CalPERS, CalSTRS considering more rate increases

The state’s two largest public pension systems never recovered from huge investment losses during the deep recession and stock market crash in 2008. CalPERS lost about $100 billion and CalSTRS about $68 billion.

Now after a lengthy bull market, most experts are predicting a decade of weak investment returns, well below the annual average earnings of 7.5 percent that CalPERS and CalSTRS expect to pay two-thirds of their future pension costs.

The two systems are still seriously underfunded, CalPERS at 68 percent and CalSTRS at 65 percent. This is not money in the bank. It’s an estimate of the future pension costs covered by expected employer-employee contributions and the investment earnings forecast.

Last week, the CalPERS and CalSTRS boards got separate staff briefings on how the “maturing” of the two big retirement systems creates new funding difficulties. Both are nearing a time when there will be more retirees in the system than active workers.

The California State Teachers Retirement System board, for example, was told that in 1971 there were were six active workers in the system for every retiree. Today CalSTRS only has 1.5 active workers for every retiree, similar to the CalPERS ratio.

A wave of baby boom retirees that began around 2011, and the continuing increase in the average life span of retirees, have added to the growing cost of paying pensions, giving both systems what actuaries call “negative cash flow.”

The annual cost of paying pensions is more than the annual contributions from employers and employees. So, the pension funds are forced to “eat their seed corn” by selling some investments to cover the gap, thus reducing potential investment earnings.

The California Public Employees Retirement System had about $14 billion in contributions in fiscal 2015-16 and pension payments totaling $19 billion. By 2035, the board was told, contributions are expected to be $17 billion and pension payments $35 billion.

Mature pension funds also have another difficulty. The pension investment fund becomes much larger than the active worker payroll, which means that replacing an investment loss requires a larger employer contribution increase.

The CaSTRS board was told that replacing a 10 percent investment loss in 1975, when the teacher payroll and investment fund were about equal, would have required a contribution increase of 0.5 percent of payroll.

Replacing a 10 percent investment loss today, when the investment fund is six times greater than the payroll, requires a contribution increase of 3 percent of pay. CalSTRS has had losses of 10 percent (below the 7.5 percent forecast) four times in the last two decades.

Both systems recently adopted modest “risk mitigation” strategies to reduce losses. When CalPERS earns 11.5 percent or more, half of the excess will be shifted to conservative investments. CalSTRS is shifting 9 percent of its fund to more conservative investments.

Gov. Brown’s modest cost-cutting pension reform gives new CalPERS and CalSTRS employees hired after Jan. 1, 2013, lower pension formulas, capped at the upper end, and possibly higher contributions. Significant employer savings are decades away.

Meanwhile, CalPERS and CalSTRS are still phasing in record high employer contribution increases. And both will be considering more rate increases in the next several months.

Chart

A CalPERS rate increase of roughly 50 percent was enacted in three consecutive years: a lower earnings forecast in 2012, an actuarial method that no longer annually refinances debt in 2013, and a longer average life expectancey for retirees in 2014.

A staff survey of more than 600 CalPERS employers in October and early this month found that most are aware of discussions about another drop in the earnings forecast used to “discount” pension debt.

Nearly two-thirds have begun planning for a rate increase with budget forecasts and 13 percent are “prefunding” by contributing more than the required rate. Their top priorities are less volatile and more predictable rates and a phase-in rather than lump-sum increase.

A League of California Cities lobbyist, Dane Hutchings, told the board the association has no formal position on another rate increase. But he thinks most cities expect an increase and pressure to improve funding after new accounting rules expose more pension debt.

Pensions are needed to help cities remain competitive in the job market, Hutchings said, but another rate increase will be painful for some. “We have cities that are very close to filing for bankruptcy,” he said.

The governor unsuccessfully pushed for a major CalPERS rate increase when the risk mitigation streategy was adopted last year. The CalPERS staff is concerned that its consultant, Wilshire, dropped its 10-year earnings forecast to about 6.1 percent, echoing many experts.

“Given that, we think it’s appropriate for this committee to look at our discount rate,” said Ted Eliopoulos, CalPERS chief investment officer.

A Wilshire consultant, Andrew Junkin, told the board the 30-year earnings forecast is still 7.5 percent or more. But, he added, that assumes there is no major investment loss, like one big enough to cause officials to question whether the state should continue to offer pensions.

“I’ll use this phrase, I don’t mean to be inflammatory, there could be a return that puts you out of business somewhere before you get to year 30,” Junkin said.

CalPERS was 100 percent funded in 2007 before the stock market crash dropped funding to 61 percent. Experts have told CalPERS, now only 68 percent funded, that if funding drops below 50 percent getting back to full funding could require impractical rate increases and earnings forecasts.

The board was told that a rate increase must be approved by April to take effect for the state and schools in the new fiscal year beginning next July and for local governments in July 2018.

Supporters suggested a rate increase by April would allow a phase in before a recession, if one is on the way, while being fiduciarily responsible. “Pay now or pay more later,” said board member Richard Gillihan, a Brown administration official.

Alarmed union representatives, backed by some board members, urged the board to go slow and follow the regular two-year process leading to a full “asset liability management” review scheduled in 2018.

Dave Low of the California School Employees Association said many non-teaching school workers have not had a pay raise for five or six years. He said if Brown is not putting money in the state budget to offset a rate increase his members could be harmed.

“If you’re not at the table, you’re probably on the menu,” Low said, apparently referring to an old saying about labor bargaining. “We feel like we are on the menu in this discussion.”

With the consent of other board members, Richard Costigan, chairman of the CalPERS fionance committee, directed staff to prepare a report for the December board meeting on a vote for a rate increase by April.

strs

Unique among large California public pension systems, CalSTRS has been unable to raise employer rates, needing legislation instead. That changed with a long-delayed rate increase two years ago that is phasing in a $5 billion rate increase over seven years.

School district rates will more than double, going from 8.25 percent of pay to 19.1 percent by July 2020. Teachers got a small rate increase, going from 8 percent of pay to 10.25 percent for most and to 9.21 percent for teachers hired after the reform on Jan. 1, 2013.

The state rate (a way that CalSTRS remains unique, since other systems only get contributions from employers and employees) is scheduled to go from 5.5 percent of pay to 8.8 percent.

The legislation also gave the CalSTRS board the new power to raise annual rates for the deep-pocketed state, limited to a 0.5 percent of pay each year. And now for the first time, the CalSTRS board is scheduled to consider an annual state rate increase next April.

If the board maximizes its new power, the current state rate of about 6 percent of pay theoretically could go to 21 percent before the legislation expires in 30 years, when the system would be fully funded if investments hit their earnings target, the board was told last week.

The legislation gave the CalSTRS board another new power to annually adjust school district rates beginning July 1, 2021. But the employer rate is capped at 20.5 percent of pay, allowing only small changes in the phased-in rate reaching 19.1 percent by 2020.

