Spanky
Thinks s/he gets paid by the post
There's a nurse that gets paid well also (while other nurses are making in the $50K range).
ANTHONY BIFFLE
NURSE
DEPARTMENT OF STATE HEALTH SERVICES
$152,176
State pension inflation protections start to get cut
- Thread starter Running_Man
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There's a nurse that gets paid well also (while other nurses are making in the $50K range).
ANTHONY BIFFLE
NURSE
DEPARTMENT OF STATE HEALTH SERVICES
$152,176
ziggy29
Moderator Emeritus
The main rebuttal I'd have to this is that if the private sector deal one "signed up for" as a 20-something was taken away 10-20 years into your career, you're screwed. You can't go back and get those all-important years of service back for pension calculations. Your retirement is permanently impaired.
Yes, maybe you can change to public sector work in your 40s, but you won't get enough credited service time to get all that much when you are ready to retire. I think that's something the "go get a government job and stop complaining" argument fails to account for. Yes, we can get a government job now, but we've lost a lot of years once our private sector pension and retiree health insurance were taken away, years that equate to a significant chunk of lost potential pension income.
Like those who joined the public sector (say) 20 years ago, those who entered the private sector made a decision which often included pension and retiree health insurance benefits just like the public sector. So to say we "made our own bed" by not choosing a government job at age 22 is a little unfair unless you assume that we should have been able to "see the future" and know that the private sector employee would increasingly get screwed in the 21st century. That would be true of people who took jobs with no pension, but not for those who "signed up" for a job which had a pension that would later be frozen on us.
In short, those who say it's our own fault for choosing private sector work back when it also provided retirement benefits should also be prepared to offer us a time machine to go back and make different choices. Otherwise it's a rather unfair statement and feels "let them eat cakey" to me.
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And those who chose a public sector job at lower immediate pay, but with a generous pension, can't go back and recapture those foregone years of higher earnings when their pension is reduced.
This sounds like my little brother when we were kids. Whenever he got in trouble, he would make sure to tell my parents something I had done wrong too, so that we both would get a beating and he wouldn't have to suffer alone. I don't think its fair when private employers retroactively cut pensions either. And, frankly, I don't see that as sufficient justification to cut public sector pensions. "Some got screwed so all must get screwed" is hardly a basis for sound public policy.
I don't fault people for any employment choices they made. When we are 22 years old, its hard to make any predictions about the future. I would suspect that not too many people make their initial choice of employment based on the ultimate pension possibilities. Some do, but I think it is rare. I was in the military when I was young, but didn't stay past five years, so no pension there. Then I worked in the private sector for the vast majority of my career, first as an engineer and then as a lawyer. I had a 401k, but never a company match. And now I am working for the state for the last few years of my career; I won't be here long enough for a pension. (and my pay is less than 25% of what I made in private practice.). In short, I chose what to do at various points in my life because that's what I wanted to do at the time and this debate is largely academic to me.
My point is that many, many people would rather complain that others have a better deal and try to drag them down rather than improve their own lot. I can't tell you how many times I heard that lawyers are overpaid. Since no one wants to hear that this stereotype is far from the truth, my usual response was to call their bluff and say "It's a free country. You should become a lawyer and get in on the gravy train." I knew they would always have some excuse why they couldn't.
ziggy29
Moderator Emeritus
First of all, I have never advocated "screwing" anyone already in the system so this is already a non-starter, at least if it's directed at me.
Second of all, you don't seem to be accounting for the strong likelihood that some of us who already got screwed may face getting screwed a second time as we eat higher taxes and/or reduced services to maintain the deal for others which was taken away from us -- thus pushing our retirements even *farther* back than they already are, because higher taxes could reduce our ability to save for our own 401K-based retirement and other retirement investments. No one in politics and government seems to give a damn about the private sector folks who lost theirs, or care that their 401Ks suck and have probably delayed their retirement by several years.
