Houston, we have a problem...

So, snow it did, all night and all day. I was thinking this is probably the longest snow storm that I have witnessed. Schools were closed, my husband worked from home but I still had to go to work this morning if I expected to get paid. They let out us a couple of hours early so that was good. At least I got to fishtail myself there and back in the daylight though visibility at times was still challenging.

Tomorrow there is a two hour delay for the schools. I know that people have to shuffle their children to school, blah blah blah but with the school day already shorter than the business day, why are weather issues a catastrophe for them when the rest of us still have to observe our regular hours. I had to quickly make arrangements for my children to spend tomorrow's two hour delay with others so that I can show up to work on time.

The private sector does not take kindly to the vagaries of the school schedule. I remember when my oldest was a toddler and there was little sympathy for me when I was late to work because of an issue with her or her care-giving. With the school year topping out at 180 days, that makes a full 16 weeks or 80 weekdays that the children are not in school where alternate care is required if you are a working parent.

Since we are decades past the need for children to work on the farm and children in all other countries study a lot longer than ours do and America and all people American are no longer the center of the universe and teachers get paid the same as the rest of us for 36 weeks of work and receive a decent lifetime pension and are still complaining that they are not paid enough and the tax dollars continue to fall short of public spending and all of these things continue to add to the imbalance of the current debt-ridden world...Houston, we have a problem.

Keeping the Job Hunt Rolling

Rolling, rolling, rolling, keep that job hunt rolling...

Tomorrow I continue my bid for a civil service position. It has been a long and arduous process but I'm happy to still be in the running having reached the actual interview stage. Yes, I am indeed drinking the koolaid when it comes to working in the public sector. But the public sector has fared well, despite the recession, because states and localities used federal stimulus money to plug their budgets and avert layoffs among the rank and file.

Unfortunately, the influx of federal cash won't be available next year and state and municipal tax revenues continue to decline meaning that next year there will be huge budget gaps to fill. So, those of us attempting to join the ranks of public employment at this juncture may be late to the game. I must admit that I am concerned that any new recruits will not have the same job protections as the sitting ducks and I feel that even if I do land a civil service job, I may end up being part of a new wave of layoffs unprecedented in the public sector.

Nevertheless, I am still going for it because I am at least intrigued by the position and having reversed myself on the sector entirely, I truly hope to get it. I am willing to adjust my worldview for the right opportunity and those of us who are unemployed know that we must be flexible in order to improve our odds. Despite recent positive data on the national level, the employment horizon remains bleak on Long Island. Competition is fierce and we have to play hard to win while being thankful for the chance to step onto the playing field. Tomorrow I step out onto the field. Wish me luck.

Eeny Meeny Miny Moe: Public vs. Private Employment

Today the New York Times reported on the recent spike in applicants to the New York City Police Department. The cast offs from a shrinking private sector are trying to get their foot into the shrinking public sector. Unfortunately, due to municipal budget constraints, the NYPD is currently trying to shrink through attrition and they are hiring very few new recruits. But, the prospect of a job with a starting salary in the low forties that can pay in the nineties after five years and still carries a pension after 20 years of service looks very good when you are coming from the private sector.

A steady paycheck and job security are very enticing especially when you have been slapped around by layoffs and a diminishing paycheck. Even I am warming up to the prospect of working in the public sector. My only concern is the shrinking tax revenues and the fact that little has been done here in NY to curb spending in the public sector. Those budget cuts are inevitable but continue to be delayed through budgetary sleight of hand or the leveling of new fees and indirect taxes.

Despite the economic reality, it is political suicide in NY for politicians to push for budget cuts that involve cutting personnel; the unions do not take kindly to these types of suggestions. But, I think the economics will eventually trump the protection enjoyed by public sector workers and the new hires will suffer the brunt of any cutbanks. I fear that will be my fate should I be fortunate to get on board but right now employment in the private sector offers nothing but uncertainty as well. Eeny meeny miny moe.

Washington to the Rescue

With the jobless rate at alarming levels, 10.2% officially but depending upon who you consult unofficially, it is upwards of 20% when the under-employed and discouraged workers are included, the Keynesian economists and others are advocating that Washington spend more to create jobs. Recently the Obama Administration claimed that the stimulus has saved or created 640,00 jobs but unfortunately this falls far short of the numbers required.