“There is no need to increase state contributions further, based on what we have seen to date, even with the 1 percent return last year,” David Lamoureux, a CalSTRS actuary, told the board last week.

The CalSTRS board is scheduled to review “actuarial assumptions” in February, including estimates of the average retiree life span and probably a discussion of the earnings forecast.

“There is a possibility, depending on where we end up with the assumptions, that it could trigger an increase in the normal cost of more than 1 percent (of pay), and it could increase the member contribution rate,” Lamoureux said.

The “normal” cost is the rate for the pension earned during a year, excluding the debt or “unfunded liability” from previous years usually resulting from investment earnings that fall below the forecast.

Under the pension reform, employees are required to pay half of the normal cost when it increases by 1 percent or more.

Reporter Ed Mendel covered the Capitol in Sacramento for nearly three decades, most recently for the San Diego Union-Tribune. More stories are at Calpensions.com. Posted 21 Nov 16

77 Responses to “CalPERS, CalSTRS considering more rate increases”

  1. Tallie Jones Says:

    defined benefits are ponzi schemes. all db participants should be lumped out into 401K accounts and defined benefits should all end immediately. they are fraudulent, always were.

  2. larrylittlefield Says:

    “CalPERS was 100 percent funded in 2007 before the stock market crash dropped funding to 61 percent. Experts have told CalPERS, now only 68 percent funded.”

    It should be obvious by now that the 100 percent funding in 2007 was a lie. So was the more than 100 percent funding in 2000.

    What has happened since then? Stock prices went down? Those were bubbles. Stocks were never worth that to begin with, and besides there is a third bubble and stocks are higher.

    Contributions were reduced? No they were increased. The Baby Boom retired? Wasn’t its retirement pre-funded?

    No, what happened was a huge fraud and theft by Generation Greed. The richest generations in history have stolen the future from those to follow.

    And not just with regard to public employee pensions. How can the federal government afford another round of huge Republican tax cuts for the rich when Social Security, which is all the serfs have coming to them, is on pace to be cut by 25 percent in fewer than 20 years? How could it afford benefit increases for today’s retirees in excess of inflation, which many Democrats wanted?

  3. Tough Love Says:

    Regardless of the “spin” (S Moderation Douglas ……. are you listening ? ………… there are ZERO “solutions” that do not include either (a) a DB Plan hard freeze with zero future growth in current DB plans, or (b) VERY material reductions in the pension accrual rate for the future service of all CURRENT workers.

    We MUST stop digging the financial hole we are in deeper every day, and (a) or (b) above is NECESSARY to do so.

  4. SDouglas47 Says:

    Here are some options:

    For all pensions to existing retirees over $50,000 per year, whenever necessary, reduce the pension payout by an amount proportional to the amount the existing pension assets are underfunded. Restore them – but not retroactively – whenever and to the extent the funds move back towards being 100% funded. This can be accomplished by declaring a fiscal emergency.
    For all participants still working who are unable or unwilling to afford to pay 50% of the required pension contribution – should it skyrocket in the face of persistent low returns to the fund – offer them an opportunity to accept a smaller defined benefit that they can afford. This can be done pursuant to AB 340.
    Impose a ceiling on pension benefits to retirees, based on the principle that pensions are supposed to ensure retirement security, not lavish affluence. Similarly, establish a floor for pension benefits to retirees, based on the principle that employees at the low end of the pay scale are nonetheless entitled to retire with an income sufficient to live with dignity. Assuming the pension ceiling is realistic, the savings from establishing a ceiling for benefits will greatly offset the costs of establishing a floor on benefits.

  5. Tough Love Says:

    SMD,

    Only addressing the monthly (or annual) “payout” is insufficient.

    E.g. A $50,000/yr annual pension beginning at age 55 has a “value upon retirement” just about twice that of a $50,000 annual pension beginning at age 65.

    E.g., A pension with a guaranteed 3% annual COLA (starting at age 55) has a “value at retirement” about 1/3 more than an otherwise identical pension but with no COLA.
    ———————————————————

    And of course the MOST APPROPRIATE adjustment would be to reduce (yes, it will always be a “reduction”) the Public Sector worker’s pension to what he/she likely would have been granted in a comparable position in the Private Sector……. after all, RIGHT NOW, the TAXPAYERS (85% of whom work in the PRIVATE sector) are being called upon to fund 80% to 90% of the Total Cost of Public Sector pensions.

  6. Henry M. Says:

    One issue that seldom if ever receives any coverage is the fact that many employers and some employees have been given contribution holidays over many years if not decades. A full payback of the principal amounts and at least some of the lost investment profits should be part of any solution to make the pensions systems viable.

  7. Tough Love Says:

    No Henry M., A employER contribution “holiday” …from fully funding a grossly excessive pension (which all PUBLIC Sector pensions ARE) ……. is APPROPRIATE to negate the effects of granting such grossly excessive pensions in the first place.

  8. CalPERSon Says:

    The financial consultants and experts are saying the market will only return 6% in the future. Based on what crystal ball?

    CXO Advisory studied over 6,000 forecasts made by financial gurus over a 10-year period and found an accuracy rate of 47%, slightly worse than a coin toss. So why believe the 6% forecast?

  9. Tough Love Says:

    Quoting CapPERSon ….

    “The financial consultants and experts are saying the market will only return 6% in the future. Based on what crystal ball?”

    Since you included the word “only”, I assuming that you feel it will earn more, and hence investment rate shortfall-driven increases in Plan liabilities will not occur.

    But when they DO occur, it’s the Taxpayers (not the workers) stuck with paying for that increase in liabilities….. so keeping the rate assumption high has no downside to Public Sector workers, and by keeping the taxpayer contributions lower (than they would be if the rate was increased) there is more money available for Public Sector raises….another “plus” for Public Sector workers.

    But that’s the way YOU (as one of the very many insatiably greedy Public Sector workers/retirees with a sever case of entitlement-mentality, and a taxpayer-be-damned attitude) want it …. right?

  10. Tough Love Says:

    Correction ….In my above comment directed at CalPERSons, where I stated … (than they would be if the rate was increased) …the word “increased” should have been “decreased”.

  11. SDouglas47 Says:

    And “sever” should have been “severe.”

    And “insatiably greedy” should have been “industrious, selfless” Public Sector workers/retirees.

  12. Tough Love Says:

    SMD…… “self-serving” is FAR more accurate than “selfless”.

    And industrious? Don’t make me laugh.

    I’d need 20 hands and feet to even come close to counting on my fingers and tows the number of times I’ve seen pothole-filling road crews (on very local roads) with 3 of 5 standing around doing NOTHING.

  13. Tough Love Says:

    No SDouglas47 (aka S Moderation Douglas) ……..

