Public Pensions and Employer/Labor Relations
After reading the Dorfman article, “Public Pensions are Still Marching to Their Death (Links to an external site.)”, respond to the following questions:
- What are the political reasons public pensions are underfunded?
- If the pension problem is political, what steps would have to occur to remedy the problem? Do you think such a remedy will ever take place?
- If you do not see a remedy for the situation, what do you predict will happen to public pensions in the future
Solution Preview
There are millions of public employees who depend on the government for their salaries and the long-term pension benefits. There is, however, a problem of underfunding as politicians prefer to use that money to conduct activities that are expected to give more immediate effect. Political activities all aimed at ensuring that their interests benefit from the public fund and they hence end up using the pension money to make other investments that payoff (Dorfman, 2014). There is, therefore, less hope of the survival of public employee’s pension plans which calls for the need of the labor unions to implement a better idea.
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