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Wonk Wars: Do Public Employees Get Too Much?

"Public Employees Have Too Many Benefits" Discuss!

Tuesday, September 21, 2010

Welcome to Wonk Wars, a weekly feature from It's A Free Country as part of the Brian Lehrer Show's 30 Issues in 30 Days. Early each week, we'll post one of those issues in the Wonk Wars sections of the website and invite two or more policy experts to start the discussion online, along with your input. Then, each Thursdays, the conversation continues on-air at the Brian Lehrer Show.

This Week's True/False: Public Employees Have Too Many Benefits

Opening statement from James Parrott, Deputy Director and Chief Economist at the Fiscal Policy Institute.

It is truly remarkable that some commentators can so readily look past the continued polarization in how we compensate labor in this country to argue that public sector workers might be doing “too well” relative to their private sector counterparts. Most workers generally, as opposed to CEOS and the highest-paid executives, have not fared well over the past two decades in terms of sharing in the prosperity their efforts create. If they had, wages and benefits would be much higher for the typical worker and our middle class would still be broad rather than shrinking.

Private sector workers have really taken it on the chin. Inflation-adjusted real hourly wages for men are less today than 30 years ago, despite substantial productivity growth that should have made possible commensurate gains in wages and living standards. Many fewer private workers have employer-provided health insurance or pensions than in decades past. And now, those with a “winner-take-all” mentality want public sector workers to give up their hard-earned health and pension benefits.

We need to take a step back from this debate and ask where have all the gains in the economy gone since the 1980s? And how do we restore an economy that shares prosperity among all workers?  We shouldn’t be making scapegoats out of our public employees. They certainly didn’t cause the economic collapse, nor are they responsible for the erosion in the wages and benefits of private sector workers.

Opening statement from Steve MalangaManhattan Institute Senior Fellow and author of the forthcoming book Shakedown: The Continuing Conspiracy Against the American Taxpayer

In New York State and in other states with similar problems, notably New Jersey, Illinois and California, the issue is not what public employees earn in salary and benefits versus the private sector now. In truth, we have never seen a period in America where the bulk of private workers, including most workers in private unions, earned the kind of costly benefits, including pension benefits, we now see in the public sector in New York. The tab for those benefits is squeezing government budgets, forcing taxes higher and trimming spending on other programs. As Democratic gubernatorial candidate Andrew Cuomo notes in his agenda for New York, many of the promises made to public employees are “out of line with economic reality.”

New York has a complex public retirement system with many tiers and enhancements created over the years, but the upshot is that a civilian employee in New York State can earn a pension equivalent to 60 percent of final salary after only 30 years on the job, or by 55 years of age, in addition to full health benefits in retirement. Added to this are a host of gimmicks never common in the private sector and well-chronicled last spring in a New York Times investigation, and later in a study produced by the state’s Attorney General’s office, by which employees load onto their final pensions by padding their later year salaries through a technique known as spiking.

There are stark consequences to such benefits for taxpayers. State government costs for pensions and health care for retirees, which the state provides because so many public workers retire before they are eligible for Medicare, have soared from about $1 billion in 1999 to about $6 billion. In part these costs are a result of promises made by state officials to unions when the stock market was doing well and were based on unrealistic projections of future stock market gains.

Once upon a time rich benefits were justified for public workers on the grounds that they earned less in salary than private counterparts, but that difference has long ago eroded, as numerous studies and New York and nationwide have demonstrated. Again, as the New York Times noted in its investigation: “By tradition, public employees have said they accepted lower salaries in exchange for better benefits, but the Census data show this has not been true for a number of years.”

The enormous cost of public sector compensation is turning even old friends of public unions into opponents. As Los Angeles Mayor Antonio Villaraigosa (who was once a teachers union official) has said, his city can no longer afford its rich public sector pay and benefits. Neither can New Yorkers.

---

James Parrott: The average retiree covered by New York State’s employee retirement system receives an annual pension of $17,615, while the average retiree under the police and fire retirement system receives $38,367 in annual pension benefits. These benefits—which are certainly not luxurious—represent the deferred wages of public employees. It is simply not the case that, when you adjust for occupation, education and age, public employees are paid more than their private sector counterparts. Studies that claim to show higher public sector wages fail to account for the fact that public employees tend to be older and better educated than private sector workers in the same occupations.

During the late 1990s financial market boom, for reasons that did not make long-term good fiscal sense, the employer contributions to public pension plans in New York were dramatically reduced, in some instances, to zero. That fact, together with volatile markets, go a long way toward explaining why pension contributions that have to be made by the state and local governments are what they are today.

The fact remains, in this horrendous economic and budget climate, many observers are pointing the finger at public employees, and acting as if their benefit costs are the main driving force behind our budget deficits. The dynamic bears too much resemblance to the national level where budget deficits largely caused by the Great Recession and tax cuts for those in high income brackets leads to renewed calls for cutting back Social Security.