If not screwing the public sector didn't likely require a second screwing of those already screwed, I think your assertion would be much stronger.
But in the meantime there is *zero* justification, IMO, for not pulling the plug on DB pension plans for new public sector hires in *most* occupations. If that means higher base pay and a 403B match, so be it (though the value of job security needs to be factored into total compensation). The sooner we stop compounding the problem by adding new participants, the less draconian the "fix" will need to be and the more likely it is we can continue to give the current deal to those already *in* the system to their retirement and beyond.
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Not directed at you in particular. You have been clear that the changes should not be retroactive. Others, however, have not.
In effect, we are all "customers" of the government. Like customers of any private business, part of the price we pay for the goods or services goes to compensate the employees who produced/provided them. Should the employees of GE or IBM or any other private company lose their pensions because you lost yours? Should Walmart squeeze its employees so it can lower its prices because you would like to pay less and retire sooner? (Yes, I know you will say "I have to pay taxes, I don't have to shop at Walmart". But, in general, we all have a basic basket of goods and services that we need to get from private companies. So you should view my examples collectively.) Generally, private companies price their products at what the market will bear -- they don't know or care about your personal financial situation when you step up to the counter to make a purchase, nor should they. The bricklayer who has ten kids and an unemployed spouse pays the same as the single millionaire hedge fund manager. At least with taxes richer people pay more.
And lest it be forgotten, public employees are taxpayers too.
Sounds entirely reasonable to me. My major complaint has nothing to do with the merits of either side of this debate. Rather, I have been trying to point out the entirely self serving and irrational nature of some of the arguments on this thread (by a number of people on both sides), which in most cases could easily be turned around and used by the other side.
ziggy29
Moderator Emeritus
Yes, I agree that some of the more strident positions on both sides have done little to foster any productive discussion about what to do. It's like so many other public policy issues; we (collectively as a society) spend too much time arguing at each other instead of listening to each other. All that does is polarize us even more, makes it more emotional than rational, creates more of an adversarial, us-versus-them mentality and creates two clearly defined "sides" whose positions are intractable and determined to "defeat" the other side. With such a toxic atmosphere, building on common ground, compromise and shared sacrifice become almost impossible to achieve. There are simply no great statesmen (or women) today who can bridge the divide any more. (Those types don't tend to make it past the primary.)
Being on the private sector side, I do think some folks on the public sector fail to understand why the bitterness is here, particularly among those who were screwed and had their pensions frozen and retiree health insurance taken away completely. And why there's backlash to the prospect of paying more taxes to protect the retirement of others when no one did the same for our lost pensions or our tanking 401Ks. It begins to feel like second class citizenship at some point.
And although I don't advocate any takeaways from current public sector employees and retirees, I will go back to your statement where you said, "Some got screwed so all must get screwed" is hardly a basis for sound public policy." I would normally agree with that, but if the alternative is a second screwing for the people who already got screwed so the people who never got screwed don't get screwed, there is some basic fairness issue in that.
As for public sector employees paying taxes, sure, but it's not like their taxes were raised to prop up my 401K, and it's not like I had the option of paying another 1-2% in taxes to keep my pension and retiree health insurance intact -- which I gladly would have done. I don't consider raising my own taxes by 2% of my income to keep my retirement deal as a screwing -- I consider it a blessing if the alternative is losing my retirement. I *do* consider raising my own taxes 2% to protect others when no one gives a crap about what's happened to my private sector retirement as a screwing. Hence if taxes are raised to prop up public sector retirement, in terms of the "screwing score" I see Private Sector 2, Public Sector 0.
And if I have to get screwed some more to honor the deals already in place, I'm prepared to suck it up. But I will strongly object to tax hikes on me to prop up an ailing and unsustainable system if we keep bringing more new hires into it.
