, and the country bordering the St. Johns river, Florida, are reserved and set apart for the settlement of the negroes [sic] now made free by the acts of war and the proclamation of the President of the United States.”

“Section two specifies that these new communities, moreover, would be governed entirely by black people themselves: ” … on the islands, and in the settlements hereafter to be established, no white person whatever, unless military officers and soldiers detailed for duty, will be permitted to reside; and the sole and exclusive management of affairs will be left to the freed people themselves … By the laws of war, and orders of the President of the United States, the negro [sic] is free and must be dealt with as such.”

“Finally, section three specifies the allocation of land: ” … each family shall have a plot of not more than (40) acres of tillable ground, and when it borders on some water channel, with not more than 800 feet water front, in the possession of which land the military authorities will afford them protection, until such time as they can protect themselves, or until Congress shall regulate their title.”

“With this Order, 400,000 acres of land — “a strip of coastline stretching from Charleston, South Carolina, to the St. John’s River in Florida, including Georgia’s Sea Islands and the mainland thirty miles in from the coast,” as Barton Myers reports — would be redistributed to the newly freed slaves. The extent of this Order and its larger implications are mind-boggling, actually.” (http://www.pbs.org/wnet/african-americans-many-rivers-to-cross/history/the-truth-behind-40-acres-and-a-mule/)

Stanton had gone to a group of African American preachers and ministers at the conclusion of the war, asking what would be an appropriate payment for the debasing of a race and people.  The answer was the assurance of future economic freedom by receiving land on which to farm, land that had been taken in Sherman’s march along the southeastern coast of the United States.  Sherman later threw in the single mule with the 40 acres – as many of the pack animals were now available after the war.

“And what happened to this astonishingly visionary program, which would have fundamentally altered the course of American race relations? Andrew Johnson, Lincoln’s successor and a sympathizer with the South, overturned the Order in the fall of 1865, and, as Barton Myers sadly concludes, “returned the land along the South Carolina, Georgia and Florida coasts to the planters who had originally owned it” — to the very people who had declared war on the United States of America.”

Only a small handful of states – Hawaii, Montana, New Hampshire, North Dakota and South Dakota – do not recognize the date as a day for observance, a ceremonial holiday or state sanctioned holiday.  45 other states, including Illinois, recognize the date’s importance and its observance of the participation and achievements of African-Americans in the progress of our country.  

Next Target of the Republican Junta? Mueller.

Next Target of the Republican Junta?  Mueller

Had Robert Mueller decided to entertain a doctorate in British Literature rather than Jurisprudence, he might have been the darling of the Literary Review Board for his unique ability to generate almost unfathomable, nuanced statements replete with double negatives. 

“It was not as if Hamlet were unable to not comprehend his father’s not being aware of his own brother’s lack of fealty to the realm and even the former’s not feeling guilty about his attitude.” 

Board of Professors: “Oh, well done, sir.”  “Remarkably layered, my young man!”   “You're not the first who hasn’t failed to notice the connections, you prodigy.” 

Any normal American trying to follow what exactly Mueller is stating in his report will have to contend with nothing so ridiculous, but a particular careful semantics which will leave many readers wondering whether to just leave the interpretation to Sean Hannity or Anderson Cooper.  “Yawn, whatever, I have Game of Thrones to watch…”

Coming soon:  Mueller implores us all to read the Report.  And Mueller knows that he has only limited time because, failing to motivate an unreading public to read a 400+ page report detailing two years of investigation will soon make him the target of the Trumpian/Republican Party and Fox News, which will target him for abuse and character assassination to defend the unspeakable alliance they have accepted as their fate.  

In the summary of Part Two of the Mueller Report, the Office ends with this statement before providing the litany of facts and evidence behind obstruction.  Every American should be aware that the evidence is there, that double negatives that state there was no evidence of not having done anything illegal equates to THERE WAS EVIDENCE OF LIKELY ILLEGAL ACTIVITY.

Mueller Report: Conclusion to Executive Summary to Volume II

“Because we determined not to make a traditional prosecutorial judgment, we did not draw ultimate conclusions about the President’s conduct.  The evidence we obtained about the President’s actions and intent presents difficult issues that would need to be resolved if we were making a traditional prosecutorial judgment.  At the same time, if we had confidence after a thorough investigation of the facts that the President clearly did not commit obstruction of justice, we would so state. Based on the facts the applicable legal standards, we are unable to reach that judgment.  Accordingly, while this report does not conclude that the President committed a crime, it does not exonerate him.”     

