Note: This blog draws in part on my experiences and observations interviewing political figures, writers, and analysts for "The Campbell Conversations" on WRVO. To hear past interviews I refer to in these posts, please go to the show's website. The views expressed here are solely my own, and do not represent Syracuse University, the Campbell Institute, or the WRVO Stations.


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Wednesday, January 25, 2012

More Pension Myths?

The bashing of public employee salaries, pensions, collective bargaining rights, and competencies shows no signs of slowing.

Consider this more subtle example from today's Post-Standard lead editorial, "Pension Plutocrats," which you can find here.  The problem is in the following sentences:  "One problem with pension reform is that not everyone in the pension system is getting big bucks.  The average public pension in New York state is just $19,000 per year.  The federal average is $31,633.  But nearly 15,000 federal retirees receive six-figure pensions.  The most well-compensated federal retiree...."

And then the piece goes on to name several individuals with some justifiably unsettling pension payments.  These examples are in addition to the individual pension figures cited at the beginning of the piece, enjoyed by Newt Gingrich, Dick Cheney, and Tom Daschle. 

Here's the problem:  The listed examples are Members of Congress, a vice president, and two executives from federally funded institutions outside of the mainstream federal workforce.  They are not typical federal employees.  But many--and I'm guessing most--of those 15,000 in the paragraph above are former executives in the federal workforce--the "bureaucracy."  The clear implication is that no one who worked in the federal government deserves a six-figure pension.  That's what's debatable.

Let's look at two factors.  It's generally accepted that a pension (or the payouts from a 401k) should bear some relationship to one's earning history.  Rounded to the nearest hundred dollars, salaries in the management levels of the federal government--GS-14, GS-15, and the Senior Executive Service (SES)--have the following ranges:  GS-14, $84,700 to $110,100; GS-15, $99,600 to $129,500; SES, $119,600 to $179,700.  Many career federal employees spend a lot of their career life at these levels; I've met many GS-14s who are in their 30s and 40s, for example. 

The frequent reaction to the figures I've just noted--that federal employees are simply overpaid--introduces the second factor.  It's also generally accepted that rates of pay should bear some relationship to the level of responsibility and accountability of the employee.  But when you consider the amount of money, resources, and extensiveness of operations that these executives are responsible for, their salaries seem low in comparison with the private sector.  Again, I've met many GS-14s and GS-15s whose units they manage are responsible for hundreds of millions and often billions of dollars.  It's important, professional, managerial work. 

The real problem with public pensions is not their rates, per se--absent the kinds of outliers that the paper's editorial called out by name.  The real problem is the comparatively shorter amounts of time that career workers have to spend at a given earning level in order to earn the highest pensions.  But that, I think, is more a problem for certain state and local-level public employees.

I admit that it may seem like I'm banging on about a small wrinkle, but the level of toxicity surrounding public service as a profession is eroding the esprit de corps of the public workforce, such that performance and efficiency, not to mention quality of life, must be suffering.  We're not going to get to better government by beating up on government.

28 comments:

Anonymous said...

Your comparison of federal bureaucrats to private sector executives," But when you consider the amount of money, resources, and extensiveness of operations that these executives are responsible for, their salaries seem low in comparison with the private sector." Is this a incorrect analogy due to the fact that private sector jobs are based, in number and salary, on a fluid market and not public service. To better comprehend why some federal administration positions merit high salaries and pensions might be better served by moving away for this common comparison. These jobs are driven by differing missions, though they might have similar responsibilities. Afterall, government is not a business.

Grant Reeher said...

Thanks very much for the comment. I get your point and take your point. I may not be as confident as you that salaries in the CORPORATE private sector are based on market forces, in the way that we tend to think about markets in the abstract. But that's for another day. And there are lots of folks out there who want to view government as a business in order to criticize government. Again, for another day. But to your point: While the missions are different, I still think that as a rule of thumb, we believe that salaries and pensions ought to roughly correspond with responsibility as measured by the aspects I mentioned. Even taking public service as the defining mission, it's not at all clear to me that government managers are not entitled to a six figure retirement, for a career of service at that level of responsibility. --Grant Reeher

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In some countries, there are retirees who even have to wait for pensions and there are the unlucky ones who die before even receiving their first check. I there's one thing the government should do is to expedite the process and give the veterans what they are due.

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