When Erin McFarlane looks at public workers, she sees lucrative pension benefits she doesn’t ever expect to get. And it makes her mad.
“I don’t think that a federal employee or government employee is worth any more than anybody else who does their job and does it well,” said the Slinger, Wis., woman. She’s been working a couple of bartending jobs since January, when she was laid off from her job at a Harley Davidson plant after almost a decade.
She’s not alone in seeing public servants as public enemies in some ways.
It’s a case of pension envy.
For McFarlane, 36, it’s part of a ubiquitous discussion, at the bars where she works and on Facebook. And it’s the center of some of the biggest political battles playing out in state capitals across the country as governors say their states can no longer afford the benefits that public employees have been promised.
Government workers in McFarlane’s state have rallied for weeks against Gov. Scott Walker’s efforts to take away many collective bargaining rights, saying that would amount to killing the middle class.
A USA Today/Gallup poll last month found show that Americans largely side with the employees, though about two in five that want government pay and benefits reined in.
Barbara Davis, a retiree from Cherry Hill, N.J., has been watching public workers in rallies in Madison, Wis., as well as Trenton. She says the protesters are wrong about tightening benefits hurting the middle class.
“I’m sorry, but what they’re doing is telling off the middle class,” said Davis, 76, and a co-chairwoman of the Cherry Hill Area Tea Party. “The middle-class people don’t get all the goodies that they do.”
At its heart, the issue is this: Some public workers get a sweet deal compared to other workers. And it’s taxpayers who pay for it.
That’s set off resentment in a time when economic doldrums have left practically everyone tightening their belts. Many people have found their tax bills rising even if their earnings haven’t.
In Davis’ case, it’s the property tax that smarts. She and her husband pay about $12,000 per year for the house she describes as a three-bedroom “tract home.” That’s a high tax even in New Jersey, where the average property tax bill tops $7,000 and where the Tax Foundation has found homeowners pay three and a half times the national median.
A half century ago, industrial jobs at car and steel plants provided high salaries and rich benefits. But as manufacturing moved overseas, many formerly well-paid workers had to take lower-paying jobs. By the end of the Great Recession, the economic order was undeniably changed.
“It’s the government sector worker who’s the new elite, the highest-paid worker on the block,” said David Gregory, who teaches labor and employment law at New York’s St. John’s University.
For instance, most non-uniformed public employees who have worked in New Jersey for 30 years with an ending salary of $85,000 can look forward to retiring at 55 with an annual pension of about $46,000. Working until age 60 and a salary of $90,000 can bring a pension of $57,000. And many of the New Jersey’s public-sector retirees have no or low premiums for their health insurance.
For a private-section worker who retires at 55, relying solely on a 401(k) without an employer match, it would take a $100 contribution to a plan every week for 30 years and getting an annual return over 7 percent to get to the same level of pension benefit as the public worker retiring at that age. Those benefits would run out after 25 years for the 401(k) retiree.
To be fair, most public-sector retirees don’t get such rich pensions. New Jersey’s Treasury Department says the average annual pension due state workers who retired between July 2009 and June 2010 was just over $30,000 per year; for local government employees, it was about $20,000.
And the members of the state’s two biggest public employee retirement systems are required to pay 5.5 percent of their base salaries into the pension funds.
St. John’s Gregory says the rest of the benefits are deferred compensation promised to workers instead of better salaries.
National data compiled by the U.S. Bureau of Labor Statistics confirms that public-sector workers do better when it comes to pensions and benefits.
As of last September, professional and management workers in the private sector were making $34.91 in hourly salary; public sector professionals made $33.17 an hour.
The government entities spent 1.7 times as much on health care per employee-hour worked and nearly twice as much on retirement costs. Public-sector workers — who are more often represented by unions — are far more likely to have defined-benefit pensions with promises to pay for the retirees’ whole lives.
Olivia Mitchell, a professor of insurance and risk management at the University of Pennsylvania’s Wharton School, says the data isn’t perfect. It doesn’t compare workers with the same education or experience levels, and it covers a broad range of jobs. Also, she said, it doesn’t take into account that about one-fourth of public workers aren’t covered by Social Security.
There’s one clear downside for the public employees: “We also know that the public-sector pensions are in deep trouble financially,” Mitchell said, pointing to studies that suggest that they’re underfunded by a total of $3 trillion, largely because governments have skipped payments. “Exactly what will be done about that, nobody knows.”
