Dramatizing the Inequity

This is a hilarious video that is accurate and nicely summarizes our challenge – our state and local governments are going broke in order to pay not only for pensions that are 3-5x more generous than social security, but for overall compensation and benefits to public employees.  To balance budgets, we don’t have to cut services or raise taxes, we just need to reduce the grossly over-market compensation paid to public employees. Warning – while clever and accurate, this video does contain foul language…

http://www.fullertonsfuture.org/2010/stop-the-madness-now/

By the way, I have personally verified the compensation parameters referenced in this video, as summarized in this post:

http://civfi.com/2010/08/27/the-cost-of-firefighters/

8 comments to Dramatizing the Inequity

  • Oliver Stone

    Thanks for the plug, I have a G rated version coming out tonight. Keep an eye out for it. I have put more details in it.

  • Editor

    Oliver – the facts are more important than whether or not there is profanity. You have provided accurate facts, the whole thing is hilariously entertaining in addition to making accurate statements, and there is no need from here at least that you change anything. It is compelling and brilliant and I hope it goes viral. We are honored you have commented on our link to your excellent work. Thank you for your courage. This is the fight. Your profanity need not suggest disrespect, rather it is an effective way to humor as well as dramatize the inequity.

  • oz

    Ed-

    Clever though this video may be, it is not even close to accurate for reasons I will go into, but facts never seem to slow you down do they Ed? and now Oliver?

    I have observed that it seems to be firefighters who take the most potshots lately from the “government waste” crowd. This itself is a distortion as paid firefighters themselves represent a minority of public employees. There are 3x as many police officers and 10-20X as many teachers on the payroll as FF’s, but “lets hold up the small number of firefighters as an example of government waste”… a real quality argument Ed (and now Oliver).

    Here are the 3 reasons I think people like Ed and Oliver find it easiest to get their jollies going after the FF’s.

    1) Firefighters are generally pretty good natured folk and don’t get as riled up as other employee groups.

    2) The “2 days a week” thing. This is inaccurate for reasons I will describe later.

    3) The beds in the firehouse. More comments on that later, too.

    Now, to vett the facts on your video. Which you BOTH should have done, but chose not too.

    Firefighters in Fullerton and most other metro areas do not work 2-3 “days” a week, but 2-3 twenty four hour SHIFTS per week.

    If a FF goes into work at 8AM one day and goes home at 8AM the next day, he or she has worked two days, not one. It is possible he or she slept during those 8 hours from midnight to 8, but chances are the FF was up and working. For every 1 FF that gets to sleep, 2 or 3 are probably up and working. Why?

    The term firefighter is actually somewhat of a misnomer. All large metro fire departments in the country now provide some level of Emergency Medical Service including Fullerton. Fire departments employ lots of paramedic FF’s since nationally ~75% of FD call volume is EMS calls. Those Fullerton hours between midnight and eight were filled with handling vommitting college students, drug OD’s, strokes, heart attacks, and your occasional fire. If the FF’s slept “on the clock”, it likely was only for an hour or two, and is that really a waste since the ER physician they will likely see a few times that evening is sleeping “on the clock” in between patients, too? It’s called getting through the night shift and trying to maintain a decent level of alertness.

    Had you actually researched Fair Labor Standards Act law, you would have discovered that firefighters are in a wage class with a special exemption from 40 hour overtime regulations. A firefighter who worked 72 hours in a week would not receive any overtime like the 32 hours Oliver’s video claims. Under FLSA law, firefighters are not granted overtime protection unless they exceed 212 hours in 28 days! They have to exceed a 53 hours a week average for 4 weeks to get any…

    As for FF recruitment, it is theoretically possible to get hired in many departments with just a High school diploma and a few college classes, but the reality is that most people with just that who show up to take a FF entrance exam are wasting their time. FF recruitment is looking for some type of paramedic certification. They may make a list of 1000 “eligible” candidates, but only the very small minority of folks with a certificate/license and/or military preference have any chance at a job offer.

    Ed, you stick to your point… actuarial rates of return. I’ll stick to my point… the feds drive police and fire compensation.

    Oliver Stone, since you are so facts-driven to produce relevant and accurate videos, I look forward to these facts being incorporated into your next video.

