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Column: Should Public Workers Have to Pay More?

The state's fiscal mess is mostly not their fault.

Over the last few weeks, the battle over New Jersey public employee pensions and health benefits has been fierce.

Last week, .

The issues often are portrayed as simple ones—the unions are bullies who strong-armed state or local employers to get cushy perks for their members, or the governor and Legislature are the bullies stealing hard won benefits and collective bargaining rights from poor workers.

It’s actually much more complicated than that.

Way back 20 or 30 years ago, there was pretty much no doubt that New Jersey’s public workers on a whole were low-paid compared with people in the private sector. If you went to work in a public job, it was for the benefits, particularly for a good pension.

Then came Gov. Tom Kean’s $18,500 minimum starting salaries for teachers, which had a ripple effect into other jobs. Good times followed and teachers were getting pay raises approaching double digits. Other unions sought similar salary hikes.

Today, there are districts where a 22-year old fresh out of college can make $50,000 teaching from September through June. In 2009, a probationary patrolman in Chatham Township with no experience started at $55K and got a $1,000 bonus for having a bachelor’s degree. State agencies employ about 75 people working as public information officers, earning anywhere from $55,000 to six figures.

So how do public worker salaries compare with the private sector today and what does that mean for other benefits?

Unfortunately, no seems to be able to agree on the answer.

A report by the Center for State and Local Government Excellence and the National Institute on Retirement Security found that both the salaries alone and the total compensation, including more generous benefits, of state and local workers are lower than those of comparable private sector employees.

But Bureau of Labor Statistics data from 2009 shows that the average government worker made about $2,400 more than the average private sector worker.

But the same data shows that an accountant working in the private sector earned about $7,000 more than a local government accountant.

But one University of Michigan researcher says public sector wages rose 42 percent in the 2000s, compared with 32 percent for private sector wages.

And so on, and so on.

What seems clear is that pay for public workers, particularly those in unions, has kept rising while many in private sector jobs have had to deal with wage freezes or layoffs. Only very recently have public workers agreed to pay freezes or lost their jobs.

Fewer and fewer private workers today have the luxury of a traditional pension, and if they do, there is no guarantee their employer won’t freeze or cut its benefits before they retire or after. Public pensions, on the other hand, are sacrosanct.

Taxpayers are jealous.

But is that any reason to impose the kind of large pay cuts–and forcing workers to pay more for their pensions and health benefits is a pay cut–that a majority of lawmakers just approved, and that Gov. Chris Christie is likely to sign?

Under the legislation, workers would have to pay as much as an additional 2 percent of salary to fund their pensions and several thousand dollars, depending on their pay, for family health insurance.

If you are of a certain age, you remember when everyone had a traditional health insurance plan, which allowed him to go to any doctor without need of pre-certifications, and he paid little or nothing for it. That’s the first health insurance I had as a full time, private sector worker in a low-wage reporting job.

Today, it seems, everyone is stuck in an HMO or PPO with all sorts of rules and limitations and is paying on average 30 percent of the premium for a family policy, or $4,000 a year, according to the Kaiser Family Foundation and Health Research & Educational Trust. How we got here is a complex national problem that President Barack Obama’s health care reform did not fix, and Congress does not seem to want to try to tackle.

How New Jersey’s pension funds became so deeply underfunded, however, is an easier question to answer. It includes legislators of both parties handing out pension enrichments to individuals and groups as freely as candy on Halloween while at the same time governors starting with Christie Whitman in the 1990s up to Chris Christie last year refused to make the necessary payments into the system, and sometimes told local governments they didn’t have to make any payments either. The result, according to the New Jersey treasurer, is a $54 billion unfunded liability that was the fault of local workers only in that they sought or agreed to higher pension payouts.

Now they are the ones suffering.

Should they?

