OT: The Golden State

[CA renter]

Just one comment about the retiree healthcare. Many public employers began doing away with this back in the 90s. I don’t know of any newer hires (since ~ the mid-90s) in local government who get retiree healthcare. I used to work for one of the largest municipal employers in the state, and even they were phasing it out back then. I’d like to know where they got their 90% from. Perhaps they’re talking about older employees who were grandfathered in, but the newer employees are not getting it for the most part…at least not from any public employer that I’m aware of.

As for public/private employee turnover rates, the #1 reason *by far* that you see a lower turnover rate in most public professions is the pension benefits; medical benefits and general job security follow closely behind. Without defined benefit pensions, there would be a much, much higher quit rate. Like BG mentioned, once you reach a certain level, it’s not an easy decision to “lateral over” to another department or employer because of the probation period and the possible loss of seniority, etc.

I’d also like to add, as someone who has worked in both the public and private sectors, the standards for working in the public sector tend to be much higher than for similar positions in the private sector. They usually require more education, more experience, and tend to do more background checks, psychological testing, pre-employment medical exams, etc. than employers in the private sector do.

In my personal experience, public employees tend to be harder working, take fewer breaks, remain “on task” more, and tend to be more trustworthy. Contrary to the myths and stories, there is a LOT of accountability in the public sector; far more than what I’ve seen in the private sector. It’s more bureaucratic in public service, but that’s often because they take great pains to avoid corruption and reduce liability. If you screw up in the private sector, you might lose your job; screw up in the pubic sector, and you might end up in jail.

Though it’s difficult to quantify, public employers focus more on “integrity” and the character of a potential employee because of the nature of the work (in major positions of trust) and the liability issues involved with public work. For example, I knew someone who had once gotten a ticket (don’t remember if it was a ticket or arrest???) for urinating in public (in bushes, no public restroom, not being belligerent or anything…just really bad timing). When he applied for a job in public service many years later, he had to jump through major hoops, getting personal references to vouch for his character, then basically writing an essay about what had happened and how he would never let something like that ever happen again, etc. Another person I know got a DUI when he was very young, and had to jump through similar hoops when applying for a job *decades* later. You are definitely scrutinized more when applying for a job in the public sector, and one could easily argue that this, in itself, would warrant a premium of sorts.

[CA renter]

Ditto what BG said about public and private employment and the opportunity to move up or increase your compensation.

More anecdotal stuff, but when I worked in the private sector, I quickly advanced from an entry level position to management, and was able to multiply my compensation many times over within a few years. That’s VERY difficult to do in the public sector.

If they are going to compare things like “job security,” then they need to include the opportunity for advancement (and the opportunity to earn bonuses!), too.

[livinincali]

[quote=CA renter]Ditto what BG said about public and private employment and the opportunity to move up or increase your compensation.

More anecdotal stuff, but when I worked in the private sector, I quickly advanced from an entry level position to management, and was able to multiply my compensation many times over within a few years. That’s VERY difficult to do in the public sector.
[/quote]

Well of course. The public sector rarely rewards performance and instead rewards time served. How do you expect to move up quickly in the public sector when various work rules established by unions prevent you from doing so. Wait until you earn seniority rather than performing to earn seniority.

The bottom line for the public sector is their wages and benefits as a whole cannot grow faster than the tax base. The tax base is heavily dependent on economic growth so when you have weak growth and recessions over the past decade the public sector needs to slow down wage/benefit growth and yet they haven’t. If the tax base is growing at 2% per year than public sector wages and benefits as a whole can only grow at 2% per year and probably should grow slower than that considering the budget difficulties.

They way they’ve avoided realizing that fact is by increasing the percentage of department budgets towards wages and benefits and deferred maintenance/discretionary hoping the budget would catch up. It unfortunately didn’t and now there’s a fight to increase taxes because those plans for growth didn’t materialize.

When you work for a private company it has the ability to growth at a rate faster than GDP, i.e. AAPL growing 50%+ per year, so employees have a chance to reap the reward of that growth. The worker bees may not reap enough of that growth, but they do have the opportunity to. If your company is growing at 10 or 20% per year than maybe you can get 5%+ raises. If you aren’t growing then you probably aren’t getting anything and perhaps a pay cut. The GDP isn’t growing and the public sector employees demand their raises so we must raise taxes.

[carlsbadworker]

[quote=livinincali]
Teachers are a pretty decent place to look. The NCTAF says that about 50% of teacher turn over in the first 5 years, but the total turn over is only 16.8%. So once you get past that first 5 years the turnout must get really low to balance out the stats. Here’s an article that talks about public school vs charter school turnover http://latimesblogs.latimes.com/lanow/2011/07/los-angeles-charter-schools-have-high-teacher-turnover.html
[/quote]

OK. A math lesson here: if you have 13% of people who turn over year over year. In 5 years, you will have 1-(1-13%)^5=50% of the 1st year teacher left the position (assume each year, new teacher and old teacher has the same turn over ratio).

