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OP-ED | The Truth About Pensions

by Uri Allen | Dec 11, 2013 11:27am
(25) Comments | Commenting has expired
Posted to: Economics, Equality, Labor, Opinion, Pension

Let me start with full disclosure. I’m a young person and a state employee. I use Facebook, Twitter, and other social media. And I welcome being engaged in any discussion of “dense fiscal issues” like pension liabilities.

Too bad my demographic wasn’t fully represented during the “Make Government Work” forum that was held at the fancy Hartford Club and covered by Hugh McQuaid for CTNewsJunkie. Then again, how could I quarrel with a panel comprised of middle-aged and older men from organizations like Connecticut Business and Industry Association telling young folks like me how to take back their democracy by grabbing hold of this thorny pension problem?

How could I not have faith in a panel moderated by David Walker, founder and CEO of the Comeback America Initiative? After all, Walker is a loyal minion of Pete Peterson, whose “Fix the Debt” crowd believes that middle class “entitlements” must be cut especially without telling us why (because billionaire corporate executives should continue to enjoy their over-the-top compensation while collecting their pensions).

Okay, I get it. Real workers and unions were not welcome. But with such imbalanced representation, the panel’s message was doomed to a narrow focus and a flawed narrative.

For instance, nobody talked about the fact that expenditures from state and municipal pension benefits supported more than 29,000 jobs and $4 billion in total economic output in Connecticut, according to the respected National Institute on Retirement Security.

So you see, the problem isn’t that state employees have pensions. The problem is that too few private sector workers have them (with the exception of the big business folks who want to gut our pensions before cashing out on theirs). Steep declines in employer-sponsored plans and employee participation have put us on the brink of a retirement crisis.

Earlier this year, the New School’s Schwartz Center for Economic Policy Analysis (SCEPA) issued a report that confirmed the scope of the problem. As of 2010, roughly half of Connecticut workers — about three-quarters of a million residents — were not participating in an employer-provided retirement plan (for most of the non-participants, the “plan” is a savings account with no employer support). If this trend continues, the number of seniors living in poverty will skyrocket as workers lack sufficient assets to afford even basic expenses when they retire.

The New School’s research also finds that the average person in Connecticut who is over the age of 65 and in the bottom 20 percent of the income distribution lives on $7,368 per year, including Social Security and public assistance programs. People in the 20th to 40th percentile of the income distribution live on $14,673 per year.

I shudder to think of the social and economic consequences of such mass downward mobility of our seniors. But there are ways to fix our broken retirement system.

Sen. Martin Looney, D-New Haven, sponsored a bill, SB 54, during the 2013 legislation that would allow workers who do not have access to a retirement plan through their employer to deposit a percentage of their annual salary into a retirement savings trust fund. The plan would be portable, so workers could take their investment with them from job to job.

And unlike other portable plans this has low administrative costs, because it’s a not-for-profit structure administered through the state treasurer. Whatever administrative costs are associated with the plan are charged to the participants, not taxpayers.

Vehicles like SB 54 make sense for an economy ravaged by gaping income inequality and corporate greed. My union represents more than 32,000 public service workers, the vast majority of whom are fortunate enough to have a real, defined benefit — pensions.

That’s because we’re there to fight for them at the bargaining table, to ensure that after a long career, workers are able to live in dignity, enjoy their families, deal with unexpected expenses — and help Main Street flourish because that’s where they spend their retirement income.
   
The state legislature and Gov. Dannel P. Malloy should make the enactment of SB 54 a top legislative priority in 2014. Every future retiree should have the opportunity to retire with adequate income and dignity. It’s what we young people call the American way.

Uri Allen is a state employee and union steward for AFSCME Local 269.

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(25) Comments

posted by: Matt Zagaja | December 11, 2013  12:38pm

I do not think it is fair to say that our demographic was not fully represented at the panel. The event was also co-sponsored by CT Voices for Children and Wade Gibson, their policy director, was on the panel (http://www.ctvoices.org/events/2013/make-government-work-forum). Unfortunately it appears Hugh did not include any quotes from Wade.