Trump's EPA announces that Roundup is Safe!!!!!!!!!!

First: The Real News and Fake Science.  

From CBS on May 1, 2019: “EPA Says Roundup Weed Killer is Safe, in a win for Bayer”

·      The U.S. Environmental Protection Agency gave Bayer a boost when it decided that its Roundup weed (sic) killer didn't cause cancer.

·      Two recent court cases found just the opposite, ruling against Bayer and Roundup.

·      Environmental advocates, including the National Resources Defense Council, denounced the EPA's decision.

“After two recent defeats in court, Bayer has won a round — this one delivered by regulators — as it contends with more than 10,000 lawsuits claiming a chemical in its widely used Roundup weed killer causes cancer. The U.S. Environmental Protection Agency on Tuesday said it "continues to find that there are no risks to public health when glyphosate is used in accordance with its current label and that glyphosate is not a carcinogen." 

“The agency said its findings were consistent with those of "many other countries and other federal agencies." But environmental advocates, including the National Resources Defense Council (NRDC) denounced the decision. 

"’Health agencies and credible non-industry experts who've reviewed this question have all found a link between glyphosate and cancer," Jennifer Sass, a senior scientist at NRDC said in a statement. The World Health Organization in 2015 termed glyphosate as "probably carcinogenic to humans.’"

What follows is a post from August 2018 that is so very much in line with today’s special interest takeover of our current government and, given this week’s EPA announcement, the long-lasting effects upon our world and we the people.  And your children’s children.  

Good Morning from Monsanto and Bayer.  Snacks for All the Kiddies!

I know it is cold and wet. Have you been wandering along the aisles in Menards or Lowes, or Home Depot in anticipation like me and noticing the white plastic bottles of Roundup layered on pallets like rows of shark teeth waiting to be purchased at reduced “spring sale” prices.  

My last post warned about the continuing poisoning of ourselves and especially our children with the chemical, glyphosate, in Roundup. Here’s another look in specifics at what levels your feeding to you children, friends, or selves:

From the Holistic Health Journal:

“In the United States, glyphosate was deemed safe for public use in 1974 and since then has been applied on crops by farmers. The most popular product that contains glyphosate as a main ingredient is Roundup, a product made by Monsanto. It is marketed not only towards farmers, but also heavily promoted towards people who have gardens at home. However, glyphosate, may not be as safe as the marketing claims suggest. Different studies have actually linked this herbicide to cancer and other health problems. ^[1]

“According to a 2013 study published by Thongprakaisang, et. al., glyphosate caused the growth of breast cancer cells in humans. Glyphosate was found to be an “endocrine-disruptor”, meaning it has detrimental effects on the body’s hormones, specifically on estrogen. High levels of estrogen is known to cause hormone-dependent breast cancer, where in breast cancer cells multiply and spread in the presence of estrogen. ^[2]

“According to an FDA- registered laboratory, popular American food contained worryingly high levels of glyphosate. Recent evidence suggests that glyphosate can pose a threat to human health at very low levels of 0.1 parts per billion (ppb). The laboratory found that popular snacks sold in most supermarkets had glyphosate levels between 289.47 and 1,125.3 ppb. ^[3]

“Other countries all over the world, specifically the European Union, are more strict regarding glyphosate exposure – with the “safe” limit placed at 0.3 mg per kilogram of body weight per day compared to the US 1.75 mg/kg/bw/day. Here are the values of glyphosate content reported by the laboratory:

Call your Representative and Senator.  Inform that you are concerned at the personal level as well when your neighbor is spraying Roundup around the yard and garden without any self-protection or comprehension of the breeze’s spread to your yard and children

Or?  Call your favorite snack company?  Kids love Goldfish!  We are off Triscuits…. You should be too.

Jonathon Chait on Why "Congress Should Impeach William Barr"

From NEWYORK Magazine

“Congress Should Impeach William Barr”

By Jonathan Chait

“House Democrats are going to face a difficult decision about launching an impeachment inquiry into President Trump. Balanced against the president’s impressive array of misconduct is the fact that several more criminal investigations that may add to the indictment are already underway, and that impeaching the president might jeopardize the reelection of red-state Democratic members. But in the meantime, Attorney General William Barr presents them with a much easier decision. Barr has so thoroughly betrayed the values of his office that voting to impeach and remove him is almost obvious.

