Costs of public workers

[ITR champion]

The topic of government pay and public sector unions keeps coming up, but the threads usually devolve into shouting matches. I’m hoping that we can have a civil thread that looks at the actual facts about these issues.

Since the economic crisis hit in 2012, many states and cities in the USA have faced budget disasters. California is the best-known case. In order to make up a budget shortfall, the state government was forced to furlough workers, shut down most government offices for a few days each month, and make drastic cuts to K-12 education, higher education, state parks, state highways, assistance to the poor, and many other areas. The same story has been playing out on a smaller scale all over the country. Naturally most people would prefer to not have such things happen in their state or city, or to not happen again if they’ve already happened once. It thus seems reasonable to ask why these things happened and what needs to be done to prevent them from happening again.

The first thing to note is that while the economic crisis was the immediate cause of government shortfalls because it cut revenue, that can’t be the end of the story. Part of a government’s job is to be aware of things that are happening in the world and to be prepared for obvious dangers such as a recession. Indeed, some state and city governments did that and made it through the past few years without having to take drastic measures. And we’ve been through recessions of various sizes before without having the consequences for state and local governments that we’re seeing this time. So the question that has to be asked is, why did some state and local governments put themselves in a situation where the recession forced disastrous cutbacks?

The second thing to note is that every government budget has two sides, revenue and spending. When there’s a shortfall, one can blame either low revenue, high spending, or both. Some have blamed California’s crisis on a 1973 resolution that makes it very difficult to raise taxes. However, California’s tax burden is one of the highest in the nation. If we look at the list (http://money.cnn.com/2009/04/10/pf/taxes/state_tax_rates/index.htm), we see that 8 of the 10 states with the highest tax burdens as of 2009 were among those who had layoffs or furloughs in that year (New Jersey, New York, Rhode Island, California, Maryland, Hawaii, Ohio, and Wisconsin). There’s a similar story with cities. Detroit, currently the scene of a high-profile financial disaster, has a sky-high tax rate. (http://www.freep.com/article/20110102/COL33/101020437/1336/OPINION/Detroit-must-jettison-its-losing-tax-scheme) I offer it as a postulate that a city or state with a tax rate well above average can’t get out of its budget hole by raising taxes even more.

So solving the budget crisis that some places are in, and averting repetition of such things, must involve looking at spending. Total state and local government spending has gone up 60% (http://www.cato-at-liberty.org/total-state-spending-has-not-been-cut/) in since 2000, and realistically almost all the increase was in just 8 years, from 2000 to 2008. It's not as if state and local governments were doing a great deal more in 2008 than they did in 2000. If anyone has offered a solution to the budget mess in California and other states that doesn't involve chopping down the soaring salaries (http://sacramento.cbslocal.com/2012/01/31/on-the-money-calif-public-employees-highest-paid-of-any-state/) and pension benefits (http://reason.com/archives/2010/01/12/class-war/singlepage) of public workers, I'm not aware of it.

Many try to phrase this as a Republican vs. Democrat issue, but it's actually an issue of those who want a financial stable government vs. those who don't seem to care. Some Democrats (http://www.chicagotribune.com/news/local/ct-met-pat-quinn-illinois-pensions-0421-20120421,0,2328090.story) are willing to acknowledge the problems and try to fix it.

[Grey]

The economic crisis of 2012? What the hell is that?

[Snowboarder Bo]

The economic crisis of 2012? What the hell is that?

So far, it appears to be something that didn't happen but is being widely invoked as another reason to trash those people who choose to exercise their contitutional right to freely associate in ways that others don't approve of; i.e. by belonging to unions.

[Steve MB]

Since the economic crisis hit in 2012

I'm sure I speak for many when I say that your secret of cross-timeline posting is far more important and interesting than whatever the original topic of this thread was.

[ITR champion]

It was a typo. I meant to write '2008' rather than '2012'. I apologize for any confusion.

[Steve MB]

Ah, so the mess created by Wall Street corruption in 2008 should be resolved by attacking Main Street freedom of association -- sort of like when one of my cats got pissed off about having her claws clipped and took out her frustrations on one of the other cats. Gotcha.

[Snowboarder Bo]

Clearly the 2008 Wall Street crisis would not have happened if those financial wizards hadn't had all those pension funds to play with, therefore the fault lies with the unions. Or something like that.

:dubious:

:rolleyes:

:confused:

[Cumberdale]

Yeah, those county librarians and their ilk, sitting there with huge salaries, generous retirement packages and lets not forget those excessive bonuses they get every year. When the revolution comes they will be the first ones against the wall!

[ITR champion]

Ah, so the mess created by Wall Street corruption in 2008 should be resolved by attacking Main Street freedom of association -- sort of like when one of my cats got pissed off about having her claws clipped and took out her frustrations on one of the other cats. Gotcha.
My OP is not about Wall Street corruption nor about Main Street Freedom of Association. As you can see if you read it, it's about state and local government budgets. Do you have anything to say about that topic?

From the looks of it, it seems that you prefer changing the subject.

[Dr. Drake]

California's problems are in part because their "high tax rate" is income tax and sales tax, which vary a lot with the economy, while the more stable and reliable property tax rates were gutted in the 1970s. Low property taxes are also partly responsible for the housing bubble, which in turn is partly responsible for the 2008 crash. Just one strand of many, but there you go.

When I was there and furloughed (higher education), we were told that we were forbidden from working on our furlough days, but our workload was not, in fact, reduced, so it was really just a scheme to force us into being more productive for less pay. This, of course, varies a lot by industry.