Unchanged, those retirement systems could eventually stop paying entirely.
“One way or another, if we don’t make changes, the government will collapse,” said Abel Stewart, of Toledo, Ohio.
Stewart, 36, the director of contemporary worship at a Methodist church in suburban Toledo, says he has a hard time conjuring up sympathy for the government workers he’s seen protesting because of all the time he’s spent working with struggling immigrants.
“These are middle class people who have a house, who have enough food, who are complaining they don’t have enough,” he said. “Instead of fighting for their piece of the political pie, they’d be better looking at how to live within their means.”
That’s not a unanimous view.
Tony Christoff, a 38-year-old stay-at-home dad in Perrysburg, Ohio, believes public workers like police officers and teachers — including his wife — should be rewarded. “They go over and above and deserve the pay they get,” he said.
Jeff Nash is a Democrat elected to the county freeholder board in union-heavy Camden County, N.J., who has come to believe that public employees need to sacrifice.
“The days of government workers receiving free benefits and pensions without risk, those days are coming to an end because everyone else who pays for government services is paying more for their health insurance, like myself, and running the risk of a 401(k) as part of their retirement savings. Government is changing to match what the rest of middle-class America is enduring today.”
“It’s not a matter of fairness,” he said. “It’s a matter of evolution.”
Hetty Rosenstein, the New Jersey director of the Communications Workers of America, which represent New Jersey government workers in several fields, says she gripes about her members’ pensions are misplaced.
“There’s pension envy because people who are working in the private sector, they’re being denied pensions,” she said.
___
Associated Press writers Carrie Antlfinger in Milwaukee and John Seewer in Toledo, Ohio, contributed to this report.
Related articles
- State workers: ‘Hey, don’t blame us’ (capitolhillblue.com)
- People@Work: Now, Governments Are Shifting Pension Burdens Onto Workers (dailyfinance.com)
- Finally Some One Explains “Why employee pensions aren’t bankrupting states” (middletownmike.blogspot.com)
12 thoughts on “Voter anger growing over government workers’ benefits”
We are mad as hell and we won’t take it anymore.
Wake the Hell Up America! “JOIN THE REVOLUTION”
Read “Common Sense 3.1” at ( http://www.revolution2.osixs.org )
We don’t have to live like this anymore. “Spread the News”
Vote for a better America. Petition for a better Government ((( NOW )))
https://www.osixs.org/Vote.aspx
From WSJ on Muni Bond slowdown.
https://finance.yahoo.com/banking-budgeting/article/112300/deep-freeze-hits-muni-bond-market?mod=bb-budgeting&sec=topStories&pos=2&asset=&ccode=
I think the major chill in the muni-bond market is due to investors having morbid fear of default on such obligations. Two of the three major insurers of muni-bonds have gone bellyup since 2008 leaving only one and it simply can’t handle major defaults no different than the PBGC could handle a major rush on pension funds failing or the FDIC and FSLIC if hundreds of banks went bellyup simultaneously. Hundreds of banks have been failing since 2008; ie., the little guys for which there are no ‘bailouts’, but you don’t hear about this on the national evening news.
Seemingly the USS America has holes in every major compartment, we’re listing to port, bow submerged, stern up. It won’t take much more incompetency or more likely the engineering of such in high places to send us to the bottom.
Carl Nemo **==
Carl
When I knew we were in deep was the first bailout that took place in 2008. It was amazing at the level of cooperation between both parties and the president to get it done and done quick. I knew then that if things got worse and some routine investigation took place everyone was part of the mess. Cover their collective arses.
This is silly. They show be angry at themselves.
Wake up people – “JOIN THE REVOLUTION”
Read “Common Sense 3.1” at ( http://www.revolution2.osixs.org )
FIGHT THE CAUSE – NOT THE SYMPTOM
We don’t have to live like this anymore. “Spread the News”
Thanks morpheus for the link material. I plan on reading it a bit later.
Just remember the entrenched powers that be will never relinquish their grip on an entire nation simply as a function of mere eloquent protests on paper. It didn’t work in 1776 and it won’t work now. It took seven years of warfare to expel the Brits from our newly formed nation in November of 1783 when the last of the remaining troops and Brit sympathizers left.
Carl Nemo **==
I wonder, Carl, if the feds get air miles on that freaking giant Visa card they are running up trillions on. If so book about 200,000,000 million of us to Hawaii.
