Those pension-grabbing public employees

Not mumbling any maybes, a new book is a full-throated denunciation of public employee pensions said to be overly generous and threatening to help push governments into bankruptcy.

“Plunder!” by Steven Greenhut, a columnist for the Orange County Register for 11 years, is subtitled: “How public employee unions are raiding treasuries, controlling our lives and bankrupting the nation.”

Pensions are a big part of the book.

But it’s a broader argument citing, among other things, excessive pay, unparalleled job security, incompetent teachers that can’t be fired, brutal police that go unpunished and child protection services that tear apart families.

“Simply put, the public’s servants have become the public’s masters,” the book contends.

Greenhut writes with force and clarity, but also from an unambiguous libertarian-conservative point of view that fears the growth of government is eroding freedom. It’s a “call to action,” like the work of an impassioned pamphleteer.

The guiding spirit here is definitely not the old reportorial tradition that, for better or worse, goes something like: “On the one hand this, on the other hand that, and let the readers do the mediation for themselves.”

The book is based on Greenhut’s own work in Orange County, where public pensions have been an issue, and the extensive use of excerpts from newspaper stories, a compilation of much of the critical coverage of pensions in recent years.

Greenhut got an hour on C-SPAN on Jan. 3 to discuss “Plunder!” his second book. His first book was on the misuse of the government power of “eminent domain,” the taking of private property for public use.

The new book in abbreviated form is the cover story in the February issue of the libertarian-oriented Reason magazine, “Class War, how public servants became our masters.“ The cover illustration shows a big boot crushing little human figures.

Greenhut’s book was not mentioned in an article in the Dec. 10 issue of the Economist magazine. But the article makes similar points, like Greenhut describes public employees as “coddled,” and mentions charter-school competition as a school solution.

Now Greenhut, relocating to Sacramento, has launched a website, Calwatchdog.com, sponsored by the Pacific Research Institute, a conservative think tank. A three-person staff began covering politics and state government last week.

“The whole idea is to keep an eye on government and to keep an eye on the unions that control Sacramento,” Greenhut said on C-SPAN.

He will get to see first hand, for example, how unions have expanded into in-home health services and struggled with limited success to roll back pro-business workers’ compensation cuts imposed under Gov. Arnold Schwarzenegger six years ago.

The book, “Plunder!” has created little stir among some unions so far. A spokesman for the largest state worker union, Jim Zamora of SEIU Local 1000, said no one there has read the book. He said the average pension of retired state workers represented by the local is $27,000 a year.

Greenhut said in his book the average pension cited by unions includes persons who worked short periods for government, not full careers, and those who retired before a big increase in benefits a decade ago.

His book points to a list of CalPERS retirees receiving pensions of $100,000 a year or more, posted on the website of a group that hopes to put a pension reform initiative on the November ballot.

The 6,133 retirees in the group’s “$100,000 club” are about 1 percent of the total 492,513 retirees, the California Public Employees Retirement System has said in previous responses.

A spokesman for an association that represents firefighters, who are said by Greenhut to “reflect the public-employee problem at its extreme,” is aware of the book and how it is being publicized.

“It‘s an echo chamber play,” said Carroll Wills of the California Professional Firefighters. “Steve Greenhut wrote the book. The venues through which the conservative media views are amplified are hard at work.”

Greenhut wrote that when he said on the “Glen Beck Show” on Fox News that the average pay and benefit package for Orange County firefighters is $175,000, the reaction from a Midwestern caller was disbelief.

Many firefighters and police have a generous pension formula that gives them 3 percent of their final pay for each year served if they retire at age 50. Greenhut disputes the rationale that they have particularly dangerous jobs and a shorter life expectancy.

His book cites Bureau of Labor Statistics on the “most dangerous professions” showing law enforcement at No. 12, with fishing and logging at the top, and firefighters far down on the list not far from architects.