Another part of the problem is that infrastructure maintenance costs are increasing, and were never really a part of the budget. They tend to delay maintenance and only repair water mains, for instance, after breaks. This makes each repair more expensive in a few different ways. It's pretty much impossible to stick to a budget when you have no savings and use the equivalent of a credit card for every emergency.

Add to that, the pay scales are unfair, and out of whack with the private sector. Some public-sector employees receive ridiculous pay, whether too high or too low, but those who are doing well have a strong interest in not having the light shone on them. At the same time, it's an easy rhetorical target: while we're focusing on public sector workers, we can shout and get attention and votes while not dealing with the real problems.

It's also very, very difficult to remove administrative bloat, which accounts for a lot of government spending. This is particularly true because a lot of these adminitrators are actually doing good work; it's just that the system could function without them. But how to you fire and eliminate the position of an employee who is doing his or her job well? Whose job is it to look at the bigger picture and be the axe (wo)man in the name of the greater good?

[kunilou]

The very same article the OP cites about the "soaring" salaries of California emplyees also points out that California has the lowest ratio of public employees to total population (http://sacramento.cbslocal.com/2012/01/31/on-the-money-calif-public-employees-highest-paid-of-any-state/)of any state. By that measurement, it looks like California is doing a good job of making things more efficient.

Also, are there any cites for the staff:supervisor ratio? Since management tends to earn a higher salary that can skew averages upward. I notice that the California governor's salary was cut to $173,987 (http://www.therichest.org/nation/highest-paid-america-governors/), but state legislators still get $95,291 plus $173 per diem (http://sunshinereview.org/index.php/California_state_government_salary)when the legislature is in session.

So what are the alternatives?

[ITR champion]

Another part of the problem is that infrastructure maintenance costs are increasing, and were never really a part of the budget. They tend to delay maintenance and only repair water mains, for instance, after breaks. This makes each repair more expensive in a few different ways. It's pretty much impossible to stick to a budget when you have no savings and use the equivalent of a credit card for every emergency.

Add to that, the pay scales are unfair, and out of whack with the private sector. Some public-sector employees receive ridiculous pay, whether too high or too low, but those who are doing well have a strong interest in not having the light shone on them. At the same time, it's an easy rhetorical target: while we're focusing on public sector workers, we can shout and get attention and votes while not dealing with the real problems.

It's also very, very difficult to remove administrative bloat, which accounts for a lot of government spending. This is particularly true because a lot of these adminitrators are actually doing good work; it's just that the system could function without them. But how to you fire and eliminate the position of an employee who is doing his or her job well? Whose job is it to look at the bigger picture and be the axe (wo)man in the name of the greater good?
I'm not suprised b any of this. In any government as large as the state level, there will be substantial examples of bloat and inefficiencies. It would be ever-so-nice if we could have a government that mercilessly trimmed its budget, cut out unnecessary positions, and carefully planned to minimize long-term infrastructure costs. Many centuries of history suggest that this simply isn't possible.

While small-scale changes to the budget happen all the time, it's a few big decisions that determine a state's financial destiny. When California decided to give public employees extremely generous pensions, that was a big decision that set the state on the path to financial calamity. While certain small fixes to small budget items are certainly welcome, they won't be sufficient to cover the promised pension costs. What's needed is a big decision to take action before the pension tsunami hits.

[ITR champion]

The very same article the OP cites about the "soaring" salaries of California emplyees also points out that California has the lowest ratio of public employees to total population (http://sacramento.cbslocal.com/2012/01/31/on-the-money-calif-public-employees-highest-paid-of-any-state/)of any state. By that measurement, it looks like California is doing a good job of making things more efficient.
Laternately, it could be that California is just doing a bad job. To cite just one popular measure, California's student-teacher ratio is among the nation's highest (https://docs.google.com/viewer?a=v&q=cache:MQCsJOK9SwEJ:www.educationminnesota.org/news/newsroom/newsreleases/2011/~/media/Files/Sections/News/News%2520Releases/ClassSizeSheet.ashx+average+class+size+by+state&hl=en&gl=us&pid=bl&srcid=ADGEESg6IryetYvaXGIOpAPCZ_6g0yfb_dbN0_wltTR6SAushfyG0YInbRUcf_tNsIDv6rqY7zFDfKpxdf5agg66CrpeG9 9WFchyrG2IBEMMQsIHsklb95mlvCjmskvquxesu3LHWH5u&sig=AHIEtbRTS1zgyLIWnkYEG4g-P4noGFQTiA). Since the state government and its employee unions reached a mutual agreement to give the public employees high salaries, higher pensions, and lavish benefits, the necessary result is that they can't afford nearly as many employees as some other states.

So what are the alternatives?
I see two main alternatives. One is to do what Governor Quinn is trying to do in Illinois, which is to take on the unions and fight for reduced benefits, thereby getting the state on a sound financial footing. The other alternative is the one that California seems certain to take, keeping spending and deal with financial shortfalls by furloughs and other desperate measures that no one wants to see.

[kunilou]

OK you've posted about wasteful government spending in California. I pointed out that your own cites show that California has the lowest ratio of public employees to population. Your reply is that shows that the goveernment is doing a bad job.

I'm outta here.

[iamthewalrus(:3=]

Sorry, accidentally hit post with a partially-formed thought. I'll be back.

[ITR champion]

I'm outta here.
If you're outta here, I guess I'm not going to get any clarification of your posts, but I'm a bit puzzled. The financial disaster that hit California from 2008 up to the present seems fairly factual. I know of no one who thinks it was a good thing or would want to see it repeated. So do you have a proposal for balancing California's books? I don't see how noting California's low ratio of public employees to population is going to solve the problem.