[CA renter]

[quote=livinincali][quote=CA renter]Ditto what BG said about public and private employment and the opportunity to move up or increase your compensation.

More anecdotal stuff, but when I worked in the private sector, I quickly advanced from an entry level position to management, and was able to multiply my compensation many times over within a few years. That’s VERY difficult to do in the public sector.
[/quote]

Well of course. The public sector rarely rewards performance and instead rewards time served. How do you expect to move up quickly in the public sector when various work rules established by unions prevent you from doing so. Wait until you earn seniority rather than performing to earn seniority.

The bottom line for the public sector is their wages and benefits as a whole cannot grow faster than the tax base. The tax base is heavily dependent on economic growth so when you have weak growth and recessions over the past decade the public sector needs to slow down wage/benefit growth and yet they haven’t. If the tax base is growing at 2% per year than public sector wages and benefits as a whole can only grow at 2% per year and probably should grow slower than that considering the budget difficulties.

They way they’ve avoided realizing that fact is by increasing the percentage of department budgets towards wages and benefits and deferred maintenance/discretionary hoping the budget would catch up. It unfortunately didn’t and now there’s a fight to increase taxes because those plans for growth didn’t materialize.

When you work for a private company it has the ability to growth at a rate faster than GDP, i.e. AAPL growing 50%+ per year, so employees have a chance to reap the reward of that growth. The worker bees may not reap enough of that growth, but they do have the opportunity to. If your company is growing at 10 or 20% per year than maybe you can get 5%+ raises. If you aren’t growing then you probably aren’t getting anything and perhaps a pay cut. The GDP isn’t growing and the public sector employees demand their raises so we must raise taxes.[/quote]

Yes, but the point was that this is a perk that these anti-union folks were not taking into consideration from what I could tell. If they want to value “job security,” then they also have to value the ability to move up and rake in bonuses in the private sector, as well.

Also, it’s not true that you just have to sit and wait for seniority in order to move up in the public sector. Some people fast-track their way to management, though it does take longer in the public sector than in the private sector. One of the main differences is that the pay does not increase as much when you move up in the public sector as it does in the private sector. The gap between wages/salary of the entry-level positions and the compensation of those at the top is much narrower in the public sector…as it should be, IMHO.
…

Just to be clear, most public employees have not had net raises since about 2008. Many (if not most) are actually making less than they were in 2008, and when you take the pension reform into consideration, they will probably end up making about 10-20% less in the next few years than they were making in 2008, and that is NOT taking into account the other concessions that were being made as the economy slowed.

Not sure where the info is coming from WRT public employees getting raises. Most new contracts are keeping compensation the same, or reducing it. With the pension reform that has already passed, it is a definite double-digit percentage net loss for most employees from ~2008 levels.

[livinincali]

[quote=CA renter]
Just to be clear, most public employees have not had net raises since about 2008. Many (if not most) are actually making less than they were in 2008, and when you take the pension reform into consideration, they will probably end up making about 10-20% less in the next few years than they were making in 2008, and that is NOT taking into account the other concessions that were being made as the economy slowed.

Not sure where the info is coming from WRT public employees getting raises. Most new contracts are keeping compensation the same, or reducing it. With the pension reform that has already passed, it is a definite double-digit percentage net loss for most employees from ~2008 levels.[/quote]

I’ve been talking wages and BENEFITS. While the compensation the employee sees may remain the same the cost to employee that person has gone up since 2008.

For starters medical benefits have been increasing somewhere between 5 and 10% per year so a $50K employee with a $10K medical benefit that goes up 10% ends up increasing the employee’s compensation by nearly 2%. The fact that the costs of employing somebody are hidden from the person that is employed is one of the biggest problems in society. You should know exactly how much you cost your employer and yet almost everybody doesn’t know.

Second while the city did do pension reform everything else is grandfathered in so as the city’s pension performance continues to lag we have to pay ever increasing amounts to the pension program. This is another cost of employing somebody that is going up and the employee doesn’t see it yet is has to come out of the tax base.

The last issue is that if you look at 10 years of tax data (I found CA from 2000 to 2010) you’ll see an increase of about 24% in the tax base. Of course when you go look at something like CA average teacher salaries for the past 10 years and they increased almost 30% (without the benefit increase included) and you see why we have a problem. Total compensation for public sector workers has been increasing faster than the tax base and that’s why we have so many problems.

