Public Sector Unions

Reader JC sent a link to Young Conor Freidersdorf talking about public employee unions. I know how you all feel about Young Conor, but since I haven’t read anything he’s written in a while, I took a look.

Conor brings up the example of San Jose, which has huge pension obligations and just voted for a pretty sweeping pension and benefit reduction plan. In the piece, Conor hits the high points of the issues people have with public sector unions: public safety unions that negotiated 90% salary on retirement at 55 even for upper management making six figures, prison unions that exert influence on prison building and sentencing laws so their membership keeps growing, and terrible teachers that can’t be fired.

He also has some interesting anecdotal evidence about the firefighters in Rancho Cucamonga, where he worked for a local paper. By his telling, their union held politicians hostage by campaigning against any politician who didn’t vote for what the union wanted. They did so by the nefarious tactic of sending out mailers with pictures of firefighters and the candidate. Considering that this town is on the edge of the mountains in Southern California and firefighters have to pretty regularly risk their lives to save property built insanely far up in the foothills, it’s interesting that Conor doesn’t examine the possibility that the interests of the voters and the union were actually fairly well aligned. Conor identifies a couple of important issues (the cozy relationship led to a “frat house” environment, and overtime and fringe benefits that allowed both parties to report an artificially low base salary), but since Conor was a journalist there, I’m sure he exposed both of those issues in hard-hitting watchdog pieces.

Kidding aside, I’ll buy the notion that there are some serious issues with the way that public union pensions are negotiated, and that negotiators on both sides have become adept at pushing off obligations into the far-off future. But Conor’s solution is the usual radical one: defined contribution rather than defined benefit pensions, no job protection over and above that provided by law, and no negotiation over seniority. And it’s a radical one in a piece where very few facts are on offer. Setting anecdotes aside, how much bigger are the wage and benefit packages of the public sector unions, when you compare a lifetime of public and private sector employment, and understand that nobody wants a 65 year old firefighter coming to their house to save their kids? Why can’t we enact laws that are tougher about the pension assumptions that govern collective bargaining, so municipalities start paying now instead of later for pension plans? And what’s a reasonable amount of job protection for teachers, who get a hell of a lot more scrutiny from some unenlightened parties (parents) than your average mid-level corporate manager?

If Conor wants me to come back and plow through another of his long pieces, perhaps he can address those issues and throw in a few facts to boot.

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92 replies
  1. 1
    Tokyokie says:

    Well, as far as I’m concerned, a defined contribution plan in which the retirement income is dumped onto the Wall Street dog track is no pension at all.

  2. 2
    Baud says:

    “By his telling, their union held politicians hostage by campaigning against any politician who didn’t vote for what the union wanted. They did so by the nefarious tactic of sending out mailers with pictures of firefighters and the candidate.”

    We should start referring to these thuggish union tactics as “Citizen United” activities.”

  3. 3
    Derelict says:

    I love how public-sector (and even private-sector) union-negotiated pensions are now considered so lavish as to be obscene. It’s like a Jamie Dimon who’s been proven to be wildly incompetent is getting no more than his due for a $20 million a year salary and tens of millions more in retirement perks, but a firefighter who has saved children’s lives is some greedy asshole for getting most of his salary after retiring with bum knees, screwed-up lungs and a bad back.

    It’s this simple: Unions accepted “lavish” pensions in lieu of contemporary pay raises, while their partners, public or private, offered those pensions so that they wouldn’t have to offer pay raises. The unions did their part, but now that their partners actually have to live under the terms of the contract they willingly signed, well, that’s just way too much to ask.

  4. 4
    maurinsky says:

    Personally, I think retirement shouldn’t be age specific but be the number of years worked specific. My father is a wreck at age 70 because he’s worked as a carpenter (well, he started as an apprentice) since he was 12 years old.

  5. 5
    Schlemizel says:

    Public sector workers used to be the lowest paid group for comparable work. Those pensions were not out of line when you looked at a life time of lower wages. What has happened in the last 20 years is private sector wages have gone to hell while unions held the line on jobs that can’t be shipped to India (“Hello, Rajesh? Yes could you please dispatch the engine company from Bangalore to the fire at my house?”)

    So now those wages & benefits APPEAR to be out of line. But I guess the American middle class will not be happy until every member of the 99% are as miserable and under-paid as they are.

  6. 6
    Soprano2 says:

    Back in the 1990’s my employer, a mid-sized city government, improved the pension benefit several times rather than raise our rate of pay. This meant that it was harder and harder to hire good people, since the wages we offer aren’t competitive especially for the higher level jobs. (There was one management job that stayed open for two years because no one would take it at the pay they were offering.) At the time I told my boss I thought the pension improvements were a bad idea, and they should be raising pay rates instead. Of course the public loved that the city was doing this, since it kept their taxes low because all the payoffs were in the future, wheras higher wage rates would have necessitated that the city get more revenue right now. I’m sure lots of cities did this, and now that it’s starting to be time to pay they want to back out of it. As a city employee who is 10+ years from retirement what happened in San Diego and San Jose terrifies me. People don’t seem to understand that the pension benefits are something we got in lieu of pay raises, and most of the time we didn’t have much of a choice in the matter. This was all done in a city where only a few groups within city government are even in a union.

  7. 7
    Fargus says:

    I can’t tell you how many people I’ve talked to who have shitty private sector jobs with shitty private sector benefits whose attitude is basically, “If I don’t have all those union protections, they shouldn’t either.” It never even occurs to them to flip it around and think, “They’ve got all those union protections–why don’t I?”