He wrote that CalPERS life expectancy data is the same for “miscellaneous” members and the “public safety” group that includes firefighters and police: “If the current age is 55, the retiree is expected to live to be 81.4 if male, and 85 if female.”

Wills said firefighter unions have pushed for breathing apparatus and physical condition programs that make the job safer. He said firefighters still face physical stress, emotional burnout and a wide range of cancer-causing substances.

“They are the ones going in when everyone else is going out,” Wills said of firefighters. “It sort of defies logic to say that is just as safe as sitting in the offices of the Orange County Register writing a political column.”

The president of the Peace Officers Research Association of California, Ron Cottingham, said he has not read the book but did see Greenhut’s presentation on C-SPAN.

“He had no discernible facts,” said Cottingham. In recent rounds of contract negotiations, he said, many law enforcement unions are responding to tough times by foregoing raises and agreeing to pay a larger share of pension costs.

Greenhut wrote that a person present last year when PORAC interviewed three potential Democratic candidates for state attorney general said they were asked if they would slant the title and summary of a pension reform initiative to undermine support.

“We asked what their stance was on pension proposals that were being talked about,” said Cottingham. “We did not ask them specifically what they would do if a pension crossed their desk. Mr. Greenhut definitely got some skewed information.”

Last week, the office of the current attorney general, Jerry Brown, issued the title and summary for an initiative that would cut pensions for new state and local government hires and extend retirement ages.

“It’s very fair,” Marcia Fritz, president of the reform group said via e-mail. “And whether the attorney general intended it or not, it highlights the group who has abused the pension systems the most — police and fire. They now make up half the retirees joining our $100,000 pension club (and less than 10 percent of all workers).”

Reporter Ed Mendel covered the Capitol in Sacramento for nearly three decades, most recently for the San Diego Union-Tribune. More stories are at http://calpensions.com/ Posted 22 Jan 10

22 Responses to “Those pension-grabbing public employees”

  1. StevefromSacto Says:

    “The guiding spirit here is definitely not the old reportorial tradition that, for better or worse, goes something like: ‘On the one hand this, on the other hand that, and let the readers do the mediation for themselves.’”

    Thank you for pointing out that this is not any sort of objective report on public pensions, but rather just another right-wing screed from the likes of Keith Richman, Marcia Fritz and Arnold Schwarzenegger. It is sad that his new blog California Watch Dog, is being considered a mainstream blog when quite the opposite is true.

    I’m particuarly sickened by Greenhut’s argument that the relatively low figure for the average public pension benefit in California–actually little more than $20,000 a year–is due to short-timers. This is absurd. For every $100,000 a year pension beneficiary Greenhut can find, I can find thousands of retirees who worked for the state for 20 years or more but get less than $20,000 a year in pensions.

  2. Tough Love Says:

    Dear StevefromSacto:

    And exactly WHY is Mr. Greenhut’s comment that the low “average” pension is due largely to older retirees and those with short careers being included in the calculation ….. because YOU say so ?

    He happens to be correct. What matters is NOT the past , but the future. and, the future INCLUDES FUTURE year accruals for CURRENT workers as well as NEW workers.

    That’s why (coupled with the fact that we’re just about broke NOW) my comments focus on the absolute need to reduce pensions for FUTURE years of service for CURRENT (yes CURRENT) workers. Savings from pension formula reductions only for NEW workers will not materialize for 20-30 years until they retire …. we’ll never make it. We’ll be broke in 2-3 years, not 20 or 30.

    We MUST also either eliminate or very substantially reduce retiree healthcare.

    And since the $ dollar amount of pensions is under discussion, it is NOT just the relatively few very large pensions that hurts us (the taxpayers). At EVERY (yes EVERY) income level, the value of the taxpayer paid-for share of the typical (non-safety) Civil Servant’s pension is 2-4 times that of the employer paid-for share of the average Private sector worker making the SAME pay, having worked the SAME # of years, and retiring at the SAME age …… and that multiple increases to 4-6 times for safety workers (police & firemen).

