Janus: the Beginning of the End of California’s Pension Crisis?

John Mirisch

Beverly Hills City Council Member and two-time former mayor


Cities in California are already starting to crash and burn because of an unsustainable pension system for public employees. With CalPERS expected to significantly raise rates cities are paying each year just to keep up with the liabilities, Oroville is just the latest example of a Californian city on the brink.

Thanks to the US Supreme Court, public sector unions could lose some of their power, which might – just might – open the door to real and lasting solutions to California’s pension crisis, unfortunately, probably too late for cities like Oroville.

At the root of the problem are the all-powerful Californian public employee unions who over the years have been able to use their political juice to get their members pensions and benefits that private-sector employees can only dream of – because they are simply unaffordable. Who, for example, in the private sector can retire at the age of 50 with 99% of her highest single-year salary for life (and with COLA increases built in)?

True, PEPRA, the Public Employee Pension Reform Act of 2013 increased retirement ages somewhat and made tweaks to the taxpayer-funded system, but the changes were essentially cosmetic and did not create the fundamental systemic shift necessary to create predictability, fiscal responsibility and economic sustainability. The systemic changes needed to our public employee pension system are mathematically fairly simple, but politically seemingly impossible in California because of bald self-interest and the outsize political muscle of the public sector unions in our one-party state.

SCOTUS has agreed to take up the case Janus v. American Federation of State, County and Municipal Employees (AFSCME), which could, like the Friedrichs case which remained unresolved after Antonin Scalia died last year, put an end to the practice of forced employee payments to public sector unions.

Mark Janus of Illinois, much like Rebecca Friedrichs of California before him, is being forced to contribute union “agency fees” to support the union’s purported costs of collective bargaining. The union’s argument is that since Janus benefits from the results of collective bargaining, he should be forced to pay a “fair share” even if he doesn’t agree with the union’s political positions.

The AFSCME acknowledges that forced union payments represent a form of “forced speech,” generally forbidden by the First Amendment, but contended to SCOTUS that, “certain labor-relations interests justify the small intrusion on employees’ First Amendment interests that fair-share payments represent.”

Beyond such a facile selling-down-the-river of free speech, the unions are wrong in suggesting that their members are all paragons of self-interest, that the individuals’ sole goal is to get as much for themselves as they can, society and the rest of us be damned. Though in general, public sector unions like to use buzzwords like “Chicken Little” – and worse – when the math of our state’s unsustainable defined benefit pension system is pointed out, not all of the public employees who are forced to pay the unions agree with union’s efforts to take as much from the public treasury as they possibly can. In a game of “vocabuspin” (as in vocabulary plus spin), unions call public employees who don’t want to be a part of the union machinery “free riders.” And, yes, the use of the phrase “fair share” is itself spin: there is nothing “fair” about forcing public employees to pay for union activities with which they disagree or for benefits they not only don’t want, but might actually oppose because they themselves put societal interest above greed.

As Rebecca Friedrichs said: “The unions call me a free rider. But the benefits they negotiate for me are not worth the moral costs. The defined benefit program and the expense to my community and my nation, and using my money to protect teachers who are ineffective and sometimes abusive in class — this is a liberty issue for me.”

The response of the public employee unions, which themselves are special interest groups, to the Janus case being taken up by SCOTUS is nothing if not predicable, self-righteous outrage. Said Eric Heins, president of the California Teachers Association: “Janus is simply the culmination of decades of attacks on working people by corporate CEOs, the wealthiest 1 percent and the politicians that do their bidding to rig the economy in their favor.” Similar statements can be found by other high-ranking public union bosses throughout the country.

But the stated cause of their outrage is patently absurd. This case has nothing to do with corporations or Big Business. Corporations are not on the hook for unsustainable pensions: we are. This is about the taxpayers, namely all of us. This is about ordinary, hard-working Californians who want their local governments to be able to provide the kinds of services which we all deserve.

Sure, I get it that the union bosses are outraged: forced funding will end and they will actually have to work to get potential members to see the value of membership should Janus prevail. They won’t have the same clout if not all public employees buy into their “it’s all about me” agenda (because it sure ain’t about the residents, taxpayers, citizens or kids). They might not be able to buy and sell politicians the way the currently can and do in states like California.

Kudos to public employees like Friedrichs and Janus who are willing to think for themselves and have the intestinal fortitude to stand up for their rights to do so. Let’s hope that SCOTUS decides to reward them for their courage by empowering them, in a Marxian – Groucho, that is – twist, not to have to be members of a club which would force them to be a member (and charge them royally for the “privilege”).

Should SCOTUS decide to remove the shackles from public employees like Janus and Friedrichs and other employees who recognize that our current defined benefit pension system is simply unsustainable, perhaps we can avoid the pain of the Orovilles of the country. Perhaps we will finally arrive at a situation in which public employee unions throughout the state will actually have to acknowledge the absurdity of the voodoo economics which they, with the baldest of self-interests and the straightest of faces, use to justify the unjustifiable.

In Roman mythology, Janus was the god of endings, beginnings, transitions and duality. Let’s hope the Janus case marks the end of a system which puts the residents and taxpayers last, the beginning of a more balanced relationship between public sector employees and the citizens and residents whom they are supposed to be serving, and a future which is less one-sided and in which pensions and benefits are both fair and sustainable.

John Mirisch has served on the Beverly Hills City Council since 2009 and twice served as mayor. He created the Sunshine Task Force to increase transparency in local government and has advocated for meaningful pension reform for the past eight years

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