Parity in benefits for "public employees"

[Leonidas]

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Originally Posted by nun I am a libertarian socialist and believe that state ownership and involvement in certain areas of society is vital...

Not sure what label I would apply to myself, but "work or die" capitalist feels right, and I know that state ownership and involvement in certain areas of society is vital. Wonder how our lists of what things should be owned would compare.

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Originally Posted by ERD50 For example, if my municipality decided to cut spending for Firefighters to the point we couldn't hire qualified people, I bet there would be people protesting in our municipality - we want/need a good fire department. We need certain functions, we just don't want to overpay (more than supply/demand dictates) for them.

D'accord. However, just as the airlines hide so much profit in fees these days, our politicians concealed the true cost of such services by hiding it inside the pensions that were years away.

[nun]

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Originally Posted by Leonidas Not sure what label I would apply to myself, but "work or die" capitalist feels right, and I know that state ownership and involvement in certain areas of society is vital. Wonder how our lists of what things should be owned would compare.

Agreed, the extent is the question. For me it doesn't stop with national defense. But that gets me back to the original thrust of my question. Why isn't anyone asking the military to change from final salary pensions to defined contribution plans, take wage cuts and for soldiers to pay for their very rich health care plans. Surely, if fiscal responsibility is the issue, and we can't sanction final salary pensions for Government employees, then we can't sanction them for military personnel either.

[samclem]

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Originally Posted by nun Agreed, the extent is the question. For me it doesn't stop with national defense. But that gets me back to the original thrust of my question. Why isn't anyone asking the military to change from final salary pensions to defined contribution plans, take wage cuts and for soldiers to pay for their very rich health care plans. Surely, if fiscal responsibility is the issue, and we can't sanction final salary pensions for Government employees, then we can't sanction them for military personnel either.

There is no "final salary pension" for military personnel. You started this thread, did you do any research before just letting loose?

[nun]

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Originally Posted by samclem There is no "final salary pension" for military personnel. You started this thread, did you do any research before just letting loose?

Oh sorry I thought there was. I've worked with lots of folks form the Air Force and in conversations with them I got the impression that after 20 years they got an pension that was linked to their salary. Please tell me how military pensions are funded and calculated. Do soldiers pay a portion of their salary into a DC plan?

[samclem]

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Originally Posted by nun Oh sorry I thought there was. Please tell me how military pensions are funded and calculated. Do soldiers pay a portion of their salary into a DC plan?

Service personnel do have a defined contribution plan available to them. That plan (the TSP) can, by law, be funded in part by employer contributions, but the military services have decided not to do that. There might be a few exceptions for certain hard-to-fill specialties (Explosive ordnance disposal, combat infantry, etc) but in general service personnel get ZERO matching for any contributions to this plan. How does that compare to civilian employers?

Yes, there is a defined benefit plan, and it is part of the individual's total compensation. A servicemember becomes vested in this program after 20 years. Not a minute earlier (barring service-connected injury or very rare special inducements to get numbers down). If the person has been in for 19 years but doesn't want to go back to Afghanistan, doesn't want to be separated from his family one more time to go to sea or go on a remote tour, then that person may be able to quit the service (depending on his/her enlistment status, etc,) but he/she will get zero retirement. Go to bed with a superior or a subordinate--maybe go to jail and also lose your retirement. Got a DUI? Say something bad about the President to the newspaper? Get fired and get zero retirement. To receive his "retirement" check, an officer must agree to be available for future callup (if a person has to agree to additional service, is it truly a "retirement"?). And the amount of that check is not based on the individual's final compensation. The compensation of a servicemember is comprised of several portions, and only the "base pay" is used in computing retirement pay. This is typically about 60 percent of what the person was earning. The "retirement" pay percentage of this "base pay" is based on years of service. And it is not the final "base pay" that counts, but the average base pay for the previous 3 years, which may be a lot less.

I'm not saying it is a good deal or it is a bad deal. I will not get into the whole issue of what an individual must do, and must be prepared to do, in order to earn this retirement. There are two things worth mentioning:

1) This deal, or one like it, is available to most Americans and resident aliens of good character and physical condition. There's no need to know somebody special, have a friend in the business, etc.

2) Whether we are talking about soldiers, truck drivers, or teachers, there's a big difference between a) breaking a promise to those who have already put in years of service and b) changing the rules for those who are now accumulating "points" in the system and are therefore free to take their talent and time elsewhere.

[Zathras]

Here is another example of news reports:

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Thousands rallied at the capitol building in Madison Wednesday. They’re against Gov. Scott Walker’s plan to strip most state workers of their collective bargaining rights.

This is from the local WCCO news site (CBS) as reported on Wednesday.
Yes, many people are unhappy about taking a pay cut. But the primary concern I have seen in all the local news (we are in MN and get a fair amount of Wisconsin news) has been the doing away of the collective bargaining rights.

