Governor Warns Unions to Consider Concessions on Pensions

Jerry-BrownI will never forget the day, at the behest of a mutual friend back late in 2009, I met with two organizers from a prominent union organization in California, the California Labor Federation.

I understood that there were concerns about my view on the local firefighters union, as well as my view on pensions in general.  What I did not expect was a nasty and unpleasant experience unlike any I had ever encountered before.

What is amazing is that my wife has worked for unions for much of the past decade.  She was even arrested in Houston in a successful effort for union janitors who were being paid $20 per day for their work.  Both of my parents have been proud union members all of their working adult lives.  And I have both been a member of and worked for a union.

I am also not going to bury my head in the sand about things either.  I have been a huge critic of the political power of the firefighters union in Davis and its ability in the past to exert tremendous pressure on salaries and compensation.  Local governments over the last decade have greatly increased their salaries and compensation to employees.

However, I also distinguish the people who earn less than $70,000 and receive a 2% at 60 pension from those earning six figures and making 2.5% at 55 or 3% at 50. 

What has killed the public pension system and is threatening local government is not the average employee, but rather public safety employees with their enhanced benefits and early retirement and largely unionized management.  The typical public employee is not making six figures.  My wife, for instance, represented people making less than $30,000 per year and there is another tier of people making less than $60,000 per year.  These people get 2% at 60, and it is a modest pension upon retirement and should be protected.

The point I tried to make with no success in my discussion with the CLF representatives is that we can re-write the pensions, we now have a pretty decent blueprint by the Governor to do so, or at some point the voters led by conservatives with huge pools of money will rise up and do it themselves.

This is the point that Jerry Brown made on Thursday when he told his labor union allies that they ought to be open to the concessions that Republicans are seeking on public employee pensions, in exchange for GOP votes on the budget.

I agree with the Governor completely.  I also happen to believe that only Jerry Brown can fix pensions, just as only Nixon could go to China.

The Governor warned unions that if Republicans fail now, conservatives could try for even bigger giveaways with a future ballot initiative.

Republicans have criticized the Governor, suggesting that he had not taken their suggestions seriously and that he is unwilling to confront public employee unions. 

However, on Thursday this all may have changed, as he warned unions about the possible consequences of resisting change.

“I tell my union friends, you’re going to have to make some changes now, or much more drastic changes later,” Governor Brown said.

He basically said the same thing yesterday to the unions as I said back in 2009.  I suspect they will react a bit differently to the Governor’s proposal as they did my suggestions.

Steve Maviglio, a spokesperson for a group representing over a million public employees, told the AP on Thursday that “unions gave up $400 million in benefits as part of a statewide deal last year, and local government pensions have already been scaled back. He said unions are open to other reasonable changes, such as preventing the final-year spikes in pay that lead to inflated pensions.”

“The notion that unions haven’t already given at the office is false, and we’re more than happy to discuss additional changes that make sense and are lawful,” he said.

Mr. Maviglio said voters rejected two proposals in 2005 to limit unions’ influence.

“Californians have a long history of rejecting ballot initiatives that are against the interests of working families,” he said.

While there is little doubt that it would be a fight, times have changed since 2005 and a lot of people involved in local government are more acutely aware of the problems faced by the failure to contain pensions, at least on the top end.

More serious challenges are coming.  On Thursday, the AP reported that “Former state Assemblyman Roger Niello, a Republican, filed a proposed initiative that would limit public employee pensions at all levels of government to 60 percent of a worker’s highest 3-year salary average, require employees to contribute an equal amount and set 62 as the minimum retirement age.”

The same day, a member of the Howard Jarvis Taxpayers Association, filed a proposed initiative that would “set a spending cap, limiting the state Legislature’s ability to increase the budget beyond accounting for changes in the cost of living and population.”

—David M. Greenwald reporting

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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27 Comments

  1. Neutral

    Your position and the Governor’s both mirror the media-driven public perception of out-of-control employee benefits draining state coffers. You both know better. Rather than give voice to the “seventy-eight percent of CalPERS retirees [who] receive $36,000 per year or less”, and directing your focus on the real problems created by the 22% – specifically including public safety and management – you prefer to press for fixing a system that isn’t broke.

    Unions are one of the last lines of protection for whatever remains of what used to be a reasonably equitable balance between labor and management. Brown, and certainly you, know that.

  2. Frankly

    [quote]““I tell my union friends, you’re going to have to make some changes now, or much more drastic changes later,” Governor Brown said.
    [/quote]
    For me, these are encouraging words coming from Brown. Of course action speaks much louder than words in the game of political cat and mouse.

  3. Gunrock

    David- I think that your experience with the Davis Firefighters is what, writ large, is the fundamental problem with California’s unions. They have become bloated, corrupt and have been found that negotiating with management has been as easy as playing poker with your dog.