    “insatiably greedy” was right on the money.

  14. SeeSaw Says:

    This is a situation that belongs in the hands of the principals involved with the DB pensions in CA. TL has no part in this situation–so he should stay up there in his NJ crow’s nest. He knows zilch about public employees–their work and what they do for the citizens who need their services.

  15. Tough Love Says:

    SeeSaw,

    I don’t need to be in the trenches of CA, or ILL, or PA, or CT or KY or anywhere else in particular to understand what is going on.

    While the level of gross overcompensation (via pensions & benefits many multiples greater in value that those offered comparable Private Sector workers) varies from State to State and from City to City …. all but the VERY VERY VERY few that do NOT offer Traditional style “Final Average Salary” Defined Benefit pensions are grossly excessive, unnecessary to attract and retain a qualified workforce, are clearly unaffordable, and monumentally unfair to Taxpayers.

  16. S Moderation Douglas Says:

    LOL!!!

    Another sidewalk superintendent counting his tows.

    How many public workers does it take to change a lightbulb?

    Safely…

    Legally…

    You don’t know jack.

  17. Tough Love Says:

    Yes SMD, that was indeed amusing how I misspelled “toes”. While it’s important in business communications, I really don’t pay much attention to spelling on Blogs. CONTENT is certainly what’s important.

    Even MORE amusing is your comment ……… “How many public workers does it take to change a lightbulb?”

    Since you stated that changing light bulbs was part of your job responsibilities as a CA Public Sector worker (now retired), please enlighten the readers.
    —————————–

    Quoting …………. “You don’t know jack.”

    What I (as well as anyone WITH a reasonably well-functioning brain) “knows” is that Public Sector workers in CA are grossly overcompensated…..and are depending on pensions that are rapidly approaching insolvency, and healthcare benefits totally unfunded (in MOST jurisdictions).

    You’ll only “win” if you die soon.

  18. S Moderation Douglas Says:

    Tough Love…

    Even MORE amusing is your comment ……… “How many public workers does it take to change a lightbulb?”

    No, Touth, you don’t “knows” that Public Sector workers in CA are grossly overcompensated…..

    That would be an “opinion” based on one outlier study using data four to eight years old.

    I’m not concerned about outliving my pension. I am over 6′ 5″… too big to fail, and Handsome as Sin. My pension is as safe as Social Security.

    And SeeSaw will probably outlive both of us.

  19. S Moderation Douglas Says:

    …With her pensions intact.

  20. Tough Love Says:

    SMD,

    Some interesting reading (Forbes)…..

    http://www.forbes.com/sites/adamandrzejewski/2016/11/26/mapping-the-100000-california-public-employee-pensions-at-calpers-costing-taxpayers-3-0b/#69bc0f967153

    Given CA’s love for surfing and riding the big wave, looks like (pension-wise) you missed the big one, and should have become a CHP Officer …. instead of a light-bulb-changer.

  21. Pierre Says:

    Larry littlefield said it best. CalPers was insolvent in 2007.
    Check with your City &a county officials, they should advise the Weirdos at calipers that no increases will be allowed.
    Those pensioners receiving in excess of $50k per year should find themselves with a reduction in pay.
    Remember there are more Millionaires made through CalPers than in all of the Internet companies.

  22. SeeSaw Says:

    Pierre–no! CalPERS was 100% funded in 2007 -then Wall Street caused a global financial crash in 2008. The people at CalPERS are not wierdos and nobody’s pension is going to be reduced unless it was obtained illegally. Maybe the execs at CalPERS will become millionaires someday, but CalPERS does not make millionaires of its annuitants–by the time a million has been received it has been used for subsistence–that will be 20 years for me. Go spend your time doing something that you are knowlegeable about!

  23. Tough Love Says:

    SeeSaw, For those short on grey matter, by “Millionaires made through CalPers”, Pierre meant the present value of the pension upon retirement …… which is the appropriate way to look at it.

  24. SeeSaw Says:

    One can only be a millionaire if they have a total of at least one million dollars–if a retiree receives monthly amounts from a pension plan that are spent on food, shelter, etc. which are necessary for sustenance, and the pension plan happens to have given out to , respective, annuitants a million dollars or more during the remainder of their lifetimes, that does not make them millionaires. You and your cohorts should not call retired public employees millionaires because they are not–most are just lower to upper middle class people who are the nucleus of the country’s economic system.

  25. S Moderation Douglas Says:

    “Remember there are more Millionaires made through CalPers than in all of the Internet companies.”

    Possibly true, but irrelevant. According to a 2015 study, there are over 770,000 …actual… Millionaire households in California. 5.9 percent of California households have more than $1 million in investible assets. And very few of those are public employees or retirees.

    You may also have read that public workers/retirees are the “one percent”. Also not true. To be in the top one percent of income earners requires an adjusted gross income of over $454,000 a year. There are no public retirees at that level. The average income of the top 1% is $1.4 million. No public retirees there, either.

    Transparent California is infamous for their list of public worker total compensation and pensions… it is no accident that they are by default sorted highest to lowest for greatest shock value. If all private sector salaries (plus benefits, bonuses, etc.) We’re merged into this list, (with names excised, of course) the first public employee would be buried dozens, if not hundreds of pages down the list.

    “…… which is the appropriate way to look at it.”

  26. S Moderation Douglas Says:

    ” For those short on grey matter, by ” yadda, yadda, yadda

    Matthew 7:1–2 Μὴ κρίνετε, ἵνα μὴ κριθῆτε· ἐν ᾧ γὰρ κρίματι κρίνετε κριθήσεσθε, καὶ ἐν ᾧ μέτρῳ μετρεῖτε μετρηθήσεται ὑμῖν.

    …… which is the appropriate way to look at it.

  27. Tough Love Says:

    SeeSaw, If having $1 Million constitutes being a “millionaire”, does it make a difference if it is in cash, a valuable painting, real estate, a stock portfolio or ………………….. a pension with a present value upon retirement of $1 Million ?

  28. Tough Love Says:

    Quoting SMD ………..

    “According to a 2015 study, there are over 770,000 …actual… Millionaire households in California. 5.9 percent of California households have more than $1 million in investible assets. And very few of those are public employees or retirees. ”

    Repeating ……….

    If having $1 Million constitutes being a “millionaire”, does it make a difference if it is in cash, a valuable painting, real estate, a stock portfolio or ………………….. a pension with a present value upon retirement of $1 Million ?

  29. SeeSaw Says:

    My definition of a millionaire: One with a million dollars in the bank at that moment or with property that can be turned liquid into a million dollars at that moment. No matter what definition you use, most public employees do not and never will have a million dollars at their disposal. TL, you once bragged that my former CM who gets over six times more than I in his own retirement had nothing on you. So bully, why don’t you go pick on a cohort instead of a public employee!