“…And while many members of the old Republican political Establishment had recoiled against Trump’s contempt for the rule of law, Barr has shown no signs of having joined them. He met with Trump to discuss serving as his defense lawyer, publicly attacked the Mueller investigation (which risked ‘taking on the look of an entirely political operation to overthrow the president’), called for more investigations of Hillary Clinton, and circulated a lengthy memo strongly defending Trump against obstruction charges.

The events since Barr’s letter have incinerated whatever remains of his credibility. The famously tight-lipped Mueller team told several news outlets the letter had minimized Trump’s culpability; Barr gave congressional testimony hyping up Trump’s charges of ‘spying,’ even prejudging the outcome of an investigation (‘I think there was a failure among a group of leaders [at the FBI] at the upper echelon’); evaded questions as to whether he had shared the Mueller report with the White House; and, it turns out, he’s ‘had numerous conversations with White House lawyers which aided the president’s legal team,’ the New York Times reports. Then he broke precedent by scheduling a press conference to spin the report in advance of its redacted publication.

“…Barr’s letter had made it sound as though Trump’s campaign spurned Russia’s offers of help: ‘The Special Counsel did not find that the Trump campaign, or anyone associated with it, conspired or coordinated with the Russian government in these efforts, despite multiple offers from Russian-affiliated individuals to assist the Trump campaign,’ he wrote. In fact, Mueller’s report concluded, ‘In some instances, the Campaign was receptive to the offer,’ but that the cooperation fell short of criminal conduct.

Where Mueller intended to leave the job of judging Trump’s obstructive conduct to Congress, Barr interposed his own judgment. Barr offered this incredible statement for why Trump’s behavior was excusable: ‘[T]here is substantial evidence to show that the President was frustrated and angered by a sincere belief that the investigation was undermining his presidency, propelled by his political opponents, and fueled by illegal leaks,’ Barr said. ‘Nonetheless, the White House fully cooperated with the Special Counsel’s investigation,’ and credited him further with taking ‘no act that in fact deprived the Special Counsel of the documents and witnesses necessary to complete his investigation.’”

“…There is no other department in government in which mere norms, not laws, are all that stand between democracy as we know it and a banana republic. Barr has revealed his complete unfitness for this awesome task. Nearly two more years of this Trumpian henchman wielding power over federal law enforcement is more weight than the rickety Constitution can bear.”

The entire article is available here.  I urge you to read it.  

Why the Tribune Is Pushing a Constitutional Amendment Change

Tribune Calls on Pritzker to Propose a People’s Vote on an Amendment to the Pension Protection Clause in the Illinois Constitution 

An up-to-date reader of the Chicago Tribune would have to scratch his/her head at the newspaper’s strained reasoning to force a voter’s amendment to the state Constitution remove or “fix” the Pension Protection Clause in Article XIII, Section 5.  

Why?   Major changes made to the benefit structures of current and future hires in Illinois’ public workers’ sectors will make drastic reductions in eventual pension earnings in the approaching future.

There’s no need to make any alterations in a promise to pay the contractual benefits.  Not when the contractual benefits are being diminished by the General Assembly every year or so.  

The Pension Protection Clause protects what you were promised once you started, but if you are getting less and less when you start, the “protection” isn’t worrisome when it promises less or little.  

Tier One teachers who have the benefits afforded to current retirees were those who began working and contributing to their pensions before January 1, 2011.  The General Assembly changed that for all those hires who began working and contributing on or after January 1, 2011, by creating a new benefit structure called Tier Two.

Tier Two public sector workers are required to work an additional 12 years (age 67) before retiring or face penalties of 6% of the annuity for each year before age 67.  A wall will stop the determination of a final average pension payout as the Consumer Price Index (currently approximately $110,000).  Any Cost of Living adjustments will no longer be 3% compounded; instead, the COLA will be 3% simple or ½ the Consumer Price Index, whichever is less.  

This is getting thorny, so take my word that Tier Two workers are getting taken to the retirement cleaners.  In fact, the benefit structure is so bad, there may be later consequences for the state of Illinois in not meeting the “safe harbor” requirements for retirement thresholds determined in Social Security returns.  (See Glen Brown for more information there)

But wait.  There’s more.

