Public employees work hard for the money
Back in the day, I would tell my students that if their goal is to become rich, don’t become a teacher. I suppose I could’ve included police officer, fire fighter, emergency medical professional, and a host of other public professionals and workers to that caution.
If I were in the classroom today, I would be remiss not to add to the desire for wealth accumulation the preference for not being considered a thug, mafia member, or some other reprobate given the continued climate of political and social demagoguery. For to many on the right, it is the rich who are noble and public professionals and workers that are slugs, slackers, and parasites—“a bunch of slobs” in the words of Wisconsin senator Glenn Grothman—feeding from the public trough.
If it’s not dollars that motivate individuals to make a lifetime commitment to a public profession, then what compels them? The reasons are certainly varied and personal, but one commonality among them is that, as aforementioned, it’s not about reaping earthly treasure.
The problem is, however, that high-minded intentions will not pay the bills. To flip Jesus’ retort to the Tempter that “Man shall not live on bread alone,” we also understand it takes “bread” to pay the bills: mortgage, rent, car, utilities, food, clothing, and so on.
There was the time in our not-too-distant past when teachers, for example, were expected to be female and eternally non-pregnant. That schoolmarm archetype dominated society’s perception of teachers well into the 1950s. Two factors, though, helped change that stereotype: men entering the profession in larger numbers and the right to collective bargaining, giving rise to teachers’ unions.
According to a recent report, $1,000,000 is the minimum amount a retiring person needs today in his/her 401k to maintain a comfortable, not exotic, lifestyle. Assuming one’s portfolio is not wiped out by another Wall St. meltdown, at a 6 percent return, $1,000,000 would provide $60,000 annually. However, the report said most Americans are under-prepared financially to retire with a mere $147,000 in average assets.
That caused me to wonder how an everyday public worker could save that amount over a span of 30 to 40 years. Dividing $1,000,000 by 40 years, we learn workers would’ve needed to have earned $25,000 more annually to put toward that nest egg.
Further, assuming a 2 percent inflation rate, in 35 years the $1,000,000 base will double. So, premising a worker entering a public professional job today should save $2,000,000 for his/her retirement, he/she would need to earn $50,000 in addition to his/her current annual salary.
Now, I understand it’s not quite that clean and simple, but nonetheless, it gives us an idea, a perspective, as to what it could cost taxpayers if they would opt to ante up to provide a salary scale that provides for both immediate compensation and future investment.
The other side of the financial compensation package, inseparable from the pay scale, is that of the post-career, retirement years. As shown above, it would have been impossible, given their rates of pay, for a teacher, police officer, or fire fighter to put away $1,000,000 over the course of his/her career and still do little things such as eat and stay warm.
Therefore, states created public employees retirement programs as part of the social contract that essentially says, “We cannot pay you big bucks up front for what you do, but know that you’ll be assured of a good standard of living in your later years for having served the people of our state.”
In 1931, the State of Colorado created the Public Employees Retirement Association (PERA), thus predating Social Security by four years. While similar in goals—providing retirement benefits—structurally they operate quite differently with PERA very connected to the ebbs and flows of the market due to its need to invest.
What we’re witnessing across the nation is internecine class warfare stoked and funded by rightwing media and plutocrats. The problem for them is that the political middle is not buying it. According to the recent NBC/Wall St. Journal poll, while a large majority believes public workers have gotten sweetheart deals that need to be reworked, an almost equal number believes in the fundamental right for workers to organize and bargain collectively.
I’m up for having that conversation. When it’s concluded and the dust settles, the general public will understand the sweetheart deal it’s getting given what it compensates its teachers, police officers, and firefighters both during their working and retirement years.