[AlienVessels]

If you're outta here, I guess I'm not going to get any clarification of your posts, but I'm a bit puzzled. The financial disaster that hit California from 2008 up to the present seems fairly factual. I know of no one who thinks it was a good thing or would want to see it repeated. So do you have a proposal for balancing California's books? I don't see how noting California's low ratio of public employees to population is going to solve the problem.

The reason for the disaster was explained to you. When the basis for revenue is founded upon income tax, you will come up short exactly when you need the money the most.

You are assuming an immediate balancing of the books is necessary. I don't think it is.

However, if you're looking for a source that would help, I note that for every dollar California sends to the Fed, 78 cents comes back. I haven't done the math, but eyeballing the difference, I think our budget woes would be corrected quite nicely.

Another area to look at is the huge California prison system and the high cost per inmate. A few billion potentially to be saved there if you decriminalized drugs and fixed the prison bloat.

[kunilou]

If you're outta here, I guess I'm not going to get any clarification of your posts, but I'm a bit puzzled. The financial disaster that hit California from 2008 up to the present seems fairly factual. I know of no one who thinks it was a good thing or would want to see it repeated. So do you have a proposal for balancing California's books? I don't see how noting California's low ratio of public employees to population is going to solve the problem.

You asked so nicely that I believe you sincerely want to debate this. So I'll come back.

It's my belief that the California financial crisis began with Proposition 13 (http://www.boe.ca.gov/proptaxes/pdf/pub29.pdf) in 1978. That act not only rolled back property taxes but eliminated a state budget surplus.

Combine that constriction on the city and county governments' inability to raise revenue (thus shifting more of the burden of providing services to the state) with the charming California initiative system, where anyone can propose anything, including simultaneous measures dedicated to increasing expenses and cutting revenues.

A quick look at the propositions currently pending, for example, include this one (http://ag.ca.gov/cms_attachments/initiatives/pdfs/i1059_12-0011_a1s_(college_tuition_and_fees).pdf?) mandating that the state's colleges roll back tutition and fees to 2010 levels, reduce spending to pre-2010 levels and NOT cut student aid amounts. Good luck with that.

And just for good measure, we can always point to drastic mismangement, like the people of Bell (http://www.reuters.com/article/2010/09/22/us-california-payscandal-arrests-idUSTRE68K40N20100922) had to go through, or the Orange County bankruptcy (http://en.wikipedia.org/wiki/Orange_County,_California).

So if you're sincerely asking how I'd balance California's books, I'd start with more rigorous auditing, keep an eye on your elected officials, reform your intiative process so that ballot measures have to include a cost analysis understandable by voters, and fix your unbalaced tax structure.

Maybe after you fix all the instutitional problems in your economic system, you can look at employee salaries and benefits. Otherwise, your position smacks of blaming the employees for the mismanagement of the bosses.

[Dr. Drake]

It's my belief that the California financial crisis began with Proposition 13 (http://www.boe.ca.gov/proptaxes/pdf/pub29.pdf) in 1978. That act not only rolled back property taxes but eliminated a state budget surplus.The other thing about Prop 13 is that it took a couple of decades for the effects to be felt. The state infrastructure coasted for a couple of years. It did very well in years when the economy was good, and in bad years the state coped with a variety of short-term strategies. It's only now, nearly 35 years after Prop 13, that the state is realizing what a hole it has dug itself.

[ITR champion]

The reason for the disaster was explained to you. When the basis for revenue is founded upon income tax, you will come up short exactly when you need the money the most.
If you had said five years ago that real estate taxes were very stable and reliable, that would have made sense. But are they right now? Housing prices in California have plunged by about half since the crisis started. Since property taxes depend on assessed value, that presumably means that property taxes have plunged as well. Have income and sales taxes fallen more than property taxes? (I don't know the answer, but I'd be interested in seeing some numbers on the issue.)

You are assuming an immediate balancing of the books is necessary. I don't think it is.
All states are required to have a balanced budget each year. Of course they can finance things with bonds to be paid back later, but given how interest on past bonds is a large part of California's current problems (http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/03/05/EDEI1H57IL.DTL), that's not a wise long-term solution.

Another area to look at is the huge California prison system and the high cost per inmate. A few billion potentially to be saved there if you decriminalized drugs and fixed the prison bloat.
I entirely agree that scaling back the War on Drugs is an excellent idea for saving money and other reasons as well. However, in the budget "Corrections and Rehabilitation" is $7.8 billion, small compared to education and "Health and Human Services". Moreover, much of that $7.8 billion goes to those unionized prison guards who are among the biggest earners, and are part of the problem that needs to be dealt with.

[ITR champion]

So if you're sincerely asking how I'd balance California's books, I'd start with more rigorous auditing, keep an eye on your elected officials, reform your intiative process so that ballot measures have to include a cost analysis understandable by voters, and fix your unbalaced tax structure.

Maybe after you fix all the instutitional problems in your economic system, you can look at employee salaries and benefits. Otherwise, your position smacks of blaming the employees for the mismanagement of the bosses.
Firstly, I'm not Californian. I just focus on that state because it's the biggest, baddest example, but similar problems are occurring all over the country.

You're correct that the ballot initiatives and various instances of malfeasance have contributed to California's disaster. However, as I see it, the costs of paying for public workers are the big problem that has to be dealt with. It's worth remembering that the crisis of the last few years is just the preview. The main event is the pension shortfall, which this report (http://reason.org/studies/show/fix-california-pension-crisis.) measures at $500 billion. If California spent every penny on that for six years, it would barely cover the necessary amount. The cause of that shortfall is clear. Large numbers of employees and their families getting benefits, benefits that are ridiculously generous (retirement at age 50), tiny individual contributions to the system, and inadequate funding for the system from the government. If these issues are not addressed, California will repeat its disaster in the years to come.

