Tuesday, February 16, 2016

Robert Fellner: Pay Gap Widens Between Public, Private Workers

Mod: We hear a lot of noise around town these days from certain parties on the topic of public employee pay. Especially now when they're discussing the kind of compensation the likes of the Sierra Madre Police Department is pulling down. Folks that, when you throw in their very generous benefits, overtime pay and CalPERS, somehow receive far more than what their private industry counterparts are being paid. They also believe they deserve to make even more than that. Fortunately for us there are articles like the following from Robert Fellner (link). It remains to be seen if the voters in Sierra Madre will be able to deal with this.

Pay gap widens between public, private workers - The call for government to enact “share the wealth” policies is growing louder, thanks to a recent Brookings Institution study on rising income inequality.

But this demand rests on a fallacy: that the amount of wealth is fixed, by which one profits at another’s expense.

The exact opposite is true, of course. Income generated in the marketplace — based on voluntary purchases and mutually-agreeable salary negotiations — is a positive-sum game, where both sides gain.

Indeed, the benefits of this wealth-creation process — an abundance of continually improving consumer goods alongside an increasing standard of living — have become so commonplace that they are often taken for granted.

There is one group, however, that actually does enrich itself at the expense of others: the government.

Median government wages have long exceeded those in the private sector — mostly due to occupational differences between the two groups. But that gap has exploded in recent years.

New U.S. Census Bureau data reveals a 43 percent increase in the pay gap between local government workers and their private, for-profit counterparts. That’s comparing median earnings of full-time, year-round workers for the 2010-2014 period against the previous five year period.

Nationally, the median private worker saw their earnings fall an inflation-adjusted 3.32 percent, down to $42,437, while local government earnings increased 0.87 percent to $49,444.

In other words, even though many private workers took a hit during the recession, government wages continued to rise. Almost certainly, that’s the result of multiyear contracts with guaranteed rates of pay, regardless of what hardships befall those responsible for bearing the cost.

In California, the disparity was even harsher: private earnings fell 3.59 percent, down to $45,028, while local government earnings increased 1.66 percent to $62,286. The resulting local government pay gap — 38 percent above private earnings — is over twice the 16.5 percent national overage.

Median earnings for public workers at dozens of cities — like Escondido ($78,602) and El Cajon ($84,508) — were over twice ($36,620 and $41,592) what residents earned, according to 2014 data from TransparentCalifornia.com and the Census Bureau.

In El Monte, California’s poorest residents paid for the state’s highest-compensated city worker: In 2014, former Police Chief Steven Schuster cashed in unused leave to boost his total pay and benefits package to $634,181, while the median full-time, working resident earned only $24,419 — the lowest of any California city surveyed by the Census Bureau that year.

Certainly, higher wages for all is a worthy goal, but clearly that’s not what’s happening. For government workers in these areas, it’s coming, quite literally, at the expense of those already struggling.

This mindlessly reflexive push for higher government pay — even while the rest of the community struggles — is something California teacher Harlan Elrich would “never support.”

And so, unable to legally opt out of paying dues to an organization with conflicting values from his own, Mr. Elrich is one of 10 California teachers currently petitioning the Supreme Court for that right.

Undoubtedly, many other government workers feel the same way. So what is driving such an inequitable outcome?

The culprit lies in mandatory collective bargaining laws — like those found in California — that force public agencies to contract with government unions. Such coercive statutes give government unions excessive leverage in negotiations with their ultimate employers — the taxpayers and the general public.

Notably, within the 28 states that mandate collective bargaining for local government workers, the average state’s median government earnings were 18.6 percent higher than private sector earnings. That’s more than triple the 5.5 percent overage in the states without such laws.

Making matters worse, the cost of a growing government pay gap is amplified by retirement plans that can cost up to 20 times more than what private employers pay.

While the median private employer contributed a maximum of 3 percent of pay toward their employees’ retirement accounts, the San Diego City Employees’ Retirement System cost taxpayers a staggering 60 cents per dollar of pay in 2014.

