Though I saw it all around
Never thought I could be affected
Thought that we'd be the last to go
It is so strange the way things turn

Sunday, February 20, 2011

The Assault on Public Employees and Unions

Some food for thought regarding the Wisconsin Troubles. (Grokked from Janiece)

Some more food for thought, I don't know about Wisconsin, but here in Ohio public employees (teachers, street workers, etc) don't qualify for Social Security. Instead they have their pensions though STRS or PERS. For my time working for the Village, Soc. Sec. is not deducted, but we pay into PERS. When I leave, I'll pull my money out (all $1-2000 for 10 years of work) because in Ohio, if you accept PERS/STRS you can't receive Social Security (even if you earned benefits through private sector employment), and if you accept Soc. Sec. you can't receive PERS/STRS payments (at this point you forfeit the money, also you don't qualify for their medical insurance). In our case, we'll get my Soc. Sec. (if it's still intact) and the pizza money STRS will pay my wife (in case I should die before then, she will inherit my Soc. Sec. and will need to make a decision when she retires). The same for medicare.

So before you get all righteous about "they get so many more benefits than we do," understand that you aren't getting the whole picture. Some of the benefits you get, they don't.

When you go into financial planning sessions for retirement you'll hear about the 3-Legged Stool of Retirement; your 401k/pension, savings, and Social Security. In case you haven't been paying attention, most people only have 2 of those, and in some cases only 1 (Social Security). Public sector employees only get 2 to start with, and given their lower than private sector payment, mostly it's just the pension (as is the case with many of my neighbors).

It's a trade off.

5 comments:

Random Michelle K said...

Here in West (by God) Virginia, state employees pay SS taxes and FICA and all that, and many of us have a retirement plan instead of a pension, into which way pay as well as the state(employee contributions to retirement are mandatory to 3%, but you can pull out more than that, which I do.)

We also pay for a portion of our health insurance.

I'm perfectly fine with all that, and in fact prefer TIAA-CREF to a pension.

Let me explain that last bit: In West Virginia, coal mines and steel mills were the big industries, all of which came with pensions, and these workers often sacrificed wage increases to have better pension benefits.

Except that all these mines and mills went out of business, and so those sacrifices came to nothing.

Like most other areas, working for the state means you get crap for salary, but you've got a decent health insurance plan, aren't treated like crap, and have job security. Plus, chances are, you're doing something you enjoy or believe to be important.

You take away one of those things, and we begin to wonder, "why am I working for crap wages when I could make so much more in the private sector?"

WV is still fine--in fact we've remained in decent shape throughout the economic downturn, but it's an ugly position to be in, if your state economy is in the crapper.

Me? I'm more than willing to keep working for the state. I've got good health insurance, decent job security, no one is forcing me to work 80+ hour weeks, and I enjoy the work I do. But you change one of those things? I'd consider leaving.

Anonymous said...

Interesting - I didn't know that my husband is ineligible for SS because he's in PERS. I've got a pittance in STRS that's not likely to go up (my employment is with the high school team I coach, not through the school district.)

Did you see the video of Gov. Chris Christie of NJ talking to a state employee (trooper? I'm not sure) where he lays it out pretty clearly. Can't find the link, but if you want it, I'll try to track it down.

And, flashback to our discussion about high-speed rail:

I found this while looking for something else (know anything about private military contractors?) and I don't know anything about the site, its POV or the writer yet, but I think it sums up several of the issues about high speed rail that must be addressed before the people are going to get on track with it. I don't say that it can't happen; I know the Eisenhower administration had to sweat bullets to get the interstate system built(and it's used in this article to justify not building HSR.) Anyway, enjoy.

http://www.newgeography.com/content/002063-obama%E2%80%99s-high-speed-rail-obsession

Anonymous Cassie

Steve Buchheit said...

Michelle, that's good to know. And that's part of the trade off, it pays worse but you get better benefits.

Cassie, check the pay stubs for the PERS and STRS work, you'll notice no SS is deducted. When the PERS people come around again (it's been about every two years lately because of the shifting benefit levels and retirement plans), have him ask about it. I haven't heard that they changed the rules lately.

Also, the gas tax has long been not able to meet the needs of the highway system, which is why there has been discussion about raising them. The longer we delay, the greater the start up costs will be (his argument about the "explosion of costs" since 1999). And the costs of the rail systems in other countries has been bandied about (again, it depends on what you include and what you don't include). And much of the argument is based on an underlying theology of "if it were profitable, private investment would already be building it". And since he likes to "follow the money," he only needs to see what interests are funding the move against rail.

It's a logic fallacy. Businesses lobby government to build their infrastructure all the time, and to eliminate their tax burden, etc. The best thing our village did was pay to install water and sewer lines alone a road we wanted industrial development on. We tried to get industry to expand the road, but none were interested unless we extended the water and sewer, the road, and electrical service.

We'll see where the argument goes when gas is over $4 and air travel doubles cost this year.

Anonymous said...

I know that Hubby Darling doesn't pay SS. Neither of us qualify for SS right now (but his pension through PERS is fully funded as he hit the 30 year mark last year) but we've talked about me getting a job that would bring in SS, if by some miracle it's still around. The $20 the school system put into my STRS retirement fund 1991 is still less than $30. Beer money?

As for the train - I'm failing to see the fallacy you're pointing out. Once more, please?

AC

Steve Buchheit said...

Cassie, just did a full post on the SS/OPERS/STRS thing. The law has changed, so you might qualify for SS, however it'll be reduced by your pension benefit. You might want to examine that before working to get another benefit that you might not receive.

As to the logic fallacy, sorry, rewrote several times and moved that line to where it didn't make sense. There's an underlining logic fallacy that if something was really worth doing (in a business sense), some private business would already be doing it. Ergo, anything the government needs to start isn't profitable or necessary. It's the underlining fallacy that will sink most libertarian dreams. Businesses are constantly negotiating with governments to build their infrastructure (as well as waive their tax burden for land development) or pushing costs onto the adjacent land owners (who, after all in their minds, will also benefit from the improvement, however much they need to be assessed for the improvement).