    Thanks,
    Oz

  • Editor

    Oz – this video was appealing because, after viewing it, I realized that in our commitment to reasoned dialog we were losing sight of the outrageous truths that compelled us to get involved in this issue in the first place. Here are the facts that were stated in the video that we have verified with our own analysis posted on CIV FI.

    1 – The firefighter in the video said he works two days per week and collects overtime on work beyond that: In the post “The Cost of Firefighters,” using information from the Labor Agreement, this is what we determined: “firefighters working the “suppression” shifts, i.e., most of them, the guys who staff the firehouses and are on call 24 hours per day, typically work two 24 hour shifts every six days. That is they work a 24 hour shift one in every three days. During these 24 hour shifts, most of the time, they have time to eat and sleep, in addition to performing their duties. But if you review the agreement, you will see that by the midpoint in their careers, after 15 years, firefighters will earn the following quantity of 24 hour shifts off with pay – 6.53 for holidays, 9.33 for vacation, and 2.0 for personal time. This means, not including sick leave, the average firefighter works 2 shifts of 24 hours every 7 days.”

    2 – The firefighter in the video said he made $125K per year. CIV FI has looked at this in-depth in two posts, one examining firefighter compensation in Costa Mesa, California (The Price of Public Safety), the other examining firefighter compensation in Sacramento, California (California’s Firefighter Compensation). We estimated the average firefighter’s total compensation in Costa Mesa to be $202K per year, and $180K per year in Sacramento. If you take away from these calculations the amounts allocated to fund future retirement and health benefits, you still will come up with an average compensation of about $125K. If that number is on the high side, it isn’t high by very much.

    3 – The civilian in the video states the “median household income in California is only $60K per year.” Here is a Census Bureau study showing household income in California averaging $62K per year.

    4 – The firefighter in the video says he will retire at 50. That is generally known to be the age at which public safety employees in California become eligible for retirement. It is true that most of them are not at that point eligible for a 90% pension – or are they? The common practice of pension spiking, where sick time (which accrues without limit) and overtime can be applied to the final year of pay, enables an effective rate of 90% to be achieved by age 50 in far more cases than would apply if spiking were illegal.

    5 – The abuse of the disability benefit is widespread, as you know if you are familiar with California’s situation. I have read statistics stating as many as 80% of the upper echelons of public safety employees retire under some sort of disability status. And current legislation pending in California promises to make this abuse even worse.

    6 – Public safety employees, using CalPERS own actuarial data, are as long-lived as the general population. There is virtually no difference in life expectancies. The commonplace assertion that public safety employees die a few years after retirement is absolutely false.

    In our discussions you have made some good points about recruitment challenges, and you have acknowledged my point that current fund earnings assumptions are causing policymakers to grossly underestimate the costs of pension benefits. But we disagree as to what is a fair and equitable rate of pay for public employees, and we disagree as to the amount of the discrepancy between what people make in the private sector compared to the public sector.

  • oz

    Ed-

    YOU “verified” the “facts” with YOUR own analysis. Who is the we? Do you have employees running numbers for you?

    Your analysis again is lacking facts, so I will address the lack.

    1) Thank you for using the term “shifts” per week instead of days, but your using of the vacation to reduce the days or shifts per week worked is not correct for compensation comparison purposes. You are using a poor measure to make their work schedule look lighter.

    If I work a traditional M-F job in the private sector and after being with a company 15 years, I get 3 weeks vacation, 1 week sick time, and 5 holidays a year off, (common, even in the private sector, I should know) do I then refer to myself as only working 4 and a half days a week? Of course not. You set up a straw man, because the FF schedule is the easiest to mock for your purposes.

    2) Your own analysis of Sacramento came up with 101k for wages including 10% overtime. A base pay of 70k per year (your numbers) on a ff schedule equates to 25$/hr. The vacation pay is a non issue. Almost every full-time job has some sort of leave pay. (I am with you on creating better restraints on pension spiking with leave payouts.)

    3) The household income statistic does not mean too much. We have only mentioned 3 cities, Sacramento, Costa Mesa, and Fullerton and I don’t think these cities are representative of the typical CA household. California, for all its largess, is still a very agricultural state.