Based on a fundamentally flawed premise, wealth redistribution schemes ultimately harm the very people they are designed to help.

Instead, elected officials should lighten the burden that ballooning government pay imposes on those least able to afford it.

Riding the bus makes you healthier. No, really!

Mod: One of the more bizarre claims being made for taking the bus.



Sure. Bus riding increases physical fitness and mental health. 

sierramadretattler.blogspot.com

67 comments:

  1. Of course riding the bus makes you healthier. Think of all the health benefits gained from running to catch that bus that is pulling away from the curb, and then having to walk several blocks to your actual destination because the bus route goes nowhere near where you need to be.

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    1. Not sure about the mental health claim. Bus Stops nowheres near where you want to go drive most people crazy.

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    2. That's why it's called a bus and not a taxi.

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    3. It is also why you'd have to be nuts to take one.

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    4. I used to take the bus -late at night. A higher risk than a tour of Afghanistan -but w/o the body armor!

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    5. But you were saving the planet!

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    6. It's mainly people who are not able to afford a car,insurance,gasoline, maintenance,elderly,and youth that use busses not all of us are born into the entitled classes.

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    7. 1:59 "higher risk than a tour of Afghanistan" try telling our boys that have died or come home maimed for life, or their families that. Certainly are a lot of stupid people here today.

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    8. Are they physically and mentally superior to non-bus riding people?

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    9. 5:31 - the poster that has so incensed you was making an ironic joke. Instead of being angry say "Ha! Ha! Ha!" Then people will think you have a sense of humor.

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  2. The Sierra Madre Police Dept has priced itself out of its host city. Small city PDs are an endangered species, and what is happening here is hardly unique.

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    1. They wouldn't be endangered if they were a fair price, competent and honest.Sadly none of those very basic virtues apply to SMPD.

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  3. Thank you for this valuable information, I hope it is okay that I bookmarked your website for further references.

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    1. Sure, Larry anytime!

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    2. Lawrence. Thank you.

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    3. You're welcome.

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  4. In the long run local government employees pay is beginning to out strip the state and national pay scale average and contributing to excessive tax increase on those local governments to pay for these over priced in so many expensive ways. To off set excessive salaries in days of old incentives such as retirement and medical were the perks dangled in front of perspective employees now all three have peaked to the point of serious danger to local governments.

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    1. Danger to local governments? Perhaps you mean danger to taxpayers?

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  5. And here I thought it was all about when you fell in love with Sierra Madre.

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  6. If you want your neighbor to be allowed to build a new 1322 square foot home with out building permits, vote for Johnny hardbedian for president or ask him to leave cc office. Just think, little John is a lawyer, woopee

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    1. John Harabedian supports resident rights to exercise.

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    2. And cook in the kitchen.

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    3. Councilmember Harabedian is also an art lover.

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    4. Cooking up scams and the art of lies for his 'chosen' ones?

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    5. Harabedian has some photoshop skills

      spell checked questioned Harabedian and gave me this alternative "harebrained"

      spell check doesn't know Harabedian but got him right

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  7. Notice how we are always told that if we don't increase the UUT all these vital services to the residents will have to be cut whether it's police response times, senior services or access to the library. What they never mention is the excessive salaries, benefits and pensions for the public employees. Ask yourself if you want to keep working harder and retire later so that our "public servants" can retire at at 50 with 90 percent of their salaries, cost of living increases and often full medical benefits. I for one and not willing to pay for this scam so I never vote for any tax. No matter how worthy the cause, all it does is free up more money for higher salaries, benefits and pensions for the public employees. I hope more people will see through this. We can't trust our politicians to stop this because all they want is campaign support from the unions and to keep the peace during their time in office.

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    1. Please blame the council several years ago who voted to have a City Manager and a public employee union in Sierra Madre. Now that it is here, we either need to pony up, or change the method of governing in the City. There is no other choice, can't reduce the salaries nor can we change the benefits without union negotiations.

