Who Can Restore Equity in Private-Public Employee Compensation?

Abstract

THE CALIFORNIA Journal of Politics & Policy Commentary Who Can Restore Equity in Private- Public Employee Compensation? Joe Nation* Stanford University Stanford’s Institute for Economic Policy Research has recently issued two reports on the condition of public em- ployee pension funds in California. The first identified a $425 billion funding shortfall for three state pension sys- tems: the California Public Employees’ Retirement Sys- tem, California State Teachers’ Retirement System, and the University of California Retirement System. The sec- ond found a nearly $200 billion shortfall for local govern- ment pension systems. Both reports focused on the overall financial health of pension systems in California but did not touch on retiree benefit levels. It’s time to begin that conversation. www.bepress.com/cjpp Volume 3, Issue 2, 2011 Discussing public employee retirement benefits is dan- gerous politically. So let’s start with the legal status of ben- efits owed to public employees. Public employee retirement benefits are legally pro- tected. Period. Case and contract law guarantee retirement pay, even in obscene cases where public employees double dip (i.e., collect a large pension from one or more employ- ers and work at full salary for another). If the public is angry about benefit levels or double dippers, we shouldn’t blame public employees, but the political leaders who ap- prove benefits that are excessive and unsustainable. I may have a unique perspective on this issue because every member of my immediate family has worked in public service. My mother is a retired school librarian; my younger brother works as a firefighter/paramedic; an older * A former Democratic state lawmaker, Joe Nation is Professor of the Practice of Public Policy at Stanford Uni- versity. An earlier version of this article was published in the San Francisco Chronicle.