---

Steve Malanga: Public employees have been resistant in New York and other states to changes in their benefits packages, and especially to pensions, that would bring them into line with economic reality and relieve long-term burdens on taxpayers. Unions argue instead that any significant changes are part of a ‘race to the bottom’ in which retirement benefits in general in the U.S. are declining. They point to the small savings rates of some private workers who have 401(k)-style pensions and argue that public workers deserve a better retirement.

But these criticisms ignore the fact that there are retirement systems in place which have been shown to provide workers with a decent retirement at an affordable cost to the employer, systems that cap the employers’ long-term liability and are more resistant to political pressure than the current system.

Federal employees, for instance, are covered by a system instituted in 1986 which includes a basic guaranteed pension, a thrift savings plan which is similar to a 401(k) in which both the government and the employee make tax free contributions that build up over time, and participation in Social Security. The thrift savings plan has the added benefit of being portable, meaning that if an employee leaves government service the accrued benefits go with him or her. That’s significant when you consider that nearly half of all public school teachers leave the profession within 10 years.

In addition to the federal plan, some 15,000 universities and colleges participate in retirement programs managed by TIAA-CREF in which the institutions and their employees contribute to defined-contribution retirement savings programs that allow employees to enjoy a satisfying standard of living in retirement, but which cap the long-term liability of the employer. Few people would contend that both federal employees and those enrolled in TIAA-CREF plans are somehow being exploited or shortchanged, yet public worker unions in places like New York have tenaciously resisted similar plans by claiming they would somehow undermine the retirements of their workers.

State and local governments now face somewhere between $3 trillion and $5 trillion in future liabilities for pension and health benefits that are out of line with economic reality. It is entirely possible to provide government workers with a competitive level of benefits without overburdening taxpayers or squeezing money out of other programs. It’s time for sensible reform.

Tune in to hear Steve and James continue this conversation an-air Thursday, September 23rd at 11am on the Brian Lehrer Show

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Comments [71]

John Mulligan from Providence RI

Brian, what was up with your badgering of Mr. Parrot? You seem absolutely paranoid about unions.

Example: "Has [Cuomo] received specific union endorsements of the very state workers he would have to negotiate with on behalf of the taxpayers?"

Simple question: Would you EVER ask of any politician, "Now that X has received the endorsement of the Chamber of Commerce, can we expect X to be an honest broker in terms of labor law?"

Come on.

Oct. 01 2010 05:07 PM
Jennifer

The assertion that public sector workers are better educated on average than private sector workers is, in itself, comparing apples and oranges. Public sector workers usually have degrees from the lowest tier universities and their skill set, dulled by years of guaranteed desk work, is certainly smaller on average than most private sector workers with comparable levels of education.

Sep. 23 2010 07:00 PM
Steve from Brooklyn from Brooklyn

I would like to avoid the strong temptation to engage in any polemics on the general issue, in favor of making a small factual contribution in terms of one detail: about cost of living adjustments. Pension COLAs were mentioned briefly on the show this morning and I would like to note what is really being talked about. This applies to the most favored group of New York City civilian retirees served by the New York City Employees Retirement System (not all tiers and not uniformed forces). After five years of retirement and attainment of age 62, a retiree is eligible for an annual cost of living adjustment equal to 50% of the CPI on the first $18,000 of pension (or the entire pension if it is less than $18,000) with a minimum of 1% and a maximum of 3%. This translates into a minimum of $180 (if there is no or low inflation) and a maximum of $540 (if there is high inflation). This information is offered for what it is worth, leaving evaluation of its fairness, etc. open. Thank you.

Sep. 23 2010 06:10 PM
qball from nyc

Michael asked:

What the public workers also receive a job security beyond the public sector.

yes, in some cases thats true but i've seen lots of city workers laid off during budget crisises, pay freezes, and givebacks during the years (82-07) i was city worker. what you might not know is that i and many others fought the city for years over the misuse of provisional status. i spent almost 5 yrs as provisional (no due process, can be fired even for *no* reason, no seniority, no pension, no civil service). then i spent a year on probation as a 'new' employee...for a job i'd already been doing for nearly 6 years!

Sep. 23 2010 12:53 PM
Yvonne from Park Slope

I have several problems with this discussion. I will limit myself here to these three:

First, I don't think the 401K, or whatever they are called, are a viable option for most people - either city or private - because they are too risky unless one is knowledgeable about investing.

Second, defined-benefit pensions are being unfairly attacked; as a retiree from the NYC Department of Education who is receiving only 50% of my prior salary, I resent being lumped together with someone who is retiring with 80-90% of their salary ... never-mind more than 100% of their prior salary. Yes, I think it is a problem if a pension is higher than the actual salary but this does not mean all defined-benefit pensions are excessive. It makes exciting press to focus on those cases that are but focusing on these cases misses the real issue that only defined-benefit pensions offer any real security and perhaps there should be better oversight and caps. It makes for exciting politics to threaten to demolish something and is much less exciting to promise to fix an essential but flawed benefit.

