Thursday, July 23, 2009

California public employees and the 'envy' factor

SACRAMENTO, Calif., USA - It's a tough time to be a state worker in California. In addition to being forced to take three days off per month without pay (a 15 percent pay cut), public respect seems to have slipped even lower than it was before the current budget crisis.

And to read The Sacramento Bee newspaper, it seems as if the pensions paid to most state employees (through the California Public Employees Retirement System) represent an evil as least as threatening as global warming, or perhaps a temper tantrum by Korea's Kim Jong-Il.

At the heart of all this is a tremendous shift in thinking, resulting in an envy that is devouring some people. Certainly more than a few people at The Sacramento Bee newspaper, a likely candidate for bankruptcy later this year.
  • McClatchy Heads for the Cliff

  • Just a few years ago, friends of mine who were heavily invested in the stock market and/or 401K plans crowed about their early retirement plans, how wealthy they were (or would be) and what chumps those of us sticking it out in the public sector were with our defined-benefit retirement plans.

    Fast forward to this year, and those same people are scrambling to cover the costs of their health care (doubled and tripled in some cases). They are also trying to get back into the workforce because their earnings from the stock market and/or 401K plans have tanked so incredibly they can't get by on what they are paid out. (Not a good time to be 60-plus and looking for a job by the way.)

    And who are these folks mad at? Their financial advisors who said everything would be fine, leave the money in the market? The folks who helped create the house-price crash through shaky mortgages? The U.S. corporations who have been sending jobs offshore for years?

    Nope. The problem is public workers and their damned pensions.

    In The Sacramento Bee, the favorite adjective lately when public employee pensions are mentioned is 'lavish.' Public pensions are always portrayed as lavish, though The Bee doesn't bother to publish any numbers supporting the contention.

    What is published is usually dollar figures for a high-profile case, where it can be argued a person has gamed the system and gotten a public pension that seems extreme. What The Bee always fails to mention is that the employee had been contributing significantly to that retirement while working. What The Bee does is give the impression that every dime some fire captain gets in retirement is stealing money from current taxpayers' pockets.

    Envy is such an ugly thing.

    It's certainly an arguable point that public monies have been mismanaged in recent years (as have the monies of the McClatchy Corporation), but to keep trying to make out public employee pensions as the root of all evil - without bothering to prove it with numbers - is unconscionable.

    State workers stick around despite the public's abuse (and now a pay cut) because there is some security and a relatively secure pension at the end of their employment.

    Take that away, and what's left of deteriorating public service in the state is likely to start getting even worse.

    But in the meantime, if you have to visit a Department of Motor Vehicles office (or the offices of another state agency), leave a little extra time. Between the furlough/pay cut, the public's incessant hammering and most recently all the talk about going after pensions, the workers just might be a little touchy.

    With good reason.

    1 comment:

    1. Michael, The analysts predicted McClatchy's quarterly report would result in 8 cents loss per share, as reflected in the article you linked. Earnings were actually reported of 50 cents per share, on the positive side, and the stock started climbing again.
      There's also another media blog that reports McClatchy is the most likely company to come out of this year in good shape.
      Who knows? I hope the company survives. Too many good people get hurt otherwise.