AlphaAlpha

Mon, Jan 17, 2011 : 8:39 p.m.

YpsiLivin - Lehman's BK was huge; two years into the unwinding, most work is yet ahead. The point made above was, products purchased through them stand on their own, irrespective of Lehman's issues. Many knew MBS was garbage prior to 2007, you likely know GS in particular shorted MBS whilst selling MBS to Joe Public and every one else who just 'knew' RE only rises. If your plans bought MBS, sorry. Even so, MBS would have tanked with or without Fuld & Co. Paulson & Co. made sure of that; that's another story. Other assets Lehman was an agent for rose and fell on their own, irrespective of Lehman. This was the only implication. Sorry for the confusion. JohnQ, just to make Eddie even happier, you may begin with the local companies.

John Q

Mon, Jan 17, 2011 : 8:13 p.m.

If you listen to AlphaAlpha, the "free market" wage for a corrections officer is what you pay to the Briarwood security guard. Social workers should be paid what you pay daycare and home care workers since they both work with children and the elderly. According to AlphaAlpha, education and skills are irrelevant, only what the market dictates we pay the lowest paid worker in a field.

RDParsons

Mon, Jan 17, 2011 : 7:59 p.m.

Here's a practical exercise to consider when debating State Employee wages and benefits: How much do you think they should be paid? I presume that most observers agree that the state needs to have certain employees around. In my opinion we need to have prison guards.Corrections Officers earn $15.38/hr to start and $23.56 at the top of their scale. Consider this as well, the Department of Corrections can't keep people in these jobs. Why? Because new hires can't handle dealing with felons,working inside a prison, and the daily threat of physical harm.There is a very high turnover rate. How about a job that requires a college degree? Social Workers are required to have a Masters in Social Work. They top out at $31.80/hr. God help those workers considering the human tragedy they deal with in an unrelenting daily grind. You couldn't pay me enough to deal with stuff like child abuse. There are many other examples. As workers, what is a fair wage for the service they provide?

YpsiLivin

Mon, Jan 17, 2011 : 12:03 p.m.

AlphaAlpha said: Lehman's bankruptcy (aided by ex GS CEO Paulson?) generally did not affect the products they sold. I'm not sure where you developed the idea that the Lehman bankruptcy was no big deal. It is the largest bankruptcy filing in US history. The Dow Jones dropped by 500 points the day Lehman Brothers declared bankruptcy. Freddie Mac got stiffed for about $1.5 billion. The Federal Agricultural Mortgage Corporation had to write off nearly $50 million in losses due to the Lehman Brothers bankruptcy. The NYSE halted trading of Constellation Energy, which was eventually bought out because it was so exposed to Lehman Brothers. (It's stock dropped from nearly $68/share to below $13/share in one day.) The Royal Bank of Scotland lost nearly $2 billion on the bankruptcy. I'm sure they'll all be glad to know that the Lehman Bankruptcy had no real effect, after all. The "products" Lehman was selling were asset-backed mortgage securities. The residential and commercial real estate markets have dropped substantially in value, and these "securities" are no longer backed by anything. They're worthless paper because the asset value that once guaranteed them has been gutted. Trust me, the "products Lehman sold" were definitely affected. The Lehman bankruptcy also evaporated $600 million of someone else's money that MPSERS was playing with. Similar MPSERS investments with other firms lost another $1.5 billion in mortgage securities once Lehman fell because they couldn't get away from these subprime mortgage securities fast enough. The effect of the Lehman bankruptcy was that MPSERS had to cough up $2+ billion of its own cash to replace the $2+ billion of someone else's cash it lost at the casinos on Wall Street. Of the $14 billion MPSERS lost in 2008, it's been able to make up about $300 million. You see, pensions generally don't buy risky investments; they prefer tangible, safe, solid investments, like real estate.

AlphaAlpha

Mon, Jan 17, 2011 : 11:09 a.m.

John Q - Hundreds of large companies, and thousands of small ones, made the transition. Significant company obligation change ends the day DCP begins. You would do well to evaluate your private competitors. You may begin with the Fortune 500, or 5 if you wish. DYODD. If you can err so much re: representation, you won't trust anything else.

John Q

Mon, Jan 17, 2011 : 10:40 a.m.

"While the above pension plan conversion plan was described with brevity, it can, in fact, be implemented at city, state, and federal level. And not in the cumbersome fashion John Q alluded to. It's not rocket science, and there are many examples to follow." Cumbersome? It's basic economics. Share with us your many examples of how to switch workers from one system to another without incurring higher costs during the transition period.

AlphaAlpha

Mon, Jan 17, 2011 : 10:35 a.m.

John Q - Please pay better attention. AlphaAlpha has not ever once blamed representation for anything.

AlphaAlpha

Mon, Jan 17, 2011 : 10:33 a.m.

