Income equality: abolish pensions based on having been a government employee

[ricmat]

I think that there are a lot of misconceptions out there about the salaries for some government jobs, too.

Unless you’re at the top of the pay scale, some of the jobs don’t pay much differently than a private sector job.

From this link.

The study found that federal government workers earned an average of $84,153 in 2014, compared to the private sector’s average of $56,350. Cato based its findings on figures from the U.S. Bureau of Economic Analysis (BEA).

But when adding in benefits pay for federal workers, the difference becomes more dramatic. Federal employees made $119,934 in total compensation last year, while private sector workers earned $67,246, a difference of over $52,000, or 78 percent.

I think the only misconception is that government workers get paid less than the private sector.

 

[Secret_Square]

The figures you cite are averages that don’t reflect variations among individual jobs. Some government jobs do pay considerably more than the private sector, while others pay about the same and some pay less. “Average” does not necessarily mean “typical of every member of the group,” especially if the average is skewed by extremes or outliers. For example, if Bill Gates walked into a room occupied by 10 working class people, the average income of everyone in the room would be in the millions. That’s an extreme example to make a point, but a small percentage of very high paid people combined with a large percentage of low paid people can make the average pay higher than what the majority of people actually receive. A better figure to cite would be the median pay – the figure that half the group is above and half are below. It is NOT the same as the average in many cases. Finally, federal employee pay is not necessarily representative of what state and local governments pay their workers, which can be considerably less.

 

[pensmama87]

From this link.

The study found that federal government workers earned an average of $84,153 in 2014, compared to the private sector’s average of $56,350. Cato based its findings on figures from the U.S. Bureau of Economic Analysis (BEA).

But when adding in benefits pay for federal workers, the difference becomes more dramatic. Federal employees made $119,934 in total compensation last year, while private sector workers earned $67,246, a difference of over $52,000, or 78 percent.

I think the only misconception is that government workers get paid less than the private sector.

Does that at all take into account that there is a much wider variety of jobs in the private sector, and that since many government positions are administrative in nature, they’ll lean towards the top of the payscale anyway? The private sector as a whole is also much, much larger than the public.

Also, you’ve only noted federal positions.

My husband works in the public sector. He makes much, much less than what would be available to him if he worked private sector. He does have certain perks, though, that’s true - he has good benefits (no pension, though) and he isn’t required to be a workaholic. He’s also not union.

But he’s also saved taxpayers an average of triple his salary every single year he’s been employed, too. And he gets to go to public meetings where people scream in his face because if it’s the gubmint, it’s evil, the end. Never mind that earlier that day he successfully negotiated a union contract or balanced a budget or applied for a grant to improve services without raising taxes. He’s a bad man who’s a drain on all of us because we pay his salary and we should make his job so low paying and so miserable he leaves so only incompetent people who can’t find employment elsewhere will agree to do it.

Golly. Strikes me as a kind of self-fulfilling prophecy.

 

[pensmama87]

It also strikes me as silly in this discussion that private enterprise is held up as an ideal. There’s corruption, old boys networks, unfair compensation and every other problem under the sun. But those become problems with individuals and single companies, but if it happens in the public sector, suddenly it’s “all government is bad.”

It reminds me a lot of Protestant complaints about the Church. Every bad thing that happens in the Church - “well, that’s the problem with those Catholics.” Every bad thing that happens in some other religious denomination? Single problem, not representative of anything. Just a few bad apples. They weren’t “real Christians.”

 

[ricmat]

The figures you cite are averages that don’t reflect variations among individual jobs. Some government jobs do pay considerably more than the private sector, while others pay about the same and some pay less. “Average” does not necessarily mean “typical of every member of the group,” especially if the average is skewed by extremes or outliers. For example, if Bill Gates walked into a room occupied by 10 working class people, the average income of everyone in the room would be in the millions. That’s an extreme example to make a point, but a small percentage of very high paid people combined with a large percentage of low paid people can make the average pay higher than what the majority of people actually receive. A better figure to cite would be the median pay – the figure that half the group is above and half are below. It is NOT the same as the average in many cases. Finally, federal employee pay is not necessarily representative of what state and local governments pay their workers, which can be considerably less.