  30. Tough Love Says:

    Quoting SeeSaw …………..

    ” So bully, why don’t you go pick on a cohort instead of a public employee!”

    I’m not picking on Public Sector workers. I’m strongly advocating to END a VERY VERY unjust/unfair structure under which Public Sector workers are granted pensions & benefits many multiples greater in value upon retirement than those of their Private Sector counterparts ….. and all while the betrayed and beleaguered Taxpayers (85% of whom work in the PRIVATE Sector) are being called upon to pay for 80% to 90% of the Total Cost of those grossly excessive pension and benefit promises.

  31. SeeSaw Says:

    TL, what law has ever been enacted requiring salaries/benefits to be equal for public sector workers and private sector workers in comparable jobs? Apples and oranges?

  32. Tough Love Says:

    SeeSaw, Not a “law”, just common sense and fairness.

    Taxpayers are not here to unnecessarily and unfairly (to them) provide Public Sector workers with a greater standard of living than their employment contribution justifies.

  33. S Moderation Douglas Says:

    “Taxpayers are not here to unnecessarily and unfairly (to them) provide Public Sector workers with a greater standard of living than their employment contribution justifies.”

    “greater standard of living” based on what? Four major studies said that public workers earn about the same (or less) than equivalent private sector workers, even when pensions and benefits are included. One major study said state workers earn 12% less in wages but 30% more in total compensation (and job security. )

    All these studies rely on data up to eight years old. Pension formulae in almost every state have been reduced, and/or employee contributions increased.

    We don’t know what the difference in wages is. Generally speaking, movement in the public sector lags behind the private sector, so during the recovery, private sector wages would increase faster.

    But most importantly, the difference in compensation is an average. You can not say categorically that public-sector workers have a “greater standard of living.”

    “Common sense and fairness” would still, according to all the studies, bar none, require reducing the benefits for the lowest levels; janitors and clerks, and increasing pay and/or benefits for the doctors, lawyers, CPAs, etc., and lawyers.

    That dog probably won’t hunt.

  34. Tough Love Says:

    Quoiting SMD …….

    “Four major studies said that public workers earn about the same (or less) than equivalent private sector workers, even when pensions and benefits are included.”
    ————————————————————
    Horse manure ……………….and you know it.

  35. S Moderation Douglas Says:

    Let us say, for the sake of argument, that …all… the studies are biased. Including Biggs.

    That still leaves the fact… not “spin”… that the data are four to eight (very volatile) years old.

    That still leaves the fact… not “spin”… according to all the studies, that the difference in compensation is a weighted average. The studies all concur that the lower educated public workers earn significantly more in total compensation than similar private sector workers, and more highly educated and professional public workers make much less… even with benefits and pensions you call “many multiples greater in value.”

     ……………….and you know it.

  36. Tough Love Says:

    SMD we have been through this with your BS studies before (one of which authored by Rutgers Professor Jeffrey Keefe), the last time on 5/31/16 in Unionwatch comments.

    So rather than rehash it, I’m pasting the comment I made to you on that date……….
    ————————————————————–
    “SMD,

    When I saw the reference to University Professor Jeffrey Keefe I didn’t need to read more ……….

    I suppose very long tenure (and likely funding/grants from sources [Public Sector Unions?] supporting pre-determined study results) is what has stopped Rutgers from terminating this fellow.

    In fact, one of your favorite references, Andrew Biggs, has enumerated MANY of the VERY material flaws in Keefe’s work. While many, the one flaw that ALONE should disqualify ANY credibility as well as continued employment as a university professor, is his insistence that in calculating the annual pension-cost-element of Public Sector “Total Compensation” (wages + pensions + benefits), Mr. Keefe insists that what the gov’t entity ACTUALLY CONTRIBUTES in that year is the correct figure ….. no matter that virtually every other economist believes that the correct figure is an estimate of the present value of the pension benefits ACCRUED IN THAT YEAR (using assumptions consistent with the strength of the guarantee that those accrued pension benefits will indeed be paid).

    Point ….. in several years, NJ (Rutger University’s home State) contributed nothing (yes nothing) towards its Public Sector pensions, all while NJ’s workers accrued another year of (undeniably) very valuable pension benefits.

    Not a problem under Keefe’s logic…. there was NO COST. Really ? Only in academia would someone with such off-the-wall ideas keep their job.”
    ————————–

    And you, you’re a charlatan ………. hoping future cohorts of Public Sector workers can continue to rip-off the the Taxpayers …. as you did.

    Time will tell whether you will get all of the grossly excessive pension benefits that you were promised. Future workers and many CURRENT CA workers certainly will not.

  37. S Moderation Douglas Says:

    LOL!!!

    “See my long comment above.”

    Dang, since you are copy/pasting, I thought you would go with…

    Tough Love:
    ……………”I’m fine with raising the compensation of Public Sector workers now under-compensated …. as long as IN TOTAL for all Public Sector workers taken together, their Total Compensation is REDUCED by their current 23%-of pay advantage. It’s an unnecessary, unjust, unfair, and affordable Taxpayer-rip-off that must end.
    And no, I’m NOT going to feel sorry for the lower paid (but vastly OVER-Compensated vs their Private Sector counterpart) Public Sector worker that would have to give up their Platinum+ healthcare and rich pension formula …. because they deserve no more than similarly situated Private Sector workers …. on the Taxpayers’ dime.”
    …………………………………………………………………….
    Point being, this is one point that Keefe and Biggs and all other studies agree on…

    More highly educated and professionals earn much more in the private sector than the public sector, and the opposite is true at lower education/skill levels.

    Ergo, “grossly excessive pension benefits ” is an opinion which, even if true, does not apply to many public workers.

  38. S Moderation Douglas Says:

    “And no, I’m NOT going to feel sorry for the lower paid (but vastly OVER-Compensated vs their Private Sector counterpart) Public Sector worker that would have to give up their Platinum+ healthcare and rich pension formula …. because they deserve no more than similarly situated Private Sector workers …. on the Taxpayers’ dime.”

    I reiterate: That dog probably won’t hunt.

    Unless you can convince even some of the more staunch pension reform advocates…
    ………………………………………………………………….
    “Bloated Pensions for Many Will Mean Retirement Hardship for Some in Illinois, But How Many?” – WP Original
    Posted August 23, 2015 12:17 am by WirePoints

    “But aren’t at least some pensions reasonably sized and genuinely needed to avoid hardship in old age? Ideally, I think most would say we should at least try to find a way to reform pensions that identifies and protects those small ones — reform that’s means-tested or progressive in some way.”
    ……………………………………………………………….
    Saving Defined Benefits Requires Lower Pensions for Existing Workers and Retirees
    by ED RING on DECEMBER 6, 2012

    “Similarly, establish a floor for pension benefits to retirees, based on the principle that employees at the low end of the pay scale are nonetheless entitled to retire with an income sufficient to live with dignity.”
    ………………………………………………………………..
    Pension group fired up by grand jury report

    By Chris Rooney Marinscope contributor May 27, 2015

    “CSPP’s grievance (Citizens for Sustainable Pension Plans) is not with the rank and file employee of the county. It is with the exorbitant salaries, pensions and benefits being paid to the top few percent of county workers, referred to in the press as the ‘top brass.’
    ……………………………………………………………………

    The $100,000 club gets lots of attention. Transparent California’s jaw dropping list of pensions up to north of $400,000 gets a lot of press.
    Ironically, even according to Biggs, a lot of these guys are underpaid.