    As far as defined-benefit vs. defined-contribution, not that anybody here doesn’t understand this, but it’s a shell game. More fees can be collected from individually run accounts, and then those accountholders are at the mercy of what the market happens to be doing when they want to retire. Those poor folks who tried to retire in 2008 on their 401ks learned this the hard way.

  8. 8
    Caz says:

    First of all, union teachers are basically exempt from merit evaluation. They have total job security, have summers off, and are well compensated. And results in education have been stagnant for 40 years while the number of teachers has doubled and cost per student has skyrocketed.

    The first part of your post describes several problems with public sector unions. Then you spend the second half rationalizing to defend them.

    If you recognize the problem, why not recognize some of the solutions instead of remaining stubbornly supportive? You’re allowed to go against your party; the gestapo won’t come after you….yet.

  9. 9
    Caz says:

    @Fargus: your solution is to expand unions to all private employees rather than solve the public sector union problem, lol???

    Don’t you all have any intellectual honesty about you??

    Public sector unions are costing near-bankrupt states tons of money, and still the liberals will defend them to the detriment of everyone else including the state itself. Unreal.

  10. 10
    gene108 says:

    Why can’t we enact laws that are tougher about the pension assumptions that govern collective bargaining, so municipalities start paying now instead of later for pension plans?

    Part of it isn’t due to not wanting to fund pensions.

    Pension assets get invested in things like the stock market or bonds or whatever they think can increase the value of those assets.

    The people investing those assets expect a certain rate of return.

    Over the last 12 years getting an expected return, based on historical trends, from the stock market or other investment vehicle has become hard to determine.

    Therefore more money has to be put into pension funds to offset the lack of growth on pension assets.

  11. 11
    arguingwithsignposts says:

    @Caz:

    First of all, union teachers are basically exempt from merit evaluation. They have total job security, have summers off, and are well compensated.

    No, they’re not. And they don’t. And they aren’t always well-compensated. Teacher salaries vary widely by school district, and are indexed by number of years worked and degrees earned. They often have numerous continuing ed requirements which must be met per year (frequently in the summer) and they spend much time out of the classroom grading and developing lesson plans. They frequently work second jobs in the summer to make ends meet. You want to put them in school year round? Expect to pay even more.

  12. 12
    Fargus says:

    @Caz:

    Part of the solution for those people, the actual workers despairing about decreasing wages and benefits and job security, is to make it easier for them to assemble and collectively negotiate their compensation. Might that affect companies’ bottom lines? Sure. Fine. I don’t happen to hold the view that a company’s profits are more important than its employees’ ability to attend to their basic needs.

    As others have pointed out, the problem with obligations is less that they were made and more that they weren’t paid for. Some were unwisely large, and were made that way to make workers swallow lower salaries and benefits at the time of the negotiation. But that doesn’t mean that those obligations should just be dropped because it’s no longer convenient to hold onto them.

  13. 13
    Bostondreams says:

    Caz, your understanding of public education is flawed. Schools are no worse now than they ever were. We have always been middle of the road in education. Always. Teachers are not exempt from firing, and as long as the principals do their jobs, it can be easier than most believe to fire teachers. I know, I’ve taken part in the due process system to fire a couple. And summers off? Ha!

  14. 14
    Commenting at Balloon Juice since 1937 says:

    I think the conservatives are pining for the old days of work stoppages, strikes, and armed violence. There’s a reason for the system that we have now.

    Pensions are deferred compensation. You earn one, and are then owed one. There’s no free lunch no matter what Ayn Rand wrote.

  15. 15
    arguingwithsignposts says:

    @gene108: The state of Illinois hasn’t contributed its share to the state employee pension funds in decades, and now they want to cut pension benefits and change the plan. Imagine the rate of return the pension funds would have gotten if they had twice as much money to invest over that time period. There wouldn’t be a “pension crisis.” Not to mention that, in many cases, public employees are not contributing to Social Security. The state/local government is required to provide a benefit equal to or better than minimum SS.

  16. 16
    gelfling545 says:

    @Bostondreams: It is the only profession where a period of uncompensated layoff is called a “vacation”.

  17. 17
    Schlemizel says:

    @Caz:
    BULLSHIT!

    We spend 1/2 per student now (adjusted for inflation) than we did in 1970.

    No body in my extended family is a teacher or school administrator yet this information is available to me. The problem is your bullshit has been spread so think for so long it is now taken as truth.

    I see others have done a good job of demolishing the rest of the bullshit so I’ll leave it at that

  18. 18
    Paula68154 says:

    @Caz the average public teacher pay is $44K -$56k.

  19. 19
    Tata says:

    I’ll buy the notion that there are some serious issues with the way that public union pensions are negotiated, and that negotiators on both sides have become adept at pushing off obligations into the far-off future.

    Baloney.

    The firefighters kept their end of the bargain by showing up and putting out fires, at the risk of their lives and limbs. Period. There is no both sides do it to be seen here. The municipalities bargained and should keep their ends of those bargains.

  20. 20
    Davis X. Machina says:

    @gelfling545: I have to sign a form every year to elect to receive my pay in 26 payments. If you don’t file the form, the default is 20 payments.

    I’m paid over the summer, because I shorted myself over the winter.

    Why a nation of people who spend March waiting for their income tax refunds don’t understand this defeats me.

  21. 21
    chopper says:

    @Tokyokie:

    yeah, we already have defined contribution plans. they’re called ‘401(k)’s. or their equivalent such as a TSP.

  22. 22
    Chainsaw says:

    The school district in which my wife teaches very nearly fired her this year. She has a certificate in elementary education, one in guidance, and one in reading. She has a Master’s in counseling, and another in reading. She is not one of those teachers who sit on their assets and collect the check, counting the days until retirement.

