State salaries, benefits not so ‘lavish’ compared to private sector

Posted March 06, 2011, at 8:27 p.m.
Last modified March 07, 2011, at 8:59 a.m.
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A common theme among those who favor changes in state employee compensation is that these workers are overpaid and their pension benefits too generous. A little perspective is in order.

A recent study found that public sector jobs require more education, but pay less than those in the private sector. The study was commissioned by the Center for State & Local Government Excellence and the National Institute on Retirement Security, so critics will argue that it is biased in favor of government jobs. That would be unfortunate, since it provides valuable data, rather than just anecdotes.

The report, which analyzed data from the U.S. Bureau of Labor Statistics, found that state workers earn an average of 11 percent less than their private sector counterparts. The gap has widened over the last 20 years. This, despite the fact that 48 percent of employees in the public sector hold college degrees, compared with 23 percent in the private sector.

Government pensions have been a focus of cuts — and anger — in Maine and other states. Such benefits typically make up a larger share of compensation for public employees than they do for those in the private sector.

Still, total compensation is nearly 7 percent lower for state employees than comparable private sector workers, according to the study.

David Cay Johnston, who won the Pulitzer Prize for his reporting on tax loopholes and inequities for The New York Times, writes in a recent online column that the conversation about government employees contributions to pension systems is skewed by a fundamental misunderstanding. “The ‘contributions’ consist of money that employees chose to take as deferred wages — as pensions when they retire — rather than take immediately in cash,” he wrote on the Tax.com website.

In other words, public sector employees often accept lower wages in exchange for other compensation, such as pension contributions and health benefits. When those benefits are later reduced, this compounds the inequity between public and private employees.

Further, it must be remembered that in Maine, employees who become vested in the state’s pension system forgo Social Security benefits, even if they’ve worked in the private sector. The state’s contribution to the retirement system is 5.5 percent of an employee’s salary. If the state paid into Social Security instead, the state’s share would be 6.2 percent.

This flies in the face of the “lavish” benefits decried by Tarren Bragdon, the head of The Maine Heritage Policy Center, a think tank with eight employees, who makes nearly twice what the governor does.

Certainly, Gov. Paul LePage is right that the state should reconsider its benefits and pension packages, especially in light of depressed state revenues. Raising the retirement age, especially when young people added to the payroll are expected to live much longer than current retirees, makes sense. Increasing employee payments for health insurance probably does, too.

But these discussions must happen in light of reality, not preconceived notions that state employees are paid too much or are greedy.

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  • Anonymous

    Isn’t it interesting that when we were discussion tax cuts, 250,000 a year was a measly income? Now, 50,000 is lavish.

    Fine if you want to put a tax on the state salaries, but put that tax towards their pension fund. If you are going to argue that it costs too much and there is a need to charge them more, then why is the money being funneled elsewhere?

  • Anonymous

    One of the higher costs for retirees is health insurance. It is not getting cheaper year by year and is not a common benefit offered by the private sector any more. Another factor is the pension fund was “raided” by prior Democratic legislatures to balance prior budgets. I read over Mr Johnson’s claims and he must have studied what they call “new math.” His “analysis” was performed on the Wisconsin retirement system. A better analysis was done by Robert Costrell published in the Wall Street Journal. (Again on the Wisconsin retirement system). If you continue with Mr Johnson’s train of thought one wonders who sold that bill of goods to the retirees. Maybe the union did it.

  • Anonymous

    I’m glad the so-called Maine Heritage Policy Center’s flim flammery is being exposed. This “think tank” is low on think as well as tank. In fact, no one can find the tank. It’s a Portland post office box with no street address. It is shared by a few overpaid charlatans who call themselves Directors when there are no employees under any one of their direction. Often they can not answer how the numbers they issue were arrived at. I strongly suspect that they are fed them by their Mother Ship the National Heritage Foundation. Check out that web site if you want the latest on loopy right wing ideas. Also, their funding source is double quiet on the down low top secret. Wonder why.

    Time to stop giving these jokers the publicity they are overpaid for.

  • Anonymous

    You do your best to keep your children healthy, but sickness and accidents are a part of life. Getting health insurance for your children gives you peace of mind knowing they have health coverage when they need it. Search one the web “Wise Health Insurance” for kids they are the best.

  • Anonymous

    What a crock of crappola. At the tail end of this
    article the real reason is finally given. It took a bunch
    of BS to get to it.

  • Anonymous

    Eliminate government unions!!

  • Anonymous

    They are NOT paid by the government though, as you apparently are! They actually have to be accountable.

