The Rest Of Us Will Be Digging Ditches At 90
To pay the pensions of all the "public servants" who retire at 50. Thomas Sowell writes at investors.com:
You cannot have generous welfare state laws that let people retire on government pensions while they are in their 50s, in an era when most people live decades longer.In the U.S., that kind of generosity exists mostly for members of state government employees' unions -- which is why some states are running out of money, and why the Obama administration is bailing them out, in the name of "stimulus."
Once you buy the idea that the government should be a sort of year-around Santa Claus, you have bought the kinds of consequences that follow.
...Nothing is easier for politicians than to play Santa Claus by promising benefits without mentioning the costs -- or lying about the costs and leaving it to future governments to figure out what to do when the money runs out.
In the United States, the biggest and longest-running scam of this sort is Social Security. Fulfilling all the promises that were made, as commitments in the law, would cost more money than Social Security has ever had.
Europe's similarly scamalicious. Rachel Donadio writes for The New York Times of highly educated college graduates who can't find paying work or who find work that barely pays -- and where all that's leading:
LECCE, Italy -- Francesca Esposito, 29 and exquisitely educated, helped win millions of euros in false disability and other lawsuits for her employer, a major Italian state agency. But one day last fall she quit, fed up with how surreal and ultimately sad it is to be young in Italy today.It galled her that even with her competence and fluency in five languages, it was nearly impossible to land a paying job. Working as an unpaid trainee lawyer was bad enough, she thought, but doing it at Italy's social security administration seemed too much. She not only worked for free on behalf of the nation's elderly, who have generally crowded out the young for jobs, but her efforts there did not even apply to her own pension.
"It was absurd," said Ms. Esposito, a strong-willed woman with a healthy sense of outrage.
The outrage of the young has erupted, sometimes violently, on the streets of Greece and Italy in recent weeks, as students and more radical anarchists protest not only specific austerity measures in flattened economies but a rising reality in Southern Europe: People like Ms. Esposito feel increasingly shut out of their own futures. Experts warn of volatility in state finances and the broader society as the most highly educated generation in the history of the Mediterranean hits one of its worst job markets.
...With pensioners living longer and young people entering the work force later -- and paying less in taxes because their salaries are so low -- it is only a matter of time before state coffers run dry.
"What we have is a Ponzi scheme," said Laurence J. Kotlikoff, an economist at Boston University and an expert in fiscal policy.
The company I work for is downsizing a lot of departments and it usually ends up being the younger, more productive workers getting the boot while the older, less productive workers get to stay because they have seniority over us by virtue of having their ass parked in a chair longer. The department I'm currently in has cut 30 people in the last year (we only had 70 to start with). Of the remaining 40 people, seven of them are in their mid to late 70s (another 10 are in their 60s, so roughly half of us remaining are under 50). They are collecting their paycheck, Social Security and Meficare, plus company insurance benefits and their pension which is automatically paid out at 70 regardless of retiring. They also take off on month-long vacations several times a year while the rest of us have to pick up their slack while being unable to get vacation time due to seniority applying to vacation scheduling as well. Us younger workers feel completely shafted by the way things are going considering we are much more productive, take little to no time off, and are paid a lot less. I know my company is not the only one like this as multiple friends are having similar experiences at their jobs as well.
BunnyGirl at January 4, 2011 1:06 AM
Bunny Girl, Have you considered that the company might be opening itself up to lawsuits if they disproportionately fired older workers?
I have no idea who you work for, but my experience has been that every time layoffs roll around, our management uses the opportunity to trim the retired in place, uncooperative, and then the least productive or most expensive or less essential (i.e. not directly involved in providing services to the customer.)
Is it possible that the surviving oldsters have unique skills that can't be readily replicated? I think back to the last decade, when companies were suddenly desperate for COBOL programmers to fix all the obsolete programs they were still using for the upcoming Y2K rollover.
Is it possible that all those "more productive" younger workers were working harder to deliver the same output? I just had an older, highly paid guy retire. His experience is irreplaceable. We still have old, obsolete equipment to support and he was the go-to guy for the entire company.
I don't see business as being benevolent, and if they could shed older, less productive workers, they would. It's similar to the "women earn 70% less" myth. If it were true, men would be out.
I don't know the facts regarding your situation, but I suspect there is another side to it.
MarkD at January 4, 2011 6:18 AM
@MarkD
Agreed!
nuzltr2 at January 4, 2011 9:13 AM
With every round of layoffs we have had, it's been the older people who have been cut or encouraged to retire because they make the most money.
While my father is part of the problem on this (he makes about as much on pension as I do on salary, plus Social Security, and he has been retired for almost 30 years), I have to say that I'm glad he gets it, because without that income, I'd be screwed. With it, we can afford to hire help to take care of him. Without it, I would have to quit my job. He would have blown through the value of his house long ago and would likely be on Medicaid now.