Now, if you think unions have no place and ought to be done-away with, fine, but then take out all the public worker union's right to collective bargaining, not just some.

And yes, I agree the democratic reps should return to the state capital. They have made their point and are just hurting themselves at this point by ducking the issue.
Cast their votes 'no' and let the governor take the consequences of his actions.

As for the bulk of the protestors being the people directly affected, isn't that usually the case? I don't see why one would expect the general public that is not directly affected by something, to come out and protest it in greater numbers than those primarily affected.

[nun]

Sorry, so the pension is calculated as some fraction of the base pay. The vesting sucks, 20 years is bad, it's 10 years for MA state employees, but they contribute 11% of salary to the pension too.

It would be bad to alter military pensions for the already retired, but if we are thinking of changing the pensions of current state workers, or increasing SS age, we should also think about getting rid of military High-3 and going over to a 401k type plan which will be cheaper for the tax payer. It would also give soldiers the freedom to invest their own money, surely a good thing.

Quote:

2) Whether we are talking about soldiers, truck drivers, or teachers, there's a big difference between a) breaking a promise to those who have already put in years of service and b) changing the rules for those who are now accumulating "points" in the system and are therefore free to take their talent and time elsewhere.

I agree 110% with the above comment

[samclem]

I keep reading about the Wisconsin law "stripping workers of their collective bargaining rights." I've heard a lot less about a fundamental freedom the new law would give to state workers:
From the Green Bay Press Gazette:

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Union dues would no longer be automatically deducted from paychecks. Members would have to vote annually whether to recertify their unions, rather than every few years. And public workers could decide not to join a union, a choice they currently don't have.

It seems to me that the freedom to hold a job without having mandatory deductions from your pay to support causes you may oppose is not a minor issue. I'd bet the loss of this compulsory funding bothers the unions (and animates their resistance to this legislation) much more than any loss of collective bargaining "rights."

[martyp]

Defense is different than most functions of government. It is one of the basic responsibilities of the Federal Govt. We have an all volunteer force. The compensation + pensions and benefits are part of what factors into recruitment and retention. Whatever gets us the force we think we need is pretty much what we have to do. We could always do away with real world economics and go back to conscription.

[clifp]

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Originally Posted by youbet I doubt we'll ever know. Unless there were some official negotiations being covered by reliable media (sorry for the oxymoron), anything we hear is just speculation or posturing. What makes this so interesting for me is that the Wis public employee pension system is based on such sound principals and is working very well. Instead of COLA's, they have market performance based adjustments up and down (yes, people take cuts!) calculated with five year moving averages. It reminds me of the variable withdrawal plans frequently discussed on this forum. You have a choice of aggressive and conservative investments. The state gov't hasn't been busy borrowing (stealing) or tampering with the money. Compared to my home state of Illinois, it looks like a wonderful thing. Plus Wis educators pay into SS, so they get that on top of their pensions. Other than the fact that the employees pay zero into the system, it looked like something Illinois should aspire to. And, BTW, Illinois teachers already pay significantly more into their pension system than the Wis teachers are being asked to pay. The Illinois teachers are being rewarded for this by having a massively underfunded system destined to go out of business in about a decade without some sort of huge, and unlikely, intervention.

I went back and looked at the WI pension and you are right, there is good reason that has been consistently one of the best funded pension in the country.

First the benefits are reasonably modest about 1.6-1.8% time the number of years worked. If you have 30+ years you can retire at 57 with a full pension, 10% less at 55. Second much of the money is invested in a variable fund which causes payout to be based on market performance. My general rule of thumb is that the combined employee and employer (i.e. government) contribution need to be in the range of 25-35% of their salary. for adequate funding of a pension plan and the Wisconsin plan is certainly on the low side of this range.

Still is pretty outrageous that many/most? WI employees contribute zero toward their pension and health insurance this is certainly equivalent of 25% pay raise and when people talk teacher salaries in WI if they aren't adding in a figure like this you are being disingenuous.

However, of all the state with fiscal problems why the biggest protest on cuts and roll backs is happening in state that is in reasonably decent fiscal shape is mystery.

[Music]

I feel I have been beat up with the emotion, I have read on the posts in the last 4 pages. Wew. I'm glad that's over.
My take: Removing rights of the individual worker, does nothing for a budget. Smoke and mirrors... All it does is make it easier for the majority to oppress the minority. The Unions were formed from the understanding that UNION gave the workers (minority) a voice and choice. It put into place a form of checks and balances in the employer / employee relationship. Remove it and stomp on the employee because we need to make more profit, or cut a budget. Have they always used a brain in their negotiations? No. But that does not make them evil institutions.