Now that the banks are saved and the economy is stabilizing, the private sector has failed to create any jobs as expected. In fact, there has been a net loss in private sector jobs this decade so I don't know what Washington was expecting when they set out to save them. Instead, companies are continually cutting payroll to balance out their bottom line. So, if Corporate America cannot or will not create jobs, the belief is that the government should step in to remedy the situation. Besides, the Democrats have a stake in getting people back to work else their dominance of Congress and the Presidency may likely evaporate as the populace becomes more disgusted.

Meanwhile the government, in the face of declining tax revenues, has ratcheted up its ever burgeoning debt in its efforts to save the economy, save the banks, save current homeowners and encourage future ones among other stimulus efforts. Yet, despite the backlash against continued government spending, given the massive $12,000,000,000,000 debt and the $1,400,000,000,000 annual deficit, the government is being urged to spend more on job creation a la FDR's work programs during the Great Depression. Theoretically, the government could have spent more money on job creation and less on cash for clunkers and homeowner tax credits. After all, if jobs are created people will naturally have money to spend instead of enticing them with perceived "savings."

But there is more to consider when it comes to job creation. I came across a statistic recently that 58% of Americans receive some form of income from the government - public sectors workers, social security & pensions recipients, members of the military and military contractors and so on. Corporations are telling us that cutting costs is the only way to balance the books when revenue falls. If so much of our tax dollars are going back into paying ourselves, how can the government ever balance its books?

Civil Service, Not for Me...?

A while back, I mentioned I was taking a Suffolk County civil service test to broaden my job search options. It was for a trainee position, paying in the thirties and though I initially passed it up, I reconsidered when my prospects started to look dim. After all, statistics do show that job growth is occurring in the healthcare, education and government sectors.

Alas, there was not much information about the test and I initially surmised that since it was a trainee exam, how long could it be and how hard could it be? Well, it was long, five hours long, and it was hard, the type of hard that gives you a headache from question one. I've had my share of education and I'm telling you, it was hard.

I had done my due diligence, having driven over to Suffolk County Community College the day before to case the joint so I would know which building and where to park. Everything went according to plan until I got into the room and learned about my five hour fate. I had some snacks with me and water but the combination of stress and my low blood sugar issues (I have to eat within a certain time frame or else I start to feel ill) took its toll on me and I began to overheat and feel nauseous three hours in. Technically, it was lunchtime but there was no scheduled break for this exam.

I excused myself and went to the rest room, wet my face, drank some water and removed a layer of clothing. The test proctor asked me if I was OK and was incredibly sweet and procured me some raisins and a tangerine. Unfortunately, my body would not agree and I turned completely green. I endeavored to finish the test so I could get out of there. That's all I could think of, getting out of there and, of course, I quickly gave up on the whole notion of pursuing this avenue. Unfortunately, I tossed my cookies the second I got out, at four and a half hours in, with barely enough time to find a suitable receptacle. Thankfully, there was a well-placed garbage can.

Anyhow, after fielding inquiries from friends and family regarding my test results, I finally called Civil Service and was told that it would take three to six months. That was fine with me because I didn't want anything do with it anymore. Well, they called me today to tell me that I was one of the high scorers and they'd like me to come in for an oral examination before a panel (death squad?) of three persons. I am still thinking that this is a trainee position, that will net me, after taxes, not much more than I am receiving from unemployment, not that unemployment will last forever...

Of course, immediately upon receiving the phone call with the "good" news, I had an instant headache, as the tricky civil service policy questions came back to haunt me. Do I really want to do this job? I know people think of civil service as a godsend but me, I'm not so sure.

Private Sector Employment Losing Luster

Now that all of the experts are predicting that the recession is pretty much over and the stock market is up 50% since March, we all should be breathing a sigh of relief. Our 401k plans are rising again, the economy is leveling off, all should be OK right? Yet, somehow, I feel disconnected from all of this economic joy. When I look around, I do not see things getting any better for the middle class; at least those employed by the private sector.

Over the last decade our wages have been stagnant but now they are just downright declining. In the last 8 years, my husband was only able to gain a wage increase by switching jobs, the last time we both actually got raises from a private employer was at the end of the 1990s. So far, many of our fellow unemployed folks who have been fortunate to get employment offers are accepting less pay for the same or similar job that they just lost.

