Miles's blog

The union-busting governor of Wisconsin survived his recall vote, and taxpayers in two California cities have decimated the pensions of their municipal workers.  The import of these voted, and their associated rhetoric is clear: government employees will be ostracized as the scapegoats of government spending.

Governor Scott Walker not only hailed his triumph as the best way to effectuate cost savings for Wisconsin taxpayers, but he again pulled out the right-wing banner that those taxpayers want smaller government.  How much one pays your workers and how they bargain for their remuneration does not seem to be directly connected to how many workers you employ, but I guess those who donated something like $35 million to his effort choose to conflate the two. 

Californians, along those same lines, chose to break their promises to employees and cut their promised pension benefits to those who are currently working for the cities.  (I don’t know if they cut the payout to those who have retired and are collecting.)  I sincerely doubt those same voters would have supported a plan whereby their employers could have reneged on promised benefits after years or even decades of work.  Most of these employees have not been paying into social security so their pension is all they had. It stood in place of social security.  Can you imagine if the federal government proposed a law to immediately cut promised social security benefits?  The outcry would deafen Martians.  But faced with having to raise taxes, most people chose to save their right to buy another video game or extra case of beer every year rather than support their police, firefighters, etc.

Obviously underlying these votes, and undoubtedly more to come, is outright jealousy at the generosity of government pension plans.  Certainly I have heard a great deal about the benefits of PERA, and of course I am the beneficiary of an ill-managed and underfunded pension program.  I realize that perhaps I am not the greatest spokesman for government pensioners, but there is nothing being said on our behalf so I will choose to write about it. (Oh hell, only about 10 people read these things anyway.)

When I was at CDAC we fought hard to get the right for DA employees to become eligible for PERA, and Pete Weir accomplished that at great political effort.  Very many legislators either disdain public employment altogether or expressed contempt for PERA’s expansive benefits.  (I found this somewhat disingenuous as the legislators themselves took salary and other compensation and made themselves eligible for PERA.)  Pete’s effort has reaped little benefit for local DA employees as only a few districts were able to convince their funding bodies to implement PERA, one of which was Boulder when all county employees joined PERA.

Pension benefits are perhaps one of the main reasons that public employees choose to stay at their jobs.  The pay is lower, generally, than that in the private sector, and the working conditions with the current budget cuts can be very difficult.  Would you like to work at the DMV?  Long ago government officials realized that hiring and retaining quality employees was a difficult proposition.  Because unlike a private business government cannot increase wages based upon success, governmental entities created pension plans which exceeded the benefits available under social security.  They never joined social security, leaving public employees retirement years solely at the mercy of the pensions.  Unfortunately, many factors coincided with the increased costs of these plans at exactly the same time private industry was leaving the defined benefit model in favor of 401(k)s, but also including their workers in social security. 

Now that people are living longer and needing expensive medical benefits after retirement, the pension plans constitute a significant expenditure for local governments.  With most people having defined benefits unavailable, seeing the generous benefits received by a few government pensions, and loathe to pay a penny more in tax, there is strong public sentiment to gut the benefits their public employees have been promised. 

Unfortunately, the argument in favor of keeping these plans has not been well made or well received.  People today are very anti-government, hostile to the police, and frustrated with what they perceive to be reduced and substandard services.  The occasional, but inevitable, discovery of waste only exacerbates taxpayer apoplexy at government remuneration.  The answer, reduce benefits.

I fear that this short-sighted policy will result in even more frustration with government services.  San Diego police officers start at about $46,000 a year.  Not poverty wages, but not very much for being asked to risk your life every day.  Working for the police for 20 or more years will not yield a substantial amount of money, while every day facing the possibility that some untoward act, even things as mundane as a traffic accident, will severely compromise your ability to enjoy your retirement.   The promise of sustained income was a major incentive to keep working.  I realize that many police departments long ago went away from defined benefit plans and yet they continue to hire, but I have no doubt that process gets more difficult.

There will become a point where government compensation is just too low to induce dedicated, hard working and intelligent people to put up with the enmity of their fellow citizens.  Too often we hear people criticize the work of government employees.  But without high enough wages and attractive pension benefits what do they expect?