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.” Last year, the Alliance of Retired Workers, an affiliate of the 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.
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 signficantly 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 stand alone 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.
We’ll have more to say on this topic in the coming months.