  • Anonymous

    What some also fail to understand is that retirees pay deferred tax on those deferred wages when they draw them. If they take them out of the system early as a lump sum, they get only what they paid in (not what employer paid in for them) and pay taxes on it.
    Lyn

  • http://www.stcroixvideoproductions.com stcroixvid

    I have a question.
    Is it true if a teacher retires from the Maine State Retirement, and also under the “federal system” qualified for social Security that the State of Maine receives their (Federal share) Social Security Share?

  • Anonymous

    @ David Ha, if you can find any error in my column at tax.com it will be corrected forthrightly and immediately. BTW, you misspelled my name.

  • Anonymous

    Spambot.

  • Anonymous

    “But these discussions must happen in light of reality, not preconceived notions that state employees are paid too much or are greedy.” ~~~~BDN

    A couple things. No one is saying that state employees are too greedy except perhaps by implication the BDN. Otherwise there is no reason to mention that.
    The Unions may well be but for certain the average employee isn’t.
    Attacking the pay scale of a private group isn’t even relevant to to the issue and only further obfuscates the whole issue.
    The manner in which BDN decided to write this editorial betrays a political agenda and not a serious look at the pension and benefit system. And when the BDN decides to do that it makes all their data suspect.

  • Anonymous

    Your source may be correct when comparing government workers nationwide, however in Maine the scenario may be different because of the lack of industry here. Mr. Bragdon is actually comparing Maine’s work force not the national average. No one wants to see State workers go without but there is a limit to how much Maine taxpayers can afford. Most people I know in the private sector has lost money or stayed static for past 4 to 5 years if they have kept their jobs and they are thankful that they still have jobs. What Governor LePage is attempting to do is getting Maine to place where private industry will come to Maine and help us with the tax burden so we all can thrive not just the public employees.

  • Anonymous

    Did he touch a nerve shill?

    Like I said in another post. The BDN’s use of you data it an over-the top partisan way makes it suspect. You posting here confirms it.

  • Anonymous

    First: That public workers “defer” a portion of their salary for pension benefits is no different from the private world.

    Second: When labor costs outstrip the ability of a private corporation to pay for them, they either 1) cut payroll or 2) go out of business. Why should the private sector be any different? Why should raising taxes or borrowing more money be an option?

  • Anonymous

    @ MaineMaple, not at all.

    I forthrightly corrected errors. The writer claims I got it wrong (citing no evidence). But when someone asserts I erred, unlike most journalists, I inquire so that errors can be corrected.

    BTW, I’m a registered Republican so I am not sure where you get your idea that I am being partisan. Perhaps you should read my actual column at tax.com, which numerous economists from a wide range of political perspectives have all said is spot-on, a view joined by a number of lawyers and fellow business owners. Why? Because I accurately described the economics and the law in a column criticizing my former newspaper and others for not being skeptical and not getting the facts, and economic and legal concepts, right.

  • Anonymous

    Sure. Ah Hah. And the 17% raise and windfall pension booster that the President of the Maine Maritime Academy received in 2009, the year before he retired is just a preconceived notions that state employees are paid too much or are greedy. The first rule of conceptional holes is: “When your in one – stop digging”

  • Anonymous

    Sure. Ah Hah. And the 17% raise and windfall pension booster that the President of the Maine Maritime Academy received in 2009, the year before he retired is just a preconceived notion that state employees are paid too much or are greedy. The first rule of conceptional holes is: “When your in one – stop digging”

  • Anonymous

    Maine Heritage Policy Center’s research and conclusions are impeccable. The report cited by the BDN above seems very self-serving.

    MHPC has empirically determined that indeed, we have too many people on state payrolls, and their combination of pay and benefits is too high. One important point that the BDN fails to discuss is that for too many years, state employees jobs were absolutely secure. It has been extremely rare for state employees to ever face termination. This is an important reason for people to seek these jobs, and by itself is an enormously valuable “benefit”.

    For those readers who are interested, see the two excellent MHPC reports linked below.

    http://www.mainepolicy.org/2011/02/right-sizing-maines-state-government-workforce/

    “In 2009, Maine state government employed 5.51 people for every 100 people employed by the private sector—hereafter referred to as the “employment ratio.” Relative to the national average of 4.74, Maine’s state employment ratio is 16 percent higher and is the 21st-highest ratio in the country.”

    http://www.mainepolicy.org/2009/01/maine%e2%80%99s-state-workforce-is-too-big-and-overpaid-but-where/

    “In 2007, the average Maine state government worker took home $51,073, including wages, overtime and benefits. If Maine state workers’ compensation was at the average ratio of public versus private sector employees, it would have been $42,130. This over-compensation cost the Maine taxpayers up to $245,772,870 in 2007.”