The economic impact of pension spending does not mitigate the fiscal pressure it is putting on state and municipal budgets. Pensions are not inherently good or bad policy, but they must be correctly funded and administered. Unfortunately many pensions were not. Now we are faced with the reality of that decision. In Detroit this means pensioners are not going to get all the money they were promised. In other words a pension is now a “defined-benefit retirement plan” except when government can’t afford it then you lose some of it. To me this seems inferior to a defined contribution plan where you can be reasonably sure you’ll get your principle.

The IRS has allowed Individual Retirement Accounts for years. Most of the intelligent investors I talk to recommend using Vanguard which is an investment vehicle that is investor owned. However it contains an interesting component: SB54 is an opt-out retirement plan. This is the kind of nudging popularized by Richard Thaler and would likely do some good in addressing the retirement issues outlined in the op-ed. Looney is a smart guy and I think many would benefit from something like this.

If the unions and politicians had come together to ensure that the pensions were properly funded, then I think this would not be an issue here. Unfortunately it seems this is not something that the state has responsibly managed (http://www.ctmirror.org/story/2010/09/07/90s-pension-raid-haunts-state-officials-now). Pensioners in Connecticut will be the ones that lose out because of it, the same way they are losing out in Detroit.

posted by: gompers | December 11, 2013  2:15pm

Matt,
I agree with some of your statement, but I disagree with the point that pensions are not inherently good or bad.  They are overwhelmingly good.  They have worked well in this country for the middle class for about eighty years. On the other hand, 401k only retirements have been a disaster.  The results are in after about 30 years of this experiment.  The average person retiring on a 401k has under $60,000 in savings.  The man who is credited with inventing the 401k came out publicly and said that 401ks are a supplementla savings plan and cannot make up for a pension.  It is estimated that you would have to put away 25% of every dollar you ever earned into a 401k to make it pay off for reasonable retirement.  That is beyond the ability of most of the population.  You presume that the governmental retirees pensions will be cut.  One hundred years of pension law has said that pensions can’t be cut for existing retirees, pulbic or private (thought health care can be completely stripped away unless protected by a contract.)  We just have to hope that the current anti-middle class Supreme Court gets better before a case on cutting pensions gets before it.

posted by: Joebigjoe | December 11, 2013  3:03pm

Gompers thats quite a fantasy that you have there.

If the Chinese were to make the big push with all the gold they’ve been hoarding to be the worlds reserve currency, public pensions and private will be cut and 401Ks will have all or part of them confiscated.

There are some things going on related to currency wars that are so far beyond the old woman with the pension that if you research it, it will scare the heck out of you.

posted by: ABC | December 11, 2013  3:05pm

You want the truth about public sector pensions?  Here it is.

The fact is that up until relatively recently the audited balance sheets of the municipalities or the state did not record the actual present value of the long term pension obligations as liabilities for which the taxpayers were on the hook.  The financials also understated the gold-plated health benefits that public sector union employees get and that taxpayers shell out for.

So because mayors and governors could do sneaky, secret deals with union bosses in exchange for political support, and keep it largely hidden from the public, they back-ended huge early retirement packages for their members.  These plans were of the type that no private sector worker would ever be given. 

Well, now the accounting is more transparent and now everyone sees it.  And the unfortunate fact is that CT is the most indebted state in the country as a result of its large un-funded pension obligations. 

So to all the public sector union supporters who want us to “keep the promise” and “stop pension theft”, here’s a question: When were the taxpayers ever told about what they were signing up for when these deals were made? 

Answer:  They weren’t. And thats bad news for you because you are about to be crammed down big time.  Taxpayers have woken up to the fact that we were never party to the back-room union agreements that indebted us and our children to support state and municipal workers in their golden years (golden years in the public sector seems to start around age 52).

The morale of the story is don’t do sneaky deals with crooked pols.

posted by: Hugh McQuaid | December 11, 2013  3:36pm

Hugh McQuaid

Matt, the panel I covered was one of several discussions at the event and did not include Mr. Gibson. The panelists on the “Fiscal Panel” included Comptroller Kevin Lembo (D), economist Fred Carstensen, former Lt. Gov. Michael Fedele (R), and U.S. Rep. Jim Himes (D). It was moderated by David Walker.

posted by: Matt Zagaja | December 11, 2013  5:35pm

Hugh, thanks for the clarification. The event announcement made it sound like there was one panel with everyone. Apologies for that misunderstanding.

