Bing administration says 2,500 proposed layoffs will help save Detroit $250M

[jj84]

That's fascinating. Can you detail this a bit more for us? Why would they leave early and risk losing wages vs. a small reduction in pension?

Changes to their pension, with new state laws that Snyder is pushing for pension reform. Fast example – say after 10 years you get a 50% pension. Under old laws you could use vacation/comp/sick time as well as OT in your multiplier. So if you had a Job where you made 50k a year [[$24/hr) you pension would be based on your best 3 years of the past 7. But you can use OT wage and comp time in that formula. So say this person made 72k per year for their best 3 years and had 1200hr of unused comp/vacation/sick they could cash out. The current contracts have those provisions in them so they stay until that contract is up.

So rather than getting [[50+50+50)/ 3 x %50 or a $25,000 a year pension like they would under the proposed new system. They get [[72+72+101)/3 x %50 -- they get a check for all that unused time which is added to that year or about $41,000.

That is the reason Police/Fire and City employees HATE Snyder so much. The 100K pensions that they thought they were going to get are gone.

[Wesley Mouch]

I would imagine that the city has about the same number of employees [[or possibly more) than it did in 1950 [[with 1.8 million residents).

Parkinson's Law shows that government work forces expand without regard to work to be performed.

A government executive is paid on the number of his subordinates and the amount of the budget he consumes. his goals in life are then to increase the size of his empire and spend more money every year.

Most important post ever. Thanks.

Here's a link to Wikipedia on Parkinson's Law: http://en.wikipedia.org/wiki/Parkinson's_law

I'll add one thought. Power increases with staff size.

[Novine]

"A government executive is paid on the number of his subordinates and the amount of the budget he consumes. his goals in life are then to increase the size of his empire and spend more money every year."

This is no more true in the public sector than it is in the private sector. As a general rule, the more people someone manages, the higher their compensation. However, there are plenty of exceptions to this rule based on education, training, etc. How many doctors are administrators? But doctors often get paid far more than administrators who manage a large number of people. Same with attorneys. Same with people in IT.

[Wesley Mouch]

Changes to their pension, with new state laws that Snyder is pushing for pension reform. Fast example – say after 10 years you get a 50% pension. Under old laws you could use vacation/comp/sick time as well as OT in your multiplier. So if you had a Job where you made 50k a year [[$24/hr) you pension would be based on your best 3 years of the past 7. But you can use OT wage and comp time in that formula. So say this person made 72k per year for their best 3 years and had 1200hr of unused comp/vacation/sick they could cash out. The current contracts have those provisions in them so they stay until that contract is up.

So rather than getting [[50+50+50)/ 3 x %50 or a $25,000 a year pension like they would under the proposed new system. They get [[72+72+101)/3 x %50 -- they get a check for all that unused time which is added to that year or about $41,000.

That is the reason Police/Fire and City employees HATE Snyder so much. The 100K pensions that they thought they were going to get are gone.

Great explanation. Thanks.

I'd hate Snyder too if he kept me from my $100k pension. Explains a lot to those of us on the outside looking in.

[Wesley Mouch]

"A government executive is paid on the number of his subordinates and the amount of the budget he consumes. his goals in life are then to increase the size of his empire and spend more money every year."

This is no more true in the public sector than it is in the private sector. As a general rule, the more people someone manages, the higher their compensation. <snip>

The critical difference is that the private sector has strong motivations in place to reign in unnecessary size and bloat and wring out inefficiencies. People on this forum regularly attack private firms for 'rightsizing'.

A private firm's owner is spending their own money. They watch every dime like a hawk -- if they're good.

A publicly traded private firm is the same. Shareholders don't tolerate excessive spending for long. Even where waste reigns, like the pre-bankruptcy auto companies, things eventually get adjusted. And to a great extent they did.

Government on the other hand has little incentive to reduce its own size and increase efficiency. The only check on government spending is their ability to tax. Fortunately for our future, the economy tanked and we get to make out governments more efficient. They are necessary. But they will be a lot smaller. And that's good for all of us in the long-run.

[kraig]

Does anyone else find it interesting that Snyder decided to jump the gun and force a consent agreement down the City's throat right after the City reached an agreement with its unions?

[Wesley Mouch]

Does anyone else find it interesting that Snyder decided to jump the gun and force a consent agreement down the City's throat right after the City reached an agreement with its unions?

No. Just looks like a couple of things you do to attempt to get control of Detroit's finances. The Union knew about Snyder's Consent Agreement. No switcheroo.

[kraig]

No. Just looks like a couple of things you do to attempt to get control of Detroit's finances. The Union knew about Snyder's Consent Agreement. No switcheroo.

Not so sure about that. The union had reached a tentative agreement with the City earlier this year. They were just waiting for the City to iron out the details that would allow their members ot vote on the deal. Once everything was worked out and the agreement was ready for City Council's approval. Snyder, before the very same review team that he appointed [[right after the tentative agreements had been reached, I might add) had even finished gathering information to look at before making their recommendations, jumps in with a consent agreement that he presents, not to the mayor who has to then present it to City Council, but City Council themsleves.

Why circumvent the process that way? It appears to me that he's more interested in denying the Union's contracts than the City's finances at this point. Otherwise he would allow the City to save whatever money it could as quickly as possible.