Spanky
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I understand your frustration Ziggy and the sense of unfairness you feel. I'm not going to be getting a pension at all, so my natural economic interest lies with those who would cut them. But, as you rightfully suggest, we should at least have an open, honest and, above all, calm debate about what to do.
I think there are certain factors in this debate that are often assumed but unstated and which are just not true.
1. Some argue as if all private sector employees had defined benefit pensions and lost them. I'm sure that someone here has actual data, but it seems to me that all my adult life, and certainly the last 20 years, the vast majority of private sector employees have had defined contribution (401k) plans. And not all defined benefit plans have be eliminated or frozen. So there are a substantial number, perhaps the majority, of private sector workers who are not the potential victims of a "double screwing". Those people complain loudly because they don't like taxes and, at least it appears to me, that they are envious.
2. Most appear to assume that all taxes go into the pockets of public employees. Again, I don't have actual figures, but I do know that a substantial amount of our tax money goes right back out the door to private companies who are government vendors. Consider, for example, the cost of building a new submarine for the Navy. The overwhelming majority of that money goes to Electric Boat or Newport News Shipbuilding. Very little goes to public employees. Thus, when we say "let's cut the budget deficit by cutting pay or benefits of public employees", we are making the assumption that the cause of the deficit is the employees, not paying huge sums to private vendors. Consider, for example, a situation where the state builds an unnecessary building and it causes a $1 million deficit. Because we don't like deficits, we cut the pay of public employees by the collective amount of $1 million. We have just made them pay 100 cent dollars to close the budget gap because we were unwilling to pay 6 cent dollars (the top tax rate in my state) by raising our taxes.
I think there are certain factors in this debate that are often assumed but unstated and which are just not true.
1. Some argue as if all private sector employees had defined benefit pensions and lost them. I'm sure that someone here has actual data, but it seems to me that all my adult life, and certainly the last 20 years, the vast majority of private sector employees have had defined contribution (401k) plans. And not all defined benefit plans have be eliminated or frozen. So there are a substantial number, perhaps the majority, of private sector workers who are not the potential victims of a "double screwing". Those people complain loudly because they don't like taxes and, at least it appears to me, that they are envious.
2. Most appear to assume that all taxes go into the pockets of public employees. Again, I don't have actual figures, but I do know that a substantial amount of our tax money goes right back out the door to private companies who are government vendors. Consider, for example, the cost of building a new submarine for the Navy. The overwhelming majority of that money goes to Electric Boat or Newport News Shipbuilding. Very little goes to public employees. Thus, when we say "let's cut the budget deficit by cutting pay or benefits of public employees", we are making the assumption that the cause of the deficit is the employees, not paying huge sums to private vendors. Consider, for example, a situation where the state builds an unnecessary building and it causes a $1 million deficit. Because we don't like deficits, we cut the pay of public employees by the collective amount of $1 million. We have just made them pay 100 cent dollars to close the budget gap because we were unwilling to pay 6 cent dollars (the top tax rate in my state) by raising our taxes.
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Why didn't all the complainers take government jobs if it's so lucrative?
My pension is simply part of the compensation I agreed to many years ago.
ziggy29
Moderator Emeritus
Here we go again. I repeat from an earlier quote of mine:
"Just go get a government job" is a throwaway comment when you're saying it to someone who has already lost 10, 15 or 20 years of their working career toward a deal that was taken away from them and who can never retire with a solid pension based on 30+ years of service at a reasonable age. We couldn't predict the future and we can't go back and take a "mulligan" on our career choices in out early 20s.ziggy29 said:
People in their 20s today *know* better and if they want a good retirement deal, they need to try to get a government job while the deal is still being handed out. But saying this to someone in their 40s who has been screwed by the private sector and doesn't have enough time to get the years-in-service needed for a strong pension, it's a rather flippant and even callous statement.
Suggesting it's our fault for taking private sector work when it had a similar retirement deal at the time -- saying it's our fault for not accurately predicting the future -- is a bit like blaming the victim.