Gompers, as far as I’m aware public sector pensions do not have the same protections as private sector ones (see this link on municipal bankruptcy). I am not saying that 401ks are inherently superior to pension plans, but rather “as applied” a 401k appears to be a less risky bet than participating in a public pension in certain places including Detroit, Illinois, and Connecticut.

I think the mistake you make in your analysis is assuming that a pension, if present, would be added to whatever a person’s current salary is. This is not always the case. In the eyes of the company the salary plus the benefits is the cost of the employee. If a company needs to put away money to fund a pension, then that comes from the same pool of money that funds salaries and therefore they would make lower salary offers but include a pension. Thus we are faced with two separate issues: total compensation for many employees seems to be going down, and who will shoulder the burden of saving for retirement (and as part of that how will the risks and rewards be allocated). 401ks are not successful because individuals do not save enough to begin with and/or are not sophisticated enough to manage the account. Pensions are now not successful because government was not saving enough to begin with (and maybe were not sophisticated enough to manage the account either).

What’s the solution? Well I said I like Looney’s idea. Expand the PBGC to include public pensions? Some kind of insurance pool? Maybe, I’m not knowledgeable enough to opine on financial engineering.

Finally going back to Detroit and Connecticut, who is responsible for the contributions government (we) failed to make in the past to fund the pensions. On a macro level it seems to sit with the government. However the result of crushing the citizens with taxes and gutting services does not seem equitable. Neither does making bondholders (maybe themselves retirees) or pensioners take a haircut. It’s important to find a way to minimize the pain for everyone. I just wish I had a magic answer for that.

posted by: Janster57 | December 11, 2013  5:47pm

I absolutely agree that the problem is not the existence of pensions, but the size of the absolutely outrageous pensions handed to their benefactor unions by CT politicians. Senators becoming judges (even Supreme Court Justices with no prior experience) to jack up their last 3 years. Special bills passed to benefit individuals by waiving minimum vesting requirements. DOT Employees retiring at over $200K a year. Overpayments of nearly $500,000 simply being waived. The list goes on and over the horizon.

posted by: BMS | December 11, 2013  5:54pm

I’m a senior living on pension, social security, and savings. That is the three legged stool needed to live with dignity. This young lady paints a dismal picture for her generation. Unfortunately, she is right..

posted by: unionleo | December 11, 2013  8:08pm

Uri - you are a shining star, a ray of hope, a spark of activist energy that’s sadly needed in the policy debates focused on your future an that of so many others.  Keep the push on for pension fairness.  Work to take back the economy that has been eaten up by wall street and the 1%ers. We need more fighters for the middle class and active opponents to poverty, low wages and economic exploitation.  It is a very tough message environment in which we try to have meaningful conversations about just what our fading American Dream and prosperity for all should look like. Our collective nightmare brings scary images of pensionless futures, lack of health care, lower wages, little or no time off to spend with family, huge family debt, no savings and the work till you die plan.  Look around—which way are we moving?  Dream or nightmare. You can inspire more people to sound off, stand up and fight for the dream.  It’s been done before. We can make it happen again and you are an inspiring leader who can help others to see the light…

posted by: perturbed | December 11, 2013  10:56pm

perturbed

@Matt—A couple of the points you made need to be challenged. First, perhaps understandably because of the way the issue is framed by fiscal extremists (and the mass media in general), you are way overestimating the “fiscal pressure” pensions are putting on state and local governments. The fiscal mess in Detroit, in particular, has very little to do with municipal pension obligations, as has been observed by Alicia Munnell and others (see interview transcript:  Despite Detroit And Illinois Pension Deficits, Cities And States Aren’t Bad Off). For that reason, it would be a travesty if any Detroit retirees are forced to suffer the injustice of pension cuts—which in essence amounts to taking pay from employees after it is earned.

[In fact, pensions are part of the whole compensation package, which allows governments to attract and retain qualified workers at lower wages than would otherwise be possible. And in the public sector, there is a high premium for retaining good people, due to the importance of acquired “institutional knowledge” in government positions.]

