Race to the Bottom: The Christie Administration's War Against New Jersey's Public Employees

The following is an early draft of an article that was  post n an edited version for a number of publications, including the Huffington Post. I have kept the original title and added a few points for our readers, points to the left of the edited article, but points which in no way deviate from its major arguments.

Norman Markowitz

A day after he was inaugurated as Governor, New Jersey Chris Christie issued an Executive Order which reduced the maximum contribution to public employee pension funds, which in some instances to $300 Christie had campaigned against public workers, blaming them for the state deficit.

Trade unions knew through leaked memoranda even before Christie was inaugurated that his advisors were planning to divide the labor movement, which has historically been strong in New Jersey, by pitting public employees against other workers. Christie's Executive Order was thrown in the State Court of Appeals, and he began to seek to implement it through state legislation, seeking allies among Democrats who control the majority in both houses.

The demagoguery, which was directed most against teachers and their unions—Christie called the National Education Association (NEA) the "National Extortion Association" was both crude and extreme – a style reminiscent of Senator Joe McCarthy which Christie has cultivated.

The reality of course was that New Jersey public employees were neither living high through their pension benefits, nor were they the cause of the state's complex fiscal crisis.

First, public sector employees earn, as studies have long shown, less than their counterparts in terms of money incomes in private sector activities. When this is factored in, their health and pension benefits, what many Europeans called "social incomes" balance out with private sector workers. Also, the pension "crisis" in New Jersey as in other states has been the result primarily of the larger stock market crisis and the raiding of pension funds, i.e., states and communities "skipping" payments to these funds in order to balance budgets. Studies have shown that as of 2009, when Christie took office, all public pension funds in New Jersey were underfunded by 46 billion. Instead of having a system where pensions are funded by general revenues and are organized so as to permit retirees to have an adequate income, we have a system where pensions at the state and city level are often raided to pay general expenses and those retirees who have the greatest need get the least in income.

In New Jersey Christie went on the attack in the Spring of 2010, proclaiming his own version of a "class war" with the comment that there are "two classes of people in New Jersey: Public employees who receive rich benefits and those who pay for them.

With the help of strategically placed Democrats and a united Republican party behind him, Christie succeeded in passing "reform" legislation, that would reduce benefits by limiting the pension system to full time employees who work 35 hour weeks at the state level and 32 hour weeks at the local level, base pensions for new employees and teachers on their five highest salary years as against three highest years change the formula used to determine pensions again for new employees from the present 55 year age to 60 years. push new employees as much as possible into 401K plans.

Similar action was taken on health care as new state workers would have to work a minimum of 35 hours a week to receive health benefits and municipal and school employees 25 hours, along with premium payments.

Christie also signed into law a 2 percent "cap" on property tax increases for communities (although Democrats were able to have health care, pensions, debt repayment and existing contracts with public employees exempted from this cap. Although he routinely denounces "big government," Christie has called upon communities to "renegotiate" existing contracts with public employees, threatening them with cutoffs of state aid. In New Jersey, all serious observers regard him as the most virulently anti-labor, right governor in the state's modern history.

The Democrats have pursued a policy of retreat, their leaders hoping that Christie will over extend him and the disastrous consequences of these policies, that is, the breakdown of education and social services, retirement of teachers, police, and other municipal employees who see their pension and health care rights eroded, will lead voters to turn against Christie and his party. Although Christie's obesity(a medical doctor, I have been told, observing hm, estimates that he must eat 8,000 calories a day to maintain his present weight while he speaks of "belt-tightening" for the people) and bullying style limits greatly his possibilities as a national right-wing politician, he has been hailed in right-wing circles in Florida and other states as a "crusader" for "fiscal responsibility" aka making New Jersey into a cheap labor right to work state.

However, the trade union movement is united, both public and private sector unions, are united in their opposition to Christie's policies. And there are some outstanding exceptions among the Democrats—most prominently Assemblywoman Linda Greenstein, who is currently running for a state Senate seat with strong labor support and a lot of Republican money against her. For Christie and his advisors, her defeat would be an example to the Democrats that labor is weak and would lead them to retreat further.

These are just highlights of the Governor's nihilistic war against public sector institutions and public employees. Recently he has revved up the rhetoric, calling for a 30% premium co pay for health benefits for all public employees, including retirees covered by the New Jersey State system— a policy that would mean thousands in out of pocket expenses for employees and constitute a large de facto wage cut. It would have a particularly devastating effect on both retirees and low wage workers.

He has also come forward with a series of reform proposals oddly called a "tool kit" which would devastate the civil service system, eliminate gains that public employee unions have made over decades, and lead to major income and benefit reductions for public employees. It is as if he wishes to repeal the entire 20th century in regard to civil service, labor's rights, and public education.

All of the the incentive in the Christie policies lead governments at all levels  to replace full time employees with part-time employees who would not be eligible for pension or health care benefits.  They impact low income employees the most and  accelerate the race to the bottom  helping to  make New Jersey, which currently has the highest per capita income in the nation, a cheaper labor state.

Christie is an example of what the Republican party offers the people today  His definition of progress and responsible government is a return as far as it can be done to a public work force without unions, without pensions, without health care—a work force scapegoated for regressive property taxes, poor schools, and low incomes.  How such a work force can run schools, police forces, municipalities, state agencies, doesn't matter to him.  The more the public sector is decimated the more everything can be privatized.

Perhaps the governor, who supports "vouchers" for schools, will come up with a voucher system for police and fire, giving wealthy communities discounts while poor communities scrap by with reduced services.

His policies certainly  offer no solution to the pension question, or rather the crazy quilt system of pensions funded by regressive payroll taxes that we have in the U.S.  But a comprehensive solution to these questions has to be carried forward at the federal level, through a progressive transformation of social security---the opposite of what the present Commission is discussing, and through the establishment of a real system of National Public Health Care without private insurance companies playing any role.

Right now in New Jersey, Christie is using the pension and health care fiscal crisis an attempt to divide and conquer the labor movement. Fighting him in the courts, the coming elections, and in the communities at every level is what the New Jersey labor movement is doing today. Defeating Christie in New Jersey is essential not only to the defense of public workers and not only in New Jersey but as a lesson to all of the "little Christies" through that the policies Reagan Bush era which produced the present economic crisis will not be recycled as a phony solution to that crisis.

This article is based largely on important material compiled by Peter Guzzo, who represents various trade union and other groups in the New Jersey legislature.