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When city retirement pays better than the job
- crdoconnor 10y agoStep 1: Slash wages. Step 2: Stir up resentment between people on slashed wages and retirees. Step 3: Leverage that resentment to manufacture consent for slashing pensions. Step 4: Tax cuts for the wealthy.
- branchless 10y ago1. remove banking regulations 2. let banks farm the young via land prices 3. give boomers a cut, it's a one generation deal after that everyone else is screwed I can understand if you are rich and have no morals why you would support this. What I don't understand is why old people are selling their own grandchildren. Say what you will about the rich, they won't shaft their own. The boomers have sold us off very cheaply.
- vacri 10y agoCan we please cut it with the boomers/millenial shit-flinging? There are plenty of boomers out there who don't have tons of money, even after multiple decades of working.
- cookiecaper 10y agoYes. Young/childless people don't understand this, but there is nothing that older people want less than to harm their children. They've just spent the last 50 years of their lives taking care of their posterity so that they could have a nice life in a nice world. Parents and grandparents are not just going to muck that up casually; it would counteract everything they've worked for. You can argue that the policies of the older generation have unintended consequences that will negatively impact younger generations, but it is not credible that the older generation as a class is intentionally selling out any part of their posterity that is currently living for short-term personal gain.
- branchless 10y agoBut in aggregate, which is what we should be interested in, the gap is stark.
- vacri 10y agoIn aggregate, young people today have a lot of advantages that the boomers didn't have. Just talking about money is disingenuous. Poor people have always spent their entire income on living expenses - yes, rent now is more expensive, but food, clothing, and transport is much cheaper, for example. And no, the gap is not stark when you look at the boomers in their youth. It's only stark now, when the boomers have a lifetime of earnings behind them - hardly an apples-to-apples comparison. And when we look at things other than money, the young today are better off than ever before. Remember when it was shameful to be seen to be pregnant in public? Remember when intellectually disabled kids were shameful and you were expected to keep them out of public view? Remember when every house had only one phone, and it was in a central area? None of these always-on-call compact contact and entertainment machines that travel with you. Remember when if you forgot to do your food shopping on Saturday, you'd go hungry on Sunday, because nothing was open? And this is before we even start to touch on equal rights for minorities and similar. I don't have a problem if you complain about how we got here and are looking for a way to fix it, but just whining that you've been shortchanged while simultaneously ignoring all the better things about life... just sounds so adolescent. There isn't a boomer 'team' and there isn't a millenial 'team'. People don't fall into such overbroad demographics, at least not to any useful diagnostic degree. Boomers didn't get together and simply decide to fuck over their kids, so talking about them like that's what they did is just plain rude.
- crdoconnor 10y agoWhen the 0.1% nudges the pitchforks away they usually gesture in the direction of one of the two most convenient villains - boomers or robots. I'm sure your grandma will be very sorry for her part in corrupting politics with money, deregulating the financial sector and de-taxing land when her social security is cut to the bone.
- antidaily 10y agoMichigan, in a nutshell.
- nugget 10y agoCorruption plain and simple. There should be claw backs and reductions on self-dealt pension benefits such as these.
- kspaans 10y agoPublic-sector pensions are almost always voted on by elected city council members.
- empath75 10y agoSure, in the case of the guy that voted for his own pension. But if you take a job and work it for two decades with the expectation of getting a pension, that pension is part of your salary. Clawing it back after the fact is complete bullshit.
- emidln 10y ago> El Monte has a history of generous employee benefits — including a four-day work week for civil servants, who put in 10 hours a day and have Fridays off. Working 40 hours per week is a generous benefit?
- sparky_z 10y agoIt's something a lot of people want but most workplaces won't accept.
- dogma1138 10y agoThey often don't count brakes as work hours so 10 hour work day with 1.5 hours of total break time means 8.5 actual work hours per week, that's not bad.