Third, the over simplification of the issue obscures the reality that government pensions are not all the same and this lack of equity makes one group feel that they should have the privileges of the other. One can argue from here to eternity about whether police and firemen burn out faster and need to retire earlier or whether unions have traded to get lower salaries in exchange for higher pension benefits and so get a double loss if the pensions are reduced. Some can retire in their 40's after 20 or 25 years (?), I don't remember which, while some others can retire at 55 after 25 years and others must wait until 62. Different groups use different formulas with different loopholes to compute their pensions. Nothing this complex can be either all good or all bad. It need a sifting through to save what remains needed while discarding what is an obvious abuse of the benefit.

Sep. 23 2010 12:41 PM
Mike from Inwood

Yes, lawyers, doctors, CPAs - these people will have much higher salaries in the But these are not the bulk of public employees. firemen, policemen, teachers, social workers and the clerical staff will not have higher salaries in the private sector; they do much worse. This is simply the truth. Can't you people listen or have you so channelled yourselves into yur career that there's nothing left over.

Sep. 23 2010 12:29 PM
Dave in Red Bank from Red Bank, NJ

The issue isn't what or how much public sector workers are receiving, it is how much they may EVER receive.

When you go to work in the public sector, you KNOW, with 100% certainty, that if you stay 30 years you will NEVER get rich. But the benefits and the conditions and the job security are good, so you take the middle class salary. The exceptions (double pensions etc...) are generally corrupt no doubt about it.

There aren't the same limits in the private sector. The guy in the mailroom can, and often does make it _BIG_.

Sep. 23 2010 12:25 PM
jp from Brooklyn

RJ is one of the few people here who understand the golden thread of the discourse. It's the same old class divisions that are played upon by the political class. Need I remind folks that Paladino and Cuomo are financial elites. My take is that we should all be able to bargain collectively. It's an american and capitalist right to talk over the conditions of labor and employment even on a united level.
I agree however that certain unions, and we all know who they are, have encouraged their members to take inordinate amounts of overtime in the final years of public service in order to boost their benefits and this calculation should be modified or removed. I agree with the caller who mentioned that supervisors must have the workers do work during the course of the day.

Sep. 23 2010 12:14 PM
Esq

Blossom- did you ever consider that perhaps that caller's wife earned the money in that household, and not the teacher?

I have a JD and can't even afford to pay into our pension system, so I won't get one. (Our pension system is barely worth considering unless you plan to spend your whole career here. I pay into our deferred compensation system instead, which is a pre-tax, non-matching 401k, rather than FICA, and have a Roth IRA, buth this means my retirement depends on the stock market. If I do the pension system, I must pay into FICA as well which will cost too much).

I wish you were working with me at 1am on Monday morning, when you could have told me I was doing nothing. And despite the fact that I was assigned to work an extra shift on Sunday night in addition to my regular M-F, I earned all of zero extra pay (overtime! that's funny!) for that shift.

Also, we can carry over only 5 vacation days per year, with a lifetime max of 50-something days. So an employee who does this could look forward to a bonus of less than 2 months pay-- a pay that is still low as a result of working in the public sector.

Sep. 23 2010 12:06 PM
Lauren

Www.seethroughny.org

Sep. 23 2010 11:54 AM
mike from Manhattan

Mike from Inwood: If you go to TIAA-CREF.org or Vanguard.com you can sign up for a retirement account. If you choose a safe option from the ones they offer and you contribute 6% of your salary (equal to 3% from your extra private sector wages that your employer might have been contributing if they were deferring it and 3% from your current income, like the teacher) you too will have a monthly retirement income.

Sep. 23 2010 11:53 AM
kb from New Jersey

I didn't hear any complaints or whining about the public sector having better benefits when the private sector was booming! If the public sector receives more benefits than the private sector, it still doesn't make up for the disparity in salaries.

Sep. 23 2010 11:53 AM
Daniel

Why does the private sector need to compete with the services the government should provide? You can't privately compete with the DMV (I mean, you can try issuing your own This Dude's License to Drive cards, but it won't get you much). You can't privately compete with government administration. And there's no need to privately compete with the education system. The education system should be operated --- with teachers paid appropriately high salaries, given budgets to provide for their students, and the freedom to plan their own lessons --- such that you wouldn't be able to compete with it. The private education sector should exist only for parochial and other specialized educations.

Sep. 23 2010 11:50 AM
sarah from bronx

Let's kill public sector wages, benefits and pensions. We will get the results we deserve.

Sep. 23 2010 11:47 AM
jm

Karen:

" How about use it or lose it in the year it is accrued as in the public sector"

Perhaps our private sector should look to Europe, in terms of vacation days.

Sep. 23 2010 11:46 AM
blossom

Have to add:
A week or so ago, a NYC teacher called in to the BL show upset that he and his wife, who together earned over $200K (or maybe $250K), were going to be paying higher taxes if the Bush cuts aren't extended.
People earning that much are completely capable of contributing to a 401(k) or 403(b),

If teachers are earning so much that they are supporting Republican tax policies, how do you ever expect the union movement to support fairer treatment for the rest of us?

And again, as to the $17K average. That really means that that each worker is earning about $17K more a year in total comp. So the person kvetching about earning 50K is really earning 67K.

Lastly: City workers with a BA or Masters earn LOADS for doing not much. I know that from knowing people in those position. Its nothing like working in the private sector. They work "OT" and they get comp time. In private sector, if you're a pro you just work!