    This is patently unfair to taxpayers and in the words of Ron Seeling (California’s chief actuary) “unsustainable”.

    The endless comments that pensions cannot be changed for CURRENT workers are made by people (legislators & judges) that belong to these Plans and would be negatively impacted by the needed reductions. We need to bypass these decisionmakers with a conflict-of-interest.

    Ballot initiatives, change in the State constitution, or challenge in FEDERAL court (bypassing the conflicted decisionmakers) is the way to go

    Voters ….. get off you duff and demand change !

  3. StevefromSacto Says:

    Many older retirees are making far less than $20,000 in pension benefits even though they worked for the state for more than 20 years. That’s a FACT. That’s hardly a “lavish” pension, except to those anti-public-employee zealots who begrudge workers every dime they receive.

    Here’s another FACT: 75 cents of every pension benefit dollar paid out by CalPERS comes from CalPERS investment income. 13 cents comes from contributions made by the workers themselves. Just 12 cents of every dollar comes from taxpayers.

    We keep hearing how public employee benefits are “bankrupting” the state. The reality is that actions like providing huge tax breaks for corporations, eliminating the vehicle license fee, and refusing to tax oil production–like every other oil producing state does–are doing more to bankrupt the state than public employee benefits.

  4. Allan Says:

    After 28 years with EDD our workload was arbitrarily doubled under then Gov Wilson. Calling our so-called union did nothing. I was in unit 1 and most of us had rejected “fair share” and were not members of CSEA, CSEA would ask if we were members and then hang up on us. I explained they are supposed to represent ALL of us in the unit. Two units de-certed CSEA (Prof Engineers and Stationary Engineers). I was advised to get out by my DR or face a nervous breakdown due to grossly excessive woprkloads. I left after 28 years and got $605/mo (current pmt). The only thing that made it tolerable was having retiree medical. 5 people in my office who were eligible for early retirement took it within a year. There was no future working with the state. The Gov was delighted as us older folk were replaced by minimum pay scale trainees. Meanwhile SEIU ousted CSEA in the Civil Service Division rep but they have done no better. The only way to get large payments is to start very young and work a long 40+ year career. We paid in an average of 6% to PERS in addition to all other deductions. Private sector employees retirement are typically employer paid plus a match of sorts for 401k–something the State will not do. The real goal of proposed changes is not just to hit future employees but take away retiree healthcare from current retirees. If you are going to hit retirees what about Fed retirees, VA pensions< private pensions, etc. Why pick on State employees? We all pay for private sector retirements as it is factored into the price you pay for tha goods/services of that particular company. State employees are not the problem and have never have been. Wake up!!

  5. Tough Love Says:

    StevefromSacto,

    Commenting on your middle paragraph above …. hogwash!

    The are ONLY two “original” sources of contributions; the employer (meaning the TAXPAYERS), and the employees. ALL investment earning DERIVE from these contributions. Investment income is NOT an independent “source”. Even WITH investment earnings on your contributions, Civil Servant typically pay for only 10-20% of their retirement.

    Looking at it more simply ….. all interest earned FROM taxpayer contributions would have stayed in the TAXPAYERS’ pockets if they weren’t forced to make these excessive contributions (to fund your widely excessive pensions).

    As to your 3-rd paragraph above ….. Without doubt the by-far-and-away #1 cause of the State’s ills is employee pay, pensions, and benefits. Second of course is the ridiculous welfare benefits, and keeping 1,000’s of pot smokers in jail.

    Discussing Corporate pay & perks is a non-starter … as most Civil Servants do, you’re just trying to divert attention from YOU as the real root cause of our financial ills.

  6. StevefromSacto Says:

    There you go again. $20,000 a year for 20 years of service is an excessive pension benefit? Pure garbage.

    And why is public employee pay, pension and benefits the #1 cause of the state’s ills…because YOU say so? Again, pure garbage.

