Some industries are still growing - PeachParts Mercedes-Benz Forum

AustinsCE · #1 02-19-2009, 02:31 PM

The leeching, parasite sector is stronger than ever!

http://www.forbes.com/forbes/2009/0216/078.html

Quote:

Don't let anyone tell you the American dream has faded. the truth is the U.S. is still minting lots of millionaires. Glenn Goss is one of them.

Goss retired four years ago, at 42, from a $90,000 job as a police commander in Delray Beach, Fla. He immediately began drawing a $65,000 annual pension that is guaranteed for life, is indexed to keep up with inflation and comes with full health benefits.
Goss promptly took a new job as police chief in nearby Highland Beach. One big lure: the benefits.

Given that the average man his age will live to 78, Goss is already worth nearly $2 million, based on the present value of his vested retirement benefits. Looked at another way, he is a $2 million liability to Florida taxpayers.

"When I got the job at 21, I knew it was a dangerous profession but that I'd be rewarded on the back end," says Goss. Even so, he adds, "The benefits back then weren't anywhere near what they've become today."

The problem with this picture is not Glenn Goss. By all accounts he was a good cop. The problem is that there are millions of Glenn Gosses from Highland Beach to Honolulu. So many that they pose a vast, debilitating burden to state and local finances.

They're creating a nasty social problem as well. America, in case you hadn't noticed, is dividing into two nations. The 22.5-million-strong public sector (that includes retirees) is growing ever larger, and enjoying ever greater wages and benefits often guaranteed by state constitutions.

In private-sector America your job, assuming you still have one, hangs on the fate of the economy. If your employer ever offered a pension for life, like young officer Goss is receiving, odds are it has stopped doing so, or soon will. Those retirement accounts you scrimped and saved to assemble? Unless they are invested in Treasurys, they aren't doing too well. In private-sector America the math leads to the grim prospect of working longer and living poorer.

In public-sector America things just get better and better. The common presumption is that public servants forgo high wages in exchange for safe jobs and benefits. The reality is they get all three. State and local government workers get paid an average of $25.30 an hour, which is 33% higher than the private sector's $19, according to Bureau of Labor Statistics data. Throw in pensions and other benefits and the gap widens to 42%.

For New York City's 281,000 employees, average compensation has risen 63% since 2000 to $107,000 a year. New Jersey teaching veterans receive $80,000 to $100,000 for ten months' work. In California prison guards can sock away $300,000 a year with overtime pay.

Four in five public-sector workers have lifetime pensions, versus only one in five in the private sector. The difference shifts huge risks from government to private-sector workers.

NYC socked away $20,000 per employee last year for pension benefits. Since 2000 its pension funding bill has risen ninefold, from $615 million to $5.6 billion in 2008. That's more than the city spends on transport, health care, parks, libraries, museums and City University of New York combined, says the Citizens Budget Commission.

These benefits are so sacrosanct, and such a source of union power, that labor bosses have turned them into the third rail for NYC politicians--touching them is suicide. That goes for the benefits not only of existing workers but of future ones as well.

"We have far less to spend on core services, such as public safety, education, parks and senior centers," Mayor Michael Bloomberg wrote in December of the city's pension costs. "That defies common sense, and it's hurting our city."

Despite its huge contributions, New York City's five pension plans had only 74% of what actuaries said a year ago they need to pay future benefits. The recent financial meltdown lopped another 30% off the funds' value. If markets fail to roar back, taxpayers will have to save the day. After all, public pension benefits are enshrined in law. Don't you wish your 401(k) was?

Around the nation states, cities and their workers typically kick in a set amount to fund defined benefit pensions. The remainder, it is assumed, will come from investment returns of 8% to 8.5% annually. Often, however, the kitty comes up short.

The recent market meltdown erased $1 trillion from municipal pension funds, Boston College's Center for Retirement Research figures. That has left the average public plan 35% underfunded. With benefits inexorably rising, the shortfall will balloon to 41% by 2013 if stocks and bonds stay at current levels, representing an unfunded liability of roughly $1.7 trillion, according to the Boston College center.

That's a lot less than Social Security's $11 trillion unfunded liability. But the feds have lots of wiggle room to lessen their burden by, say, raising the age at which you become eligible to draw benefits. Most public employees' benefits, by contrast, are set in stone.

"The tax hikes you face [to fully fund public pensions] will have a much more tangible impact on your financial life than anything a Social Security fix will entail," says Alicia Munnell, who runs Boston College's retirement center.