  • Anonymous

    The political context the BDN put your data in makes it partisan not your political party affiliation. I was a registered Democrat until 2004,was un-enrolled until I joined the Republican party in 2010.
    If there is one thing I have learned about economists it is this. They are correct in their analysis about as often as a broken clock. Twice a day, then they are still unsure if it is AM or PM.

  • Anonymous

    Not sure who gets their share but they don’t get all of it. Ronald Reagan pushed through a 40% tax on earned social security benefits for Public Employees who receive a Pension. He did however leave the Railroad Pension plan alone.

  • Anonymous

    It’s almost like Maine has a smaller population than the other states and therefor has more public employees to carry out the same amount of required tasks. Why not compare it to states like Nebraska, Kansas, Idaho, and Wyoming with similar populations and Republican leadership? (Hint, in all of them over 16% of the population works for either the Federal or State governments, well over the Maine numbers).

  • http://www.stcroixvideoproductions.com stcroixvid

    I was told, if a person who retires from the Maine State Retirement, and who (Rep. Doug Damon) also qualified for Social security would receive an amount “off set” from maine State Retirement. I was probably told wrong that the State received all of their social Security. Maine, I understand is only one of seven states.

  • Anonymous

    Thanks for explaining that.

    To be clear, I am not an economist and my column was focused on journalists getting legal and economic principles wrong, not data, though there is some data in my column at tax.com

    And I share your concerns about how badly mainstream economics gets it wrong, a focus of my last bestseller, FREE LUNCH, and of my next book, THE FINE PRINT, both of which are about the value of competitive markets and how faux markets benefit a few at the expense of the many.

    Instead of relying on the BDN’s characterization, how about reading my column at tax.com:

    http://tax.com/taxcom/taxblog.nsf/Permalink/UBEN-8EDJYS?OpenDocument

  • http://www.facebook.com/people/Bekka-Koroski/646062800 Bekka Koroski

    I believe the federal government keeps all of the money that is offset when someone qualifies for both Social Security and a state pension. It was to prevent “double dipping”, although that makes not sense considering that the person has earned those benefits by working in the private sector.

    The state wouldn’t be able to receive the proceeds from the offset because they don’t pay into the system. It was a federal law to protect Social Security.

  • Anonymous

    David, thank you for responding in these pages.

    However, when contributing here, I remind you of the tried and true economic principle:

    “Never mud wrestle with a pig. It wastes your time, and the pig enjoys it.”

    Regards.

  • Anonymous

    Thank you for responding. I will read it. I had already had your website in my bookmarks and will revisit for your article.

  • Anonymous

    I was clarifying something he misunderstood about what I said. What exactly is your issue?

  • Anonymous

    Don’t snow you with valid statistics and facts, right?

  • Anonymous

    And you aren’t partisan?

  • Anonymous

    That is a really silly reason to argue to have more state employees. (we have fewer people therefore we need more on the government payroll.)

  • Anonymous

    I guess you’re a one-issue commenter.

  • Anonymous

    “Maine Heritage Policy Center’s research and conclusions are impeccable.”

    Impeccable? Really?

    “The report cited by the BDN above seems very self-serving.”

    And MHPC’s aren’t self-serving?

  • Anonymous

    You’re drawing the conclusion that Jason is somehow paid for by the government, how?

  • Anonymous

    Agreed. Flagged.

  • Anonymous

    In my opinion the BDN should be held to a higher standard than a common poster for both accuracy and keeping on topic. They are acting as a lap-dog for Democrats and can’t even be honest doing it.

    They give lip-service to all this talk about civility in public discourse yet are first ones to throw in irrelevancies and further anger and split people apart. These people are scum.

  • http://www.stcroixvideoproductions.com stcroixvid

    It can’t be, because Maine is only one of seven states that doesn’t allow
    their citizens to collect both. Bangor state Rep. Doug Damon is the one who
    told me this was the case. I think if you qualify and have paid into both
    you should get both.

    The reason I am asking is, I was told Maine pockets the money their citizen
    would normally receive. I probably have been given the wrong info, but
    someone should get the right information. There would be no reason for Maine
    to deny a person their benefits unless Maine gained.