    By the way, you assume…wrongly…that I am a public employee. I am not. I’m just sick of you right-wingers bashing public employees while refusing to even talk about abuses in the private sector.

    Actually, we do agree on one thing. Release all the pot smokers from prison! However, I’d like to see their places taken by white-collar criminals.

  7. Tough Love Says:

    Here’s the real issue …………..

    The types and number of abusive (and costly to TAXPAYERS) Public Sector pension gimmicks is so extensive, the entire system needs to reformed with ONE singular measure for potentially granting ANY benefit or provision to Civil Servants …. and that is …. do the majority of participants in PRIVATE SECTOR plans get that provision or benefit. If not, then neither should Civil Servants. If this principal were followed, 90% of underfunding issues would disappear.

  8. Bob Says:

    Funny how the pendulum swings. I left my private-sector sales job five years ago after the first stock market crash sliced my 401(k) into a 201(k). I went to work for the local county government and my co-workers considered me crazy. After all, I took an entry -level position at half of what I was making in sales. I did so because I knew the county offered steady employment and a defined-benefit retirement plan, the PERS system. Fast forward to 2008-2009 and the aftermath of the second stock market crash. My old co-workers now contacted me on how they can get a “cushy” job working for the government which gives them secure retirement benefits. I’m guessing when the economy improves and private sector jobs return, the pendulum will swing back and I’ll be called a fool for sticking with a “low paying” government job. *Sigh*

  9. Tough Love Says:

    Quoting Bob … “I’m guessing when the economy improves and private sector jobs return, the pendulum will swing back and I’ll be called a fool for sticking with a “low paying” government job. *Sigh*”

    No, one day when your near retirement (or perhaps already retired) and your Plans fail miserably, you’ll be called a fool for actually BELIEVING that Taxpayers would be so foolish as to actually fund the ridiculously excessive pension & benefits that you have been “promised”.

  10. Just the Facts Ma'am Says:

    I ran into an old acquaintance yesterday who runs his own engineering and architectural firm. He’s hurting. Just like Tough Love. On the one hand, Tough Love’s vilification of public employees plays into the very worst history of right wing populists that focus on groups of people (groups viewed as a minority) as the source of social problems. It’s the fault of the Jews, the communists, labor leaders, illegal immigrants [insert you favorite minority] and if not for them everything would be okay. So, among people who hurt, an easy target means you don’t have to work at a real solution that benefits everyone. That’s what happened in the southern United States between 1870 and 1960; Germany in the 1930s and in Rwanda in the 1990s to name a very few.

    Back to my acquaintance. His business depends on large capital investments by government. He can hang on doing small jobs, but the real engine of the economy for his engineering firm are the big projects that state and local government initiate. After he vented about the public sector unions (insisting on doing work internally instead of contracting out) and the pension issue, we both considered the fact that the scariest thing facing us all is a downward spiral in the economy. One element of the downward spiral is the cut in public sector spending on his kind of projects, another is the broad effect of cutting public sector employment which in turn dries up the private sector businesses that depend on pubic sector spending. I suggested that there doesn’t seem to be any space to have a dialogue about how we all sacrifice a little to stop the downward spiral. We both agreed that seems to be the case and that it’s not a good place to go.

    None trusts anyone else. If you give a little, will the other guy also give a little or will you be left holding the bag? The unions are under pressure from their members to deliver good pay and benefits. Union members feel beseiged and villified. Taxpayers, both individuals and businesses, don’t trust that if they put a little more in, they’ll get that much back. We all should know by now that if we don’t invest in k-12 and higher education, we will kill the goose that has laid many golden eggs for California. Similarly, we have to figure out a way to invest our way out of recession.

    How do we re-start the upward sprial, Tough Love? Assigning blame or identifying a whipping boy won’t get us there. We need to figure out a way to engage all parties to find a workable solution to a complex problem and that may very well include compromises and concessions…from everyone.