YpsiLivin - Thank you for the succinct, reasonably fact based commentary you provided. Just a few random ideas - While the above pension plan conversion plan was described with brevity, it can, in fact, be implemented at city, state, and federal level. And not in the cumbersome fashion John Q alluded to. It's not rocket science, and there are many examples to follow. As you likely know, equity markets have risen ~75% from the lows in '08; no doubt pension funds have recovered similarly. Bennie and the Inkjets have all but shouted that boosting stock prices is a new Reserve Bank System mandate. Models suggest they will fail later, but times are better for now. Lehman's bankruptcy (aided by ex GS CEO Paulson?) generally did not affect the products they sold. The PBGC only 'guarantees' a variable 'portion' of an individual's pension benefits. While a walmart 'associate' would likely be paid 100% of their planned pension if WM should fail, workers with jobs nearer median and higher pay would only get a small fraction of their originally planned pension benefits: a mere 25% in the case of workers earning the pay associated with dislocated auto workers. And, PBGC is 'underfunded' and potentially up for 'reform'. Yikes. We may well see PBGC covering public employee pensions as a result of some of the drastic changes which are to occur in the next few years. It's a bargaining chip. Watch for it. Offering that chip is one idea which can be used to lower public employee pay and benefits. There are others, but that's another story... The fact that your pension is not legally guaranteed is all the more reason why you and your peers should advocate for individual possession of, and thus control of, your pension assets. Fund mismanagers do not have your best interests in mind - only theirs. It's sad that public pension money has been misused. It is perhaps another classic example of government hypocrisy: like the admittedly Ponzi-like scheme SS is, government's pension misdeeds are not illegal, even though both these actions are quite illegal for companies. It must be lovely being exempt from most regulations... A worker's money is best left in the worker's possession. Having this responsibility might require people to spend a bit more time learning about finance, and a bit less time being entertained, but the alternative is less pleasant.

John Q

Mon, Jan 17, 2011 : 10:05 a.m.

The views of the "stunhsif"s and the "AlphaAlpha"s of the world show what's so wrong with this discussion. In their world, the pay and benefits of the non-union private sector are the true benchmarks of what people should be getting paid. In the same breath, they tell us that people in the unions are overpaid and have benefits that are too generous. But the mantra of the anti-unionists is that if you get out under the yoke of the union bosses, as a free man or woman, you can go out and earn your own level of pay and benefits. How's that working out for everyone? People in unions should get rid of them for what reason? So they can earn less and get less in benefits? Meanwhile, the same people who nearly destroyed the financial markets in 2008 are earning record profits. The CEOs are enjoying their salaries measured in millions and huge bonuses on top of that. Companies are booking record profits as they slash pay and benefits. I've never been a union member or had to pay union dues. But from what I can see, the obsession with attacking the unions is misguided in the extreme. If your pay and benefits stink and you're not in a union shop, I'll have to assume according to the theology of stunhsif and AlphaAlpha that you're a lazy working and getting exactly what you've earned.

YpsiLivin

Mon, Jan 17, 2011 : 8:37 a.m.

stunhsif said: The state needs to file for bankruptcy and void all these pension plans. The retirees can then go to the PGBC to get their bailout, they will get roughly 50 cents on the dollar and this state can get a new start just as GM and Chrysler did. Read slowly, starting here. Public pensions are not guaranteed by the PBGC. The PBGC guarantees private pensions only. Local governmental entities (like cities and counties) can declare bankruptcy and VOID their pension obligations, leaving their retirees with nothing but a fish story. States can simply void their pension obligations by changing the rules, which Michigan and other states have done several times already. There is no safety net for a public pension because public pensions are not insured by anything or anyone. The state can promise the moon to pension plan participants but there is no legal mechanism to hold the state to a-n-y-t-h-i-n-g it has promised its retirees, and the state can change the terms of the plan retroactively, at will. Last year's State Supreme Court ruling that the state is not required to honor the health care benefit for pension participants demonstrates this neatly. The state can walk away from pension obligations anytime and those people in the pension plan have no recourse and no safety net. There is no PBGC for public pensions, stunhsif. There just isn't, so please stop assuming that a retiree with a public pension won't be harmed if their current/former employer just walks away. Workers' entire retirement savings will be wiped out. How's that for good public policy?

stunhsif

Mon, Jan 17, 2011 : 12:18 a.m.

YpsiLivin said: "The State Supreme Court decided last year that retiree health care, the most expensive portion of the state pension plan, isn't enforceable. Employees are required to pay the premiums for retirement health care benefits, but have no guarantees that the state will provide the benefits down the road. Further, public pensions aren't guaranteed, so there's no mechanism to force a state or municipality to make good on its pension obligations period. The real problem isn't that the pension plans are breaking the state, but rather that the state is breaking its pension plans." Thanks for re-inforcing what I said above in my previous post. The state needs to file for bankrupcy and void all these pension plans. The retirees can then go to the PGBC to get their bailout, they will get roughly 50 cents on the dollar and this state can get a new start just as GM and Chrysler did. Good Day No Luck Needed

YpsiLivin

Sun, Jan 16, 2011 : 11:56 p.m.