    She was nearly fired because the district discovered that they have some pension obligations to fulfill. Which was a surprise, I guess. Thirty, forty years ago, the district agreed to a pay structure that included deferred compensation for its teachers, and as the bill comes due, the district finds itself a bit short.

    This seems to be a failure of management. Bad planning, at least. It’s almost too stupid to be an accident. And yet it’s the teachers, those overpaid teachers who are the problem. If those teachers would just work for minimum wage, and teach the kids how to do likewise, we wouldn’t have these problems. Lots of teachers like cats, so they already have cat food on hand for their retirement.

    My wife, with 16 years at her job, and a pair of advanced degrees, earns less than an MBA two to three years out of Master Of The Universe School.

    And don’t even get me started on the “They only work six hours a day” nonsense.

  23. 23
    gelfling545 says:

    Some interesting things most people don’t know about teacher compensation –
    When contracts became the norm salary scales were set with most increases built into the later years.This was largely because most teachers were, by then, women and would not be working into the later years being expected to quit on marriage and required to quit for pregnancy. Later, as women began remaining in the work force longer, school boards realized that they could save a lot of money by periodically getting rid of more senior teachers and replacing them with new graduates. Certain districts in my area were notorious for this. (I’m sure this was true in other types of employment as well.) Thus the advent of seniority provisions in contracts. Oddly enough, experienced teachers are generally more effective than brand new graduates as it takes time to translate “book learning” to interacting with real live students and to develop one’s relationship and presence in the school community.

  24. 24
    Rock says:

    Clearly, when I look at where money goes in this country, I can see that union members and their gold-plated rocket cars are bankrupting the rest of us.

  25. 25
    fasteddie9318 says:

    You guys, glibertarian is seriously glib. And tarian.

  26. 26
    Trakker says:

    I belonged to the UAW when I worked in a factory in Indiana, back in the 70s. The union members had very little knowledge of economics, how wages and benefits were paid for, and how it affected the factory’s bottom line. All they cared about was THEIR bottom line and they knew they had the power to strike. I came away with a poor impression of unions.

    On the other hand my cousin was mentally challenged and in the 70s got a union job as a janitor. He was a hard worker, he had a good heart, but a janitor job was all he was capable of. Because of the union he made a living wage and enjoyed modest raises throughout his career, and retired with a modest pension that has kept him out of poverty.

    If my cousin was just starting out today he would be working for a contractor (if he had a job at all), making minimum wage all his life, with no benefits, raises, or a pension. He would have been dependent on the taxpayers for assistance and would have felt like a failure despite being a good person and a hard worker.

    Every good, decent American who is willing to work deserves a job and a living wage like Larry got. That’s why I’m pro-union.

  27. 27
    HRA says:

    It seems like a lot of people are under the impression that public employees get a free retirement plan. That is not true.

    Last week I sent out a check to my government employee retirement fund to cover a 9 months absence from work which was due to a work related accident over 10 years ago. If I had not started the search for employment history being left out of my work record by the state, I would not have known about having to pay the retirement fund.

    As I look over my work history in both the private and public sector, I have to admit private was better in many more ways except for the lack of permanency.

  28. 28
    chopper says:

    @Tata:

    it’s true that the municipalities made a deal and should stick to it, just like the workers do.

    OTOH, if both sides come to the table and accept a package that pushes costs off to the far-off future, they’re both agreeing to a pretty irresponsible package.

  29. 29
    Secretly Jealous of Nickleback says:

    @Tata: The “both sides do it” in this case refers to negotiating, not fulfilling the terms agreed upon, but your point still stands. Saying “both sides do it” about agreeing to defer compensation is like saying that, in war, both winning and losing nations have become adept at agreeing on treaties that heavily favor the victors.

    Unions didn’t accept this deal because they preferred it. They accepted deferred payment because they didn’t have a prayer of getting paid what they were worth at the time that they earned it. Now they’re getting shafted because the municipalities that didn’t want to pay fair market value for services still don’t want to pay what they owe for the services already rendered. I don’t know why this surprises anyone.

    Having said that, the union that’s really costing Cali more than any other is that prison guard’s union. Roll back thirty years of the “tough on (victimless!) crime” BS that they’ve happily enabled, and Cali no longer has a fiscal crisis. They could afford to pay their firefighters and chemistry teachers if they weren’t committed to life sentences for jaywalkers.

  30. 30
    jonas says:

    @Soprano2: This is spot on. A lot of cities in SoCal and elsewhere have done this for decades and now they have to pay the piper and there’s no money for it. On top of that, voters see a few upper-level public administrators gaming the state pension system *on top of* what they already see as over-the-top salary packages and assume that your average city worker or teacher is equally coddled. Most people don’t realize, for example, that public employees with pensions don’t get Social Security. If you gut their pension, they’ve got nuthin.

  31. 31
    Fargus says:

    @Trakker:

    I get why your initial experience would make you somewhat anti-union, in an academic sort of sense, but isn’t negotiating for the workers’ bottom lines against the owners who are negotiating for their own bottom lines, you know, basically the point of unions?

  32. 32
    mai naem says:

    I am sick and tired of hearing about public sector unions. I have a friend whose buddy makes 55K in retirement govt pension and it bugs him because the guy retired after working for 25 yrs. BTW, the guys a wingnut and my buddy’s a liberal both of which are ironic. Anyway, the point is the guy is a lawyer, worked in the AG’s office in a pretty specialized position and BTW has the same job as a contractor now(that part bugs me too.) I don’t think $55k is a lot of money for a lawyer because in his position I would guess most people in his position in the private sector would be a criminal defense lawyer making some big bucks.