[kunilou]

My apologies, I thought you were speaking of California in the first person.

Of course, there are calls for pension reform, and in fact, CalPers has done a thorough actuarial analysis of the Republican proposal. (http://www.calpersresponds.com/issues.php/CalPERS-releases-republican-pension-reform-proposal-analysis)

Now the entire report is 47 pages, and even that links to another 33-page report. But I slogged through both reports and was able to glean the following:

1) The "tiny individual contributions to the system" come from some local government employees, whose pensions are administered by the state, but paid by local government. Actual California state employees pay a share toward their pensions more in line with other states.

2) While for most categories of employees, moving from a defined benefit to a defined contribution system will save the state money, for a few categories it will actually cost more. There is no single solution.

3) "The current language of SCA 13 does not include enough details for anyone to properly analyze its impact." Which means the actuaries had to make their own assumptions. They assumed a 4.5% rate of return (which seems generous, compared to what my investments are getting, but anyway...) They also assume an employer contribution of 2%-4% salary (compare that to your own employer's contribution, if any.) And with all that:

4) The total cost savings works out between 1.0% and 3.1% depending on the category of employee.

Granted, 3 percent is better than nothing. But if that's all that can be wrung out of the system, it suggests to me that "chopping down" pension benefits is just the latest boogyman for people who want a quick fix to a long-term problem.

[ITR champion]

I'm not arguing for the Republican plan. Despite insinuations from some pundits that the Republicans intend to have Grannie picking through garbage cans to find her next meal, their budget cuts at federal and state levels are always pretty timid. I'm simply trying to point out that state and local governments are steering us into a financial disaster.

Let me present some numbers briefly. Many public employees get (http://www.nationalreview.com/articles/297094/public-employee-unions-gone-wild-patrick-brennan) "20-and-out" pensions plans. Any employee who works for twenty or so years gets a pension for the rest of his life that provides the entire salary that he had at retirement (or close enough). Basic math tells us that an employee could work to age 45, then retire and pull down benefits for the next 40 or 50 years. The cost of his pension could easily be more than double the entire amount of salary that he earned while he was working. And that doesn't even count health care expenses, which are also covered for life. And it doesn't count health care expenses for his family. So all in all, the expenses for hiring this guy can amount to many times more than the salary that he earned in his lifetime. Now multiply that by the ridiculously high salaries that many public employees make and multipply the result by 380,000 public employees in California alone. The result tells us that California's state and local governments are paying too much money, and as the number of retirees piles up they will have to pay out more and more.

By comparison, must of us humble folks who aren't in government have to retire at age 67 to get full benefits from Medicare and Social Security. For some that will mean working more than twice and as long as the 20-and-out crowd, and the benefits we get as a result will be far less generous. Few of us can expect to earn as much money per year in retirement as we did when employed. Our health care plans are much less generous as well. What's seems to be missing is an explanation for why public employees should work half as much as we do and get vastly better benefits? The other thing that's missing is any will to change the system before it causes disaster. You, obviously, are willing to think seriously and do some research about the financial issues facing governments. However, as anyone can see by some of the other responses in this thread, other folk prefer a 'shoot the messenger' approach. They lash out at anyone who even talks about the issue. Hence the fear that we'll see more and more states and cities governing by the California-Greece method: spend, spend, spend until the money just isn't there.

[Ludovic]

I offer it as a postulate that a city or state with a tax rate well above average can’t get out of its budget hole by raising taxes even more.They could get out of their budget hole by seceding from the union. Seriously, check it out. They could even keep all their "profligate" tax and spend policies and still come out ahead of the game if you don't count all the money they're sending to Uncle Sam that the US government then sends to the red states.

So while high taxes may or may not contribute itself to economic woes, the reason for high taxes is not a liberal legislature somehow enamored of teh tax, but at least partially necessarily in order to provide the same services as states that are net recipients of US cash rather than net donors.

[What the .... ?!?!]

So far, it appears to be something that didn't happen but is being widely invoked as another reason to trash those people who choose to exercise their contitutional right to freely associate in ways that others don't approve of; i.e. by belonging to unions.

Are you good with right-to-work laws so that you aren't forced to "freely associate" in order to work a certain job?

How about those that require union members to freely pay out their dues if they want to rather than have them confiscated from their pay checks?

[Saint Cad]

If you had said five years ago that real estate taxes were very stable and reliable, that would have made sense. But are they right now? Housing prices in California have plunged by about half since the crisis started. Since property taxes depend on assessed value, that presumably means that property taxes have plunged as well. Have income and sales taxes fallen more than property taxes? (I don't know the answer, but I'd be interested in seeing some numbers on the issue.)


First of all, a litttle background on Prop 13.
In the late 70's there was a concern that people that bought their property decades before in large urban areas (LA, SF, SD, etc.) could not afford the taxes on their homes as their income became fixed and property values skyrocketed. Thus Prop 13 made property taxes dependent on purchase price and not assessed value. The housing market collapsed killed the Californian economy because houses were now selling for less than they were before, in some cases significantly less.

But wait, what happened to all of the money while housing was on the bubble? California budgeting is at best a black box and at worst a clusterf**K. Do you know what haapens when California gets money for education from the lottery or the Feds an equal amount is taken out of the education budget and put into the general fund to spend like a drunken Keynsian.

And let's not forget that with the size of it's economy and amount of foreign trade, California is in some respect just like it's own country. I think an oft-quoted stat is that if it were independent, California would have the 9th largest economy in the world. It's flag still represents the time it was an independent nation (Texans can relate to this) so to look at what happens in California and relate that to the other 49 simply does not work.