Sep. 23 2010 11:44 AM
Lolo from Brooklyn

How is the public sector supposed to compete with the private sector for workers if they do not provide equal if not better compensation? Also, perhaps we need to consider that the average private sector worker is under-compensated for their labor? I'm not talking about Wall Street titans, rather service and retail workers.

Sep. 23 2010 11:41 AM
Gabriel from NYC

This is plane and simple a class warfare canard. Working people are angered by other working people getting what all working people deserve. It's not the people at the bottom, the working people that are the problem. Why fight each other? The problem is at the top. The debate isn't whether workers of one sector are getting more than another it's that the management is making too much, taking from the workers and pitting us against each other.

Sep. 23 2010 11:40 AM
jm

Some of you are either crazy, or should just be ashamed. I was pursued by a city agency a few years ago for a particular job, and I'd never before interviewed for a public position. The potential boss was incredibly kind, and it seemed like an interesting description. Sadly, the starting salary was BELOW half of what I would have made normally, even at the appropriate level. Granted, the benefits were great, but I wondered how people actually live on that kind of salary.

Another aspect that was somewhat disturbing was their sick policy. Apparently they crack down on anyone who happens to be sick on a Friday (and requiring doctors note for other scenarios), and the environment seemed very rigid in other aspects. I hardly get sick, but was disturbed by the lack of relative freedom I was accustomed to in the private sector.

Clearly there are trade-offs involved with this type of employment. Why would you want to work for the government without the incentive of the benefits package?

Sep. 23 2010 11:38 AM
Maria from Manhattan

Thank God for the few remaining unions. We need more of them, not less. This survival-of-the-fittest, race-to-the-bottom, let-the-free-market-rule thinking pushed forward is a disgrace and a shame. When people sign on with a public sector entity, they enter into a contract with their employer: I will perform my duties in exchange for the salary and benefits that you will pay me.

It is just NOT ON for the State to want to change the arrangement mid-stream. You have a contractual commitment to those people you hired. Would those workers be able to as cavalierly decide they want different working arrangements (say, a four-day work week) and be able to get away with it? Of course not.

There are always other places where fat can be trimmed rather than attacking middle class benefits.

And that Paladino, what a crackpot to say he wants to fire everyone. Great way to treat the State's employees....

Sep. 23 2010 11:37 AM
Norman from NYC

Conservatives only believe in sanctity of contract when they feel like it.

Sep. 23 2010 11:37 AM

I was a NYC teacher. I resigned in 2008.

The fact that Principals make so much more is ridiculous. It is a more difficult job in terms of hours in the school building BUT not less hours even if a teacher did not "work" during the summer.

We are not "paid" for the summer off. Our salary is divided up so we have paychecks in the summer.

I am pro-union but not pro-UFT. They have not represented the enrichment of students.

Sep. 23 2010 11:36 AM
jawbone

Oh, c'mon, those 401K's have worked out so extremely well, especially for those who had to withdraw money during the recent stock market fiasco.

Yeah, real dependable way to plan for your future.

Defined pension benefits -- it's not just for public workers. You, too, might get them if you unionize.

Class war? It's already over, and the rich have won. Now, they're just trying to get rid of any lingering real benefits for workers.

We've achieved the "reserve army of the unemployed" that Marx said capitalism requires to force workers' wages lower. Now it's just a mopping up action.

How's that disemployment working out for ya, Americans? It's now planned and part of the long term economic strategy.

Sep. 23 2010 11:36 AM
Daniel

Do you know why teachers (and other public employees) are guaranteed such raises and benefits? It's because they are paid such awful salaries from right off the bat and because without such built in benefits, they would never get proper raises and pensions. I'd be totally in favor of performance based raises, if teachers were actually paid salaries commensurate to their level of training and work from right off the bat. Why do we believe so much in education and push for better education systems, and yet complain about paying educators appropriately?

Sep. 23 2010 11:35 AM
karen from New York

public employees can carry over their vacation days for an unlimited amount of time, when they retire they are paid out at a much higher rate. How about use it or lose it in the year it is accrued as in the public sector>

Sep. 23 2010 11:35 AM
Ken from Little Neck

What's stunning to me is that we've now reached the point where people are seriously arguing that employees don't deserve both decent pay and good benefits. The problem is not that the public workers have excessive benefits, it's that the private workers have allowed their benefits to be watered down over the last 30 years so that those at the top get to keep more.

Sep. 23 2010 11:34 AM
Juan from White plains

Non civil services employee get too little benefits.

Other countries have wokers that are better off.

Sep. 23 2010 11:34 AM
hc from new york

Would the definition of "public employee" include the employees of the banks that benefited from the bailout? My point is, why we are NOT discussing instead the parasitical relationship of the credit system on the public and the support they get from government finds, I mean we are talking about pennies in comparison. THIS is the tax payer liability.

Sep. 23 2010 11:34 AM
Jeff from New York

I'm a City Lawyer. I wish I made $103,000. I can't even fund my retirement at this point. I fund my student loans. Public sector deferments need to happen now, not after ten years of public service.