    Also, I know a dentist who works for the prison system and makes about $120K which also I don’t think is that much considering what he could make in the private sector but its the benefits that make up for that. Ofcourse, the thing is that in a very bad recession a lot of dentists would be happy to make $120k with very good benefits.

    Last thing, how come Scott Walker and his ilk don’t have a problem with the multi multi million dollar golden parachutes CEOs of failing(and even not failing) companies get. Nobody, but nobody is worth $100 million dollars. I don’t care if its Steve Jobs or Jack Welch.

  33. 33
    jonas says:

    @Caz: 1. unionized teachers are absolutely not exempt from merit evaluations. 2. there have actually been fairly substantial gains in educational achievement over the past 40 years. Way more people go to college now than did back then, for example. 3. A lot of the additional expense going into public education now is for things like special ed and classroom technology that costs a lot more than it used to (kids have to use computers now, not chalk and a slate board). 4. In equal dollar terms, teacher salaries have actually *fallen*, esp. relative to the average pay of other college-educated professionals.

  34. 34
    chopper says:

    @HRA:

    exactly. pensions may look like some magical free-money deal but they aren’t. they’re part of the compensation package. without the money going into my pension both from my gross pay and from my employer, technically my paycheck would just be that much bigger. no different from my TSP in that regard.

    the thing that confuzzles people is how defined benefit packages work. and the fact that so many of these agreements tend to leave out the ‘how we intend to pay for it’ part adds greatly to that.

    as a public employee, i worry that my pension will someday be liquidated. the thing that really sucks is, i’m assuming that if it happens, it will be mostly out of spite, i.e. conservatives just screwing over public employees for the sake of it.

    when i look at my total retirement package, including social security, pension etc, at my current employment it looks pretty good for the future. then i realize how a bunch of greedy, spiteful politicians could figure out a way to crash the system entirely and i start freaking out.

  35. 35
    arguingwithsignposts says:

    It also should be mentioned that, while state and local governments have been kicking the can down the road wrt their pension contributions, workers have had to pay every penny of their contributions because it is automatically deducted from their paychecks. You can’t elect not to pay your share of the pension contribution, unlike the government.

  36. 36
    Davis X. Machina says:

    In equal dollar terms, teacher salaries have actually fallen, esp. relative to the average pay of other college-educated professionals.

    80% of a typical district’s budget is wages-and-benefits, and benefits are the killer.

    Every penny in base-salary increases I have received in the last 10 years was cancelled out, and then some, by an increase in the employee’s buy-in for BC/BS. Experience raises (I can’t get onto another column by gaining another degree, I’m maxed out) are the only real, constant-dollar raises I see.

  37. 37
    chopper says:

    @mai naem:

    jesus, that guy’s a choad. gubbermint pensions are based on your highest salary and the number of years you worked. 25 years is a long time, and a lawyer’s salary, even in government, is going to be pretty high. 55K isn’t a crazy pension for a guy who worked as a lawyer for 25 years.

  38. 38
    negative 1 says:

    I work for a public sector union in a state where this just happened (Rhode Island). At the time, the state was arguing they couldn’t afford to pay the future benefits. Our members were willing to renegotiate, the treasurer just basically did away with the pension with no further input, basically dared us to vote republican next time, and away the defined benefit pension (mostly) went.
    The thing about this is, it’s not good business for anyone involved except the politician who gets to extend a middle finger to the union on TV. She just cut the value of the pension in half before the first ‘funding test’ to restore cost of living bumps. I’ll tell you how this ends – our retirees will move to a state with no property taxes and a cheaper standard of living (Florida). So now rather than those payments helping our state economy, we’re essentially transferring wealth to Florida.
    For our active members? We’re making them work longer before they can afford to retire. So now in a state with double-digit unemployment, we’ve basically said the state can’t help alleviate it for the next 10 years.
    And on a personal note — if you planned a certain amount of wealth for retirement, and someone just cut it in half, at 60 years old you’re f^&ked. Totally and utterly. There’s not enough time to make it back, and no one realisitically will hire you. It takes a special kind of a-hole to pick on a person like that.

  39. 39
    negative 1 says:

    @chopper: The equivalent on the direct contribution side is if the state decided it was in trouble, so it was going to take half of the value of your 401(k). Why are you complaining? You’re just a leech anyway.

  40. 40
    Rafer Janders says:

    By his telling, their union held politicians hostage by campaigning against any politician who didn’t vote for what the union wanted.

    Under this standard, doesn’t every single voter hold politicians hostage by the threat of withholding their vote?

  41. 41
    jonas says:

    Let’s not forget, too, that one of the major underlying issues here is that health care costs have ballooned over the past 25 years way beyond what any actuary could have predicted. One of the problems cities and school districts are facing is that what used to be a fairly standard benefit — full health care coverage in retirement — is now a budget-busting albatross that no-one can afford anymore. That was really what was killing GM before its bankruptcy, for example.

    Tackle the growth of health care costs, and a lot of these pension problems will take care of themselves.

  42. 42
    Villago Delenda Est says:

    Yet when CEOs negotiate eight figure salaries with equally generous retirement packages, not to mention stock options that give them a tremendous incentive to plunder their own company’s value, young Conor can’t manage to work up so much as an iota of outrage.

  43. 43
    TG Chicago says:

    And what’s a reasonable amount of job protection for teachers, who get a hell of a lot more scrutiny from some unenlightened parties (parents) than your average mid-level corporate manager?

    I haven’t been following the union stuff that closely, and I’m generally sympathetic to the argument that it’s too hard to fire bad teachers.