In general, if public pension obligations were expressed in terms of the size of governments’ economies over the same period, or the size of the budgets over the same period, they would appear manageable. Instead, extremists prefer to cite the dramatic-sounding unfunded pension liabilities in absolute dollars due over a period of decades, say 30 years.

Second, as much as I seem to disagree with gompers, he’s right about the superiority of pensions. We’re not talking about subtleties here: defined benefit pensions are overwhelmingly more reliable than defined contribution plans—and the real-world experience bears that out. Yes, a huge part of the failure of 401ks is the failure of individuals to save adequately. Only part of that is financial/behavioral; the rest is due to a lack of financial literacy. But the fact that the vast, overwhelming majority of Americans fail to save for retirement is a fact.

The workers that actually do put something away for retirement then face all the classic investing pitfalls, like foolishly trying to time the market, chasing performance, and taking on inappropriate levels of risk. Even the select few that do manage to avoid sabotaging their own best interests are forced to contend with expensive plan administration fees and lousy, expensive investment options, which enrich the financial industry but cut deeply into workers’ returns.

(continued below…)

posted by: perturbed | December 11, 2013  11:01pm

perturbed

(...continued from above)


Worst of all, even if the stars align, and intelligent investors have saved diligently, invested wisely, and are lucky enough to have a decent defined contribution plan with low cost and adequately diversified options, working folks then face—potentially—an even bigger hurdle. Individuals investors need to be lucky once more: if the market tanks (think: “Great Recession”) at the start of retirement, the chances of retirement security are dramatically diminished. That simple fact is really the inherent flaw with defined contribution plans. (The same extreme market event towards the middle or end of retirement poses far less danger.) But is it really reasonable to expect folks to contend with a crap shoot like that? Or is there a better way?

Fortunately, defined benefit pensions have the advantage of spreading risks out over generations, not a single person’s life span. And that long time horizon allows pension funds to easily absorb the short- to mid-term gyrations of the market. So for retirement security, it’s really no contest. Pensions beat 401ks hands-down.

We should all be fighting to make some form of defined benefit plan available to everyone, not arguing to take away the pensions from those folks who valued them enough to seek (or stay with) an employer that offers one as part of the overall compensation package.

—perturbed

posted by: Joebigjoe | December 12, 2013  9:16am

Perturbed very interesting comments but you got one part really wrong. It used to be this way but the gap has closed too much and its very unfair to the people that work in the private sector who pay for this.

[In fact, pensions are part of the whole compensation package,
which allows governments to attract and retain qualified workers at lower
wages than would otherwise be possible

posted by: Just another CT resident | December 12, 2013  2:42pm

Uri -
CT has one of the highest per capita unfunded pension and healthcare liabilities and state debt. As Ct residents currently pay the second highest income taxes per capita in the nation, I don’t know where the legislators in Hartford are going to find all the money to pay those benefits to the teachers and state employees. I can tell you that over the past 10 years the population in Ct has declined as a lot of people have become residents in other states (like Florida which has no personal income tax) while retaining their residences in CT. This trend will only accelerate as more well off baby boomers retire and become residents of lower income tax states. The net result will be that the burden to pay for those pensions, healthcare and debt will fall on a smaller number of CT residents who pay income taxes to CT.
My advice to you is to find a job with a company that has good pension and post-employment healthcare as I doubt this state will be in the position to pay you 100% of your pension and other retirement benefits.
Sorry to say but Detroit is the canary in the coal mine.

posted by: Joebigjoe | December 12, 2013  4:54pm

I wonder what the state pension situation would look like if we passed a law that said you get 100% of what was promised if you remain a state resident, but move out of state for more than 90 days a year you only get 60-70% ?

posted by: art vandelay | December 12, 2013  7:00pm

art vandelay

To Uri and the rest of the pro defined benefit package activists.  The game is up, it’s no longer sustainable.  Legislation MUST be passed that any future state employee will only be afforded a 401K with no lifetime health benefits as a requirement for employment.  The taxpayers can no longer support Tier I benefits.  It’s no longer sustainable.

