Left In Lowell

City Council Meeting 10/2/07

6 Responses to “City Council Meeting 10/2/07”

1. jdayne Says:
   October 2nd, 2007 at 8:47 pm

   UTL President and the fellow can’t understand what he sees or hears? Doesn’t reflect well on the competence of the instruction in the Lowell public school when the union head doesn’t demonstrate competence in the basic skills. My mother, retired public school English teacher, would be embarrassed to have had such representation during her years as a union member.

2. waittilnextyr Says:
   October 3rd, 2007 at 8:52 am

   Where there is smoke (the $300M to $450M figure) there is fire, (or at least cause for concern).

   Maybe the city should join Social Security so that eventually the primary cost of retiree health insurance would be from Medicare. In the meantime, the city should flush out any retirees who are eligible for Medicare, yet remain on the city’s system.

3. sarahminkz Says:
   October 3rd, 2007 at 9:49 am

   Many of you may not know that municipal employees pay into and are eligible for Medicare like all other employees in the United States (.0145%)with a match from their employer. The City should have a policy of moving all eligible employess on to medicare upon retirement like most other Americans now do. But with Union presidents like Paul Georges fanning the fires of fear what is right becomes almost impossible. The figure the CM is referring to is the new “Other Post Employment Benefits (OPEB)” funding requirement. It requires municipalities to fully fund all “other” benefits offered upon retirement-namely health insurance-in advance of retirement. It’s an astronomical number in addition to fully funding retirement systems by 2028. Paul Georges started this fire on WCAP and then he spoke at the City Council meeting as though he is suprised by the number of calls he’s receiving from retirees on this issue. Like he didn’t start the fire. He didn’t even want HMO’s offered to his membership unless he “got” something in return. Lowell is one of the few municipalities left that continues to offer Master Medical because it is too costly. Most have phased it out. He never has the best interest of the City in mind because he doesn’t live here nor does he pay taxes here. He has no problem misrepresenting things the Manager says or in this case did not say to suit his own agenda. As far as him speaking against the Managers contract extention because other Union Contracts aren’t settled I would ask him to take a zero percent raise like the Manager did. You’ll never see the Teachers union ever take a zero.

4. confused Says:
   October 3rd, 2007 at 10:12 am

   Can someone please explain the rationale behind these unions demanding benefits packages for retirees? I just don’t get it. So you worked for some company/entity, have retired an no longer work there, but you still want them to foot your bills?

5. Jay Booth Says:
   October 3rd, 2007 at 10:27 am

   There’s a section of MGL that Tyngsboro adopted that automatically shifted all eligible retirees onto Medicare. I forget which section it was but I don’t think we even had to impact bargain it, we just adopted it at Town Meeting a couple years ago. Good move for any municipality, shift your most statistically expensive members (retirees) onto the federal safety net where they’ll be taken care of just fine and more of your current employees’ payments into the pool actually go to those employees’ health problems. You’d think that the membership of the union would be for this even if the president isn’t.

6. jdayne Says:
   October 3rd, 2007 at 2:33 pm

   Employment in the US, in contrast to Europe or Japan, has included the implicit “contract” that certain benefits will be provided in retirement. The theory (let’s defer on practice for a moment) has been that I, the employee, will forego some income today to assure a certain outcome tomorrow and, from the point of view of the company (and keep in mind that large US companies after WW II fought letting the union’s assume managing health care costs) it will pay somewhat less today to the employee to enable certain payments in the future. Also note that, with respect to pension accounting, it has been very lucrative–on paper–for companies to underfund pension plans and rely on current market gains to make pensions and financial statements of those companies appear more robust. That game is over, but was greatly abused by the GEs and GMs of our country and almost entirely overlooked by investment analysts who confused pension accounting outcomes for true company results.

   There a many theories on why Europe adopted a more societal approach to guaranteeing health and financial security in retirement. One reason is that the USSR was right next door and the pressure to socialize was intense (or lose elections to the national communist parties). The US was not immune to these pressures but, being the exception to all developed country practices for historical and geographical reasons, large companies became the guarantors–at least for their employees of outcomes elsewhere taken on by countries.

   The irony is, now, that Japan and European companies do have lower health and financial security costs for current and retired employees–although the Japan and the individual European countries do not. In the US today, we want the companies to enjoy lower costs (to be competitive is the mantra) without offering any significant country support. The truly disadvantaged are the workers who (whatever you may think of them, their pay or their motives) did enter into employment with one set of historical expectations and are finding themselves in a changed world without any way of seeing who or what will make them whole.

   401(k)s, similarly, are a gigantic shift of the risk of longevity and savings from companies to individuals with virtually NO additional compensation to make up for that implicit contract (I’ll take less in pay today to have a pension tomorrow). (And cash-balance plans are a particularly noxious screw job.) Company matches are nice; also nice and cheap for companies and nothing like the cost of a true defined benefit pension. ( It may be an unattractive future for many individually and not necessarily nice for the country in its entirety.)

   So yes, workers who are in unions that once set the standard for that implicit and explicit employment contract are now facing a very different and unplanned for future. There is a trickle down from unions to other workers (far more than any Regan imagined trickle down economics of wealth), so these are important changes.

   With respect to teachers, I do not know the arrangement in Lowell. However, individuals who reach Medicare age typically have to sign on–it is any MEDI-GAP coverage that can be at issue in funding retiree health care. This is the coverage in addition to Medicare that pays for those things Medicare does not, i.e., more and better health care (the type most of us who have health insurance prior to retirement have). In my mother’s case, a portion of her MEDI GAP comes out of her teacher’s pension and a portion from the school system, making it affordable.

   So, like all City issues, this one engages current City policy and tax practices, past policy and tax practices, historical and national policies/practices and a rapidly changing world. The UTL President has little reason to be reasonable, but the citizenry of the City does need to face facts and support the City or the teachers as is most appropriate on the issue at hand for the future of the City within this very changing world.

   What the citizens should not do is be bullied by misinformation and manipulation. Not attractive in union leader any more than in a President. Genuine issues in changing and challenging times need thoughtful reactions and a willingness to enable reasonable and fair solutions. Fear is never a solution and ignorance is never a productive path to good outcomes.

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