For decades, political and business leaders failed to set aside the right amount of money each payday to cover the pensions workers earned and, in some cases, covered up the mismanagement of pension fund investments. This is nothing short of theft, as pensions are simply deferred wages, that is, money that workers could have taken as cash in their regular paychecks had they not opted to set it aside…
Norman Stein, a Drexel University law professor who is an expert on pensions, said that if the Detroit order stands it will become standard practice to slash benefits.
“It would be a human catastrophe of the first order if pensions of vulnerable older workers can be cut whenever a local government goes to bankruptcy court,” Stein said. “We will be consigning firemen and policemen, who did nothing wrong other than protecting the city and depending on the city’s promise, into old-age poverty.”
At Newsweek, David Cay Johnson takes a closer look at the Detroit ruling lifting protections on state pensions, and explains some of the history that has led to the shortfalls all across the country. This, of course, is a huge deal for retirees who’ve worked for the city and who are now bracing for pension cuts.
Photo: Patricia Drury