Sep. 23 2010 11:33 AM
Mike from Inwood

The reason that public workers must have the same wages and benefits that private sector workers have: As long as public sector workers have heavily-subsidized cadillac health care plans, there will be a large number of people who believe it is against there interests to reform health care. As long as there are public sector workers who have defined benefit pensions, there will be a bulk of people uninterested in the plight of people without such pensions who live on only social security and inflation and stock-market ravaged savings.

Sep. 23 2010 11:32 AM
blossom from ny

$17,000 in pension per year??? THat's huge!

And really, the folks who are teaching would likely NOT be earning the million dollar bonus. Why do they think that's there they'd be if not for their public sytem jobs.

That million-dollar bonus was based on performance. Does any NYC teacher really want their pension to be based on performance? Haven't they been fighting against pay for performance?

And why shouldn't we try to level down? The rest of us have been leveled-down.

Sep. 23 2010 11:32 AM
desdemona finch from Brooklyn

If they're making less than their private-sector counterparts for comparable education and job roles, then it stands to reason that they should get better benefits.

What's the incentive of working for the government if your salary AND benefits are worse than the those of your private sector counterparts?

CEOs have seen their salaries skyrocket over the past few decades. Does that mean government executives should see such salary increases?

There's nothing wrong with giving your employees decent benefits. We cannot expect the private sector to ever provide adequate benefits to its employees if the government skimps on benefits to its own employees.

If the government starts acting like the private sector in its treatment of its human assets, we have nowhere to go but down.

Sep. 23 2010 11:31 AM
jawbone from Parsippany

Gee, maybe having Medicare for All - Improved! would not only be good for everyone's health and sense of personal security, but then the local and state government wouldn't have to try to negotiate with the Big Health Insurance Players.

In my municipality here in NJ, I understand different workers get differing health care benefits. And libarians get the short end of the stick. Not fair, right?

Medicare for All -- Improved!

It would lessen your health care costs and perhaps your local and state taxes!

Too bad we miss this latest opportunity to work for that....

Sep. 23 2010 11:31 AM
Norman from NYC

How much is Steve Malanga getting from his retirement benefits from the Manhattan Institute?

Sep. 23 2010 11:30 AM
Katie Kennedy from Huntington, NY

My husband received full health benefits after 34 years of teaching--IT WAS AN INCENTIVE to get older, more experienced teachers to retire. The district wanted to bring in younger (read make less money) teachers. Apparently your guest wants us to go back to the days when senior citizens lived in poverty.

Sep. 23 2010 11:30 AM
Sandra from Long Island

New York State and its residents has had the services of the most skilled and most highly educated and most highly trained workforce in the world. The state has developed an efficient workforce due to employees who have had continual training and development throughout their working life. Every state around the country models their services after what they have seen New York State do,

Sep. 23 2010 11:29 AM
mike from Manhattan

I am not a public employee and never have been. If a private sector person retires from a job and begins to take their private retirement benefits, can they continue to work and draw a salary? Of course! Retirement benefits are part of compensation for work done. They are deferred compensation that is paid with corresponding interest, NOT welfare. Why don't we just pay public employees nothing? Hold them prisoner for the crime of taking our tax dollars to live on?

Sep. 23 2010 11:29 AM
Norman from NYC

The main reason our health care costs are so high is that we have a private insurance-based health care system, which costs twice as much as Canada or other countries.

If health care costs are such a problem, would Steve Malanga prefer a single-payer system?

Sep. 23 2010 11:28 AM
Mike from Inwood

George from downtown states: "Public employees get good benefits because we united and fought for our rights. Other workers should aspire to the goals we have acheived instead of envy our benefits to the point were they dont want us to have them. We work and get paid. We will never get rich as some might in the private. It is a trade off we have made. Dont try to beat us, join us."

George, our jobs can be exported. Yours can't. We can't afford to support you. The private sector cannot support a public sector living in a grander style than it lives.

Sep. 23 2010 11:27 AM
John from Fanwood, NJ

I retired after working for 35 years for the National Archives in New York. I never made as much money as my friends in private industry, but I also never experienced layoffs that inevitably happened during economic downturns. During my career, I contributed 7% of my pay to the Civil Service Retirement System, and now collect a relatively generous pension. Since I contributed to a pension plan, I did not pay Social Security tax, and therefore am not eligible for Social Security benefits. I don’t feel at all guilty about this benefit.

My pension plan was disbanded during the Reagan administration, and was replaced by a system that requires a large contribution to the Thrift Savings Plan, a kind of Federal 401-K. Savings are subject to the ups and downs of the stock and bond market, and I’m sure many Feds lost huge sums during the Great Recession. Federal employees now pay Social Security tax, so their savings annuity is supplemented. The retirement system went from a traditional pension plan to a do-it-yourself plan that politicians on the right want for all public employees. If public employees have reduced benefits, their pay should be increased to private sector levels.

Sep. 23 2010 11:27 AM

It is pointless to bring up individual situations in the context of the larger discussion about fairness. Especially when it's just hearsay and you don't know any of the particulars. It just muddies the already roiled waters. I would urge the BL Show to not get side tracked with 3rd hand stories for either side of the issue. Stick to empirical accounts -- not vilification without reason.

