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Governments consider cuts to once-untouchable pensions

When an arbitrator ruled this month that Detroit could reduce the pensions being earned by its police sergeants and lieutenants, it put the struggling city at the forefront of a growing national debate over whether the pensions of current public workers can or should be reduced.

Conventional wisdom, and the laws and constitutions of many states, has long held that the pensions being earned by current government workers are untouchable. But as the fiscal crisis has lingered, officials in strapped states from California to Illinois have begun to take a second look, to see whether there might be loopholes allowing them to cut the pension benefits of current employees. Now the move in Detroit — made possible, lawyers said, because Michigan’s constitutional protections are weaker — could spur other places to try to follow suit.

The mayors of some hard-hit cities have said that the high costs of pensions have forced them to lay off workers: Oakland, Calif., laid off one-tenth of its police force last year after failing to win concessions on pension costs. Elsewhere there is pension envy: some private sector workers, who have learned the hard way that their companies can freeze or reduce pensions going forward, resent that the pensions of public sector workers enjoy stronger legal protections. But government workers, many of whom were recruited with the promise of good benefits and pensions, say that it would be unfair — and in many cases, very likely illegal — to change the rules in the middle of the game.

—Michael Cooper and Mary Williams Walsh,

The New York Times

Sales of new homes increase in March but remain slow

The market for new homes is so depressed that even a rebound last month did not keep it from being the slowest March on record.

Buyers signed contracts in March at a seasonally adjusted annual rate of 300,000, an 11 percent increase from the month before but down from 384,000 in March 2010, the Census Bureau said Monday.

In March 2005, when a lack of income or savings was no deterrent to getting a dream home with granite countertops and a walk-in pantry, families and investors flocked to real estate at an annual rate of 1,431,000 houses.

The millions of homes built during the boom have created a drag on the current market as owners surrender them to foreclosure. Builders cannot compete against relatively new construction offered by banks for large discounts.

The March sales numbers modestly exceeded analysts’ expectations but nevertheless did not impress.

“Still miserable,” said Joshua Shapiro, chief U.S. economist for MFR Inc.

—David Streitfeld, The New York Times

Walmart tests service for buying groceries online

Walmart has begun testing an online grocery delivery service, called Walmart to Go, in the San Jose, Calif., area.

The company has been expanding its online options, including a nationwide rollout of a service that lets customers order merchandise (not food) online and pick it up in the store the same day. While that program is aimed at getting shoppers into stores more frequently, this one creates a more convenient way to buy from Walmart.

Walmart declined to make executives available for interviews about the grocery test, which started Saturday. In early March, asked about the possibility of an online grocery ordering service, Steve Nave, senior vice president and general manager of Walmart.com, would not discuss specifics.

—Stephanie Clifford, The New York Times