Schwarzenegger: Public Pensions and Our Fiscal Future • Hacker News Board

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#161

Post by _delirium » Sat, Aug 28, 2010, 7:49 AM UTC

camiller wrote: post #115

_delirium wrote: post #61

Earlier quoted context omitted.

> It may not seem fair to change the rules on public employees, but effectively the rules have changed for private employees It's possible this has happened some places, but not at any major companies I know about. Companies that have phased out defined-benefit pensions have generally not done so retroactively, but only closed them to new hires. Phasing them out retroactively would be a breach of contract, since the…

Also some of the old phone company (AT&T prior to the 1974 breakup) employees had their retirement benefits whittled away over the years, my father-in-law included. Additionally most private sector employees are not under any sort of contract. I didn't sign a contract at any of the three corporations I've ever worked for (over the past 22 years). Fortunately my retirement was all 401k and as I changed jobs I rolled t…

Interesting re: the contracts. I don't think I've worked any job, even relatively minor summer jobs, without signing a contract of some sort. It usually covers both obligations to me (salary, termination conditions, benefits, etc.) as well as my obligations to the company (intellectual property ownership, non-solicitation if I leave to start a competitor, etc.).

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#162

Post by erikpukinskis » Sat, Aug 28, 2010, 8:41 AM UTC

amalcon wrote: post #98

shin_lao wrote: post #53

Earlier quoted context omitted.

I was thinking exactly the same thing. In addition when you know an employee is going to cost you a lot of money in pension, the incentive to reduce the work force as much as possible is high. You end up in a situation where your budget is used to pay for the retired employees and you have nothing left for active employees. One of the reasons you are there is that it's pretty tempting for someone in command to offer…

So, in other words, the bottom line in the budget should be delta (assets - liabilities). This is how individuals are encouraged to do their own budgeting; how would it hurt to require the same of the state?

Isn't there a government office that calculates that stuff? The long-term fiscal impacts of each bill? I want to say it's the GAO, but I don't think it is.... it's driving me nuts!

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#163

Post by HaloZero » Sat, Aug 28, 2010, 9:21 AM UTC

jshen wrote: post #151

houseabsolute wrote: post #145

Earlier quoted context omitted.

> You know what policemen and highway workers get paid? Policemen get paid a lot of money where I live. ( http://sf-police.org/index.aspx?page=1655 ). Personally I think an entry-level pay of $80k for someone with only a high-school diploma is pretty good. There are other areas in the Bay where pay is even higher, like Oakland. I can't speak to highway workers.

My wife happens to be a teacher in L.A. (not lausd). Her entry level salary was barely 40k and she is now in the 50k range after 6 years. I'm a programmer with less education, less years of experience, and I make more than double what she makes. If they are getting a posh deal I sure as hell don't see it. But, neither of our single data points says anything about the situation. I'm assuming most people on here took s…

Programming is a very difficult field to enter and it is very lucrative. You can't really compare the programming job vs any regular government job. Consider that most employees in private areas are probably more desk jobs (not programming) they get equivalent salaries minus all the lush retirement.

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#164

Post by igravious » Sat, Aug 28, 2010, 9:39 AM UTC

DanielBMarkham wrote: post #54

dantheman wrote: post #29

He got that exactly right, unfortunately he didn't go far enough -- debt financed projects are also a huge problem. Look at the big dig & the mbta. People need to learn that you pay as you go, that's why 401ks are great the total cost of an employee is understood completely. Taking debt in someone else's name, which is what essentially all government debt is, is fundamentally immoral and shouldn't be allowed. It caus…

Interesting point about taking debt in someone else's name. Over the last year I've begun to wonder if people aren't going to start feeling like the deal is off. If granddad elected somebody who made so much of a debt obligation that my taxes can't fix the roads? Why does granddad get to leave me his debt? He's not even around anymore. How can dead people vote to make living people 100 years later poor? In some ways…

What an interesting perspective. Making war with the spirits of your departed ancestors is a movie that I'd buy a ticket for.

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#165

Post by gwern » Sat, Aug 28, 2010, 12:05 PM UTC

erikpukinskis wrote: post #162

amalcon wrote: post #98

Earlier quoted context omitted.

So, in other words, the bottom line in the budget should be delta (assets - liabilities). This is how individuals are encouraged to do their own budgeting; how would it hurt to require the same of the state?

Isn't there a government office that calculates that stuff? The long-term fiscal impacts of each bill? I want to say it's the GAO, but I don't think it is.... it's driving me nuts!

There are, but it's very easy to fudge the numbers. For example, New York State is supposedly one of the best-funded state pension plans around, but if you change the predicted annual rate of return for the pension plan's investment from 8% to 5 or 6% IIRC, it's suddenly deep in the red. Small looking obscure change, big difference.

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#166

Post by gwern » Sat, Aug 28, 2010, 12:12 PM UTC

whyenot wrote: post #154

houseabsolute wrote: post #145

Earlier quoted context omitted.

> You know what policemen and highway workers get paid? Policemen get paid a lot of money where I live. ( http://sf-police.org/index.aspx?page=1655 ). Personally I think an entry-level pay of $80k for someone with only a high-school diploma is pretty good. There are other areas in the Bay where pay is even higher, like Oakland. I can't speak to highway workers.