AlphaAlpha said: Many companies are converting by freezing their defined benefit plan on a certain date, then simultaneously commencing their defined contribution plan. Sadly, that's a little too simplistic for the situation the state is in. First, the pension contributions that the state takes in today aren't set aside for tomorrow's retirees; they are also used to pay for today's retirees. When you take today's contributors out of the system, you also cut off some of the funding for the plan's current beneficiaries. That's ok as long as you have a different funding mechanism to cover the pension obligations until the last person is out. If not, well then the "just say no" approach won't work too well. You see, as it turns out, the pension plan investments haven't performed as anticipated. In fact, in 2008, they lost $12 billion on declining investments alone. By itself, investment loss forgivable, seeing that most investments tanked at that time. The pensions have also suffered other losses as the result of the games people play. The state's pension plans engaged in (and maybe still do?) a practice called securities lending, where they "lend" assets that belong to the pension plan to other borrowers as a kind of short-term, high-interest loan. The borrowers typically put up cash as collateral. The loaned securities are also essentially insured in case the borrower fails to return the funds, but that's not what went wrong in this case. Michigan's pension managers took the cash they'd received in September 2008 as collateral (the stuff they were supposed to return to the borrower when the deal was done) and invested it in short-term, asset-backed notes (i.e. subprime mortgage derivatives) issued by (ta-da!) Lehman Brothers. Lehman Brothers declared bankruptcy in mid-September and took nearly $600 million in Michigan's pension funds with it. By the end of September 2008 the pension funds had lost another $1.5 billion the same way (but with different investment firms) and the state was on the hook for the $2 billion in collateral it lost. That money is gone for good, and there's no way to get it back. The pension managers made a bet and lost, and those losses had to be made up from the pension fund assets. The second problem facing the pension plans is that the Legislature has "borrowed" pension funds at various times for various things, leaving these funds even shorter. The State Supreme Court decided last year that retiree health care, the most expensive portion of the state pension plan, isn't enforceable. Employees are required to pay the premiums for retirement health care benefits, but have no guarantees that the state will provide the benefits down the road. Further, public pensions aren't guaranteed, so there's no mechanism to force a state or municipality to make good on its pension obligations period. The real problem isn't that the pension plans are breaking the state, but rather that the state is breaking its pension plans.

Jay Thomas

Sun, Jan 16, 2011 : 10:56 p.m.

Only the ghost would come up with such a cockamamie way of justifying teacher salaries. Exaggerated class room sizes and the whole nine yards. Looks like it is around 13 students a class for grade school (which is how I remember it). Sheesh! Say "Hi" to your teacher family for me.;)

stunhsif

Sun, Jan 16, 2011 : 10:02 p.m.

John Q said: "This may be true. But in the short-term, it would cause a huge increase in costs to the state and local schools and governments. The conversion from a defined benefit plan to a defined contribution plan actually raises costs for a period of 5 to 15 years." Not if the state of Michigan decides to file bankrupcy and wipe out the 60 billion dollar unfunded pension liability for Michigan's public workers and start over with a clean slate which would bring the unions to the table with an empty plate. We can only hope, my wallet would love it and so would those "all too many" unemployed workers in this sorry state!

John Q

Sun, Jan 16, 2011 : 9:43 p.m.

"At the local government level most employees still have a defined contribution plan across the state." Do you have any numbers to back up this claim? "If all government employees in Michigan move to a defined contribution plan, the long-term cost to the state tax payers would be reduced." This may be true. But in the short-term, it would cause a huge increase in costs to the state and local schools and governments. The conversion from a defined benefit plan to a defined contribution plan actually raises costs for a period of 5 to 15 years. Most people who advocate for this change have little understanding of the financials involved or the pros and cons of such a change. They are simply repeating talking points they've picked up in the media or online.

michaywe

Sun, Jan 16, 2011 : 9:41 p.m.

Mr. Ghost; Great idea you have. Define teacher's core competency as 'babysitters'. One can easily find the local prevailing wage and benefits of 'babysitters' with a search of the DOL Wage & Hr. Division website. Please don't share your findings with the babysitters. They'd quickly realize they're being treated unfairly as to wage, benefits and job security! Seeking parity, they'll surely begin charging us for days our children aren't in their care, conferences, snow days, summer vacation etc.... Besides, I can't afford special 'workers' who demand pay, benefits and job security over the threat of a strike!

UtrespassM

Sun, Jan 16, 2011 : 9:22 p.m.

Education? Degrees? believe or not? The vocation time of K-12 teachers is 180 days/year. They are much better paid than these professors teaching at university.

Hillbillydeluxe

Sun, Jan 16, 2011 : 9:02 p.m.

This middle class,lower middle class,upper middle class,blue collar,gray collar class war fare has got to stop. nobody complained when auto workers made 80 or more thousand a year with overtime that helped the economy or the next persons wage in the region if pay has been negotiated its managements fault if they can't then balance the books, don't take from the working man or women, all social/welfare programs & OR all business property tax giveaways need to be looked at first also these folks in middle to upper management state positions with pensions after little to no time on the job with lifetime benefits as well. Snyder = the rich get richer the middle class becomes poor, the new republican socialism.

