mead cohen berger shevtsova garfinkle michta grygiel blankenhorn
Blue Civil War
Pension Mismanagement Hits Blacks Hardest

One of the under-appreciated tragedies of black history in the United States is that they have tended to win access to employment in certain sectors of the economy just as those sectors were starting to decline—or, as WRM put it several years ago, “blacks often only get to the gravy train when the locomotive is coming to the end of its run.”

Toward the end of the 19th century, when employers had access to mass low-skilled European immigrant labor, blacks were more-or-less shut out of Northern factory jobs, one of the underpinnings of middle class prosperity. Blacks started to make their way into manufacturing by midcentury, but by the 1970s, this sector of the economy had already peaked.

Ditto for government employment. A key objective—and success—of the civil rights movement was to grant blacks access to middle-class professional jobs in the civil service. In the 1970s and 1980s, blacks flocked to public sector jobs that provided middle-class wages and strong retirement security. But now state and local finances are starting to deteriorate, burdened by can-kicking legislators and mismanaged pension funds.

A sobering report from the left-wing think tank Demos highlights the degree to which blacks are dependent on public sector pensions, and how disproportionately they will bear the burden of reforms that may be needed to bring public finances back in line:

The importance of public pensions to black retirement security is perhaps mostly starkly illustrated by the huge difference between the poverty rates of black retirees with and without public pensions. Less than 3 percent of black retirees with public pensions lived below the poverty line in 2014, which is nearly 87 percent lower than the 21.8 percent of black retirees without public pensions who lived in poverty, as shown in Figure 4. Black retirees were nearly twice as reliant on public pensions to provide a secure retirement as the retiree population as a whole.

These depressing numbers stand to create frictions in state and local politics going forward. Many of the most serious and well-founded grievances of the disadvantaged black communities in Democratic-run urban areas have to do with the inadequacy of various government services—the criminal justice system, welfare bureaucracies, failing schools. Cash-strapped urban areas like Chicago will increasingly face a choice between paying off pensioned workers and re-investing in services that black citizens disproportionately depend on. This competition over resources could exacerbate the phenomenon we have called the blue civil war, or the conflict between various state and local democratic constituencies.

The author of the Demos report clearly favors keeping public pensions as they are, or even expanding them. This is quite simply economically unrealistic; incompetent state and local governments have allowed the total pension shortfall to rise to $3.4 trillion dollars, by some estimates. What we can focus on is trying to break the racial disparity in 20th century economic history, whereby blacks are shepherded into fading economic sectors. As WRM wrote, “As the blue model breaks down, the next train is leaving the station. This time, Blacks should be on board from the start and it’s in the interest of all Americans to make sure that this happens.”

Features Icon
Features
show comments
  • Andrew Allison

    When, oh when, will blacks come to realize how royally they’ve been screwed by the Democrats.

    • Boritz

      When will Democrats forget how to craft promises?

    • f1b0nacc1

      Never. Their leadership has been bought off, and they are kept blind, deaf, and dumb ignorant by the educational system that fails them. They are essentially cattle, being bred for their votes.

      • Andrew Allison

        Would that it were only Blacks who were being failed by the public education system.

        • f1b0nacc1

          Indeed so, but they are the most representative group…

          • Andrew Allison

            I think that the nationwide collapse in education is having far more deleterious effects.

          • f1b0nacc1

            Likely so, but the effects are not evenly distributed. That is to say, it is negative everywhere, but far worse in some places (poor black communities, for instance) than in others.
            Let me say something most politically incorrect though…Blacks in America vote monolithically for Democrats with far greater consistency than any other demographic group. We are not talking about inclinations, we are talking about North Korea-level devotion (90%+), and there is little reason to suspect that this will change anytime soon. If this is there choice, then let them live with the consequences of it.

          • Andrew Allison

            Unfortunately, the rest of us have to live with significant consequences too. FWIW, I believe that the Black presidential vote is consistently 84% Democrat, 10 points higher when a Black is the candidate (talk about racism!)

          • f1b0nacc1

            Precisely, but of course that is the racism that we cannot talk about…

    • Johnathan Swift Jr.

      Their leaders sold them out and cheap. At least the Clintons set up a massive slush fund and sold a large part of America’s uranium supply for massive contributions and big speaking fees. Public officials in places like Detroit, East St. Louis or Gary, Indiana sell out for a pension promise,a few paper bags full of twenties and a few bottles of Old Rotgut. The white grifters at the top of the food chain virtually always keep their pet minorities at the bottom of the hole or the back of the bus.