  • http://www.facebook.com/profile.php?id=615646687 Linda Anthony

    Thanks BDN for yet again shining light on the topics that affect real Maine people! This helps the ill informed as well and helps them to see that perhaps there is a ray of hope for all Mainers and not just a few who are still gainfully employed in this state. I realize it boils some people into lashing out which is sad…they either don’t know what it means to get a piece of the pie or they already have a huge slice and want to keep it that way..not sure? But it isn’t all that bad. My college degree that I can’t afford to use in my field because the low wage in the social service arena has found me in a job in which a Union has enabled me to survive in this state where I was born and raised and I get to give it back to the community in which I live and to the state in which I live..nothing new under the sun. I feel bad for people who are struggling to make ends meet as I have to get here but even with the decent wage, I find that I need more income given the rise in costs. It’s doable but if there are more cuts to the workers…it’s unforgivable..we’re already carrying a burden and I earn more than a state worker does because my employer is for profit. Anyone reading this from corporate America should see if they have a few extra bucks in their wallets and put this nonsense to rest! It’s all the same: Corporate America = Union Buster causing dissent among the people one way or another…divide and conquer. Name it what you would call it!

  • Anonymous

    It’s called Economy of Scale, it is a basic economic theory. It is why a Hamburger is cheaper at McDonald’s than at Sea Dog. In larger states, there are fewer people needed per 1000 to carry out the tasks required to keep a state running than in a smaller state. It isn’t hard to understand.

  • Anonymous

    with you. flagged

  • Anonymous

    I believe is the question is to whom are they accountable? They refuse to answer that question thus making their motives suspect, particularly when they are weilding such influence in Maine p0litics.

  • Anonymous

    This is very helpful data, but it only gets to part of the picture. It is true that public employees generally earn less and have more income than private sector employees with equal skills. It’s also true, historically, that benefits were improved to compensate for that inequity and to attract good people. What this analysis is missing, though, is that what makes public pensions different cannot be understood simply by looking at dollars. Public pensions both allow people to retire earlier than private pensions and offer a defined benefit, which is guaranteed by the state. This is an approach that has largely been abandoned by the private sector over the last few decades. All of which is to say that if you only look at part of the equation you can make the argument that the overall pension and benefits plans of public employees are either too rich or simple compensation for inadequate pay. The truth is probably somewhere in the middle. Change needs to happen. The current system is unsustainable. But that isn’t really the fault of public employees as much as accommodating elected officials over decades. The fix should not, in my opinion, include breaking a social contract with current retirees. It should be forward-going.

  • Anonymous

    I understand full well economies of scale. I also understand that what the Sea Dog charges for a burger has a lot more to do with the quality of their product and the captive marketplace in which they operate than what they are charged by their suppliers. Are you saying the people of Maine are in a captive marketplace that must succumb to a bloated state government?

  • Anonymous

    I’m in the private sector and not paid by government.

    Was for a while though.

    Eight years, US Air Force.

  • Anonymous

    Sorry on the misspelling of your name. I had more concern about your methodology the the actual math itself. The Wisconsin Retirement site mentions that the state applies 10.4% to the state retirement system. Then they will apply 5% to the employees account, that was difficult to evaluate from your column. Now it would appear that employees are “forced” to participate at a minimum 5% level with “their” own deferred funds. Apparently not a a level that pleases the Governor of Wisconsin. The attempt to restrict bargaining by the unions is to forestall the attempt to “recapture” the pay.

  • http://www.stcroixvideoproductions.com stcroixvid

    If it was only “federal” than you would think it would apply to all 50 states. Like I said earlier I was told there is only seven states that can’t draw both. I would like to know if that’s true. Someone who follows this should know.

  • Anonymous

    Actually much of the difference is not a question of quality, but in the labor required as well as the cost from suppliers.

    In terms of the Maine State Governments economy of scale it is very simple. In Maine, one person may be able to serve every client for a particular agency, say there are 20,000 people. That same person in California may serve every client for their agency, but there are not 20,000 people but 500,000 people. There will clearly need to be MORE people per 100 in situations as this. It happens in every smaller state. Maine is not going to be able to repeat the efficiencies of larger states. We are much more efficient than most states of similar size. Really that is the best we can hope for.

  • Anonymous

    When Willie Sutton was asked why he robbed banks, his reply was: “because that’s where the money is.” If one wants to identify the least benefit for the most subsidized ripoff .. then one needs not to look any further than the MMA.

  • Anonymous

    I found your article very interesting.

    I agree with you completely about the misrepresentation of total compensation. That does not change the fact that at present funding levels the defined benefit pension plans are going to fail financially. We can try to assess blame, (and there is lots to pass around on both sides), or we can look at the problem objectively. However, looking at total compensation in this way obscures the details. It would be better for all if everyone had to report total compensation as gross wages and the full amount of all deductions, contributions, etc. were shown on every pay stub. Then people would have an accurate picture of their compensation and of the true cost of other things they are paying for.