Stephen Landes

Sun, Jan 16, 2011 : 8:53 p.m.

EMG: You brought up the $259,000 bogey and asked us to believe that should all accrue to the teacher/daycare worker. Don't ask anyone else to guess how much of that total needs to be devoted to facilities, supplies, services, administration, etc. YOU go dig it up and present a whole story -- not a few facts tailored to make your point. If you actually talk to someone who runs a daycare business you will probably find out exactly why they pay daycare workers what they are paid.

AlphaAlpha

Sun, Jan 16, 2011 : 8:52 p.m.

"Time for all parties concerned--unions, school boards, legislators, and taxpayers--to step up to solve the problem." Any thoughts about how?

Speechless

Sun, Jan 16, 2011 : 7:24 p.m.

Thank you for publishing this!... It's been over 24 hours since perusing this site's previous Snyder entry, and those withdrawal tremors and headaches had begun to kick in. By tomorrow, it would have been time for cold turkey. It's also time once again for the daily assault on public employees, those people who do actual work for a living. Pour me another tea, please. Meanwhile, Michigan doles out literally billions in tax breaks for business interests. By ceasing this practice immediately cold turkey! combined with leaving the current business tax untouched, that would go a healthy distance toward balancing the state's budget. Attacking state workers will damage middle class livelihoods and, naturally, reduce everyday economic spending. The wealthy, who get big tax breaks and entitlements, do not recycle them into their respective local economies, but instead turn them mostly into additional Wall Street play money. Again, it will be interesting to see how assertively Snyder deals with the brats who comprise the new legislative majority. Is he willing to be the adult?

AMOC

Sun, Jan 16, 2011 : 7:15 p.m.

Oops. Typo.. I meant "1/3 to 1/2 of the revenue"

AMOC

Sun, Jan 16, 2011 : 7:12 p.m.

Dear Ghost - Daycare charges per child are so high because day care providers are limited by law to caring for a maximum of 10 children at a time in a center where all the children are more than 30 months old. For infants under 6 months, where the going rate is actually the $48/day you quoted, the limit is 4 children at a time. And for mixed age groups (family or home-based day care) there is a lower absolute limit, and a sliding limit based on the ages of all the children, including the care-givers' own children who live in the home. So your comparison is between day-care providers who are limited to earning $200/day, or $44,000 / year caring for 4 infants with a teacher supervising 20 older students. In reality, most day care workers earn a lot less, because the overhead of their employing center or pre-school eats up 1/3 to 1/3 of the payments made by parents. Perhaps a better way to consider the appropriate wage for teachers vs. the cost of administration, food, buildings, etc. would be to look at the money the school district collects for each pupil in a classroom. Ann Arbor got a generous $9,700+ per pupil for the 2009-2010 school year, while Plymouth-Canton, a district similar in size and levels of student achievement got $7,600. So Ann Arbor collected $194,000 per classroom of 20 students, while P-C got only $152,000. If, as you suggested, half of an organizations' revenue might be needed for things other than labor (books, paper, supplies, building, lights, heat, administration) then Ann Arbor has up to $97,000 per year with which to compensate teachers, and P-C has a mere $76,000. But both groups of teachers have the same state-mandated pension plan, and both groups of teachers receive similar health insurance benefits from their employing districts. And surprisingly enough, teachers in Plymouth-Canton earn very close to what Ann Arbor teachers earn. Their district somehow manages to pay similar teacher wages and obtain similar high student achievement with a LOT less overhead. We need to look at re-structuring education to minimize overhead and maximize results. There is LOTS of room to improve on that without cutting a single dollar out of a working teacher's paycheck, or a current retiree's pension.

Ralph

Sun, Jan 16, 2011 : 6:26 p.m.

Defined pension plans work if they are not abused and raided by politicians. 401K's stink for the common man who really knows nothing about investing. The Gov. also plans to cut dental care for the poor. Not a smart decision, since dental health affects general health.

Sam Adems

Sun, Jan 16, 2011 : 6:16 p.m.

While I'm sure that there are people in state and local government whose base salary is too low, you have to look at total compensation, base salary including the cost of all benefits (including retirement pensions, healthcare benefits and post-retirement healthcare benefits) to benchmark whether or not a public sector employee is underpaid or overpaid. Michigan is still very generous with all the benefits we pay our public servants. The Mackinac Center published research in 2009 that indicates that if public sector employees in Michigan were paid comparable salary and benefits to comparable private sector jobs, it would save $5.7 billion per year (see www.mackinac.org/10839). When he was candidate for Governor, Mike Bouchard announced the text of a Constitutional amendment he proposed, which would be a game changer for the state. It would prohibit the state and all local units of government from paying any public service employees salaries and benefits that are more or less than 3 percent of those comparable jobs in the private sector. Per the Mackinac Center published research mentioned above it would save $5.7 billion per year. The savings would be enough to eliminate the Michigan Business Tax, plug the state's $1.8 billion structural budget deficit and eliminate the deficits at the local level of government. It would allow us to start to eliminate the over $60 billion pension fund deficit that our state government currently is labored with. You can read the text of the proposed constitutional amendment at: www.bouchardforgovernor.com/home/2010/06/18/bouchard-pushes-constitutional-amendment-to-put-government-in-line-with-the-private-sector/. Of course eliminating the Michigan Business Tax would bring tons of jobs to the state, especially when Illinois (being run into the ground by Democrats) just raised that state's business tax rate to 7%.

dotdash

Sun, Jan 16, 2011 : 5:49 p.m.

