Five Reasons Why Pension Reform Is a TERRIBLE Idea.

San Jose Mayor Chuck Reed

Nation watches as San Jose voters dismantle benefits for public employees

As California goes, so goes the nation Pension Reform
— author unknown

As a conservative friend of liberal blogger Justin Rosario asked, “Why should public sector jobs be better than private sector jobs?” San Jose voters apparently asked the same question, while casting their ballots for Mayor Chuck Reed’s Measure B, which drastically reduces benefits for our public employees. The question we REALLY should be asking is, “Why have private sector jobs gotten so much worse?” Within many of our living memories, the majority of U.S. workers enjoyed secure employment and generous benefits, including pensions or 401K matching, medical/visual/dental, paid holidays, and vacation time. We forget that back when today’s retiring police, fire fighters, teachers, and other public employees launched their careers, they sacrificed the significantly higher wages then offered by the private sector to follow their calling to serve.

Now that the proverbial chickens have come home to roost after 30 years of gutting our economy with deregulation, supply-side economics, union-busting, and off-shoring, we bitterly resent the few workers who still possess a measure of economic security. Instead of voting against generous benefits for the people we rely upon to keep our City’s infrastructure up and running, we should be advocating more generous benefits for all workers, and for policies that require China, India, and other developing nations (to whom our companies outsource jobs) to rise to OUR standard of living, rather than continuing to lower ours to theirs. We cannot even hope to compete against corrupt, exploitative nations that do not conform to U.S. standards and rule of law.

When my family and I moved to Willow Glen last year, we were attracted to this community’s livability, cohesiveness, creative vitality, diversity, amenities, good schools, thoughtful urban planning policies, and robust local job base. Thanks to abundant Silicon Valley tech jobs, the recession has not hit this community as hard as the rest of California — and the U.S. in general. I greatly admire my neighbors and fellow parents for their activism in the community, general neighborliness, support for law enforcement, emergency responders, and our schools. But, having lived in a rural area in Sonoma County that was devastated by the recession (and often struggles to begin with) I find the budget deficits of our new home in comparatively fortunate San Jose, and Mayor Reed’s call for budget cuts, to be utterly terrifying. I also feel disappointed in my fellow citizens, because San Jose seemed too progressive to vote for something so vile and evil.

Aside from my liberal biases, here are five logical, pragmatic, and business-friendly reasons why Mayor Reed’s ” pension reform ” is the WRONG way to go about balancing our budget:

