Submitted by tom on
Related to a previous discussion forum post on public sector pensions is the general state of public sector finances.
Barron's (subscription required) Editor Thomas Donlan wrote a recent piece (click here to read) on the alarming state of state finances.
Donlan provided some enlightening statistics from Bureau of Labor Statistics on the average wages and benefits of state and local governments versus the private sector:
- Average wages and benefits are $26.24 an hour in government versus $19.45 an hour in private employment.
- Health benefits cost state and local government an average $4.43 an hour compared with $2.01 for private employers.
- State and local governments award their workers an average $3.23 an hour for pensions and savings plans compared with 94 cents an hour in the private sector.
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Anonymous replied on Permalink
California Milk and Billboard Inspectors
According to the Wall Street Journal, 15,000 public employees in California have retired with annual pensions greater than $100,000.
The San Ramon Valley fire chief's annual pension is $284,000.
During the past decade, California public worker pension costs have increased to $3 billion from $150 million (a 2,000 percent increase). This occurred while state revenues increased only 24 percent.
LG replied on Permalink
San Ramon Fire Chief Pension
$284,000 in annual pension payments for the San Ramon Fire Chief--how nice.
Assuming that this person lives another 30 years the present value of those pension payments is about $4.9 million.
How nice for that fire chief to have a $5 million net worth on the taxpayers' dime...
tom replied on Permalink
Government's Options
Interesting article and comments from PIMCO CEO El-Erian.
Fallout from deteriorating public finances will be more painful than envisioned by many.
Options available to governments include:
- Decrease spending (good luck)
- Increase taxes
- Deliberate inflation
- Default and confiscation
http://www.bloomberg.com/apps/news?pid=20601010&sid=aYI_3n1Zc13s
Anonymous replied on Permalink
Protests in Greece
Interesting discussion.
While extreme, are protests similar to those taking place right now in Greece a possibility for our future?
http://news.bbc.co.uk/2/hi/europe/8562621.stm
Anonymous replied on Permalink
Municipal Bond Market Crisis
Interesting opinion piece on the municipal bond market: http://www.bloomberg.com/apps/news?pid=20601039&sid=aKj_LXH6zUrw
Also interesting to note that 4,770 municipal bond issues defaulted during the Great Depression years of 1930 - 1939.
Los Angeles said this week that they might go broke in a month...
JL replied on Permalink
Berkshire Credit Safer than United States
Interesting thread.
Credit of private companies such as Berkshire Hathaway are yielding less than credit of the United States: http://www.bloomberg.com/apps/news?pid=20601010&sid=azz5FiyZHvMY
Anonymous replied on Permalink
San Francisco City Workers
1 in 3 city workers in San Francisco make over $100,000 per year: http://cbs5.com/local/sf.salary.data.2.1656896.html
Average pay before benefits is $93,000.
Highest earner was $516,000.
Salaries--not including benefits--make up $2.5 billion of the $6.5 billion budget (for 800,000 or so residents).
$500 million budget deficit on a $6.5 billion budget--no wonder...