    In that light, I wanted to say thank you for this sentence. I hadn’t thought of the teacher job security thing from that angle, and it’s helpful towards getting a fuller understanding of the issue.

  44. 44
    gypsy howell says:

    My new strategy for dealing with all of this is to campaign for no pensions or benefits at all for any government employee. I’m starting my crusade with the military, cops and firefighters, who’ve been sucking on the public teat for far too long. Start a 401K, moochers! Buy your own damn medical insurance policy, like I do, leeches! Hell, if they’re going to vote against my interests, why shouldn’t I vote against theirs? Screw ’em.

    Bring it on, I say.

  45. 45
    Roger Moore says:

    @Tokyokie:

    Well, as far as I’m concerned, a defined contribution plan in which the retirement income is dumped onto the Wall Street dog track is no pension at all.

    And I think a defined benefit plan where the employer can change his mind and rescind promised benefits, or can refuse to fully fund the pension and declare bankruptcy rather than do so isn’t much of a pension, either. Unless we have better legal protections for pensions, we’re stuck with a system where you can get a better promise that depends on your employer following through years from now or a worse and less certain promise that’s paid up front.

  46. 46
    BC says:

    I wish it would always be pointed out in the same paragraph with talk about public pensions that public employees are NOT in the Social Security system. Everyone assumes, when they hear “pension,” that the public sector gets their pension plus Social Security when the public pension is their Social Security. What happens when the state and local governments get rid of the public pensions, which were set up with mechanism to not pay into during bad times, and throw the employees into the Social Security system, where the governments have to pay the 6.47% every pay week?

  47. 47
    Fargus says:

    @chopper:

    This is exactly it. A lot of times when people frame these issues, they say stuff like, “We just want public employees to pay for more of their benefits.” But those benefits are part of public employees’ compensation. They are already paying for those benefits through their work. What they mean is that they want more of those benefits to be filtered through the employees’ paychecks, which ultimately is no different than calling for a pay cut.

  48. 48
    negative 1 says:

    @TG Chicago: I would say that before you make that assumption you should research it a little bit. Teachers get fired/let go, etc. all the time. We just insist that there is a reason, not “I don’t like that guy”.
    Part of the problem on that message is that there are a lot of parents who feel a teacher should lose their job every time their kid gets a D. Either the teacher ‘had it out for their kid’ or ‘obviously can’t teach well if their kid couldn’t understand the work’. We defend the teacher, the parent says ‘oh they couldn’t be fired because of the union‘ rather than acknowledge that their kid deserved the D.

  49. 49
    Cacti says:

    @Caz:

    And results in education have been stagnant for 40 years while the number of teachers has doubled

    This is one of the criticisms that makes me scratch my head.

    Our population has grown by over 100 million nationally in the last 40 years.

  50. 50
    Villago Delenda Est says:

    @Cacti:

    If being a moran were a capital crime in this country, dumbassess like Caz here would be before a death panel faster than you can say Captain Jack Sparrow.

  51. 51
    g says:

    @Derelict:

    I love how public-sector (and even private-sector) union-negotiated pensions are now considered so lavish as to be obscene.

    Meanwhile, in reality world, my morning radio news tells me that CALPERS just announced it’s hiked the cost of retiree’s medical coverage by 10%.

  52. 52
    g says:

    @Rafer Janders: It’s fine when Focus on the Family or the Teaparty does this, apparently. Only not when unions do.

  53. 53

    @Derelict:

    Unions accepted “lavish” pensions in lieu of contemporary pay raises, while their partners, public or private, offered those pensions so that they wouldn’t have to offer pay raises

    This.

    And, in hindsight, I’ve come to believe that reneging on the contracts when the bill came due was always the plan. No way some executive decades ago looked at the numbers and didn’t see the inevitable fiscal problems.

    Same with Greenspan’s Social Security ‘tweaks’ back in 1983. The extra funds were never really intended to go into the trust fund. It was a scam all along, wasn’t it Alan?

    Call it the Revenge of the 1980s, if you care to.

    Turns out these fuckers are capable of long-term planning, after all. They just prefer to use this skill to take money from the public coffers, instead of fixing anything.

  54. 54

    @Caz:

    First of all, union teachers bankers are basically exempt from merit evaluation. They have total job security, have summers off, and are well compensated.

    FTFY.

    Bankers and other skimmers extract more money our wallets than teachers ever did. Yet we’re supposed to punish the teachers, and worship the bankers.

    Why is that, exactly?

  55. 55
    Davis X. Machina says:

    without the money going into my pension both from my gross pay and from my employer, technically my paycheck would just be that much bigger.

    My pension contributions are the single largest deduction from my gross — larger than BC/BS, larger than federal withholding…

  56. 56
    RSA says:

    @Judas Escargot, Your Postmodern Neighbor:

    I’ve come to believe that reneging on the contracts when the bill came due was always the plan. No way some executive decades ago looked at the numbers and didn’t see the inevitable fiscal problems.

    I’ve had the same thought. Local or state government officials put together a plan with some immediate benefits and costs that would only come due years later, long after they’re gone. And the response from conservatives seems to be, “Then cancel the contracts and screw the people who lose out.”

    I don’t see any easy solutions, but it would be nice if the people who made those plans were held responsible for them down the line.

  57. 57
    Roger Moore says:

    @Judas Escargot, Your Postmodern Neighbor:
    I think you mean that CEOs are basically exempt from merit evaluation. They stack their own compensation committees with their friends and cronies and then pretend that the outcome represents the free market at work. They get paid lavishly even when their companies are going down the tubes, and if they ever do so badly that they actually do get fired, they’re given a golden parachute. I guess accountability is for little people.

