Editorial: Dysfunction in bargaining relationship caused pension crisis

The Daily Herald Editorial Board
Updated 8/19/2012 7:55 PM

Gov. Pat Quinn and legislators met in special session Friday to try to arrive at a solution to the shortfall in funding pensions for teachers and state government employees.

That no solution was reached is not surprising. It's a tough issue to solve, especially in advance of an election where Democrats can ill afford to buck their labor constituency and Republicans are unlikely to cross their taxpayer base.


There will some day be a solution. Of that, we are confident. That's because, ultimately, if there is no solution, there will be insolvency. It's as simple as that.

The thing is, as necessary as a solution is, it is unlikely to make anyone happy. Labor will have to contribute more to the pensions and receive less. The state and local schools will have to cut more programs and reduce staff. And another sad truth is, taxpayers will in the end have to pay more.

It's not like a solution can be one way. Everybody's going to have to give. That means, group suffering, not group hugging.

There will be anger in all quarters. We all got a glimpse of that future with the strong protests that greeted Quinn and his party leaders at the state fair's Democrats Day on Wednesday.

It's not going to be a happy time. But what choice is there? Have we been paying attention to what's happened to overextended nation after overextended nation across the pond? Anybody notice the pictures of outrage in the streets over there?

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But though everyone is going to have to join in the pain, we shouldn't lose sight of the fundamental cause of this crisis.

It's not local school boards that padded the payroll to maximize pensions they did not have to pay, although that certainly has been part of the problem and needs to be addressed. It's not the state legislature that failed year after year to meet its obligations to fully fund the system, although that's been part of the problem and needs to be addressed. Those are factors and cannot be ignored.

But the fundamental problem has been a systemic dysfunction in negotiating position between labor and management when it comes to public pensions. In the private sector, this relationship is adversarial; in the public sector, not so much.

In the private sector, labor pushes for all it can get, and normally also, management pushes back to restrain costs as much as it can. Each position is somewhat extreme and somewhat natural but, most significantly, tends in varying degrees to balance each other out.

But it's different in the public sector. In the public sector, because of the political power of the unions and the dependence candidates have for labor support at the polls (Democrats in particular), so-called "management" ends up to one degree or another beholden to labor.


The result has been, in the case of public pensions, acquiescence to pension benefits that, simply stated, are admirable but unaffordable.

What the solution is to that, we're not sure. How to force balance into a system that is unbalanced, that's easier said than done.

But we hope at the very least, that the political courage and statesmanship can be mustered to avert disaster. And that this present crisis can make all sides more realistic in the future.

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