    Every time I talk to people about unions I hear the refrain “but they were really needed once”, I agree. There was a place for them a long time ago, no longer. Public employee unions are the cause of most of our financial woes in this state.

    David is correct that Brown, like Nixon in China, is the best person to address the problem. For people like me though, his strongest words, most provocative proposals and painful cuts to unions will only scratch the surface. If he is not successful, then California should follow in the footsteps of Wisconsin.

    Public Employee Unions ARE the problem.

  4. Perezoso

    [i]What has killed the public pension system and is threatening local government is not the average employee, but rather public safety employees with their enhanced benefits and early retirement and largely unionized management. The typical public employee is not making six figures [/i]

    I would agree that defending teacher unions and education does not necessarily imply defending firefighter or cop unions–a point some faux-liberals overlook. A teacher fighting for her job, or protesting pension modification (pay cuts, in effect) seems quite different, qualitatively-speaking, than firefighters or cops demanding raises or other perqs. The teacher is a professional of a sort.

    The GOP-TP anti-union types don’t usually take on the cops or f.f.’s either—preferring to bash educators, knowing that appeals to many Foxbots . Moreover they can bully educators–who tend to be nerds–but the usual businessperson doesn’t have the spine to take on cop unions.

  5. Neutral

    [i]Which of the Governor’s proposals do you think fix portions of the system that isn’t broke?[/i]

    Starting with having this conversation in the first place? I’d have to say all of them. While these public discussions make for good political theater, they are nothing more than publicity stunts to stake out negotiating positions.

  6. Mr.Toad

    Its not like Nixon going to China and its not like Wisconsin. Its like Jerry Brown and his father who taught him how to govern. He is telling the truth that there needs to be some changes but he is doing so respectfully. Notice he finished negotiating new contracts before taking on pension reform and he is engaging labor in a discussion. This generated some good will from which to work. He isn’t demonizing or rubbing peoples noses in it like Arnold or the Gov of Wisconsin. I just want to say it remains to be seen if he can get it done but one thing is certain, Meg Whitman couldn’t have done it without turning the state inside out like Wisconsin. Brown is trying to get it done with a gentle hand.

  7. E Roberts Musser

    dmg: “I understood that there were concerns about my view on the local firefighters union, as well as my view on pensions in general. What I did not expect was a nasty and unpleasant experience unlike any I had ever encountered before.”

    Welcome to the real world. Unions have gotten a bad rap for a reason. They are not pure as the driven snow…

    dmg: “What has killed the public pension system and is threatening local government is not the average employee, but rather public safety employees with their enhanced benefits and early retirement and largely unionized management. The typical public employee is not making six figures. My wife, for instance, represented people making less than $30,000 per year and there is another tier of people making less than $60,000 per year. These people get 2% at 60, and it is a modest pension upon retirement and should be protected.”

    What percentage of the pensions are public safety? You have to know that in order to determine if the pension problem is largely as a result of public safety employees…

    dmg: “This is the point that Jerry Brown made on Thursday when he told his labor union allies that they ought to be open to the concessions that Republicans are seeking on public employee pensions, in exchange for GOP votes on the budget.”

    It’s about time…

    dmg: ““Californians have a long history of rejecting ballot initiatives that are against the interests of working families,” he said.
    While there is little doubt that it would be a fight, times have changed since 2005 and a lot of people involved in local government are more acutely aware of the problems faced by the failure to contain pensions, at least on the top end.”

    It is a new day and a new dawn… the economy is in far worse shape, and the unions must understand that they had better get a bit more cooperative or the voters will put some teeth into pension reform themselves…

  8. Alphonso

    Missing from this discussion is Total Compensation – it is not just the pensions. When many of the public employee pensions were enacted the salaries were were low compared with the private sector. To a large extent public salaries have caught up with the private counterparts while pensions have continued to improve or at least remain unchanged. Low salaries/ great benefits was understandable but high salaries and great benefits (compounded by high salaries) are not sustainable

  9. E Roberts Musser

    From http://www.reason.org: “In the 1960s, just one out of every 20 California state workers received “public safety” pensions. Now, one out of three state workers receives the lavish public safety benefits originally intended for the firefighters and police officers who put themselves in harm’s way.”

  10. Frankly

    [i]”The GOP-TP anti-union types don’t usually take on the cops or f.f.’s either—preferring to bash educators”[/i]

    The state GOP has traditionally been the “tough on crime” Party, so going after cop pay and benefits has been a difficult political path for them to manuver. However, this has changed over the last couple of years.

    But, even so, there is also a need for careful strategy to win balanced budgets. As education costs are about 1/3 of state expenditures, there is a bigger return for winning that battle. It is probably not a good strategy to go after the police and FF at the same time, as the unions will join forces. However, rest assured that the police, FF and prison guards are all on the radar for future cuts.

