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.