My husband just got an offer over $10,000 less than his old job with an inferior healthcare plan. In fact, the company announced today that next year's plan will be even more inferior due to rising costs. We accepted the offer though because you can't look a gift job in the mouth these days. We are thrilled that one of us now has a job but as he looks around at the folks toiling in his new workplace, they are grateful to have a job and fearful of losing it. They all get in by 8am, work all day, take no lunch, take no vacations, and do not leave the office before 6pm. This is the new reality for many who work in the private sector.

Last weekend, I read in the New York Times that the economy produced 120,000 private sector jobs since 1999. In ten years, during all of the economic boom that we were supposedly experiencing, before all the bubbles crashed at once, only a net of 120,000 private sector jobs were created. Yet, during those boom times, many public sector unions were able to obtain the most generous salary and benefit increases that now must be honored despite the economic reversal of fortune.

Where I live, on the south shore of Suffolk County, most of the parents that I encounter in my community are public employees of some sort; teachers or school workers, police people, railroad workers, postal workers, fire people and the like who seem to be the only people still spending money. The rest are contractors; plumbers, carpenters, landscapers and mechanics, all of which did quite well over the last 10 years judging from their homes and their lifestyle but are now pulling back because of the economy. There are very few who work in the private sector, and if they do they are Long Island based. I imagine they are in the same boat as we are.

So far, in the six years that we have been living in our community we have not met anyone who commutes to the city like my husband does; I'm sure there's a few out there, though. After traveling all over the island and meeting more people, anecdotal evidence suggests that most NYC commuters live in Nassau County or above the LIE in Suffolk County. In fact, when we moved out here, our neighbors were shocked that my husband worked in the city. I suppose if we were surrounded by more NYC commuter folk, we could get a better pulse on how they are surviving.

Anyhow, we are starting to get jealous of the public sector people. They have job security, incredible lifestyles, nice homes, nice vacations, nice vehicles, nice everything and we feel like we are struggling all the time. We have no comfort zone when it comes to employment, we have no job security, we have to save for our own retirement and every year we have to pay more and accept a lesser healthcare plan. Who knew this was going to be the case? None of those public sector jobs were glamorous back in the 1980s when we were going to college and making our choices but now they look downright lovely. Sure, there will be a day of reckoning for those public sector employees but right now they are sitting pretty and I wish I was sitting there next to them right about now.

Local Unions Still Resistant to Concessions Despite Bad Economy

On a local level, Governor Paterson recently proposed the layoffs of nearly 9000 state workers if the union does not make any attempt to help him find $500,000,000 in cost savings; the MTA voted today to raise fares approximately 23%, raise bridge tolls, cut services and layoff workers unless the state votes to help bail them out and Suffolk County Executive Steve Levy has sent out 2,200 notices to some county workers putting them on notice for the potential layoff of 386 persons if the unions do not agree to some concessions.

As the State and local governments struggle to bring their budgets in order and minimize their looming deficits, the biggest area of contention are with the unions. Note here that I am speaking only about unions that represent employees who work in any public service sector supported by taxpayer dollars; the United Auto Workers, the teamsters and the like who work for large private corporations fall into a different category for purposes of this discussion. Anyhow, we must admit that the generous union contracts entered into during the previous boom years are crippling state and locals governments alike in their ability to trim their budgets as they stare down the failing economy.

Now it may not seem from any of my previous posts that I have any support for unions but I do believe that unions have a noble purpose in providing employment security for many citizens. Certainly this purpose was critical during much of the 20th century to balance out huge employee/employer discrepancies and abuses. Yes, we needed unions to reset the playing field and that did take place. Now, unions are reaping generous benefits above and beyond what employees of private enterprise could ever hope to attain. In addition, these private employees most shoulder the higher tax burden required to pay for all of those union perks.

I believe that a shift in the balance between the benefits of public and private employment requires an re-evaluation of union benefits. So, at the very least, unions should be reasonable when it comes to economic crisis. For the majority of New Yorkers who are not in a union, the axe could come at any time. While they work fearful for their livelihood, union members have the advantage of negotiation before the axe falls. Yet, union members are acting like the Wall Street folk, defending their entitlement to their generous contracts.