To “perturbed” I got a chuckle out of your term “fiscal extremist”.  What your telling me is that a “fiscal extremist” is a person who balances his check book every month, pays off his Master Card every month, pays off his house, and accumulates a retirement fund.  Quite the opposite of what our state and federal governments are doing.  Prior to the Wilson Administration, the nation had a ZERO deficit.  Wilson enacted the income tax and the country has gone downhill ever since.  In 1991 Weicker enacted the state income tax and our state has gone downhill, and never recovered.

posted by: DrHunterSThompson | December 13, 2013  12:43am

DrHunterSThompson

Perturbed,

Well done once again.  sooner or later those interested in the truth will begin to pay attention to you.

and there is no doubt, the idea is not to destroy those defined pension plans that have survived, but to work towards providing everyone with such a plan.

HST

posted by: perturbed | December 13, 2013  7:22am

perturbed

@Art—Thanks for returning the favor and giving me something to chuckle about. The “fiscal extremist” I’m referring to is not the model of responsibility you describe—it’s the one that would justify defaulting on his mortgage payment by labeling it “unsustainable,” even though that payment only represents roughly 5% of the household budget.

You might not have read or listened to the NPR story I linked to above, as it provides some information that is not consistent with an arbitrary, undefined claim of “unsustainability.” One bit of data from that piece for you to consider: “Nationwide, pension expense is about 5% of state and local budgets.” As bad as things are in CT, I don’t think we’re far from that national average. What was CT’s Annual Required Contribution (ARC) to pension funds this past fiscal year? Was it over 5% of the budget?

So I ask you earnestly: How do you define “unsustainable?”

A fiscal extremist would order a tankful of heating oil, and then refuse to pay the bill. His justification would be that at $75,000, the cost of heating oil is downright “unsustainable.” (Of course, he’d never mention that $75,000 is the present value cost projected out 30 years, or that it equates to less than 5% of the household budget.)

Some positions are tough to justify unless you can find a way to quantify the issues in some outrageous way. But advocating a default on willfully incurred obligations in the name of fiscal responsibility takes things to a new extreme.

—perturbed

PS: Could Alicia Munnell be onto something with her suspicion of pension envy?
wink

posted by: financial security for life | December 13, 2013  9:39pm

Providing coverage to all workers is a noble goal. Thankfully, the current retirement system provides a solid foundation for achieving this. In fact, 80 percent of workers have access to an employer-sponsored retirement plan. Of those covered, approximately 80 percent participate in these plans. With some changes to laws that would make it easier for employers to offer plans, more workers will get coverage. A new report by ACLI, ICI and ABC examines the issue well.

posted by: imheretohelp | December 13, 2013  11:28pm

All of you here seem to be ignorant of the topic at hand…facts have a way of killing a good argument I know but sorry it must be done.

The total percent of budget # is 9% going to 11.5% ..and by the way that is 34% of payroll and climbing to 40% by 2028.

you’ll find it here: http://crr.bc.edu/wp-content/uploads/2013/02/Connecticut.pdf

second the underfunding in Detroit was hidden by the unions…they are using an 8.4% rate of return!!! the reason for inflating the return and hence the underfunding issue is simple…Michigan law allows the Gov. to remove pension boards that drop below 80% of funding…so hiding it keeps them there jobs but screws the rank and file pensioner…see how the unions help..lol

the issue here in Ct and why the masses are finally upset is simple…the private sector is hurting…high taxes, poor job outlook, ect…when the economy was booming it was easier to hide the political dealing.  Now people are more aware of there tax bill, they see public sector employee #‘s in the paper and go can’t understand how Uconn can pay so many people so much money for so little work…

or worse yet the State police officer that is allowed to inflate there pension doing OT the last 3 years of there 20.  hard job…yes…OT sure…but doubling your pension by doing roadwork hours ...not fair to the rest of us…

posted by: perturbed | December 15, 2013  7:01pm

perturbed

imheretohelp wrote:

“All of you here seem to be ignorant of the topic at hand…facts have a way of killing a good argument I know but sorry it must be done.

“The total percent of budget # is 9% going to 11.5% ..and by the way that is 34% of payroll and climbing to 40% by 2028.”

Thank you for a very informative summary from the Center for Retirement Research at Boston College. However, if you really want to help, you should try to be accurate. Unfortunately, the figures you cite are not accurate as part of the preceding discussion.

