Why San Francisco is in trouble – highly compensated city employees
forbes.com
forbes.com
Calgary has a similar dynamic with over reliance on commercial real estate for major oil and gas companies.
Alberta is an outlier in how it finances public services. These are structural problems which won't be solved by public sector taking 5, 10, or even 20% reduction.
[1] https://open.alberta.ca/dataset/9c81a5a7-cdf1-49ad-a923-d1ec...
[1] https://www.reuters.com/article/us-crisis-timeline/timeline-...
Taking your linked budget update the three highest expenditures being Health (which is not just wages) $20B, Education $8B, and Advanced Education $5B amount to $33 Billion.
How much would you have to reduce public sector wages as a percentage (note not all those expenses are wages) to cover the $8 Billion pre-covid deficit. Now how much would you have to do to cover the $24 Billion deficit? The budget update mentioned there is only an additional $3 Billion in post-covid recovery spending but somehow an additional $21 Billion in deficit? Seems like the deficit is coming from revenue collapse.
There is no doubt they will have to increase taxation or reduce spending. My point is that there is perhaps there is no longer any 'Alberta Advantage' allowing for the special taxation status of the province.
Often enough the highest visible overtimes on a city budget are social functions, like a sheriff who provides honorary protective detail to stadiums where they are later bizarrely reimbused through that mechanism.
Below that and down-to the median overtimes usually speak for themselves and draw a fair amount of criticism, but otherwise, the vast combined aggregate under the median points out that we don't pay people enough for the jobs they do, and we can't hire enough of them at that price.
But the overtime budget breakdown for SF (City and County) was roughly 65% transit, 28% maintenance, 5% enforcement. So admin is < 2% of it.
Those numbers in context are interesting. In FY2011/12 the departmental breakdown of employees exceeding set overtime limits were:
- Transportation: 634 employees
- Fire Department: 378 employees
- Public Health: 115 employees
- Sheriff: 85 employees.
Everyone else in the city - combined - came to just 63 employees. In other words, these are critical positions drawing nearly all of the overtime.
Publish a calculating spreadsheet that shows how people's pension benefits are calculated, and what line items (overtime, etc) will or will not be included, and what costs will be incurred to the city if they are/are not. And let people review and find out how it will be exploited.
I'm allergic to incompetence and inertia of this level that gradually ratchets up the cost for everyone.
Government jobs are not a charity to be milked into giving people benefits above and beyond. Government service is supposed to offer job security, not high pay for performance and risk (or at least that's what it generally has come to be). Why are we paying top dollar, along with job security and low performance?
Also, the double and triple dipping where someone retires from one government job and then takes another one with a different agency. They collect a pension check and a pay check at the same time while also establishing a second pension account in a different system.
I think the issue is the 'you should not ...' part. I don't see it as a moral issue.
Also, who cares? SF is one of the most expensive cities in the world - it's probably fair to expect city employees to make a liveable wage in the city they serve.
Normally, as a city, you'd probably want your employees to live in the city that they service. If you don't live there, you're not going to care about hypodermic needles on the street as much. "Meh, it's San Francisco. Who cares?"
https://www.sfexaminer.com/news/why-muni-cant-find-good-driv... https://www.sfgate.com/bayarea/article/City-and-Muni-operato...
As a quick example, here we can see the author making an extremely weird argument that the guy running the agency that serves the homeless in the city is somehow doing a bad job because there are more homeless people now than there were in 2016.
> In 2016, the city added a new agency to serve its homeless residents. By 2019, the department had 148 employees, and 53 of them made more than $100,000.
> The director, Jeff Kosinsky, brought home up to $238,182 annually, but each year the city’s homeless population continued to grow.
SF is seeing a steep reduction in cost-of-living, yet these extremely high salaries won't decrease accordingly.
Also, the herds of people moving out and companies shifting remote will mean lower revenue for the city, meaning these high salaries won't be fiscally sustainable.
SF gets its revenues from its citizens via taxes. The employees don’t produce revenues themselves. They are cost centers. Cities by their nature, use regulatory capture to extract revenues.
If googles revenues go down they cut staff. Cities rarely cut staff in line with budget decreases.
Why do cities offer tax benefits to these companies at the expense of their own residents?
Ironic that SF is going broke with some of the richest companies ever residing here.
It's not a surprise, to anyone who thinks about it for more than 20 seconds that RN or firefighter is not, in fact, a revenue generating position for the city. But they're generally agreed to be necessary, so why should they not be paid a living wage?
They'll work a typical salaried position for ~30 years, and then in their last year (or last couple years) they'll stuff as much overtime as they possibly can in, sometimes more than triple their regular salary. Pension is based on wages over the last year or two, so their pension payments skyrocket upwards.
Managers know and are complicit in this, in solidarity with their coworkers. There's often peer pressure too; lower ranked staff are urged to not even request overtime so that it can all go to the near-retirees without a paper-trail of favoritism. It's not uncommon for >98% of overtime to go to the 2 or 3 people who are close to retirement.
I'm all for a living wage for people in critical or permanent roles, but this is not that, and it's not fair. This is the opposite, driving pay down for newer recruits (because they can't request overtime), driving retirement benefits up (far above what was earned during the career), and costing the public in the process.
You don't need to drag down others to pull yourself up.
1) There is far too much risk involved. No one really knows how long a person will live beyond retirement 40 years from now;
2) The systems, as they are in place today, result in retirement income that far exceeds expected returns from investment or growth in GDP over the preceeding 30-40 years of work, and are unsustainable by taxpayers _by definition;
3) The taxpayer - who should be the adversary when negotiating pensions and salaries for public servants - gets no place at the table during negotiations. It is in the best interests of both the leadership of civil institutions and the employed civil servants to increase both salary, pensions, and benefits far beyond any rational economic analysis.
Eventually these policies result in places like Flint or Detroit. My expectation is that Illinois is likely to join them in about 10 years they are so far in the hole.
That's renting a 1 bedroom apartment money. To even dream of ever buying something and supporting a family you're talking $200k+.
With a fixed 3% rate, you could probably do a mortgage with 4x income. And a quick look shows there are not a lot of houses in the $600k range.
Most decent homes are going to be in the $1M range.
I haven't looked at what percentage of cost for other cities salaried employees are, but it does not seem exceedingly high. I guess you could justify shaving off 10-15% or so, but I wouldn't characterise this as being a major source of trouble.
https://www.sfchronicle.com/projects/2020/san-francisco-over...
How does someone work 3000 overtime hours?
Yes, there can be rampant overtime abuse by government workers to get these inflated salaries, that's a large problem in NYC transit agencies.
However, the overt limiting of city revenue due to Prop 13 is a major cause of budget shortfalls that's looking them right in the face.
If someone is in serious debt while at the same time going out of their way to voluntarily take a lower salary, does it make sense to blame it on their expensive internet bill, or tackle the salary first?
Very good point
Now, I am not claiming they're highly productive (and suspect the opposite), but until the data is there we're missing an important factor in judging.