  • Pete

    Blacks on board of the new, next train from the start? Wouldn’t that take education, intelligence, and a willingness to come out of the government hammock?

    • Andrew Allison

      The utterly cynical response would be that how, since they’ve always been in one hammock or another, would they know any better.

      • Pete

        The don’t know … but they sure know how to vote for more government spending on social hammocks.

        • Johnathan Swift Jr.

          That is the circularity of the blue model, all by design. You create worthless schools that produce few even remotely employable or entrepreneurial young people, chase all the jobs and employers way with high crime, high taxes and a poorly educated work force, so that all is left is employment at a government job or a life of dependency. It’s the Big Blue Plantation and its proved to be amazingly resilient and effective. The only way to stop it is to stop the cash flow.

          • Pete

            Agree 100%

          • Andrew Allison

            Yes, but the subject is Blacks, and the Big Blue Plantation is an equal opportunity disaster.

    • Anthony
    • GS

      Murray and Herrnstein, “The Bell Curve”, 1994. Those with the wherewithal [between their ears] to handle it, would handle it then, and are handing it right now. The issue is squarely about those without the said wherewithal, regardless of pigmentation.

    • Johnathan Swift Jr.

      There are of course millions that have, the problem is the people who have been left behind – by design, the blue model – in areas with high crime, worthless schools, where there is virtually no opportunity to ever hold a private sector job unless its sweeping up at a bodega or minimart.

    • Dave6034

      If blacks are on board the next train from the start, that train will never leave the station. Liberals think blacks fail because they’re discriminated against; conservatives think blacks fail because they’re given handouts. Both are wrong; blacks fail because they are black. If you expect black people to be something they are not, you will always be disappointed.

  • Anthony

    Pension problems realistically are an American worker issue, not a function of colored models; i.e., “are ten million Americans about to be screwed out of their pensions? http://www.investopedia.com/stock-analysis/062916/are-10-million-americans-about-be-screwed-out-their-pensions-kr-kr.aspx

    Private (not just public) pension woes are emblematic of an affliction plaguing pension funds across the country – chronic underfunding and swelling ranks of retirees with smaller contributing base of employees. A pertinent question to ask going forward is what kind of world are we living in – globalized, accelerating, transforming.

    • Boritz

      ” not a function of colored models”

      I’ve never heard of such a concept.

      • Anthony

        If you think continued study is warranted, then….

    • Johnathan Swift Jr.

      But I thought all this was to be solved through the importation of millions of usually poor and often poorly educated migrants, many of whom come from the most violent nations on earth, while others come from lands where the value system is at odds with those of the United States and the semi-civilized West.

      • Anthony

        We all misapprehend sometimes.

      • Fred

        Dude, you’ve been anthonied. He’s infamous for making controversial statements or linking to half-assed sources and when called on it, claiming his interlocutor has some kind of “cognitive bias” (He uses the word “cognitive” because it sounds all sciency and stuff). I wouldn’t waste my time in any exchanges with him.

      • Anthony

        The commenter (Fred) is an avid troll (in my case) who can no longer harass and misrepresent me personally via Disqus (they’ve blocked him). But, he tries to seek virtual allies in his one man obsession despite counsel of both “First Things and The Catholic Thing” (7 years of trolling this site). Make sense out of it if you opt to waste precious time. And please take my initial response at face value.

  • Boritz

    “or, as WRM put it several years ago, “blacks often only get to the gravy train when the locomotive is coming to the end of its run.”

    I hate to draw comparisons between WRM and Dan Rather but sounds like something ol’ Dan would say.

  • JR

    I think we just need to raise the taxes on high-end earners. Right, FG? That just has to be the solution.

    • Johnathan Swift Jr.

      It always is, meanwhile all those patriotic left wing companies like Apple keep their copious cash offshore and thus out of the hands of their own beneficent government. They talk a good game but never get around to opening plants in Baltimore or Detroit, places where the blue model has vanquished virtually all employment save government jobs.

  • klgmac

    The Fed’s ZIRP is punishing savers and crushing pension funds, insurance companies and banks. If they were trying to collapse the system on purpose, what would they be doing differently?

© The American Interest LLC 2005-2016 About Us Masthead Submissions Advertise Customer Service