[Excuse previous message that went before it was finished.]

Sep. 23 2010 11:25 AM
Leslie from New York City

Public employees’ benefits are excessive and misaligned with reality and affected by nepotism.

Public vs. private employment demands are not comparable. The pursue of profit and efficiencies in the private sector demands much more time, efforts and sacrifices from employee (and not necessarily from management).

I proposing opening up our books and then assessing the reality and finding a fix.

Sep. 23 2010 11:24 AM
jawbone from Parsippany

Gabriel from NY who said public employees don't get too much in benefits - the rest of the working Americans get TOO LITTLE. Yup.

And there's that Obama/Pete Peterson Cat Food Commission which wants to lessen what people will get from Social Security!

One caller was concerned about a principal from NY now working in NJ and may get two pensions: One solution would nationalized pensions which follow workers from job to job. And it should be defined so people can know what they're going to get. Not 401K's subject to the whims of the market (and the costly "service charges," among which are a charge to close out an account! Wow. Who knew? Fidelity never mentioned that when they were setting up by 401K transfer.... Bet it was in some fine print somewhere....)

Sep. 23 2010 11:24 AM
Mike from Inwood

To the teacher who just called in who will have a $24k retirement: I have a 4-year degree in computer science and work for a large bank. After 30 years, I will retire with a lump sum pension of roughly $60k. You will exceed this after 3 years and from there on it's all gravy. I've worked just as hard as you without having the summer and all the major holidays off.

Sep. 23 2010 11:24 AM
Norman from NYC

Question for Steve Malanga:

The top 1% of income earners get 25% of the income (according to Carol).

Do they deserve 25% of the income? If you say civil servants are getting too much income, why can't we say that the top 1% are getting too much income?

Sep. 23 2010 11:23 AM
George from downtown

Public employees get good benefits because we united and fought for our rights. Other workers should aspire to the goals we have acheived instead of envy our benefits to the point were they dont want us to have them. We work and get paid. We will never get rich as some might in the private. It is a trade off we have made. Dont try to beat us, join us.

Sep. 23 2010 11:22 AM
qball from nyc

retired after 25 yrs as nyc paramedic age 52 on 24,000/year. also, paid into it about $300/month while working and earned 25-30% less than my counterparts in private sector.

Sep. 23 2010 11:21 AM
Mark

Isn't it as simple as the system simply can't last. If you look at budget shortfalls on both the federal and state levels, you are at the point that wages & benefits have to be changed. When a private company has a bad year, people are fired, wages are freezed, and there is no bonus. Why should this not happen to public workers?

Sep. 23 2010 11:20 AM
Michael

What the public workers also receive a job security beyond the public sector.

Sep. 23 2010 11:20 AM
Mike from Inwood

54% of public employees have 4 year degrees while only 36% of private sector? OK. Do these public sector employees have degrees in engineering? No. They have degrees in social work that lead to lower paying jobs in the private sector.

Sep. 23 2010 11:19 AM
donna from brooklyn

1. why do legislators get a pension? what part time job in the private sector entitles you to a pension?

2. public employees should not be able to retire after 20 years with a full pension. given today's life expectancy, how is that sustainable? you work for 20 years and then get a pension for the next 40 years? it's ridiculous

Sep. 23 2010 11:17 AM
Norman from NYC

A principal has a right to quit (or retire from) one job and take another job.

Sep. 23 2010 11:17 AM

I thought it was a given that in the case of union and public sector workers -- slightly more generous benefits -- pension and health care -- were used to offset lower wages or wage increases. Once again, the middle class workers are pitted against each other and the very rich are immune from any social responsibility. It's so easy to get angry at what is perceived to be an advantage for someone else -- but so often it's just a perception not reality.

Sep. 23 2010 11:16 AM
Norman from NYC

What pension plan and medical benefits will Steve Malanga get when he retires?

Sep. 23 2010 11:14 AM
steven from brooklyn

When the economy was booming, public employees were the butt of derision for their lack of ambition and were led to think there was something wrong with them for not chasing millions in the private sector. Now that the economy is in the tank and pjublic employees enjoy security and solid wages, the are derided as being leeches. Both of these attitudes were shaped by a ruling class that wants to divert attention away from the true problems with our economy, then and now. Public servants were simply people smart enough to be tghe turtle in a hare society.

Sep. 23 2010 11:10 AM
Norman from NYC

I can't follow Steve Malanga's argument that the benefits of public employees are too high. What are the numbers?

If this is "wonk wars," why doesn't he cite his sources with footnotes, so that we can look them up to see if he's right?

Sep. 23 2010 11:10 AM
Ken from Soho

If you think that public employees earn too many benefits,then become a public employee!

Sep. 23 2010 11:10 AM
Edward from NJ

In terms of health care benefits for New Jersey public employees, we've got hundreds of municipalities, counties and the state negotiating prices with insurance companies. If all the public employees could be consolidated into one plan, the state would have tremendous leverage to set the plan pricing. Forces on both ends of the political spectrum won't let that happen. On the left, unions would object since health plans are often points of negotiation in contracts. The ideological right would likely call this consolidation a socialist move against the private insurance industry. Would either guest care to dispute that analysis?

