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Teh One Who Knocks
03-08-2011, 02:36 PM
By GEOFF MULVIHILL, Associated Press


When Erin McFarlane looks at public workers, she sees lucrative pension benefits she doesn't ever expect to get. And it makes her mad.

"I don't think that a federal employee or government employee is worth any more than anybody else who does their job and does it well," said the Slinger, Wis., woman. She's been working a couple of bartending jobs since January, when she was laid off from her job at a Harley Davidson plant after almost a decade.

She's not alone in seeing public servants as public enemies in some ways.

It's a case of pension envy.

For McFarlane, 36, it's part of a ubiquitous discussion, at the bars where she works and on Facebook. And it's the center of some of the biggest political battles playing out in state capitals across the country as governors say their states can no longer afford the benefits that public employees have been promised.

Government workers in McFarlane's state have rallied for weeks against Gov. Scott Walker's efforts to take away many collective bargaining rights, saying that would amount to killing the middle class.

A USA Today/Gallup poll last month found show that Americans largely side with the employees, though about two in five that want government pay and benefits reined in.

Barbara Davis, a retiree from Cherry Hill, N.J., has been watching public workers in rallies in Madison, Wis., as well as Trenton. She says the protesters are wrong about tightening benefits hurting the middle class.

"I'm sorry, but what they're doing is telling off the middle class," said Davis, 76, and a co-chairwoman of the Cherry Hill Area Tea Party. "The middle-class people don't get all the goodies that they do."

At its heart, the issue is this: Some public workers get a sweet deal compared to other workers. And it's taxpayers who pay for it.

That's set off resentment in a time when economic doldrums have left practically everyone tightening their belts. Many people have found their tax bills rising even if their earnings haven't.

In Davis' case, it's the property tax that smarts. She and her husband pay about $12,000 per year for the house she describes as a three-bedroom "tract home." That's a high tax even in New Jersey, where the average property tax bill tops $7,000 and where the Tax Foundation has found homeowners pay three and a half times the national median.

A half century ago, industrial jobs at car and steel plants provided high salaries and rich benefits. But as manufacturing moved overseas, many formerly well-paid workers had to take lower-paying jobs. By the end of the Great Recession, the economic order was undeniably changed.

"It's the government sector worker who's the new elite, the highest-paid worker on the block," said David Gregory, who teaches labor and employment law at New York's St. John's University.

For instance, most non-uniformed public employees who have worked in New Jersey for 30 years with an ending salary of $85,000 can look forward to retiring at 55 with an annual pension of about $46,000. Working until age 60 and a salary of $90,000 can bring a pension of $57,000. And many of the New Jersey's public-sector retirees have no or low premiums for their health insurance.

For a private-section worker who retires at 55, relying solely on a 401(k) without an employer match, it would take a $100 contribution to a plan every week for 30 years and getting an annual return over 7 percent to get to the same level of pension benefit as the public worker retiring at that age. Those benefits would run out after 25 years for the 401(k) retiree.

To be fair, most public-sector retirees don't get such rich pensions. New Jersey's Treasury Department says the average annual pension due state workers who retired between July 2009 and June 2010 was just over $30,000 per year; for local government employees, it was about $20,000.

And the members of the state's two biggest public employee retirement systems are required to pay 5.5 percent of their base salaries into the pension funds.

St. John's Gregory says the rest of the benefits are deferred compensation promised to workers instead of better salaries.

National data compiled by the U.S. Bureau of Labor Statistics confirms that public-sector workers do better when it comes to pensions and benefits.

As of last September, professional and management workers in the private sector were making $34.91 in hourly salary; public sector professionals made $33.17 an hour.

The government entities spent 1.7 times as much on health care per employee-hour worked and nearly twice as much on retirement costs. Public-sector workers — who are more often represented by unions — are far more likely to have defined-benefit pensions with promises to pay for the retirees' whole lives.

Olivia Mitchell, a professor of insurance and risk management at the University of Pennsylvania's Wharton School, says the data isn't perfect. It doesn't compare workers with the same education or experience levels, and it covers a broad range of jobs. Also, she said, it doesn't take into account that about one-fourth of public workers aren't covered by Social Security.

There's one clear downside for the public employees: "We also know that the public-sector pensions are in deep trouble financially," Mitchell said, pointing to studies that suggest that they're underfunded by a total of $3 trillion, largely because governments have skipped payments. "Exactly what will be done about that, nobody knows."

Unchanged, those retirement systems could eventually stop paying entirely.

"One way or another, if we don't make changes, the government will collapse," said Abel Stewart, of Toledo, Ohio.

Stewart, 36, the director of contemporary worship at a Methodist church in suburban Toledo, says he has a hard time conjuring up sympathy for the government workers he's seen protesting because of all the time he's spent working with struggling immigrants.

"These are middle class people who have a house, who have enough food, who are complaining they don't have enough," he said. "Instead of fighting for their piece of the political pie, they'd be better looking at how to live within their means."

That's not a unanimous view.

Tony Christoff, a 38-year-old stay-at-home dad in Perrysburg, Ohio, believes public workers like police officers and teachers — including his wife — should be rewarded. "They go over and above and deserve the pay they get," he said.