Reminds me of what happens in corporate America. The CEO of a national corporation is desperate to make the bottom line attractive to investors so he cuts staff at local offices. The local offices put out a smaller and less attractive product and lose customers. Income drops. To save the bottom line, he cuts more staff, thousands of hard-working relatively low-paid employees over the period of a couple of years. The product keeps suffering, the customers keep abandoning it. And for this, he receives $9.4 million a year in pay and stock options, not to mention the other perks of office.

The average worker just can't catch a break.

If you want more details about the legislation, you can find an explanation here.

Colleen O'Dea is a writer, editor, researcher, data analyst, web page designer and mapper with almost three decades in the news business. Her column appears Mondays.

DidUReallyJustSayThat June 30, 2011 at 04:27 PM
According to NJ PERS, only teachers retire after 25 years of service, or more, are eligible for free health care from the state of NJ. I also don't think you can "retire" at less than 55 years of age without serious consequences to your retirement benefits. Something is wrong with the facts in this case. The retirement benefits we pay for are fabulous, but not that fabulous.
Lurky Loo June 30, 2011 at 04:46 PM
Thats what happens to people like Wilbur who have nothing left to add rationally. They lash out because they're beat and it's all over but the crying and I will keep posting this message until the cows come home so go ahead and smite my comments again.
Observer June 30, 2011 at 04:46 PM
Robert, your "story" is very creative but has more (factual) holes than a slice of Alpine Lace! You must be a writer for Faux News in the Made-up News Department! The example you cite (a 42 year old NJ public school teacher with 20 years of service), would be considered Tier 1 employee in the TPAF (Teachers Pension and Annuity Fund) system. Under current NJ law, a Tier1 employee with only 20 years of service would not be eligible to collect a pension until reaching age 60 and therefore would also be ineligible to receive any medical benefits. Don't believe me? See the following link: http://www.state.nj.us/treasury/pensions/epbam/exhibits/handbook/tpafbook.pdf In the future, please fact check.
Lurky Loo June 30, 2011 at 04:51 PM
Thats what happens to people like Wilbur who have nothing left to add rationally. They lash out because they're beat and it's all over but the crying.
Lurky Loo June 30, 2011 at 04:52 PM
Thats what happens to people like Wilbur who have nothing left to add rationally. They lash out because they're beat and it's all over but the crying.
Observer June 30, 2011 at 05:34 PM
Robert, your "story" is very creative but has more (factual) holes than a slice of Alpine Lace! Sounds more like a Faux News story. The person you cited, a 42 year old NJ public school teacher with 20 years of service would be considered a Tier 1 member of TPAF (Teachers Pension and Annuity Fund). By current NJ law, she would not be eligible to collect her vested pension until she reached age 60. Since she would not be eligible to receive her pension, she would also be ineligible to receive medical benefits. Don't believe me? Check the link: http://www.state.nj.us/treasury/pensions/epbam/exhibits/handbook/tpafbook.pdf Fact check prior to posting.
Robert Catalanello June 30, 2011 at 06:13 PM
I must correct myself. My cleint's wife is actually still employed as a teacher in NJ. I misspoke when I said his wife had retired at age 42. In fact she is still teaching IN NJ and the family is insured under her plan. Imagine the decision to be seperated from your family by such a great distance. Clearly there is value in the benefit package. Again, I feel we must consider this value in duscussions on educator compensation so that we may raise the level of debate from the mere gainsay of opposing viewpopints to some sort of intellectual argument in order to reach a compromise solution for the benfit of all citizens.
Patrick Franklin June 30, 2011 at 07:37 PM
Hey Randy (aka Roll Back our taxes), I was talking to a senior in town today and he told me that Gov CC had significantly cut the Homestead tax benefit for senior/disabled people. Which according to him was made to ease the tax burden for seniors who have been paying NJ taxes for decades. In 2009 he received a tax break of $1500, after Gov CC changed it he got $0 back and 2010 and after another adjustment probably around $300 in 2011. If this is part of the reason your fighting I can greatly understand. Gov CC loves screwing teachers, seniors, and the disabled. He should fit in great once he leaves this state for Washington.
