Tag Archives: Pension

News

Rhode Island superintendent fires entire staff at unionized public school

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Story here on Business Insider. (H/T Hot Air)

Excerpt:

A school superintendent in Rhode Island is trying to fix an abysmally bad school system.

Her plan calls for teachers at a local high school to work 25 minutes longer per day, each lunch with students once in a while, and help with tutoring.  The teachers’ union has refused to accept these apparently onerous demands.

The teachers at the high school make $70,000-$78,000, as compared to a median income in the town of $22,000.  This exemplifies a nationwide trend in which public sector workers make far more than their private-sector counterparts (with better benefits).

The school superintendent has responded to the union’s stubbornness by firing every teacher and administrator at the school.

ECM sent me this article about New Jersey earlier this week, which ruined my entire Monday.

Excerpt:

One state retiree, 49 years old, paid, over the course of his entire career, a total of $124,000 towards his retirement pension and health benefits. What will we pay him? $3.3 million in pension payments over his life and nearly $500,000 for health care benefits — a total of $3.8m on a $120,000 investment. Is that fair?

A retired teacher paid $62,000 towards her pension and nothing, yes nothing, for full family medical, dental and vision coverage over her entire career. What will we pay her? $1.4 million in pension benefits and another $215,000 in health care benefit premiums over her lifetime. Is it “fair” for all of us and our children to have to pay for this excess?

The total unfunded pension and medical benefit costs are $90 billion. We would have to pay $7 billion per year to make them current. We don’t have that money—you know it and I know it. What has been done to our citizens by offering a pension system we cannot afford and health benefits that are 41% more expensive than the average Fortune 500 company’s costs is the truly unfair part of this equation.

And from CNSNews.

Excerpt:

Time.com reported last week that Office of Personnel Management Director John Berry estimated the government shut down cost taxpayers $100 million a day in labor that workers were unable to perform. That would suggest that the four and one quarter days the federal workers missed last week cost taxpayers about $425 million–close to the $445 million calculated on the basis that federal workers average $79,197 per year in salary not counting benefits.

The federal government was officially shut down on Feb. 8, 9, 10, and 11 and opened for business two hours late on Feb. 12.

Federaljobs.net’s Damp told CNSNews.com that not all of the more than 340,000 federal employees stayed home on those days. Some of these workers are designated as “essential” employees and are supposed to show up even when the weather or other conditions closes the federal government. These include, for example, law enforcement officers, key personnel with the Federal Aviation Administration, and workers who are needed for national security reasons.

“But I think it’s safe to say most of the workers did not go to work,” Damp said.

When non-essential federal workers are told to stay home because of a government shutdown, they still get paid, according to the Office of Personnel Management.

And also from CNSNews.

Excerpt:

State and local governments spent $1.1 trillion on employee wages and benefits in 2008. That’s half of what those governments spent overall.

And while the private sector job market remains bleak, there are more civil service jobs than ever. The federal Labor Department projects wage and salary employment in state and local government will increase 8 percent by 2018. That’s a comforting thought for anyone who has to spend time in line at the DMV.

Wish we could be as confident about the prospects for creating new corporate and manufacturing jobs to help pay for these new hires.

It’s not simply the number of new jobs that costs taxpayers. It’s that these government jobs pay more than ever. The U.S. Bureau of Labor Statistics reports that state and local government workers earn almost $40 per hour in wages, salaries and benefits. That’s more than 25 percent higher than the combined compensation of the average private sector job ($27 per hour).

One of the things that weights most heavily on my mind is the outrageous pay and benefits that are paid to public sector union employees. I am in the private sector and I have to pay these exorbitant salaries to people who have probably never worked a day in their entire lives! I have never had a moment’s peace in my career – the threat of layoffs has been a constant since I was doing internships during my undergraduate days. And I have two degrees in computer science!

Look, I’m a child of first generation immigrants, and I’ve been volunteering since I was 14 and working since I was 16 in high-tech. How can it be that people who cannot even teach children successfully can make so much money? It just is not fair, and I find it very depressing that I am paying for these layabouts. It makes me want to give up trying to do anything! The fact that Obama keeps raising public sector salaries in a recession does not help. And Obama opposes school choice, too.

