
Why San Francisco is in trouble – highly compensated city employees - bgentry
https://www.forbes.com/sites/adamandrzejewski/2020/09/01/why-san-francisco-is-in-trouble--19000-highly-compensated-city-employees-earned-150000-in-pay--perks/
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izend
Similar situation to Calgary, Alberta. When the oil sector was booming the
private sector was being paid the highest salaries in North America and public
employees complained massively and received the highest public sector salaries
in the country. Now, oil and gas has cratered and the salaries in the private
sector have collapsed (and thousands of job losses) the public sector is
refusing to have any salary reduction even though the province of Alberta is
completely broke and heading towards fiscal collapse.

~~~
thedmstdmstdmst
Saying the province is broke misses the point. Alberta has the lowest
provincial tax rate in North America, has the lowest personal tax rate in
Canada, and has no provincial sales tax. All of these because of a reliance on
Oil and Gas royalties.

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.

~~~
izend
Please take a look at the latest Alberta government 2020-2021 budget update
[1], the resource revenue has collapsed to a mere $1.5 billion which is 2% of
government expenditures. Also, the government is running a pre-Covid deficit
of $8 Billion which has ballooned to $24 Billion due to Covid. The government
must raise taxes or reduce expenditures or face more indebtedness than Quebec
per capita.

[1]
[https://open.alberta.ca/dataset/9c81a5a7-cdf1-49ad-a923-d1ec...](https://open.alberta.ca/dataset/9c81a5a7-cdf1-49ad-a923-d1ecb42944e4/resource/df5d0611-2278-4fdb-
aa7b-0c71932479cb/download/2020-21-first-quarter-fiscal-update-and-economic-
statement.pdf)

~~~
NotSammyHagar
So in Canada, unlike most or all us states, Alberta can run a budget deficit,
they can just get loans? What if they declare bankruptcy or can't pay some
bills?

~~~
izend
Yes, in Canada the provinces can run deficits and all of them have quite large
debt loads but eventually the debt loads become too large as the interest
payments grow. In the 90s Canada had to cut government services due to an
extremely high debt load [1].

[1] [https://www.reuters.com/article/us-crisis-
timeline/timeline-...](https://www.reuters.com/article/us-crisis-
timeline/timeline-how-canada-tamed-its-budget-crisis-idUSTRE7AK0FF20111121)

~~~
thedmstdmstdmst
Canadian Provinces also do the bulk of the spending compared federally with US
States.

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pp19dd
Having worked on stories like these, I'd caution anyone to examine some of the
overtime outliers before responding to them.

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.

~~~
supernova87a
It would be just some one-time outliers, except there are real problems where
overtime is counted towards retirement, and workers actively inflate their
last years just to bump up their pensions and retirement pay. And none of that
kind of thing is protected against in the contracts. So the city and taxpayers
are being screwed.

~~~
pp19dd
The last-three-years retirement bowling lanes you're describing need a US-wide
overhaul, but it's definitely not an uncommon occurrence in public service
admin anywhere in the states, on a City, State and Federal level.

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.

~~~
DebtDeflation
>The last-three-years retirement bowling lanes

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.

~~~
JoeAltmaier
This is ... normal? You get a pension for working a duration at a job. If you
want to 'supplement' your income after that point its a free country, isn't
it?

~~~
DebtDeflation
In the private sector, with multiple employers, perhaps (though very few offer
pensions any more). In the public sector, you would essentially be getting
paid twice and multiple pensions by the same employer (the taxpayer).

~~~
JoeAltmaier
Yes. Go on. And the problem is ....

~~~
athms
The problem is CalPERS. If you are not retired, you should not be drawing from
a pension. When a person goes to another government job and starts paying into
CalPERS again, the pension needs to stop.

~~~
JoeAltmaier
??? The pension is somehow not a contractual obligation? They didn't work the
required years? They didn't meet the pension terms?

I think the issue is the 'you should not ...' part. I don't see it as a moral
issue.

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adt2bt
This reads like a clickbait article with an agenda.

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.

~~~
alehul
That's the thing - the livable wage is changing in San Francisco.

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.

~~~
athms
The city will take on debt load like Vallejo and Orange County. They will try
to win concessions, but most likely the unions won't budge. Worst case, SF
files for Chapter 9 bankruptcy.

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freeone3000
This article fails to make the point as to why this is a problem. You might as
well make an article "Why Google is in trouble - 60,000 employees earned
$150k+".

~~~
mc32
Not really. Google isn’t saddled with retirement entitlements. Also Googles
employees generate some of the highest revenues per staff in the industry.

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.

~~~
content_sesh
"Retirement entitlements"? You mean the pensions people have earned, with
their labor?

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?

~~~
diebeforei485
If public sector employees want private sector wages, they shouldn't also get
pensions. They can save for retirement in a 401(k) or equivalent.

~~~
content_sesh
If private sector employees want public sector benefits and job protections,
they can agitate for them. Talk to your coworkers about organizing and
unionizing.

You don't need to drag down others to pull yourself up.

~~~
WkndTriathlete
No. There are three problems with defined-benefit systems, especially as a
form of civil servant benefit:

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.

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woke_neolib
It's wonderful that city employees make competitive salaries. I wish they were
held accountable when they failed to do their job.

~~~
panzagl
I have no problem with most of the base salaries, but the amount of overtime
screams either inefficiency or corruption.

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thatfrenchguy
Do we want city employees to live in the city ? Because unless your family
bought a house in the 60s, you probably want to earn $150k to live in the
city.

~~~
aphextron
>Because unless your family bought a house in the 60s, you probably want to
earn $150k to live in the city.

That's renting a 1 bedroom apartment money. To even dream of ever buying
something and supporting a family you're talking $200k+.

~~~
konjin
200k? I know people on 600k total comp who have been stuck in a one bedroom
flat for 4 years because of how many strings the money comes attached with.

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Barrin92
Putting those numbers into context, from the article there's about 40k
employees earning on average 131k. That would be somewhat higher than the
median wage in SF (~100k), and for all the employees be about ~5 billion in
cost, which is slightly more than a third of the budget of 13.7 billion for
the fiscal year 2020.

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.

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vcolano
The issue I perceive with this is that all of these wages seem to be extremely
inflated compared to the job market for similar roles. Are private hospitals
in SF paying RNs almost 300k a year? Are the FB shuttle shuttle drivers or
delivery drivers in industry making 108k a year? I doubt it.

~~~
tootahe45
It's a common problem actually. Private shuttle companies complain they are
unable to compete with all the benefits etc. Government monopolies are the
absolute worst for this reason.

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hindsightbias
Here are the SF city workers who earn big overtime checks

[https://www.sfchronicle.com/projects/2020/san-francisco-
over...](https://www.sfchronicle.com/projects/2020/san-francisco-overtime/)

How does someone work 3000 overtime hours?

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KoftaBob
Until California overhauls their ridiculous Prop 13 artificially keeping
property taxes low, these arguments blaming budget shortfalls on salaries will
continue to be a moot point.

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?

~~~
syspec
That's true if it wasn't for Prop 13, the sherif would of definitely not made
350k in overtime this year.

Very good point

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maerF0x0
To add another dimension, the article makes no statements of productivity.
Highly productive workers can demand higher salaries.

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.

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konjin
A family of 4 is low income on $110k. SF and but-fuck-nowhere West Virginia
are not places to compare on cost of living.

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pupppet
Forbes has become nothing more than a tabloid. Article immediately after this
one: "The Best Shampoo For Dandruff, According To Dermatologists".

~~~
kwertyoowiyop
It should at least be “According to Venture Capitalists.”