[Left Hand of Dorkness]

Are you good with right-to-work laws so that you aren't forced to "freely associate" in order to work a certain job?
Yeah, man. Like, the union ain't the boss of me! I'm the boss of me. Similarly, I'm good with "right to work" laws that let me come to work when I feel like it, dress how I feel like, and treat the public how I feel like.

If unions get no say in working conditions, why on earth should management?
How about those that require union members to freely pay out their dues if they want to rather than have them confiscated from their pay checks?
This is more nonsense. Nobody has ever had union dues confiscated against their will: as with right-to-work, you always have the right to find a job at a different place.

But if you choose to work at a place where the majority of current workers want a union, then you're choosing to work at a place with a union. And paying for the choice you make is very sensible. When you get tired of paying for the union that the workers there want, feel free to work somewhere where the workers don't want a union.

[BlinkingDuck]

They could get out of their budget hole by seceding from the union. Seriously, check it out. They could even keep all their "profligate" tax and spend policies and still come out ahead of the game if you don't count all the money they're sending to Uncle Sam that the US government then sends to the red states.

So while high taxes may or may not contribute itself to economic woes, the reason for high taxes is not a liberal legislature somehow enamored of teh tax, but at least partially necessarily in order to provide the same services as states that are net recipients of US cash rather than net donors.

Not really. They would need to build up a military. If they didn't, we would just invade and enslave them.

[septimus]

They could get out of their budget hole by seceding from the union. Seriously, check it out. They could even keep all their "profligate" tax and spend policies and still come out ahead of the game if you don't count all the money they're sending to Uncle Sam that the US government then sends to the red states.

I don't know if this is exaggerated, but I agree that OP places too much emphasis on tax-rate differences between states. His own link shows California at 10.5% and most states outside Deep Dixie at 9.0% or more ... not that huge a difference IMO.

(I'm curious whether non-personal taxes are included in that table. The outliers of Nevada and Alaska may be explained by revenue from casinos and pipeline.)

[sitchensis]

Let me present some numbers briefly. Many public employees get (http://www.nationalreview.com/articles/297094/public-employee-unions-gone-wild-patrick-brennan) "20-and-out" pensions plans. Any employee who works for twenty or so years gets a pension for the rest of his life that provides the entire salary that he had at retirement (or close enough). Basic math tells us that an employee could work to age 45, then retire and pull down benefits for the next 40 or 50 years. The cost of his pension could easily be more than double the entire amount of salary that he earned while he was working. And that doesn't even count health care expenses, which are also covered for life. And it doesn't count health care expenses for his family.

I’m on the calPERS website right now, (calpers.ca.gov) and it looks as though a regular public employee that retires at 50 with 20 years of service will receive 22% of their highest salary. In order to receive 100%, you would have to be 63+ with 40 years of service.
If you retire around 60 with around 30 years of service you are going to probably receive around 70%.


This seems like a pretty normal defined benefit system.

ETA: From looking at the site, it seems that 50 is the minimum retirment age

[Saint Cad]

I’m on the calPERS website right now, (calpers.ca.gov) and it looks as though a regular public employee that retires at 50 with 20 years of service will receive 22% of their highest salary. In order to receive 100%, you would have to be 63+ with 40 years of service.
If you retire around 60 with around 30 years of service you are going to probably receive around 70%.


This seems like a pretty normal defined benefit system.

ETA: From looking at the site, it seems that 50 is the minimum retirment age

And CalSTRS (the teacher union) moved from defined benefits to defined contribution about 10 years ago meaning that teachers that start after that date have their pension amount controlled by the state of the economy.

[Left Hand of Dorkness]

I’m on the calPERS website right now, (calpers.ca.gov) and it looks as though a regular public employee that retires at 50 with 20 years of service will receive 22% of their highest salary. In order to receive 100%, you would have to be 63+ with 40 years of service.
If you retire around 60 with around 30 years of service you are going to probably receive around 70%.


This seems like a pretty normal defined benefit system.

ETA: From looking at the site, it seems that 50 is the minimum retirment age
Not only that, but ITR is exaggerating even the National Review's argument: not conservative enough for him, he's got to make the numbers even worse.

The closest anything in the article comes to his claim, AFAICT, is this:
In Illinois and California, almost one in three state employees are now on “public safety” retirement schedules. Public-safety rules often extend, for instance, to any “law enforcement” employee — including, say, all employees of public defenders’ offices. In New York City, the level of benefits for public-safety workers was soon enough extended to all uniformed employees of the city, so that sanitation workers fall under the same “20 and out” policy as do officers of the NYPD.
As near as I can tell, it takes 30 years for an employee to reach 90% of their salary in pension, not 20, and ten of those years will need to be after age 50 in order for it to work out well. But I may be misreading.

In any case, ITR appears to be exaggerating in order to bolster the claim, unless he's drawing his information from somewhere else. It seems to me that this isn't the first time I've seen him do this.

[ITR champion]

I’m on the calPERS website right now, (calpers.ca.gov) and it looks as though a regular public employee that retires at 50 with 20 years of service will receive 22% of their highest salary. In order to receive 100%, you would have to be 63+ with 40 years of service.
If you retire around 60 with around 30 years of service you are going to probably receive around 70%.
I'm not finding where you got those figures. One of the articles that I linked to earlier says:

In June 2005, BusinessWeek reported that “more than 14 million public servants and 6 million retirees are owed $2.37 trillion by more than 2,000 different states, cities and agencies,” numbers that have risen since then. State and local pension payouts, the magazine found, had increased 50 percent in just five years.