  58. 58
    rikyrah says:

    @Soprano2:

    People don’t seem to understand that the pension benefits are something we got in lieu of pay raises, and most of the time we didn’t have much of a choice in the matter.

    THIS.

    THIS.

    THIS.

  59. 59
    burnspbesq says:

    @Tata:

    The municipalities bargained and should keep their ends of those bargains.

    Using what money? It’s a bit late to be saying that state and local governments should have been subject to ERISA minimum funding rules. That ship sailed in 1974.

    If you want to exhume what’s left of Emanuel Celler’s corpse and spit on it, feel free.

  60. 60
    Raoul says:

    mistermix @top “job protection for teachers, who get a hell of a lot more scrutiny from some unenlightened parties (parents) than your average mid-level corporate manager?”

    Tell me about it. My sister-out-law (my bf’s sis) had a handful of parents of hellion kids ruin her career because she dared to discipline them.

    And by discipline, I mean appropriate, district-approved measures for elementary schoolers. These entitled-as-shit parents cannot for one second fathom that little Johnny ever acts out.

    Though I’d be willing to bet that darling Johnny is a little shit at home, too, that these permissive and overwhelmed parents know they suck but can’t stand anyone else noticing.

    OK. I’m ranting. But she lives in Scott Walker’s Wisconsin and all she’s wanted to do is teach, and as far as I can tell she’s smart, caring and competent. She busted her hump with bottom-of-the-totem-pole one year teaching contracts to get enough experience to finally land a decent career-path job.

    As the new teacher (again), she got the troublemakers and minimal admin support against these asshole parents. And then since there’s budget cuts, she got fired in such a way that it will be very, very hard to get hired anywhere else. At least her union stood up for her.

    It’s a cluster. And I get that there are bad teachers out there. But there are extremely entitled and loud parents with piss poor judgement, too.

  61. 61
    Piratedan says:

    its funny how contracts matter when they favor the 1%, that they are a matter of trust and our word is our bond and how true, upright folks meet those contractual obligations and how incredibly flimsy they are when it comes to the rest of us when we have a contract that we want honored.

  62. 62
    YoohooCthulhu says:

    @Caz: And results in education have been stagnant for 40 years while the number of teachers has doubled

    Yeah, I forgot about all those calculus and high-level chemistry classes that they were teaching in high school back in the 1960s. Results are only stagnant because the standards are continually moving. What was considered and adequate high school education 40 years ago is a joke today.

  63. 63

    I have a simple solution for the Prison Guards Union. Abolish it. At least abolish every last activity that doesn’t pertain directly to working conditions at the prisons, and yes, that means having someone supervise, monitor and judge everything along those lines.

    They represent an industry in the business of taking away freedom. I’m just goddam *fine* with curtailing their free speech rights.

  64. 64
    Rob in CT says:

    As has been pointed out, this is basically all about the explosion in medical care costs.

    Since we haven’t gotten that under control, we’re scrounging around looking for change in the couch cushions (aka teacher’s pensions). It’s embarrassing.

    I personally don’t have a problem with governments going to the unions and asking to renegotiate their deals, in order to help with budget crunches. I *do* have a problem with the effort to break the unions.

  65. 65
    gian says:

    How many public sector employees are opted out of social security? I am. And implicit in many of the railings against my pension is the notion that I’d collect social security too. I won’t for this job.

  66. 66
    Rob in CT says:

    @Raoul:

    And I get that there are bad teachers out there. But there are extremely entitled and loud parents with piss poor judgement, too.

    I had a really depressing conversation with a friend who is a teacher here in CT a couple of years back. Oddly enough, the guy is: a) a teacher, b) a union rep; and c) a Republican. But I digress.

    He was telling me about the *constant* complaining about grades from parents. Why did you give Johnny a C!? Well, Johnny got Cs on his tests and assignments. But! But! But…

    And he told me that after a short while, he just stopped fighting and started agreeing to adjusting grades upward, because otherwise it was nonstop whining, threats, etc.

    This is an established teacher. A department head.

  67. 67
    Raoul says:

    @Fargus:
    There’s another, not often talked about reason, beyond fees and the whole gambling with your 401(k) stuff you said, that the masters of the universe want to end public pensions.

    The power of public pension funds to exert proxy changes in corporate America. A number of pension funds have taken to voting to exert shareholder rights in ways that boards and CEOs hate.

    Smashing public pensions thus has a bonus bottom line: those nasty CALPERS-type activists will loose access to new money.

  68. 68
    rikyrah says:

    First of all, union teachers are basically exempt from merit evaluation. They have total job security, have summers off, and are well compensated.

    You are an idiot.

    1. teachers are evaluated every year,and until they get tenure, they are at the whim of the principal. even after tenure, that only makes them not subject to the whim of the principal.

    2. no, they don’t have total job security.

    3. summers off? – for which they don’t get paid, unless they prorate their money for the entire year.

    4. well compensated? you must only know teachers in well-off suburbs. teacher who work in urban areas should get combat pay, and I mean that.

  69. 69
    RaflW says:

    Of course, we can never. ever. talk about tax increases on high earners.

    Oh no. There just are no solutions out there!

    Now, I get that just raising taxes isn’t enough. But the idea that everything is 100% cuts and no increases on those who can afford it most is obscene.

    When I see that Sheldon Adelson can write $10M campaign checks with more ease that I can $100, then there’s some room for a tad more taxation at the top.

    I think we really have to start putting things in the starkest terms. Two choices, rich person: tax increases or pitchforks. You decide.