Policemen get paid a lot of money where I live. They work in a city where it's difficult to buy a home for less than a million dollars. Contrary to your assertion, further highly specialized education beyond a bachelor's degree is required to be a police officer (hint: http://en.wikipedia.org/wiki/San_Francisco_Police_Department... ). Also contrary to your assertion, it appears starting pay is no higher in Oakland th…

> and risk their lives doing it

Lots of people risk their lives. I risk my life every day driving to work.

Did you know that policemen don't even make the top 10 list of most dangerous jobs? http://money.cnn.com/2005/08/26/pf/jobs_jeopardy/

Garbage men, BTW, perform a very important service and risk their lives (#5) doing it, and are paid much much less.. They deserve every cent IMO.

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#167

Post by gwern » Sat, Aug 28, 2010, 12:16 PM UTC

kenjackson wrote: post #117

CWuestefeld wrote: post #111

Earlier quoted context omitted.

Considering the early age that many public pensions allow you to retire at, you can have your cake and eat it too. Retire early on a guaranteed public pension, then take your chances in the private sector. Or don't take chances. It's very common for bureaucrats to retire to become lobbyists, working for private industry at comfortable salaries in order to exploit the regulatory system for others.

I'd actually do it the opposite way. Take your chances when your young and are more willing to work 24/7. When you get older, do the gov't job with the pension ready at the normal retirement age.

You might have a hard time getting into an equivalent government job, and many government jobs have mandatory retirement ages (which I think are not as common in the private sector); so if you tried that, you could find yourself shut out with not enough years at the high ranks to make the pension worthwhile. Read about cop salaries and notice how much of their pensions are based on their final years out of 20 or 30. ('spiking' and vacation-time etc.)

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#168

Post by yummyfajitas » Sat, Aug 28, 2010, 1:28 PM UTC

jbooth wrote: post #135

yummyfajitas wrote: post #123

Earlier quoted context omitted.

Union contracts are not negotiated in good faith. That's the problem. Our politicians do not get into negotiations with the union, driving as hard a bargain as possible and looking out for the taxpayers. Our politicians are in league with the unions hoping to get their support in the next election. In any case, no one wants unions to supply labor for free - all anyone is advocating is that the government pay it's sup…

Liberals don't claim that the government should renege on a contract that was lawfully entered into with a military contractor. In fact, nobody claims that, ever. Yet whenever local budgets are crunched, we always hear about how greedy the municipal workers are. You know what policemen and highway workers get paid? I've negotiated union deals from the government side. I negotiated fairly, in good faith, and nobody at…

Liberals generally favor making it easier to renege on contracts when the financial consequences of paying off one's debt might be dire. Here is Krugman's opinion on the topic:

http://www.nytimes.com/2005/03/08/opinion/08krugman.html?_r=...

The workers pay for the screwup just like any other creditor would. It's not as if OC bondholders were paid off but workers were not.

In general, I assume a deal is crooked when one party gets consistently above-market rates for their product, when there are laws on the books explicitly giving one party massive advantages, and when the political interference of one party is plain to see for anyone with a TV.

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#169

Post by nkassis » Sat, Aug 28, 2010, 2:46 PM UTC

dpifke wrote: post #72

CWuestefeld wrote: post #28

Earlier quoted context omitted.

I'm sympathetic to your point, but you can't really make this comparison, because it's apples-to-oranges. The set of jobs in each set is quite different. For example, there are few farmers in the government employ. However, we can still reach interesting conclusions from the data. For example, I would expect that regardless of the salary of the job, benefits such as healthcare insurance would be fairly constant for e…

Even when broken down by industry group and job type (apples-to-apples), public-sector employees make significantly more than their private-sector counterparts, see this Department of Labor press release: http://www.bls.gov/news.release/pdf/ecec.pdf (On page 3 is a comparison of % spent on different benefits for public- vs. private-sector; not sure what conclusions can be drawn from it.)

This varies very much depending on the state or department you work in. I work for the Government in Florida and the average IT pay was much lower than comparable jobs in the private sector. In IT I saw differences of about 20K in pay. I was looking at the salary scales and comparing them to the average for things like DBA/Sys Admin/Programmer.

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#170

Post by jshen » Sat, Aug 28, 2010, 2:48 PM UTC

houseabsolute wrote: post #155

jshen wrote: post #151

Earlier quoted context omitted.

My wife happens to be a teacher in L.A. (not lausd). Her entry level salary was barely 40k and she is now in the 50k range after 6 years. I'm a programmer with less education, less years of experience, and I make more than double what she makes. If they are getting a posh deal I sure as hell don't see it. But, neither of our single data points says anything about the situation. I'm assuming most people on here took s…

> If they are getting a posh deal I sure as hell don't see it. We were talking about policemen and road workers, but now that you mention teachers, we can talk about them too. Among other things, it's almost impossible for them to get fired and their raises don't seem to be connected to performance. They also get to take three months off during the summer, bringing their annualized salary up to about 70k. If you thro…

most programmers pay isn't related to their performance, hell most ceos pay isn't related to their performance, so that's a red herring.

I'd love to know what factors actually set programmer or ceo pay. Saying, "market factors" is just hand waving.

Now on to the specifics. According to this article they probably aren't going to get the pension they were promised since it's insolvent. They don't get 3 months off, exaggerating won't help your point. It's closer to two months. I get 3 weeks off.

So I'm still failing to see the posh deal. An insolvent pension, and an extra 5 weeks of vacation is traded for a loss of 60k of money right now. That's a pretty lousy deal if you ask me.