We fully endorse the principle that government agencies need to pay salaries adequate to attract and retain quality employees. But we're also concerned that public sector compensation, including benefits, increasingly is out of sync with those in the private sector, especially here in the valley.
The public salary surveys reported in Sunday's Bee and on www.modbee.com reinforce our concern. So do observations by experts such as Jeffrey Michael, director of the Business Forecasting Center at the University of the Pacific. Michael points out that public salaries have grown in the Northern San Joaquin Valley while private sector pay has fallen. "You had an unsustainable situation before the economy collapsed, and there are no prospects for a rebound that would make these numbers work out in the long run," he told Bee reporter Leslie Albrecht.
The prevailing wisdom used to be that government jobs should have compensation comparable to similar positions in the private sector. If the salary itself was a little lower, then that would be offset by better health benefits and retirement packages.
These days, in many occupations, public sector jobs tend to have the edge in all three areas -- salary, health coverage and the defined benefit retirement plans that we've written so much about lately. Many public employees can retire at 50 or 55, with guaranteed monthly incomes that include annual cost-of-living increases. That sort of pension has become rare in the private sector.
There's no doubt that local government agencies have made cutbacks. The city and county both have fewer full-time employees than a year ago. And some of the remaining employees lost income due to furloughs -- required time off without pay. As we said last week, in reference to state workers, furloughs are a good temporary solution to budget troubles, but they do not permanently lower operating costs because once the furlough period is over, salaries revert to the previous levels.
Modesto Mayor Jim Ridenour is one elected leader who truly seems to grasp the need for structural changes. He is concerned specifically about controlling overtime among public safety workers. Overtime is a key reason that more than 14 percent of the city's work force made more than $100,000 in 2009. Almost half of those earning the high salaries were firefighters.
Stanislaus County, which does not operate a firefighting agency, had a smaller percentage of employees making $100,000 plus. The county's list of top paid people was dominated by doctors, Sheriff's Department personnel, and department directors and mid-managers.
We believe it's entirely possible to respect and value the work of public safety employees while questioning whether the current public safety compensation packages are sustainable. If there's to be any money available for parks, libraries, health inspections and other essential functions, something has to change.
Whenever we publish lists of highly paid public employees or retirees, many people tend to zero in on the few names at the top. Those names aren't near as important as the trends and the practices revealed by the lists.
Local agencies, like the state, aren't just facing one more year of budget troubles, but multiple years. They will have to reduce the size of their work forces, which translates to fewer and slower services.
But there's another way to handle the situation -- to reduce payroll and benefits instead of or in addition to layoffs. That's already happened in many businesses in our region, though it doesn't tend to get anywhere near the attention as it does when government makes cuts.
In determing what is "competitive" compensation, government agencies tend to compare themselves to other government agencies. But that has contributed to the current dilemma. The economy, especially in the private sector, has undergone a massive reset. Public agencies need to review what they can and should offer to keep competitive in the current economy.