  1. Pension reform reduces our city’s competitiveness for recruiting quality personnel: Less than a month later, we’re already seeing the negative effects of Measure B. Actually, we’re a total laughing stock amongst public agencies. In the wake of mass resignations from the San Jose Police Department following the passage of Measure B and resulting shortages of trained law enforcement personnel, the SJPD recruiting sergeant emailed other police departments across the country encouraging them to spread the word about our new job openings. Steve James, president of the Long Beach, CA Police Association responded via email, “To be very candid with you, there is no way in good conscience that I could recommend your department to anyone at this time due solely to the efforts of your mayor and other elected officials to decimate the pay and benefit structure you currently enjoy.” San Jose has long proudly boasted of being “the safest city in America.” Let’s see how long THAT lasts. Gee, long hours and risking my life on a daily basis for reduced pay and sucky benefits? Oh yeah, gimme some o’ dat.
  2. Pension reform and other cost-cutting measures will erode San Jose’s quality of life, and (eventually) local real estate values: Despite continued foreclosures and sagging home values elsewhere, the real estate market here in Willow Glen and other San Jose neighborhoods remains sizzling hot because home buyers are attracted to our various and enviable quality of life indicators, including (as previously-mentioned): Public safety, timely emergency response, good schools, parks and recreation facilities and programs, friendly neighborhoods, public transportation, pedestrian/bike/scooter/skateboard friendliness, well-kept roads and sidewalks, abundant jobs, and intelligent urban planning. Unfortunately, these standards will be difficult to maintain if we continue demoralizing our public employees and de-funding services. Neighbors have recently expressed concerns about police responsiveness, as well as the reduced hours of our wonderful public libraries. At the rate we’re going, it’s only going to get worse. How can a city whose home buyers steadily bid up the prices of $500K “starter homes” POSSIBLY be unable to afford its pension obligations?
  3. Pension reform sets a VERY BAD example: Measure B was widely covered by the national media, because of its potential for setting precedents for the rest of our country. If a comparatively vibrant and affluent city like ours thinks it can’t afford to maintain a decent level of public services and employee compensation, I shudder to think about what will happen everywhere else. As some business maven of old once said, “It takes money to make money.” Hasn’t the past 30 years of budget cuts taught us that austerity only makes things WORSE?! Despite the occasional scandal, the public sector is highly efficient and already runs on a shoe-string. If we expect functional public services — and when push comes to shove, most of us do — then we need to be willing to pay for them. Thanks to Proposition 13 (which bases property tax rates on the original purchase price), long-time residential and business property owners do not pay their fair share of property taxes, and this is part of why San Jose — and most of California — runs deficits despite our state’s comparative wealth. Expecting younger generations to pay disproportionately exorbitant taxes for fewer services, when they are fewer in numbers and generally  less prosperous, is disgustingly unfair and discriminatory. Since Federal and State taxes are often disbursed for local services, we need to lobby for tax policies that ensure that the wealthy pay their fair share (I’m not talking about “soaking the rich,” I just think it’s fair for the more fortunate among us to pay the same percentage of their income and assets as the rest of us pay, since they, too, benefit from tax-funded public infrastructure and services). In the meantime, we should seriously consider raising local taxes to maintain acceptable levels of public infrastructure and services. (self-disclosure: we are currently renters, but assume that we will indirectly pay for any property tax increases via raised rents). I also strongly oppose tiered benefit structures (for all unions) in which younger workers/recent hires receive inferior benefits, because they foster inter-generational resentments and are flat-out discriminatory. What kind of message are we sending to our young people when we tell them we don’t give a crap about them?
  4. Pissing off our public employees makes NO SENSE, plus, we should keep our promises:  These workers accepted lower earnings throughout much of their careers in exchange for their excellent benefits packages, plus the warm, fuzzy feelings one gets from public service (many silents and boomers were genuinely idealistic and rejected the corporate world). So-called “pension reforms” are, in reality, an offensive breach of contract, and I don’t blame San Jose’s unions for suing the City (the defense of which will cost our city a bundle of money that could be better spent). By voting for Measure B, we are demoralizing the people who keep us safe, teach our children, drive our buses, run our libraries, process our paperwork, and maintain our parks, roads, and public spaces. How can we even look these folks in the eye, after effectively telling them that they’re blood-sucking leeches whose contributions to the well-being of our communities are worthless to us. If we can’t trust our local, state, and federal governments to keep its promises, then who CAN we trust? Seriously, anti-government, privatization proponents need to think things through and seriously consider whether they would REALLY want private sector, corporate entities to provide our law enforcement, emergency response, education, and other public services … or worse yet … not have these services at all.
  5. By accelerating our “race to the bottom,” we endanger ourselves, our futures, and everything we care about:  By de-funding public employers, we further reduce private employers’ incentive to compete for employees with better wages and benefits. Do we seriously want to continue on this road of making the Good Old U. S. of A. more and more like our third-world competitors? If so, let’s keep on voting to destroy our own government, so we can experience the joys of living in a dysfunctional, post-apocalyptic “Mad Max” world, because that’s where we’re headed. How could anyone in their right mind POSSIBLY consider widely-despised private sector companies like AT&T, Walmart, and Comcast to provide better value for our dollars — in terms of efficiency, transparency, cost-effectiveness, responsiveness, customer service, and accountability — than the public institutions we support through our taxes and our votes? Face it … American workers cannot possibly compete with their counterparts in India’s Bangalore or China’s Guandong Province. When President Barack Obama asked Steve Jobs why he can’t bring Apple’s manufacturing jobs home, back in January, Jobs flatly responded, “Those jobs aren’t coming back,” because Apple and other U.S. companies (which now consider themselves to be “multinational” rather than “American”) can basically force workers to accept squalid third-world working conditions that are illegal in this country (well, that’s not what he actually said, but it was clearly the underlying subtext). If the governments of developing nations like China and India had to play by OUR rules — including transparency, openness, worker safety, minimum wages, health insurance, intellectual property laws, environmental protections, etc. — outsourcing jobs wouldn’t be nearly as profitable, and more middle-class jobs would stay in the U.S. The wages and pensions we pay to our public service employees have also played a major part in keeping the effects of the recession from being even WORSE than they are now, because their continued purchasing power has helped keep the economy afloat. In the midst of a fragile economic recovery, this is NOT a good time for cities to cut benefits and lay off more people.

