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The guy mowing the grass at the park may not look like Public Enemy No. 1, but politicians and pundits, from Gov. Arnold Schwarzenegger to the army of talking heads at Fox News, would like you to believe he’s a major threat to our future. After all, the parks department guy—along with your child’s kindergarten teacher, the woman testing wastewater for the sanitation district, and the policeman who just took the report about your stolen bicycle—are public employees, the same folks who are supposedly bankrupting our states and cities with their lavish pay and extravagant retirement benefits. Forget about the Wall Street bankers once again scoring seven-figure bonuses: It’s these public workers who make up America’s “new privileged elite class,” according to billionaire media mogul Mort Zuckerman.
In reality, the lavish lifestyles almost never materialize. Research from the National Institute on Retirement Security and Center for State and Local Government Excellence finds that state employees in California earn 6.9 percent less than similar private-sector workers, while California’s local government workers earn 1.3 percent less. The state’s public retirees, meanwhile, average the princely sum of $25,000 a year, most of which derives from public workers’ own contributions and returns on investments. In San Luis Obispo, retirees from the county workforce get a benefit of $22,200 a year on average, according to the San Luis Obispo County Pension Trust. This is hardly an extravagance.
Critics are quick to mention Bell, Calif., where high-ranking municipal officials engaged in blatant self-dealing to pump up their compensation. The case should be a clarion call for greater public transparency and ethics—instead, it has become a pretext to attack the wages and benefits of rank-and-file public workers, who wouldn’t see Bell-like pensions if they worked for a century. Far from illustrating a new public-private divide, Bell repeats the familiar story of people at the top abusing their power.
Still, at a time when many private-sector employees can count on no retirement income at all beyond Social Security, any type of guaranteed pension may look like a luxury. But before resentment of EMTs and library aides reaches the boiling point, it’s worth considering what the real problem is. Should we be enraged that many public employees continue to earn middle-class compensation and pensions? Or that an increasing number of private sector workers don’t?
Profitability and executive pay are once again rising, but private corporations are failing to pass on the gains in the form of adequate wages and benefits for their employees. It’s no wonder consumer spending remains weak and the recovery is floundering. A number of measures—from strengthening union organizing rights to guaranteeing paid sick time to all workers—would begin to remedy the imbalance. But turning public jobs into the same type of contingent, low-wage, no-benefits work that’s eroding the private-sector middle class does nothing to create jobs or raise standards for private-sector workers. In fact, it drives down private-sector job standards further, fueling a race to the bottom that undermines everyone who works for a living. After all, if we cannot afford pensions for the men and women who rush into burning buildings, what hope do the rest of us have for retirement security?
Nor is it necessarily the case, as state pension advisor David Crane insists, that middle-class compensation for public workers is only affordable if we agree to sacrifice the public services we rely on. It’s true that the nation’s deep recession has shrunk city and state tax revenue and that crashing stock markets have decimated government pension funds. CALPERS alone lost $70 billion between 2008 and 2009 (a result of plummeting investments, not lavish retirement payouts).
When the economy recovers, both the tax base and the performance of pension investments will improve. In the meantime, there’s no need to pit a social worker’s pension against funds for the abused children she served during her working career—unless, of course, it has already been decided that our wealthiest individuals and most-profitable industries must not be asked to sacrifice anything. It’s only when progressive tax increases have been taken off the table, as Gov. Schwarzenegger has done, that tradeoffs for the rest of us become so painful.
The California Budget Project finds that the incomes of the top 1 percent of Californians have soared 77.8 percent since 1993, at the same time middle-class earnings have shrunk. Seen in this light, it’s pretty clear that whoever the “privileged elite” may be, they aren’t the employees working at county hospitals, community colleges, public works, or the city clerk’s office. ∆
Amy Traub is director of research at the Drum Major Institute for Public Policy, a nonpartisan think tank founded during the civil rights movement. Based in New York, the Drum Major Institute is focused on advancing progressive policy in cities and for cities nationwide. Send replies to email@example.com.