Wednesday, July 1, 2009

Union Tribune Challenge from Chris Reed

Chris Reed of the Union Tribune sent an open challenge; to prove high pay and benefits are crucial to retain public employees. His belief is provided as; "The truth that's waiting to be discovered is that public employees pay in nearly every category could be frozen for years, with new hires given standard 401(k)-style private sector benefits, with no disruptions for local and state governments."

Chris Reed threw the gauntlet down; but as with anything the Union Tribune does he added qualifiers to his challenge so as to prevent any real, open and honest exchange. Chris wrote this; "But if anyone can present any actual empirical evidence for the retention argument, send it my way and I will post it immediately."

"Empirical Evidence" does not exist and hopefully never will for the sake of the taxpayer and the "Private" sector community. The belief of Republican's and far right aligned individuals would have taxpayers believe "anyone" can and will seek out these "Public" service jobs without the security of adequate benefits or compensation commensurate for the job, locale of work, cost of living and ability to provide for the future of their family. In an ideal world this would not work, let alone the one we currently inhabit. Below is my reply and argument against the ideals of the Republican, Far Right, agenda driven political machine and their attempts at destroying the will of the Civil Servant.


Notwithstanding the practical difficulties of making this argument, I believe this debate is more ideological rather than empirical, since it is not possible to determine one job over the other in the "Public" versus "Private" sector through case studies, which can only be selective in nature but I will take a stab at it.

"Public" employment jobs are in place to provide for the public good. "Private" employment jobs are in place to provide investors with a profit of their investment. In the "Public" sector, the jobs and services provided are done, so that the "Public" benefits. If you seek completely "empirical" evidence you need look no further than San Diego. The word empirical denotes information gained by means of observation, experience, or experiment. A central concept in science and the scientific method is that all evidence must be empirical, or empirically based, that is, dependent on evidence or consequences that are observable by the senses.

You seek to have someone refute your claim that local governments would not miss a beat if they froze wages and provided only a 401(k)-style retirement. I am a police officer and have been for the past 30 years, here in San Diego. I have also served as a Trustee for the Poway Unified School District's Board of Education. In my 30 years with the San Diego Police Department I also served two separate stints as a Board Member for the Police Officer's Association. While serving as Trustee for the PUSD I was a member of Management's negotiations team. I believe my "Real World" experience allows my observations and experience to opine to this challenge.

You appear to acquiesce to the idea that the ability of the City to hire and retain police officers would be greatly hampered if the described changes were to be implemented (401(k)-style retirement and pay freeze for years). I believe we are currently seeing the impact of the pay and benefit cuts (NOT simply a wage freeze) already implemented for police officers. While the list of candidates taking the test to become police officers has been similar to past experiences, the quality of those candidates has fallen. Candidates who compare wages; benefits; and stability of the community they are seeking to serve, have chosen to go elsewhere. Some have accepted job offers, but soon after completing training have left for agencies offering better wages and benefits.

Recent studies have shown, when asked what matters most when seeking career placement; respondents placed "benefits" above wages, 70% of the time. Medical, vision and dental insurance; followed by retirement benefits; then wages, were listed in order of importance. Wages was only considered first, when other benefits offered were not adequate to satisfy a family. It was also noted, when comparing similar jobs in the "Private" versus "Public" sector; candidates placed a higher value on the "Defined Benefit Retirement" offering than they did the wages offered. Conversely when both the private and public job offers had a 401(k) style retirement; the employer who offered a higher wage won out in almost all cases. A factor that played a large part of employees willing to seek employment in the "Public" sector was the reputation of the agency or city (I could end my argument at this point speaking of San Diego as the employer).

The longevity of employees in "Public" sector jobs is greatly a result of the "Defined Benefit Retirement" and the security it provides. When a 401(k)-style retirement is offered, the carrot is removed for the employee to remain with the "Public" employer, when a "Private" employer is now offering a better wage and chance for bonuses and promotion for the same job. The portability of the 401(k) retirement plan does not require an employee to remain faithful, nor connected to the employer, when wages are frozen. The employee is now free to seek employment in the "Private" sector where wages are increasing.

