France Has Nothing on the RI Public Sector

Folks are rioting in France because they feel retirement at 60 to be a birthright. In Rhode Island, public-sector unions promote the birthright of retiring much earlier, collecting pensions, and starting second careers. That’s what was on Mark Patinkin’s mind yesterday:

Sarkozy is worried that 60 is a ruinously young age for pensions in France, and yet we have 43-year-olds collecting on the back of taxpayers. The question isn’t whether firefighters deserve it, it’s whether taxpayers can afford it. We can’t. The result, said Van Noppen, is that cash-poor city governments have been forced to reduce the count of employees who do work in order to pay the pensions of 43-year-olds who don’t. At least they don’t work for the taxpayers; they’ve gone on to second jobs even as they collect pensions. It’s an irony: The point of pensions was not to feather the nests of productive workers, but to support those too old to work, or who earned a cushion for their legitimate golden years. I’ve never seen 43 — or 54 — described as the start of the golden years.

This system has to change dramatically. Now.

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michael
10 years ago

Let’s put Mark on a fire truck or rescue for twenty years and see how quickly he changes his tune.

Justin Katz
10 years ago

Not to be flippant, but I wasn’t under the impression that you’re still working on a fire truck, either…
More to the substance, though, I think Patinkin’s argument could incorporate your justifiable claim, with regard to the career length of a fireman. Retire from the job after 20 years (or whatever), but don’t collect your pension until 65. Sounds fair to me.

michael
10 years ago

If you read my comment you would plainly see the word “rescue.”

michael
10 years ago

Twenty years ago the City of Providence advertised for the position of firefighter, with the enticement of twenty years honorable service, half salary after those years. I’ve done my share.

mangeek
mangeek
10 years ago

“Twenty years ago the City of Providence advertised for the position of firefighter, with the enticement of twenty years honorable service, half salary after those years.”
That’s a reflection of how hard it was to attract employees from the private sector at the time. Who in their right mind would leave a middle-class job for a firefighting position that had crappy pay and high risk?
Now the tables have turned, though. The municipal unions have managed to make firefighting, teaching, police work, and other government jobs the ‘Cadillac’ jobs.
25 years ago, my parents discouraged me from wearing my ‘firefighter’ hat and put me in front of a computer. They wanted me to ‘have a good career’. If they had only known that I would get better pay, more job security, a guaranteed pension, and lifelong benefits if I had kept that firefighter dream alive. Instead, I work for total compensation lower than many firefighters’ ‘base pay’, nobody gets overtime, and downsizing can happen whenever the economic tides demand it. I have to put away 12% of my income for 45 years if I want to retire with the same deal many public-sector employees are getting after contributing 9% for 25.
I wouldn’t take it away from you, Michael, but I would dramatically alter the deal incoming and existing workers are getting. It’s just not fair that private sector folks choose one or two from the ‘big three’ (good pay, good benefits, job security) and public sector workers get all three.

michael
10 years ago

“Now the tables have turned, though. The municipal unions have managed to make firefighting, teaching, police work, and other government jobs the ‘Cadillac’ jobs.”
“The unions” have done no such thing. Private sector pay and benefits have tanked, making public sector jobs look like Cadillacs. “The unions” have steadily given back and made concessions during the last twenty years, but it isn’t keeping pace with the race to the bottom the private sector employees are engaged in, while their employers profit from the cuts. It won’t end until our workers are equal to those in China and similar countries with an impoverished workforce willing to work for peanuts in hazardous factories, and we become globally competitive.

mangeek
mangeek
10 years ago

“Private sector pay and benefits have tanked”
It’s my understanding that they did’t ‘tank’, they just stopped improving much in the 1980s. Meanwhile, government workers maintained annual 3% raises and boosts. Eventually, it got to where we are today, where you can earn more as a grade school teacher than as a skilled professional in the technology sector.
Let’s be honest, part of this is Reaganomics and trickle-down, with much more wealth being concentrated in fewer hands, but other components are also behind stagnating wages, and wage problems aren’t all caused by Evil White Men wearing monocles:
1. The change to a services economy just fundamentally changes the way we value labor. It’s much more competitive when work isn’t backbreaking, gritty, or dangerous.
2. International competition. We’re not the masters of the world by divine right. Even if the rich weren’t getting richer, we’d have to accept stagnating standards of living as the global economy made us less ‘exceptional’.
3. Technology makes it easy for larger and larger companies to exist; larger companies contribute greatly to income inequality. The president of a 10,000 person company -deserves- a lot more pay than the president of a 10-person operation, and the 10,000 person company likely replaced 100 smaller ones. People on the bottom rung do the same thing in both companies, so their value hasn’t really changed.
Shouldn’t public sector compensation be indexed to the rest of us, even if only for moral reasons? We can’t -all- be public workers; it’s inherently unfair to the producers of the tax revenue for the government employees, now a new class of worker, to say ‘too bad, you missed the boat’ when there are only enough seats for a fraction of the passengers.