    4) You didn’t even check your OWN sources, Ed. The document you provided shows that in your own example, Sacramento FF’s under all 3 tiers cannot retire until 55. (By the way, this throws off all your metrics for pension compensation, you’ll need to rework that part)

    5) Disability abuse is a problem. However this predominately affects people’s federal tax burden, something I have a hard time getting you interested in, since you’re so worried about how a few FF’s are supposedly jacking up your property taxes.

    6) Your last point is true (the only specifically true point in the video) and I don’t like to hear people use that specific argument either. But that really did use to be the case. 20-30 years ago, before the widespread use of breathing apparatus and the mandatory ban on smoking as a condition of employment, FF’s life spans were considerably lower than even the general pop. But this dramatic increase in longevity should be remembered as a success that is due
    to good union safety negotiations. Please don’t argue against the right of any worker to be involved with a union.

  • Editor

    Oz – let me respond to your points one by one:

    1 – In my opinion the true measure of how many days, hours or shifts someone works is how many days, hours or shifts someone works. If someone is on vacation they are not working. I’m comfortable with that assumption. You’re right that if someone stays with a large corporation that can afford generous benefits, then that person will earn vacation benefits that approach the level of public sector vacation benefits. We could spend entire posts on just vacation comparisons, but in general, I would say that vacation benefits (let’s just talk in eight hours shifts for now) in America come down to these averages: Public sector workers get between 35-75 paid days off per year (teachers even more), Career employees with large corporations get between 20-35 paid days off per year, and employees with small private companies get between 8-20 paid days off per year. Most American workers belong to this third group – yet our taxes pay for the first group.

    2 – Regarding base pay for Sacramento firefighters, you have quoted me, but here is what I wrote: “In terms of basic pay, the ‘base hourly earnings’ of Sacramento’s firefighters was $74,000 per year. Overtime, on average only added $10K to that total, which suggests that – at least in Sacramento’s case – overtime is not creating a crippling additional burden to the department expenses. But when you add ‘incentive earnings,’ ‘holiday payoff,’ ‘other earnings,’ ‘sick payoff,’ ‘other payoffs,’ and ‘vacation payoff’ to the total, the average firefighter in Sacramento makes $101K per year.” So the average, not including overtime or any benefits is about $91K, and the average, including overtime and all benefits is about twice that – which I believe is a grossly over-market rate of compensation.

    3 – I’m not sure what your point is here. If you are saying the household income in California probably averages less than $61K, I would agree with you. And the cost of the average public sector worker in California – once you properly fund all their retirement health and pension benefits, is at least $90K per year.

    4 – You’re right that the video may have over-generalized regarding the retirement at 50 benefit, which is very common but not necessarily in force everywhere in California’s public safety agencies. But my calculations have always assumed an average retirement age of 55. I have never published an analysis that assumed a lower retirement age than 55 for a public safety employee. One of the reasons I appreciate these discussions is because you are carefully challenging all of my assumptions, which I try to keep conservative. My assumptions regarding what it takes to fund a future retirement benefit rest on conservative assumptions – the reality, and hence the real number for total compensation, is probably higher than my estimates.

    5 – Taxes are fungible – don’t you see a federal bailout coming to the states who have bankrupted themselves trying to pay over-market wages and benefits to public sector employees? We’ll pay for that, too. The entire gestalt of this is what has generated outrage: The public sector’s inflated pay and benefits, its impact on our government budgets, taxes and our nation’s economic health, and the political influence of public sector unions.

    6 – Thank you for acknowledging my point about the life-span data. The problem is many advocates against any sort of public sector pay and benefits reform are using this argument relentlessly, and if you don’t know the truth, it is a powerful argument. As for your comment about the right of any worker to be involved with a union, I think professional associations can work for better and safer work conditions without becoming taken over by labor unions. In my opinion, for myriad compelling reasons stated throughout this blog, the way unions have taken over our public sector is one of the greatest tragedies in American history. In my opinion, while unions played an important role in the 19th and 20th century, and while they may retain some legitimacy today in the private sector, in the public sector unions should be illegal.

