Given the recent losses in the stock markets, this news from the San Francisco Chronicle should come as no surprise: “The California Public Employees’ Retirement System portfolio has lost 31.1 percent of its value since peaking last fall, a staggering $81.4 billion drop.

CalPERS officials say a “rainy day fund” is helping to defray the losses – for now. “But if the market slump continues, they will hit up state and local employers for more money. “That’s a painful prospect as California struggles through a fiscal emergency and municipalities cope with the foreclosure crisis and economic downturn.” Cal-PERS has the power to force the state and local governments to increase contributions to make up for shortfalls.

That is good for the state economy, because well-funded pensions help provide jobs and ensure that retired workers are financially secure, easing the burden on, and creating more job openings for, younger workers. But that’s also a political problem as the costs can cause a political backlash against not just Cal-PERS as an institution, but against public workers for being “greedy” for daring to want a secure and properly funded pension.

Already Orange County has decided to put public workers’ pensions to a public vote, a move designed to screw those workers out of a fair retirement. Here in Northern California, public workers have taken the brunt of the blame for the Vallejo bankruptcy.

In Pacific Grove, the town next to Monterey, I was treated to the spectacle all year of so-called progressives attacking public workers and Cal-PERS for causing the city’s financial problems, which actually stemmed from poor accounting, giveaways to the politically connected, and a refusal to raise taxes. As the economic crisis worsens across California, well-funded pensions are an absolute necessity.

The movement that eventually produced Social Security, for example, was born in California out of a desire to provide for elderly folks without the cost burdening families already mired in the Depression. We run a very real risk in California of this economic and budget crisis dramatically accelerating the destruction of the public sector, the race toward the bottom.

It’s important for us to recognize that government jobs and fair wages and benefits promote economic growth. To undermine and cut them at this time would feed the deflationary cycle and worsen the economic picture.

Robert Cruickshank is a historian, activist, and teacher living in Monterey. He is a contributing editor at Calitics.com and works for the Courage Campaign, in addition to teaching political science at Monterey Peninsula College. Currently he is completing his Ph.D. dissertation in US history, on progressive politics in San Francisco in the 1960s and 1970s. A native Californian, he was raised in Orange County and educated at UC Berkeley. Posted on December 08, 2008 on the California Progress Report website: www.californiaprogressreport.com.

Add this page to your favorite Social Bookmarking websites