    In the Chicago area, of those retirees with 40 or more years of service, 2,033 have pensions of $50,000 and under, which is 29% of all pensioners with 40 or more years of service. About 600 have pensions under $30,000.

    Unlike Tough Love, it seems a lot of people ARE inclined to protect the rank and file.

    The little guy.

    If Biggs “23%” compensation were ever true, the little guy is the reason. All those with a high school or “some college” are driving up the public sector advantage average.
    ……………………………………………………………..
    Here is (another) chance to repeat your belief that the lower paid public workers should make no more in pensions and benefits than their private sector equals.

    Moderation, on the other hand, agrees with Ed Ring, Mark Glennon, and others that there should be a floor on pensions. It’s not just good for the employee, it’s a plus for society as a whole. And find a way to create better pension security for the lower paid private sector, too.

  39. Tough Love Says:

    SMD, I am not afraid to be politically incorrect …..

    There is ZERO justification for Public Sector workers (even the lowest paid) to receive greater compensation (in total, including wages, pensions, benefits, etc.) than their Private Sector counterparts.

    If they have too little for basic needs they should have to address that JUST LIKE their Private Sector counterparts would have to ….. via the Social Service system.
    ———————————–

    And while I agree that there likely are SOME within the group (the “professionals” and PHD’s”) of Public Sector workers that you claim (via carefully selected studies to support your point of view) to be compensated lower than their Private Sector counterparts, that are indeed paid less, we should keep in minds that this group encompasses less than 10% of Pubic Sector workers and less than 5% of Private Sector workers.

    But the FINANCIAL IMPACT to Taxpayers comes from the overall impact of compensation granted to ALL PUBLIC Sector workers ….. the vast majority of whom are indeed OVER-COMPENSATED….. via the grossly excessive pensions & benefits that their Unions have successfully BOUGHT from Elected Officials with BRIBES disguised as campaign contributions and election support.

  40. S Moderation Douglas Says:

    Déjà pooh.

  41. Tough Love Says:

    S Moderation Douglas,

    Repeating ….

    The FINANCIAL IMPACT to Taxpayers comes from the overall impact of compensation granted to ALL PUBLIC Sector workers ….. the vast majority of whom are indeed OVER-COMPENSATED….. via the grossly excessive pensions & benefits that their Unions have successfully BOUGHT from Elected Officials with BRIBES disguised as campaign contributions and election support ….AND BY THREATS ………

    http://unionwatch.org/seiu-spokesperson-threatening-california-lawmakers-with-union-retaliation/
    ————————————

    Public Sector unions are a CANCER inflicted upon civilized Society …. and should be outlawed.

  42. S Moderation Douglas Says:

    One Response…

    Douglas says:

    “Who is this woman? Is she a union official or just a union member?
    Normally in legislative hearings actual witnesses are seated at a table.

    Towards the end of meeting, they often allow comments from the audience. That is what this looks like.

    Anybody know for sure?”

    ______________________________________
    Douglas? Hmm… Coincidence?

    Dr. Love is diagnosing CANCER on very slim evidence.

  43. Tough Love Says:

    SMD, Well, the Title of that video is …. “SEIU Spokesperson Threatening California Lawmakers with Union Retaliation”.

    So you think commentator (“Douglas”) simply asking exactly who she is changes that?

    Nice try.

  44. Tough Love Says:

    SMD,

    From a Letter from President FDR Regarding Collective Bargaining of Public Unions written August 16, 1937…………………

    All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service. It has its distinct and insurmountable limitations when applied to public personnel management.

    The very nature and purposes of Government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with Government employee organizations.
    Particularly, I want to emphasize my conviction that militant tactics have no place in the functions of any organization of Government employees.

    A strike of public employees manifests nothing less than an intent on their part to prevent or obstruct the operations of Government until their demands are satisfied. Such action, looking toward the paralysis of Government by those who have sworn to support it, is unthinkable and intolerable.
    ——————————————————————-
    Public Sector unions are a CANCER inflicted upon civilized Society …. and should be outlawed.

  45. S Moderation Douglas Says:

    Nope

    I’m saying you can’t believe everything you read on the Web. I don’t believe she holds any position of authority in SEIU.

    And you are exaggerating the significance of this clip.

    She has no more credibility than some nameless crank on the Web who frequently uses ALL CAPS, continually copies and pastes the same baseless rants, and uses Internet math on “assumed” data…

    GIGO, in other words.

  46. Tough Love Says:

    Quoting …….”I don’t believe she holds any position of authority in SEIU. ”

    Any EVIDENCE for that “belief” ….. other than that it supports your (i.e., the PUBLIC SECTOR) point of view ?

  47. S Moderation Douglas Says:

    “There you go again.”

    Quoting Ronald Reagan, who, coincidentally, signed the Meyers Milias Brown Act in 1968, giving collective bargaining rights to local public employees in California.

    Why is it that those who quote FDR so frequently omit the paragraph (directly above your quote):

    “The desire of Government employees for fair and adequate pay, reasonable hours of work, safe and suitable working conditions, development of opportunities for advancement, facilities for fair and impartial consideration and review of grievances, and other objectives of a proper employee relations policy, is basically no different from that of employees in private industry. Organization on their part to present their views on such matters is both natural and logical, but meticulous attention should be paid to the special relationships and obligations of public servants to the public itself and to the Government.”

    I was a member of California State Employee Association before Gov. Brown signed the Dills Act, extending bargaining rights to state workers.
    Prior to the Dills Act, Association member dues were withheld from the employees paycheck (though membership was optional). The Association represented members in grievances and matters of discipline. The Association lobbied the legislature on matters of pay and conditions. Very little changed except that fair share payments were required from all employees.

    A funny thing happened on the way to the forum… In one of, if not the first “negotiation”, the union came to agreement with the Department of Personnel Administration on increases in pay and benefits. DPA has the power to negotiate. Fortunately, or unfortunately, only the legislature (and Governor) have the authority to actually authorize expenditure. The California legislature reduced the total increase package and told the DPA and CSEA to split the pay and benefits however they want. Again, very little changed.

