California's pension funds underfunded. Public sector will be blamed for crisis more and more

The bosses are piling up their statistical evidence for the continuing propaganda war against the public sector.  They are intent on decimating public services in their efforts to boost profits through reducing public spending; except on their predatory wars that is, or when public funds are needed to rescue their system from collapse. Part of their strategy is to drive a wedge between public and private sector workers as well as public sector workers, students and taxpayers.  The capitalist press has already blamed public sector worker pay and pensions as the reason for the cuts in education.

Now a Stanford University study released this week announces that California's three largest public pension funds, CalPers, the California State Teachers Retirement System and the University of California Retirement System are underfunded by more than $500 billion.  This is ten times the $55 billion figure the funds themselves claim they are underfunded.  The three funds also lost $100 billion in the recent, and as yet unfinished, free market crisis.

The study was prepared at the request of Governor Schwarzenegger and not surprisingly recommends, among other things, increasing employee contributions to the plans and reducing pension benefits for future employees. This is their divide and rule strategy at work.  They apply the same strategy in contract negotiations dividing one section of the workforce against the other by introducing new wage scales for new hires, or increased pension contributions for the younger workers while increasing payouts for the older ones.  This happened to me.  The Union leaders have done little to prevent this as new hires can't vote in contract ratifications and delay what the Union hierarchy wants, quick, easy and concessionary contract settlements-----labor peace at the cost of workers' living standards and workplace protections  The tragic consequences is that it increases tension on the job as new workers doing the same job receive vastly different and lower pay scales. They also hate the Union for this betrayal.

Schwarzenegger has already jumped on the study's findings warning yesterday that in order to cover pension obligations, he'll have to divert funds from other state programs---more divide and rule. Writing in the Financial Times last year, Matt Miller, a strategist of capital warned that, “A reckoning looms if ordinary people come to believe that US capitalism is a rigged system run by insiders for their own benefit.”   A day of reckoning does indeed loom, and would have loomed a lot earlier were  the working class in this country not without a party of our own and saddled with a leadership in the organized sector whose world view and policies are basically the same as the employers.

For those of us that are active in the struggle against capital, for education, housing and increasing public services, preparing for this reckoning, not being caught off guard by it, is crucial if we are to be successful.