Over the past three decades, Silicon Valley — and its leaders, regardless of political affiliations — has served as a shining beacon for the amazing possibilities and benefits of technology and progress for improving our quality of life and advancing our society, despite the general decline of other industries and the American middle class. Alas, too many of us have forgotten that the technological advances we enjoy today — along with the big stock option pay-outs which enable a small number of us (not me) to afford those fabulous million dollar homes with hardwood floors, sub-zero refrigerators, and granite counters here in Willow Glen — were originally researched, nurtured, and funded by government agencies. Our collective financial, civil, and intellectual contributions to “Big Government” lifted multitudes from poverty, promoted American ascendancy, and made this country the envy of the world during the latter half of the 20th century. Maintaining moral, technological, intellectual, creative, and economic leadership as a region — and as a nation — requires investments in research, development, and infrastructure that cannot be adequately provided by the private sector.  The current dysfunctional state of our health care system, and uneven outcomes of the once-lauded for-profit charter schools (as reported by Rand Corporation) prove this in spades. Governments are much better at delivering investments and services that benefit society as a whole and foster economic competitiveness, but which do not generate the short-term profits required for our businesses to profit and stay competitive.

Featured image: City of San Jose.

Comments 13

  1. nice article. I was born and raised in Willow Glen and lived most of my life in San Jose area. I worked for the unemployment office for the State of Calif.. in San Jose and worked 20yrs for the City of San Jose. When it came time for me to retire in 2002 I found I could no longer afford to live in my home town, my pension was below poverty. So I moved to San Joaquin County bought a house that was affordable. I figured this is where I would have to live out my life, and then the City took away part of my medical, because I qualified for a small social security benefits and medicate, and left me to pay what those who are still working pay, even though its ten years later. Then they put this proprosition on the ballot that the citizens really do not understand at all, except if you are a government retiree you must be making the big bucks. Well, I am not making the big bucks, but I did my job and served my City because they promised me certain things when I retired. Now that I am retired they are taking them all back at my expense. I dont blame the officers from resigning they were promised and need to provide for their families also. Let the mayor and council get a possee going and go to work for a change.

  2. I agree with most of what you said, but when i hear you say that Willow Glen has great services, parks, libraries, etc, I do feel rather bitter. I live in the vicinity of Sherman Oaks School in San Jose where the single family houses are more visible than the low-income, non-subsidized apartments that also exist there. About 75% of the kids at our local elementary school, Sherman Oaks School, qualify for free/reduced fee federal lunch, a poverty indicator. This area has been so neglected; despite having been declared an SNI area (blighted) by the City in 2000, even after 12 years of fighting we have not been able to get a park, not even 1/8 acre addition to an existing 1/8 acre park. Despite two streets in the area, Parkmoor and Moorpark, we have no park other then an tiny pocket park. The fields of SJCC and the schools used to be open for the community to use as parks, indeed until very recently they were counted by the City as part of the per capital park space for this area. The SJCC pool and the high school pool used to be used by the community. No more. The library and community Center promised us in 2001 and completed in 2010 was empty for over 400 days. The library which will dramatically affect the education and accessibility to computers for perhaps 1/3 of the students at Del Mar High School (high drop out rate) a block away is still not open and will not be open in less than a year, if at all. Our community center opened this week, but the monthly fees of $29 per individual are not affordable to about half the families who live here (Gold’s Gym charges $15). Even the $22 per week per child charged low-income families for summer camp is not affordable to those who need it most. When the breadwinner has been deported or can barely find work, and other people stop having their houses cleaned by the women who live here, my neighbors in the nearby apartments suffer. We do not even have a Summer Lunch program which can be found in eastside neighborhoods to fill the gap for meals when school closes. Many families depend on Sacred Heart Community Services to help them with groceries twice a month, or with the once a month grocery distribution at Sherman Oaks School site for low-income families with minor children in the home. We are so close to Willow Glen (if you have a car – about 1 mile), and yet so far. CORRECTION: the charter schools in San Jose are non-profit. Rocketship, ACE, etc are very successful with children from low-income families with little education and little to no English spoken in the home. Our area is served by Campbell elementary and high school districts and we need some of those charter schools here.