[CA renter]

[quote=livinincali][quote=CA renter]
Just to be clear, most public employees have not had net raises since about 2008. Many (if not most) are actually making less than they were in 2008, and when you take the pension reform into consideration, they will probably end up making about 10-20% less in the next few years than they were making in 2008, and that is NOT taking into account the other concessions that were being made as the economy slowed.

Not sure where the info is coming from WRT public employees getting raises. Most new contracts are keeping compensation the same, or reducing it. With the pension reform that has already passed, it is a definite double-digit percentage net loss for most employees from ~2008 levels.[/quote]

I’ve been talking wages and BENEFITS. While the compensation the employee sees may remain the same the cost to employee that person has gone up since 2008.

For starters medical benefits have been increasing somewhere between 5 and 10% per year so a $50K employee with a $10K medical benefit that goes up 10% ends up increasing the employee’s compensation by nearly 2%. The fact that the costs of employing somebody are hidden from the person that is employed is one of the biggest problems in society. You should know exactly how much you cost your employer and yet almost everybody doesn’t know.

Second while the city did do pension reform everything else is grandfathered in so as the city’s pension performance continues to lag we have to pay ever increasing amounts to the pension program. This is another cost of employing somebody that is going up and the employee doesn’t see it yet is has to come out of the tax base.

The last issue is that if you look at 10 years of tax data (I found CA from 2000 to 2010) you’ll see an increase of about 24% in the tax base. Of course when you go look at something like CA average teacher salaries for the past 10 years and they increased almost 30% (without the benefit increase included) and you see why we have a problem. Total compensation for public sector workers has been increasing faster than the tax base and that’s why we have so many problems.[/quote]

You need to go further back than that. If you look at 2000 numbers, you’ll note that these numbers are totally off from historical norms, and that is why the pension boosts, etc. were able to pass. The government employers were contributing very little (many/most were contributing NOTHING) toward pension contributions because of the stock market bubble. Those numbers were an anomaly, they were not the norm — not by a long shot.

If you look at the historical tables of pension contributions, you’ll see that today’s rates, while a bit higher as a result of the financial crisis caused by WALL STREET, are very much in line with historical norms.

http://www.calpers.ca.gov/eip-docs/employer/actuarial-gasb/30-year-rate-hist.pdf

You are right about the medical costs, though. That could easily be solved by creating a national healthcare system. We, the taxpayers, already pay for the most expensive patients through Medicare, Medicaid, and child welfare programs. We’ve given all the profitable/inexpensive patients to the private sector. What we’ve done is, once again, privatized the profits and socialized the losses…and then people complain about “welfare.” No kidding.

[CA renter]

Back to the employees taking a net loss…

Governor Brown’s pension reforms will result in historically LOW pension contributions on the part of the public employers (taxpayers) since employees now have to share the total burden of the contributions 50/50. Prior to this, the employee portion was a fixed percentage while the employer portion varied based on return assumptions and the actuarial numbers coming from the pension funds. In many cases, this will result in a net loss of 10-20% (or more, if return assumptions change) for public employees.

This is **in addition to** any concessions already made by unions over the past few years, and it is **in addition to** the concessions on retiree healthcare made in the 1990s.

Funny how the media never crows about these concessions like they do the one-off stories about some police chief making a $200K retirement pension. Perhaps that’s because the people who are pushing the anti-union message are NOT taxpayer advocates, but PRIVATE INDIVIDUALS who are trying to take over public assets and revenue streams. Funny how that works, isn’t it?

[ctr70]

Much of the roots of all these problems are with Gray Davis and his rewarding the Public Unions (that paid millions to get him elected) by showering them with unprecedented massive pay & benefit increases. Scandalous.

Now instead of trying to change some of these scandalous abuses, California’s answer is to clobber our few high income earners busting their butts in the private sector every day with even MORE taxes (Prop 30).

[paramount]

When psychiatrist Gertrudis Agcaoili retired last year from a state mental hospital in Napa, California, she took with her a $608,821 check for unused leave banked in a career that spanned three decades.

She wasn’t alone. More than 111,000 people who left jobs as employees of the 12 most populous U.S. states collected $711 million last year for unused vacation and other paid time off, according to payroll data on 1.4 million public workers compiled by Bloomberg.

California employees accounted for 39 percent of that total. Since 2005, the state’s workers collected $1.4 billion for accumulated leave, calculated at their last pay rate, regardless of when the time was accrued. New Jersey Governor Chris Christie calls such payments “boat checks” because they can be large enough to buy yachts.