    One more point… public education quality is dismal, while police, fire and prison guards seem to provide satisfactory service.

  11. Alphonso

    “One more point… public education quality is dismal, while police, fire and prison guards seem to provide satisfactory service.”

    Of course the low per student spending rate (compared with other states) probably has some negative impact on the quality of public education. You get what you pay for – a consideration for the upcoming parcel tax election.

  12. Frankly

    [i]”Of course the low per student spending rate (compared with other states) probably has some negative impact on the quality of public education.”[/i]

    Not so. Look at DC schools. The highest cost and the least quality outcome. In fact, there is little correlation between the cost per student and the level of outcomes.

    From the US census, California is ranked #1 in teacher salaries.

    See here [url]http://www.all4ed.org/files//California_wc.pdf[/url]

    Only 68% of California students graduate. Only 55% and 57% of blacks and Hispanics (respectively) graduate.

    See here [url]http://www.all4ed.org/about_the_crisis/schools/state_cards[/url]

    See the table “National Assessment of Educational Progress (NAEP) Reading Scores for California Eighth Graders in School Year (SY) 2008–09”. California is well below the national averages.

    Here is an interesting report/study on teacher effectiveness. It compares the US with Singapore, Ontario and Finnland… three countries with the highest education outcomes: [url]http://www.all4ed.org/files/TeacherLeaderEffectivenessReport.pdf[/url]

    Note the following:
    [quote]The respect accorded to teachers is not just about money. While new teachers in Singapore are paid nearly as well as new doctors entering government service, Finland’s teachers—among the most admired professionals in the country—earn about the average Finnish salary, the equivalent to the average of mid-career teachers in OECD nations (about $41,000 in U.S. dollars).5 Salaries in Ontario range from $37,000 to $90,000, comparable to those in the United States.[/quote]

    Of course we can argue all level of differences between these countries and the US. The main point is that outcomes do not correlate with spending or teacher pay. Even so, if California teachers delivered Finnish-level outcomes, I bet we would not be fighting over their pay and benefits.

  13. Mr.Toad

    “One more point… public education quality is dismal,…”

    Not for many, not in Davis. Of course Davis pays extra and has an educated population that cares about education.

    When I taught motivated students I saw students for whom the system worked well. When I taught unmotivated students I saw low quality outcomes. I have had students go to both M.I.T. and Pelican Bay. So your generalization is unfounded and shows a lack of awareness of the realities of the public schools.

  14. Frankly

    Are there really that many unmotivated students, or is it just teachers taking the lazy approach teaching to the easy-to-teach kids and blaming their poor outcomes on the kids?

    I see more the second than the first.

    Frankly, it is your type of response that steams me a bit. I think very few students are unmotivated, however many of them are uninspired by crappy teachers that should be let go to find a career more suited for their personality and wiring.

    Most of the time you can split the class into thirds in terms of learning capability. The top third are generally genetically, and/or strong-family, gifted kids that are relatively easy to teach. The middle 1/3 are on the fence and need more attention and a bit of inspiration. The bottom third need much more help and encouragement. Davis teachers benefit from a bloated top third that makes up as much as half the class. Many kids in the bottom half come away from the Davis Middle School and High School experience uninspired about education… and not in agreement with the pat on the back Davis teachers give themselves.

    I have heard from some people on this blog that it is parents that inspire the kids to learn, not the teachers. If that is the case, then I want teachers replaced with online education and an army of college kids as tutors. It would be much less expensive and much more effective.

    Note I am mostly addressing the Jr. High Campuses and High School. My experience taking two kids through the entire Davis public education experience was that the elementary schools are great, and from there is is down hill.

  15. wdf1

    [i]Even so, if California teachers delivered Finnish-level outcomes, I bet we would not be fighting over their pay and benefits.[/i]

    Some of the rest of the story:
    [quote]Even though the salaries of Finnish teachers are comparable to those in the U.S., a job opening in a Finnish classroom typically attracts more than 40 applicants.

    The job’s popularity can be partly attributed to the country’s liberal approach to its curriculum. In Finland, teachers are allowed to choose their own textbooks and customize their lesson plans. They aren’t required to administer standardized tests, and assign little homework.

    “Teachers are very independent, and there is little cooperation between teachers,” says Maria Lisa Wahlfors, a teacher at the Tapiola School outside of Helsinki. “I think having this freedom is much better because I can choose the material I want to teach, and it can match my personality.”

    In addition, the Finn’s success is due in large part to the country’s demographics. Unlike the United States, where great disparities in income and an extremely diverse population present obstacles to education, Finland enjoys one of the highest standards of living in the world, is largely homogeneous, and has a strong national culture.