Spanky
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Sorry, not for me. It's not that lucrative. Other than the pension, the type of federal jobs in electronic engineering is limited and not that interesting.
Engineering Jobs in the Federal Government
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1) In general I agree with you. It has been open season on employees since the Reagan era.
2) It is also unseemly and unfair to blame the public servants who made their choices and had to live with them too .
ziggy29
Moderator Emeritus
A couple thoughts:
1) Aside from seeing an opening to turn this political and using it as a chance to blame politicians and/or political parties here, there is one very good thing that happened in the Reagan era: the replacement of an unsustainable pension plan (one like many state and local entities still have) with a sane, sustainable retirement system that relies on a true three-legged stool. Had state and local governments followed suit with a FERS-like plan for new hires shortly after the feds did so, we probably aren't having this conversation today.
2) I don't see anyone blaming individual public employees. What are they going to do, refuse to take their retirement benefits because the rest of us are having theirs taken away? That would be silly. As long as the deal is out there and they are eligible for it, someone has to take it. The politicians overpromising on unsustainable benefits (and sometimes the unions that hold out for them in denial of economic realities) are where the blame would lie. But in reality, I'm not interested in assessing blame. I'm interesting in fixing the problem.
youbet
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Exactly. The fed govt seems to have gotten the message but state and local govt agencies are sometimes too stuck in the mud of graft, greed, payola, power and patronage to get on with what has to happen. Tax payers want to pay new hires less (combo of salary and benefits) and are trying to get their representatives (elected officials) to listen. Perhaps this will be a mistake and the quality of applicants will decline and problems will result. Or perhaps not. Maybe there will still be long lines of highly qualified applicants even if pensions are made similar to what's available currently in the private sector. I'm willing to take that chance.
If a municipality is broke and can't pay all its obligations, I'm wondering who is legally entitled to be paid first, the bondholders or pension recipients?
clifp
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On defined benefits, the research I've done shows that during the height of DB in the 70s less than 1/3 of private sector employees were covered by a defined benefits. Up until the 401K law the majority had no retirement plan. Now days IIRC the numbers are about 15% for DB and about 35-40% have no retirement plan.
For me this issue isn't a desired to screw the public service employees. It is a simple economics we can't afford the state and local pension plans even with the current retirees much less adding new ones.
Time magazine has good article about the bankrupt states, and there is no doubt that current state workers are suffering with furloughs, pay cuts, and layoffs. Needless to say private sector folks have been hurt, with 10% out of work, another 5% underemployed and a large group who have given up looking. Among those with jobs, pay cuts, 401K matches, and increased workload are the rule not the exception. Even the long term unemployed just lost their minimal unemployment checks yesterday.
Retirees have also been hit, the medical benefits associated with mom's survivor pension are being cut, and plenty of folks have seen reduction in the pension through bankruptcy (e.g. GM, Chrysler) or when the PBGC took them over.
For retirees, like myself without pension, we have been hit hard also. In addition to the big hits on our portfolio value, we have also seen in our income drop. Interest rates have plummeted, formerly high dividend paying stocks, like GE, Pfizer, and now BP, have slashed dividends, and virtually every bank dividend has been slashed to $.01 or $.05, So not only has the value of our nest egg gone down but the income potential going forward has also decrease and the prospects of it increasing in the future (due to higher interest or dividends) looks dicey.
One of the big exceptions in the dreary picture is public employee pensioner. While their nest eggs have suffered, many/most of them have pensions large enough to meet their needs. Now I would say good for these folks if their pensions were adequately funded. They aren't even close .
In public pension fund and after pension fund I have looked at, and backed up the Pew Center, Washington Post, NY Times reporters etc the pension are severely under funded. The total assets per retiree is in the range of $150,000 and $300,000 and yet they they pay pensions averaging between $22,000 and $30,000 to retirees who typical retire in their 50s or early 60s. Now you don't need to be a FIRECalc wiz, or an actuarial to know that you can't pay out $30K/year on $300K in assets in today's interest and investment environment.
