I noted the other day that the average (the average!) cost to the city of Oakland of employing a police officer is $188,000 and that the city was negotiating for concessions to avoid layoffs. Today comes the news that they couldn’t agree–80 Oakland police officers have been laid off.
With the story comes a few more facts:
Oakland laid off 80 police officers Tuesday after negotiations between city officials and union leaders failed on one simple matter: job security.
The police union demanded that the city guarantee that its officers would not be laid off for three years in exchange for giving up some pension benefits that would have eased the city’s budget problems.
City leaders, however, said it would have been irresponsible of them to agree to protect police jobs for more than one year because the city’s budget problems are likely to worsen.
Basically the city wanted officers to contribute 9% of their salary to their pension. They currently contribute zero. How generous are those pensions?
They are allowed to retire at age 50 and collect 3 percent of their salary for every year of service.
The way I understand that is that if you start on the police force at 25 and work for 25 years, you get 75% of your salary. Don’t know if it’s your last year’s salary or some kind of average. Can you work till 60 and get 105% of your salary? Either way, does that strike you as a pretty good deal? It depends on the salary. How much of that $188,000 figure is salary and how much is pension and other benefits?
It’s hard to be a police officer. But is it possible that this pension (measured by the amount of money and the age of retirement) is a tad more generous than it needs to be to staff the police force with competent people? Does the Oakland police department have any trouble recruiting new officers? Or is there a long line of applicants?
The story closes with a way to avoid the layoffs:
The layoffs leave the department with 695 officers. Unless the city and union come to a new agreement, the only hope for restoring the city’s police force lies with voters.
Brunner and union officials talked about working hand-in-hand to convince voters to approve two ballot measures, neither of which has yet been written. The measures – one of which would ask for a parcel tax of about $360 per home to raise an estimated $50 million – could allow the city to rehire the laid-off officers.
A parcel tax would require a two-thirds majority of voters, a threshold that many believe would require the unanimous support of the council and a lack of organized opposition.
Organized opposition would make it hard to get the tax passed? I guess so. I read that to mean that if people get the facts, they’re not very likely to vote for the tax. Would you want to pay $360 to keep the compensation package of the average police officer at $188,000 and get those extra 80 cops? How many Oakland residents earn salary and benefits equal to $188,000 and get to retire at 50 with a generous pension?
Share
Podcast RSS Feed
Full EconTalk Text
{ 79 comments }
← Previous Comments
Oh please, public salaries are public salaries. There are plenty law&order Conservatives who believe paying police officers are more important than professors.
Or does this style of argument vouch for the Anarcho-Libertarians? If you're some government roles and for some people to be paid via the taxpayers then you can't complain when others see other government roles they like that you may not like. Either you believe people should derive their income from their private efforts in the private sector or they derive their income from pandering to voters that their employment is too beneficial to be left to whims of the free market.
Yes there is. It is a form of 'situational irony'.
I would ask you what your point is, but I'm too stunned by your dazzling brilliance to care.
Don't you mean right-leaning voters?
Being a CEO isn't a dangerous position per se either. The risk of being killed on the job isn't really factored into a job at all.
I would argue that police officers and soldiers get a woefully disproportionate amount of attention if they die compared to other professions. Especially as both require that you be willing to put yourself in harm's way should you apply for either position.
Yes, it would be factored in at the margin.
Need to keep the police in your corner if you occasionally choose to engage in illegal activities right?
Is there much value to Wall Street for someone who has a PhD, versus a suitable masters? Would it justify someone with an MBA or masters in finance to pursue a PhD?
“If GMU (a public university, btw) could hire someone as good as I am”
They couldn't. He's pretty happy where he is.
Isn't this just an ad hominem argument?
That's what I was thinking. How does Russ' salary or employer invalidate his point?
It depends on what job you want to do. Quant departments are staffed with PhD's in fields like physics and math. While quants make more money on Wall Street than in academia without the burdens of academia, they aren't usually the highest paid guys. It takes more than math to actually make money and the people who are directly responsible for making money for investors are paid the most (if they are successful in that endeavor). So, I would say that anything above an undergrad degree is not worth pursuing unless you're going into investment banking (yuck!) or you want to be a quant. Your compensation will be decided not on the number of degrees but how well you do your job. That's why I love this business – but I'm in the part of the business where I eat what I kill.
“Aren't the Bay Area taxpayers to blame for constantly electing liberal Democrats?”
No the problem lies in an inherently corrupt political process where in lpublic employee unions are the overwhelming contributor to political campaigns.
The same process reaches the same result in bastions of conservative republicans like Orange County and the central valley.
The only way to stop this insanity is to severe public employees from funding politiical campaigns.
One taxpayer-funded employee complains about the compensation of another taxpayer-funded employee? Get it? It's as hypocritical as vidyohs complaining that S.S. is “bankrupting the country” or “screwing over the children”.