Those are all good points. Especially the point that private sector CEOs etc. might pull up the average on the private sector side.

Also, my previous comments were directed at federal employees not local ones.

But, getting back to pensions - what is so special about federal government employees and most state and local government employees that they should receive pensions when almost nobody else does any more?

 

[ricmat]

It also strikes me as silly in this discussion that private enterprise is held up as an ideal. There’s corruption, old boys networks, unfair compensation and every other problem under the sun. But those become problems with individuals and single companies, but if it happens in the public sector, suddenly it’s “all government is bad.”

Yes, there is corruption, etc. It’s not ideal.

But when those things get out of control (for example, they all decide to pay themselves outrageous salaries and give themselves super benefits,) it is self regulating. Money runs out, CEOs get fired, employees get laid off, the accountants go back to the drawing board and decide that we paid ourselves too much, and to stay in business, we need to cut back on salaries, benefits, etc. And so it happens, or else everybody in the company ends up employed somewhere else where there is less greed.

In the public sector, there is no self regulation. If they want higher salaries and benefits, no problem…just raise taxes.

 

[ricmat]

Here’s an example of the type of thing that makes me mad. It is related, sort of, to government pensions.

There’s a large city near where I live that has a public bus system. A few years ago, they figured out that they didn’t have a lot of actual bus riding customers, so the revenue was way down. In order to solve the budgetary crisis, they proposed that the solution was to cut the number of bus routes (and running buses) in order to save on gasoline. That’s it. That’s the solution. (As almost anybody else could see coming - fewer buses running reduced the revenue even more…)

But their thinking is “don’t touch employee salaries. Don’t touch employee pensions. Don’t tell people to work longer hours for the same pay. Don’t tell people to work through their paid vacation days. Don’t put MORE buses out there on new routes to draw in new customers, or just try new routes.” It’s OK if the bus company has a huge bureaucracy sitting around managing things but actually doesn’t have ANY buses running, because that saves the most gas. THAT’S “government-think.” If only they could go out of business, and let the private sector find a solution, it would be better for everybody.

 

[pensmama87]

Yes, there is corruption, etc. It’s not ideal.

But when those things get out of control (for example, they all decide to pay themselves outrageous salaries and give themselves super benefits,) it is self regulating. Money runs out, CEOs get fired, employees get laid off, the accountants go back to the drawing board and decide that we paid ourselves too much, and to stay in business, we need to cut back on salaries, benefits, etc. And so it happens, or else everybody in the company ends up employed somewhere else where there is less greed.

In the public sector, there is no self regulation. If they want higher salaries and benefits, no problem…just raise taxes.

Maybe that wouldn’t be an issue if voters weren’t so apathetic.

We the people are supposed to keep our government officials in line, aren’t we?

 

[on_the_hill]

But their thinking is “don’t touch employee salaries. Don’t touch employee pensions. Don’t tell people to work longer hours for the same pay. Don’t tell people to work through their paid vacation days. Don’t put MORE buses out there on new routes to draw in new customers, or just try new routes.” It’s OK if the bus company has a huge bureaucracy sitting around managing things but actually doesn’t have ANY buses running, because that saves the most gas. THAT’S “government-think.” If only they could go out of business, and let the private sector find a solution, it would be better for everybody.

Some of that could have been influenced by union contracts.

I totally get that there is corruption and waste in government, just as there is everywhere else. And I totally get that it seems worse because government is funded via taxes (mostly), aside from fees, penalties, fines, etc.

But it’s also unreasonable to expect people to work for the government out of some sense of public charity and willingly accept less than they can get.

 

[ricmat]

Maybe that wouldn’t be an issue if voters weren’t so apathetic.

We the people are supposed to keep our government officials in line, aren’t we?

Amen to that!

But the government already employs so many people, when it’s time to vote, they obviously vote for their own benefit. Which by definition “is at the expense of everybody else”

I think that’s why the District of Columbia was set up not to have senators, or voting representatives.

 

[pensmama87]

Here’s an example of the type of thing that makes me mad. It is related, sort of, to government pensions.