In the many case studies completed by various non-profits and institutions of higher learning (Michigan State, Harvard's John F Kennedy School of Government, University of Findlay, University of Alabama, WorldatWork) the more qualified candidate seeking employment would chose "Private" sector employment over the "Public" sector in "the majority" of cases. Those candidates choosing "Private" sector work did so because they had better financial incentives and opportunities for performance bonuses. These same candidates viewed promotional opportunities to be more readily available for exceptional performance which provided more job satisfaction.

Your idea or suggestion that by freezing public employee pay for years, and providing a standard 401(k)-style retirement benefit would result in no disruptions to local and state governments is most likely true. There would be no disruptions; for a very short period of time. Then employees would begin moving back and forth between "Public" and "Private" jobs, chasing the almighty dollar. We saw this trend in the late 70's in Law Enforcement here in San Diego, when retirement and medical benefits were similar among agencies, but wages fluctuated from year to year. Officers changed agencies as often as they changed shoes. This created a drain of experience, knowledge and stability.

The adage; "You get what you pay for" could not be more appropriate for this argument. If the goal is to "Dumb Down" the workforce of the City of San Diego by paying less and reducing benefits to merely appease the deeper underlying resentment of taxpayers toward the "Defined Benefit Retirement," you could easily do that in today's economy. As the economy improves those workers willing to take on those jobs available in the "Public" arena, will soon flee to the "Private" sector for better pay and similar benefits; again providing for a void of experience and a workforce not capable of providing the services expected and demanded by the taxpayer. The recent exodus of over 500 City employees will provide your "Empirical" data as the City tries to fill the vacant positions of upper level management; technical and skilled positions.

It is crucial to provide "Competitive" wages and benefits to provide a competent workforce. When the benefits (Retirement and Medical) are enhanced or better than those of the "Private" sector, the wages need not be "as" competitive as those of the "Private" sector. When all things are equal, as you are suggesting; the "Private" sector wins out over the "Public" sector in almost all areas.


Anonymous said...

Bravo Steve...a better laid out response I have never heard!

Matt Dobbs

Bill said...

So what happened to Chris Reed? No reply, comment, challenge? Seems you called his bluff Steve. Awesome job!!!

Thank you for speaking for all of us in such a professional and articulate way.

Anonymous said...

Greg Levin, a former San Diego Comptroller, wrote a letter that was published in the Voice of San Diego this evening about the SDUT payroll study. It's a great read that thoughtfully dissects the flaws, falsehoods and lack of journalist integrity for the sake of selling papers...

If you care to read it, here is the link Greg Levin's Open Letter of SDUT lies

Just said...

Great analysis Sparky. I'm just wondering if Reed will respond too?

Just Wondering said...

On a slightly different subject but connected SDUT. I read a letter published by the Voice of San Diego and written by Greg Levin, former City of San Diego Comptroller.

Levin left city employment in late Decemeber 2008 after working his way up through the city's financial operations. He has unique insight into the working of the City's financial operations.

He tells us the SDUT's Watchdog hit piece on city payroll is greatly flaw and inaccurate. I suspect, if anyone should know it would be him. This also makes me wonder how the editor ultimately responsible, Karin Winner, is weathering the storm of legitimate criticism aimed at her and San Diego's newest tabloid, the SDUT.

Here's the link Read Greg Levin's Letter
(you'll need to scroll up a little after following the link)

Trevor the Man said...

Sparky is the man! I read your reply to Chris Reed and said to myself, "Finally, someone put it in perspective." Thank you Steve. Well written and well researched. This is one of the best pieces I have seen and it is dually noted there has been no reply from Reed either here or on the UT blog where you posted to.

Keep the posts coming Steve, they are the highlight of mine and many other peoples day.