I say abolish public sector unions, and abolish bailouts to private sector unions, too.

News

Moderate George Will loves Paul Ryan’s plan for economic recovery

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Rep. Paul Ryan

Editorial from the Press Telegram. (H/T ECM)

Excerpt:

Ryan would eliminate taxes on interest, capital gains, dividends and death.The corporate income tax, the world’s second highest, would be replaced by an 8.5 percent business consumption tax. Because this would be about half the average tax burden that other nations place on corporations, U.S. companies would instantly become more competitive – and more able and eager to hire.

Medicare and Social Security would be preserved for those currently receiving benefits, or becoming eligible in the next 10 years (those 55 and older today). Both programs would be made permanently solvent.

Universal access to affordable health care would be guaranteed by refundable tax credits ($2,300 for individuals, $5,700 for families) for purchasing portable coverage in any state. As persons under 55 became Medicare eligible, they would receive payments averaging $11,000 a year, indexed to inflation and pegged to income, with low-income people receiving more support.

Ryan’s plan would fund medical savings accounts from which low-income people would pay minor out-of-pocket medical expenses. All Americans, regardless of income, would be allowed to establish MSAs – tax-preferred accounts for paying such expenses.

Ryan’s plan would allow workers under 55 the choice of investing more than one-third of their current Social Security taxes in personal retirement accounts similar to the Thrift Savings Plan long available to, and immensely popular with, federal employees. This investment would be inheritable property, guaranteeing that individuals will never lose the ability to dispose every dollar they put into these accounts.

Ryan would raise the retirement age. If, when Congress created Social Security in 1935, it had indexed the retirement age (then 65) to life expectancy, today the age would be in the mid-70s. The system was never intended to do what it is doing – subsidizing retirements that extend from one-third to one-half of retirees’ adult lives.

My last post on George Will is here: Moderate George Will lauds the virtues of Michele Bachmann. He’s actually quite moderate, not at all a conservative, so this is very interesting.

ECM also send me this article from the American Spectator.

Excerpt:

Ever since his back and forth with President Obama during last week’s question time at the Republican retreat, Rep. Paul Ryan’s “Roadmap for America’s Future” has been gaining attention as a plan that the Congressional Budget Office has projected would actually solve our nation’s long-term entitlement crisis.

[…]“The lower budget deficits under your proposal would result in much less federal debt than under the alternative fiscal scenario and thereby a much more favorable macroeconomic outlook,” CBO writes in page 14 of its analysis of the Ryan plan.

CBO projects “real gross national product per person would be about 70 percent higher in 2058 under the proposal.” But after 2058, the CBO’s model completely breaks down when trying to project current trends, “because deficits become so large and unsustainable that the model cannot calculate their effects.” By contrast, the model shows the Ryan plan continuing to achieve economic growth in the decades that follow. This is demonstrated by the CBO chart below.

So the CBO is backing up Ryan’s calculations.

News

Are public sector union employees paid too much?

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From the Competitive Enterprise Institute. (H/T ECM)

Excerpt:

The most recent BLS release on employee compensation (issued December 9, 2009) states that, during September 2009, “[p]rivate industry employer compensation costs averaged $27.49 per hour worked,” while, “[s]tate and local government compensation costs averaged $39.83 per hour worked” — a difference of over $12.00 an hour.

Moreover, a greater proportion of public employees get benefits, and they get greater employer contributions.

[,,,]And still that’s not all. As Don Bellante of the University of South Florida, David Denholm of the Public Service Research Foundation, and I note in our Cato Institute study on the topic, another benefit unionized government workers get is job security unlike any found in the private sector.

[…]Even worse, the greatest costs associated with public sector unions often do not become apparent for many years, in the form of pensions.

There’s a lot more here. It’s a nightmare. I try not to sound too upset about it, but it really is bad. Speaking as a private sector employee, I cannot afford ME and adult day care for government-employees who aren’t even accountable to their customers.