Jeff Nash is a Democrat elected to the county freeholder board in union-heavy Camden County, N.J., who has come to believe that public employees need to sacrifice.

"The days of government workers receiving free benefits and pensions without risk, those days are coming to an end because everyone else who pays for government services is paying more for their health insurance, like myself, and running the risk of a 401(k) as part of their retirement savings. Government is changing to match what the rest of middle-class America is enduring today."

"It's not a matter of fairness," he said. "It's a matter of evolution."

Hetty Rosenstein, the New Jersey director of the Communications Workers of America, which represent New Jersey government workers in several fields, says she gripes about her members' pensions are misplaced.

"There's pension envy because people who are working in the private sector, they're being denied pensions," she said.

FBD
03-08-2011, 02:58 PM
Best description I've heard for public sector union "collective bargaining":

Collective Collusion.

There is nobody "on the other side of the table" to negotiate with, and the taxpayers arent even in the negotiating room, much less having a seat at the table.

Deepsepia
03-08-2011, 11:02 PM
One of the perverse things about the bankruptcies of American business is that it makes the benefits of a government job all the more rare.

My two cents' worth: private and public employees should be in the same pool for healthcare and pension benefits.

Take away the bizarre incentives . . . as it stands now, you'll never see a public employee who's "in" for ten years move to another job-- they lose too much in benefits.

Equalize benefits, take the pension and healthcare issue off of the plate of employers (who don't want the problem, and can't budget for it).

Southern Belle
03-09-2011, 12:43 AM
I just don't appreciate the fact that the people who are paid from my taxes have better benefits than me.

Teh One Who Knocks
03-09-2011, 12:48 AM
I just don't appreciate the fact that the people who are paid from my taxes have better benefits than me.

And do a lot less work. We've all seen the city workers standing around, a group of 8 or 10 of them all looking on while 1 guy actually works :|

Southern Belle
03-09-2011, 12:50 AM
And do a lot less work. We've all seen the city workers standing around, a group of 8 or 10 of them all looking on while 1 guy actually works :|

Exactly

Loser
03-09-2011, 01:02 AM
I used to work in government and I can tell ya, the benfits for retirees is absolutely fucking outrageous.

Where I worked, you could retire from the county after putting 10 years in. You would get roughly 1000$ a month, before taxes, and keep your health benefits, which you paid 1$ for and they paid 95% of your health care costs. You could retire at any age.

On top of that, they ran a second state funded retirement plan. For every dollar you put into your retirement fund, they would put in 2$. That you couldn't collect on until you were 65 years of age.

-edit-

But I will throw this out there.

Firemen and Police deserve every bit of their benefits, and that shouldn't change one iota.

Teh One Who Knocks
03-09-2011, 01:29 AM
But I will throw this out there.

Firemen and Police deserve every bit of their benefits, and that shouldn't change one iota.

Agree with you 100% there :tup:

Deepsepia
03-09-2011, 02:44 AM
Firemen and Police deserve every bit of their benefits, and that shouldn't change one iota.

Actually they don't.

On my old ice hockey team, we had a guy who'll remain nameless here. Fire Department/EMT on full disability for back injury having carried a guy out of a building.

And yet . . . he was still quite a good left defenseman.

Imagine that.

Loser
03-09-2011, 03:11 AM
Actually they don't.

On my old ice hockey team, we had a guy who'll remain nameless here. Fire Department/EMT on full disability for back injury having carried a guy out of a building.

And yet . . . he was still quite a good left defenseman.

Imagine that.

That's workmans comp fraud, not retirement benefits. Two completely different things.

KevinD
03-09-2011, 03:51 PM
Some of you may not be old enough to remember when a good retirement package in the private sector included a real pension plan, mostly paid for by the employer (non-union) This was part of a benefit package that was sought out by smart people and offered by companies as a reward for longevity. As an example, my grandfather retired a full bird colonel (USAF) 25yrs and got a decent pension, along with great medical. While he was retired from the USAF, he continued working in the private sector and retired from Southland Corp, after 20 years with another great pension and benefit package. So, the man had basically had two jobs from college on. The workforce has changed as far as the private sector goes. These retirement packages don't really exist anymore, except for gov. type jobs. It seems to me that some who are getting upset the most don't understand that this was once a part of all workfoce.

Noilly Pratt
03-09-2011, 04:07 PM
I used to work in the BC Provincial Government and when I joined in the early 90's it was a great position, great benefits and you were well paid and there was too much extravagance.

Well, in Canada at least, before the meltdown it eroded to "OK, no pay hike for 3 years, and you have to wait 2 years for an optometrist, not 1" and so on at every negotiation, every benefit was chipped away until it became that to be in the public sector, you were actually underpaid, and under-benefitted in comparison.

Many are desperately waiting until they retire to get a decent pension. The provincial gov't stayed still while in 20 years wages got considerably higher. I still have a government pension awaiting me - I'm still part of their benefit package. But that's a 2 edged sword...I work along side people who are being paid more for the same job I'm doing.

The way things are going, there'll be no more money left for that pension that we've all paid into, anyway. I can see the day when our government will dip into the pension that we worked for and we'll only get a percentage.

I wish that the BC Government was like what Loser described...I've been working for 17 years and no way can I retire (rightfully so, really). I've still got another 20 years to go at least - t'il I'm 65.