    1. Defined benefit plans have an inherent problem. And that is the fact that promises made for the future are based on assumptions and guesses about the economy over the intervening years.

    2. Even worse are promises of paying a fixed percentage of health care costs in the future. A more financially realistic promise would be to pay a fixed dollar amount towards the cost of health care. And I do realize this means that there would be no guarantee of what percentage of those eventual health care costs would be covered.

    3. What the government employees, (and actually all members of any defined benefit plan), need to be told is the honest truth. And that is the fact that the unrealistic promised benefits cannot be given unless a higher percentage of that total compensation is paid into the pension plan. Either contribute more or receive less.

    4. The unions want government to simply increase taxes and increase their contribution to the pension plans however much is necessary to pay out the promised benefits. This would in effect be a gift to those unions, an increase in the total compensation paid to those employees, and an increase not even agreed to within the collective bargaining system. In the case of Maine and any other entity who has borrowed from those funds or failed to pay in their agreed original share of that total compensation then there is no legal or moral basis for not making up those payments. But not a dollar more.

    5. Using your own logic I believe social security and medicare are defined benefit plans. At the very least politicians present them as such. And they suffer from the same long term problems. They really are even worse since they rely on payments into the system to pay present benefits and nothing is actually invested.

    6. All defined benefit plans suffer from changes in demographics, another inherent flaw.

    7. The only system that avoids most of these inherent problems are defined contribution plans. The problem with these plans at present is that people do not contribute enough to them. All defined benefit plans should be converted to defined contribution plans and with enforced minimum levels of contribution to provide a minimal living standard. There should be no upper limit to the amount of income that could be put in these plans so people could provide for as lavish a retirement as they are willing to fund. Such plans would be transferable between jobs, (similar to social security etc.), and inheritable. There are multiple societal benefits to such a system. among other things is the fact that government would no longer control the money and because it would affect their retirement people would be much more critical of government policies that cause or even encourage inflation.

    I disagree with your assessment of economic efficiency. For one thing having all that money invested in various things would be a huge source of capital and would tend to hold down interest rates. Also, not every fund has those high costs associated with them. The huge amount of money would lead to more competition and force those costs down. Also, while government run funds tend to have lower costs associated with their management, (but not all have those lower costs), they also tend to have lower rates of return, often because of overly cautious management.

    Your argument about the higher education levels of public employees also ignores several factors.

    1. “Education inflation”. The practice of requiring a degree for a position even if it is not really necessary. I personally know one individual who works for the federal government who was told when he first applied for his position that he wouldn’t even be looked at unless he had his master’s degree. He got the degree and shortly thereafter got the job. As he put it, ” Anyone with a high school education could do my job easily.” Teachers often get their masters and even a PHD for no other reason than it is a guaranteed increase in salary. Most do not need these degrees to be effective teachers.

    2. The creation of government positions requiring a degree that either do not exist in the private sector or exist in small numbers. In particular, positions requiring degrees in public administration, social work, etc.

  • Anonymous

    Thanks for your post, which is thoughtful.

    My column — its a reported opinion column not an article — was foremost about the press misunderstanding basic economic and legal issues.

    All compensation systems raise issues. DC plans, for example, as my column notes, require each individual to possess investing skills that violate a basic tenet taught by the father of capitalism and market economics, Adam Smith. They also require each individual to reserve against a long lifespan, reducing current enjoyment of income by those who will die sooner rather than later. For a given outcome this will result in workers demanding higher pay to compensate them for this reserve, standard neoclassical economic theory holds.

    The Wisconsin plan, the one I wrote about, is 99,7% funded using the same standards that are applied to other pension plans. And this in a market so weak that when you adjust for inflatuion we are still behind 2000 (as are incomes and federak tax revenues, as nother of my columns at tax.com show).

    My point on higher education is not whether or not we need higher education for many government jobs, but that we do in fact hire people with higher educations. I think the benefits are obvious. For example, police violence has fallen significantly since we raised education and training requirements for officers. And money spent on advanced degrees means more crimes are solved through scientific investigation.

    Your post is mostly about your views, my column about my views based on sound, well established economic and legal principles, especially that all compensation is earned and there is no gift, actual or implicit, in the compensation of Wisconsin state workers, whose pay is set by contract.

  • Anonymous

    Take a course in logic, yesman. Your blubbering praise for MHPC is entirely void of it.