There’s a large city near where I live that has a public bus system. A few years ago, they figured out that they didn’t have a lot of actual bus riding customers, so the revenue was way down. In order to solve the budgetary crisis, they proposed that the solution was to cut the number of bus routes (and running buses) in order to save on gasoline. That’s it. That’s the solution. (As almost anybody else could see coming - fewer buses running reduced the revenue even more…)

But their thinking is “don’t touch employee salaries. Don’t touch employee pensions. Don’t tell people to work longer hours for the same pay. Don’t tell people to work through their paid vacation days. Don’t put MORE buses out there on new routes to draw in new customers, or just try new routes.” It’s OK if the bus company has a huge bureaucracy sitting around managing things but actually doesn’t have ANY buses running, because that saves the most gas. THAT’S “government-think.” If only they could go out of business, and let the private sector find a solution, it would be better for everybody.

That gets down to union contracts, I think.

There are some things I think are better left to local government than private enterprise. Public transit is one of those things. But you need administrators with teeth who are willing to fight for the taxpayer and say, “Sorry, this is the level of service, and this is what we can afford.” I don’t think making it about profit will work, because those who need the service the most are the least likely to afford it.

A few years ago in another job my husband had to negotiate new union contracts and it was a nasty business. One union in particular had been running all over the system and was manipulating a lot of loopholes so their employees were making a TON of money they were never expected to, and his job was to rein it in. You would not believe the flak he caught for that on both sides. But my father, who’s worked in the private sector his whole life, has had to do the exact same things for the foundries he worked in. It’s not a government only problem.

 

[pensmama87]

Amen to that!

But the government already employs so many people, when it’s time to vote, they obviously vote for their own benefit. Which by definition “is at the expense of everybody else”

I think that’s why the District of Columbia was set up not to have senators, or voting representatives.

Again, what government?

It’s not a monolithic thing and you’re treating it like a monolithic thing. Which officials, which government bodies?

My husband shouldn’t be allowed to vote? Should our household not be allowed to vote because our family is sustained by government money?

 

[ricmat]

Some of that could have been influenced by union contracts.

I totally get that there is corruption and waste in government, just as there is everywhere else. And I totally get that it seems worse because government is funded via taxes (mostly), aside from fees, penalties, fines, etc.

But it’s also unreasonable to expect people to work for the government out of some sense of public charity and willingly accept less than they can get.

I’m not blaming people for working for the government because the salaries and benefits are better. I’m blaming the government for making them available (at taxpayer expense) in the first place.

Union contracts — even in private companies, union demands end up being regulated in the sense that if they “get” too much, the company goes out of business, with the union getting hurt too. NOT SO the government. They just raise taxes. There is no limit on the amount that government unions can get. Raise taxes and borrow the money from China. Then pass the bill on to the grandkids. Sheesh!!!

 

[ricmat]

Again, what government?

It’s not a monolithic thing and you’re treating it like a monolithic thing. Which officials, which government bodies?

Across the board, government employees will vote for their benefit, which makes them at odds with taxpayers. My point was that the government(S) are getting so big, and employing so many, that they outvote (or substantially swing the vote) the people actually paying their salaries.

My husband shouldn’t be allowed to vote? Should our household not be allowed to vote because our family is sustained by government money?

I didn’t say that.

I do worry, however, that when we reach the point where 51% of the people can vote themselves tremendous benefits to be obtained from the other 49%, that we will be in deep trouble.

Something I learned back in the dark ages, when civics was taught in public schools, was the rationale behind the capitol of the US being located NOT in a state (because that state would have too much power), and the rationale behind DC NOT having representation in the Senate and House (because government employees would always vote their own interests at the expense of the rest of the country).

 

[Secret_Square]

Depending on what state you live in, the constitution and/ or case law of that state may decree that public employee pensions are contractual obligations that the State must pay no matter what. Any state, as far as I know, can change its pension laws for FUTURE hires, and give anyone hired after a certain date a smaller pension or none at all. In fact, IL has already done this for anyone hired for the first time on or after 1/1/11; they have a smaller benefit and a significantly later retirement age.

Whether or not benefits can be reduced for workers already retired, or for those currently working, is another story. I know that courts in IL have ruled repeatedly that retirement benefits cannot be reduced in any way for current workers and retirees because the state constitution says these benefits “shall not be diminished or impaired.” This has been the law for nearly 50 years. The problem is that additional benefits such as compounding COLAs have been added over the years with little or no consideration of how those benefits would be paid for in the future. So if you ask what makes government employees “special”, the short answer is “the law”. In many cases it would take legislative action or a constitutional amendment to change that; of course, public employee unions fight such changes tooth and nail.

