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Schwarzenegger: Public Pensions and Our Fiscal Future

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Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#181

Post by jhickner »

whatusername wrote: post #141
MaysonL wrote: post #91

Earlier quoted context omitted.

I have a feeling those graphs are more than a little fishy - the bottom one especially. Retirement costs went up ~5X from 2000 to 2010? And they'll go up by the same from 2010 to 2020? I call BS.

The label on the 2nd one is off. WSJ states that it is in Billions and then has 5000 on the left hand scale. I'm pretty sure California doesn't have $5 Trillion in Pension costs. Pretty sloppy fact checking.

That's the total projected pension cost for each year from now until the last currently retired employee dies, which may be 30+ years from now. So it's not debt, per se, since that cost is amortized over the same 30+ years. It's a projection of the total cost over that time period.

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#182

Post by anigbrowl »

aswanson wrote: post #109
ericb wrote: post #71

Earlier quoted context omitted.

I think this is a game theory problem. CEOs (looking at you, GM) and politicians up against tough unions have an easy out with no "cost" to themselves. They pass the buck by placating unions with pension concessions so all seems well during their tenure. Long after they've collected their bonuses or enjoyed reelection, someone else gets to deal with the unsustainable consequences.

One solution may be to have taxpayers directly vote on benefits for public servants...make the unions take on the people who will be paying for it rather than temporary placeholders with no real skin in the game.

Do you really think people are going to go to the polls and vote to cut pay for prison officers, police, firemen etc.? Sure, it may actually be legislation targeted at specific kinds of pensions and double dipping, but on TV it's going to be 'our cops and firefighters can't even put food on the table'.

Anyway, the whole point of representative democracy is to not have to consult the electorate for every little thing. Voting on pay is too nitpicky. The best alternative I can think of is that no one bargaining contract can run longer than 5 years, but that just swaps one set of problems for another.

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#183

Post by yummyfajitas »

jshen wrote: post #178
yummyfajitas wrote: post #174

Earlier quoted context omitted.

In NYC, teachers get july, august, 1 week of september, the week after christmas and a week of spring break. That's 2 months 3 weeks, though obviously this varies from place to place. I'm not sure why you think teachers take a loss of 60k right now - most teachers are low human capital individuals and would not be earning $100k/year right out of college. And yes, most programmers pay is related to their performance.…

Ok, I wasn't counting holidays for my time off, only vacation days, so the difference is still the same. I didn't earn 100k a year right out of college, your trying to change the facts of the comparison. "And yes, most programmers pay is related to their performance." It really isn't, it's based primarily on years of experience, who you know, and how outspokenly confident you are (regardless of whether the confidence…

I'm not counting holidays, I'm counting week long periods where NYC teachers don't have to work. Do you get spring break and a week long Christmas vacation at your job?

I got the number $100k from you: a teacher makes $40k, and when one takes a job as a teacher, "an extra 5 weeks of vacation is traded for a loss of 60k of money". Then I used fancy mathematics.

As for programmer pay, I'll just tell you the range from the last time I looked for a job. My lowest offer [1] was about 40% of my highest offer, but they weren't seeking great developers. I also happen to know of someone considerably better than me making 50% more (at the same level of experience).

As for firing the incompetent, I don't know what company you are talking about. Plenty of people get fired. In NYC, until very recently, they were paid to show up to rubber rooms for years.

[1] Not technically an offer, but salary was discussed.

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#184

Post by billswift »

btilly wrote: post #138
robryan wrote: post #9

Earlier quoted context omitted.

Yeah I knew it would be bonds, just seemed like a risky proposition. I guess any responsible economic action here isn't going to be popular so it's not going to happen? Hypothetically what would happen if the state decided to reform these pensions, slashing them right back to something they could realistically afford?

The fundamental problem is that a large amount of possible government action is hampered by a constitutional rule that says that 60% of the house has to agree on any budget. Structurally neither party has the power to get to 60% of the state legislature, voting for taxes is political suicide for Republicans, and voting to cut benefits is political suicide for Democrats. So we have permanent deadlock with no attempted…

Another problem there is that there is no mechanism for a State to declare bankruptcy. There were several discussions about this on Megan McArdle's blog http://meganmcardle.theatlantic.com (I think from last fall through early this summer).