  11. Lee Says:

    I work for a local government agency. If I worked in the private sector, federal and state wage statistics for my region show that my annual private sector pay would probably be about $10,000 higher. Professional contacts and friends in my line of work confirm this. My employer pays $4,340 annually into CalPERS for me (and I pay the same). If my employer eliminated my future CalPERS pension, which is desirable due to the time value of the money invested in it and its professional management of its very large fund, everyone in my line of work would demand market wages to remain in public service. My agency has occasionally contracted out services in my line of work, and I notice that they usually pay about 40% more than my combined wages and benefits (including retirement) when they do, usually to politically well-connected individuals or firms. In-house employees save the government money.

  12. StevefromSacto Says:

    Compromises from Tough Love? Yeah, when pigs fly. It’s much more fun beating up on public servants than trying to find real solutions.

  13. desperado Says:

    I can see that the uninformed love to attack without regard for the real facts, so I’ll throw a few out and see what kind of stupid answers come back.
    I am a cal-pers covered employee of a medium sized municipality. When I started for them the negotiated contracted retirement thru cal-pers was 1.5% for every year of service (after vesting) at age 60. For that generous pension I paid 15% (thats right) of my salary for my share. (Let’s see..15% for 1.5%..Seems a little low) Over the years on several occasions my union gave up raises or other benefits (vacation days, holidays, healthcare payments, etc.) to finally raise that to2% at age 55. We also negotiated our share of the payment down to 7% of our salary. By any stretch of the imagination that amount saved would pay someone at least 5 times the amount invested after 25 years. Do the math..I am now elegible for 50% of my salary after 25 years. (It’s lower than outside people doing the same work because we gave up raises, etc. to get this benefit) But wait, there’s more.. Unlike private employers who are required by law to fund pensions as they go, most government entity’s are exempt from this requirement and don’t fund the plan untill the employee actually retires. In other words they didn’t pay thier share when it was small and now have to pay the full cost of thier side of my pension. (they were required to put the part I paid in) This is the reason they are now complaining that pension costs are too high, not because I get such a big pension. If they had paid as they went like I did they wouldn’t even have a bill after I retired. Additionally, back when cal-pers was making lot’s of money on what was paid in the state twice borrowed huge sums then passed a bill saying they didn’t have to pay it back. (They can no longer do that) Now that they have years of unfunded payments plus interest they want to point the finger at me and claim I’m the cause of the problem that was totally created by thier own fiscal irresponsibility. What’s more there are plenty of uninformed morons out there ready to jump on the band wagon. When they hire in contractors with the same skills as me (they claim this is cheaper) they get paid almost twice as much and thier pensions are fully funded after 25 years and they can retire at almost full salary. Yet once again some moron is out there claiming I have an excessive pension and wanting to take it away. Oh, by-the-way..I don’t get social security either so if you take away my excessive (ha-ha) pension I’ll probably go on welfare and you can pay for that. Just make sure when you pass some ill-considered bill to take away my pension that I paid my share into that you return my share (that I paid in) and the interest it’s earned so I can invest it in some Chinese company and make enough to squeek by on when I retire from wherever I go to work when I leave my government job and work somewhere else long enough to be vested in thier retirement plan.. Seems fair to me..

  14. StevefromSacto Says:

    Desperado, don’t try to confuse ToughLove and the other public employee-haters with the facts. Their minds were closed some time ago.

  15. desperado Says:

    Seems to be an ongoing thing.. Elect irresponsible people to run the state then blame the problems they cause on someone else. Back when cal-pers was overfunded the state sued claiming that if they had that much money the state was obviously paying too much. They found a friendly democrat judge and got a huge refund plus a lower fee for the pensions even though cal-pers argued that the fee schedule was set based on the possibility that income would fluctuate on thier investments. The state argued that they would simply fund any shortages when the employee retired. Now they are once again claiming it’s too much even though there would be no problem if they had left the fees at the originally contracted levels. Instead of taking the blame squarely where it should be they blame the employees, the unions, and anyone but themselves and the answer is to punish those who devoted thier entire lives to public service..These point to everyone else types make me sick. Wake up.. Every other employer has to pay as they go and so should the state. Not go back and try to change the deal 20 years later to cover thier own mistakes. Other employers aren’t able to go back and change thiers and why should the state be able to???