MonicaP at January 4, 2011 9:16 AM
Employees of the federal government, in the military branch, get full pensions and lifetime medical coverage after 20 years of service.
A guy can be 38 years old, and sucking down taxpayer money for the next 50 years, free as a bird (at the expense of our children and grandchildren, and great grandchildren.....
BOTU at January 4, 2011 9:59 AM
In my department at least, we all perform the same function using the same software and equipment. We have set minimum requirements for production and quality as well as attendance. The older employees who have been their the longest have lower production and quality than the younger workers (they post a spreadsheet quarterly that shows this). The older ones are also the most likely to miss work for ill-time and doctor appointments and we are then often sent emails asking to please donate our own vacation time to so and so because they've run out of sick time. Then a month or two later the are off on their fancy vacations apparently with plenty of paid time off. We've only lost two older workers since the downsizing started, one volunteered to retire, the other one had a heart attack and was no longer able to work. The company says they are cutting based on seniority only so they can't make subjective decisions someone might sue over. We feel the whole department is likely to go down in the future so they are dumping the workers most likely to stick around first. I know I'll be losing my job this year because of it so I'm planning to go back to school so I can get my LPN certificate (I've got most of the classes for it out of the way already so less than a year to get) but likely won't start until summer when I've had a chance to rearrange my other commitments better.
BunnyGirl at January 4, 2011 10:42 AM
A guy can be 38 years old, and sucking down taxpayer money for the next 50 years, free as a bird (at the expense of our children and grandchildren, and great grandchildren.....
Posted by: BOTU
And if it werent for those guys, and gals, we'd al be speaking gremn, or russin, or japaneese.
Besides most of the guys who put in a full twenty usually hav destroyed their bodies, and most of those who havent dont just quit at the 20yr mark
lujlp at January 4, 2011 12:04 PM
I have a relative that's been serving in the Navy for right around 35 years now and intends to stay in for at leadt another 5 if he is still physically capable of it. Otherwise, the military people I know only serve for a few years. I doubt there are that many on full military retirement at 38.
BunnyGirl at January 4, 2011 2:04 PM
Having been an Army brat, I can attest that, yes, a member of the military can retire after 20 years. There is a big difference between being in the military for 20 years and working just about any other job for 20 years, and my father has the horrendous scars to prove it.
I don't know what military pay is like today, but when my Dad "retired" from the Army, he was able to get a job that paid substantially more, allowed him substantially greater freedom, reduced work hours, and he didn't have to worry about being shot. Instead of flying helicopters for aerial assaults (and getting shot down multiple times), he was able to fly a helicopter for an oil company. He didn't have to worry about the possibility of being shipped off to some third world country to live in squalor while being shot at, entirely against his will.
You can always just quit a civilian job, attempting to do so when you are in the military and about to be shipped out is a crime that results in spending time at Leavenworth.
I'd suggest googling the phrase "Army amputees" for a little context.
http://www.usatoday.com/news/world/afghanistan/2010-10-05-afghanistan-amputations_N.htm
"At the NATO hospital, doctors amputated a major limb — a leg or arm — an average of once every other day in September, according to Navy Capt. Michael Mullins, a hospital spokesman."
MikeMangum at January 4, 2011 3:44 PM
Where I used to work, lays-off where by position-type and seniority...and occasionally (my case, by location) geo-location (the closed out my function to only be at a few locations - 2 U.S., 1 Europe, 2 India). I will also note that above a certain level there was never lay-offs while I was there.
This is how it worked - people below a certain level in the company where considered by # of years with the company - fewest years first. Then, by job type/special abilities. So it might go something like this. John has only been with the company 3 months so he is considered first, but then they see he has Cobol skills (to use the earlier example) so he is kept. Jane has been there 4 months so she is next considered, and she only has Visual Basic skills which the company has plenty of so she is chosen to let go.
Of course in reality it was a lot more complicated then that...special skills were created to keep people. In the example above, if management liked Jane they might say, oh, but she is familiar with xyz application and so we might need her to fix that so lets keep her instead of having someone else learn that app if we happen to need it.
I have worked with a lot of ex-military and only one has had a broken down body (knees - he says from all the marching) - at least that was evident. Their ability to think for themselves had been destroyed, however.
The Former Banker at January 4, 2011 3:56 PM
ignore butthead, he hates the military and cannot get over it to use a little logic. Mikemangum, just ignore the troll and hopefully he will just go away
ronc at January 4, 2011 5:04 PM
Hey, we have to cut the federal budget. What makes federal military employees--not draftees--of the military sacred?
The Pentagon pension system strikes me as very, very fat. I know of no private-sector system even close. GM collapsed with a pension-health system about 1/10th as generous.
