Steinberg: Only ‘far right’ wants big pension changes. PPIC: 68% back shift to 401(k)-type accounts

According to legendary psychoanalyst Erik Erikson, a crucial stage of individual development comes from ages 5 to 13, as kids begin to develop complex interpretive skills and moral values and learn the importance of being industrious and serious of purpose. They leave childish fantasy, stubbornness and denial behind, adjusting to the world as it really is. Which brings me to Senate President Darrell Steinberg: Was he locked in a pantry from age 5 to 13? In asserting that only the “far right” want profound changes to public employee pensions, Steinberg is displaying a level of fantasy and denial more appropriate to a kindergartner than a powerful political leader. Yo, Darrell: A December PPIC poll shows 68 percent of the public backs switching new public employees to 401(k)-type benefits — including 64 percent of public employees!

This is from the O.C. Register account of the poll:

On changing the pension systems for new employees from guaranteed payouts (as we have now) to a defined contribution system similar to a 401(k) plan, 68 percent of adults said yes, and so did 64 percent of public employees.

In recent years, this public embrace of fundamental pension changes has been fueled by scandals, local and state budget crises, and envy. But a strong case for huge changes exists even without these factors, because a closer look at the rationales for taxpayer-punishing defined-benefit pensions for public employees shows they no longer remotely hold up,.

The old theory rationalizing the generous pensions was that they were necessary because public employees were paid so little they couldn’t save for retirement. USA Today and other journalistic groups have long since obliterated that claim:

The newspaper probe relied on 2009 data (that) showed that federal civil servants received average pay and benefits of $123,049 while private workers made $61,051 in total compensation. … federal civilian employees received an average salary of $81,258 and benefits worth $41,791. Private-sector workers got $50,462 in pay and $10,589 in benefits.

Officials from public employee unions and some economists dismiss the compensation comparisons. They say the gap reflects the increasingly high level of skill and education required for most federal jobs and the government contracting out many lower-paying jobs to the private sector.

Another report by USA Today focused on salaries alone. It compared the 2008 pay for 40 occupations that exist in both the federal government and private sector, as defined by the Bureau of Labor Statistics data.

Federal employees earned an average salary of $67,691 while private workers, in the same mix of jobs were paid an average $60,046. That’s a difference of $7,645.

And they got an average of four times as much in benefits. Similar studies at the state level have shown similar apples-to-apples gaps between public pay and the private sector.

So what have apologists for the pension status quo done? They’ve changed their main argument to the claim that government agencies would suffer a mass brain drain of talented employees if pay were frozen and benefits reduced for public employees. But this is bunk, as I wrote in 2009:

With the exception of law enforcement officers and a handful of niche positions, there is no market demand for public employees. Nor are these employees clamoring to leave. The Bureau of Labor Statistics reports job turnover is tiny in the public sector compared with the private sector.

The truth that’s waiting to be discovered is that public employee pay in nearly every category could be frozen for years, with new hires being given standard 401(k)-style private sector benefits, with no disruptions for local and state governments.

In Orange County, after its 1994 bankruptcy, de facto pay freezes were in place for years. Did county workers flee? No, not at all. Because there was no demand for those workers — and because even after years without raises, even in the booming late 1990s, county workers were content because their compensation was really, really good and they didn’t think they could do as well elsewhere.

Once all this is on the table, it becomes obvious that in California, public employee compensation is first and foremost a function of public employee union political power. It is not a coincidence that the most powerful political force in the Golden State is the California Teachers Association and that our teachers are the second-highest-paid in of any state.

Yet Steinberg says only the “far right” wants to change this sad state of affairs — this status quo that distorts how California is run to the benefit of government employees and the detriment of everyone else.

But then that’s what the former union attorney has to say if he wants to keep his job as one of the main tax collectors for the union state. Peddling fantasy and living in denial amount to job requirements for the president of the California Senate.

3 thoughts on “Steinberg: Only ‘far right’ wants big pension changes. PPIC: 68% back shift to 401(k)-type accounts

  1. As a teacher for LAUSD for 37 years, I am amazed that you still think
    most Californians favor the existing pension system. Even my
    colleagues realize the necessity for change, and our anger mounts
    as you jeopardize the our state’s future for your political gains.

  2. California needs to do more outsourcing of current state jobs, such as prison and prisoner management, school reform, distance learning, and a whole host of other areas.

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