- chaostheory 10y agoDon't most people outside of the public sector work more than 40 hours / week? That said, even in the public sector, once you've transitioned into management; the 40 hour work week no longer applies to you.
- fatbird 10y agoNo. Certain employment sectors like Silicon Valley and Wall St. have created cultures of expected overtime, but they're very unrepresentative. The US overall averages only 34.4 hours worked per week.
- otoburb 10y agoAt some point CalPERS and the city of El Monte aren't going to be able to cover the costs of the defined benefits pension packages - there will literally be no money left to fund the ongoing costs especially given the demographics listed in the article. Presumably some hard decisions will need to be made in the coming years. Given that "El Monte has more than twice as many [municipal civil servant] retirees drawing pensions as it does active employees" any attempts to legislate changes will be met with fierce political opposition until it's too late.
- toomuchtodo 10y agoAs long as California or the federal government has taxing authority, there will always be money. Just because you don't like how the current system is set up, doesn't make it not so.
- crdoconnor 10y agoRepeal prop 13 and start redirecting the tsunami of unearned income away from landowners in California and towards the state budget and CalPERs could quite easily be made sustainable again.
- cloakandswagger 10y agoWhy does every suggestion of yours involve stealing money from someone else to keep pensions on life support a little longer?
- jacalata 10y agoPresumably they think pensions should be funded and aren't stupid enough to think the money can just be invented from nowhere for it.
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- crdoconnor 10y ago
- Dowwie 10y agoIf you feel upset or angry about what public employees receive, realize that the problem isn't that they get too much but that you get too little.
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- imgabe 10y agoThe problem is that what they get is unsustainable. The public is on the hook for paying those pensions for decades. Which means there will be an ever-increasing pool of public retirees that that taxpayers will have to fund.
- crdoconnor 10y agoRaise taxes on the assets of the wealthy, crack down on tax havens and it "magically" becomes sustainable again.
- ohwello 10y agoPlease show me the math on how you are going to give everyone a pension greater than the GDP per capita by changing tax law.
- m0llusk 10y agoNo, it doesn't. California pensions for example are such that even if the state dropped all other obligations and paid only pensions even with massive tax increases pensions could not be fully paid. This mess will unwind in the short term. Yet another argument for some kind of basic income alternative.
- clort 10y agoonly if the population is increasing.. and if the population is increasing, then the burden to the taxpayers is spread ever wider. the problem starts when the tax income shrinks
- Spooky23 10y agoWhat isn't mentioned here is that the state usually mandates binding arbitration for public safety employees, which eliminates the ability of the municipality to negotiate. That's how police pensions get so crazy -- the pension allows the city to kick the can down the road vs a 10% raise or whatever. The supplemental pension thing for bigshots is another matter. That's pure greed, and a city shouldn't be able to do such a thing if the are part of the state system.
- snarf21 10y agoExactly. Here in PA, the state police cost more in benefits and retirement than then cost for salary from day 1. Add to that their retirement is based on their 4 best quarters and that includes overtime. I'm not saying that they should be paid a good wage plus money for their high risk occupation. It is just that pensions are pyramid schemes and not sustainable. And anyone who says just raises taxes to make them sustainable is proving that they aren't sustainable. We need to get rid of pensions and switch to fixed contribution. If people run out of money, then use taxes to fund social programs to help them.
- mavelikara 10y agoCounting overtime in that calculation is pure evil.
- tedunangst 10y agoPension spiking.
- snarf21 10y agoThe state has been unable to get the union to drop it. Also a few years ago there was a manhunt for a cop killer. The total cost was $11 million, largely all overtime. How much do you think that is going to cost taxpayers during the life of all of these cops' retirements? (a lot !!!)
- cm2012 10y agoPolice work is low risk compared to sanitation, logging, fishing, slaughterhouse work, other min wage positions...
- HarryHirsch 10y agoFacts are a bit thin on the ground in the article - they list the city manager as poster child, and that's that. You'd like to see averages to get the picture how generous the city government really is. I guess it's all "fake news".
