Forbes: America's Two Nations

Forbes magazine examines the difference between America's private and public sector (H/T):

In public-sector America things just get better and better. The common presumption is that public servants forgo high wages in exchange for safe jobs and benefits. The reality is they get all three. State and local government workers get paid an average of $25.30 an hour, which is 33% higher than the private sector's $19, according to Bureau of Labor Statistics data. Throw in pensions and other benefits and the gap widens to 42%.

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Cops and firemen initially were granted early retirement because their work was physically demanding and they tended to die young. These days they live as long as everyone else, but early retirement lives on for an ever expanding pool of public workers. So do liberal disability rules. Nevada law 617.457 decrees that heart disease among uniformed safety workers is job-related. The medical reality, says the American Heart Association, is that a fireman gets heart disease from diet, lack of exercise or genes, not from dashing into burning buildings. Still, veteran Las Vegas firemen hobbled by heart disease can collect an inflation-protected $40,000 a year for life on top of their pension. That applies even if they're healthy enough to work in another occupation.

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All this would be infuriating enough if public employees were merely retiring with pensions that paid out a reasonable percentage of their working wages. Instead, they have found legions of ways to boost payments well beyond those levels. In New York, Philadelphia and several other cities police officers rack up huge amounts of overtime in their last two or three years on the job to goose the base pay used to calculate lifetime pension benefits.

But there's another side:

When misguided policies lead to extreme underfunding, public employees are often left feeling as victimized as taxpayers. Chicago police Sergeant Michael Murphy, 41, is a third-generation cop whose grandfather was killed in the line of duty. Murphy works on an antiterrorism task force and narrowly missed being shot himself 16 years ago. He plans to retire at 55 and draw 75% of his salary. If he makes lieutenant it would top $70,000 a year.

The fly in this ointment is that the Policemen's Annuity & Benefit Fund of Chicago is only 35% funded. This despite the fact that Murphy and other Chicago cops contribute 9% of salaries and the city matches that nearly two-to-one. The city is pressuring police union boss Mark Donahue to swallow pension cuts. Murphy is outraged.

"I made a pact with the city when I was 23," he says. "I put my life on the line. You keep your promise to me when I retire."

Don't shed too many tears for public employees, says Gary Clift, a 52-year-old Californian who speaks with an insider's authority. Clift spent 26 years working for the state's Department of Corrections & Rehabilitation, retiring in 2006. He's now collecting 78% of the $112,000 salary he earned before stepping down and full health care coverage for life. Clift is thinking about using some of the public's largesse to write a book about the outrageous ways public employees milk California.

Clift holds special vitriol for a state program that lets employees retire and return to work part-time as "consultants." Some of the "retired annuitants," known as retired irritants to full-timers, deliberately get themselves laid off to collect unemployment pay without having to even show up, Clift says.

Near the end of his career Clift spent two years in the Department of Corrections' Sacramento headquarters analyzing legislation. The office's mandate was to provide the governor with insights into how proposed laws would affect the giant prison system. Not surprisingly, Clift says his colleagues took another agenda more to heart: doing their union's bidding and heading off anything that hinted at job cuts or lower salaries. Clift says he was the only manager at his former prison that he is aware of who didn't put in for disability on retiring.

The prevailing attitude, according to Clift: "It's just taxpayers' money, so nobody cares."