Almost all the states are required to balance their budgets so that expenditures cannot exceed revenues. Technically no deficit. Now money sent to the state by the feds is considered part of the revenue pool with strings attached such as program specific. The old mandate that is soon decreased letting the states make up the fiscal difference. Underfunded mandates that are often passed down to towns by the states especially in education. States can also issue bonds for capital improvements and some have rather ill defined limits. All of it adds up to an debt obligation that continues to increase with each budget and those bond rating are dropping.
But the crusher is the unfunded/underfunded obligations and that is where the crisis is happening. Revenues down and expenses up so the short fall has to be balanced by either taxes or cuts – hence the nationwide disaster faced by states since the major cost is labor and the benefits associated with labor – hello pension and health care! Massachusetts has 22 billion in unfunded pension obligations but that is spread out but taking an ever increasing part of the budget. Ouch! California was mentioned. Double ouch! Since I believe the California one is actually a budget gap for this fiscal year. Not sure and too lazy to look it up since we all know they are screwed.
The reality is state after state is faced with what Wisconsin currently faces and the only way to correct it is higher taxes (I hate the term revenue sources) or reduction in budget. The election results in most of those states clearly shows a raise in taxes is unacceptable.
What’s interesting bogofree is it’s mentioned in “The Government Waste and Fraud Report” link that I’ve supplied a number of times that half of all purchases on U.S. government issued credit cards are fraudulent purchases on behalf of government employees…ouch!?
Just about everything I come across indicates our nation is suffering from ‘core rot’ and the only redemption is to be trial by ‘fire’; ie., major crises so to speak across an entire society. Of course the uber wealthy can hide out in their mountain retreats, distant hidaways and armed, gated communities with the protection of “Blackwater XE” and other security enterprises.
Seemingly there are no honorable men and women in Congress who will face up to the enemy; ie., key Congressional committeemen and women who can either make or break legislation that could turn things about. Instead ‘self interest’ reigns supreme with their partisan “I’ve got mine, screw you” attitude prevailing as the order of the day. As I’ve mentioned before in other writings they’ve got their pass to safety as a function of COG (Continuity of Government) in the bunker, while the rest of the population is rioting for a loaf of bread and the last can of SPAM.
These greedy, selfish mattoids are seemingly hell bent on sending the USS America to the bottom. In naval terminology it’s called scuttling a vessel and it’s usually done for the insurance policy, in their case it seems they are deluded into believing they’ll have jobs for life as members of the New World Order’s politburo representing the U.S. as a minor plantation within the greater order of such known as “Plantation Planet” post crisis.
With reference to our now seemingly ‘hand-clapping” politburo, once our somewhat honorable Congress I feel this quote best sums it up for our nation and soon to come just deserts for having fallen asleep at the wheel as proactive, ever-vigilant citizens.
***
“So this is how liberty dies. With thunderous applause.” … Senator Amidala in Star Wars
***
Carl Nemo **==
Thanks bogofree for the Charlie Lincoln story. What’s interesting is this same phenomenon is occurring nationwide. Seemingly no one could countenance that our entire retirement paradigm would eventually crumble both public and private.
Possibly things would still be well if our federal and state governments had not gotten addicted to deficit spending. The Federal government has the printing press which is tantamount to legally enfranchised ‘counterfeiting’ whereas state governments cannot do so, therefore were quite foolish to engage in deficit spending. I believe California has 25 billion in debt hanging over their state budget with no means in sight to pay it down.
Individual citizens abuse credit too by running up their debts owed with little thought that the use of a CC is not money, but more incurred debt. Seemingly living as function of debt has become a national addiction. Unfortunately the cure is going to be an extremely painful withdrawal that will drive this nation to its knees; that is, if we survive as such?
https://www.wsws.org/articles/2011/jan2011/stat-j24.shtml
Carl Nemo **==
My father sold his business in the late 50s and had to sign a non competitive agreement to keep him from opening a similar business. This was five years and when his time was up he started another business competitive to the one he sold. I would love to see that applied to folks in the public sector that leave one high paying job via retirement and then sign in for a similar job in another state – non competitive.
In the town I live in our school superintendent “retired” and got 65% of his three highest years earnings as his pension (not the full 80%) and quickly took another position in another state.