- mturmon 10y agoThis is a general problem with LA Times muckraking. They do a lot of articles like this, with a single example used to backstop a whole narrative. On the other hand, they can go long (rarely!) with great results, as they did with the self-dealing of politicians in the small city of Bell (in LA County) -- (http://www.latimes.com/local/la-watchdog-me-bell-sg-storygallery.html http://www.latimes.com/local/la-watchdog-me-bell-sg-storygal...).
- fencepost 10y agoThis is a general problem with LA Times muckraking. They do a lot of articles like this, with a single example used to backstop a whole narrative. I'd call it Tribune more than just LA Times, and I'd note that the single example they use is generally an outlier. If they used an example from the median it'd be a lot harder to get people worked up.
- brandur 10y agoIf you want a maddening read, Google for "Transparent California salaries" + your city name (I won't link it because they have some of anti-adblock thing going on now) [1]. Many public sector employees have wages that are more than competitive with the 1% of the private sector; after you factor in the incredible benefit of a pension and early retirement, it's not even on the same order. One problem with government that is usually true is that it can grow, but it can't shrink. This applies to cost, workforce size, and benefits. We're at a strange turning point right now. Pensions in the private sector have all but disappeared. Pensions in the public sector are alive and well because it doesn't need to be self sustaining, and by running huge deficits it can steal the money it needs today from future generations. It's pretty obvious that cities and states should start eliminating pensions, but the beneficiaries of those same pensions are the people that need to do that. I'm not holding my breath for the right thing to happen here. [1] Sorry if you're not in California. Your state/country may have similar open information.
- crdoconnor 10y agoThe private sector has a strong incentive to drive down compensation (wages and pensions) in the public sector since it drives down the cost of labor for them too. >it can steal the money it needs today from future generations. 1) Future generations aren't buying our T bills. People are. Future generations will be receiving as well as paying interest. 2) Trying to make a moral case for stealing money from pensioners and giving it to the wealthy in the form of tax cuts is hard, but you gave it your best shot.
- brandur 10y ago> 1) Future generations aren't buying our T bills. People are. Right. Future generations are the ones paying the interest on them (and other government-issued debt). > 2) Trying to make a moral case for stealing money from pensioners and giving it to the wealthy in the form of tax cuts is hard, but you tried your best. I imagine you already know it, but I didn't say anything to this effect at all.
- AJ007 10y agoGiven current interest rates and expected investment returns, someone receiving even $50,000 a year in pension benefits is a millionaire or better.
- calcsam 10y ago> That puts him in the top one-hundredth of one percent of all public pension recipients in California. If Johansen is unrepresentative of the average, it would be nice to give some stats on what the average actually is.
- debacle 10y agoThe median is far more important, I think. I am going to receive a pension when I retire for the 4 years of full time work I did at a hospital. I think it's going to be on the order of $28 a month.
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- dublinben 10y agoOutliers gonna be outliers, yo. This kind of article crops up every now and then when a journalist rediscovers this information is public. They always focus on extreme outliers, and never even mention what the median situation looks like.
- losteverything 10y agoThe concept on anonymity in the future for these pensioners will go away whether they like it or not. Instant facial recognition will present pensioners (& others) to everyone. I can see where citizens charge them more or demand they pay for public services - or spend their money on the tax region from which it was sourced. Legislation wont bring change but people will.
- smallnamespace 10y agoOne reason pension plans are perpetually out of money is that they are allowed to assume that they will make around 6-8% a year from investments, rather than funding based on a riskless instrument like a T-Bond, which only gets you 2-3% a year. This means most pensions are funded only about half if what they should be. You might think this sounds reasonable, because historically equity markets do return something like 6-8% a year over the very long term, but the pension benefit is fixed and riskless in the sense that the city must always pay it out, so the investment should also be similarly risk free. Otherwise, if investments fail to perform, then taxpayers are always left holding the bag, as we see every time a market downturn occurs. Heads I win, tails you lose...
