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Friends with Benefits – Part 8 Global Perspective

We've had an occasional thread on public servant benefits here, here and all the way back here.  This week The Economist weighs in with a cover story that shows it's not a San Mateo County, California, or even U.S. issue–it's global.  Here are a couple of selected quotes, but the full coverage is worth reading at the library:

Look around the world and the forces are massing.  On one side are Californian prison guards, British policemen, French railworkers, Greek civil servants, and teacher just about everywhere.  On the other stand the cash-strapped governments of the rich world.

In many rich countries wages are on average higher in the state sector, pensions hugely better and jobs far more secure.  Even if individual state workers do magnificient jobs, their unions have blocked reform at every turn.  In both America and Europe it is almost as hard to reward an outstanding teacher as it is to sack a useless one.

Too many state workers can retire in their mid-50s on close to full pay.  America's states have as much as $5 trillion in unfunded pension liabilities.

Allowing a subway driver to retire at 50 on an artificially inflated pension means less to spend on infrastructure: just look at America's highways and railways.

Ouch, that last one really hurt!

 

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21 responses to “Friends with Benefits – Part 8 Global Perspective”

  1. holyroller

    What a load of BS
    Next time I hit a pot hole I am going to blame a Subway engineer.
    This is EXACTLY the rhetoric that encorages mentally ill nut jobs to go on a shooting rampage.

  2. Lorne

    Although our problems are certainly not unique to San Mateo County, local decision-making ultimately caused our problems (thus, responsiblity must be acknowledged!). FYI, here’s John Horgan’s latest follow up piece, entitled “Local pols respond to pension analysis”:
    http://www.mercurynews.com/john-horgan
    And here’s the county controller’s report on which Horgan’s original column is based:
    http://www.co.sanmateo.ca.us/Attachments/controller/Files/PAFR/2010PAFR.pdf

  3. Rich

    Interesting article on sfgate. Encouraging to hear that city officials, union leaders and business representatives sitting down to craft a solution together. Even more encouraging that unions acknowledging that “labor understands something needs to be done.”
    —————————————
    You’ve got major credit card debt. Can you solve the problem by vowing to pay off all your future credit card purchases in a timely matter without tackling the bills that already exist? It doesn’t take a PhD in economics to know the answer, sadly, is no.
    City officials and union leaders working to rein in the city’s skyrocketing pension costs have learned a similar cold, hard truth.
    Controller Ben Rosenfield today released an analysis showing the only way to make a significant dent in the problem is to require current employees to pay more of their paychecks into their pensions. Most of the other ideas – which affect only new hires rather than current ones – save almost nothing, especially in the short term.
    The city this year is paying $360 million in pensions, a number expected to spike to $800 million in 2014. That’s a major chunk of the city’s $6.6 billion budget and means less money left for basic services.
    A group of city officials, labor leaders and business representatives, including financier Warren Hellman, has been meeting for months to craft a reform measure for November’s ballot.
    Rosenfield has priced out all their ideas and found that requiring current employees to pay 2.5 percent more of their salaries toward pensions would save $60 million by 2015-16 and $89 million by 2025-26. Requiring them to pay 5 percent more would save $120 million and $178 million in those years. Most city employees pay 7.5 percent of their salaries towards pensions, though some pay more and some pay nothing.
    The only other big money saver is eliminating a provision that gives retirees a bonus when the pension fund makes gains like it did this year. (One city official likened this to a climber falling off a cliff, scaling back up part of the face and being described as performing well.) Getting rid of that bonus would save $19 million by 2015-16 and $85 million by 2025-26.
    Ideas that sound good – including a cap on pensions and not including overtime or premium pay for special tasks when calculating pensions – save hardly anything. They’re still likely to be part of a ballot measure because they’re popular among voters, but they’re not going to affect the bottom line.
    Tom O’Connor, head of the firefighters union, said, “Most of labor understands something needs to be done and needs to be done fairly quickly. Asking employees to contribute a little bit more during this down economic cycle seems like a fair compromise.”
    Supervisor Sean Elsbernd said that even a 5 percent hike in employee contributions isn’t going to save enough money, but said he’s not yet sure what percentage hike he will support.
    Read more: http://www.sfgate.com/cgi-bin/blogs/cityinsider/detail?entry_id=84990#ixzz1Ggghcyb7

  4. Ron Fulderon

    They say the city is paying $360 in 2011 and it will go up to $800 in 2014. How much will it be in 2015, 2016, 2017,….? When does it peak?
    The idea that these concessions of tens of millions of dollars would save them system is ridiculous.
    Cut current retiree benefits, current salaries, and future retirement benefits now. If we can’t do that we are over.

