JerryK wrote this in a comment a couple of weeks ago:
Stop payments into City retirement funds (that are underfunded anyway) and convert employees’ equity into annuities. Subsequently make annual contributions into employees’ IRA accounts so they are on a level playing field with the private sector that has largely abandoned pensions. Contribute what we can afford, like the private sector.
If any of us have to participate in the social security system then I believe that all of us should have to.
The pay that our government employees receive should compensate them fairly while they are working. Pension plans should be eliminated.
We deserve better
In order to accomplish this you would need to make sure that public unions could not threaten to “vote for the other guy” any time these types of discussions are in play.
Teacher, Fire and Police unions vote for people who give them, among other things, generous pension plans. Any time they don’t like something, they strike.
There is no benefit to the taxpayer in having public sector unions. They should be banned. The taxpayer is not running sweatshops, forcing anyone to work 20 hour shifts against their will or beating people who refuse to work for low wages.
There is, literally, no good reason for public sector unions to exist.
” participate in the social security system”
Jerry K is proposing a defined contribution plan (IRA or 401k) not social security.
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Yes, I see no mention of social security in his proposal, so why are y’all going off at that tangent? As for there “literally” being no good reason for public sector unions to exist, I have to take exception. Government entities never pay as well as private sector employers, even in the high management positions. So, they have to make up for that in offering better benefits, which almost always means a better pension plan. Without unions, you would be slaving your unknown life – whatever you do – away, and that includes government jobs.
John, your comment was true in the 70s and 80s, but not true anymore. Public sector wages have risen much faster than the private sector. Yes, people can point to high profile CEOs in multi-billion dollar companies with huge paychecks, but that isn’t true in most companies even at senior levels. Government employees are paid far better (and have better benefits than the private sector, particularly in the higher level positions). Most public sector administrative employees in El Paso would take a pay cut if they moved to the private sector because they likely wouldn’t have the skills and competencies needed to be hired at the level they can rise to in a public union-protected environment. They also get far better deals if they are fired for cause. But public sector employees propagate the myth that they are underpaid. The reality is that we all have choices. In the private sector, if you don’t like your compensation, you move elsewhere for better pay. You roll over your 401k and you still have retirement planning in place. If turnover is high at your former employer they increase compensation because employees leaving is a sign they need to do that. That’s how a healthy economy should work. In a unionized public sector job, your retirement vesting plan locks you into that employer for 10-20 years. Unions and politicians conspire to keep mediocre employees and politicians in place using the voting bloc power and pension fund as negotiating tools. No truly competent employee needs to “slave their live away” because they can always take a job elsewhere. My grandmother taught me that when I whined about the pay at my first private sector job after college. I believe her comment was something to the effect of: “if you feel you aren’t paid what you are worth, find someone who will pay better. If no one wants to pay you what you think you are worth, figure out what skills you need to acquire to get a job that pays that well.” Btw, she was a high school dropout who moved to an executive level in fashion merchandising in Miami on the strength of that philosophy at a time when women weren’t in the executive suite in that career field.
A key factor in the public versus private sector employment debate is that there are no layoffs in the public sector except on very rare occasions. You can begin a job at the city and expect to retire in it 40 years later. That does not exist anymore in the private sector.
Also, in private-sector jobs there are usually very objective performance criteria, like sales and profits. That does not exist in the public sector which is not to say that there are not performance criteria.
I have held two very responsible positions with the city in the last 15 years. I can honestly say that, among the city’s Senior Management, I met some of the best managers of my career. You want to see s*** for brains managers? Work in the Silicon Valley tech sector for a while like my former wife and I did.
Jerry, I did work in the Silicon Valley tech sector for six years. Your comment is correct for Silicon Valley, but not for other parts of the country where there is a higher percentage of established businesses growing the management skills in their region. But, looking at inefficiency I’ve seen in government here in EP over the last 20 years, I’m not sure I agree with your assessment of local management competency. There may be pockets of good management, but overall problems seem to take a very long time to be identified and corrected. Look at recycling. How long were they paying penalties from the recycler before they initiated an education campaign to tell residents that the guidelines for acceptable recyclables changed because China was changing what they’d buy? I think the problem festered for more than a year before it was addressed. That is just one example. The phishing incident with the street car situation was another example. Checks and balances were overridden to pay those funds. Competent managers don’t do that. And, no one got punished for it.
I actually have a small State of Texas pension, and I’ll have to put myself forward as proof against your statement that “Unions and politicians conspire to keep mediocre employees and politicians in place.” For one thing, if a Union for Texas State employees still exists, you should know that it is very weak, and virtually useless. As for keeping any employee in place, you should be aware that the State of Texas became a “Right to Work” employer under W, and from that moment on, no employee can feel that their position was safe, because they can and do let people go with no reason given.
You are confusing “Right to work” meaning you cannot be compelled to join a union as a condition of employment, with “at will” meaning an employer need not provide a reason for employee termination
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Anyone who is opposed to government employees having representation should also oppose public executives like the city manager being represented by personal attorneys who negotiate rich multi-year contracts for the executives. That also costs taxpayers even more money because the city ends up having to pay outside attorneys to negotiate with the executive’s attorneys.
I agree with you 100% and in most cases in the private sector employees at senior levels do not have attorney-negotiated employment contracts. Typically they have an agreement that outlines compensation and benefits, but there is no set term or guarantee that those benefits won’t change. And in EP we waste additional money by giving key public sector leaders raises not guaranteed by the contract. The point of having a contract when you are an employer is to lock that employee into a negotiated compensation package.
At the lower wage levels, people under contract stay a few years and move on to something with better benefits. That leads to one person after another knowing very little about what they’re doing, undermining efficiency and providing inadequate service to the public. With the contract system we are teaching people to just add to their resume. If the employer doesn’t care or invest in the employee why should the employee care or invest in their job responsibilities?
Once again, I stand corrected. Tim C. points out that Texas – as an employer – became an “At Will” employer under W. It is also a Right to Work state. Either way, employees have not protection against being dumped whenever the employer wants to dump them.
If you’re one of the highly paid executives like Gonzalez or Cabrera, you have protection and a golden parachute because you have a rich multi-year contract negotiated by expensive attorneys. You on the other hand have no guarantee that the city will deliver services for the taxes you pay.
Actually, John, competency is great protection against being dumped (and in staying continually employed if a layoff occurs). The guys that have no protection are the ones that feel an employer owes them a job and are resistant to job assignment changes. We live in an era where technology shifts alone are going to eliminate jobs and leave some people who are resistant to change behind. No one is guaranteed a job. It always amazes how people who spent most of their time working in the public sector have such a issue with that concept. The average person will have at least 12 employers in their lifetime, according to BLS studies.