    [url]http://www.pbs.org/wnet/wherewestand/reports/globalization/finland-whats-the-secret-to-its-success/206/[/url][/quote]
    Notes:
    Finland — very high standard of living, smaller income disparities, more homogenous demographics, strong national culture

    Some ways to set up the U.S. for Finnish-type success? — raise the standard of living, reduce the income disparities, homogenize the demographics, strengthen the national culture

    Jeff, I think there’s plenty about Finland that I have the feeling you wouldn’t want to emulate, but many of those conditions happen to set up Finland for better educational success. Personally I’d like to do away with a lot of standardized testing (STAR/CST) in the public schools.

    [i]From the US census, California is ranked #1 in teacher salaries.[/i]

    But what goes with that is that California schools have the largest class sizes. California also has the fewest administrators and support staff in public education.

  16. J.R.

    “What I did not expect was a nasty and unpleasant experience unlike any I had ever encountered before.”

    I’d be very interested in hearing what happened that led to this remark.

  17. wdf1

    [i]I want teachers replaced with online education and an army of college kids as tutors. It would be much less expensive and much more effective.

    Note I am mostly addressing the Jr. High Campuses and High School.[/i]

    Given what I’ve seen of college online classes, I think that system would fail. Online education works well for certain students who are more independent, organized, and self-motivated.

    How would you reach kids/families who don’t have a computer/internet access?

    By default you’d be getting rid of adult role models, visual and performing arts, team sports…

  18. Mr.Toad

    “I have heard from some people on this blog that it is parents that inspire the kids to learn, not the teachers. If that is the case, then I want teachers replaced with online education and an army of college kids as tutors. It would be much less expensive and much more effective. “

    First, I have never taught in Davis.

    Just because the responsibility to learn is that of the student’s doesn’t make the teachers irrelevant. The teacher should be prepared to teach, try to motivate and provide a safe environment for the learning to go on. Teachers have their role as do parents, nurses, psychologists, counselors, doctors, librarians, Healthy Start representatives, child care providers, bus drivers, custodians and everyone else who toil in support of healthy children.

  19. hpierce

    [quote]My wife, for instance, represented people making less than $30,000 per year and there is another tier of people making less than $60,000 per year. These people get 2% at 60, and it is a modest pension upon retirement and should be protected.[/quote]If I remember correctly, your wife represents folks who work for the State. Most of those get both PERS pensions [b]AND[/b] SS benefits. So what is the [u]total[/u] cost to the employer, and what is the TOTAL ‘pension’ (PERS + SS) to the retired employee?

  20. wdf1

    Jeff B: [i]From the US census, California is ranked #1 in teacher salaries.[/i]

    wdf1: [i]But what goes with that is that California schools have the largest class sizes. California also has the fewest administrators and support staff in public education. [/i]

    I would also add that California has one of the highest costs of living. That will affect what salaries you have to pay.

  21. wdf1

    US experiencing uneven job growth across states

    [url]http://news.yahoo.com/s/ap/20110325/ap_on_bi_ge/us_state_unemployment_5[/url]

    [quote]California and Michigan, which each suffered some of the worst losses during the recession, are adding jobs again. California last month had its single best month for job creation in more than two decades.

    Still, six states lost jobs from February 2010 through last month. Among the worst for job creation in that time were New Mexico and New Jersey, states that only a year ago were in the middle of the pack.

    Overall, 44 states boosted employment in that stretch, one of the best year over-year showings since the recession ended in June 2009. And the unemployment rate has fallen in 41 states. The February report from the Labor Department on state and regional employment is the latest sign that job growth is picking up.

    Nationwide, employers added 1.3 million net jobs in that period.

    California, which was still losing jobs as recently as September, has added nearly 200,000 jobs in that time. That’s second only to Texas, which added 254,200 net jobs.
    [/quote]

    At least the trend is going in the right direction.

  22. anonymous

    [i]the short answer is that there’s simply no evidence that state pensions are the current burden to public finances that their critics claim.[/i]

    I always felt that the public employees criticisms were a coordinated Republican effort to shift the focus away from misbehaving bank lenders as a cause of the recession.

  23. E Roberts Musser

    “Pension contributions from state and local employers aren’t blowing up budgets. They amount to just 2.9 percent of state spending, on average, according to the National Association of State Retirement Administrators. The Center for Retirement Research at Boston College puts the figure a bit higher at 3.8 percent…”

    Do these figures include teachers pensions? Teachers are state workers…

  24. hpierce

    [quote]Teachers are state workers… [/quote]NONSENSE. Local districts choose applicants, direct performance requirements, judge performance, set salaries, benefits… FUNDING for local districts goes through the State. Using your logic, SS recipients (elderly) are ’employees’ of the federal gov’t…

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