    What shall then and thereafter be known as the right to collective begging. Powerful Public Employee Union is an oxymoron.

    Side note… I just noticed that, according to Calwatchdog, the Dills Act, SB839 passed 70 to 7 in the Assembly and 24 to 3 in the Senate.

  48. Tough Love Says:

    SMD,

    I have no problem with that additional FDR paragraph as I interpret “fair and adequate pay” to be compensation EQUAL to their PRIVATE Sector counterparts, while you (and most Public Sector workers) feel that it’s appropriate to mooch, cheat, lie, and bribe your way to FAR greater compensation …… and to hell with the Taxpayers called upon to pay for it.

    Note that that paragraph DOES say ……

    “The desire of Government employees for ……. is basically no different from that of employees in private industry.”

    FDR’s comparison being to “Private industry”.

  49. S Moderation Douglas Says:

    ………….mooch, cheat, lie, and bribe…………. ..

  50. Tough Love Says:

    SMD.

    You should stop trying to play financial expert and stick to what you know best, and what you did for a living ………

  51. Tough Love Says:

    S Moderation Douglas,

    Considering just how often you go out of your way to find and quote (misleading and flawed) studies that support your position regarding Public/Private Sector compensation comparisons, I though you might find this article DISTURBING ……. because one of the authors you most respect (Andrew Biggs), who often trashes the articles (and author’s assumptions, methodology, and conclusions) you quote, has done so AGAIN (and quite handily):

    http://www.aei.org/publication/response-to-the-economic-policy-institute-regarding-connecticut-state-government-employee-compensation/

    Be sure to read the linked “Full Report”.

  52. S Moderation Douglas Says:

    I don’t know how you came to the conclusion that Biggs is “one of the authors you (I) most respect”..

    In my opinion, Biggs is totally biased, as is Monique Morrissey. It is just something one must factor in when reading any of these studies or articles.

    I was impressed by that one (2014) study, though, for two major reasons.
    First, Biggs (and/or Richwine) gave the most detailed descriptions of methodology I have seen before or since. He very clearly illustrated the complexity of choosing data sources and other “assumptions” an economist uses in one of these studies. The chances of error, inadvertent or otherwise are staggering. These differences were a big factor in the debate between Biggs and Morrissey in these dueling articles.

    That was one of the main reasons I have and will continue to recommend Biggs 2014 “working paper”.

    The other is the concept often mentioned in these and other studies of wage compression. Most studies mention offhand that “lower educated public workers earn more than their private sector counterparts, and higher educated public workers earn much less (even when the higher pensions and benefits are included.) Biggs gave a much better description of this concept, and quantified it, up to a point. Oddly, I very rarely see Biggs even mention this in any of his other many articles or studies. And it is vital.

    Morrissey covered it quite well, though, I think…

    “Workers without college degrees are compensated somewhat more in the public sector than in the private sector, whereas those with college and graduate degrees are compensated somewhat less. This is true even when factoring in the more generous benefits in the public sector.

    The lower compensation of college-educated workers in the public sector offsets the higher compensation of those with less education. As a result, taxpayers are not overpaying for public services, while still ensuring a decent standard of living for less educated workers.”

    Wait! Where have we heard that before?

  53. Tough Love Says:

    Well. Mr. Biggs summarized Moorrissey’s ….. ““Workers without college degrees are compensated somewhat more in the public sector than in the private sector, whereas those with college and graduate degrees are compensated somewhat less. ” ….. with the the OVERALL AVERAGE for ALL Connecticut (non-Safety) State employee groups combined (i.e., both high earners AND low earners) as follows ……

    “These more generous fringe benefits, which are the source of significant budgetary problems for the state of Connecticut, created an overall compensation premium for state government employees of between 25 and 46 percent over private sector levels.”

    And indeed it is that overall compensation advantage for all workers COMBINED that impacts the Taxpayers pockets ….. in the form of an enormous, unnecessary, and unfair THEFT of Private Sector Taxpayer wealth.
    ——————————-

    Keep an eye on the Dallas Police & Fire pension developments. “Guarantees” mean nothing when the Ponzi scheme blows up, and THAT is CA’s future.

  54. S Moderation Douglas Says:

    One of these things is not like the other.

    All pension systems are not the same.

    And, according to one of the authors you most respect (Ed Ring) ” And comparing defined benefits – or social security, for that matter – to Ponzi schemes or Pyramid schemes are specious arguments that do not belong in serious debate.”

  55. Tough Love Says:

    S M D, Yes, all State and City pension systems are not alike.

    But interestingly, in that other Andrew Biggs Study, BOTH CA and NJ came in with a 23%-of-pay PUBLIC Sector Total Compensation Advantage …….. and yes, WITH all those supposedly lower compensated PHD’s and “professionals” included.

    The very few LOWER-compensated PHD’s and “professionals” are so numerically overwhelmed by the HIGHER-compensated “everyone-else”, that in total (counting everyone) theire is a significant PUBLIC Sector Total Compensation just about everywhere…and THAT is what UNJUSTLY impacts the Taxpayers’ pockets

    Distort, obfuscate, mislead, BS all you want, but that conclusion remains …and it is THAT Public Sector Total Compensation ADVANTAGE that must be eliminated.
    ————————————-

    And taxpayer should refuse further funding of Public Sector Pension Plans until that reduction is FULLY implemented.

  56. S Moderation Douglas Says:

    Theoretically, your “average” CA public worker in 2010 is “overpaid”, because, according to Biggs, even though he earns 12% less than an equivalent private worker… But, by “properly” discounting his pension value using the approximate 3% rate, his pension is worth much more.

    For the sake of argument, say that same worker has been employed by the state since 1970, and for the entire career, he has earned roughly twelve percent less in cash wages. Give or take a few percent. He occasionally went two or three years with no raise at all, then would play catch-up… almost.

    Was he also overpaid in 1970? 1980? 1990? 2001?

    “We have no idea how federal (or state) pay compares to the private sector. So let’s stop acting like we do,”

    Jeffrey Neal

    https://www.washingtonpost.com/news/federal-eye/wp/2015/10/12/expert-we-have-no-idea-how-federal-pay-compares-to-the-private-sector-so-lets-stop-acting-like-we-do/?utm_term=.78fc3690dd2b

    At least we have no shortage of opinions.

  57. Tough Love Says:

    SMD,

    With Safety workers excluded from most of these studies, do you think they are underpaid as well (I need a good laugh) …… INCLUDING pensions and benefits that in CA are ROUTINELY 5 to 6 times greater in value upon retirement than those granted Private Sector workers making the SAME wages, working the SAME # of years, and retiring at the SAME age.

    Oh yes … before you go their ….. their cash pay is ALSO greater than most workers with comparable skills, experience, education, and knowledge ……. AND in jobs with no less risk.
    ————————————–

    Taxpayers ….. you’re the sucker in this equation.