I agree with David Cahill: let's see what the new governor has to say. Here's a question, though. What if what we want (education, healthcare, roads, safety, justice, etc.) just costs more than we as a society want to pay? Like healthcare: everyone wants chemo if they get cancer, but no one wants to pay for everyone else's. It doesn't seem to do any good to tinker around the outside of the issue (no raises here, 5% cut here) if it's the big issues we don't agree on....

timjbd

Sun, Jan 16, 2011 : 4:20 p.m.

Certainly sounds like the kid who did the interview thinks public employees can be slashed quite a bit, and, of course, tax cuts for the wealthy. Hell, public employees don't have any political power with Obama nor Snyder. Zero. Time to gut them. Slash benefits, cut taxes. Can't have one without the other: AnnArbor.com: Should we be replacing pensions with 401k plans? AnnArbor.com: Do you think that businesses are prepared the accept the loss of specific lucrative tax incentives in favor of an overall lower tax burden? NEVER.. would anyone consider paying HIGHER taxes to cover a deficit! Of course not. Funny how even so-called "journalists" perpetuate these republican ideals as though they are the only possible way to think about any issue. And what a great time to replace pensions with 401k's. It's like the past 10 years never happened. Bubble/bust/bubble/bust/bubble/bust. Snyder: "I dont view it as just an across-the-board cut. Thats not the best way to do things. My preference is to work hard in a collaborative fashion, working with public employees to say, how can we address these issues, how can we get more in line with the private sector and be more affordable? Ill probably focus more on the benefits side, in terms of retirement plans and health care as opposed to current compensation, which is the hardest to address because people have to make a living today." "...in line with the private sector" meaning no benefits, vastly lower pay and TONS of cream at the top to be skimmed by campaign contributors. Pretty soon teachers will be getting replaced with computer programs; cops with privatized security; fire departments with private fire mitigation services (already happening in California), park service employees with nothing; etc. AnnArbor.com: Is tenure something you specifically want to look at? Why not? (and great question- thanks for the talking points cover!) That way, the teachers who are left can be subject to the whims of the politicians on the school board. Just look how well that's working in Texas! They now get to teach creationism as science, global warming as urban myth and the contributions of Thomas Jefferson have been replaced with Phyllis Schlafly and Ayn Rand. 5000 years ago, Phyllis Schlafly was riding her own dinosaur! At least that's what the kids of Texas will be learning. I hope I'm wrong and this guy turns out to be different than the current republican brand itself. But he ran as one knowing full well what Tom Coburn, James Inhofe, John Boehner, Michelle Bachmann, Sarah Palin, Dick Cheney, etc. were turning the republican party into. I didn't hear him objecting.

average joe

Sun, Jan 16, 2011 : 3:47 p.m.

There is a difference in what the state employee is compensated, & what that employee costs the state when you figure in life long benefits, etc. When comparing private to public, one just can't figure the wage/salary & current benefits package. Every one knows that the state deal makers aren't typically worried about getting the most "bang for the (taxpayers) buck", like a private company would be. Also, to those that are hung up on Gov. Snyder commuting from A2, How about we ask him to kick in for the extra gas, along with wear & tear on the state car over what it would cost if he lived in Lansing. That's the only extra cost that I see incurred by the taxpayer. He already has security & driver at his side whether he lived in Lansing or not, so the cost of that isn't any higher. And let's not forget that the former Gov. had a residence in Northville (in addition to lansing)& I would bet that she spent a lot of time on I-96 at what cost to taxpayers(?).

AlphaAlpha

Sun, Jan 16, 2011 : 3:39 p.m.

Fact based is A-OK Eddie. Just pointing out a potential conflict of interest. Disclosure is good, wouldn't you agree?

AlphaAlpha

Sun, Jan 16, 2011 : 3:36 p.m.

The DCP payment would be in addition to the DBP payment, obviously.

AlphaAlpha

Sun, Jan 16, 2011 : 3:33 p.m.

"I don't know how I feel about the transition for employees who have a defined benefit plan to a defined contribution plan. How do you fund the transition or do you just make it for new employees?" Hello DonBee - Many companies are converting by freezing their defined benefit plan on a certain date, then simultaneously commencing their defined contribution plan. So, the worker knows today what their DBP payments will be when they retire, and then they watch a second, new DCP retirement payment amount grow, typically with each pay period. A typical DCP may show a retiree's pension growing at a rate of $8 per month per pay monthly pay period, such that after one year, the employee would get $7 x 12 = $84 per month retirement pay. That would grow to $840 per month after 10 years, $2,100 after 25 years, etc.

