Don't Blame California Public Employees!


Posted on 08 February 2011

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By Martin J. Bennett

A recent article in the Economist magazine titled "Tough Times for Everyone - Except Public Sector Workers" states that taxpayers are now learning about "the banquet public sector workers have been having at the expense of everyone else" and that many public employees can "retire in their mid-50s on close to full pay."

These unsubstantiated claims--repeated endlessly in media--stand reality on its head. Such accusations are part of a systematic campaign by corporate America to mislead taxpayers and scapegoat public employees.

California public sector workers, such as teachers, public health nurses, firefighters, librarians, maintenance, park, transit, and social workers are not responsible for the economic crisis that makes drastic cuts to state and local governments necessary. These public employees earn modest, middle-class pay and benefits.

Rather, it was big business and the wealthy who gamed the deregulated financial system to make huge profits. Their speculation in the home mortgage markets triggered the Great Recession; then they proceeded to take billions in bailouts from the government; and last year, Wall Street's leading investment and financial services firms paid out a record  $144 billion in compensation and benefits.

These same corporate interests adamantly refuse to pay their fair share for vital public services or education.

Moreover, the recent Congressional extensions of the Bush era tax cuts are an unexpected windfall for the richest Californians. According to the Citizens for Tax Justice, the top 1% of the state's income earners will now bring home about $14 billion more each year to their mansions. This represents more than one half the state's budget deficit.

What are the myths and what are the facts about California public employees?

First, there are not "too many" public employees in California. According to the California Budget Project (CBP), we have the second lowest ratio of state workers per 10,000 residents in the nation. In addition, more than 70,000 public sector jobs have been eliminated in California since the crash of 2008, and public sector job loss is proportionately greater in California than in most other states.

Second, public employees in California are not overpaid and they do not receive lavish benefits, compared with the private sector, according to the UC Berkeley Institute for Labor and Employment (IRLE). Economists Sylvia Allegretto and Jeffrey Keefe authored the IRLE report, "The Truth about Public Employees," in which they examined wage and demographic data from the Bureau of Labor Statistics, and found that the average California public sector worker is older, more experienced, and more educated than their private sector counterpart--55 percent of public employees have completed a bachelor's degree, compared to 35 percent in the private sector.

The report indicates that the typical private sector worker receives higher wages, but public employees with the same characteristics earn somewhat better vacation, medical and retirement benefits. The researchers conclude that an "apples to apples" comparison that takes into account age, experience, and education reveals "no significant differences in the level of employee compensation costs on an annual or per hour basis between private and public sector employees."

Third, public sector employees do not receive "gold plated" pensions as alleged by the corporate media like the Economist magazine. Again, reality defies the myth.

The California Public Employee Retirement System (CalPERS), which administers and manages a pension fund for 1.6 million public employees, reports that the average CalPERS retiree receives a pension of $25,000 per year. Half of CalPERS retirees receive less than $16,000, and 78 percent receive less than $36,000 annually. Less than 2 percent of CalPERS retirees receive a pension of more than $100,000 per year, and the majority of these are highly paid managers and supervisors--not union members--with 30 years' service.

Often forgotten is that public pensions are not paid from operating budgets of state and local government but are earned through monthly employee and employer contributions over 20 to 30 years. CalPERS professionals manage the $225 billion trust fund, and 75 cents on every dollar of retirement benefits are investment earnings. The taxpayers contribute 14 cents for every dollar of benefits.

Blaming public employees for our fiscal crisis deflects from the central issue of the historic, and widening, divide between the rich and everyone else. The solution is to reform our inequitable and unsustainable system of taxation.

The CBP reports that corporate profits increased by more than 400 percent between 2001-2008 in California, and the adjusted gross income of the upper 1 percent increased by 77 percent between 1993-2008, while incomes of the bottom 80 percent remained flat. Yet state revenues from corporate taxes have declined by one half since 1981, and the wealthiest 1 percent of income earners (who averaged $1.7 million in 2010) pay lower tax rates than they did two decades ago.

In California we have a revenue crisis--and not a spending crisis.

Tax reform and boosting taxes for those most able to pay would make it possible to restore cuts to public services, adequately fund public education, safety, and health care, and fairly compensate public employees. Such a progressive tax policy includes: 1) increasing by a modest 1% the corporate tax rate (returning to the 1981 level); 2) closing corporate tax loopholes such as the failure to reassess commercial real estate at market rates (now protected by Proposition 13); 3) enacting a severance tax on oil extracted and produced in California; 4) restoring the top personal tax rate for the upper 1 percent from 9.3 to 11%; 5) reconsidering and repealing some of the $12 billion in tax cuts by the legislature for individuals and corporations over the last fifteen years.

A healthy and vital public sector is essential for the private sector to flourish.
Corporations and the wealthiest Californians greatly benefit from public investment in infrastructure such as mass transit and affordable workforce housing, high quality education accessible to all, and comprehensive social services, particularly for low-income Californians.

Let's stop pointing fingers at hard working public employees and begin to build a broad coalition to implement a responsible and progressive tax policy.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Martin J. Bennett teaches American history at Santa Rosa Junior College, serves as Co-Chair of the Living Wage Coalition of Sonoma County and is a member of the California Federation of Teachers Local 1946.

