A fiscal crisis is looming for many US cities

Weird situation. Shrinking demographics in the 70’s led to layoffs. By their union contract layoffs were done strictly by seniority. Working on a contract that was stepped by seniority, this led to a very top heavy cohort of teachers 20 years later, who were being paid top of the scale. To redistribute the ages of service they offered a limited number of buyouts, which lowered their overall costs and normalize the pipeline.

This was also a legit and reasonably sustainable move as the NY State Teachers fund, is funded at 101% of liabilities.

No, it was a trade. You would accept low pay, very little opportunity for career advancement, and even if you worked hard to advance you were never going to more than double what you were making when you were hired. Also, government jobs are political jobs, are often eliminated on a whim, or you're forced to work unpaid for a while because of a budget vote.

In return, you got a pension. A pension that everyone understood the yield of, and everybody understood about what it was worth. It was entirely sustainable. The problem was and is that invested pension funds become underfunded because if instead of depositing the money, you spend it somewhere else and promise to put it back later, it's basically a low-interest loan. If the budget is tight enough (so credit is probably bad enough) that a state or municipality is considering raiding pensions, then this represents a huge amount of savings. The problem is that you're never going to pay it back.

Another problem is that managing those funds became lucrative for the managers, and for the products that they would steer these institutions into buying, often in exchange for kickbacks or in a complex web of self-dealing: Somehow, the person managing pensions funds for your state has them all invested in products sold by a company his son works for. His son didn't directly profit from the trade, but for some reason makes $500K a year, barely graduated high school, and nobody knows what he actually does there.

That's not the fault of pensions, that's the fault of thieves. What's unsustainable is a government that promises a pension in return for a shitty boring career as a clerk, and then after you retire from sitting in a DMV window for 25 years, takes the pension back. Nobody would accept a government job cheaply then, because the state has ruined its reputation in the same way as if they had defaulted on their bonds.

Nothing wrong if that's how we want to pay government employees: a days work for a days pay. But we got a discount because we didn't pay like that, and if we had, that money would just have been spent at the time, rather than being stolen throughout their retirement. Pretending like pensions were an unreasonable demand or an absurd promise is just laying groundwork to justify stealing from people who worked for a living.

edit: If government jobs were so good, why weren't they in demand? Does supply and demand only break down when we need it to?

Some go on to another municipal job and get a second pension so they get paid twice as much to do nothing in retirement. I know someone who worked for the USPS then on to the NYC DoE as a janitor in a school. His wife worked for the public school system as well, then went on to work in a catholic school after retirement. Three pensions in one household. They invest a lot into long term investments such as bonds, CD's and the like. I hear they have millions in the bank.

The people who worked those jobs are all sitting pretty right now. I know plenty of people who made out like bandits in various NYC agencies, especially in the DoE. My aunt left her heirs 2.2 million and a house worth a million from her pension money she heavily invested and was still able to travel the world in retirement. She was a secretary in a middle school. Amazing what you can do with tons of free time and money.

I don't think that's insane at all. Sounds pretty reasonable in exchange for taking at least one third of her time for 43 years of her life (and over those years where she was young and most healthy).

Corporations used to offer similar pensions all the time. They started offering them in 1875 and they were extremely successful doing it. 401(k) plans were a scheme to shift the risk and responsibility from the employer to the employees and that change made already wealthy and successful companies a lot richer, but at the expense of making many people work right up until the day they die, or they become too sick to work at which point they become impoverished. The move from pensions to 401(k) plans was bad for the economy, and for local economies in particular.

The only thing I think is crazy about it is the lifelong medical benefits which shouldn't be on the employer at all since everyone should have universal coverage.

(And, barring those promises not being fulfilled, plenty of people your age and younger have already been working in jobs that qualify them for pensions when they reach a certain age, or have a relative with such a pension with survivorship benefits, and will benefit from them as beneficiaries.)

You should be mad at the Capitalists not the workers.