 

[ricmat]

Depending on what state you live in, the constitution and/ or case law of that state may decree that public employee pensions are contractual obligations that the State must pay no matter what. Any state, as far as I know, can change its pension laws for FUTURE hires, and give anyone hired after a certain date a smaller pension or none at all. In fact, IL has already done this for anyone hired for the first time on or after 1/1/11; they have a smaller benefit and a significantly later retirement age.

At least IL is moving in the right direction.

In terms of " the State must pay no matter what" - another example of government benefits that private companies don’t have. If they go out of business, and the pension fund dries up, there is no “must pay no matter what.”

Whether or not benefits can be reduced for workers already retired, or for those currently working, is another story. I know that courts in IL have ruled repeatedly that retirement benefits cannot be reduced in any way for current workers and retirees because the state constitution says these benefits “shall not be diminished or impaired.” This has been the law for nearly 50 years. The problem is that additional benefits such as compounding COLAs have been added over the years with little or no consideration of how those benefits would be paid for in the future. So if you ask what makes government employees “special”, the short answer is “the law”. In many cases it would take legislative action or a constitutional amendment to change that; of course, public employee unions fight such changes tooth and nail.

Yes. So let me re-phrase my question. What makes government employees so special that they have legal protections by the government, when private sector employees do not?"

Government unions were long considered to be a really bad idea even by “progressive liberals”. Even FDR was against them.

 

[on_the_hill]

If you want government benefits, get a government job.

A relative and his wife had very young children. He worked in sales, or something like that. He wanted to make a lot of money. So he went to dental school and became an orthodontist. He’s very wealthy now.

I know a guy who wanted his summers off so he could lifeguard at an ocean beach. So he became a teacher.

Jobs have compensation of one sort or another. Take the one that gives you the compensation you want.

Sure as shootin’, I wouldn’t vote against my own interest as a govt employee. That would be irrational.

 

[ricmat]

If you want government benefits, get a government job.

A relative and his wife had very young children. He worked in sales, or something like that. He wanted to make a lot of money. So he went to dental school and became an orthodontist. He’s very wealthy now.

I know a guy who wanted his summers off so he could lifeguard at an ocean beach. So he became a teacher.

Jobs have compensation of one sort or another. Take the one that gives you the compensation you want.

Sure as shootin’, I wouldn’t vote against my own interest as a govt employee. That would be irrational.

I’m retired so I don’t have any desire to work for the government or anybody else at this point

The problem is, everybody can’t have a government job. The taxpayers can’t afford it as it is.

Just to be fair, everybody can’t have a private sector job either in which the wages and benefits are totally disconnected from “what the employee actually produces.” There are no such jobs, and that’s the way it should be.

In the private sector, you can get higher wages and benefits by working harder, and smarter, and longer, and in general more competently, and perhaps be lucky as well (and yes, there is nepotism, etc.). But generally there is at least some connection between the value you provide your employer and the wages/benefits you receive.

Not so the government. Please stop making ME pay for your life of luxury. If we think WalMart or GE or Ford is giving me poor products, we can stop buying from them, and they change their ways. Or they don’t, and we buy from someone else. Not so the government.

Your “own interest” as a government employee is short sighted. Eventually the peasants will revolt with torches and pitchforks

 

[pensmama87]

Life of luxury?

 

[on_the_hill]

In the private sector, you can get higher wages and benefits by working harder, and smarter, and longer, and in general more competently, and perhaps be lucky as well (and yes, there is nepotism, etc.).

No, not really. There are a whole lot of people working really hard and they’ll never make ends meet. The old canard that, with hard work and dedication, you can lift yourself up by the bootstraps into a life of relative ease is drifting further and further from the truth.

As for being paid what you’re worth–that’s a myth also. There’s a huge disconnect between a person’s value to the workplace and the wages he or she earns. As any line supervisor at any production plant if he’s making what he should relative to management. Ask any nurse if she’s making what she should be given the stress and long hours.