AlphaAlpha

Sun, Jan 16, 2011 : 3:17 p.m.

The study linked by sh1 is interesting, but contains no significant data. It is an NPR puff piece, which quotes the same study by public employee Ballard, mentioned above, which, in essence, suggests that, via Ballard's new metric of 'compensation per educational level', public employees are underpaid. Compensation should be based on performance. A clerk with a PhD in comparative planetology gets paid to be a clerk.

DonBee

Sun, Jan 16, 2011 : 3:08 p.m.

@queenmom - I know at least 3 people with 2 masters degrees working at McDonalds, because that is the job they can find. I know a person with a PhD who is working at Borders at a cash register, because that is what she can find. They are all UofM graduates, all were working at better jobs, but they don't today. If the 2 masters degrees are from an online program in english and history, is that worth as much as 2 masters degrees from a good engineering school? I don't have an answer.

DonBee

Sun, Jan 16, 2011 : 3:04 p.m.

EMG - My, my - The daycare provider did not offer a facility, no water, no food, no other services, it was pure wages to the daycare provider? If I look at some of the public daycare providers who publish their financials, a big chuck of their cost goes into supplies, facilties, utilities, etc. I guess you had to pay extra for that, or supply your own or let the kids go hungry and dirty all day?

DonBee

Sun, Jan 16, 2011 : 2:58 p.m.

@ gail gerstenlauer In general you are correct. Most STATE employees do. Some do not (some departments have avoided conversion to DBP). If you were a state employee before 1997, you got to keep your defined benefit plan. The good news is the number of state employees who have this plan have mostly retired, the bad news is the people who figure out how much the plan will cost were wildly wrong, and they are costing a lot more than planned. People are living longer and the cost of health care is much higher than expected. At the local government level most employees still have a defined contribution plan across the state. Since the state provides about $1,000,000,000 in revenue sharing, that money goes into those local defined contribution plans. Additionally the state provides the lion's share of school funding for K-12 and most schools still have defined contribution plans. If all government employees in Michigan move to a defined contribution plan, the long-term cost to the state tax payers would be reduced. I don't know how I feel about the transition for employees who have a defined benefit plan to a defined contribution plan. How do you fund the transition or do you just make it for new employees? This is yet another hard issue that we need to face.

Macabre Sunset

Sun, Jan 16, 2011 : 2:56 p.m.

I have been absolutely disgusted with the quality of the teachers in Ann Arbor. I was expecting so much more. I don't know how you implement a merit-based system or what it would incorporate, but the AAPS desperately needs reform from top to bottom. At this point, I'd recommend privatizing everything. These employees are fattened by tenure and just don't care about the kids anymore. If they ever did.

SpamBot1

Sun, Jan 16, 2011 : 2:17 p.m.

@Rob Libbert I appreciate your thoughtful comments based on research. I will enjoy watching the debate of public vs. private sector pay and benefits change as tax-cut-babble is replaced by research and fact. You are part of the shift in that discussion. I hope you'll notice how those that regularly demand facts squirm when they are presented information contrary to their position. Enjoy the show.

YpsiLivin

Sun, Jan 16, 2011 : 2:10 p.m.

Like everyone else, I'm interested to see Snyder's plan to close Michigan's chronic budget hole. I'm also encouraged by the film tax credits, not because I think they're generating a lot of wealth for the state - they're not. They're probably too generous and should be looked at for potential downward modifications. However, they do seem to demonstrate that cutting taxes on businesses generates business, which is something Michigan needs. The state should reserve its most generous tax breaks for businesses that locate/relocate/remain here and employ Michigan citizens. I suspect that the most stable plan to "reinvent" Michigan will include a combination of business-friendly tax breaks designed to put more people to work; state spending cuts that reflect the reality of our economic situation; and new/increased taxes on services, goods and personal income designed to generate additional revenue.

sh1

Sun, Jan 16, 2011 : 1:58 p.m.

This study just out: http://www.publicbroadcasting.net/michigan/news.newsmain/article/1/0/1748961/Michigan.News/State.employees.over-compensated.fat.cats Looks like balancing the budget on the backs of state workers wouldn't be fair after all, so let's work together to find a solution without offering each other up as sacrifice.

braggslaw

Sun, Jan 16, 2011 : 1:43 p.m.

Rob I would quit and get a better job if I were you If you do not that is your choice

AlphaAlpha

Sun, Jan 16, 2011 : 1:26 p.m.

Hello Rob - Running similar numbers got similar results; it appears you are correct: you deserve a raise. Congratulations. Now, get it. As you likely know, several engineering fields are currently some of the most in-demand of all professions. You are lucky. Send those applications today. Unfortunately, yours is an exceptional situation. Teachers, and all manner or other public employees, are substantially overpaid. Local teachers at $104K total employee cost/compensation? That is about twice what private teachers make. Regardless of education levels, experience, certification, etc. Many think twice is too much. You might want to begin the process of selecting a new employer by sharing your research with your supervisor; there might be some raise room for you. If not, monster.com, etc. awaits.