Sep. 23 2010 11:03 AM
Barbara from Brooklyn

Most public employees (especially professionals) have chosen work in the nonprofit world over lucrative employment options in the for profit world. Many have traded off higher salaries for good benefits and 'relaible' defined contribution pensions. What has changed?
So now public employees deserve BOTH lower pay AND lower benefits? Everyone seems to forget that contracts are two-way agreements; State/county/city managers negotiated with unions to agree on the benefits that public employees and pensioners hold. The Taylor law was passed in 1967 (forbidding strikes). Society still has 'a social contract' with their dedicated public employees. Must the viscous soul-killing and disrespectful practices of the for-profit world now rule in the non-profit realm? Disturbing.

Sep. 23 2010 10:52 AM
T in Tarrytown from tarrytown

My husband has been working for the state, for a few years. He and his co-workers work under ever increasing pressure and caseloads. He has good benefits health and an actual retirement... but his salary is literally 25% of what it was in the private sector. And by the way, his retirement will be based upon that salary…. Is this really excessive?

Sep. 23 2010 10:52 AM
Gabriel from NYC

False. Public employees do not get too many benefits. The real issue is private sector employees do not get enough and the CEO's make way too much. Stating Public employees get too much is an attempt to divide the middle class and obscure the true enemy which is the super wealthy and their greed.

Sep. 23 2010 10:49 AM
Carol from Brooklyn

Again we are castigating the "rich" benefits of public employees while the income distribution in this country, and especially in this city, continues to show the destruction of the middle class. The top 1% of income earners in this country now earn approximately 25% of all income, and that is the highest it has been since the depression. But in NY state the top 1% earn approximately 35% of all income, and in NYC the top 1% earn an obscene 45% of all income. Yet all the pundits reject the idea that government might benefit more from those incredibly rich folks paying a little more in taxes to cover the costs of public services provided to those who are suffering from the destruction our wealthy brethren have wrought. Instead the services will be cut and the remaining decent middle class wages and benefits that some public employees earn should be cut further so the income gap can be even greater. I demur.

Sep. 23 2010 10:27 AM
RJ from brooklyn

I am continually amazed that we are engaging in a conversation that pits decently paid middle-class workers with benefits against poorly paid middle-class workers without benefits. The primary difference between these 2 categories of workers--and they fall into similar white- and blue-collar fields--is that the decently paid ones with good benefits are unionized. If the poorly paid (private sector) ones rectified that difference--i.e., unionized--their wages etc. would increase, as would the taxes they pay to maintain the levels of the public sector workers providing services *they want.* It would ensure the level of public service--first responders, sanitation, etc.--that *everyone* depends on. It certainly is easier to target the already stigmatized public sector workers for the imbalance than the seemingly untouchable corporations that need to be unionized, but it has been and can be done.

When an inevitable scandal hits over an abused child, we will then find out that the forced attrition of public sector child caseworkers once again overburdened them and made it impossible to give appropriate oversight. But the failure of the wealthy to pay an addition .07% in income taxes, say, or to pay their workers better so their taxes could pay more caseworkers will not be faulted. No, a few caseworkers will be laid off, several (cheaper) inexperienced ones will be hired in their places, and the cycle will continue.

Private sector folks: Please help yourselves and your communities out and find a union.

Sep. 23 2010 10:20 AM
Bill from New York City

It's amazing that we are talking about salary income at the levels of around $40,000 being excessive, and that we somehow think a retirement income of $25,000 after a lifetime of work--with health security thrown in for good measure--is extravagant. At the same time, nobody seems to blink at CEO salaries hundreds of times greater, where they are actually rewarded for wrecking the economy and shedding jobs in their companies. If we continue on this race to the bottom, the growing inequality of wealth in this country will threaten the very democracy we claim to cherish.

Sep. 23 2010 10:04 AM
rachel from stamford, ct

Development, real estate taxes & municipal salaries

What I find troubling about the situation is that no media outlet (that I know of) has pointed out the relationship between the housing market bubble and city workers pay and benefit packages. The town that I live in, Stamford, is not unlike many other places which saw quite frankly reckless development over recent years. As a home owner adjacent to a Mcmansion development, we watched closely property values of the lots (newly built and still unbuilt) next to our home. With each new 5000+ sq ft home went up it became clear to me that the city had a vested interest in allowing such developments because it increased the city tax revenues-the bigger the house the bigger the taxes. Further, the valuation of existing homes ballooned which gave reason for Stamford to do property re-valuations twice in the nine years I have lived here, the last time was in 2007 just before the housing market tanked. Some parts of Stamford saw as much as a 50% increase in their property taxes. What I feel has been overlooked as we try to take a closer examination of the burst housing bubble is that the municipalities were in on the money grab too. Now cities have to contend with the reality that they have overcommitted themselves by way of city workers pay packages. Many businesses have had to cut pay to their employees (or eliminate positions altogether) so why should a municipality be any different? Unions appear to be the stumbling block. I am friendly with several city workers in Stamford and have become aware of certain practices which exploit the terms of union contracts. One of which is purposely using up sick days so that the worker can take full financial advantage of overtime (which I believe pays time and-a-half). I have attended meetings for the city and find it particularly bothersome as a taxpayer that the terms and negotiations for these union contracts are handled behind closed doors. One local municipal union here has gone so far as to hire a public relations professional in an attempt to protect their image... and interests. No one wants to see a policeman, fireman, sanitation worker or teacher get mistreated. Most tax payers simply want to know that their tax dollars are being distributed equitably and fairly... no double-dipping.