  5. Ron Fulderon

    And I do understand that the article was written about that great city to the north, but I know the same holds true here in little Burlingame, scaled down.

  6. Holyroller

    A huge part of this problem is only due to the rising cost of HEALTH INSURANCE!
    Is there some sort of plague?
    That is what is driving up the cost of pension benefits.
    It is easy for someone like you Mr. Fooleround/ me as well, to blame these increases on the City of Burlingame Fireman, Police, Park & Sewage workers.
    I get it.
    You can see there faces. Lash out at them.
    You can not do the same with some GIANT CORPARATE ENTITY.
    SO IN YOUR FRUSTRATION YOU, AND PEOPLE LIKE YOU GO AFTER THE LOWEST COMMON DENOMINATOR.
    Your neighbor, the people who keep the water going,street lights working.
    The increase in cost to everything is too complicated for people-like you/me, who are just struggling to make ends meet. Our collective frustraion is being used against us.
    The insurance industry, the banking industry, and the Military Industrial Complex will be the ruin of this country.
    WITH ALL DUE RESPECT…
    GET WITH IT MR FOOLEROUND.
    WE as a country are getting ripped off by our Goverment/Corparate America because we are to involved in living “hand to mouth.”
    Just the way “they want it.”

  7. Lorne

    Moving the needle in Los Angeles:
    http://www.mercurynews.com/breaking-news/ci_17694170?nclick_check=1

  8. Ron Fulderon

    Lorne, I’m not sure what you mean by moving the needle. ??? The concessions are not at all close to what is going to be needed to solve this ruinous problem. Governments are going to fail unless they take the problem more seriously. Salaries must be cut, expectations about what the government should be providing, and retiree and retirement benefits are going to have to be adjusted much more significantly. Look at the numbers reported. Tiny concessions compared to the still remaining deficits, let along the immoral debt being left to every child born.
    The needle was pinned to the max in the red and it is still pinned.

  9. Holyroller

    Mr. Fulderon,
    Why to you believe it is wrong with people who work hard all their lives, and become aged, unable to work, being able to live out the rest of their lives in some level of comfort and security?
    Why would you deny quality of life to anybody?
    Wrath, Greed,Sloth,Pride, Lust, Envy, Gluttony.
    How many of these categories do you fill?
    I say five out of seven.
    What do you think?

  10. Krauster

    I thought I couldn’t be objective answering your questions myself, so I asked my wife.
    Wrath – check
    Greed – no
    Sloth – no
    Pride – no
    Lust – no (Ouch, that hurt)
    Envy – yes
    Gluttony – yes
    I have to start working on that lust thing again.
    But Holy, I really can’t figure out what that has to do with government being broke and government worker salaries and total compensation being far more than the private sector.

  11. Holyroller

    It just is not true.
    Goverment Worker salaries and total compensation is not far more that the private sector.
    It has become a catch phrase.
    People do not want to do the investigating needed to suss out what is real.
    The reason benefits have become more expensive is the runaway health costs.
    That has nothing to do with “Goverment Workers.”
    It is Corprate America using lobbists, loop holes, and lawyers to influence our elected reps into allowing this American Health Care System to bankrupt our society, and determine the outcome of elections.