Tom Joad

Sun, Jan 16, 2011 : 1:21 p.m.

Employee compensation considerations have caused the mass exodus of jobs to India and China. That begun with manufacturing but it's rapidly being eclipsed by high skilled positions and salaries being off-shored. Michigan's economy is defunct and moribund. As another article's comments suggest growing marijuana is becoming the only thriving cottage industry but as more and more dope growers enter the market the price they command for their 'medicine' will drop. Are we going to bank our future on dope and gambling?

Rob

Sun, Jan 16, 2011 : 1:02 p.m.

AlphaAlpha: I just ran my salary through payscale.com as you suggested. I am a senior civil engineer for MDOT with 30 years of experience. I make about $73,000 per year. However, for the past few years with furlough days, banked leave time, increased co-pays, etc, I have been making about $65000. According to payscale.com, the average salary for someone in my position is $96,408 with the top end being $130,000. It appears that I may be undercompensated.

David Cahill

Sun, Jan 16, 2011 : 12:50 p.m.

I think we should suspend judgment on Governor Snyder's program until we see his State of the State address and his first budget. And I'm a hard-core Dem who campaigned hard for his opponent. Michigan is the only state that lost population during the past decade. Our economic base has vanished. Drastic action is required if we are to save whatever remains of our once-great state.

julieswhimsies

Sun, Jan 16, 2011 : 12:50 p.m.

I certainly cannot get through my day without my a2.com Snyder update. It seems to me that Snyder ought to be considering the idea of trimming a little fat from his expenditures (the Lansing commute, for one), unless he's doing it on his own dime.(which I doubt)...in addition to trimming his own waistline.

AlphaAlpha

Sun, Jan 16, 2011 : 12:20 p.m.

"Looks like the teachers are underpaid to me based on comparison with the private sector. Time for teacher pay to go up--substantially." An amusing, myopic, minority view, spoken by a retired public employee enjoying plush retirement benefits, at taxpayer expense.

AlphaAlpha

Sun, Jan 16, 2011 : 12:16 p.m.

Rob - Thank you for the interesting link. The fatal flaw in public employee Ballard's study of public employee wages is: he measured wages in terms of education achieved, which is quite odd, and it renders the study quite useless. Pay should be based on performance. Someone over- or mis-educated for a task carries baggage which an employer has no obligation to compensate for. Many PhD's are uncompensated for their education. It's sad, but it's true. So, thank you for the link, but do you have another which is reality based?

lklady

Sun, Jan 16, 2011 : 12:08 p.m.

Not only have we had a defined contribution for 15 years, we have had 3 pay cuts in the past 5 years. Have you forgotten the fun of having gov. offices closed every other Friday in 2009? The outcry from taxpayers led to the silent "40 hours work for 36 hours pay" this past year. Both were pay cuts.

Cash

Sun, Jan 16, 2011 : 11:37 a.m.

sb builder, Waste is how we got to that deficit. And increasing expenditures for himself while expecting sacrifice from others is "let them eat cake" a few centuries later. He should pay for all of the cost of his choice to live in Superior Township. Instead he points the finger at others.

Rob

Sun, Jan 16, 2011 : 11:31 a.m.

AlphaAlpha: The data for public employee compensation comes from a study done by Charles Ballard, MSU department of Economics. Here is the link: http://www.miafscme.org/PDF%20Files/stateemployeesstudy.pdf

braggslaw

Sun, Jan 16, 2011 : 11:29 a.m.

Elise, I completely agree, people should be able to change their job and profession whenever they want. If the voters/taxpayers of the state want to employee 10's of thousands of state workers with complete job security, pension, and no accountability that is the decisions of the voters. But the reverse has happened in Michigan, the voters in this state have given Snyder a mandate to eliminate the public works project that is state govt. People also vote with their feet, companies, workers (and their money) are moving to the south. When your best people and companies leave income levels drop, state funding drops etc. In the past, people in Michigan were fighting over the crumbs and nobody was baking the bread. I hope we can get back to the ovens soon.

stunhsif

Sun, Jan 16, 2011 : 11:24 a.m.

John said: "We are going to pay John Nixon a staggering sum of $250,000 a year, and how much does the motorcade cost us to escort this Governor to and from Ann Arbor to Lansing each day?" Unfunded "public pension" liability is over 60 billion dollars in Michigan and we are worried what it costs to drive the governor to Lansing from Ann Arbor. Good grief! Good Day No Luck Needed

braggslaw

Sun, Jan 16, 2011 : 11:22 a.m.

"Educators" in this state believe they are a protected class, this is the root of the problem. As the private sectored shed jobs and imploded, state employees did not take a hair cut. Educators are important as are other professions and should be treated like other professions. Michigan is now a poor state. BUT based on the state's per capita personal income levels, Michigan teachers have the highest salaries in the nation.

John

Sun, Jan 16, 2011 : 11:18 a.m.

