Friday, March 26, 2010

Public sector workers: friend or foe?

Right wing pundits claim that city, state and federal workers are robbing us, with total compensation vastly higher than those doing comparable work in the private sector.

Leftists say these workers are our brothers, and we should unite against our common foes, the greedy bosses and financiers.

So--do public sector employees make more? I looked for nonpartisan factchecking sources, and found that it looks like they do. Not as much as many right wingers claim...but definitely more. USA Today said it averaged around 20% (once you take all the perks into account). And it should be definitely less.

That was the civil service deal from time immemorial. You exchanged less pay for more security.

But no more. One local newspaper asked local cities for lists of employee pay. They all refused, even though public employee pay is a matter of public record. How could it be otherwise? But after suing them it got the lists and publishes them regularly. Your local paper should, too.

It's not an eye-opener. More of a jaw-dropper. For example, the city manager of a nearby town with a population of 75,000 makes more than the Vice President of the United States. And the grift goes all the down to the secretaries and street sweepers. And managers' compensation is often tied to that of the employees--yet those are the ones negotiating workers' salaries. Plus compensation is often required to be determined in comparison with other cities' workers' wages, explicitly excluding comparable private sector compensation.

And as for the greedy bosses--yes, they're greedy, by and large. Only they aren't the bosses of these public employees.

We are.

That's a fundamental difference the public employee unions don't want you to think about. I'd love it if all of us had the compensation and job security of our public sector counterparts, but we don't. So they should have the compensation we do until or unless ours goes up.

And this isn't just a problem of pay equity. During the boom the public employee unions demanded more pay, and the cities etc. bought them off in part with lavish pension deals that didn't have to be funded right away. So they weren't. Or the cities stole the funding for immediate needs, just like Congress has been raiding the Social Security trust fund for decades.

But now the bill's coming due as city employees with the sweet deal start retiring. It's an unfunded mandate that's going to rob cities of their ability to repair their infrastructure. It drove one local city--Vallejo--into bankruptcy.

The public employees claim that those pensions are just reward for taking less money than if they'd been in the public sector. They say that this mandate is unfunded because city governments stole the pension fund money, moving it into the general fund. This is often true. But I've been looking at these lists of their pay, and at least around here city employees are getting more up front and later on as well.

Plus many are gaming the system. Their pensions are based on work they do in their last year or two, and many get so much overtime during that period that their pensions are inflated spectacularly.

And the public sector employee unions give those running for office--such as city councils--lists of demands the candidates must agree to, or the unions will campaign against them.

Thus my local city council has at least four members who are in the unions' pockets--they vote for the unions reliably. So it's hard for elected officials to go against the unions.

At the state level, here in California the prison guard union wields enormous power, and acts aggressively to deflect corrections budgets into their pockets and away from anything that smacks of rehabilitation. And of course they oppose legalizing marijuana and favor long mandatory sentences for everything.

So public sector unions warp public policy in favor of public employee financial interests as well directly with sweet compensation deals.

Your first action item is transparency--get your local paper(s) to publish city government compensation information. It's your money, after all. You're the boss, not the employee, in this case. As the boss you have a right to know what your employees make.

And if that compensation seems outrageous; if your city sits on a city employee pension time bomb; if your city's in debt and it's getting worse; if your infrastructure isn't being maintained...then you need to support city council candidates who are in the taxpayers' pockets, not the unions, not developers--not anybody but you.


Fugu Sushi said...

Government employee salaries are in fact public record, and for most cities they're incredibly easy to find. For example, City of San Diego. I typed in Google, "City San Diego" and "Salary", it immediately suggests "table" to complete the keyword string. Out comes the salary table for San Diego's city workers:

You can find a list of their benefits on their HR's webpage.

It's really scare mongering to say cities "refused" to give news agencies these data, considering it took me all but 30 seconds to find both the salary table and the compensation package.

Are they being over paid? On USA Today, the news source that broke the story, it stated federal employees get 20% more than private sector, state and county employees get 2% less than the private sector, and city employees get 5% more than the private sector.

You have to also take into account that some jobs are not comparable. A psychologist for the state and a psychologist for the private sector do not deal with nearly the same amount of stress. It makes total sense for a state psychologist to get highly compensated due to the types of people they deal with: rapists and serial killers.

A PR manager for the private sector works in completely different capacities as a PR manager for the federal government. One is that much less important than the other. One will cause a war if he screws up his job, the other will maybe cause his company to lose a client and the client to lose some money.