These huge pension increases have eaten away at public finances, most spectacularly in California, where a bipartisan bill that passed virtually without debate unleashed the odious “3 percent at 50” retirement plan in 1999. Under this plan, at age 50 many categories of public employees are eligible for 3 percent of their final year’s pay multiplied by the number of years they’ve worked. So if a police officer starts working at age 20, he can retire at 50 with 90 percent of his final salary until he dies, and then his spouse receives that money for the rest of her life. Even during the economic crisis, “3 percent at 50” and the forces behind it have only become more entrenched.

If Reason is too biased to trust, the union itself agrees (http://www.porac.org/3percent@50.html) that "3 percent at 50" exists. The article by Patrick Brennan also mentions a retirement plan in Massachuesetts that gives nearly full benefits after 25 years. So while I may have been wrong about plans that gives 100% benefits after 20 years, there are plans that gives public employees extremely generous pensions after pretty short careers.

The main point, though, is simply that pension costs are large enough to flatten many state and local governments. I've already linked to a report giving a projected shortfall of $500 billion for California. It's easy to find equally bad outlooks in many other places. The city of Providence, RI, has a pension system underfunded by almost a billion dollars (http://blogs.wpri.com/2012/01/31/providence-pension-tab-tops-900m-after-return-rate-lowered/). The city's annual budget is $640 million. The pension system in Illinois is $83 billion in the red (http://www.chicagotribune.com/news/opinion/editorials/ct-edit-pension-20120506,0,5129197.story), while the budget is less than $30 billion. Los Angeles faces a $27 billion shortfall (http://www.calwatchdog.com/2012/04/30/los-angeles-teeters-on-the-brink-of-bankruptcy/), and its annual budget $7 billion. The point being, a lot of state and local governments are spending huge amounts of pensions when they can't afford to do so.

I'm assuming that everyone agrees that we don't want to see more government bankruptcies or California-style financial crises. So if anyone has a plan to stop these problems before disaster strikes, I'd love to hear it.

[Damuri Ajashi]

Yeah, man. Like, the union ain't the boss of me! I'm the boss of me. Similarly, I'm good with "right to work" laws that let me come to work when I feel like it, dress how I feel like, and treat the public how I feel like.

If unions get no say in working conditions, why on earth should management?

This is more nonsense. Nobody has ever had union dues confiscated against their will: as with right-to-work, you always have the right to find a job at a different place.

But if you choose to work at a place where the majority of current workers want a union, then you're choosing to work at a place with a union. And paying for the choice you make is very sensible. When you get tired of paying for the union that the workers there want, feel free to work somewhere where the workers don't want a union.

Hey, if you don't like your job then "fuck you" find another job, unless the reason you don't like your job is that you have to join a union to get the job. Then we absolutely must do something to fix the situation. Making me pay dues is a lot like slavery. Why do you liberals keep defending slavery?

[Typo Negative]

Hey, if you don't like your job then "fuck you" find another job, unless the reason you don't like your job is that you have to join a union to get the job. Then we absolutely must do something to fix the situation. Making me pay dues is a lot like slavery. Why do you liberals keep defending slavery?Not sure you understand what slavery is.......

[Snowboarder Bo]

Are you good with right-to-work laws so that you aren't forced to "freely associate" in order to work a certain job?
In fact, I live in Nevada, which is a right-to-work state. I'm curious about where exactly you think there exists a place where by force of law you could be compelled to join a union?
How about those that require union members to freely pay out their dues if they want to rather than have them confiscated from their pay checks?I'm curious as well about this; where it is that you think there are laws that compell anyone to pay union dues or "have them confiscated from their pay checks"?

[Paranoid Randroid]

Not sure you understand what slavery is.......

You ask “Have I been whooshed?” Let me simplify Damuri Ajashi’s comment, and let’s see if your level of whooshedness becomes clearer:

If your current job displeases you, then it’s your own fault. Except if the reason for your displeasure is having to join a union. THEN it’s slavery, so we (society, government) must step in to protect you from union membership!

[Snowboarder Bo]

Hey, if you don't like your job then "fuck you" find another job, unless the reason you don't like your job is that you have to join a union to get the job. Then we absolutely must do something to fix the situation. Making me pay dues is a lot like slavery. Why do you liberals keep defending slavery?

Where do you think you could be forced to join a union to get a job?

[Left Hand of Dorkness]

I'm assuming that everyone agrees that we don't want to see more government bankruptcies or California-style financial crises. So if anyone has a plan to stop these problems before disaster strikes, I'd love to hear it.
Yeah.

Step 1) Federal legislation that prevents states and local governments from competing for business via directed tax incentives.
Step 2) Significant raising of taxes in California. They may (may!) be high by US standards, but they're pitifully low by the standards of the industrialized world.
Step 3) Stop blaming unions for negotiating on behalf of their members.

[Typo Negative]

Yeah.

Step 1) Federal legislation that prevents states and local governments from competing for business via directed tax incentives.
Step 2) Significant raising of taxes in California. They may (may!) be high by US standards, but they're pitifully low by the standards of the industrialized world.
Step 3) Stop blaming unions for negotiating on behalf of their members.

I'm with you on Step 3, but step 2 seems a little nutty. IIRC, California taxes the heck out of businesses. In the news a few days ago, they have Texas as the best place for business, while California, for like the 8th year in a row, was the worst. I'm not saying lowering California taxes is the best plan but......

Could you explain how raising taxes AND stopping California from trying to lure business with tax breaks would help that? Would we not make up the difference with payroll taxes, property taxes, sales taxes?

