*Friday marked the 80th anniversary of the Social Security Act, passed in 1935. This blog is updated from an earlier TeacherPensions.org post.
Public sector unions praise Social Security. Except they don’t want it for all of their workers.
The National Education Association describes Social Security as the “cornerstone of economic security,” and Randi Weingarten, President of the American Federation of Teachers, describes it as “the healthiest part of our retirement system, keep[ing] tens of millions of seniors out of poverty [which] could help even more if it were expanded.” A couple of years ago, the Alliance of Retired Workers, affiliated with the American Federation of Teachers (AFT) and and American Federation of State, County and Municipal Employees (AFSCME), even made the Social Security Administration a blue and white frosted birthday cake for its 78th anniversary. This year marks Social Security’s 80th birthday (and Medicare’s 50th), and there will be events held across the country to celebrate. Also with cake.
But not all local government workers have Social Security. Over 6 million public sector workers are not covered by Social Security, including about 1.2 million public school teachers; in 15 states, public sector workers do not pay into or receive benefits from the system. If you were to ask, however, whether all state and local workers should have Social Security, most public sector unions would adamantly reply, no.
Why do unions hold such conflicting views on Social Security? The primary reason—pensions. Unions fear that extending Social Security coverage will significantly cut into existing pensions, which are more generous to full-career workers in states that do not offer Social Security coverage.
However, public pensions in states without Social Security coverage offer more generous benefits because they were designed as a standalone benefit. Coordinating Social Security with state pension plans would likely result in equal or better retirement benefits overall for more teachers, especially those who do not qualify or receive much of a pension. What’s more, unlike pensions, Social Security is portable and does not penalize workers for moving across state lines. While the politics around teachers and Social Security coverage are at odds, Social Security could be a core part of improving teacher retirement plans. In particular, Social Security could provide a floor of retirement security for early career teachers who often leave the system with nothing.
See here for more information on teachers and Social Security coverage.
– Leslie Kan
This first appeared on TeacherPensions.org