    1. Thank you for telling us about what is going on in your neighborhood. I know the area. I think, for my part, that the story you tell is completely invisible to almost everyone in the power structure, especially the city and county governments much less the state and federal representatives. Have you thought about writing what you have just told us about, to your local Congressional representative? I believe she is Anna Eshoo, and she seems like a good person. At least, I am pretty sure that some of her office staff would come to see what is going in your/our neighborhood and perhaps find a way to help. If you want help doing this please repost back here and I will be glad to help you. Sincerely, Richard Grace (Elisabeth’s husband).

    2. Yikes! Susan, your comment is definitely an eye-opener. I had no idea you and your neighbors had it so rough with the Community College campus nearby and all. (BTW Sherman Oaks school has the same 7 out of 10 academic rating and 4 out of 5 star community rating on GreatSchools.Org as Willow Glen Elementary). The lack of parks and services for children is appalling. It sounds like you and your neighbors have been trying to work with the City for a long time, but keep hitting dead ends. It’s also really hard when so many families don’t have English as a first language, may not be here legally, and who either work insane hours to get by, or can’t get enough work to get by. It’s similar here in Willow Glen, and also in our previous community. My husband and I have some community organizing experience through working with neighbors in our former community of Rio Nido (in rural Sonoma County on the Russian River — http://rionido.net/). It’s a low income, unincorporated community (even the middle class sometimes struggles because most businesses rely on tourism), but my former neighbors SERIOUSLY know how to get things done. During the recession, we managed to start a community garden (instant park upgrade, builds community, helps people grow food, & Parks & Recreation Departments LOVE these things because its inexpensive for them to provide the land, materials, and some of the labor needed to get you started), organize clean-ups, obtain funding for street signs and road/culvert repairs (big issues out in the sticks), do various clean-up and beautification projects, launch a non-profit with a Web site, email list, and flier distribution to get information out there, etc. Also, the principal of our former elementary school in Guerneville is a savvy administrator and works closely with West County Community Services (a local non-profit) to fund a (mostly) free after school program and summer camp with various enrichment activities. Although some fees were requested, kids were never turned away if their parents couldn’t pay. The community also has numerous food programs for people in need. My husband and I would be happy to meet with you, learn more about what you and your neighbors have accomplished, and brainstorm about ways to move forward. Perhaps I can also be of assistance with writing letters and proposals. I also think that obtaining grants for the community center so they can offer more programs for free, and forging strategic partnerships with the college and also with the Silicon Valley YMCA. I’ll send you our contact information.

  3. I will say my last place of residence was in North San Jose near Alviso, and we also felt the pinch. Even in Manteca where I live now they give free lunch to kids up to 18 at several parks etc things are tough everywhere but we voted ourselfs an extra 1/2% sales stax to provide for our police and fire, and although we are not as big as San Jose, no police or fire were laid off, we also have police volunteers who paint over graffitti, take down all signs from public property and p/u or notify businesses about where there carts are. This while still building homes and apts to live in. We take care of our own and I am very proud of that.

  4. Hi Carol — thanks for sharing your experiences. I’m really sad to hear that the City you served, lived in, and loved has treated you so poorly in your retirement. Yet, I’m glad that your new community has been so dedicated and caring towards its youth and its public services. What you describe reminds me of my husband Richard’s & my six years of living in Rio Nido, a rural community along the Russian River in Sonoma County. The recession hit us hard, but the elementary and middle school managed to continue providing free breakfasts, lunches, and after-school care (with snacks) to its students; we all tightened our belts to vote for a tax to maintain our fire department; We started a community garden; and we also launched a “Friends of Rio Nido” non-profit group to deal with graffiti, crime, clean-ups, information sharing, etc. Like you, I felt very proud of how our tiny, financially struggling little community managed to take care of its own. Although San Jose and other cities also have lots of caring individuals, community activists, neighborhood organizations, etc., I think it’s harder for us to address issues because things are more complicated in larger communities, and there are so many of us and so many areas of needs.