DidUReallyJustSayThat June 30, 2011 at 07:45 PM
PF (aka FPD) - Couldn't one say the same about your comments?! As for all the cuts, where would you suggest getting the billions it would take to restore all the programs that had to cut because the golden goose (aka Income Taxes from the Rich) finally dried up?
Bob Boyle June 30, 2011 at 08:32 PM
The power and influence that public sector unions can exert at the bargaining table is quite formidable while the taxpayers have to rely solely on their elected officials, primarily the governor, to represent them. However, for too many years, the representatives of the taxpayers have been influenced by a conflict of interest because the unions they are negotiating with provide millions in campaign contributions and thousands of campaigners as a reward to those elected officials who support the union agenda while actively opposing those who do not. Witness the comment of ex-governor Jon Corzine, while campaigning for reelection in 2009, in front of a CWA union rally in Trenton that "I am on your side". Such words speak for themselves. Governor Christie has chosen to be on the side of the taxpayers’ and is paying the price for doing so, including being called among other things a Nazi. Well I hope CWA District 1 Vice President Christopher Shelton, the union official who made those statements, is better at his union job than he is a student of history because one of the most famous political leaders in our history was a staunch opponent of public sector unions. That leader was Franklin D Roosevelt, hardly a right wing, anti union zealot. If Christie is a Nazi then so was Roosevelt. Going forward, we need to make sure the negotiation process is not tilted in either sides favor in order that fair and balanced agreements can be reached.
Sir June 30, 2011 at 08:33 PM
It is called shared sacrafice.
Lurky Loo June 30, 2011 at 09:19 PM
FYI I do not have tattoos and a 4yr degree but what does that have to do with anything other than you love to incite people by demeaning them? You seem to be the one lacking in an any form of education . You also lack tolerance for anyone other than ones who share your views, as you resort to name calling and belittling. I guess you think it makes you a big man, it doesn't. It makes you small, narrow-minded and about as close to a racist as I have seen.
Bob Boyle June 30, 2011 at 10:23 PM
Patrick, my comments involving FDR were limited only to the fact that the concerns of CC or Governor Walker relative to the power of public sector unions are not unique to the Republican or conservative movements but were shared by an icon of the liberal left of the Democrat Party and therefore any attacks by individuals on people have issues with the power of public sector unions should be accurate and not one sided. The fact that FDR would never even have allowed public sector unions to exist in the first place never seems to come up when the Republicans and conservatives are attacked as being anti public union and this seems intellectually dishonest. This is the single point I was trying to make and nowhere did I make any effort to draw a comparison of CC's career to FDR's. If simply pointing out missing historical comparisons and facts on specific issues between current and past politicians is idiotic, then I guess I am guilty.
Patrick Franklin June 30, 2011 at 11:34 PM
Okay, no problem.
Robert McDowell July 01, 2011 at 12:03 AM
Mr Catalanello, Just wondering if there is something about this story that you would like to change? Bob McDowell
DidUReallyJustSayThat July 01, 2011 at 02:13 AM
RMcD - Mr. Catalanello's provided an update, but the Patch isn't properly posting updates under the original story, including yours. Oh, and since you are running for council, what's your position on Madison's employees paying more for their benefits? Madisonians would love to know.
Patrick Franklin July 01, 2011 at 05:52 AM
Apparently this thread is having technical difficulties, maybe the discussion should be continued in another area.
Robert Catalanello July 01, 2011 at 12:49 PM