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    2. unlike the private sector, there is no one in the public sector to challenge the unions, so it's carte blanche to whatever it wants

      the public sector employees in charge of negotiating with the unions are those that directly benefit from the negotiations

      when Calper's collapses, why are we gonna be stuck with some pension bill that was fraudulent in design and plan to begin with?

      welcome to the real world government employees, spend that money on a new Mercedes, you didn't earn it and I'll be glad when you lose it

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    3. We can outsource and the public unions can't do a thing. Buh-Bye!

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  8. An Arcadia fireman just came to my door warning me of the disastrous effects that would happen should I vote to repeal the cities UUT. The ONE QUESTION he COULDN'T answer was WHY THE TAXPAYERS HAVE TO COVER THE LOSES SUSTAINED by CALPERS POOR PENSION INVESTMENTS for people retiring at 50. The funny thing was he couldn't run away faster. Check out TransparentCalifornia.com to see OVER 50 Arcadia workers making well in excess of $200,000K. Yet somehow, NONE live in the city they profess to care so much about!!

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    1. The poor thing was singing for his supper.

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    2. Was he using a city vehicle or driving his $120,000 camper bus?

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    3. One of the vague claims about firemen is "risking their lives..." .I know a couple of F.D. guys who worked construction and both claim that construction was far more dangerous & arduous .Most F.D. work is training ,hanging around,squirting water from a safe distance.
      Does anyone have any OSHA stats on injury/death rates of being F.D. or a self employed carpenter?

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    4. I think a lot of the safety services worship we see today comes out of the 9-11 era. Undoubtedly there were some great heroes in that tragedy, but the fire and cop unions ran with the mood of that time and won some of the huge financial successes that are killing small cities today.

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    5. If true, (and I suspect it is!) that is shameful exploitation by the F.D. and grounds enough to stop the bloat?

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    6. Risking their lives? Fighting fires is what they signed up to do. The name fire fighter kind of describes the job.

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    7. Was the firefighter knocking doors in his uniform? That would be illegal.

      And he sure as hell better not have been on duty.

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    8. Arcadia has good reason to repeal the UUT taxes. Have you seen the Taj Mahal being built on Santa Anita just above Huntington. I think that is Rusnik Auto. They also have other car dealers, a large shopping center, and the racetrack. Plenty of tax monies coming in. Something that Sierra Madre doesn't have.

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    9. Yes it's easy to criticise firefighters till your home is on fire, or the mountain is ablaze, or you need medical attention. It's a dangerous job and when you need them and they respond and you are saved you have parades and are buddy buddy. You annons in this thread sure have short memories.

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    10. Yes. In Arcadia pay $250,000 a year in compensation or we'll let your house burn down.

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  9. What is Elaine's salary before benefits?

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    1. http://transparentcalifornia.com/salaries/2014/sierra-madre/elaine-aguilar/

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    2. That is total pay and benefits. Salary alone is $173,134.61.

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    3. There should be an across the board pay cut to all City employees!
      It was expressed to the Mayor once, and he said it couldn't happen.
      We now know why. Because of the Government Unions. Government
      Employees are the new Royalty.
      Sierra Madre is Elaine's serfdom. In this case down with the
      City Manager!

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    4. Sierra Madre is nearing insolvency.

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    5. No, its near to the mountains (of pension debt)

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    6. Elaine's entire salary is a benefit

      can she be sued for malfeasance?

      the union apparently doesn't have enough money to defend her and of course the city would be stuck with the ludicrous task of defending her and protecting her pension

      btw, how many former city managers, PD officers, etc do we have on the pension payroll?

      what's the value to us, the ones paying it?