  • Editor

    The blog where the video is posted has gotten over 100 comments, many of them quite interesting. This one is relevant to the discussion about unions:

    http://www.fullertonsfuture.org/2010/stop-the-madness-now/#comment-18709

    #48 by Richard Rider, Chairman San Diego Tax Fighters on September 28, 2010

    Sorry, friend. It’s you union goons who are most responsible for our lack of efforts to improve San Diego firefighting. It’s YOU and your union threaten my home — hamstringing reform efforts.

    Because most of our courageous ffs live out of the city of San Diego (many out of the COUNTY), it took hours for these off-duty heroes to cruise into work and man the trucks sitting ready and waiting. It’s an unreported scandal. We could have had trained volunteers man those extra trucks, but the unions would rather the city burned down.

    I live in Scripps Ranch. In 2003 we lost about 330 homes within a mile of my house. That did NOT have to happen. Afterwords I tried to volunteer as a reserve ff, but the ff unions adamantly oppose such an organization. They’d rather our homes burn down.

    And don’t talk to me about CERT — its a sadly useless outfit that is prohibited from putting out any fire larger than a trash can. In the 2007 fire only two of our 70 local CERT volunteers were even called up — and all they were allowed to do was pass out coffee and donuts at a neighboring refugee center. The CERT organization in Scripps Ranch has since all but disbanded.

    Here is another comment by Rider that addresses the recruitment issue:

    http://www.fullertonsfuture.org/2010/stop-the-madness-now/#comment-18642

    #46 by Richard Rider, Chairman San Diego Tax Fighters on September 27, 2010

    Because there are literally hundreds of wannabee ff job seekers for every ff opening, the ff’s have made the application and screening process unnecessarily stringent and complicated. Otherwise they’d have WAY too many applicants, which would further demonstrate the imbalance in supply and demand — a closely guarded secret.

    In San Diego, we require an applicant to complete the EMT1 course BEFORE applying — a desperate tactic to reduce the number of applicants. Then when apps are accepted by the city, it is done quietly, without fanfare, over the Christmas holiday season — again to keep down the number of applicants. The rest of the year one cannot apply.

  • oz

    Ed-

    I’ll respond to your responses 1 by 1 but this time I’m coming through in part with an overarching theme, the same one I’ve been pouring out on these comments for months: It’s the Feds that drive the compensation.

    1) You stretched your numbers here. I would like to know your definition of “small” company. The median gov’t worker (non teacher, you said) does not receive 52 (midway between 35-75) paid vacation days per year, but the typically higher level of vacation is due to the federal gov’ts influence. They set the pace many years ago. It makes little sense for many state gov’t agencies to try to open on Federal Holidays.

    2) Again, the fed precedent has already been set about leave and holidays. FF’s and public safety workers are generally entitled to the same holidays and leave as other workers in their municipality, so all that can be worked with is base pay. The 74k avg figure you reference translates to ~25$/hr. I believe and I think deep down you do, too, that 25$/hr is a more than reasonable wage for an experienced, skilled worker in a large metro area- blue or white collar. You could add a 4th shift (make a 42 hr workweek, many cities have) to the FD and bring the avg. comp down to ~50k per year, but this creates other problems and ends up costing the city a whole lot more money.

    3) I am saying the average Orange County (Fullerton) household income is 84-97k, depending on what numbers you read, not the 60k average you cite for CA. Sacramento’s is ~80k, too, not 60k. Compensation for large metro areas needs to be based on geographic area, not the whole state. The average household has about 1.3-1.5 workers at any given time.

    4) Feds have 20 and out for military, 25 and out for Federal Police and Fire, or age 50 and 20 years for Feds also. Either way, it is typically available much, much earlier than CA’s 50-55. There are ~3x as many paid police officers as FF’s. I don’t know if you ever agreed with my other arguments that military drives police and fire compensation, but you’ve got to believe that the feds as a whole play a major role in public safety compensation, esp law enforcement. There are dozens of fed agencies constantly competing for public safety personnel. As for FF’s, you can pay FF’s a little bit less than police in a municipality, but not much less. Someone as versed on pension portability as yourself can quickly understand why.

    5) I think you made the point I have been making all along. The feds are driving this train, not the unions (although perhaps some are riding the caboose). Where we differ is that I see some inflation coming along with the big train, you do not.

    6) I admit it gets ugly sometimes, but public sector unions are totally necessary as long as Congress can vote on their own pay raises.