To be clear, I made an error in my first post. I misspoke yesterday when I said my client’s wife had retired as a teacher. She has not. I was confused when he said she was driving out to their new home so I (and my colleague) assumed that she was moving out for good but in fact it turns out she is just going for the summer. Everything else I wrote is accurate and the family is most certainly on her insurance plan, not his fortune 50 company’s plan. The point is that in order to have a rational, productive discussion about educator remuneration we must include some monetary equivalent/measure of the benefit packages they receive in NJ as they have significant value. Once we come to some sort of an agreement on the value of these benefit packages it becomes possible to have a constructive argument, as opposed to the mere gainsaying of the opposing viewpoint, in an effort to reach a compromise solution.
Prentiss Gray July 01, 2011 at 01:23 PM
I think we often ignore that union members are taxpayers as well, even public union members. They have a lobby in Trenton, good for them, they pay for it. It's very expensive to belong to a union, so members expect quite a bit for their membership. In the past it's made a big difference in their lives, and probably will again soon. The way I see it the only difference between Union lobbies and corporate lobbies is who they represent. For the unions it's their member workers, for corporations it's the management and stockholders.
Steve Wells July 01, 2011 at 01:52 PM
First, Mr. Catalanello, as a Councilman, if he wants to comment in this area, should be focusing his criticisms inward, on the much higher paid (compared to teachers) municipal workers whose salaries and benefits he has not openly challenged. It might also be pointed out that his client's wife sacrificed her earnings POTENTIAL by choosing to be a teacher, and also contributed far more to society over those 20 years than most self-serving corporate executives and the majority of Fortune 500 companies who define their existences by how much profit they can make, regardless of how many individuals may get HURT in the process. No constructive argument can take place until respect, not condescension and criticism, is afforded to those who serve society rather than simply allow accumulation of money and political traction to be their "success."
Patrick Franklin July 01, 2011 at 10:17 PM
Yeah we know you either made a error or made up the story. So what is the point of this short story anyway?? You know someone who is married to a teacher, who has good medical coverage. What is her yearly salary? What diplomas and credentials does she have? Do you think she is not entitled to good medical coverage in addition to her salary? You don't know nearly enough about her contract to even have a logical opinion on it. The point here is in order to have a rational, productive discussion we must bring facts to the discussion. Not stories or third party information.
Observer July 01, 2011 at 10:43 PM
Patrick, your comment is spot-on. I hope that guy isn't an ambulance chaser because if he is, it doesn't reflect well on his profession.
Karin Swenson Szotak July 02, 2011 at 12:06 AM
Mr. Catalanello is not an ambulance chaser, I assure you. This stream has people from all towns who have strong opinions either for or against teacher and their unions. When anybody accepts a job, they consider the entire package, not just salary, but bonuses and healthcare. I happen to be fortunate enough to be a stay at home mom who has dedicated a great deal of time to volunteering in schools and my church. But my husband has not received a raise in 3 years and the health care package is not great, but is certainly better than average. However my husband receives yearly bonuses and stock options that teachers and public service workers don't receive. It's all about choices that we make and given that this weekend we celebrate our freedom to make choices, we shouldn't be demoralizing anyone who decides to dedicate themselves to the profession of serving others, whether it is a teacher or municipal worker or anyone who works in the private sector paying taxes. We all serve a purpose and we should recognize that much. At least Mr. Catalanello as a public figure has posted his name along with his opinion. I don't take away anybody's right to remain anonymous but it is certainly a lot easier to post remarks when your name is not attached. I'm thankful we can all say what is on our minds, but wish we could be a bit kinder to each other as we voice our opinions.
Patrick Franklin July 02, 2011 at 01:14 AM
Well said Karin. Its a very touchy so being kind becomes difficult. I wouldn't worry about anonymous posters too much. Remember "you can't stop the internet".
Beachdudeca July 02, 2011 at 11:02 PM