In fact, I do not detest the military, but feel as our Founding Fathers did--that a permanent standing military is un-American.
We used to demobilize after wars, and we even demobilized after the Revolutionary War when many Founding Fathers proposed an outright ban on a standing military. In fact, George Mason refused to sign the Constitution as it did not explicitly ban a standing military.
The language about the right to bear arms and form militias was intended to blunt the perceived need for a professional military.
I am sorry for young people sent on overseas follies by Bush and now Obama. It wasn't my idea, nor was the $3 trillion and counting in costs and accrued bills.
I hope we come back to our senses about military outlays soon.
BOTU at January 4, 2011 5:48 PM
but feel as our Founding Fathers did--that a permanent standing military is un-American.
Posted by: BOTU
Very true, however they all changed their minds after the Whitehouse burnt to the ground in 1814 thanks to the horrible way in which the vollenteer state militias preformed durring the War of 1812.
Why didnt you?
lujlp at January 4, 2011 7:19 PM
Employees of the federal government, in the military branch, get full pensions and lifetime medical coverage after 20 years of service.
BOTU,
Speak about that which you know -- research what you don't.
There are three systems for calculating military pensions, and they depend on the date you first entered service.
Under System 1, in effect for those who entered service prior to Sept. 8, 1980, retiring at 20 years is worth a straight 50 percent of final basic pay. Those who entered service from Sept. 8, 1980, to Aug. 1, 1986, are under System 2, known as "High-3," in which those who retire at 20 years receive 50 percent of their average basic pay over their final three years of service.
Those who entered military service after Aug. 1, 1986, may elect to receive retirement pay under the High-3 plan or the Career Status Bonus/Redux option. For 20 years of service, Redux offers a $15,000 cash bonus, but provides a pension of only 40 percent of average basic pay over a member's final three years and also has lower inflation adjustments than High-3 over a retiree's lifetime. Ref: Military pension would be hard to match
I joined in 1985 -- At 20 years -- I would have been eligible for 1/2 my base pay. I'll let you google base pay.
Depending on your specialty -- such as Explosives Ordinance Disposal (EOD) you pretty much get permanent hazardous pay as an extra.
Then if you live off base you get Basic Allowance for Quarters. If you have the rank and a have a family, you may get base housing. If no family, or you decided to live downtown BAQ covers about 90%.
Then there is the Basic Allowance for Subsistence (BAS). If I get shipped to Afghanistan, eating in the chow hall, BAS goes away. That is regardless of the family I leave behind.
Depending on what your specialty is in enlisted ranks -- getting to the E-7 Master Sergeant rank is "easy". But don't think a constant education isn't necessary.
So now I made it to E-7 at 19 years from 1985. Under that plan -- I have to stay in until I can have three years in rank to get the 50% of my highest base pay (no BAS, BAQ, Hazardous duty included.) So then I have to make it to 22 years. If I were to get E-8 right at 20 -- I then have to decide to stay to 23 or get out at 22?
If you are on the post-1986 plan -- you are at 25 years to get to the 50% of base pay.
I knew/know about three guys that were on the pre-1980 plan that were retired or working lightly and living off their pensions. All three guys are single and living in "relative" dumps.
This all should be considered in light of political considerations. Essentially from 1988 until 1998 they were doing their damnedest to cut the military with buyouts, new regs, and anything else to get rid of the "lifers" so they didn't have to pay pensions.
When a full bird colonel gets up in front of his unit and says "The information that I'm getting from [manning] is that we aren't going to get some positions filled. We have done more with less. I'm proud of you all. I don't want you to slack off. We are now at the point that we can only do less with less. I want you to come up with a prioritized list and we'll sort it out among the staff of what needs to be done."
Off-topic: If I ever run into that colonel again -- I'd follow him into hell. He'll bring us back. ;-)
I won't even go into the CHAMPUS and VA system.
The point being -- you can't really do 20 or 25 years and live off it for life.
Jim P. at January 4, 2011 10:12 PM
Jim P. at January 4, 2011 10:12 PM
Thank you for setting him straight.
For one, anybody who thinks military life is sunshine and roses even in peacetime hasn't the first clue. Starting with ... don't grow roots anywhere. You're needed? You go. To some really shitty places. Even in peacetime.
Even the best jobs have a suck-factor of 2.5 of those in the civilian world. Regular working hours? Make me laugh.
And that's not including the assholes who lord over you simply because they made the mistake of joining the service before you did.
Yeah. 20+ years of that shit just so you can make 50 percent of base pay?
No thanks.
I joined in '83, got out in '87. Didn't go to the end of the world, but I could certainly see it from there.
That was enough for me.
jimg at January 5, 2011 12:21 AM
BOTU is another one of those doctrinaire Libertarian trolls who try to argue that since all government is bad, then everything the government does is equally bad, so you're bad for having something you want to defend.