We are going to pay John Nixon a staggering sum of $250,000 a year, and how much does the motorcade cost us to escort this Governor to and from Ann Arbor to Lansing each day?

elise

Sun, Jan 16, 2011 : 11:18 a.m.

braggslaw: And...if the private sector does not like their pay...why not go over to that SOOO lucrative public sector. Goes both ways!

stunhsif

Sun, Jan 16, 2011 : 10:56 a.m.

queenmom said: "But wait, in the next paragraph he says he only is talking about benefits because people "have to make a living today." So, dear Governor, how are the retirees going to live?" The answer to your question is very simple. Said "public retirees" will live just like private sector retirees without pensions. They will work longer ( not retiring at age 55), save more of their income and put it into 401K's. Your gravy train has sprung a leak and Mr. Snyder is going to plug it!

braggslaw

Sun, Jan 16, 2011 : 10:55 a.m.

The great thing about America is that you can choose where to work If state workers feel underpaid......get a new job I would happy to remove you from the state budget Every body believes they should be paid more......the only true measure is what somebody is willing to pay you Not all degrees are valued or created equal

AlphaAlpha

Sun, Jan 16, 2011 : 10:44 a.m.

queenmom - Again, can you cite any sources to support your assertion "my salary would double to get in line with the private sector!"? Try checking payscale.com, salary.com, or other sites.

AlphaAlpha

Sun, Jan 16, 2011 : 10:15 a.m.

gail gerstenlauer - Can you please cite your sources to support your assertion that "2. they're overcompensated, beyond what the private sector employee receives. Neither could be further from the truth."? Your assertion is at odds with the realities most are experiencing. Thank you.

queenmom

Sun, Jan 16, 2011 : 10:14 a.m.

"My preference is to work hard in a collaborative fashion, working with public employees to say, how can we address these issues, how can we get more in line with the private sector and be more affordable?" says our new Governor. As a public high school teacher with 2 Master's Degrees, I would be thrilled if he was actually serious about getting in line with the private sector because after my pension - which I do contribute to - is decimated, I could afford to save for retirement because my salary would double to get in line with the private sector! But wait, in the next paragraph he says he only is talking about benefits because people "have to make a living today." So, dear Governor, how are the retirees going to live?

braggslaw

Sun, Jan 16, 2011 : 10:12 a.m.

Snyder has a mandate. The state exists to provide services not to employee people.

T Kinks

Sun, Jan 16, 2011 : 10:10 a.m.

Here we go again putting the blame on the working man (or women)! Why shouldn't state employees get health care & a retirement package as well as a living wage. I think the cuts should start @ the top. Snyder is just another union buster trying to take away everything from the working man. And it's not just the union employees that benefit from the unions, it helps the other working class people get a living wage too. I don't have a good feeling about this NEW governor.

sbbuilder

Sun, Jan 16, 2011 : 10:07 a.m.

Cash Yes, the amount we pay as taxpayers for Gov Snyder to live in his house is of such great moment. I can hardly think of a greater concern. Keep up the clashing of cymbols and blaring of horns on this one. I'm sure there's a whole crowd of people out there somewhere who share your concern. The rest of us would like to focus on less important items like closing the 1.8B deficit. Clash clash. Toot toot.

mrmoose

Sun, Jan 16, 2011 : 9:57 a.m.

If you want jobs in Michigan stop buying all the things made in China.

Cash

Sun, Jan 16, 2011 : 9:49 a.m.

Give us this day our daily Snyder. Has he mentioned how much it is costing us for him to live in the house of his choice in Superior Township? There's a question to remain unanswered.

average joe

Sun, Jan 16, 2011 : 9:48 a.m.

Gail Gerstenlauer- FYI-After his inauguration, Governor-elect Snyder became Governor Snyder. And please keep in mind that when figuring employee compensation, it's not just what that employee recieves in wages & benefits, but rather what the total costs are to the state for employing that person over that person's lifetime.

jondhall

Sun, Jan 16, 2011 : 9:29 a.m.

So the state employees have a DBP and a " PENSION", wow what a deal, no wonder this state is broke. Free medical for life also I bet. What next retirement after twenty years? Almost like being a congress person, I guess they also pay no social security? What a deal it "was " party might be ending though. Good luck Governor.

gail gerstenlauer

Sun, Jan 16, 2011 : 9:11 a.m.

I find it remarkable, and saddening, that neither the governor-elect, nor annarbor.com appears to be aware of the fact that STATE EMPLOYEES HAVE HAD A MANDATORY DEFINED CONTRIBUTION PLAN SINCE 1996. Typical; the state employee is an easy and vulnerable target for uninformed and politically prejudiced beliefs about compensation and benefits, based apparently on the assumptions that 1. they don't work and 2. they're overcompensated, beyond what the private sector employee receives. Neither could be further from the truth. I suggest that both your reporting staff and governor-elect Snyder start doing their homework before jumping to conclusions. Governor elect Snyder is at least making compassionate noises, which is encouraging. You do know you're talking about the people that maintain your roads, provide state police protection, maintain your state parks, and keep convicts behind bars? Among other necessary and sometimes dangerous services?