If people were to take a fair and unbiased look at the situation ie: sans Political Party platforms. We would find that if every company and individual payed an honest share of taxes the problem would be solved.
The problem is not Union Representation it is the Political pandering of the Politicians in power.
The average wage in Wisconsin is only $44,700. I have taken the time to look at the state government pay scales and they are not excessive.
Are their benefits excessive, maybe. However, the state of Wisconsen has made that agreement with their employees and why should newly elected politicians have the right to change the rules in the middle of the game? They need to look at ways of fulfilling those obligations, as any honest person would.

[Zathras]

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Originally Posted by clifp ... However, of all the state with fiscal problems why the biggest protest on cuts and roll backs is happening in state that is in reasonably decent fiscal shape is mystery.

I think that is because the primary cause is NOT the wage/benefits cuts, but the loss of collective bargaining.

[clifp]

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Originally Posted by Zathras I think that is because the primary cause is NOT the wage/benefits cuts, but the loss of collective bargaining.

Probably true. I guess I am still struggling to figure out why public employees need to be represented by unions.

I certainly understand why (especially in the past) that folks doing jobs that required relatively minimal training say farm workers, or miners would need a union. These workers are in opposition to the farm/miner owners who are sometimes greedy bastards, and always in a very competitive industry, and every dollar the owner pays the worker is one less dollar in his pocket.

It seems to me that firefighters, cops, teachers, building inspectors, and even to much less extent DMV clerks, require pretty extensive training and aren't easily replaced by any guys off the street. More importantly, the police chef, mayor, city manager, or dept. head doesn't personally benefit from cutting the benefits, or pay. Why not have public employer operate like most large private employers. The companies set pay grades, individual gets promoted based on a combination of objective and subjective criteria that are base primarily performance and not longevity.
If you don't like your salary you are free to negotiate with your manager, or ultimately find a job somewhere else. Why should all teacher with 5 years experience and master get the same pay, and more importantly why should it be so difficult to get rid of the bad teacher, the janitor who sleeps on the job and the numerous other abuses?

[travelover]

When I was a kid my mother was a teacher. My dad was in a tuberculosis sanitarium and she supported us 5 kids. She earned less than the male teachers because "women didn't need the money". This was before teachers were unionized. Abuse like this was common, even though it was a "government job". Unions didn't occur out of greed, but out of frustration. Take away the right to organize and the abuse will return - it is human nature. Look at the abuse reported here almost daily by salaried cube rats.

I certainly think contracts need to be renegotiated to fit current realities, but stripping the right to organize and bargain is a nonstarter.

[Mulligan]

Interesting stats on unionization in US. In 1983, 20.1 % of workforce was union. In 2010 it is 11.9%. However, only 6.9% of private workforce is now union. In public sector 36.2% of workforce is union. Source: Bureau of Labor Statistics.

[Music]

Quote:

Originally Posted by Mulligan Interesting stats on unionization in US. In 1983, 20.1 % of workforce was union. In 2010 it is 11.9%. However, only 6.9% of private workforce is now union. In public sector 36.2% of workforce is union. Source: Bureau of Labor Statistics.

So?

[Lakewood90712]

Quote:

Originally Posted by Mulligan Interesting stats on unionization in US. In 1983, 20.1 % of workforce was union. In 2010 it is 11.9%. However, only 6.9% of private workforce is now union. In public sector 36.2% of workforce is union. Source: Bureau of Labor Statistics.

Going by % of the workforce, I think this can be atributed to so much of the manufacturing jobs being sent offshore . That used to be the largest membership. In total numbers of members in the government sector, I don't think it has grown any faster than the total # of gov. employees.

[clifp]

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Originally Posted by Music So?

I think it is instructive that order to survive in a global market private companies have by and large either ditched unions, gone bankrupt, or been bailed out by the taxpayers.

Public employers who don't face global competitors for the most part, are able to continue being represent by unions. It seems to me that for the most part unions are an anachronism and we need to modernize our institutions. I still have not heard a compelling reason that we need public employee unions any more than typewriters.

[ERD50]

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Originally Posted by travelover I certainly think contracts need to be renegotiated to fit current realities, but stripping the right to organize and bargain is a nonstarter.

How can it be a "non-starter" when most private employees operate this way? You bargain one on one, no one ever took away my right to bargain.

-ERD50

[Music]

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Originally Posted by clifp I think it is instructive that order to survive in a global market private companies have by and large either ditched unions, gone bankrupt, or been bailed out by the taxpayers. Public employers who don't face global competitors for the most part, are able to continue being represent by unions. It seems to me that for the most part unions are an anachronism and we need to modernize our institutions. I still have not heard a compelling reason that we need public employee unions any more than typewriters.

The argument that the Global Market place will drive the employment of the American worker, will make the American Worker a thing of the past. With the cost of living in this country it is necessary for Americans to earn more than $2.00 a day. Unless you put the entire country in poverty, reduce the costs of goods and services to near nothing, the Global Market Place cannot work.