Cops and firemen initially were granted early retirement because their work was physically demanding and they tended to die young. These days they live as long as everyone else, but early retirement lives on for an ever expanding pool of public workers. So do liberal disability rules. Nevada law 617.457 decrees that heart disease among uniformed safety workers is job-related. The medical reality, says the American Heart Association, is that a fireman gets heart disease from diet, lack of exercise or genes, not from dashing into burning buildings. Still, veteran Las Vegas firemen hobbled by heart disease can collect an inflation-protected $40,000 a year for life on top of their pension. That applies even if they're healthy enough to work in another occupation.

DieselAddict · #2 02-19-2009, 02:50 PM

Average wage doesn't tell the whole story. Certainly much more money can be made in the private sector.

History has shown that when the public sector prospers, the private one will prosper as well, and vise versa. After all there are a lot of private contractors working for the government, and with the stimulus bill passed, that number will likely increase.

JollyRoger · #3 02-19-2009, 03:05 PM

What is the solution? Will we have to gas them?

$20-$25 an hour works out to 42K-52K per yr, I would hardly call that extravagent, and the math is rather suspect since the vast majority of wage earners in the US are cooking a hamburg concoction of some sort, so I would expect the average pay of the private sector, which prefers Mexican citizens over our own whenever the opportunity presents, something the public sector cannot do, so I would think that a properly weighted statistical study would show they get paid about the same. Perhaps I have just struck upon the ideal solution: we can hire Mexican Nationals to work as municipal workers, that should even the score.

AustinsCE · #4 02-19-2009, 03:12 PM

I wuuuuvs the gubomint, but I can't wead the awticle!

SwampYankee · #5 02-19-2009, 03:15 PM

Quote:

Originally Posted by AustinsCE

The leeching, parasite sector is stronger than ever!

http://www.forbes.com/forbes/2009/0216/078.html

I'm trying to talk my wife into becoming one once the youngest is finally off to school. Wages aren't bad but the benefits are amazing compared to what I'm getting and paying out of pocket (premium + copays) for myself in addition to the company's portion for healthcare and retirement. Can't beat them, might as well join them.

DieselAddict · #6 02-19-2009, 03:26 PM

Yup, govt employees do get the best health care benefits. Which is why I'm kind of puzzled why some people are so against offering those benefits to the private sector as well.

pj67coll · #7 02-19-2009, 03:29 PM

Quote:

Originally Posted by JollyRoger

$20-$25 an hour works out to 42K-52K per yr, I would hardly call that extravagent, and the math is rather suspect.

I'm wondering about that myself. I'm a pubic sector employee. Have been ever since I arrived here eight years ago. I'm making 16 an hour after eight years with zero prospect of increase in the medium term and not much more in the long term. And that's if I still have a job next year. I don't know of anyone around me making near what this article states.

- Peter.

DieselAddict · #8 02-19-2009, 03:33 PM

Quote:

Originally Posted by pj67coll

I'm a pubic sector employee. Have been ever since I arrived here eight years ago.
- Peter.

I'm not familiar with the pubic sector. Tell me about it.

pj67coll · #9 02-19-2009, 03:43 PM

Quote:

Originally Posted by DieselAddict

I'm not familiar with the pubic sector. Tell me about it.

It's where you get paid by the government to be unproductive

- Peter.

Dee8go · #10 02-19-2009, 04:17 PM

I've known a lot of double-dippers. I used to think I was the smart one, saving and investing my money in the "private sector." Now, I'm not looking so smart anymore. My 401K and two IRAs were decimated by this recent financial meltdown and working on commission in an economic downturn like this is really tough.

DieselAddict · #11 02-19-2009, 05:44 PM

Quote:

Originally Posted by Dee8go

I've known a lot of double-dippers. I used to think I was the smart one, saving and investing my money in the "private sector." Now, I'm not looking so smart anymore. My 401K and two IRAs were decimated by this recent financial meltdown and working on commission in an economic downturn like this is really tough.

I'm glad I haven't started my 401K plan yet and instead used the extra cash to pay down my mortgage debt.

tonkovich · #12 02-19-2009, 08:52 PM

that article is designed to turn laborers against each other (public vs private) what about all the pension plans of managers (public and private) ??

Botnst · #13 02-19-2009, 09:15 PM

Quote:

Originally Posted by tonkovich

that article is designed to turn laborers against each other (public vs private) what about all the pension plans of managers (public and private) ??

Lets turn managers and pensioners against each other instead.

450slcguy · #14 02-19-2009, 09:20 PM

And people complain about Unions. How about some outrage about public
sector pensions and benefits. Guess who's paying for their support checks and benefits.

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