If we read that CCR document more carefully, we see that the numbers you cite include non-pension costs.

So while Munnell cites a 5% nationwide average pension expense as a percentage of overall state and local budgets in the NPR interview, the CCR report has the number at 4.6%. According to the report you cited (again, thank you for that because I agree with you—we all need to stick with the facts), in Connecticut the equivalent numbers are: 5.5% before the Great Recession and 7.0% afterwards. Yes, those numbers are higher than the national average, but not shockingly so. If the state sticks with its recent plan to eliminate the unfunded liability of the state pension plans (developed under Malloy—the one fiscally responsible thing he’s accomplished), the number will apparently have to rise to 8.6%. That jump in payments is to make up for past mistakes, including the way Tier I was originally funded, and numerous payment holidays when the state didn’t contribute the required amounts to the funds.

In fairness to your larger point, it is certainly appropriate to discuss total costs, including “other post-employment benefits, it’s just that this discussion so far hasn’t included them. But as with pensions, you still have to consider those expenses part of the total compensation package due government workers for their efforts. The state could absolutely not attract or keep employees with the needed skills at their typical wages without those other benefits factored in. That is my first-hand observation anyway.

—perturbed

posted by: perturbed | December 15, 2013  7:04pm

perturbed

One thing everyone needs to be made aware of—and this goes to a point Joebigjoe made above—is the difference in the way private sector compensation fluctuates compared to the public sector. Private sector compensation responds very quickly to job market conditions. When the job market is favorable to workers, private sector pay responds quickly. In contrast, the state’s compensation is established in multi-year contracts that cannot easily be revised. So what we end up seeing is that the state pay is out of phase with the private sector job market cycles. When the economy is booming, state employees are stuck with lower wages, and it can’t compete with the private sector for qualified new hires. Many state workers leave for higher pay elsewhere, and the ones that stay are left griping about how much more they could make on the outside.

In a recession, especially one as big and long as the Great Recession, the private sector looses ground quickly, while the public sector typically freezes pay rates. (While the recession was used to justify steep cuts in the pensions of CT state workers, our pay never went lower.) So what sometimes happens is that temporarily, maybe for a few years, the state compensation level actually compares favorably to the private sector. But that temporary situation doesn’t last too long, and invariably the economy recovers, private sector pay recovers, and state workers are left with lower wages again. I’ve personally seen this cycle play out repeatedly over the 27 years I’ve been with the state.

On average, Munnel is correct: state pay is lower than the equivalent private sector pay—particularly when controlled for age and education level. Our memories are short, but five years ago that was exactly the case. We couldn’t recruit qualified new hires, no one was interested in state employment, the starting pay was much lower, and nobody gave a damn about the promise of a defined benefit pension. They really couldn’t have cared less.

Enter the Great Recession, and all of a sudden people see value where they saw none before…

—perturbed

posted by: robn | December 16, 2013  11:01am

Pensions “have worked well in this country for the middle class for about eighty years”? The failure of the Steel industry, the Automotive industry and the City of Detroit say otherwise. I’d love to think they could work but driven by back-room political deals between unions and politicians pensions are a Ponzi scheme only for the benefit of a few.

posted by: imheretohelp | December 17, 2013  2:39pm

@perturbed

I appreciate the discussion but to try to separate pensions and “other cost” like they don’t exist is fine as long as the unions will give them up the next time they bargain…otherwise they have to be addressed as part of this discussion…

second I think saying the state could not hire qualified people during the last go round when the economy was stable is disingenuous…lets be clear in that the state has never really sought to expand its hiring…they don’t bother to recruit of the college campus or offer internships with the possible exception of social services ...so lets not perceive the lack of effort in hiring for a lack of intrest in the positions

last but not least the under funding issue…the unions jumped on the under funding as a way to save jobs arguing that the economy would come back and all would be well…they said the state could not afford to lose its valued and experienced workforce with cuts and layoffs and buyouts…heck what would happen if the economy recovered ...the state needed to look long term and ignore the short term funding gap…well guess what long term ain’t working out as planned…

I think they reason people are sick of it is that its finally in the open…towns and schools being forced to keep horrible employees because of arbitration clauses but by the way it seems that only twice out of 180 arbitrations did a union employee lose…seems a bit lopsided ...(remember the willimantic guy that was plowing out family members driveways on town time with a town vehicle!!!)...and lest we forget that the same officials that are elected by the unions are then supposed to negotiate
in the best interest of the state/city/town…yeah right binding arbitration and crony capitol politics needs to end before it buries this state

posted by: perturbed | December 17, 2013  9:34pm

perturbed

@imheretohelp,

I actually agree with much of what you say, and appreciate your candor.

