This Sunday, page 5B of the Review Journal was a full-page ad, paid for by a consortium of local government unions apparently stung by the growing public awareness of how they pillage taxpayers. Bear in mind – no actual government workers were involved in the ad, just the government unions.
The five highest-paid Chamber employees are compared with two high-paid (not highest) government employees and three average pay figures.
The ad pitches more money and benefits for government union members by suggesting members compare poorly with “the private sector.” The Las Vegas Chamber of Commerce, of course, is not a private sector organization. It is a 501(c) non-profit organization which, in addition to having membership revenue from private businesses, has a bunch of membership revenue from local government entities. The Chamber is partly government-funded.
Still, the Las Vegas Chamber of Commerce is subject to most of the same payroll taxes as a private entity. Combined with retirement benefit differences, these factors drive up government compensation well beyond the Chamber.
Let’s take the Jill Flores – Greg Gammon comparison as an illustrative example.
First, reduce Jill Flores’ pay by $6,572. That’s how much the Chamber takes out of Jill’s paycheck to send to Washington for social security. Greg’s paycheck is not reduced.
Next, reduce Jill Flores’ pay by another $2,500, because that’s how much Jill gets paid for the approximately four holidays every year that she has to work because her organization is open, while Greg gets them off (or, more likely, gets double pay for working them. Government gets more days off.
(By the way, this same phenomenon causes the teacher-private sector comparison to be way off – never mind the silly comparison between a teacher and a successful salesperson. The $49,000 per year in the union ad immediately goes to $62,400 per year because teachers have three months off each summer, in addition to many of the other adjustments outlined in this article).
As a career fireman, Greg has long enjoyed a work schedule that involves being on duty for 24-hours followed by two days off duty. It’s like a weekend every other day. And, like most firemen, Greg has probably spent his two weekends off per week starting and growing a thriving small business. Jill, on the other hand, has worked at least four ten-hour days per week as a Chamber executive. Sometimes five, and sometimes she works on her weekends, for no additional compensation. You can find such dedication in government, but it’s much rarer. And it doesn’t easily allow starting and growing a side business.
But those qualitative comparisons are tough to assign dollar value to. So let’s get back to the union’s compensation comparison. After the two adjustments to Jill’s compensation, she’s at $153,844, 2.6% higher than Greg’s $149,940.
Now let’s suppose that they’re both 50 years old, have 20 years each on the job, and they both retire next week.
Here’s where the big difference happens. Because Jill is 50, she won’t collect any social security for another 15 years – assuming Congress doesn’t raise the age in an attempt to cover its’ bankruptcy of the system. And she will have to find her own health insurance. Meanwhile, Greg will immediately start collecting a retirement income of $75,000 per year from his government retirement plan. He will be allowed to continue in the government health insurance program, and may be eligible for a premium subsidy as well.
When Jill reaches the age where she can get social security income, it’ll likely be around $25,000 per year, a third of Greg’s.
This disparity is because, during their working years, Jill’s employer paid much less money for her retirement than Greg’s employer. In their final year, Jill’s employer paid around $6,500 into social security on her behalf, while Greg’s employer paid around $30,000 into PERS on his behalf. If we factor those dollars into each of their respective compensations, now Jill is close to $160,000 and Greg is close to $180,000.
Let’s say in the year 2019, both Jill and Greg’s retirements are interrupted by an attack of angina, and each must have an artery stent installed to live a more comfortable life. Regardless of what insurance either of them have, Nevada state law says that any police or fire retiree has lifelong 100% coverage for all ailments of the heart or lung, so taxpayers will pay for Greg’s operation.
This difference in benefit is funded by taxpayers putting additional dollars into a long-term savings account – something the Chamber does not do for Jill. For purposes of our comparison, this increases Greg’s compensation even further.
The union’s ad in today’s paper is as deceptive as the union coalition has ever been – and that includes all the ads they funded saying state Senator Joe Heck wanted people to get cancer and state Senator Bob Beers wanted teachers to shoot children.