Managers and employees throughout California government routinely ignore a rule limiting accrued time off to 640 hours, or 16 weeks. The accumulation of vacation hours accelerated in California from 2005 through 2010, fueled by a state policy forcing workers to take unpaid time off, or furloughs, before using paid leave.

That requirement helped reduce short-term payroll costs and balance budgets under former Governor Arnold Schwarzenegger, a Republican, and current Governor Jerry Brown, a Democrat, while deepening the state’s future obligation.

Unused leave grew to $3.9 billion in 2011 from $1.4 billion in 2003, according to state financial reports, partly because of staff shortages and around-the-clock needs at agencies such as prisons that forced employees to put off vacations.

Since 2005, more than 1,390 full-time California state workers collected “boat checks” that were greater than their annual base pay, data compiled by Bloomberg show. Those workers were paid a total of $141 million, or an average of $101,274.

Of the 100 biggest payments in 2011 in the dozen states, all but 10 went to California state workers. The average payout for the top 100 was $178,267, in addition to regular wages.

Texas doesn’t pay for unused compensatory time or holiday time, and unused sick time is paid only in the case of an employee’s death, to the worker’s estate, said R.J. DeSilva, a spokesman for the state comptroller’s office.

In California, Agcaoili, now 79, cashed out 2,893 hours of annual leave when she retired in August 2011. That meant she had accumulated the equivalent of 72 weeks’ worth of time off.

Her lump-sum payment brought her total wages for the year to $770,870, according to the controller’s office. Since 2005, she had been paid $2.4 million as a state worker. She now receives a $199,000 annual pension, according to the California Public Employees’ Retirement System.

[CA renter]

[quote=ctr70]Much of the roots of all these problems are with Gray Davis and his rewarding the Public Unions (that paid millions to get him elected) by showering them with unprecedented massive pay & benefit increases. Scandalous.

Now instead of trying to change some of these scandalous abuses, California’s answer is to clobber our few high income earners busting their butts in the private sector every day with even MORE taxes (Prop 30).[/quote]

Riiiight…the private sector workers are the only ones who “bust their butts” and do any work in your mind. And, in your mind, all of our economic problems are a result of the horrible things public sector workers do. Got it.

Still waiting for your response to this:

[quote=CA renter][quote=ctr70]I’m fine with pensions as long as their is NO tax payer guarantee at all, they are 100% self-sustaining. If the investments tank, the difference should not be made up by tax payers, the recipients should get less. If they don’t get the 8-9% target return, tax payer money should not back these defined benefit pensions up.[/quote]

Here’s the problem:

You don’t want to pay for any portion of possible pension losses for public employees. That’s cool, but I don’t want my tax money to subsidize the profits of employers who hire low-wage or illegal immigrant workers (who use the majority of public welfare benefits and are very costly for the education system), nor do I want to pay to subsidize the profits of landlords, commercial building owners, owners of large tracts of land, etc. when they are not paying market-rate property taxes as a result of Prop 13. I also don’t want to pay for the enormous profits (and personal incomes) of private contractors who offer their services to the government. On a federal level, I HATE paying for totally unjustifiable wars that kill tens of thousands of innocent people, and I HATE paying for the spy infrastructure that is used to spy on American citizens in our own land. I also hate paying for “diplomatic missions” in foreign countries where we overturn popular and/or democratically-elected leaders.

I also HATE paying for the exorbitant incomes of C-suite executives and certain shareholders and investors, etc. not to mention celebrities, whenever I have to buy goods and services (and don’t kid yourself: all too often, we do NOT have a choice).

This is just my short list, BTW.

[edited to add]… My biggest pet peeve: the Wall Street bailouts where the bonuses were quickly flowing back to pre-recession levels and higher! You also have to add what savers are losing as a result of these artificially low interest rates that are forced on us by the Fed so that certain “preferred” entities can maintain their wealth via artificially inflated asset prices. Then, there are the home buyer tax credits, and govt-guaranteed loans, the public-private investment deals (where taxpayers take the losses and private, well-connected individuals get all the profits), loss sharing agreements, govt-backed loans for speculators (like having GSE and FHA loans for speculators and those who are not owner-occupiers), etc. I could go on and on…

Yep, we all have to pay for things that we don’t like in a civilized, democratic society. ALL of us. And I truly believe that police officers, firefighters, nurses, teachers, etc. are nowhere near the top of the list (if on the list at all) of things that taxpayers have to pay for in our current system, but shouldn’t be paying for.

So…what’s the answer? Should we only be able to allocate our money directly to the causes we’re willing to pay for? Not saying that’s necessarily a bad thing, but one has to wonder how that would work in the real world.[/quote]

BTW, what part of Gov. Brown’s reforms do you not get? He essentially reversed a lot of what was gained during Davis’ term.

[Author]

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