The article is filled with inaccuracies. He doesn't mention public employees in Bell CA getting almost about million in salary. And the latest report is that they will receive--even if in jail-- from PERS retirement based on the inflated salaries, because the city council approved them.

Many public employees pay nothing into their retirement. Only teachers must contribute 8% of their salary; and they have done this for years. They can only retire at 60 with 60% of their highest salary and no health benefits.

See Retiring S.F. police brass cash in on way out
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/02/06/BAD91HJ22F.DTL

I hate to bust your bubble, but the vast majority of public employees pay something into retirement. Including Firefighters and Police Officers, who are now paying up to 75% (and at some fire or police departments, the union's have agreed to the em-ployees covering almost ALL the costs)of the cost of retirement. As for the Health Insurance issue, there is money out of my check every month to help cover the cost after retirement.

He also did comment onthose like the Bell city management..he stated that less than 2% and mainly manager level employees recieve more than $100,000 per year.

The fact is the Bell city issue is a case of management and ELECTED OFFICIALS taking the public's money, not the average government worker.

9,111 retired California government workers
receive pensions in excess of $100,000 from CalPERS.

They're all listed here.

http://database.californiapensionreform.com/database.asp?vtsearchname=&v...

And the vast majority of those names are managers who made more than $ 100,000 per year and worked 30 pus years or elected officials, not the average state or local government employee.

Unfortunately, you're an idiot. You must work in the private sector and be less educated. State employees contribute 8% of our salaries EVERY MONTH to our retirement accounts. So, before you go flapping your gums to show how ignorant you are, you really should have the correct information instead of making it up.

I work in the private sector and pay 100% of my retirement and 100% of my rather crappy health insurance. And then i help pay public employees saleries, pensions and health benefits and I get to retire when I am 65+. I you wonder why the private sector is not happy about this? BTW, I have a college education and that education info is bs as included in the private sector are all the McDonald's employees, etc. If someone is a really good engineer, CPA, etc, they could make more $$ in the private sector. So give that one up.

Anonymous you are wrong. I pay 15.6% towards my retirement as a public employee and have for 15 years. Some pay as much as 19%. Most, if not all, public employees pay into their retirement. Don't jump on the bandwagon and state that all public employees are like the city of Bell. That is inaccuraet! Oh and by the way my wife is a teacher. Get your facts straight.

Crazy. Agreed about inaccuracies. The article shifts the "blame" to big businesses when it was really the banks affecting the housing crisis on a national level. On a state level, big businesses have been actually leaving the state. Then at the end of the article , it's a predictable call for more taxes on the private sector working folk to try to sustain this unsustainable public sector mess we have in CA.

Thank you for this piece. It is well written and provides good information. We do need to oppose waste and abuse in public places.
Employees, ( usually managers) should not be able to inflate pay in the year or two before retirement in order to receive an outsized pension benefit. While these cases are not the major source of financial stress of pension systems, abuses are publicized and undermine confidence in the administration and fairness of public employee pensions.
While opposing waste, we need to build the promise of California. That promise is a good job for all, the opportunity to have a rewarding career, and the chance for a good education. The tax and budget cut mania does not promote good jobs, rewarding careers. It only digs the hole deeper. Cutting k-12 and higher education makes matters worse.
See my post here “An Open Letter to Governor Brown “ http://www.blogger.com/posts.g?blogID=11455634 providing a list of revenue sources to allow California to grow needed jobs.
You can’t cut your way out of the recession. Cutting jobs makes the recession worse. Just look at the current situation of Ireland and Great Britain. You can see what a budget cut approach produces- stagnation.

Comparing public and private sector employee pay: You got your stats. I got mine

http://www.examiner.com/political-buzz-in-detroit/comparing-public-and-p...

This article reminds me of a Mark Twain quote:

"there are lies, damn lies, and statistics". This article does a wonderful job of throwing self-serving statistics into the face of reality, and tries to mask bloated public employee benefits by making comparisons to selected private employee benefits.

I challenge the author to find many if any private employers who allow their employees to retire as early as their mid-50s with full pensions and paid medical.

You're right, there are lies, damn lies, and then you perpetuating them. If someone goes to college (which most State employees have) and they begin working for the State when they're 29 or 30 years old, by the time they're in their mid 50s they have 25 years of service. At age 55, State employees take home the number of years of service multiplied by a factor of 2, so they get a whopping 50 PERCENT of their pay, NOT FULL SALARIES.

It's math (again, private sector employees aren't as well educated and this is sad proof). Check the CalPERS web site. At age 55, the number of years an employee has worked is multiplied times two to come up with the percentage of their salary that they'll get upon retirement and that is 50 PERCENT.

Meg Whitman continually lied to the public about this, she ran ad ad that shows 25 years of service then lied right below that and claimed public employees get full salaries, and she was investigated for fraud for that ad!

Again, it is simple math. If you can't seem to figure it out in your head and need to use a calculator, go right ahead.