You are saying that two different people could say the exact same thing, word for word, and that the validity of what they say is dependent upon their source of income.
That is textbook ad hominem.
Are you saying if a CEO in the purely private sector complains police are getting too much because they wouldn't get that much for so little in the private sector is OK? Yet if a public employee complains about the same thing then there's no tinge of hypocrisy? Are public garbage collectors getting too much? Are public postal workers getting too much? And so forth? For the truly anti-government Libertarians anyone who's getting an income from taxpayers is getting too much per se. On the hand, what if police officers say that university staff serve no obvious purpose for which they should make no more than say $40,000 a year? Would they be hypocritical?
Shocked how? Many people complain about what CEOs get in the private sector especially when the company ends up being worse off. Some have argued that a contract with a CEO has to be honoured regardless of the share price or that the CEO was working on a principal of “damage minimisatoin”, i.e. the company may have lost a lot of money but without the help of the CEO it would have been way worse. However, others would argue what a CEO gets in the private sector is no one's business except the shareholders.
I can't answer until you tell me your occupation, employer, and level of education.
After you tell me those things I may require more information about you before being able to evaluate the content of your argument, because the validity of your argument is not based upon what you say, but on the person who is saying it.
/sarcasm
The gun always attracts the wrong people. It's just the way it is.
I've never met a person who sought out an occupation that allows them to inflict physical harm on people who did not get pleasure from inflicting physical harm on people.
Hows about this? People are against police officers because their working income and retirement income is practically guaranteed “at the pont of a gun at the head of the taxpayers”. Whereas the poor taxpayer has to deal with market forces where nothing is guaranteed. The poor taxpayers may have to work until they drop dead funding the retirement of public employees. But what of public employees who complain about the concept of “publicly funded employment and retirement”? Are they ready to accept that if the taxpayers have had enough and want all employees to be private then are the public complainers against public employment ready to move into the private arena (and hope public job skills transfer to the private sector)?
I don't know anyone who is “against police officers” or “want all employees to be private”.
You just traded an ad-hom for a straw man.
Thanks for reminding me of why I generally ignore you.
Part of the justification for the high wages is the high cost of housing brought on by anti growth zoning policies. Neighboring Berkeley combats these high housing costs with rent control, which raises the marginal cost of the next vacant unit sought by the aspiring Oakland recruit who, therefore, needs a higher wage to accept the job. So now we are looking for ways to build subsidized workforce housing. Don't worry, our elected officials will solve this eventually.
Semi-trained monkeys? Apparently you've never done, or not done well, “police work.”
Another consideration is how long those retirement checks will go out. Peace officer mortality statistics after retirement, are very outdated (latest ones reference 1990's) but they show that retired cops don't usually last long after retirement, five years being the average, if I remember correctly.
Are you saying you could just use untrained monkeys
I was exaggerating, of course. Plus, I lived in NYC where the police force is particularly obnoxious.
my understanding of the pension system in San Mateo county and much of California – perhaps the same in Oakland – is that the basis for the calculation is the total payment received in the last 3 years of employment. Typically, in those last three years, police put in lots and lots of overtime and receive a payment in lieu of years of accrued vacation. So… that 75% of salary ends up being 75% of a much larger number than the nominal, posted salary. It is common for a government worker to receive a pension that is much larger than the average salary they received while working for the government, and also larger than the nominal salary of their last three years.
Compare these numbers to the typical return of a 401k plan, and one sees how incredibly generous this system is, and why it is bankrupting us.
Also, as one of the Oakland Councilman stated on NPR recently, only 20% of the police force in Oakland actually walks a beat: the rest work behind a desk.
So, if citizen's interests are prioritized (and not the union's), some desk jockeys will be laid off and no one will notice any change in force on the street.
Just as no one not employed by government noticed any change in “service” caused by the furlough program…
Hi, Russ:
Sounds as though Oakland Police Department officers belong to the 3% at 50 CalPERS plan. The maximum they can earn in retirement is 90% of their pay, and they can earn that after 30 years of service (see page 32 of https://www.calpers.ca.gov/mss-publication/pdf/...). Whether the “final compensation” is based on the last 12 months or an average of the last 36 months earnings depends upon Oakland's contract.
While safety employees' pensions tend to be the most generous (especially when the employee contributes nothing — Oakland is currently contributing 28% of payroll to fund their safety employees' pensions), all state and local pension plans are pretty generous. I think eventually taxpayers will clue in to the burden these public pensions place on us all, and we'll get together and demand change.
It just seems wrong that when the stock market falls I have to work harder and longer to contribute more to my own retirement funds and also to the retirement funds of all California's state and local workers.
Anne M. Wenzel
Menlo Park, California
What? The article is about the compensation for police officers being too generous because it is gauranteed by the taxpayers.
← Previous Comments
Comments on this entry are closed.