Less May Be More

Barbara Bowen, the president of the Professional Staff Congress (PSC), the  faculty union of the City University of New York (CUNY), circulated an e-mail asking union members to protest creation of a fifth pension tier that would reduce pension accruals for future New York State workers.  The bill might reduce CUNY's and SUNY's competitiveness in attracting new faculty. Two flies in President Bowen's ointment are the state's parlous economic condition and current benefit structure. CUNY retirees still receive retiree health benefits, unlike two-thirds of the 2005 American workforce, according to the Kaiser Foundation, with a lower percentage today.   But between 2000 and 2007 1.5 million New Yorkers exited the State as tax increases made $1,000 per month burdens on homeowners common and jobs fled. Stock market bubbles have subsidized New York. Even if the stock market does return,  the St. Louis Fed reports  potentially inflationary increases in the money supply. The State's Constitution forbids reduction of accrued retirement benefits.  However, it does not require a crystal ball to consider that pension and health insurance bills may lead to bankruptcy.  This occurred in the mid-1970s.  The State has been resuscitated by a 30-year long Wall Street bubble, but the public will protest the bubbly monetary expansion should inflation accelerate. At that point, retiree health insurance and other future and non-funded benefits are likely to become a thing of the past.  If the state does not get costs under control, collapse is possible.  If so, CUNY faculty will say goodbye to retiree health insurance.