michael
10 years ago

Nobody -deserves- anything. A position of firefighter was offered to everybody. Not everybody stayed in shape, took the required courses, showed up for the five different tests, continues to be certified and trained in new technology, puts themselves at risk every shift and works first, second, third shift and most holidays. The disparity in pay is not that great. I have no idea what you do or where, but if you are not making fifty-thousand a year by now, I think you are in your early thirties, perhaps its time to look elsewhere for employment. My sister sells mattress tape and furniture and does far better that I do, one of my daughters makes more than me as a dental hygenist, the other has a great furure ahead of her as an assistant buyer for JJill, benefits and all.
You talk of competitiveness. I works a detail last weekend and watched hundreds compete for a chance as a firefighter. Dozens puked at the end of the agility tests, dozens failed. The ones that passed have a slim chance of employment in a municipal fire department. Those who do make it earned it.
We can’t all own the businesses, somebody has to work.

mangeek
mangeek
10 years ago

I’m doing well enough for myself now, but I’m definitely a statistical outlier. I’m the only one of my closest 20 or so friends under age 30 who owns property or has a 401k with more than a few hundred bucks in it. I know of a few grade-school teachers who have deals with federal contracts who pull in about 80K, plus health and pension benefits. They’re beating me. I’m scared to all hell what will happen when my generation starts to retire and they vote themselves the rights to all the money I’ve saved my whole life. I don’t mind paying a fair share, but if 95% of folks aren’t properly planning for retirement, this is going to be a different kind of place in fifty years. A sad, scary kind of place. Two things I want to point out (I’m sure regular AR readers are having a blast watching us duke it out, since we’re usually lumped together as lefties): 1. Usually, when lots of people apply for a small number of jobs, the pay goes -down-. A smart system might end the selection process with every candidate being asked individually and privately what his or her minimum acceptable starting salary will be. I’ve actually been hired that way. My first job’s pay was carved entirely out of excess in a state building’s ‘toner’ budget, I think I got paid $1,000/month because that’s what I said I would work for. 2. “It won’t end until our workers are equal to those in China… impoverished workforce… hazardous factories… we become globally competitive.” That’s a pessimist’s view of globalization, and it’s not playing out that way. People are very reluctant to let their standard of living -decrease-. Instead, I like to think that we’ll just tread water for a few… Read more »

Justin Katz
10 years ago

We can’t all own the businesses, somebody has to work.

What an astoundingly dumb thing to say. Do you and your wife just sit back and collect money from the business that you own? Or was this just a little bit of the union brainwashing slipping out?

Justin Katz
10 years ago

Let’s be honest, part of this is Reaganomics and trickle-down, with much
more wealth being concentrated in fewer hands

You’re entirely missing another key component. Trickle-down’s effectiveness (in the long term) works to the extent that those who are downstream are able to work their way upstream. Technology (your #3) ought also to make it easier for entrepreneurs and upstarts to capitalize on new ideas or the inefficiencies of their prior employers. Regulations, mandates, taxes, and complicated legalities all serve to create barriers to entry. That’s the big government angle, under heavy influence for big corporations.

BobN
BobN
10 years ago

Despite Michael’s oversensitivity, the situation in France is conflict over the retirement age of state paper-pushers, not firefighters.

Justin Katz
10 years ago

Michael,
I apologize for my response to your initial comment. Trying to do too much in the space of a 20-minute lunch break.

Phil
Phil
10 years ago

Is mangeek the infant on the ETrade commercials?

