In the states and cities of the U.S. government unions have been able to get pensions and fringe benefits during good economic times at the expense of taxpayers, of which the latter were not fully aware.
When times got bad, taxpayers soon learned government workers were being paid as much as twice they themselves were getting from pensions and benefits. Worse, the payments were unsustainable, despite ever-higher taxpayer loads.
In one example why the burden was onerous: teachers who contributed nothing to their pensions retired at age 60 at 65% of pay. And their retirement check increased 3% a year for inflation.
Not bad when secure investments earn less than 3% to 4% a year, while such pensions assume earnings as much as 8%.
Yet, little is being done to rectify the problem, owing to government union stone-walling during labor negotiations. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)
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