Tuesday, February 16, 2010

Derbyshire: The U.S.A.'s Very Own Greece Problem


The U.S.A.'s public sector — federal, state, and local — is to the private sector as Greece is to Germany. And then some: the gap that has opened up between the pay and (especially) the benefits for our public sector, as compared with those in the private sector, is far greater than a mere 67-63 difference in retirement ages. You want to talk retirement ages?

In California . . . a bipartisan bill that passed virtually without debate unleashed the odious "3 percent at 50" retirement plan in 1999. Under this plan, at age 50 many categories of public employees are eligible for 3 percent of their final year’s pay multiplied by the number of years they’ve worked. So if a police officer starts working at age 20, he can retire at 50 with 90 percent of his final salary until he dies, and then his spouse receives that money for the rest of her life. Even during the economic crisis, "3 percent at 50" and the forces behind it have only become more entrenched.

That's from a fine article on the February edition of Reason.com, subtitled "How public servants became our masters," detailing how, since the legitimizing of public-sector unions in the 1960s, we have moved to a two-class society:

The average private-sector worker, who enjoys a lower salary and far lower retirement benefits than New York or California government workers, will have to work longer, retire later, and pay more so that his public-employee neighbors can enjoy the lifestyle to which they have become accustomed. The taxpayers will also have to deal with worsening public services, since there will be less money to pay for things that might actually benefit the public.

Posted via email from The Blue Pelican

No comments: