Tuesday, November 29, 2011

Some lessons from PolitiFact on staffing reductions

Two things struck me about PolitiFact's evaluation of claims by Governor Walker and WEAC on the impact of the Walker budget and collective bargaining reforms.

First, is the willingness of WEAC to attribute retirements to collective bargaining reform. Continuing to work would not diminish the retirement benefits of any teacher or other public employee. The only reason that one might decide to retire as a result of reform is a judgment that having one's take home income reduced by approximately 5.8% makes continued work no longer worth it.

I am prepared to believe that may happen in some - albeit perhaps not many - cases.  Part of the reason that it may, of course, is the generous retirement compensation and early eligibility that has become so problematic. Still, I am glad to see our friends on the left finally come to recognize the impact of changes in marginal returns on incentives. For just as another 5.8% to the pension might cause some people to prefer retirement, an additional - let's say 5.8% added to the marginal tax rate - might cause some people to prefer leisure to work.

Second, the biggest problem with the WEAC ad is one that the Journal Sentinel misses. The paper argues that it was false to claim that nearly 4000 "educators" lost their jobs as a result of reform because some of these persons held administrative or support positions, some retirements and other staff reductions might have other causes and it could be wrong to assume that district who did not respond the the survey had the same experience as those that did. Fair enough.

But here's a more fundamental problem.

There was a net staffing reduction of approximately 3400 in responding districts.  Roughly half that reduction comes from one district - Milwaukee - where the Governor's reforms were not implemented. Although one might say that these reductions were still attributable - at least to some degree - to reductions in state aid, they also seem to have had a lot to do with the districts' inability to use the Governors' tools for dealing with aid reductions. Those layoff are on the MTEA and other unions, not the need to balance the budget.


Anonymous said...

Your reasoning is defective. Public employees in this state are retiring in high numbers not primarily because of a 5.8% reduction in their take-home pay (although reductions in compensation do have consequences, and, yes, even public employees can seek jobs elsewhere -- even if they draw pensions). The biggest reason they are taking early retirement is fear that pension benefits will change. And maybe pension benefits should change; they are pretty generous. But there is a widespread perception among public employees in all sectors that the current administration is hostile to their pay and benefits, and plans to do whatever it can to chop them. Already retired employees, vested in their pensions, are less likely to suffer from such cuts. I don't think the public employees' fear is irrational. It seems to be a rather accurate perception.

The consequence of this perception is that (until Walker, et al. succeed in chopping further) more and more public employees will retire at the earliest possible age, resulting, in effect, in a run on the bank -- pension plans having to pay out more than they otherwise would have to pay out. And the public will lose out on the service of many good public employees. It's unfortunate. An administration that wasn't perceived as being quite so hostile to public workers wouldn't trigger the spate of early retirements we're seeing now.

Recall Walker now!

BA Observer said...

Anon, the "widespread perception among public employees in all sectors that the current administration is hostile to their pay and benefits" has been contrived and perpetuated by the Left in WI since Walker's changes took effect (sadly, that's how contemporary politics work). In contrast, all demonstrable evidence indicates that *wages and benefits* for public employees have indeed not been reduced. Any reduction in *take-home pay* is the result of each individual's marginally increased contribution to their own benefits (as Rick outlined). Basing one's decision to retire early on a fabricated perception of hostility is, in my opinion, quite irrational, especially when it has been made abundantly clear that no changes will be made to pensions currently in accrual.

To subscribe to a belief in 'hostility against public employee pay/benefits' demonstrates the naivete that the WI Left is fomenting. And to define the early retirement of, at most, <1% of our public employees as a "spate" is a gross exaggeration.

Rick Esenberg said...

Anon 10:22

While it may be that certain formulas can change, persons become vested long before retirement. Vested benefits can generally not be taken away and not all benefits that are made available at retirement are ever vested in the sense that they cannot be altered.

Your argument cites "fear" without tying it to any real possibility. That is like saying that people should vote against Obama because they "fear" that he is a socialist and hostile to business and private property without regard to what he has done or said. We can do better than that!

The other implication of your argument is that because we have already given public employees the keys to the public fisc, we must let them have their way lest they clean out the till before we can get the keys back. That proves too much suggesting that the taxpayers have come to be hostages and that reform you at least suspect may be necessary is impossible or must proceed at a glacial pace.

Anonymous said...

Rick: When public employees hear from Walker's own lips (to "David Koch") about how he planned to "drop the bomb," you get out of harm's way. The way Walker handled the elimination of public sector collective bargaining was a disgrace. You can make reforms without being a jerk about it. You do things the way Chris Abele does, and not the way Walker does. You don't steamroller people, or the Open Meetings Law.

Anonymous said...

BA Observer: I don't think the widespread perception among public employees that Walker is hostile to their pay and benefits was "contrived" by the Left. Largely "contrived" by public employees themselves, based on their ordinary inferential reasoning skills. Kinda like the people of Nagasaki and Hiroshima might have concluded that somebody was being hostile to them.

Rick Esenberg said...

This delicacy about a reference to "dropping the bomb" is quaint. Given the hysteria that was happening outside his office, I don't think you have the chronology right. Protesters did not get the vapors because the Governor "talked mean."

Likening collective bargaining reform to dropping a nuclear bomb is overdrawn. Way overdrawn.

Anonymous said...

Newspeak has arrived. What Walker did was collective bargaining "reform."

That's like saying what happened on 9/11 was World Trade Center reform.

Anonymous said...

Anonymous @ 10:22:
If Esenberg's reasoning is defective, then yours is equally defective.
Our small rural district had at least one teacher whose retirement was in the works LONG before Walker even took office.
The only way to truly *know* if these retirements were related to the legislation would be to interview each and every teacher that retired. Would be nice if someone would/could do that.

Since the MPS number of layoffs or retirements was significant, it would serve us well to remember that if the MPS teachers hadn't voted against pension contributions, a number of those jobs could have been saved.

Anonymous @ 10:25: What a sadly inept comparison.

Anonymous said...

Anony 12:54 p.m.--Who are you trying to kid? The retirements are DIRECTLY related to the legislation.


Anonymous said...

Anon @ 9:46 PM: "The retirements are DIRECTLY related to the legislation."
And you believe *that* article proves it?

The article states retirements 'doubled'. If that's the case, then logically, at least 1/2 of the retirements were NOT related to the legislation.

Anonymous said...

Anony 8:25 a.m.--Your "logic" makes no sense.

Teachers retired primarily for this reason--if school districts are allowed to change the terms of the retirement benefits without union input for the following school year, why on earth would teachers eligible to retire with Compensation Package A stay to get less with Compensation Package B in the future?

This law directly influenced the majority of teachers to leave because of that fact.