  70. 70
    Sly says:

    @Caz:
    Do yourself a favor: Go talk to the teachers in your neighborhood. 99% of this nonsense is due to people having no earthly idea what the profession is like.

    First of all, union teachers are basically exempt from merit evaluation.

    Teacher evaluation systems vary widely by state, but there is no district in the country where teacher’s aren’t evaluated. The problem with evaluations is that almost all of the qualities that make someone an effective teacher are not quantifiable, and the one quality that is (years of experience) is brushed off as corruption.

    They have total job security…

    If you think due process confers total security, I’d like your explanation as to how not every convicted criminal is not automatically released after their appeal. That’s what tenure is, you know. Tenure creates a property interest in your career. You cannot be deprived property without due process of law: an independent review by a third party with an opportunity to challenge claims and accusations made against you, with limited and diminishing opportunities for appeal.

    And yet, even with these protections, the district next to me just announced that they’re laying off a quarter of their faculty, and many districts within a 30 mile radius have had similar experiences in recent years. I’ll bet those people sure are glad they have “total job security,” especially in a profession with a 50% turnover rate in the first five years.

    have summers off…

    Teacher’s have summers off in the same way that beach lifeguards have winters off. The only way teachers are still paid during the summer recess is if (a) they request that their salary from Sept. to June be stretched to cover July and August or (b) the district within which they work does that automatically as a condition of employment. And this is why teacher’s are about 30% more likely to have a second job compared to the average workers.

    …and are well compensated.

    Starting salary in my neck of the woods is 50K, and that’s at the upper bound on salaries nationally. That’s about the national average for starting salaries for careers that require a Master’s degree.

    And results in education have been stagnant for 40 years… and cost per student has skyrocketed.

    It actually doubled in the late 70s, as a means of closing the “achievement gap” between racial groups (it worked) and remained fairly consistent since then (as has the gap). So unless you’re arguing that spending on education should only increase when it produces results for white kids, you’re flat out wrong on the funding/results end. And if you are arguing that… well… you’re an asshole.

    And I always found it odd that education is the one area where conservatives insist that problems can’t be solved by throwing money at them.

    while the number of teachers has doubled

    The teacher-student increase has been 3:2, mostly due to the increasing focus on bilingual and special education in the past decade or so. This expansion is demand driven; as more parents request special education and bilingual resources for their kids, districts have to either ration them (which is politically untenable) or expand the supply.

  71. 71
    Don K says:

    The thought has occurred to me that there might have been some collusion going on between the public employers (states, counties, municipalities) and union leadership regarding pensions.

    Governors, mayors, et al, would have looked at it and said, “Cool! I can buy labor peace and some other poor bastard in this job will have to worry about paying for it”, and the labor leaders would have looked at it and said, “Cool! I can look okay to the membership and some other poor bastard in this job will have to worry about actually prying the money out of the treasury later”.

    Since there are no funding standards regarding public pensions, smart unions would have insisted on funding standards built into the contracts as they were negotiated.

  72. 72
    Rob in CT says:

    @Don K:

    Possible, but I find the healthcare cost explosion as culprit theory much more likely. They made a deal that seemed vaguely reasonable at the time, and now it looks terrible, because of circumstances out of the deal-makers’ control.

  73. 73

    @burnspbesq:

    Using what money?

    Borrow.

    Money’s pretty cheap these days: If *I* could get loans at 1-2% fixed rates, I’d borrow as much as I could.

    Hell, at today’s interest/inflation rates, you could in theory just take out a wad of cash, sit on it 10 years, and make a profit.

  74. 74
    Corner Stone says:

    @Judas Escargot, Acerbic Prophet of the Mighty Potato God:

    Hell, at today’s interest/inflation rates, you could in theory just take out a wad of cash, sit on it 10 years, and make a profit.

    How would one make a profit doing that?

  75. 75
    kideni says:

    @Rob in CT:

    Oddly enough, the guy is: a) a teacher, b) a union rep; and c) a Republican.

    Somewhat OT though related to your digression: the Wisconsin Republican state senator who lost his recall last week had been a cop and union rep, and that’s a big part of what sank him — he’d benefited from being in a union, and then he stabbed them in the back.

  76. 76

    @Corner Stone:
    When interest rates are lower than inflation rate, you can (in terms of real wealth, obviously).

    You can make secondary loans or investments with the money: Remember those “0% for a year!” checks the credit companies used to send out during the Bush years? There were folks who’d max out the card, deposit the cash into a one-year CD or other instrument, then pay it off before paying any interest.

    Of course, you’d be much better served making capital investments. Which is why the GOP’s refusal to take advantage of the (certainly temporary) low rates to invest in our decaying capital infrastructure will one day be remembered as one of the great crimes against the People of the US, ever. (So much for running the gubbmint like a bidness).

    Come to think of it, I just realized something: The GOP only seems interested in deficit spending when interest rates are high.

    Wonder why that is…?

  77. 77
    chopper says:

    @Villago Delenda Est:

    of course, the CEO always gets his payout even if the company shits the bed. and they have to liquidate the pension plan to pay for it.

  78. 78

    @chopper:

    of course, the CEO always gets his payout even if the company shits the bed. and they have to liquidate the pension plan to pay for it.

    The most astute Businessmen understand just how important it is to have a financial cushion in these trying times.

  79. 79
    Fargus says:

    @Corner Stone:

    The dollars you’ve got to use to pay the bondholders back, after inflation, are worth less than they initially paid for the bond in the first place.

  80. 80
    Corner Stone says:

    @Judas Escargot, Acerbic Prophet of the Mighty Potato God: I understand the concept of taking cheap money and putting it to work in higher risk scenarios, or even consolidating more expensive debt.
    But the part I wondered about was the “sitting on it” part.