As a former teacher I have seen the situation played out numerous times with teachers and administrators leaving my state (Massachusetts) and crossing the border to say R.I. and hiring on. Also you have a reverse migration. Get the 80% kiss and move on.
The ultimate pension abuse is Charlie Lincoln who happens to live in our town. Link to full story below but the short version was Mr. Lincoln was a Brockton cop who managed to also get a job with the county sheriff primarily for his “support” at election time. Lincoln worked both jobs for three years by taking sick time and vacation time from his Brockton job and therefore had two rather fat paychecks and his pension was based on his three highest years of earnings. Despite court action there was nothing “illegal” about what he did.
https://www.bluemassgroup.com/diary/21131/plymouth-county-commissioner-tim-mcmullen-endorsed-by-charlie-lincoln-of-historic-pension-scandal
If it’s pension envy, don’t make any changes and let the pensions go belly up. Most aren’t covered by the PBGC, so it will be the end of middle class life for most of them. They can just re-train in computers and start over like anyone else right? 😉
What’s amazing is the private sector is just ‘waking up’ to the fact that government employees do so much better overall.
I have a dental plan for my wife and I in addition to medical. I get about 50% reimbursement on a root canal, gold crown procedure of course for routine cleaning and such there’s no charge. Upon leaving the dental office recently I asked the receptionist who had the most deluxe dental plans. She said firemen and police. I asked how much do they pay out of pocket, she said “nothing”, it’s all paid. I’m sure their main medical plan is the same too.
Many people will immediately say these guys are risking their lives everyday for the community etc., so they should get deluxe bennies. Well it’s not unusual for a lowly patrol officer with overtime of which there’s plenty to make 100 g’s per annum or more. I read a recent figure that police officers in Oakland, CA make around $130,000 per annum. Yeah, it’s a dangerous job, but…?! They weren’t forced to take the job. What these officers want is a ‘risk free’ job environment along with deluxe percs. I’ll cut firemen infinitely more slack then I would cops concerning this issue. Firemen aren’t armed and don’t choose to do so because it would destroy the tradition of firefighters being protectors of life and property and they have no desire to become targets although on occasion some criminal slimeball will shoot a firefighter although rare.
Nowadays it seems the most minor confrontation entails the use of S.W.A.T., APC’s (armored personnel carriers) and recently I witnessed one of these carriers with a mounted ‘ma deuce” topside; ie., a Browning M2 .50 caliber…say what?! This is truly a dangerous weapon to use for community crisis policing. Evidently they want to be able to penetrate every house on the block in order to get the perp. In addition, the officers have military helmets, full body armor, shin guards etc., and fully automatic weapons. They look like ‘Robocops”. It’s almost laughable to the extent at which they are both armed and rigged for ‘combat’. There’s more to this than simple community policing, but to put sheer ‘terror’ into the hearts of citizens concerning modern era ‘policing’ while they the terrorized pay the freight for this policing largesse.
Our police nationwide have been completely militarized all with copious amounts of ‘Federal aid” . It seems modern day officers don’t want to risk having even a ‘hangnail’ incident when confronting bad guys/gals. Of course the reason being too is they want to live long enough to enjoy their ‘fatcat’ pensions too.
The Portland, Oregon area have police Captains retiring a 120% of their active duty pay with this trend found nationwide. They retire then find another job as a police chief in another city so they can double dip if they live long enough. Needless to say pension plans can no longer support such largesse due to the fact it’s difficult for the funds to get a reliable, decent return on investments from their funds principal assets. In the ideal situation a pension fund should be able to handle pension disbursements as a function of the interest and dividends earned on rock solid investments of which there aren’t many in these highly volatile dangerous times without ever digging into the fund’s core assets; but, that’s no longer true with many funds foundering each year showing less in the pension funds while the companies that sponsor them are failing to come up with their contributions to the same. Many pension funds have simply been closed down to future retirees.
Things are not well in Gotham City folks and its going to get far worse before it gets better if ever. Even Federal government pensions both military and civilian are at risk. Seemingly the promise of a retirement has gone up in smoke, all due to criminality in high places of government, investment banking and the stock market. Nothing is sacred, nothing is untouched by the forces of terminal greed, a sickness for which there’s no cure. : |
Carl Nemo **==
p,s. I didn’t single out police because I have little respect for their profession, but simply as an example concerning government pensions having gone overboard. It’s the same for government employees in general.
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