February 9, 2009

Forbes: America's Two Nations

Marc Comtois

Forbes magazine examines the difference between America's private and public sector (H/T):

In public-sector America things just get better and better. The common presumption is that public servants forgo high wages in exchange for safe jobs and benefits. The reality is they get all three. State and local government workers get paid an average of $25.30 an hour, which is 33% higher than the private sector's $19, according to Bureau of Labor Statistics data. Throw in pensions and other benefits and the gap widens to 42%.


Cops and firemen initially were granted early retirement because their work was physically demanding and they tended to die young. These days they live as long as everyone else, but early retirement lives on for an ever expanding pool of public workers. So do liberal disability rules. Nevada law 617.457 decrees that heart disease among uniformed safety workers is job-related. The medical reality, says the American Heart Association, is that a fireman gets heart disease from diet, lack of exercise or genes, not from dashing into burning buildings. Still, veteran Las Vegas firemen hobbled by heart disease can collect an inflation-protected $40,000 a year for life on top of their pension. That applies even if they're healthy enough to work in another occupation.


All this would be infuriating enough if public employees were merely retiring with pensions that paid out a reasonable percentage of their working wages. Instead, they have found legions of ways to boost payments well beyond those levels. In New York, Philadelphia and several other cities police officers rack up huge amounts of overtime in their last two or three years on the job to goose the base pay used to calculate lifetime pension benefits.

But there's another side:

When misguided policies lead to extreme underfunding, public employees are often left feeling as victimized as taxpayers. Chicago police Sergeant Michael Murphy, 41, is a third-generation cop whose grandfather was killed in the line of duty. Murphy works on an antiterrorism task force and narrowly missed being shot himself 16 years ago. He plans to retire at 55 and draw 75% of his salary. If he makes lieutenant it would top $70,000 a year.

The fly in this ointment is that the Policemen's Annuity & Benefit Fund of Chicago is only 35% funded. This despite the fact that Murphy and other Chicago cops contribute 9% of salaries and the city matches that nearly two-to-one. The city is pressuring police union boss Mark Donahue to swallow pension cuts. Murphy is outraged.

"I made a pact with the city when I was 23," he says. "I put my life on the line. You keep your promise to me when I retire."

Understandable, but then it gets undercut by stories like this:
Don't shed too many tears for public employees, says Gary Clift, a 52-year-old Californian who speaks with an insider's authority. Clift spent 26 years working for the state's Department of Corrections & Rehabilitation, retiring in 2006. He's now collecting 78% of the $112,000 salary he earned before stepping down and full health care coverage for life. Clift is thinking about using some of the public's largesse to write a book about the outrageous ways public employees milk California.

Clift holds special vitriol for a state program that lets employees retire and return to work part-time as "consultants." Some of the "retired annuitants," known as retired irritants to full-timers, deliberately get themselves laid off to collect unemployment pay without having to even show up, Clift says.

Near the end of his career Clift spent two years in the Department of Corrections' Sacramento headquarters analyzing legislation. The office's mandate was to provide the governor with insights into how proposed laws would affect the giant prison system. Not surprisingly, Clift says his colleagues took another agenda more to heart: doing their union's bidding and heading off anything that hinted at job cuts or lower salaries. Clift says he was the only manager at his former prison that he is aware of who didn't put in for disability on retiring.

The prevailing attitude, according to Clift: "It's just taxpayers' money, so nobody cares."

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We need to freeze the pensions now, for all state and municipal employees.

Posted by: Tom W at February 9, 2009 1:14 PM

We need to freeze the pensions now, for all state and municipal employees.

Posted by Tom W at February 9, 2009 1:14 PM

Should have been done a decade ago. Plus, no more "disability" pensions or they will all speedily "become disabled".

Posted by: Mike at February 9, 2009 7:22 PM

The answer is for more unionisation to get the rest of the work force up to the men and women who worked so hard to achieve decent wages for their work by joining in a cooperative effort to better their lot. I want to see all of the work force better paid. I don't want to drag down those who have achieved some sort of economic stability. We want a better paid work force - don't you want that to happen?- You argue that union members make too much money when you should be arguing that non-union workers make too little!

Marc, we know that you are a true representative of the common man because, as you have demonstrated and said:
1. You wear a baseball cap.
2. You were born in Maine.
3. You were raised in a small town.

1. A-Rod wears a baseball cap. That doesn't necessarily make you a cheating steroid user.
2. People of every economic and social class are born in Maine - people on welfare, panhandlers and multimillionaires. Let's put you somewhere in between.
3. Adolph Hitler and Mother Theresa were raised in a small town. That puts you somewhere in between the two of them, a place shared by almost all of us.

Old Spanish proverb says:

Pygmies stuffed and placed on the Alps are Pygmies still"

Posted by: OldTimeLefty at February 10, 2009 10:26 AM


This post is pure BS. You state that firefighters get heart disease "...not from dashing into burning buildings." BULL

You state "These days they live as long as everyone else..." Again, BULL

Fix the fiscal woes of this state. Look at "fair" solutions to the problems. But don't start throwing around BS like this. You post it, someone on here reads it, they believe it. But it's still BULL!

Firefighters have a much higher incidence of cancer than the general public and we die (on average) about 10 years before our counterparts in other professions. I know what I do and what I've been exposed to over 29 years and I've watched too many of my old firefighting buddies die off much too quickly after retirement.

Police the departments and the pension systems all you want to cut back on fraud. But be fair and realize that you just can't cut our pensions because you think they're too high.

"I made a pact with the city when I was (25). I put my life on the line. You (Gov Carcieri, Mayor Cicilline, etc.) keep your promise to me when I retire."

Posted by: Tom Kenney at February 28, 2009 1:52 AM
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