    Demand change……. REFUSE to fund these pensions !

  58. S Moderation Douglas Says:

    (The chart is the ten year treasury rate. Apparently the title fell off.)

  59. S Moderation Douglas Says:

    Same old copy and paste bushwà.

    No credibility. None.

    Your comparisons are specious.

    Need I remind you…

    Posted by Tough Love on April 16, 2016 at 5:02 pm

    “These workers have run-of-the-mill pensions, clearly very modest (and MULTIPLES LESS) than those granted Public Sector workers.”
    …………….
    As it turns out, according to easily searched data, these specific workers have average wages higher than the maximum for similar New Jersey state truck drivers. And… they can retire at a younger age, with a higher pension.

    All your silly “assumptions” and math aside, quoting Smooth Moderation Truth on April 17, 2016  (AKA: S Moderation Douglas)

    “….In the Maryland Local 992, If a driver starts at age 20, he can retire at 55 with $4,200 a month.

    A New Jersey state truck driver with 35 years can retire at 60 with $2,566 a month. Even with 3% automatic COLAs, it would take him over 17 years to get to $4,200 a month.”

    Tell me, taxpayers, would you rather retire at 60 with $2,566 a month, or retire at 55 with $4,200 a month?

  60. S Moderation Douglas Says:

    Back to the actual original question…
    In 1982, The ten year treasury rate was 14.59%.

    Assuming the average public worker was still paid less in wages than the private sector (true, according to Bender and Heywood)…

    How much more was he underpaid, according to Biggs method of using the “riskless” discount rate to value pensions and retiree healthcare?

    Same employee doing the same job for the same relative cash wage… One year he is underpaid, ten years later overpaid?

  61. Tough Love Says:

    Great SMD, you discussed Truck drivers. What is that, 1 of !000, 5000, 10,000 occupations?

    Even if your figures are true …which I doubt because you color EVERYTHING with omissions, distortions, and lies to meet your desired goal…. it means nothing.
    ———————-

    Getting back to Police and Fire workers………..

    Are they UNDER-COMPENSATED with CASH PAY certainly no less than Private Sector workers in equally risky occupations and with similar experience, education, skills, and knowledge, and with CA pensions ROUTINELY 5 to 6 times greater in value upon retirement than those of Private Sector workers who retire at the SAME age, with the SAME years of service, and then SAME wages ………. or are they VASTLY OVER-COMPENSATED ?

    Oh and how about the free or heavily subsidized retiree healthcare benefits (a VERY rare employer-sponsored benefit in the Private Sector today) EASILY costing Taxpayers another !/4 to 1/2 $million due to their absurdly young retirement ages.
    —————————-

    Taxpayers ….. DEMAND change ….. and REFUSE to fund these ludicrously generous PUBLIC Sector pensions and benefits.

  62. S Moderation Douglas Says:

    No, señor o señora Love, it ain’t about the truckdrivers. That was just another of countless examples where you emphatically posted your opinion instead simply checking the facts. Your math is worthless because your assumptions are worthless. It becomes a self fulfilling prophecy.

    Quoting S Moderation Anonymous (moi) on February 8, 2016

    “Among other things, in the past you have “assumed” (vehemently) that private sector road construction workers did not receive DB pensions. You swore that NO doctor had DB pensions. You did not believe that some full career public workers had pensions below $30,000.

    Wrong.
    Wrong.
    Wrong.

    How many incorrect “educated guesses” does it take before you admit you are not the expert you claim to be?”

    saepe in errore versans, numquam animi pendens

    https://i1.wp.com/cdn.meme.am/instances/62839419.jpg?zoom=2

  63. S Moderation Douglas Says:

    Sure, if you are a high school graduate (with a clean criminal record) you might get a job as a police officer or as a roofer. Roofer is a more dangerous job. If you seriously think the roofer should be paid more, you are beyond help.

    How dangerous is a longshoreman job?

    “ILWU workers receive a compensation package that is among the most lucrative among all blue-collar workers in the United States. Full-time workers earn an average of $161,000 annually in wages, along with a non-wage benefits package costing more than $100,000 per active worker per year.”

    http://www.modbee.com/news/local/news-columns-blogs/jeff-jardine/article101489732.html

  64. Tough Love Says:

    SMD, Every example you pick involves Private Sector workers in Unions. Did you know that (per the US Gov’t BLS) in 2015 only 6.7% of Private Sector workers belong to Unions.

    There are are likely 100 million Private Sector workers NOT in Unions with “wages” NO GREATER than their Public Sector counterparts yet with retirement Plans RARELY worth more at retirement than 1/4 of that ROUTINELY granted Public Sector workers.

    There is NO justification for the grossly excessive compensation (mostly in the form of ludicrously excessive pensions and benefits) afforded PUBLIC sector workers …. and with NOT THEM, but the Taxpayers called upon to pay for 80% to 90% of total Plan costs.

    No matter how much or how often you mislead, distort, and lie, those are accurate FACTS.
    ————————————–

    Still awaiting a ridiculous explanation from you why safety workers are justified in financially raping the Taxpayers with their WAY over-the-top pensions and benefits.
    ——————————————
    Taxpayers ….. DEMAND change ….. and REFUSE to fund these ludicrously generous PUBLIC Sector pensions and benefits.

  65. Tough Love Says:

    Gee SMD, I could “cherry picK” too………..

    Aren’t the Port “pilots” that dock ships in LA and other CA ports paid in excess of $500,000 annually ?

    Nice try ……….. but as the AEI study showed, in BOTH CA and NJ (and EXCLUDING Safety workers which would make the difference even greater) Public Sector workers have a “Total Compensation” advantage of 23% of pay (rising to 33% of pay if the value of the MUCH greater Public Sector job security in included).

    Dear Taxpayers …… how much MORE would YOU have in accumulated retirement funds if YOU were given an extra 23%-of-pay to save and invest in every year of a 30+ year career …… $500K, $1 Million, $2 Million?

    Well, that’s what’s now being STOLEN from Private Sector Taxpayers by PUBLIC Sector workers EVERYWHERE.

    ——————————————
    Taxpayers ….. DEMAND change ….. and REFUSE to fund these ludicrously generous PUBLIC Sector pensions and benefits.

  66. S Moderation Douglas Says:

    Kind of difficult to believe you don’t understand what I have said. Perhaps I was being too tactful.

    Your opinion of me:
    “No matter how much or how often you mislead, distort, and lie, those are accurate FACTS.”

    I am not “picking examples” of more highly paid private workers, although there are many. I am picking examples of the many statements you have made that are demonstrably incorrect. “Demonstrably incorrect” is a euphemism. Surely you can figure that out.
    The examples I have given are where you made up your own FACTS right on the spot, or pulled them out of …thin air.

