New York latest state to cut pension benefits
New York legislators approve state employee pension cuts by $80 billion over 30 years. Now 44 states have cut benefits to close budget gaps. Here, public sector workers attend a march against pension cuts on Nov. 30, 2011 in Glasgow, Scotland.
Tess Vigeland: Today lawmakers in New York voted to cut retirement benefits for future public employees. The measure didn't cut as deeply as Gov. Andrew Cuomo wanted, but the deal could signal more trouble for public employee unions across the nation. Here's our senior business correspondent Bob Moon.
Bob Moon: Pension benefits for future public workers have now been cut in 44 states. But Ron Snell at the National Conference of State Legislatures says it's especially significant in New York.
Ron Snell: I think there are messages there for the whole country.
Namely, state and local lawmakers are determined to cut public pensions, no matter how politically risky it might be.
Snell: I think it's significant this is happening in a state with a powerful organized labor movement, and that the legislature takes actions that it knows aren't going to be real popular, because they see this as necessary for the long-term fiscal well-being of the state of New York.
Tom Juravich is a labor studies professor at the University of Massachusetts, Amherst. He's says the cuts show not just how dire things are for the states, but how weak this has left the unions.
Tom Juravich: When this happens in New York state, it indicates how far this has gone. I think always in this environment now, public sector workers' salary and their pensions are going to be on the block.
The New York unions had fought the cuts for more than a year, with ads suggesting the Wall Street banks that caused the financial collapse should pay higher taxes to make up the budget shortfall. The intense union pushback might have succeeded in reducing the cuts, but Juravich says the New York setback demonstrates the tough fight that's still ahead.
Juravich: This is going to be the real challenge for the labor movement going forward. Approximately one half of American unionized workers are in the public sector.
Juravich says although 44 states have now made cuts, he expects that's only the first round, with much deeper and painful cuts to come.
I'm Bob Moon for Marketplace.