It is time to reform public employee compensation in California. Public employee
compensation is out of line with the private sector in every area. There are thousands of
individual government agencies in the state, employing almost 2 million individuals. Whether
the standard is salary, working conditions, benefits, or especially pensions, public employees in
California receive compensation far in excess of what workers in the private sector do. It is
illiberal and unjust, and no true liberal or progressive should support current public employee
compensation.
Tens of thousands of public employees in the area of public safety are among the highest
paid individuals in any occupation. The $2 to $5 million in annuity value that these employees
may receive through pension programs in their early to middle fifties makes these employees’
comprehensive career compensation among the highest in America.
The $1 million to $2 million in annuity value that more than a million non-public safety
employees in California will receive through their pension programs in their middle fifties to
early sixties similarly makes most California public employees de facto millionaires by their
middle to late fifties. Frequently, California public employees, particularly in public safety, pay
less than half or even nothing toward the employee’s portion of retirement programs for the
benefits they will receive.
The California public employee compensation crisis will continue to cripple the state in
the years ahead–and more so and sooner than most now recognize. As a result of inaccurate
actuarial assumptions concerning a) long-term return on investment, b) the number of
government employees in the future, and c) longevity, both the short-term and long-term fiscal
crises at the state and local government levels require change immediately. The status quo is
unsustainable.
Taxes are not too low in California, and public services should not be cut continually and
further. Rather, the answer is to pay public employees fair salaries, benefits, and pensions–not
salaries, benefits, and pensions greatly in excess of those in the private sector.
Government employees in California receive higher compensation than employees in the
private sector in these and other areas:
• Pensions
• Salaries
• Sick Leave
• Holidays
• Working Conditions
Overcompensation of public employees, considering all factors of remuneration, may
approach to 80 to 120 percent more than private employees in comparable positions as a norm
for hundreds of thousands, if not more than one million, public employees in the state.
The next crucial step in public employee compensation reform will be to consider
legislation and to develop model initiatives that could be enacted at state and local levels to set
parameters and limits on future public employee contracts.
A number of efforts in California to reform public employee compensation and pensions
are already underway, including Measure B in San Francisco this November–which would
require all city employees (including existing ones, including in public safety) to contribute
additional amounts to fund their pensions and medical costs. Initiated by Jeff Adachi, the elected
public defender of San Francisco, Measure B would save the city $167 million per year.
Unless and until excessive public employee compensation–especially in pensions–is
addressed and really resolved, little progress is possible on any issue at the state or local levels of
government for which funds are required. True liberals and progressives especially should
support reform of public employee compensation.
If all public employees were paid fair compensation in California, public services could
be increased substantially and taxes could be cut. This is the policy goal to seek.
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