I don't blame public employees for the economic mess - any more than the close to 10% unemployed (actual number is much higher, I'm sure) and millions of others suffering under the current economic conditions. However, I do have personal knowledge and anecdotal evidence that public employees have largely been insulated in the bubble of job security and decent benefits unlike most privately employed people.

I'm pleased when I see public employees take a stand for labor. Unfortunately, it's usually just in defense of their own jobs and benefits. When they are willing to step up to the plate for others, maybe other workers would be more supportive of them, too.

I appreciate firemen, I really do. But when the Fire Chief at a prison makes almost $300k, I think things are out of line. Most public employees doing the grunt work are probably not overpaid. The system needs a serious sanity check.

I really resent the bashing of public safety workers.
I am a fireman and have been for 5 years, I have been laid off 2 times and am currently back to work in the bay area of ca. I was laid off both times by financially incompetent city managers that can't even account for a accurate budget, hiding surplus funds from the media, and blaming the red fire truck. The truth is public safety has no job security as you say. Stockton fire just laid off fireman with up to 9 years on the job. In addition, we work 56 hours a week, which means in a 30 year career, we have worked the equivalent of a 42 year career of 40 hours a week. During that time, saving your property and potentially lives. We breathe toxic chemicals at every fire. Generally a fire last 2 to 3 hours at least...cause after its out were still in there overhauling and checking for extension, pulling ceiling, etc in the off gassing smoke. I encourage you to please look up what is in smoke, pay special attention to burning plastic smoke, producing hydrogen cyanide...the same gas used in ww2. Having a elevated blood carbon monoxide level every fire for 30 years...all this kills. I've had friends who are avid athletes pass of health related issues from the job before they ever retire to see the so called "fat pensions.". Not to mention all the medical exposures we face daily with air and blood borne diseases. A majority of firefighters are paramedics and all our medically trained, with a extended list of certifications that our kept and renewed every year or two in all aspects of rescue to hazardous materials. We have no job security, we work long hard hours, I never received any severance package either time being laid off, receive wages lower then that of private but make comparable wages based on our 56 hour workweek to their 40, and in my department we pay 30,000 dollars a year out of our earned money into retirements! And every increase in wage means an increase in retirement contributions. All depts are different so before statements lacking facts are used, learn about your dept.

I'm a retired Fire Captain, spent 32 years in the fire service, 30 with Cal FIRE (CDF). I retired at age 57 and have enjoyed my 2 years of retirement but during these past two years I've also lost five former co-workers that I came up with to early deaths due to diseases that can be directly attributed to their jobs. As Rich mentioned in his comments, Firefighters are exposed to all types of toxins through inhalation and absorption from both fires and hazardous material incidents. Not to mention the diseases we are exposed to from medical aids. And finally the stress created from just the job itself. Imagine sleeping soundly when an alarm bell rings at 3am in the morning, throwing on your turnouts, jumping onto the engine driving code 3 (red lights and sirens)and arriving at a structure fire with reports of people still inside. Your heart rate and blood pressure are off the charts. There is a reason you don't see many retired Firefighters in their 70's, the mortality rate is very high after retirement. I realized at age 56 the physical demands of the job were passing me by so I called it quits although I loved what I did. There has been talk of raising the retirement age to 60, doing so would just create more on the job injuries and deaths. Public Safety Employees need and earn an early retirement, don't take away the few years they might have to enjoy after sacrificing their chances at old age on behalf of their community.

REGARDING: "we (firemen) pay 30,000 dollars a year out of our earned money into retirements!"

WOW! Your annual retirement stash is more than I make per year! And what's with the fire engine always parked at the handball courts?

I really resent the bashing of public safety workers.
I am a fireman and have been for 5 years, I have been laid off 2 times and am currently back to work in the bay area of ca. I was laid off both times by financially incompetent city managers that can't even account for a accurate budget, hiding surplus funds from the media, and blaming the red fire truck. The truth is public safety has no job security as you say. Stockton fire just laid off fireman with up to 9 years on the job. In addition, we work 56 hours a week, which means in a 30 year career, we have worked the equivalent of a 42 year career of 40 hours a week. During that time, saving your property and potentially lives. We breathe toxic chemicals at every fire. Generally a fire last 2 to 3 hours at least...cause after its out were still in there overhauling and checking for extension, pulling ceiling, etc in the off gassing smoke. I encourage you to please look up what is in smoke, pay special attention to burning plastic smoke, producing hydrogen cyanide...the same gas used in ww2. Having a elevated blood carbon monoxide level every fire for 30 years...all this kills. I've had friends who are avid athletes pass of health related issues from the job before they ever retire to see the so called "fat pensions.". Not to mention all the medical exposures we face daily with air and blood borne diseases. A majority of firefighters are paramedics and all our medically trained, with a extended list of certifications that our kept and renewed every year or two in all aspects of rescue to hazardous materials. We have no job security, we work long hard hours, I never received any severance package either time being laid off, receive wages lower then that of private but make comparable wages based on our 56 hour workweek to their 40, and in my department we pay 30,000 dollars a year out of our earned money into retirements! And every increase in wage means an increase in retirement contributions. All depts are different so before statements lacking facts are used, learn about your dept.