High Stakes Gambling, Anyone?

I would be okay with state retirees making over a certain amount being forced to give up their COLA’s, at least until the economy picks up, but when you look at these numbers for people at the lower end, you can see why state workers are scared. The state is about the roll the dice and, if the numbers at the state house come up right, retired workers will begin to see their incomes erode at an alarming rate over the next two decades. From Ted Nesi, God Bless his young heart for doing some actual reporting.

The average Rhode Island state worker’s retirement income would drop from $52,000 to roughly $39,000 over the course of a 19-year freeze on cost-of-living adjustments, estimates by the state’s actuary show.

While the dollar amount of a retiree’s pension check would not change over the course of the 19 years, the continuing rise in the cost of living would slowly erode how much the benefit can buy. That reduces its value in practice, though not in nominal dollars.

The Occupy movement is giving us a hint about what needs to happen with this situation: the wealthy need to do their part. They are not sharing adequately in the “shared sacrifice” and until they do, nothing should happen with regard to reducing benefits or COLAs.

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8 responses

  1. The federal retirement(“old system”)which I’m on keys the COLA to the Social Security COLA,so this year we get 3.6%,but since we got zero the last two years,it comes out to a whopping 1.2% per year over three years.
    Now,I didn’t pay Social Security while employed by the INS,but I paid into it in the military service,private sector jobs and as a NY State employee-I was eligible for something over $900/mo.
    Along comes the WEP(Windfall Elimination Provision)which cut my Social Security to just over $300/mo.
    This also affects municipal employees in many places.I think it sucks,beause none of us want to count what we earned when we didn’t pay in.Just what we actually DID pay in.

    1. Hey ob. I think it was you who said I was just an old curmudgeon.
      No offense taken.
      Just wanted to add another odd combination; I’m also a progressive redneck.

      1. Curmudgeon is said with no rancor-I kind of fit the bill myself.
        LOL-I’m a NY Jew and spent most of my working life in “redneck” jobs,and truth to tell,a lot of the guys I was closest with would be pictured next to “redneck” in the dictionary.
        I don’t have any progressive Jewish friends.
        My family is a real Heinz 57 job.
        I am social conservative(more or less)and economically moderate.
        My main beef is with social engineering-I don’t need anyone sticking their nose into my life-I’ve survived to this point and I’m 65(almost).
        Hey-who’s the picture on your posts?

  2. At my state job, nobody but management has had a raise in 10 years.
    Older employees get a yearly longevity check, but not newer people.
    Now they are starting to roll back pension amounts.
    I’m 51, working 2 jobs, and have never been this poor in my life.

    1. I have people in my family well below the poverty line and I have to help out and it pisses me off beyond reason when a “progressive”blueblood A-hole of a “governor”worth 47 million dollars finds it necessary to cheat on the taxes on the 11 vehicles he owns.Not to mention cheaating on the tax for his Providence property,one of 21 he owns.
      I pay every cent of tax I owe and do it as soon as the bill comes.Most of us “small”people do that.

  3. Amazing.

    Who is supposed to pay for the economic largess public workers demand receiving? The cost of living for everyone is increasing but there is no money to spend unless the cost of doing business is reduced. There is a certain logic to this. Perhaps it should be the unemployed or underemployed or make up the difference–nonsense of course? Perhaps it should be small or big business so they can lay off more folks–more nonsense. Somehwhere down the money road the money stream ends and living within means is the only option. That U.S. takes in something like $2.2 trillion/year but spending $3 trillion does shave consequences. My state is required to balance the budget each year and with lots lof kicking and screaming, it does get done. Now a tillion dollars is an awful lot of dollars, 1000 billion in fact. And a billion is a lot of dollars, 1000 million in fact. We are all paying for the disasters of the Bush administration compounded by the disaster of the Obama administration, both strong competitors for being the worst administration ever, or certainly a close second to the Carter administration.

  4. Why a 19 year freeze instead of a 3 year freeze? If the economy improves and especially if inflation goes up this will be even more of a bite.

  5. How about keying it to the Social Security COLA?
    That is based on the rate of inflation.
    The hybrid system was adopted by the Federal government in 1984.
    Nobody currently employed was compelled to switch over.
    Of course Federal employees always paid for their health insurance-some RI municipalities are just getting there.
    The good answer is way over my head-just throwing out some thoughts here.

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