[Left Hand of Dorkness]

I'm with you on Step 3, but step 2 seems a little nutty. IIRC, California taxes the heck out of businesses. In the news a few days ago, they have Texas as the best place for business, while California, for like the 8th year in a row, was the worst. I'm not saying lowering California taxes is the best plan but......

Could you explain how raising taxes AND stopping California from trying to lure business with tax breaks would help that? Would we not make up the difference with payroll taxes, property taxes, sales taxes?Who's "they" in your ranking? California isn't exactly a wasteland of businesses; in fact, they've got more areas named for their utter dominance of a particular industry than any other state I can think of. Clearly they're doing something right. My proposal isn't designed to help them be even better at that; rather, it's designed to shore up the budget shortfall.

[Typo Negative]

Who's "they" in your ranking? California isn't exactly a wasteland of businesses; in fact, they've got more areas named for their utter dominance of a particular industry than any other state I can think of. Clearly they're doing something right. My proposal isn't designed to help them be even better at that; rather, it's designed to shore up the budget shortfall.
http://www.cnbc.com/id/41666606 ranks California at 47

http://chiefexecutive.net/best-worst-states-for-business-2012 has us last for the past 8 years.
It is perhaps no coincidence that Texas and Florida have the highest net migration of people to their states from 2001 to 2009. (By contrast, New York and California lost over 1.6 million and 1.5 million in net migration out of the states, respectively, over the same period.)With 12 percent of America’s population, California has one-third of the nation’s welfare recipients. Each year, the evidence that businesses are leaving California or avoid locating there because of the high cost of doing business due to excessive state taxes and stringent regulations, grows. (See “Eastward Ho!”) According to Spectrum Locations Consultants, 254 California companies moved some or all of their work and jobs out of state in 2011, an increase of 26 percent over the previous year and five times as many as in 2009

I admit, I find it hard to understand what a lot of these numbers mean, but God, it doesn't look good. If taxes go up in California, would we not be even less attractive for business?

[septimus]

... a regular [Calif.] public employee that retires at 50 with 20 years of service will receive 22% of their highest salary....
This seems like a pretty normal defined benefit system.

[tangential comment/question] The "of their highest salary" part works out very nicely for someone who, for legitimate reasons, has a short period with high wage. A more nuanced formula would be appropriate, IMO. (I have a close relative who, retiring as a public employee, did quite well because of the formula.) Do private pensions use a similar formula based on "highest salary"?

[What the .... ?!?!]

In fact, I live in Nevada, which is a right-to-work state. I'm curious about where exactly you think there exists a place where by force of law you could be compelled to join a union?
I'm curious as well about this; where it is that you think there are laws that compell anyone to pay union dues or "have them confiscated from their pay checks"?

You're a bit confused. I was clearly referring to proposals re right-to-work and dues paying (I could have also mentioned those re the way dues are used to support Democrats) that would restrict certain procedures the unions use.

Those procedures may not have the force of law...... no matter how hard the Democrats want them to.

I could also have mentioned proposals re secret ballots so you aren't exposed to undue pressure from union thugs when you make your vote known.

[Snowboarder Bo]

You're a bit confused. I was clearly referring to proposals re right-to-work and dues paying (I could have also mentioned those re the way dues are used to support Democrats) that would restrict certain procedures the unions use.

Those procedures may not have the force of law...... no matter how hard the Democrats want them to.

I could also have mentioned proposals re secret ballots so you aren't exposed to undue pressure from union thugs when you make your vote known.

You aren't making any sense here, at least not as far as I can tell. Could you elaborate in complete sentences, please?

It seems as tho you have some half-formed thoughts and then you only conveyed half of those.

[Typo Negative]

You're a bit confused. I was clearly referring to proposals re right-to-work and dues paying (I could have also mentioned those re the way dues are used to support Democrats) that would restrict certain procedures the unions use.

Those procedures may not have the force of law...... no matter how hard the Democrats want them to.

I could also have mentioned proposals re secret ballots so you aren't exposed to undue pressure from union thugs when you make your vote known.'Right to work' doesn't mean what you seem to think it means.

Union jobs are good jobs. Good pay, benefits and work conditions. These jobs are sought after. Yes, you have to be a union member to get them. And the union requires dues, which seems to stick in your craw a bit. But these jobs have good pay, benefits and work conditions because of the union. Unions had to fight for these. And without the union, without the strength of numbers, they WILL go away.

Do you really not get that?

[Paranoid Randroid]

Not taking a position on the matter at hand. But:

'Right to work' doesn't mean what you seem to think it means.

In what respect does he not understand what “right to work” means? I understand right-to-work laws to restrict the degree to which employment can be contingent on union membership; he seems to be using it in this sense. Snowboarder Bo on the other hand appears to be going for some kind of gotcha wherein no one is forced (say) to pay union dues because no one is forced to take a particular job.

But that seems beside the point.

[Typo Negative]

In what respect does he not understand what “right to work” means? I understand right-to-work laws to restrict the degree to which employment can be contingent on union membership; he seems to be using it in this sense.You are correct. He does appear to be using it that way.

The phrase itself is bullshit. It has nothing to do with worker rights or freedom. It's just about trying to weaken unions. Its about duping people into voting against their own interests.

At first glance, he seems to say 'I should be free to get that good job and not be forced to pay any union dues!' while dismissing the simple fact that without the union, it would not be a good job. If the union goes, wages go down, work conditions, security and safety suffer. This what employers want, not workers.

That's why it more appropriately called 'right to work for less' or 'right to fire'.