He's nothing but a self-important cockholster who'd find himself first with his back against the wall in his supposedly ideal anarchist state.
brian at January 5, 2011 10:56 AM
I said full pension, not full pay.
If you serve 20 years, you get a full pension, and complete medical care. For life. That is a very fat system, I stand by my sentiments.
Tough life as an employee of the federal government in the military service? Try the private sector.
No jobs for life. You can get fired any minute of any hour.
Move around? Some guys are traveling salesmen. Usually, to move ahead in a profession, you have to go where the opps are. Geographically, that could be anywhere.
Base housing is better than the Airstream trailer I live in. By far. I have no rec facilities.
Health care--we dream of the sort of coverage the military guys get.
All in all, I think military employees do well by the federal government, even better than their civilian counterparts.
DC is Fat City baby. The taxpayers are up for carving.
BOTU at January 5, 2011 11:03 AM
If you serve 20 years, you get a full pension, and complete medical care. For life. That is a very fat system, I stand by my sentiments.
What is your definition of full pension? If I worked for Ford for 20 years and was in the union -- I would get a full pension for life too.
The complete medical care -- search for "CHAMPUS veterans". Vets are paying for many of their own drugs, or at similar copays to any other insurance. If a vet lives close to a military base, or VA hospital they may get them there. But getting regular service at a VA hospital -- you are in line behind the wounded warriors. Base hospitals also triage. And there is no coverage for elective surgery. If a base hospital has the orthopedic surgeon on hand to repair your hip they will fit you in between the three guys that came back from Iraq -- if the surgeon has time. Otherwise you have the CHAMPUS copays on the local hospital.
No jobs for life.
In peacetime -- they find anyway to cut as much as possible. And of course any union employee in a civilian company -- short of doing something dangerous -- caught on camera -- has a safety net. Check out all the stories of unions protecting the workers. Especially -- firing an NYC school teacher.
Plus you have to add in the UCMJ. I know a guy that got a DUI downtown -- had to pay the $2000+ in legal fees, lawyers, and fines in the civilian court system. He then faced an administrative punishment form the USAF, 30 days confinement, reduction in rank and pay and was not allowed to re-enlist. Tell me where that would happen in the civilian world?
You can get fired any minute of any hour.
And in Iraq, Afghanistan and many other corners of the world you can be fired on any minute of any hour. For that matter it can in Fort Hood, Texas.
Move around? Some guys are traveling salesmen.
And I can say I've had enough -- I quit. Say that to your sergeant or commanding officer. The reply is "We have some nice housing in Fort Leavenworth, Kansas."
Usually, to move ahead in a profession, you have to go where the opps are. Geographically, that could be anywhere.
You have a choice -- you can move to the jobs, take lower pay, or change professions. When the military says move -- you move. No "I don't want to go there." No "Well I have kids and I don't want to leave them behind."
I knew several guys that were on a special team -- they would be assigned out to other locations on average 310 days a year. It was come home -- wash the uniforms, screw the dog, beat the wife, pat the kids on the head -- leave again. They did it because they knew what duty, honor, courage, and commitment meant.
Base housing is better than the Airstream trailer I live in. By far. I have no rec facilities.
Then why whine about -- join up. The day you are living in a converted conex in the Iraqi desert with three other guys -- tell me how great they are. At least most bases have gotten rid of the wooden barracks that were built in the '50s. Most are finally airtight. Then there is the navy fun. Even in port -- about half the guys have to live on the ship -- or if they get to go to the barracks on land -- they are living in "temporary" housing. No decorating, racking out on a bed that was filled with a guy that probably shipped out 48 hours before you got.
Health care--we dream of the sort of coverage the military guys get.
You are imagining things. I show up at the base hospital for sick call -- I then get triaged and can wait for hours. Then throw in that a military doctor screws up my surgery -- I can't sue them.
Then throw in that I showed up on sick call because my face was sunburned, to peeling, from doing Security Police augmentee duty over three days. I was asking for some cream and a shaving waiver. The clerk on the desk, not knowing details, warned me that I could be brought up on charges for abusing government property. Tell me where that happens in the civilian world?
Then you have the special forces teams. Those gentlemen put a wear and tear on their bodies that is somewhere around the NFL. And they do it for 20 years. Tell me the last NFL center that has lasted 20 years?
All in all, I think military employees do well by the federal government, even better than their civilian counterparts.
Do not conflate the officers and enlisted that stood up, put their hands and swore to protect and defend the constitution -- and your sorry ass as well -- with the Government Service Employees (GSE).
The GSE are unionized, the same as your local, state, and other federal employees. The same as GM, Ford, Chrysler, GE, and any other union. Under a union -- you have good and bad employees. You also have the same issues of protection and you can't fire, and all the rest.
Jim P. at January 5, 2011 9:45 PM
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