Union workers traditionally are paid more, and virtually all government employees are unionized. I think your fire should really be aimed at unions. I think they've gone above and beyond in negotiating compensation packages and something really should be done about it.

In terms of pension fund, majority of the cities in California, all state governments, run their pension fund through CalPers, a giant pension fund system. Employees contribute monthly into this pension fund. Some cities that provide medical care for retirees have employees contribution monthly into the medical pension fund. They're funding their own pensions. This money is not magically going into their pocket, neither is it tax dollars sucked up from citizens. CalPers is in fact doing very healthy as it has banked on conservative, incremental investments.

Vallejo went bankrupt, but it's not because of the majority of the city employees. Vallejo, a year before it went bankrupt, tried renegotiating compensation packages. Most unions agreed, except for Police and Fire. Police demanded its 15%/year raise because it "deserves" it, even in a recession.

Police and Fire cost typically make up 70~80% of a city's general fund, and these people are significantly over paid. I know it's almost sacrilegious to say police and fire are over paid, especially when you look up their salary and it's only 50k. The thing is their salary is adjusted upwards so quickly every year, and often police earn more in over time than their entire salary. One of the cities attempted to negotiate for furloughs last year. All unions in the city agreed to the furlough, except for police and fire. The story was apparently F*** U, we're police, citizens will never allow it.

I would go as far as to say police and fire unions' unwillingness to come to the table and negotiate for a salary reduction or a change in their compensation, is what bankrupted Vallejo. Thanks to police and fire unions, the city was forced to declare bankruptcy to get out of the contracts with the police union and the fire union.

I would also go as far as to say I don't think most government employees are over paid, but 1/4 to 1/2 should probably be fired for being incompetent, ineffective, slow, stubborn and unwilling to change, and a number of other things.

Ehkzu said...

Fugu Sushi—thanks for a thoughtful reply. BTW as a scuba diver I’ve seen plenty of live fugu, so I appreciate your Nom de Internet.

Some comments:

"Government employee salaries are in fact public record"

All states have some kind of freedom of information legislation, but the details vary greatly from state to state, and the implementation varies greatly even today.

Here in California, the only reason you could find that San Diego info is Prop. 59, passed in 2004. Before that you'd have been out of luck. Even today this varies from state to state, and even when the law mandates it you could still be out of luck.

For example, this month reporters from the Fayetteville Observer (North Carolina) went into various offices looking for public information as private citizens and often got the runaround or were simply turned down flat.


"Are they being overpaid?"

I think we agree that you can't simply compare salaries. When folks like looked into this they found that overall public sector employees made more when you compared their total compensation packages. Not, as I said, as much more than right wing demagogues claim--but still more.

That's why I encouraged readers to look up their local government's compensation packages in areas where they know what comparable private sector wages are.

As for job stress...yesss Clarice, dealing with Hannibal Lector's sure to tweak your brain.

But private sector employees have a job stress few public employees experience: no job security.

For example, even when private sector workers get a lifetime pension as part of their packages, they've discovered that those pensions are revocable--while public sector pensions are not in most cases.


"You have to take into account that some jobs are not comparable."

Yes, but even with the non-comparable jobs, even with ones where employees risk life and limb for us--their pay can't be infinite. And they shouldn't be able to game the system to double their pay and/or double their pensions, as many do now.

And as I said, lack of job security is, overall, the biggest stressor of all.

There are public sector employees who lack this security--notably teachers--but many/most others have it.

So even if your job means more to the world than mine, if you can't get fired and I can, my job is more stressful than your job at the personal level.

And importance to the world is nearly a random variable against salary. Think of all the entertainers (I include pro athletes) who command huge salaries.


Employees fund their own pensions?

It varies. When pensions are based on what you make in your last year or two of work and you arrange to get huge overtime in that period, your pension could be many multiples of what you paid into the system (depending on how long you live of course).

I think I once figured out that I've paid for my social security up to age 78, but if I live past that it's on the people's dime.

And yes, in agreement with you, it's police and fire department workers who game the system the most and have been most intransigent about wage negotiations.

As for other public sector employees--I think many blue collar workers are significantly overpaid as well. But I think we agree that it's not fair to just quote a percentage blanket figure.

Everyone needs to read the list for their own city/county/state etc. and see for themselves.

I've done that for the city I live in and was astonished.

Plus there's another issue besides pay--it's total size of the payroll. Our city appears to have many more city workers than comparable cities. So overstaffing is also an issue.