  5. thank you for the respon se. I was a community leader in San Jose and actually worked with a State organization to get Chuck Reed elected as councilman in our Northern San Jose area. He was a big help to us and stood by us when we were being gouged for space rents/no improvements. We took the owners to the San Jose Council and they voted in our favor and the owners were fined heavily and told to improve our park. I was also given a commendation from Chuck Reed for dedication to the City, my community and what I helped to get accomplished. I was paying more for my mobilehome then the home I now own and did not find it feasible to stay there anymore and make the parkowners rich. I was sorry that the place I called home made it impossible for me to stay there, and truthfully I would have made some kind change to my benefits of 31,000/yr but all this was thrown at me. They said if no changes to our medical in November then do nothing and Wham I am now paying a good part of my medical now as I have physical problems and must go to the doctors. Everyone in the City has to pay 25.00 to see a doctor as an example. If you are still working, or been retired for 10yrs as myself. When we started working we were not given a choice of pension, we were told its a private pension and they actually took us off social security after I first started working. But were promised if we were a certain age and worked a certain amount of years we would have our medical. They took that and then got the citizens who are not informed of our plight to vote against our COLA. Can you imagine living in San Jose under these circumstances, I was below the poverty line from the beginning. I feel in my heart that San Jose turned its back on me. I volunteered for San Jose Prepared and VOLT while there . At least in Manteca even though smaller gives us the opportunity to work with the Police dept SHARP unit(for retirees) and we assist then in doing the graffiti, etc and the fire dept SAFES who help the community and schools. I feel that San Jose threw me under the bus, did a breach of contract with me after the fact, and have left me depressed what they did to me. I still have family there who still support the activities of the City, but I feel that the values are differant, as its easier to now live in apts etc and they have no problem with that, but my generation is still of the white picket fence and owning a piece of what I worked so hard for. i am not the only person effected by what the City has done or not done its just that I am more vocal that they have hurt me so bad after my dedication and should have protected it’s retirees better then they did.

  6. I read your blog because a good friend recommended I read this post. However, the farther I read, the more I realized that you have really posted nothing that hasn’t already been repeated over and over again to the point of nausea. It doesn’t take the astute reader long to realize that you are associated with these so-called 99% or Occupiers who despise big corporations and anyone who makes over 250K a year that as you claim “Don’t pay their fair share”.

    First, you are trying to address an issue here that is far more complicated than listing a few old talking points as you have. I must ask, have you ever worked for a government entity? I didn’t read anywhere that you had, but I would be willing to bet you have not based on just one statement you made that the public sector is “highly efficient”. If you have indeed ever worked for a city or county, as I did for over 31 years, you would know how ridiculous that statement is and that you are either very misinformed or delusional.

    Municipalities do not run on the premise of being highly efficient. They only run on a shoe string budget when forced to, not because of efficiency, but due to cutbacks. If you give them more money, they will spend more money and just a tad bit more. Now that is not to say that public employees do not work hard or give their very best each day, because many do and some don’t. The same can be said for the private sector as well as the military. But I can give you example after example of just how inefficient the government can be. I have seen three city painters take five days to paint four walls and I have seen a plumber employed by the city do the work of two guys in half the time. I have observed a city sheet metal worker take three months to install a oven hood and on the other hand watched a paving crew knock out what was to be a seven day job in three.

    However, when it comes to your politicians, that is a total different story. I have seen management approve a kitchen makeover to the tune of $80K when it would have cost the average homeowner half that amount. In my own firehouse, I observed outside contractors install a $350K air conditioning system in a 60 year old building crumbling from water and termite damage, only to be told that you couldn’t run the system lower the 78 degrees or it would fail to operate. “And oh, by the way, don’t worry about the ceiling falling in the appartus bay, we will get back to you on that”.

    And our own are not without fault either. For many years, there were those in the fire department that insisted that fire engines and ladder trucks be specifically built to certain specifications to meet their desires when in fact many of these rigs could have been what we called “cookie cutter” apparatus or assembly line engines and trucks without the special bells and whistles and would have cost the taxpayer considerably less. Hell there was a time not long ago in San Jose Fire Department history when we were lucky to have an old broken down engine to run as a ladder truck company. We also had fire and deputy chiefs complaining about the hubcaps on their new Chevy Impalas and demanding that they be replaced with something more pleasing to the eye, which only cost the taxpayer an additional $250 for each vehicle.