    If you say the private sector workers who build New Jersey roadways earn far less than state workers and certainly don’t have DB pensions, (which you did), do I “mislead, distort, and lie” when I do a simple Web search and cite the sources that show you are incorrect… again?

    You got some brass calling me a liar, Love.

  67. Tough Love Says:

    Quoting SMD …….

    “I am not “picking examples” of more highly paid private workers, although there are many. I am picking examples of the many statements you have made that are demonstrably incorrect.”

    Actually there are just a very few statements that I have directed to you what were “incorrect” … but only because when I think of Private Sector workers I do NOT think of Union workers (like truck drivers or Union construction workers) but the myriads of office workers and those self-employed in small businesses (along with there employees) who are NOT in Union.

    My statements have always been accurate for that group (the non-Union Private Sector workers) …. which represents per the BLS, 100%-6.7%= 93.3% of all Private Sector workers.

    Bottom line … you’re just AGAIN trying to mislead, distort, (and if knowingly doing so lie).

  68. Tough Love Says:

    SMD, While this article addresses Michigan’s pension/benefit problems, it’s little different elsewhere. Open your eyes, and lower the greed/entitlement-mentality….

    https://www.mackinac.org/23094

  69. S Moderation Douglas Says:

    Whu?

    If you say the private sector workers who build New Jersey roadways earn far less than state workers and certainly don’t have DB pensions, you are not thinking about “myriads of office workers and those self-employed in small businesses.” You are just making stuff up to support your own bias.

  70. Tough Love Says:

    SMD, While I do not know the details of retirement Plans offered private sector workers who build New Jersey roadways … whether there are any, are DC Plans, are “Cash Balance” style DB Plans, or are “Final Average salary” DB Plans (like those offered PUBLIC Sector workers) ……. one thing I would wage BIG money on …. if they work 30 years, earn the same wages in all years as a Public Sector worker, and retire between ages 55 and 60 (quite common for public Sector workers), the value of the Private Sector workers retirement Plan upon retirement will ASSUREDLY be worth less (likely far less) than 50% of that granted the Public Sector worker.
    ——————–

    No back-and-forth commentary between you and I will change that fact.

  71. S Moderation Douglas Says:

    http://www2.ironnj.com/pension/plan-booklet-spd/

    IRON WORKERS LOCAL 11 PENSION FUND
    MAIN OFFICE
    Iron Workers Local 11 Pension Fund
    12 Edison Place Springfield, NJ 07081–1310

    IX. FREQUENTLY ASKED QUESTIONS
    Q: What type of pension plan is this?
    A: The Iron Workers Local 11 Pension Fund is a multiemployer defined benefit
    pension plan. There are six different benefit options available depending on
    your Pension Credits, Vesting Service and age when you retire.

    “2. How a regular pension is calculated. If you retire with a regular
    pension, the Plan figures your monthly benefit by multiplying your Pension
    Credits times the benefit level in effect when you retire. Benefit levels change
    from time to time, as shown in the charts on pages 17, 18 and 19.”

    “3. Example. John has 20 Pension Credits when he retires on July 1,
    2015 at the age of 62. Here’s how to calculate his pension:
    20 Pension Credits x $110 benefit level = $2,200
    John’s regular pension is $2,200 a month.”
    …………………………
    http://www.utcanj.org/iron_workers_local_11.html

    Journeyman
    . $39.24
    …………………………

    $2,200 a month for 20 years is not shabby.

    I don’t know any tradesmen in Caltrans who make anywhere near $39.24 per hour.

    Would have to be a superintendent or engineer.
    ………………………….

    Quoting Tough Love “… While I do not know the details of retirement Plans offered private sector workers who build New Jersey roadways…”

    Therein lies much of the problem. Public pay and pensions are public record easily accessed, for the most part.

    Private contracts, not so much. And the grass is always greener.

    I was a certified journeyman electrician. I guarantee I never made anywhere near this hourly rate…

    http://www.ibew234.org/filemanager/UserFiles/File/Inside/InsideWagePage12-26-2016Signed.PDF

    And I haven’t found yet the IBEW pension formulas, but they are known to be quite generous.

  72. Tough Love Says:

    SMD, Private Sector Trade-workers get pretty good “HOURLY” wages, but get paid ONLY when they work……… meaning get assigned to a job by the Union.

    I know an IBEW Local #3 Electrician now waiting … for over a month since his last job assignment in a big office building ended ….. to be placed.

    Public Sector workers get paid even when doing nothing …..which is WAY too often the way a great deal of their PAID time is spent.

  73. S Moderation Douglas Says:

    “There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don’t know. But there are also unknown unknowns. There are things we don’t know we don’t know.”
    Donald Rumsfeld

    “We have no idea how federal pay compares to the private sector. So let’s stop acting like we do.”
    Jeffrey Neal

    (Or state or local)

    “…there is actually no right answer to the pay question. You can make those numbers say anything you want,” Neal said.
    ………………………………..
    My son in law’s father is now retired from IBEW. In 1982 (double digit unemployment) he asked about applying for a state job, and asked me about my wages and work.

    He made more in nine months than I did in a year

  74. Tough Love Says:

    SMD,

    In 1982………. let’s see, that’s 34 years ago.

    By extension are you claiming that the Private/Public Sector “cash pay” relationship that existed 34 years ago are the same today?

    Really?

    Sure, 34 years age Public Sector wages were indeed lower than those of comparable Private Sector workers, justifying at least SOME of the FAR greater pensions and FAR better benefits AT THAT TIME.

    But today, Private/Public Sector wages are near equal (overall), and there is therefore ZERO (yes ZERO) justification for a continuation of the FAR greater Public Sector pensions and FAR better Public Sector benefits … and for the future service of all CURRENT (not just new) workers.

  75. S Moderation Douglas Says:

    Sic semper erat, et sic semper erit.

  76. S Moderation Douglas Says:

    Unbelievable…

    “But today, Private/Public Sector wages are near equal (overall),”

    Somehow, in your view, a 23% public compensation advantage (for California and New Jersey) has become immutable. Carved in stone.

    Yet the very same study says that nationwide the average state salary (including California state salaries) is twelve percent below similarly skilled private sector workers. And you call that “nearly equal”? Only three states in that study were remotely close to equal… within two percent. In one state, (New Hampshire) public wages were 21 percent below private.

    “Nearly equal” in Connecticut, Nevada, and Rhode Island. That’s it.

  77. Tough Love Says:

    SMD, It’s not really 23%. The MUCH greater PUBLIC (than Private) Sector job security is REAL* and according the Andrew Biggs it woroth an ADDITIONAL 10% to 11% of pay.

    * that Private Sector Union electrician I mentioned above hasn’t earning a nickle for the past month simply because his Union can’t find a job to place him ….. tell me when THAT happens to a PUBLIC Sector worker.

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