The California, Penn, or Illinois pension funds have been through the same horrible last couple of years and face the same crappy investment climate as the ClifP pension fund and I've outperformed the last two. I've cut spending why can't they? This isn't a matter of just raising taxes a little We are facing a 1 to 3 trillion shortfall in pension funds, that we can't monetize by printing money. That is roughly $25,000 per household if you double your states 6% tax rate that means a household making 100K a year needs 4 years to pay for is share of the pension fund deficit. Honestly arguing over baby steps like freezing COLA, and putting new workers in a way less generous system is just crazy.
clifp
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Spanky
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This is an legal issue. I hope that bondholders should get paid first.
Texas Proud
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On the issue of 'screwing' the public sector employees...
A system that is shown to cause economic destruction in the future should be changed ASAP...
A system that is NOT efficient should not get a pass when it comes to cutting... as an example... and I just learned about this... is the 'rubber rooms' for teachers in NY... I will have to do some more research to find out if it is true, but saw a talking head mention this... it is hard to fire a teacher in NY, so they just send them to someplace to sit all day and get paid... and the federal gvmt wants to send states money to keep this going!!!
As for schools.... I was talking to my sister who taught for 40 years... and she said the admin has been very bloated... all schools have some kind of assistant which no principal wants to cut in these 'bad times'.... but she said all they do is crap jobs that the principal and asst principal are SUPPOSED to do, but don't want to....
Let's get back to having ONE principal and ONE asst principal and maybe 2 or 3 more staff at each school... that would save a ton of money FOR the teachers... also, we can get rid of half of the administration above principals with probably no drop in education...
But... this is not the theme of this thread...
Let me just add another thought on this.... I am like Ziggy... I don't want to take away something that is happening now... but I also don't want to keep coughing up dollars to a gvmt that NEVER shrinks... all companies cull out bad employees... it seems that gvmt does not do a good job of this... they just keep hiring and hiring... that to me is a major problem... live with less when you get less... don't just raise the taxes to overcome bad decisions in the past... the private sector does not get to do this... why should gvmt...
This was one of the major problems with 'staff'.... and I did see it in the private sector... if you are a manager, your 'status' is how many people report to you... so you try and get more and more people... even hiring people the company does not need.... but at some point and time, the people who actually sell stuff start to complain that 'overhead' is way to high... and overhead is cut... it happens all the time...
Since there is nobody 'selling' in gvmt to complain... there is no cut in overhead... and all we get is higher taxes and more people... because I want to be the big man with the big staff...
A system that is shown to cause economic destruction in the future should be changed ASAP...
A system that is NOT efficient should not get a pass when it comes to cutting... as an example... and I just learned about this... is the 'rubber rooms' for teachers in NY... I will have to do some more research to find out if it is true, but saw a talking head mention this... it is hard to fire a teacher in NY, so they just send them to someplace to sit all day and get paid... and the federal gvmt wants to send states money to keep this going!!!
As for schools.... I was talking to my sister who taught for 40 years... and she said the admin has been very bloated... all schools have some kind of assistant which no principal wants to cut in these 'bad times'.... but she said all they do is crap jobs that the principal and asst principal are SUPPOSED to do, but don't want to....
Let's get back to having ONE principal and ONE asst principal and maybe 2 or 3 more staff at each school... that would save a ton of money FOR the teachers... also, we can get rid of half of the administration above principals with probably no drop in education...
But... this is not the theme of this thread...
Let me just add another thought on this.... I am like Ziggy... I don't want to take away something that is happening now... but I also don't want to keep coughing up dollars to a gvmt that NEVER shrinks... all companies cull out bad employees... it seems that gvmt does not do a good job of this... they just keep hiring and hiring... that to me is a major problem... live with less when you get less... don't just raise the taxes to overcome bad decisions in the past... the private sector does not get to do this... why should gvmt...