    This being said, I truly believe that the citizens out there, with the exception of a few “have-nots” and disgruntled wanna-be’s, really do respect and care about their public servants. There are of course those that will hate the cops no matter what they make, be it $450 a month or $160,000 a year, but for the most part people are happy to pay for the service and are damn glad they are around when they pick up that phone and dial 911.

    But public employees are not the problem and never have been, it is the people that run the show on both sides of the aisle, union and management, that have gotten us into this mess along with an ever demanding public more dependent on government that at any time in our Nation’s history. What you have now is people crying out for their entitlements but when it comes to paying the bill, the very politicians that bestowed those services in exchange for votes now want to file bankruptcy and start all over again.

    But as disturbing as all this is, what is even more disturbing is your solution to the problem. Where did you ever get the idea that the public sector drives the private sector when just the opposite is true? Are you actually suggesting that by shoring up public sector jobs this will somehow put us all back on the road to lasting prosperity and singing “Happy Days Are Here Again”? Where did you take your college economic class, Berkeley? Look, the public sector doesn’t produce a damn thing. With the exception of a few dollars in fines, tickets, and what-have-you, public employees do not bring in revenue to the city directly to pay the bills. And everyone knows, or should know, that emergency services are paid for out of property taxes the city collects.

    However, one of the reasons, and there are many, that the city does not have enough to cover pensions is because they siphoned off those property tax dollars through the largest money laundering scheme ever pulled over on the unsuspecting public, the dreaded Redevelopment Agency. This, along with Prop. 13 was the final nail in the coffin for public employee pensions.

    In conclusion, there are so many issues and problems that it is impossible to list them all there. If I listed just half of what comes to mind for me, my reply would be longer than your post. But putting the blame on the rich is just ludacris and makes no sense. Take your place for example, you are a renter right? Well, do you think a poor person owns your rental unit? Has a poor person ever provided you with employment? Has your boss ever received a business loan from a poor person? And just who do you think demands most of the services that you hold so dear to your heart? The poor.

    1. Well said Paul, I worked the same station on a different shift. I can point out something I think Paul left out. Prevailing Wage which costs the city a ton of money for city contracts and the Public Works department that “charges about 33% markup” on all city jobs that are deemed Public Works Projects. You have a budget of $1,000,000 for a Fire Station project and it will cost $1,300,000 plus. I almost forgot about the art that goes into projects. If I recall, it is 3% of the budget. I just wanted to add my 2 cents based upon my experience.. I worked for the department for 36 years, Paul a little less because of a medical condition. We both paid our dues, thank you.

  7. your answers to peoples concerns have been very good. I think what people in San JOse and other big cities need to know that there are a lot of grants available if you know where to look. Maybe if someone has a list of places you can go to get a grant would be a great thing. It just takes a little work to fill out the paper work and a lot of the grants are actually free with no payback.

  8. Provocative! Comments excellent. Unfortunately, this has become a national disease (look at Wisconsin). Our political system has been hijacked by the Supreme Court and the REALLY big moneyed interests. We can hope that the American voter will be able to see through the onslaught of propaganda and vote in this country’s best interest and not the “me first and everyone else can go down the tubes” mentality, which is destroying us. Take a look at our standard of living compared to many European (yes – European) countries. Sorry to say we’ve slipped badly.

    That’s where “me first” has gotten us. How about “All of us together for the greater good”? We could start nationally by greatly reducing defense expenditures (good luck, huh?). Let’s cut the baloney that we’re the “greatest country in the world”! Why, because we have the biggest weapons, etc.? Enough of my rant.

  9. I know this is old news but i just found this story and have a small comment of my own.

    I once worked in a small town here in Ohio as a Police officer for $9. per hour and I had Good benefits.
    This was the town i grew up in and I knew it and its people quite well. I did a good job and liked it.
    Now for the surprise. Remember i mentioned $9.00 per hour? that was in 2004. before 2000 when I was part time I got $8,00 per hour.

Leave a Reply

Your email address will not be published. Required fields are marked *