  12. Lorne

    I don’t know anything about the organization/foundation behind this site, but I found the data they acquired from Calpers quite interesting. You can search by “employer” (in this case, Burlingame) – and it shows the top ten former Burlingame city employee retirees getting paid an annual pension of $100K or more Some of the names are department heads who retired within the last couple of years. You’ll see the MONTHLY benefit ranges between $10K – $14K (= $120-$168K annually). Just for additional perspective, I then went to http://www.immediate annuities.com, to find out how much one would need to acquire in personal savings to purchase a monthly annuity for $12K (rough average of the top 10) from a commercial insurance company (so, anaolgous to creating one’s own “private” defined benefit/annuity) For a 65 year old male, it would be close to $2 million!!; for a 60 year old male, it would be around $2.1 million (given it would require a longer payout by the insurance company. You can see the pension data for Burlingame yourself at:
    http://database.californiapensionreform.com/database.asp?vtsearchname=&vtsearchemploy=burlingame&vtquery=1&vttable=calpers

  13. Resident

    Wow! 22 people costs $2.8M a year. Does that mean that there are hundreds of others lower on the list.

  14. ron fulderon

    “Does that mean that there are hundreds of others lower on the list.”
    I’ll assume that was a rhetorical question.

  15. Holyroller

    Thank you Lorne for due dilligence.
    God or Bad.
    What ever side you are on the truth is what matters.
    What is ruining this country is the divison of Dem/Repub.
    The Tea Party is just another group of power hungry people who are looking forward to fill any void created.
    I hate to admit it but we are in the same place as the Middle East.
    Buy Gold
    Buy Guns
    Buy Food
    We are one earthquake away from anarchy.
    Think about it.
    We have no one to blame but ourselves.

  16. Fed Up

    No, I can see a wide variety of people to blame that doesn’t include me or anyone I know. We’re paying a retired librarian 13 grand a month! For what! It’s time to sue to recover these ridiculous payments!

  17. Holyroller

    Really,
    $13,000.00 per month?
    The reality of your stament is that the figure is probably $1300.00 per month.
    $15,600.00 per year.

  18. ron fulderon

    I just came across this weekend’s Daily Post from further down the peninsula and was browsing; and lo and behold, there is a list of the Sequoia school district salaries. $80K for a bus driver. Not bad for 180 days a year, working from what I would figure is a four or five hour day. Seems like a lot of people are making some pretty good bucks. Then I looked closer at the title of the article, “Part 2”, and notice the rankings in the list. This second part of the list is just showing the numbers from 500 – 1000. I am curious about Part 1, which would be the top 500 employees in that school district.
    My goodness.
    The first step to ending this disastrous rippoff of the productive class is to start publishing all the salaries plus benefits of all public servants. They work for us and we should know what we are paying them.

  19. Holyroller

    Dear Mr Fulderon, would you drive that bus for $80,000.00?
    Lets say that you have to pick up 50-60 African American Teenagers in East Palo Alto.
    You and people like you, think this world is Burlingame, CA.94010
    Guess What?
    It is not.
    Stop comparing The City of Burlingame to any other Municipality.
    Maybe, then you will have the ability to discern why Bus Driver, Cop, Sewage Worker, make whatever it is that they do.

  20. Anne

    I have just figured out Holyroller’s problem. He can’t actually read.
    Here is the librarian’s figures from the webpage listed above here
    ESCOFFIER, ALFRED $13,465.39 (monthly) or $161,584.68 (annually)
    Not 1300.00 per month, 13,465.39 per month. This explains a lot. He can’t read.

  21. Holyroller

    Anne Anne bo Ban
    Fa Nanna Nanna bo Ban
    Fe Fi Fo Fan
    Anne
    A-Angry
    N-Negitive
    N-Nasty
    E-Excrement
    PS. If what you say is true,
    A
    N
    N
    E
    Things are seriously wrong in Burlingame.
    Think about it..
    A retired Librarian making all that money.
    Now a retired Fireman or Policeman would have a PARTY FOR LIFE with that payoff.
    Alfred is probably reading a First Edition in a 20 year old BARCA LONGER.
    How much will City of Burlingame Manager be making a month when he retires?
    While we are talking abouy it
    A
    N
    N
    E
    How do you support yourself?
    Who gave you their home, inheritance, education, divorce settlement?
    How do you pay for medical insurance?
    Dear
    A
    N
    N
    E…
    How would you like your business to be “out there?”
    If it is OK for Goverment Employees, wouldn’t you agree that it is also OK for people in the “Private Sector”to divulge their income, their job/position
    their salary and benefits?
    The field would then be level.
    So then EVERYONE could see what each other makes(Private/Goverment/Silver Spoon) for a living;then fairly determine what goverment workers should be paid.

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