This was one of the major problems with 'staff'.... and I did see it in the private sector... if you are a manager, your 'status' is how many people report to you... so you try and get more and more people... even hiring people the company does not need.... but at some point and time, the people who actually sell stuff start to complain that 'overhead' is way to high... and overhead is cut... it happens all the time...
Since there is nobody 'selling' in gvmt to complain... there is no cut in overhead... and all we get is higher taxes and more people... because I want to be the big man with the big staff...
Spanky
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I have not noticed any blame assigned to or any animosity toward public employees. It does not bother me that public employees receive generous pensions despite my tiny one without any medical benefits. I made the decision not to seek federal employment because of paucity of government jobs within my field of interest 33 years ago. I am fortunate to have worked on R&D of medical devices that are responsible to save lives. This opportunity would not be possible had I chosen to work for the government. Most of the electrical engineering jobs in government are military related, developing weapons to kill instead of saving lives. Anyway, my feeling is the same - fix the problem.
Spanky
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They call this job creation to improve the economy.
This is called empire building. How else can a manager justify his/her existence without an empire?
Texas Proud
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Yes.. that is the problem with staff managers... building empires... but the line side of the business usually keeps the staff side to a more reasonable level since it affects the bottom line....
In gvmt... there is no line to keep things balanced.... only more and more managers wanting to build an empire....
As an example.... I saw the news the other day about the Houston city counsel... NONE... repeat NONE of the elected officials wanted to reduce their staff budgets one cent... sure, let's cut something here or something there... let's keep my pet project, but cut the library budget, or the police or the fire... but don't touch my staff....
Gvmt is very good at empire building... not so good at cutting budgets... and I don't mean like they talk about in the fed gvmt.... where we spent $100 this year and had planned to spend $120 next year.... but we 'cut' it down to $115... for a cut of $5... I mean like spending $95 next year...
Spanky
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but when they do .. it's usually something that I care about, i.e., school and natural resource department (parks and recreation). As an example, our state cuts funding for the University of Minnesota, which will cause tuition to rise. I also noticed that parks and lakes are not as well maintained.
Texas Proud
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I saw on the news that some city in California is laying off EVERYBODY... they did not explain why... just showing mad people...
But you have hit the problem on the head... there is someone who wants that spending... and think that without it everything will go to heck quickly... the problem is that there are to many things that are 'special'.. and the people who are making the decisions are making the cuts in place we say 'what were you thinking'....
But I will say that tuition should rise... it is one of the biggest cost for our state gvmt... we do budgeting on a 2 year cycle... and the last 2 years was 25% higher than the previous 2... which was 14% higher than the previous to to that...
Budget by Area | Texas Budget Source
It is kind of like SS and medicaire for the federal budget.... they are SO big that you have to cut them to balance the budget....
Texas Proud
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OHHH... and BTW for the people who do not think that something should not change on a system that will bankrupt gvmt... they already have changed SS a few times and will likely change it again...
SOO, us in the private sector... lost our pensions because companies saw they were a black hole they did not want to have... lost our subsidized healthcare because it was a black hole the companies did not want to have.. having SS taxed so it is not the benefit that was planned... and having the retirement age increase for normal retirement from 65 to 67... and with more cuts to come...
Public sector... you want squat to happen to your pension... even if it is unsustainable and it will cost your children and grand children a lot to pay for it... just saying...
SOO, us in the private sector... lost our pensions because companies saw they were a black hole they did not want to have... lost our subsidized healthcare because it was a black hole the companies did not want to have.. having SS taxed so it is not the benefit that was planned... and having the retirement age increase for normal retirement from 65 to 67... and with more cuts to come...
Public sector... you want squat to happen to your pension... even if it is unsustainable and it will cost your children and grand children a lot to pay for it... just saying...
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