People there is way to much anger here. The big question is what are the various cities, counties & states going to do now that they need to bring spending inline with costs. For Texas this has meant they just had to cut $4 Billion from public school funding over the next two years. That means doing more with less teachers, buildings, etc. For Morris county and New Jersey it just comes down to the simple choice do you layoff 1/2 of all teachers, police officers, firemen, and all other goverment workers or will retirement benefits be changed. Teachers and all others with generous packages my take the stance that these benefits were negotiated and are due them but the worse case result could be that all packages are cancelled and they find themselves with nothing as they approach retirement. What is will hopefully happen is that all pensions will be converted to 401ks with a generous match and health care components will not exceed the level of contribution those in private industry are required.
Maxim Sapozhnikov July 03, 2011 at 12:37 AM
I could start with disbanding the rat nest that is Dept of Ed. That alone would save a couple of hundred mils, as well as guarantee that our children get EDUCATION instead of costly daycare spiced up with political hogwash. Next, give the unelected legislators-in-robes a hefty boot up their behind. That will stop Abbott waste, another cool bil every year. Then allow private schools to open, total all the tax money (both local and state) spent on schools, divide it by the number of students, and hand each of them a voucher. For the underprivilged kids in Newark, that'll open the whole new world of opporunity. And guess who's against it - yeah, UNION.
Peter July 04, 2011 at 02:05 AM
After 123 comments, please shut this down. Everyone has made their point. Enough.
Bob September 26, 2011 at 10:37 AM
Why do small business owners who typically get shafted by larger businesses, always seem to support policies that favor large businesses? Small business cry for tax cuts to create jobs. Yet it's the large businesses, typically public companies who; are paying little taxes thanks to loop holes, run a business w/ a majority focus on quarterly results leading to bogus accounting practices. Small businesses should be clamoring for a level playing field and equitable taxing, not just blanket cuts. Small business should take a page out of the union play book. Unions were organized to counter corporate greed and give the little guy a voice. Agreed, in many cases they have gone too far and caused expensive inefficiencies in some arenas, but they gave the little guy the ability bargain.
Roll Back Our Tax November 21, 2011 at 09:26 PM
Report cards are in and here's the scores.. Here's the site for the municipalities that are ABOVE the 2% property tax cap http://php.app.com/proptaxes11/results.php?COUNTY=%25&MUNICIPALITY=%25&cap=Above&Submit2=Search and BELOW the 2% property tax cap http://php.app.com/proptaxes11/results.php?COUNTY=%25&MUNICIPALITY=%25&cap=Below&Submit2=Search BTW...here's the link for the school system salaries. I am not trying to get on the teachers but I'd say "educators" as a whole are well paid starting at $275,000. http://php.app.com/edstaff/results2.php?county=%25&district=%25&school=%25&lname=&fname=&job1=%25&tfm_order=DESC&tfm_orderby=SALARY Pension funds aren't too bad either... http://php.app.com/NJpublicemployees11/results.php?lastn=&firstn=&location=%25&countyname=%25&fundname=Teachers+Pension+and+Annuity+Fund&tfm_order=DESC&tfm_orderby=locsal If you want to see what an agency, town or pensioner makes go to this site. http://www.app.com/datauniverse/ Here's the reality of some situations. Over 3,856 public workers in NJ making over $100,000 per year with the first one holding (8) positions with a salary of about $320,000. Building nice pension funds. BTW...this is dated 2008. . http://php.app.com/NJpublicemployees/results2.php?Submit3=here
Roll Back Our Tax December 31, 2011 at 12:29 AM
Glad 2011 will be over soon. Will 2012 be any better? Probably not. A look at things to come with Greece leading the way. See what happens when austerity plans have to be implemented because a country is too deep in debt to pay their public employees and they take it out on the private sector workers still employed. . http://www.telegraph.co.uk/finance/financialcrisis/8786547/The-Greek-tragedy-no-money-no-hope.html http://endoftheamericandream.com/archives/financial-panic-sweeps-europe-as-the-head-of-the-imf-warns-of-a-1930s-depression http://theeconomiccollapseblog.com/archives/the-number-one-catastrophic-event-that-americans-worry-about-economic-collapse

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