Sep. 23 2010 09:26 AM
K from NYC

As a city employee, I earn wages not consistent with similar jobs of those in the private sector, with the expectation of a pension that I contribute to, and that reaps real "benefits" only after working for 25+ years. I pay into my pension, and pay an exterme amount of money for family health benefits. A majority of city workers are struggling, just like everyone else, which makes the current characterization of public employees so disappointing. Apparently since the gov't seems unable to manage/rein in private sector excess, they've now focused on civil servants.

Sep. 23 2010 09:19 AM
Jock deCamp from Nyack

At the risk of over simplifying the issue, public employees should be paid good competitive wages geared to attract quality personnel, the personnel should be expected to fulfill their job descriptions in an efficient manner and receive raises based on merit. Benefits should be pared back as far as the market will allow.
This would empower the worker to recognize the task at hand as the benefit of their future not their manipulation of the system.

Sep. 22 2010 11:49 PM
landless from 11201

How many public employees stay thirty years in their jobs? Thirty years with a single employer strikes me as very unusual. What percentage of current public retirees are getting sixty percent of their former salary. Staying thirty years means with a single employer also means giving up opportunities when other jobs paid more. I would like to point out that public employees often are in fields that don't have equivalents in the private sector: public libraries, fire-fighting, court administration. Maybe if we had more public employees in the SEC we could have audited those banks that cost us so much money.

Sep. 22 2010 08:30 PM
Esteban Rodriguez from Brooklyn

A study from the Economic Policy Institute shows, college educated public workers make significantly less than their private worker counterparts, even when factoring in all benefits (-25%).

With so many citizens in need of public support these days, we should look toward attracting the best and brightest towards public service.

Furthermore, we shouldn't be vilifying them because private workers trade higher up-front salaries for fewer due process protections, or health and retirement benefits.

We should actually be fighting for stronger benefits for all workers.

Sep. 22 2010 07:00 PM
Dwayne from Brooklyn, NY

The Manhattan Institute has come to a senseless conclusion. My mother spent significant time as an auditor for the City and as I grew older and older it became clear to me that for the same work, her standard of living was significantly lower than other CPAs working in the private sector. In the early part of the last decade, when we began looking at the marketplace, it was evident that people with her level of experience were making in excess of 2x her salary, and enjoyed perks like museum access, discounted theatre and cinema tickets, and so on and so on, in effect, subsidizing the lifestyle expenses of their workers in addition to paying them gobs more money. Turn me to this New York Time's data, let's examine it to determine whether or not it's truly exhaustive of the labour marketplace, and I'm sure you'll find what the previous commenter and I have to say is valid.

These people, public servants, make significant sacrifices in their livelihood in order to serve the people. In the case of Auditors, they're expressed job is to ensure that the city is properly funded so that it can properly function. As property values rise, these servants are forced to live outside of the city that they spend all their time taking care of. The pension benefits they receive currently are adequate compensation for those sacrifices. It'd be one thing that if they were being paid market, but they are certainly not. I'm tired of these free-market, anti-government, Ayn Rand acolytes spewing out nonsense about how to trim government to the point where it doesn't work effectively - and how to do it on the backs of people who've given their lives to make sure this city remains. The invisible hand, may touch all things, but if one is going to give up year-end bonuses, commissions, and the like, the least they can be allotted, is the ability to retire with dignity.

Sep. 22 2010 01:43 PM
Esq

I'm a public employee, working for the City. Despite having a law degree, my pay is embarrassingly low. I did a cost of living conversion to compare my current salary in NYC to my original Midwestern home, and the equivalent of my salary in NYC is less than what my mother earned in the Midwest, and she had only her GED. I had more disposable income when I was in law school, and don't feel that I'm in the financial position to live as a "grown up." I'm in my 30s and would not be able to afford to have a child. My employer pays based on number of years on the job (a job that includes nights and weekends). I don't pay anything for my health care, but with pay this low, I wouldn't be able to. I can't even afford the prescription drug rider. So no, I don't think we get too much. We don't get nearly enough. This is just my employer though. People who do my exact same job in Manhattan make *SIGNIFICANTLY* more (in fact their starting salary, fresh out of law school, is higher than someone who has been in my office several years, and they get regular, substantial, raises while we do not). So not only can you not generalize for all public employees, you also cannot generalize for people doing the same jobs in different boroughs of our fair City.

Sep. 21 2010 12:08 PM

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