Ken
Ken
10 years ago

Justin, You said; “I’ve never seen 43 — or 54 — described as the start of the golden years.” In the State of Hawaii some commercial business consider anyone 50 and up in age a “Senior Citizen” you so eloquently put it as the “golden years” and afford them up to 50% discount off the regular price of goods and services. Just need to show valid ID or drivers’ license to validate age so now you’ve heard it and I can send you the newspaper discount advertisements for support. If anyone cares to look into some reasons why the RI state and municipal pension funds are in the unfunded liability mess that RI is in today then review why the elected leaders did not pay into the funds what they promised while the employees continued to pay in (although information is now coming to light City of Providence has been withholding firefighter payroll deductions from their retirement fund and using funds to balance the city budget). Actions like the above sparked a very nasty lawsuit in Hawaii which was won the employees requiring the State of Hawaii to pay required amounts into the fund they were not contributing under agreement. In Rhode Island it is all about an agreed contract signed into law related to the retirement that has since been altered to reflex the current economic conditions and realities which somehow some people don’t read the newspapers, listen to radio or watch TV news because they keep hopping on old subjects that are now out dated using new verbiage like “birthright” and “entitlement” also quoting worse case scenarios as the average norm. No matter how you cut it, State of RI and municipalities are on the hook for not paying in when they should have been doing so. On… Read more »

michael
10 years ago

No worries Justin, I’ve been known to fire off a few things between runs that I later regretted, and Mangeek, I wouldn’t bother coming here if everybody agreed with each other, and Bob, the comment that started it was about my oversensitivity to Mark Patinkin’s delusional world view, that in addition to the news that Cicilinni has been using my 9 1/2 percent contribution to the pension fund to par for whatever he wants put me in a bit of a antagonistic place.

mangeek
mangeek
10 years ago

“Cicilinni has been using my 9 1/2 percent contribution to the pension fund to par for whatever he wants put me in a bit of a antagonistic place.” I feel for you. This is actually something people overlook when they speak about how great defined benefit pensions are. I trust TIAA-CREF to not go spend my investments on stuff when times get tough, they legally -can’t-. Folks who have their retirement coming from government have to worry that their contributions will be misused to plug holes instead of saved for their intended purchase. If TIAA isn’t doing well, I can pull my money out and invest with Fidelity, or cash it out and invest it myself. For government, it’s too tempting to spend retirement contributions on the day-to-day or offer tax abatement and let some future administration eat the cost of lost interest. It goes beyond government pensions too, if a private company fails, pensioners have to lawyer-up and hope to collect after the bondholders. That sucks. At least my retirement savings are -mine-. You can even have your 401k put to good use if you kick the bucket before you collect, I’m setting up a plan in my will to put any remaining assets from my retirement into a trust that pays for education expenses for future generations of the mangeek lineage. If I die between age 55 and 75, there will be a million bucks or so earning interest to send my grandkids to college; can’t do that with a pension. Also, I don’t get the E-Trade baby thing… Is 28 too young to be talking about this stuff? As for the Reaganomics and technology points, it’s true what Justin says. The problem I see is that larger companies are able to count profits in areas where they… Read more »

BobN
BobN
10 years ago

Michael, you have every right to be furious at the way Cicilline has misused your money.
If I were in your position I’d be looking to file a lawsuit against him.
Oh, wait – that’s exactly what you’re doing. It’s a shame we can’t find a criminal indictment to go along with it.

David S
David S
10 years ago

Justin.. I retired with 20 plus years from Warwick Fire. I am receiving 50% of the salary that I was making when I retired. I understand the way that this retirement looks to other people who are still years away from “real” retirement. The entire time (except when my children were very young) I was working on the fire department I also worked as a building trades contractor. So when I retired from the fire service, I did not start a second job; I made my part time work my full time work. I also understand the resentment that this career path engenders with fellow Rhode Islanders that are experiencing difficult times. But there are a couple of points you offer that need some rethinking.
You want fire and police to retire and then not collect a pension untill age 65. Reality would set in. No one would retire. We would have 64 year old firefighters and police. There is a reason why these services resemble military service-its a young person’s profession.
And that point brings up another. Why, if you are saying that local police and fire service pensions are unsubstainable, you do not also find state police and armed services pensions equally so?

Justin Katz
10 years ago

David,
This is nonsense:

You want fire and police to retire and then not collect a pension untill age 65. Reality would set in. No one would retire. We would have 64 year old firefighters and police.

Public safety personnel would have to meet physical standards, and those who cannot, or who prefer to pursue second, less arduous careers could do so without having to worry about their pensions. But if they want to stay in their jobs, and physically do the work, why shouldn’t they?

Phil
Phil
10 years ago

David S
Life expectantcy for firefighters is much lower than other professions is it not? So why not make them wait to latter in life to collect on their pensions, hope for the predictable statistical outcome and that way people here on AR can keep a few more coins in their pockets.

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