There are just two points I’d like to make in response. First, while I freely admit I’m not familiar with the experiences of other agencies, I’m here to tell you that my agency most certainly did recruit new hires, and we recruited heavily. There’s no disingenuousness here. We recruited at college job fairs, both in-state and out of state, for several years prior to the economic implosion. I was asked to help in the effort, but declined for unrelated personal reasons. My co-workers who staffed the tables couldn’t even get a nibble of interest. Private industry lured qualified graduates away with $10k to $15k higher starting salaries—and tech gadgets. The only nibbles of interest that we did get were from candidates who were obviously not well suited to the position. We desperately needed new employees, but we couldn’t justify hiring such poor matches. (Ironically, after the Great Recession hit, top-notch candidates were banging on the door in droves, but after a brief window period closed, there was a hard hiring freeze in effect and we couldn’t make any offers.)

The second point concerns the relationships between elected officials, the state employee union bosses, and the rank-and-file state employees. Unlike anything I have ever seen before—or anywhere else— what we have in this state right now is a union leadership that is willing to compromise the interests of their state employee membership in order to make backroom deals with the elected powers that be, in pursuit of their own separate goals. If you recall, when our trusty union bosses negotiated the SEBAC 2011 debacle, they did it in absolute secrecy—the rank-and-file were locked out completely. When we got out first crack at ratifying the horrendous package of unprecedented (and probably illegal) pension concessions, we soundly rejected it. Guess who’s side the union bosses took. Here’s a hint: it wasn’t the side of their state employee members! Our trust union bosses stood shoulder-to-shoulder with Malloy and his henchmen trying to whip their members into line. They threatened layoffs louder than Malloy ever did. They produced YouTube videos with emotional appeals aimed at convincing state workers how good a deal it was to loose huge chunks of their pensions. Then they actually lowered the SEBAC ratification bar, changing the rules while the game was on to make sure the secret deal they cooked up with Malloy would pass. And the legislature stood right there with Malloy and the union bosses. In other states, we saw the union bosses fighting for their members. In CT, we saw the union bosses fighting against their members. It will be mighty interesting in the next election to see if there’s any loyalty left between the rank-and-file and the politicians and union bosses that betrayed them. (At least Donovan got what was coming to him.)

—perturbed

posted by: Joebigjoe | December 18, 2013  8:45am

Perturbed, I think this a great example of how when you are in the middle of something you don’t necessarily see what is going on looking back in at you…if that makes sense.

First of all I’m going to assume that the jobs that you were trying to recruit for were jobs that competed with other firms that provided opportunities for innovation. I came to that conclusion because of the tech gadget offers by competing private sector employers, and the fact that with college grads begging for jobs you couldnt get interest.

College grads cant find jobs around here so if a firm is offering tech gadgets its for a skillset (ie engineering, programming) that is more in demand and can offer a career path with innovation opportunities to keep people interested and also personally marketable. The state can’t offer that. It’s were innovation and the desire to run a profitable business go to die.

Seems like in the last 24 hours the Federal government can offer that because many companies are now accusing the Fed govt of stealing their intellectual property, so that might be pretty cool. Sort of like China within our own country.

Secondly is your feelings about union bosses throwing you under the bus. The reality from on the outside looking in was that people lost careers, homes, tremendous amounts of 401K value, in 2008 and beyond. The state workers kept moving forward during that time and didnt feel that unless they had a spouse in the private sector.

I don’t like your union or your union bosses, but I think you dodged one big time. There should have been alot of layoffs and changes to the pension promises after 2008 but there weren’t.

I said that to another state worker recently and they pointed out that the stock market is up now. They made my point because when I started talking about QE2 and the trillion dollars a year being put into the market by the Fed pushing a button they didn’t know anything about that.