  • Anonymous

    What, an compare apples to apples? Now that would make too much sense.

  • Anonymous

    “Certainly, Gov. Paul LePage is right that the state should reconsider its benefits and pension packages, especially in light of depressed state revenues. Raising the retirement age, especially when young people added to the payroll are expected to live much longer than current retirees, makes sense. Increasing employee payments for health insurance probably does, too.”

    That’s as valid as it gets. Trying to make it appear that everyone
    hates public employees is BS. Then again, when some group comes
    out with “valid” numbers that appeal to you, they are valid only then.
    All the others are bogus I would suppose.

  • Anonymous

    It becomes clearer your obsequent obeisance to the liberal left is a faint to make your bowing and scraping to the cretains of creation appear elegantly egalitarian.

    Don’t understand this poetic post? Try this:

    http://www.merriam-webster.com/

  • Anonymous

    Just re-read my post. Did I really write “faint”? Of course, as a highly literate individualist, I meant “feint”.

    By the way, “Atlas Shrugged Part I” debuts on April 15. This film has been 40+ years in the making and is not to be missed! The debut occurs upon a highly appropriate date, indeed!

    http://www.atlasshruggedpart1.com/

  • Anonymous

    “But these discussions must happen in light of reality, not preconceived notions that state employees are paid too much or are greedy.”

    But why let the light of reality get in the way of a greedy push to take more from the workers, the middle class, in the state and the country?

  • Anonymous

    Rand’s misguided belief that the “producers” of society, the architects of industry, the so-called job creators are a special class of people deserving of all the tax breaks, bonuses, income, and assets and are the true individualists that move the world forward is a myth. The bitter, not very good author alienated nearly all of her followers at the end of her life for not being individualistic enough, which says a little something about her psychosis.

    The celebrity appeal of entrepreneurs in our society because of their success is hardly a substitute for what they actually do to benefit or not benefit the people they use to rise to their positions. A thief is still a thief whether he wears Armani or a hooded sweatshirt, baggy pants, and tacky bling. Saints come in all manner of apparel as well.

    The problems is not the producers, nor are they the solution. The problem is giving them too much credit when credit is not due. Intense scrutiny is what is warranted because they have lost all sense that their positions are not because they are a special class of individual. They bleed like everyone else when punctured. They forget that.

  • Anonymous

    I’m amused that your taking an active interest in what is posted here. You may find that some agree, or disagree with you adamantly. What you don’t see is the majority that don’t fall into either camp. Those that take your comments, weigh them against any number of others and come to an informed opinion. I’ve stated before, I’m more apt to listen to grievences if tenure is ended, and we able to see clearly who the deserving are. The benefits aren’t the issue. The upside down practices of promoting and pay increases are the real cuprit. As long as this continues, any respect I have for the teaching proffession in particular, will be tempered with mistrust.

  • Anonymous

    Nice editorial and the conclusion is right on.

    You are correct The Center for State & Local Government Excellence and the National Institute on Retirement Security are both of ,by, and for the improvement for goverment workers and biased in that direction. They wouldn’t use anecdotes, of course, but they could maipulate data in favor of whatever direction they prefer.
    For example, is job loss and unemployed private sector workers factored in? Is it left out completely? Are the partially employed considered? Job loss isn’t nearly the problem for public sector jobs as it is for the public sector. If only employed private sector employees are counted, we get a skewed picture in favor of public employees.

    Incidently, who cares that the employees of the Maine Heritage Policy Center make twice as much as the governor makes. As long as they are not paid with my tax dollars they can be paid four times more than the governor. Aren’t they private sector?

    As you say, the discussions should happen without notions that state workers are paid to much or greedy. Well, no more greedy than me, you, or the rest of the world

  • Anonymous

    HOWBRI- Just howdo you propose that the MAINE HERITAGE POLICY CENTER has to be accountable to anyone? Their job is to put forth ideas and push the agenda (mostly lies) of corporate billionaires.
    Why does someone have to be paid by the government to voice the opinion that these people are a bunch of lobbyist liars.
    Get off the republican koolaid and if you are a working person in this state, dont think for a minute that these people are here to help you

  • Anonymous

    If that’s the case. I say we upgrade their pay to equal that of the private sector and let them pay into, and retire on SS. Taking the pension issue out of the equation. For some reason, I think we’d get a fight.