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  10. We are not alone.
    Read Pasadena Star News, page 1 below the fold : " Repeal of a utility users tax...". The reporter -Claudia S.Palms may find the Tattler an interesting insight to this issue ? South Pas has the same issues we have with City emplyee bloat,Police Dept bloat,Calpers. The City Manager claims to have a mandate from the residents to keep the bloat. Sound familiar? Also claims that any economies would require a cut in Staff - Duh !
    I hope the UUT crusaders in South Pasadena are inspired by reading Tattler and that the next time Ms.Palms/Pasadena Star News writes on the UUT subject she mentions the success of Tattler and Earl Ritchie in progressing the debate?

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    1. South Pasadena already rejected a petition to put a UUT repeal on the ballot. Their city attorney firm? Theresa Highsmith, the same person that Sierra Madre uses.

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    2. The UUT crusaders in South Pasadena, Arcadia and Sierra Madre are all driven by the Pasadena TeaPac whose mission it is to abolish all taxes possible. They are using Sierra Madre residents for that end. If you look at the Sierra Madre Budget you will understand that the city cannot be sustained on 6% or no UUT. Go to the Sheriff's if you want, it still cannot be sustained - we still have to pay the sheriff, or a library contract for that matter.

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    3. Cities need to band together and sue Calpers to get out of it, Calpers can't defend itself and it's business practices

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    4. wah, wah, wah.

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    5. Obviously there a still an SMPD officer or two that hasn't quit yet.

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    6. 3:29P The Tea Pac is not supporting much in Sierra Madre. The only way you can get the city to take a look at what they are doing is to not give them any money and not allow them to pay librarians 157,000.00. Yes, the UUT is needed. But not if it only gets spent on salaries.

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  11. The mistake a lot of local governments are making is that they refuse to recognize just how angry people are right now. They think they can slide by with the usual smarmy BS. Won't work this time. If you are a city employee, or an elected official, and you are not on a 24/7 truth offensive? You will be very disappointed in April. The old nonsense didn't work in 2012 and 2014. How can you be daft enough to believe it will work now?

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    1. From your daffy Sierra Madrian: I voted twice against the UUT raise, but there is no denying it now, the city is in a world of hurt financially and needs at least the 10% to balance the budget next year. Truth hurts sometimes, but you all need to face it. The police department not withstanding, even without it, funds are needed for our infrastructure. The UUT cannot be placed in a special fund, it needs to go into the general fund. So, when budget time rolls around, get yourself down to city hall and demand the UUT money be spent on Infrastructure.

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    2. I work very hard to make a living.
      Until city hall cuts some of the ridiculous salaries and benefits staff receive, I will vote no no no.

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    3. sorry 2:37, if the pension plan was fixed we'd be in good shape, I'm not interested in pay more for taxes because the primary problem is not being addressed - when the streets have 1,000 potholes maybe those who are ignoring or don't care about issues will wake up and see that we are being hoodwinked by public sector unions and executive level management and those we elect to Council

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    4. I am amused that we need to increase the UUT from 6% to 10% in July becuase of "infrastructure." The City didn't do squat with the 10% they had for several years except blow it on garbage like a "Public Safety Director" aka Police Chief but with a $20,000+ pay raise and fatter pension.

      No, no, and hell no.

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    5. If you are working so hard why are you playing on line @ 3pm? Kinda cutting your nose to spite your face. You must be a Government worker.

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    6. mr. 2:37, what have you seen that makes you think the city will apply any of the uut increase to infrastructure as opposed to what they the city says it is going to spend the money on: the police department and the need to fund increased salaries for staff.

      in fact, the mayor and the super select public safety commission have already indicated that the 10% uut will itself be only barely sufficient to meet the salary and other things necessary to keep our smpd in place.

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    7. The UUT increase is a CalPERS tax. Residents will see absolutely no benefits.

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  12. Thank you for noting the benefits of bus travel.

    Apart from fully funding competitive salaries for all the new police officer we will be stocking SMPD with, I suggest we apply some money from the new UUT increase to creating a transit hub and bus stop in town. To complete the picture we should pack in some multi story condos so people can live close to the transit hub.

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    1. Yes. Sacramento and Hasan Ikhrata know what is best for us.

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