Recently, union members protested County Executive Levy's proposal to cut some county jobs as they have the right. But, listening to some of their defense made it hard to sympathize. Many lamented with indignation how it was unfair for them to work within an environment where their jobs were threatened. Hello! Times have changed. If we continue to pay you, our whole government welfare is on the line. When the analogy is used by Obama and Bernanke alike that when your neighbors house is burning - in an upside down mortgage or potential foreclosure - we have to save them with a housing bailout to save the neighborhood. How about public service union employees realizing that if they don't sacrifice a little now, the future could be bad for all of us?

The Suffolk County employees are being asked to accept a lag payroll, meaning that they will sacrifice 10 days of pay now to be paid at a higher rate when they retire. They are still going to get the money, just not now. One Suffolk employee even suggested raising taxes as being better than laying of people. Huh! For God's sake, none of the concessions sound so bad if you still get to keep your job. And, what about the ones who do end up being laid off? They will still get their pensions. The rest of us have to rely on our own 401k/IRA savings, which averaged just $15,000 per employee by 2008 estimates though I'm sure they are worth considerably less now with the market so topsy-turvy. This is pitiful compared to the value of a union pension.

While private employees have to save for their own retirements, public employees earn retirement credits for each year that they work. It is hard to feel bad for them right now when a large portion of their health insurance is being paid and they receive generous holiday and vacation days. They had a good run but if we all have to pay the piper, then they should too. How can they still remain reluctant to do so?

We Didn't Start The Fire But We Still Have to Pay

The financial situation of most of the middle class here on Long Island is always foremost on my mind. I still have the same question that I had when I started this blog, how is everyone surviving? I thought I would have some insight by now but it is still a mystery to me.

Now we add to the mix the $15,400,000,000 budget gap, attributed largely to a decline in tax revenue from Wall Street, in the New York State budget that requires serious action on the Governor's part. In response, he proposed today serious cuts in school aid and health services, layoffs of state workers, an increase in many ordinary NY State fees, new taxes on just about every bit of entertainment that exists in the state and a repeal of certain tax exemptions especially the star (property tax) rebate.

Some of the Governor's proposed solutions will be painful for all of us; we don't want to have to pay more to renew our licenses and registrations or pay more to download a song on the internet. Most importantly, any cuts in aid means that the local taxpayer has to pick up the tab. More fees and taxes is the last thing that any New Yorker wants to hear right now. However, this is where fiscal reality meets us and indeed it is very unpleasant. We may not have started the fire but we certainly didn't push for fire prevention either.

Interestingly enough, the magnitude of the layoffs is very small, 521 out of some 200,000 state workers. This is an almost negligible layoff, speaking from one who has lived to tell the tale. Indeed the rollbacks on some employee benefits will meet the ire of many especially when the career veterans have already been grand-fathered into much better benefits than the new hires. As every special interest starts screaming bloody murder from the mountaintops this week, we will see what kind of backbone state legislators have when they sit down to vote on all of this.

Oh Happy Day?

2 Days. 483 points. Today Investors were skipping down Wall Street whistling. The market is up over 200 points singing “doowah diddy diddy…” Thankfully, they will remember none of this in the morning when they face down the reality of Merrill Lynch’s, Google’s and Microsoft’s numbers. Alas, I can’t seem to turn away from the current financial drama, such a scintillating tale of economic woe unfolding at the pace of a John Grisham novel, a real page turner. Now, if we pile on new developments occurring in my other favorite topic, public sector benefits and taxation, then we truly have a most entertaining day. Today I read that there is a real prospect of Governor Paterson signing a new round of bills to boost, yes boost, the already outrageous benefits of fire and police officers.

This from the editorial section of today’s Newsday;

“The bills would prohibit the reduction of state retiree health benefits; lift limits on disability pensions for fire and police officers who suffer heart attacks off-duty; and allow fire or police officers to join the other force after retiring, making them eligible for two full pensions…”

Am I reading this correctly? I thought we had a fight on in Albany to reduce taxes in NY State and these types of bills do just the opposite. What will happen to our taxes in the future when these pension checks come due? Our legislators found the time to send these types of bills to the Governor when we are mired in economic uncertainty. Once again, I shake my head.