[Snowboarder Bo]

Snowboarder Bo on the other hand appears to be going for some kind of gotcha wherein no one is forced (say) to pay union dues because no one is forced to take a particular job.

I'm not going for any kind of gotcha other than the kind that applies to someone who makes statements that aren't true about situations they don't understand.

If What the would like to clarify whatever the hell it is he thinks he's talking about, we could then proceed to discuss that.

[What the .... ?!?!]

If What the would like to clarify whatever the hell it is he thinks he's talking about, we could then proceed to discuss that.

Quickly....... the good guys have proposed various "anti-union" measures:

1. can't be forced to join a union to take a specific job
2. union votes should be by secret ballot
3. your dues do not have to support candidates you disapprove of
4. dues should be paid voluntarily/not taken automatically from your check


In your reply on 05-08-2012 06:14 PM you raised the argument a notch (the term for that bogus argument escapes me) when you said that there weren't any laws compelling non-union people to do any of the above. That's where things got confused. The unions make their own rules.....the proposals I listed seek to prevent them from having those rules.

[ITR champion]

Who's "they" in your ranking? California isn't exactly a wasteland of businesses; in fact, they've got more areas named for their utter dominance of a particular industry than any other state I can think of. Clearly they're doing something right. My proposal isn't designed to help them be even better at that; rather, it's designed to shore up the budget shortfall.
Thank you for actually being willing to give us a plan for solving the budget shortfall. However, I've got to say that I don't think much of your plan. First of all, there are countless rankings of states by tax business climate; here's one (http://www.taxfoundation.org/news/show/22658.html). It shows California as #48 out of 50. Right now California has one of the nation's highest unemployment rates, and other high-tax places such as Rhode Island, New Jersey, and the District of Columbia are up there as well. Of course there are exceptions. Nevada has low taxes and high unemployment, but nonetheless it's hard to believe that high taxes don't have bad economic effects.

Pointing to areas in California named for their utter economic dominance isn't going to convince. That Silicon Valley is called Silicon Valley tells us something about where it stood in the tech world decades ago, not right now. Lately tech companies have been fleeing California.

[suranyi]

Thank you for actually being willing to give us a plan for solving the budget shortfall. However, I've got to say that I don't think much of your plan. First of all, there are countless rankings of states by tax business climate; here's one (http://www.taxfoundation.org/news/show/22658.html). It shows California as #48 out of 50. Right now California has one of the nation's highest unemployment rates, and other high-tax places such as Rhode Island, New Jersey, and the District of Columbia are up there as well. Of course there are exceptions. Nevada has low taxes and high unemployment, but nonetheless it's hard to believe that high taxes don't have bad economic effects.

Pointing to areas in California named for their utter economic dominance isn't going to convince. That Silicon Valley is called Silicon Valley tells us something about where it stood in the tech world decades ago, not right now. Lately tech companies have been fleeing California.

Some tech companies have been fleeing California but overall, the tech industry is booming here right now. Just in yesterday's Chronicle there was an article about how the hiring boom is pushing rents way up:

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/05/09/BU551OD1PL.DTL

Then today there was an article in which it was said that Yelp just signed a lease for more space in San Francisco:

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/05/10/BUC11OFIV6.DTL

Practically every day there's an article about another tech company either leasing space in S.F. or the Silicon Valley or planning to hire a few hundred people

[Left Hand of Dorkness]

Thank you for actually being willing to give us a plan for solving the budget shortfall. However, I've got to say that I don't think much of your plan. First of all, there are countless rankings of states by tax business climate; here's one (http://www.taxfoundation.org/news/show/22658.html).
If "tax business climate" were a measurement of quality of life, this measurement would matter. However, it's not, so it doesn't. What matters is whether CA's policies are leading to better quality of life for folks who live there. AFAICT, their policies are pretty good for quality of life.

True, unemployment is high in California. Are you suggesting that's because businesses don't want to be there?

[Unintentionally Blank]

Taking a left-hand turn, I can speak to Colorado State Government. There's been a nascent desire to consolidate all IT sections into one big department for the better part of 20 years. 5 years ago, they finally got traction.

The end result is that the staff that DID know their stuff (and there was some, despite the stereotype) got fed up and left. The upper management insulated themselves with architects, directors, and project managers, and they're hell bent to take all the money and send it to the Private sector...despite the fact that there hasn't been a single successful private sector contract as long as I can remember.

So, where IT is concerned, they're doing their level best to do anything BUT IT, and funnel all of the money to the private sector, where there's plenty of money to be made in perpetuating the problem.

[ITR champion]

True, unemployment is high in California. Are you suggesting that's because businesses don't want to be there?
That would seem to be the logical conclusion (http://money.cnn.com/2011/06/28/news/economy/California_companies/index.htm).

Meanwhile, how bad is the fiscal situation for local governments in California? This bad (http://www.recordnet.com/apps/pbcs.dll/article?AID=/20120511/A_NEWS0803/205110313).

[Damuri Ajashi]

Quickly....... the good guys have proposed various "anti-union" measures:

1. can't be forced to join a union to take a specific job
2. union votes should be by secret ballot
3. your dues do not have to support candidates you disapprove of
4. dues should be paid voluntarily/not taken automatically from your check


In your reply on 05-08-2012 06:14 PM you raised the argument a notch (the term for that bogus argument escapes me) when you said that there weren't any laws compelling non-union people to do any of the above. That's where things got confused. The unions make their own rules.....the proposals I listed seek to prevent them from having those rules.

"The Taft-Hartley Act outlawed the closed shop in the United States in 1947. The union shop, where employees must join the union after being hired, has also been deemed a violation of the U.S. Constitution"

http://en.wikipedia.org/wiki/Closed_shop