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#185

Post by billswift »

16s wrote: post #63
philk wrote: post #19

Earlier quoted context omitted.

From the article: roughly 80 cents of every government dollar in California goes to employee compensation and benefits So that's salaries as well as pensions (and salaries will be making up the lions share of the 80%). To quote Felix Dennis "Overhead walks on two legs".

Employees are the biggest expense for any business, not just governments.

Usually the biggest single expense, but not usually more than half of the total expenses.

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#186

Post by houseabsolute »

jshen wrote: post #172
houseabsolute wrote: post #160

Earlier quoted context omitted.

Different people have different tolerance for risk, different preferences for activity, different sets of cultivated skills etc. Mine line up better with programming than teaching, and I can make more doing it to boot. Earlier, you were claiming that teachers are getting a raw deal because you are paid so much better as a programmer. To put the previous paragraph in completely unambiguous terms, let me ask you this:…

Your confusing different commenters.

My apologies. I'll edit my post to reflect the reality of the situation.

Edit: as it turns out, I can't, so you'll have to make do with my apologies. :)

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#187

Post by aswanson »

anigbrowl wrote: post #182
aswanson wrote: post #109

Earlier quoted context omitted.

One solution may be to have taxpayers directly vote on benefits for public servants...make the unions take on the people who will be paying for it rather than temporary placeholders with no real skin in the game.

Do you really think people are going to go to the polls and vote to cut pay for prison officers, police, firemen etc.? Sure, it may actually be legislation targeted at specific kinds of pensions and double dipping, but on TV it's going to be 'our cops and firefighters can't even put food on the table'. Anyway, the whole point of representative democracy is to not have to consult the electorate for every little thing.…

Do you really think people are going to go to the polls and vote to cut pay for prison officers, police, firemen etc Economics will demand it at some point.

When they look at their tax bills, reduced 401k benefits, layoffs and uncertain retirement dates, damn straight they will. http://blogs.forbes.com/digitalrules/2010/06/01/the-milliona... http://walnutcreek.patch.com/articles/walnut-creeks-100k-plu...

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#188

Post by aswanson »

anigbrowl wrote: post #182
aswanson wrote: post #109

Earlier quoted context omitted.

One solution may be to have taxpayers directly vote on benefits for public servants...make the unions take on the people who will be paying for it rather than temporary placeholders with no real skin in the game.

Do you really think people are going to go to the polls and vote to cut pay for prison officers, police, firemen etc.? Sure, it may actually be legislation targeted at specific kinds of pensions and double dipping, but on TV it's going to be 'our cops and firefighters can't even put food on the table'. Anyway, the whole point of representative democracy is to not have to consult the electorate for every little thing.…

Christie is doing it: http://blog.nj.com/njv_bob_braun/2010/05/nj_gov_christie_bud...

Approval rating seems ok:http://www.washingtonexaminer.com/opinion/blogs/beltway-conf...

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#189

Post by cce »

Many people took positions in government when it wasn't anywhere near a high-paying job. I know an engineer friend who took a job with the government in 1994 for a 40% pay difference (45k vs 75k) -- how the lower wage was justified: (a) more job security, (b) an actual pension plan with ~28 years service. The two were viewed at that time as being equivalent: with the government compensation a bit less than working for a contracting firm. I know of teachers who choose their profession, not based on the yearly compensation, but based on the idea that "yea, so after 26 years of letting children beat down on me, I can retire and not have to worry so much". I'm sure police/firemen who agree to risk their life every day for 20-some odd years make similar calculations. It's a rational choice -- and a promise of compensation made.

I simply don't understand how anyone could justify retroactive gutting of plans. Can we do retroactive taxation on those that went without the pension as part of their compensation plan?

Elimination of pension going forward -- perhaps. I'm curious to see how recruitment of these positions works... likely, the Government won't be able to attract as good candidates as it might otherwise.

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