The General Assembly has also created a new benefit structure for those entering public sector work called Tier Three.  Tier Three has so many moving parts that the exact benefit structure is still being hammered out.  The thorns are thick in this structure too, but suffice it to say that an individual choosing to remain within this yet-to-be-introduced benefit structure would need to work 60 years to attain the level of pension benefit afforded to a Tier One retiree.  

60 years.  Start working at age 21 and – for the full pension – work until 81.  

I say, defibrillators in every room, kids. 

Within the Tier Three plan, whenever it should appear, are other reductions in benefits which give ample reason for anyone still in the public sector to jump at the chance to move (one time only) to Tier Two.

In short, very short – There’s not really any need whatsoever to force a 3/5ths vote by the senate and the house on a proposed change to Article XIII, Section 5, in the Illinois Constitution which promises a protection of the benefit structure of a pension when continual removals of benefits are forced into the structure before hiring.  

So, I’m back to why? The Chicago Tribune knows full well about these Tier I, II, III changes. The Tribune knows that changes in the benefit structures of public workers will leave them severely short on retirement funds.  The Chicago Tribune knows full well that the $130 Billion debt from money diverted from funding pensions over seven decades will still remain as an ironclad and legal IOU to the pension funds as determined unanimously by the Illinois Supreme Court. 

Because, I believe, the Chicago Tribune – like the Illinois Policy Institute and the Better Government Association in Illinois – want to blame, scapegoat, and eliminate collective bargaining, unions, and pensions altogether.  

It doesn’t take a lot of perusing the editorial pages of the Tribune to see that they invite I.P.I. perspectives and anti-union slant to form their editorial positions.  In June of 2018, it was once again editorial board member Kristen McQueary who found the opportunity to present the Tribune’s singular trope: unions are bad, the pension debt is all the unions’ fault,  the tax increase (using some kind of convoluted mathematics) was the fault of the unions, politicians are corrupted by unions, the unions have too much influence, and (God forbid) the unions have an affinity for the democratic party rather than the Republicans (like the Tribune). 

“And taxpayers are on the hook. The union advocates for tax hikes and government growth — last year’s 32 percent income tax hike and now a proposed graduated income tax — to shore up its strength to the detriment of Illinoisans en masse. All those years of unbalanced state budgets and shortchanged pension funds? AFSCME, an ally of the Democratic majority, was an enabler.

“On the political side, the union is an operative in political campaigns. Its leaders interview and endorse candidates up and down the ballot. They provide staff for petition-gathering and campaign strategy. They dump cash into dozens of races. They coordinate with other unions and political party officials to elect and defeat candidates.

“From 2013 to 2017, 74 percent of the union’s political contributions went to Democratic committees or organizations, according to the Illinois Policy Institute, a right-leaning think tank. Six percent went toward Republican committees or organizations.”

Janus decision aside, the Tribune wants to eliminate the Pension Protection Clause altogether as just one step in an ongoing right-leaning process of falsely blaming unions for the unfunded liability, and eradicating collective bargaining until we too descend into a right-to-work state like Wisconsin and Michigan and Indiana.

Why Teachers Have Compounded COLA of 3%.

Compounded Cost of Living for Teachers?  How Did That Happen?

If you read the editorial pages of the Chicago Tribune or follow the voices of many of their right-bent guest writers, the 3% compounded cost of living (COLA) provided to retirees in Springfield was a smoky backroom deal done in the dark of night by unknown legislators looking to feather their own retirements.  Unknown, except for Madigan, who is deemed the Master Illuminatus controlling all past and present evils in the General Assembly.  

The real story is actually a bit more interesting and, believe it or not, an attempted bit of fiscal compassion.    

Mr. Peabody: “Set the Wayback Machine, Sherman, for 1980.”  Sorry, Millennials, this is a reference to a short series included in the original Rocky and Bullwinkle series on TV…oh well, never mind.

1980:  a year when Fax machines became operational, Rubik’s Cubes went on sale, John Lennon was sadly killed, and PacMan hit the arcades.  

More importantly - Following previous years of equally high inflation, 1980 delivered an additional blow to consumers with a country wide annual rate of 13.58%.  