  • Anonymous

    “DC plans, for example, as my column notes, require each individual to possess investing skills that violate a basic tenet taught by the father of capitalism and market economics”

    True, most individuals do not have great investing skills. But a DC plan does not have to be administered directly by every individual. It could be set up so that the money had to be placed within an approved list of financially institutions. People would be given estimates of the return they could expect when they retire based on realistic, conservative rates of return. Not the pie in the sky rates used now.

    “They also require each individual to reserve against a long lifespan, reducing current enjoyment of income by those who will die sooner rather than later.”

    Correct. And I would say that would be a good thing for society as a whole. In fact necessary.

    “For a given outcome this will result in workers demanding higher pay to compensate them for this reserve,”

    Very true. That does not mean the free market will give them what they demand. Balance will be achieved. Educating people to the realities of how they must save now for their retirement later for the system to be sustainable should help to cure people of their present unreasonable expectations.

    “The Wisconsin plan, the one I wrote about, is 99,7% funded using the same standards that are applied to other pension plans. And this in a market so weak that when you adjust for inflation we are still behind 2000″

    Absolutely. You have just verified the basic inherent problems with defined benefit plans. The problems I pointed out and you choose to dismiss. Defined benefit plans will never overcome these built in problems.

    There are two ways to think about this. One is that the state’s contribution is part of the employees total compensation package. If so then the state has NO moral or legal obligation to contribute more and if the pension fund goes bankrupt trying to pay out more than it can afford then so be it. The other option is that the state has a legal obligation to deliver a particular level of retiree benefits no matter what. This would mean that the concept of total compensation is fluid and that in effect an employees total compensation would change over time. The real effect is to require the state to increase that total compensation far above the planned for level. The only way to make this work is with massive layoffs and tax increases to make the books balance over time.

    “My point on higher education is not whether or not we need higher education for many government jobs, but that we do in fact hire people with higher educations.”

    You choose to ignore the fact that the higher education levels are not necessary for many jobs.

    “I think the benefits are obvious.”

    No, they are not obvious. In most cases they are assumed. And you choose to ignore the negative consequences that offset the benefits. Such as the fact that by hiring people with degrees and education that is not actually necessary for the job government is artificially increasing the cost of providing the services those people provide.

    “police violence has fallen significantly since we raised education and training requirements for officers.”

    You are assuming a cause and effect relationship between these things. They could just as well be a simple correlation related to a different factor or multiple factors. The police violence could be related to the nature of crime the police are dealing with such as the reduced level of drug gang violence. Or simple to new procedures and standards police follow. Or a reaction to a harsher crack down on police violence by the courts.

    “Your post is mostly about your views, my column about my views based on sound, well established economic and legal principles, especially that all compensation is earned and there is no gift, actual or implicit, in the compensation of Wisconsin state workers, whose pay is set by contract.”

    I agree, my post is about my views. Views based on different assumptions than yours. And that is where I disagree. I believe your views are well though out and show a consistent use of logic. But I disagree with some of the premises your views are predicated upon. So I reach different conclusions.

    The very fact that the pension system is generally in chaos and is in trouble financially almost everywhere is proof enough that while your views may be based on well established economic and legal principles, the soundness of those principles is an entirely different matter.

    The paradigm shift away from defined benefit plans started years ago as private sector plans failed one by one, often helping to take their parent company with them. The public sector is the last bastion of these unsustainable dinosaurs.

  • Anonymous

    Upholding negotiated benefits, pensions or healthcare in a signed contract would be a “GIFT TO THE UNIONS”? Gee, for a while there I almost thought you were going to say something worth reading.

  • Anonymous

    Believe me, the level of respect and trust that the teachers have for you, that feeling of distrust, is very mutual. But dont let that bother ya, they only take care of our kids all day.

  • Anonymous

    And I watch them like a hawk.

  • Anonymous

    You watch the teachers like a hawk?
    Glad you have time.

  • Anonymous

    Again, I am not really in need of a lecture on economies of scale. I get it. ( you lost the burger argument, give it up) “But this is the government and like any organism its nature is to grow.” This is not my statement but that of an liberal Orono public official. I would add to his statement: Governments nature is to grow beyond the means of the taxpayer to feed it. We need to starve this sucker for a while.

  • Anonymous

    And that would cost you more. The state would match the SS which is more than they are paying into State Retirement now.

  • Anonymous

    Well if you say I lost, I must. I mean you are the one who keeps trying to compare Maine to states several times it’s size. You seem incapable of actually understanding why we would have more than the national average despite us having far fewer per capita government employees than Republican controlled states of the same size. The national Average for similarly sized states is 7.28 State employees per 100 employees Maine is t 5.51. We have a very lean government in comparison. We have some of the most poorly compensated state employees on top of it. If there is room to starve the beast you need to look somewhere other than the Public Employees.