  16. Oral Exam Police Says:

    This is a great site, I love the theme you are using. I Stumbled it for you and bookmarked it on Digg.

  17. Frank Says:

    So you public sector employees with the cushy pensions STILL parrot the old saw that you are paid less than comparable jobs in the private sector? And, the claim that the ridiculous benes are necessary to keep you from jumping to the private sector? Really? checked the unemployment stats lately?

  18. Joe Pensioner Says:

    I see tough love’s still at it. She’s a stubborn and thick headed one, that’s for sure.

    You people better hope there’s plenty of us dedicated Public Servants such as Police, Firefighters, Caltrans, Dept of Corrections out there to protect your sorry ass’s. Easy for you to say, sitting behind your pencil pushing desks. You want the service, you have to pay for the whole package. Quit your crying and fulfill your collective bargaining agreements. Pensions are excessive only in your own minds. You must be talking about the same old $100,000 club, which represents less then 1%. The rest have normal retirements. Get a life. Greenhut, I think you’ve had some dramatic childhood issues. You seem mad at the world. Probably have no friends either ?

    Go up to Washington and worry about what obama’s doing to our country instead of worrying about us.

  19. Joe Pensioner Says:

    You too Frank. You private sector money grubbers with your 401k’s tanking are now jealous because the shoe’s now on the other foot….too bad you missed the boat. Now that the private sector is out of work, you guys are whining about our pensions. Tough shit, you picked the wrong path pal. Kind of like the tortoise and the hare story. We’ve stuck with it with lower pay, now it’s time to pay up.

  20. Joe Pensioner Says:

    Hey everyone, Touch Love doesn’t even live in California. She’s in another State typing on her computer sticking her nose into our business.

    In case you don’t realize it, California taxpayers like it when Police, Firefighters, Caltrans and other emergency agencies respond to help us when called for an emergency situation. I know I am.

    Thanks Public Servants….we love you guys

  21. Kathy Says:

    Calpers 2010 numbers say average pension is 2100/month paid on average for 20 years of service with average retirement age of 60. ( http://www.calpers.ca.gov/eip-docs/about/facts/retiremem.pdf).

    The thing is inflation protected guaranteed incomes look pretty expensive. According to Fidelity Investments, today, the cost of purchasing a CPI inflation protected annuity of $2100 / per month ( $25,212 a year) with spouse survivor benefits for a female person of age 60 (with spouse of age 60) runs in the $700,000 to 750,000 range ( from John Hancock and other “rock solid” financial institutions).

    My amateur math deduces, that with annual payments of $4,340 x 2 = 8,600 for 20 years ( that Lee said she contributed ) you’d need a 13% return, to save 700K. With a more sober 5% return you’d need to save $21,700 annually for 20 years !

    Where did all average private sectors workers come up with this level of savings and the financial advice to help them safely grow their retirement ? Much of it would have to have been after taxes and even in many cases healthcare costs.

    And if they didn’t, what will be the outcome for California ?

    Perhaps California should enact a new residents income tax premium so that newcomers to California would pay more income taxes than long time residents ? Perhaps this would encourage a more stable California population and provide more certainty to California residents about their future tax bills and public service pensions ? :-)

  22. vern nelson Says:

    Dont forget the medical field 100% medical for government employees ,while the $30,000 dollar a year non union range worker has to fight for there medical treatment and expense’s.Dont forget about the affordable health insurance, yeah right! I dont trust our government because there worried about there own special needs and interests instead of the people who put them there. Its coming down to who is a better person because of how much money one has, and the travel planes, and who can make them.Before you know it only government employees will be able to bear children, that would be a devasting scene.

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