Despite the median price of a home at $63,000, interest rates were running so high that people were taking out balloon mortgages that offered lower beginning rates but were tethered to an arrangement which required a full payment at the end of a specified time. That last payment was called “the bullet.”  No amortization, just a total payment for the balance later.

(If that sounds familiar, then you are too knowledgeable about pension ramps in Illinois).

Sorry, Millennials, I digress…again.

The inflation rate for our past year 2018 was 2.44%.  

But starting in the mid 1970’s and into the 1980’s, inflation rates were stubbornly high.  

1975 – 11.3%

1976 – 5.75%

1977 – 6.5%

1978 – 7.62%

1979 – 11.2%

1980 – 13.58%

1981 – 10.35%

1982 – 6.16%

1983 – 3.22%

1984 – 4.3%

1985 – 3.55%

1986 – 1.1%

1987 – 3.66

1989 – 4.83%

(The People History)

As past Illinois Teachers’ Retirement System Trustee Bob Lyons observed, “In the 21 years from 1969 through 1989 there was only one year that inflation was less than 3.3% and the average annual rate of inflation was just over 6.2%.  In making the decision in 1989 to change our annual increase from three percent simple to three percent compounded, the members of the General Assembly made what they felt was a reasonable assumption that inflation would continue and that it would grow at the rate that it had been for more than 20 years.  Since state pensions had not kept up with inflation they would provide a necessary increase, but they did not ask anyone to pay for it because they assumed it would not really be expensive.  The change would cost the state, but they assumed it would still run behind inflation. And growing inflation would mean the state would collect more tax revenue.”

Anticipating further elevated inflation rates, the General Assembly granted a change from 3% simple to 3% compounded COLA in 1989 to the retirees in TRS. 

Since 1990, (high of 4.1% in 2007 and low of .1 in 2008) the average inflation rate for the country has been overall 2.4%.   As Mr. Lyons writes, “The reality is that the change from 3% simple to 3% compounded did just what it was supposed to do and it has more than protected us from inflation.”

And he’s right.  On average, thus far, we are looking back nearly 30 years with a .6% positive break.  And in our current media environment of people turning on each other rather than to each other, this COLA correction seems unacceptable to those who criticize the Illinois “Pension Problem” as simply an issue of too many benefits. The finger pointing by the Tribune and other anti-union organizations ignore the truth: the cost of pension would not be so overwhelming if there were no debt payment as a result of decades of avoiding payments.  

Eric Madiar, the past Chief Legal Counsel for Senate Leader John Cullerton and author of a thorough exegesis “Is Welching on Public Pension Promises…,” speaking before the City Club of Chicago, once reminded his audience: “Our current pension disaster cannot be blamed on salary or pension cost increases.  Between 1985 and 2014, pension funding liabilities grew by $97 billion.  Benefit increase only counted for 8%, or $8 billion of that growth.  Pay increases were actually less than actuaries had assumed they would be. And the actually helped bring down the unfunded liability by $1.3 billion.  The state's failure to fund the system accounts for 49 or 47% of that growth.  So simply out, the main reason we are in this mess is for insufficient pension contributions” (City Club of Chicago). 

But like any Zen Balance question, we are all awash in what may decidedly come again in another inevitable wave.  Okay, so now maybe we are .6 ahead.  Now.  But in the 15 years before the 3% compounded (1975-1989), we were battling an average of 6.7% inflation – or a 3.6% disadvantage even if pensioners had compounded COLA’s.  

Maybe the General Assembly didn't foresee a lessening of inflation or the Great Recession, but they understood what continued rampant inflation was doing to state retirees.  

And, it’s not pensioners that created the fiscal problems at the state or municipal levels; it is and will always be the avoidance of funding the pensions that now comprise the interest-laden debt which must be serviced yearly.  As Bob Lyons also wisely points out, “The truth is that this year 76% of the 8.5 billion going to pensions is to make up for the continuous past underfunding of the five systems.  If Illinois pensions were fully funded, all it would take to fund the pensions for all current employees would be just a little more than two billion dollars. The so-called pension problem in Illinois has in reality not been caused by the cost of our pensions, but by the failure to fully fund them.”

The next time someone suggests that retirees’ benefits are the cause for the “pension problem,” “pension crisis,” or the “pension’s unsustainability,” please help them see the truth.

Thank you, Bob Lyons.