  • Anonymous

    I’m not even sure what your saying.. You don’t think that teachers should be hired, fired, and promoted on merit? If not, then I can only assume your a teacher. Time on the job doesn’t indicate whether my children are safe with you or not by the way.

  • Anonymous

    I know what “this article” says, not so sure I believe it.

  • Anonymous

    You are right. You dont have a clue what I am saying and no I’m not a teacher. Lets make it simple for you: The more animosity you and others show for teachers, the more they dont like you much either. Not a good thing when we want them to take good care of our kids all day.
    Get it now?

  • Anonymous

    You are wrong. MANY people are saying that state employees are greedy. The corporate patsys have got the masses thinking these people are off touring the Middle East and driving Porsches.
    I think the BDN is actually just trying to put things in perspective before the Maine Heritage Policy Center and the rest of the swine start advocating public lynchings.

  • Anonymous

    While I do not know the reasoning for the raise of the ex President for MMA, Maine Maritime is still probably one of the best bargins the State can have for education. The average wages for graduates and the rate of employment is well above average. That means increased tax revenue for the State along with goods and services bought in the State, not to mention a well educated, motivated group of individuals that this State needs to move it forward. Yeah, not every graduate lives or stays in Maine but there is still a large alumni representation here.

  • Anonymous

    Scuse me. I have no animosity for towards teachers. And by the way, are the teachers you know so petty that I should be concerned for the welfare of my children if I have a disagreement with them? If you know someone with that capability it should be addressed. If not, then your comlicit. Oh, I “Got ” what you are insinuating.

    DID YOU?

  • Anonymous

    Dont start giving me legal advice. If you read what I wrote you will see that I was not talking about you personally or your kids. If you think that there wont be a backlash from teachers when half of the country is badmouthing them and trying to take away their negotiated benefits and take even their right to a seat at a bargaining table then you must be dreaming. All this can turn a real concerned teacher maybe into one that just does the bare minimum. I dont think its a good idea to beat on people who watch and teach our kids. And by the way, most teachers are not paid just by time on the job and I think there is alot of focus on “if they deserve it”. And also: I think you do have animosity toward teachers

  • Anonymous

    So the BDN wants us to believe that the “statistics” quoted by the Center for State & Local Government Excellence and its director Elizabeth K. Keller, who is a fellow at the International City/County Management Association, is unbiased and truthful? This coming from a former community relations specialist who has worked in government her entire adult life?? I wonder if the BDN would be so quick to accept statistics provided by BP regarding oil and gas drilling safety? Or statistics from a fox on hen-house safety for that matter?

  • http://www.facebook.com/people/Walter-Kumiega-III/100001341460281 Walter Kumiega III

    The pension fund was created by a Republican Legislature and underfunded from the start. The last big ‘raid’ on the fund came during the McKernan administration, does anyone remember his party affiliation? This partisan crap is pretty useless. The State has problems and we have to fix them. We need to look at facts, not ideologies and work together.

  • Anonymous

    Clear, respectful and engaging, you both get stars.

  • Anonymous

    Well,,, I can see you certainly have plenty of animosity.

    Any teacher that would take anything out on the children in any way is despicable as far as i’m concerned. I’ve said on here several times, I think a good teacher should be paid more then what they are being paid. Although you can’t grasp the concept, TENURE is responsible for many decisions regarding pay raises, and promotions. To believe otherwise shows your ignorance and the fact that you buy what CERTAIN people are saying without the facts. Do some research before you decide to post high and mighty uneducated comments online.

    It seems what’s being asked isn’t beneath federal employees. I don’t hear them complaining that they’ve been taken back to archaic times and practices. Why isn’t it good enough for state empoyees? What i’m reffering to is the fact that those same rights aren’t afforded members are federal employee unions. I thought I should spell it out for you because I suspect you weren’t even aware of that fact. YOUR TEACHER ISN’T TELLING THE ENTIRE STORY, JUST WHAT THEY WANT YOU TO HEAR.

  • Anonymous

    The only animosity I have is toward the republican koolaid drinkers who have been lead to believe that all the problems have been caused by public servants. You think that it would be right to take away their right to collectively bargain and I contend that without collective bargaining, all workers would be worse off while the corporate pigs would force the middle class into non existence.
    Tell you what, I’ll write what I want to write and you dont have to read it. Anyone who doesn’t agree with your idiotic crap is ignorant I guess.

    By the way, I still think you are lying, you definitely have some animosity toward teachers.

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