The editorial urges Governor Patterson to veto the greed because “pension costs are busting government budgets and burdening private-sector workers whose benefits are far less generous.” Took the words right out of my mouth. There is a real concern that Paterson may support the bill because not only is the Governor a huge friend of big labor but his father, Basil Paterson, is a bigger friend of labor; his law firm is a lobbyist for public sector labor unions. Connections have an awful way of connecting the powerful to something that stinks. Let’s hope that rationality prevails.

Unions must help ease tax burden

The people who benefit most on Long Island are government officials & employees, school officials and teachers, and police officers. What do all of these people have in common? These are all positions that are supposed to serve the public good. Yet, these are now the highest paid people on average in Long Island. Yes the average private sector wages are now dwarfed by the average wages of all of these professions. In addition, public sector personnel are guaranteed cost of living increases and generous benefits regardless of the tax burden on the residents. Why? because these personnel are members of powerful unions whose political clout is legendary. No politician is willing to risk political suicide by treading on the “rights” of the unions.

Human resources – wages and benefits – are 60-70% of an organization’s operating expense be it a major corporation, government or quasi-government agency. We routinely hear of private enterprises cutting costs through attrition and as a last resort, layoffs. Yet, public agencies cannot effectively reduce their budgets (which in turn would reduce taxes) because they can never touch the most expensive part of the budget, union-protected wages and benefits. What’s left is cutting costs through the reduction of services, services that are very often popular and/or vital like when a school district threatens to cut art, music or sports. These savings of course are miniscule and can never offset the annual wage increases and perks stipulated by the unions. Yes, the unions are doing their job by protecting the wages and benefits of their members. However, it cannot be that those wages and benefits become a tax burden to the very people they are supposed to serve. The purpose of the union was to equalize the earnings of their public sector members in light of what they would be earning in the private sector, not to have earnings that are above and beyond the call of duty, literally.

The fact is we have to cut taxes. We have to think smart about how we are going to rein in these costs. Our elected officials must appeal to the unions to come to their senses for the public good by starting with some reasonable fixes. One is to have public sector workers contribute a greater portion of their health and retirement benefits just like those workers in the private sector. Every one from top to bottom with no grand-fathering could pay a percentage. If everyone active and retired paid a small percentage that would return millions to the public coffer for all to benefit – not some. Another painless solution is for unions to give greater leeway to public agencies to reduce personnel through attrition instead of demanding that those jobs remain on the books. We have to start somewhere.

School Budget Increases Approved without a Fight

How is it possible that the majority of school budgets with increases of 4% and above were passed when the price of gas, heating oil and food have risen so sharply? How could anyone vote to increase taxes on top of the increases of everything else? Last year school budget increases were resoundingly defeated. Now with the economy on the verge of recession, we don’t put up a fight. The only people who win here are the teachers and administrators. They get their cost of living increases and continued stellar benefits while those in the private sector contend with stagnant wages and eroding benefits. Why are we so helpless when it comes to the school budget? Everyone wants the best teachers and educational experience for their children. But should it come at such a high price?

In Suffolk County the average teacher pay is close to $70,000. I don't know if people do the math but that is for 10 months work and I know I'm being generous about the actual time worked considering the myriad of school vacations. Based on a 12 month scale that amount would be the equivalent of $84,000 a year not to mention the generous benefits and pensions. Years ago teachers were dedicated to the education of our young people and did so for low wages as did most who worked in the public sector. In return for their dedication and the apparent economic sacrifice of giving up a more lucrative private sector job, they received lifetime benefits and pensions. Now the tables are upside down. Not only are they are making much more than the average private sector worker, they are still getting the lifetime benefits and pensions. The teachers union claims that these wages are necessary to attract good teachers. Now we pay so much more in taxes than the rest of the country so our children can supposedly get a better education which is now making the tax burden so high that these same children can’t afford to live here once they graduate. This does not make any sense.

Long Island was a middle class haven where for decades those with decent employment could live and raise their families in a comfortable existence. Now the average middle class family struggles to have a lifestyle they can no longer afford, where they live in homes that they couldn’t afford if they were to purchase them today and where their children graduate from college and return to the family home to take up residence in the basement because they can’t afford any other place to live. In the public sector, there is no incentive to trim costs, check the bottom line or boost productivity when you can just keep raising taxes.