- d4rti 10y agoIndeed, it made the news here in the UK when the Bank of England was funding it's pension liabilities with assets that matched, instead of the more common "hope for 6-8%" return method.
- fencepost 10y agoPensions are a way for negotiators to kick the can down the road - and often they're negotiators who by the time it becomes a problem will have taken their own pensions or golden parachutes and retired far away from the town or state in question. It's also a lot easier to blame the people still around hoping to collect the pensions they were promised (and for which they took lower wages) than to blame others who screwed things up. I kind of feel that it's perfectly legitimate for legislatures to cut pensions as long as they also come to a retroactive agreement with the people affected to compensate them for the lowered pay that they took all those years ago, plus interest, and if it's going to be a lump sum cover any increased tax burden due to the size as well. Basically if you want to cut the pension, you have to retroactively fund the 401k or IRA that would make up for it. Or of course they could work out a formula that attempts to cover part of the shortfall from the pensions of those who created the problem by chronically underfunding - legislators, governors, mayors, council members, superintendents, etc. for public pensions, the retired CEOs and board members and their estates for private pensions. I can't imagine that there'd be any screaming about that. It wouldn't make much difference in the amount of cuts, but it might be a deterrent to prevent similar issues in the future. Consider Illinois, which has massive pension problems at the state and local levels. The state and towns/cities negotiated contracts that included pensions at a known level and had a pretty good idea of how much they needed to be funding in advance to cover those obligations, but instead of actually doing so they spent the money elsewhere on things more likely to get them reelected. It's like putting 1% in a 401k so you can spend the rest on parties every weekend, then screaming at retirement time that there's not enough in there to support you. There are absolutely abuses and outliers - abuses where the senior decision makers implement policies that dramatically increase payouts, then retire to take advantage of those increases as I believe was the case in this article. Abuses like that happen in the corporate world as well, where they're often called "golden parachutes." Anyone else here remember reading about companies paying senior executives tens or hundreds of millions in compensation just to get rid of them? There are also folks who've worked several different jobs, each of them with a pension that vests fully after 15 or 20 years, so once they actually retire they're able to collect separate full pensions from several different bodies or even occasionally from the same one - consider someone who was a police officer or fireman for 20 years, then "retired" and moved to another job in the same municipality. That person may well have a police/fire pension plus another civil service pension. I'm pretty sure Illinois and probably other places are working on reducing those with rules that limit the number of full pensions from one entity that people can get, but that won't make a huge difference. What happens regularly is that you'll see stories like this that highlight the outliers - particularly outliers that were previously in the most senior positions - and use them as an argument for how the whole system is broken and needs to be scrapped. Expect to see those most often from the Tribune companies (multiple papers, headlined by the Chicago Tribune and LA Times) and Wall Street Journal (News Corp).
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- edblarney 10y agoPublic sector unions are the most powerful bodies on earth, more powerful than 'big oil' etc.. I'm definitely not an 'anti government' type of person, but this kind of dysfunction is systematic. They have the power to pay themselves a lot, and they do it, it's not even a public/private issue, it's just measure of power. If progressives want to make actual progress, they need to tackle this issue.
- analog31 10y agoI honestly can't say if public salaries and benefits, including pensions, are too high or too low. But one thing I've noticed is that when salaries become a matter of public debate, it always invites a reaction from folks who believe that salaries are too high. There could be a variety of factors involved: 1. Most people make less money than people such as government officials, research professors, and the like, because most people are unskilled laborers. So it always looks like the salaries that we read about are exceptionally generous. 2. There's a cultural belief that government workers are lazy and incompetent, and their jobs are "easy" in a physical sense compared to unskilled labor and the construction trades, so we assume they're overpaid. The result is a natural political pressure to reduce salaries and benefits for public workers.