HARRISBURG, Pa. - Privatized pensions - such as those pressed by state Senate leaders - actually have higher fees and lower returns, analysts say.

The Republican lawmakers say they won't approve a state budget until Gov. Tom Wolf accepts their plan for dealing with Pennsylvania's $50 billion pension debt. Their proposal includes benefits cuts for current retirees and privatized 401(k)-style retirement plans for future retirees. But economist Stephen Herzenberg, executive director of the Keystone Research Center, said those plans cost more in fees and return less in benefits. He said they would leave former state workers and taxpayers on the hook.

"So when it costs more and you get lower returns, it's not rocket science," he said. "It costs roughly twice as much in contributions to get the same going into the retirement benefits."

Republicans in the Legislature say the state can't afford the current system. Teacher groups and others say the real problem isn't the pensions. For years, they say, the Legislature failed to kick in its full share, shifting the money to corporate tax cuts.

According to studies cited by the research center, traditional pensions historically have better returns than 401(k)-style plans. Herzenberg said traditional pensions can negotiate a better deal than can individuals investing their own money. He said privatizing a traditional plan puts the teachers and state employees at the mercy of Wall Street.

"It's essentially a transfer from Main Street retirees to Wall Street financial firms," he said.

Herzenberg said three states have tried privatizing pensions and it hasn't gone well in any of them.

In contrast, Wolf favors a plan to try to negotiate better fees for the current system, and selling bonds to reduce its debt some. The governor says the bonds could be funded by modernizing the state liquor stores.

Herzenberg said the governor's plan is a good one that would give previous reforms time to work.

"A modest bond that buys down the debt a little bit, especially when interest rates are really low, possibly with saving money in investment fees, makes total sense," he said.

About a half million former public school teachers and other former state employees get on average about $25,000 a year in benefits from the state's two pension systems. The typical public employee pays about 7.5 percent of his or her wages into the system.

More information is online at keystoneresearch.org.


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A case before the U.S. Supreme Court could have implications for the country's growing labor movement. Justices will hear oral arguments in Starbucks versus McKinney today to determine if the bar should be raised for the National Labor Relations Board when it seeks to impose court-ordered injunctions on companies.

David Groves, communications director with the Washington State Labor Council, said the Supreme Court could further undermine the power of the NLRB, the independent federal agency that protects employees' rights.

"We already have weak labor laws in this country that have such minor penalties for breaking union organizing laws that companies routinely do it, and this is another opportunity for them to weaken labor laws even further," he argued.

The case involves Starbucks' firing of seven employees in Memphis during their union campaign in 2021. The coffee company says it rehired the workers and denies wrongdoing. If the justices rule in favor of Starbucks, it could make it harder for the NLRB to seek court orders.

Groves said the law states that workers have a right to organize unions in their workplace without coercion or retaliation from their employers.

"That's all fine and good but if the penalty's not significant enough, then they'll just go ahead and break that law and consider it the cost of doing business if they have to pay a fine two years down the road," he explained.

Groves said his and other labor organizations support the passage of the Protecting the Right to Organize or PRO Act in Congress, which would strengthen labor laws, including providing greater authority to the NLRB.


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The U.S. House has approved a measure to expand the Child Tax Credit. It would help 16 million children from low-income families in Indiana and nationwide. Despite bipartisan support, the bill is stalled in the Senate. Advocates praise the credit's pivotal role in combating child poverty, pointing to its effectiveness in the past, and especially during the pandemic, when it was broadly expanded.

Candace Baker, an Indianapolis mother of 4, said the previous tax-credit expansion worked for her family, and she wants it reinstated.

"Having a child, and I had to get on some government-assistance programs. My grandmother never did because she just didn't want that stigma over her, but I utilized those services when I had a child. I didn't want to either, but I'm like, I need this support," she explained.

Congress approved expanding the Child Tax Credit in 2021. However, the expansion has expired, leaving families without vital assistance. As the Senate deliberates, pressure mounts on lawmakers to prioritize the needs of struggling families and secure passage. Opponents believe taxpayers who don't work should not be eligible. Some Republicans also contend the provision may incentivize parents to leave the workforce.

Families reeling from the pandemic received between $300 and $360 per month per child from the expanded tax credit. It lifted 3.7 million children from poverty. Baker currently works for a food bank in Indianapolis where she says she is able to help neighbors in need and give back to the community.

"Being able to be a voice for those who have no voice - that is my motto. Even though where you start, you don't have to stay there. So, that is my biggest motto that I stand on: You may start here, you may be on government assistance, you may be in poverty, but that does not have to be your end game," she said.

Families who benefited from the increased aid were more than twice as likely to pay their overdue rent during the initial stages of the pandemic. The Child Tax Credit did not pass in time for this year's tax deadline, and its prospects for the future are uncertain.


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Washington joins a handful of states to do away with mandatory meetings for employees on political or religious matters.

Sometimes known as captive audience meetings, the gatherings were seen as a way for employers to give their opinions on subjects like unionization, and held potential consequences for employees who didn't attend. Lawmakers passed a bill this session allowing workers to skip the meetings without repercussions.

Sen. Karen Keiser, D-Des Moines, a sponsor of the bill, said we live in a divided society where emotions run high on political topics.

"This bill simply protects employees to have a real choice on whether or not to attend a meeting called by their boss to be told about some political or religious issue," Keiser explained.

Keiser pointed out the legislation is nonpartisan. For instance, employers could not force employees to attend anti-union meetings, but also could not force them to attend a meeting about the importance of reproductive rights. The bill takes effect June 6.

Keiser noted the bill likely got across the finish line this session because of the uptick in union organizing and support for labor. She added there are widely known stories of Starbucks managers, for example, requiring employees to attend anti-union meetings while the employees organized the workplace.

"Employees have been forced to attend meetings to listen to the boss or the employer basically tell them why they shouldn't join a union," Keiser observed.

Washington is the sixth state to pass a law prohibiting attendance at captive audience meetings. Connecticut, Maine, Minnesota and New York have passed similar laws in recent years. Oregon passed a law allowing workers to skip such meetings without repercussions in 2010.


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