  81. 81
    Corner Stone says:

    @Fargus: I get the inflation eating real value(tm). And my 2010 dollars equal the nominal debt coupon in face value in 2020. So in that respect I am ahead in some measure.
    But it’s the ZIRP interest rate environment I’m having an issue with. Money doesn’t just grow by letting it sit somewhere in a super low interest rate environment. You have to take on risk somewhere to make it into a pile down the road.

  82. 82
    Don says:

    I’d love to say I am perplexed by the hostility towards unions and public sector folks over their “generous” pensions but it’s not really surprising. I can say that folks SHOULD be sensible and realize that these agreements didn’t happen with only one side’s participation – someone greenlit these things from the government/management side too. I can say that people should recognize that pensions are a part of total compensation and I and others up-thread made life decisions to forgo other benefits – often total salary amount – in order to get that end-of-life security.

    But its really no surprise when you look at how folks just don’t perceive the costs and value of non-monetary employment compensation. The lack of transparency in how much health care consumes pre-paycheck contributes to the health care problem. I think Ezra Klein is right on target when he paints a perfect parallel between wage stagnation and health care costs.

    Hell, just look at how common the use of the term “gives” is when discussing things like vacation time or the like. I have become that crank who my friends are afraid to speak in front of because of my ire over the issue. My usual refrain is “My employer doesn’t GIVE me anything; it compensates me with both money and other fringe benefits in exchange for my labor. And since they are part of an exchange, not a grant from the goodness of their heart, I do not think it’s acceptable for them to just decide to alter the deal mid-stream.”

    I turned 42 today and it was during my teen years that the business world started redefining the nature of employment at full speed. They gave us all notice that the days of spending your entire life at one organization were over. Personally I’m okay with that, but I am not okay with this asymmetry about our relationship.

    If I’m a commodity item to you then don’t expect me to treat you like any less of one, employer. We’re not friends; we don’t give each other gifts. You don’t pretend that your suppliers are your buddies and throw each other little parties – don’t shine me on either. We have a business relationship. Act like it. That means honoring your bargains or facing the consequences.

  83. 83
    jncc says:

    In the average little city where I live, the average police officer salary is $120K and they can retire at 55 with 90% as their pension.

    And perhaps the reason why people aren’t quite so exercised about excessive compensation for middle management in private corporations (which I agree is obscene) is because that they are not paying $9,600 a year in property taxes to pay for private employees.

  84. 84
    arguingwithsignposts says:

    @jncc:

    because that they are not paying $9,600 a year in property taxes to pay for private employees.

    And none of those private employees are going to answer the 911 call to your house in the middle of the night, either, or pull the drunk off the road before he kills someone, or break up a domestic disturbance before someone gets shot.

    OTOH, average $120K/year is not an “average little city.” National average is $55,000.

  85. 85
    Rob in CT says:

    @jncc:

    By all means, negotiate harder.

    That said, the missing part about “middle manager” compensation (which doesn’t strike me as a big problem) is that it probably *is* costing you money, unless you are yourself a middle manager or higher up.

    Non-mgmt labor used to receive a larger chunk of corporation’s after-expenses revenues. As productivity rose, so did compensation for labor. This decoupled around about 1980 (possibly in the mid-to-late 70s), such that now the financial rewards for productivity gains go straight to the top.

    That’s where we are. The truth is that it’s relatively EASY to go after that cop, because you can vote in somebody who promises to go after him (the cops will probably be last, though, after the teachers and other public employees), whereas in order to fight the pay structure at your place of private-sector employment you: a) need to find out what people are actually making (which is often grounds for immediate dismissal); and b) organize or otherwise agitate for a different pay scale (almost certainly grounds for dismissal, in many jurisdictions).

    Shorter me: going after the public employees is easier. Less risky.

    I get it, I really do. I don’t pick fights with management either. I have a pretty good job that pays very well. I’m comfortable.

    But I also don’t whine and complain *endlessly* about paying my taxes, so I have that going for me.

  86. 86
    Rob in CT says:

    I’d also like to point out that $9600/yr in property taxes means you live in a very expensive area. I grew up in just such an area (my parents still live there and pay ~$10k/yr). Not average. Not even close to average.

    I pay ~$7500/yr now. That’s because I live in a well-off town, have a big expensive house, and we have a good school system. The world’s tiniest violin gently weeps.

  87. 87
    Yutsano says:

    @Rob in CT: Or s/he lives in New Jersey, which is a property tax outlier. Either way the ratfucking by jncc continues.

  88. 88
    jncc says:

    Why so butthurt Rob?

  89. 89
    Fargus says:

    @Corner Stone:

    But it’s not just a super low interest rate environment. It’s an effectively negative inflation-adjusted interest rate environment. In that sense, letting it sit around, you will wind up with more money in real terms once you pay off the bonds.

  90. 90
    Rob in CT says:

    @jncc:

    I’m not butthurt at all. What are you talking about?

  91. 91
    jp7505a says:

    iF the government officials had negioated responsibly and set aside the money necessary to fund these obligations, then they might have had to ask the voters for a (gasp, choke, cough) tax increase. And of course that would never do. So the voters were quite happy to go along with this charade until now when the bills come do they SHOCKed SHOCKED at what was done in their name

  92. 92
    Scamp Dog says:

    @Fargus: On a gut level, no one believes this is a wealthy country any more. Yes, yes, there are various statistics proving that we are, but what does that have to do with a political discussion in America these days? Once you’ve decided that there simply isn’t enough to go around, all you can do is pull the others down to your own level.

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