As the movement for pension reform gains momentum in Sacramento and throughout California public employee organizations need to carefully look at their message, much of which has not changed in many years. First, public sector employees should be sure that their message or argument is accurate. Next, does that message make sense to the voter? In other words, will that argument persuade the voter to vote against drastic pension reform measures? Public employees should stay away from some of the mythical arguments that national and international unions have traditionally made. These arguments have become a part of the very fuel of the pension reform movement. Here are a few of the classics that, believe it or not, I have recently heard from union leaders:
Old School Union: Public Employees Are Taxpayers Too and Basically Pay for Themselves.
Try It This Way: Public Employees Provide the Essential Services to Keep Our Communities Running.
The old school union argument enrages pension reform activists. Of course most public employees pay taxes, just like everyone else. But the fact is tax revenue generated by public employees only pays for a fraction of their cost. Depending on the study, tax revenue generated from public employees only covers between 8% and slightly over 10% of their costs. It takes many private sector taxpayers to pay for one public sector employee. The old school union argument misses the point entirely. The focus should not be on the actual taxes paid by public sector employees. Rather, the focus must be on the value of the services provided by those employees. For example, most communities would not be desirable places to live without services such as police, fire, parks and road repair. A community without a high level of these services begins to look like a third world country.
Old School Union: Payment of Pension Benefits Stimulate the Economy to Such a Degree That California’s Economy Will Fail Without Them.
Try It This Way: Pension benefits are an investment in the future of our communities.
According to the California Public Retirement System expenditure of pension benefits by CalPERS retirees generates about 26 billion dollars in economic activity in California. That represents less than one half of one percent of California’s overall 1.2 trillion dollar economy. The economic footprint of pension benefit expenditures by CalPERS retirees is inconsequential to California’s overall economy in a pure economic sense. However, public sector employee organizations must focus on a different type of benefit that stable pension benefits provide the community. Stable and attractive pension benefits attract a high quality, committed employee. California public employee organizations need to focus on the overall benefit to the community and not boil it down to economic analysis. Stable pension benefits are the foundation to a stable workforce. In many ways, 1.9 trillion dollar California economy is not possible with a relatively inexpensive stable public sector workforce to support it.
Old School Union: Public Employees Could Easily Make a Lot More Money Working in the Private Sector.
Try It This Way: Public Sector Employees Have Chosen the Path of Public Service, are Valuable, and Should be Recognized.
While historically public sector jobs tended to pay lower salaries than their private sector counterparts recent studies show that is no longer the case. Over the last fifteen years public sector base salaries have increased dramatically, in some cases more than 100%. Those gains have far out distanced their private sector counterparts. Today, in many jobs the public sector employee actually makes more money than a similarly situated private sector employee. What public sector employees have done is make a choice of public service. Many public sector jobs take extensive training and years of experience to master. A community as a whole benefits from this experience. By making a commitment to public service, the public sector employee has undoubtedly sacrificed career opportunities that existed in strong economic times. And those times with return. The skill, expertise and experience of the public sector employee should be recognized and respected by their private sector counterparts.
Old School Union: We’ve Earned It. The Rich Taxpayer Is Just Going to Have to Figure out a Way to Pay.
Try It This Way: The Payment of Wages and Benefits To Quality Public Sector Employees is an Investment in Our Community’s Future.
Believe it or not, the “just tax the rich” argument is still commonly made around the union boardroom and enrages pension reform activists. Again, the focus of the union’s argument should be the value the public employees provides to its industry and the community as a whole. For example, teachers’ unions should focus on school reform and ways of making our schools more effective educational institutions. The primary tool for reform in the schools is a highly skilled, motivated teacher. That teacher will make the real difference in the classroom.