[Wesley Mouch]

Not so sure about that. The union had reached a tentative agreement with the City earlier this year. They were just waiting for the City to iron out the details that would allow their members ot vote on the deal. Once everything was worked out and the agreement was ready for City Council's approval. Snyder, before the very same review team that he appointed [[right after the tentative agreements had been reached, I might add) had even finished gathering information to look at before making their recommendations, jumps in with a consent agreement that he presents, not to the mayor who has to then present it to City Council, but City Council themsleves.

Why circumvent the process that way? It appears to me that he's more interested in denying the Union's contracts than the City's finances at this point. Otherwise he would allow the City to save whatever money it could as quickly as possible.

I don't generally believe conspiracy theories. There're just too many balls in the air here for that to be likely. That said, I'm sure Snyder wants to significantly change the Union contracts -- since labor is the biggest problem for Detroit.

Thus, there's not much different between fixing finances and adjusting Union contracts. All part of the project. All necessary.

[coracle]

Its completely stupid economics and totally indefensible that Public employees are paid these outrageous pensions out of the public purse. They should finance their pensions out of their earned income like the rest of us.. No wonder cities are going bankrupt. They are being robbed by employee's pensions.

[Novine]

Are you going to pay them higher salaries for giving up their pensions?

[jj84]

Its completely stupid economics and totally indefensible that Public employees are paid these outrageous pensions out of the public purse. They should finance their pensions out of their earned income like the rest of us.. No wonder cities are going bankrupt. They are being robbed by employee's pensions.

Not to worry, some cities and counties have changed, now they'll match up to 18% of your base salary but at least it is a fixed cost.

[jolla]

... so will city workers get more than a day's notice before the layoffs take place?

..for those who work in depts. where the entire operation is about to get outsourced/eliminated, will they get fair notice ahead of time?

If they don't consider this 'notice', they're stupid.

[Zacha341]

I mentioned earlier that per most unions you have to get some notice... sometimes as much at 60 days per collective bargaining agreements. I think that's toast now.

... so will city workers get more than a day's notice before the layoffs take place?

[evergreen]

Of the number of employees currently working what is the percentage of 'ghost' employees?? Such as was discovered when DPS went under investigation. Recall all faculty had to submit proof of current ID and employee number, and it was discovered that checks were being cut to folks no longer working for DPS.

This kind of fraud may be going on with the city too. Check into that first I'd say if it could save a few jobs... and cut costs which at this point is the bottom line...

Earlier this year, the City made all employees report to a centralized location in person with photo identification to pick up their checks. I don't think this has been a major problem with the City; certainly not since Archer took over.

[evergreen]

Snyder and Bing are clearly interested in destroying the unions. Under the consent agreement Bing gets the right to impose contract terms in July. It's possible that even seniority rights in layoff could be ignored or abridged. All city workers right now are enduring much stress and strain. A lot of people have retired and there are huge personnel gaps. In addition, no one is certain they will survive this disaster.

[313WX]

Has anyone else noticed a sudden lag in their garbage pickup since the city entered into the Consent Agreement? I guess it's the garbage workers' way of protesting what's happening without actually going on strike.

I'm also assuming that's why our finest media outlets haven't reported on it.

[Wesley Mouch]

Has anyone else noticed a sudden lag in their garbage pickup since the city entered into the Consent Agreement? I guess it's the garbage workers' way of protesting what's happening without actually going on strike.

I'm also assuming that's why our finest media outlets haven't reported on it.

Our media outlets are garbage.

If I were a city garbage worked, I'd work harder and prove that my job is being efficiently handled by the city. Its a bad time to encourage outsourcing.

[Ray1936]

Its completely stupid economics and totally indefensible that Public employees are paid these outrageous pensions out of the public purse. They should finance their pensions out of their earned income like the rest of us.. No wonder cities are going bankrupt. They are being robbed by employee's pensions.

Well, as a retired DPD employee, I'm sure glad to be just rolling in dough thanks to my pension. Of course, I contributed 5% of my salary for 25 years to the pension fund. And, of course, I am not eligible for social security or medicare. But the money just keeps rolling in. Come on over and grab a few Franklins. I have plenty to spare.

[coracle]

Well, as a retired DPD employee, I'm sure glad to be just rolling in dough thanks to my pension. Of course, I contributed 5% of my salary for 25 years to the pension fund. And, of course, I am not eligible for social security or medicare. But the money just keeps rolling in. Come on over and grab a few Franklins. I have plenty to spare.

I'm really pleased for you Ray. Not only a good putdown, and rolling in dough but a healthy sense of humor. You'll obviously live to enjoy your Pension for many years. I'm curious though, is your ineligibility for SS and Medicare age related or job related?

[Novine]

Age-related? Do the math.

[jj84]

He didn't pay the Social Security payroll tax when he was working so he wouldn't be eligible for it. Most Government Pensions are setup this way. Though if he worked a job in the private sector for his 40 quarters he would get SS benefits at a reduced rate because of the pension.

[Wesley Mouch]

He didn't pay the Social Security payroll tax when he was working so he wouldn't be eligible for it. Most Government Pensions are setup this way. Though if he worked a job in the private sector for his 40 quarters he would get SS benefits at a reduced rate because of the pension.

Just trying to understand ---- so don't think me unappreciative of current and past city workers who deserve fair treatment....but I think public pensions should be understood by all.

He didn't pay 7% or so into SS and Medicare, but paid 5% into the city's pension?

And the city didn't have to pay their 7% into SS either, right?

[Novine]

Why Are Most Jobs Covered by Social Security While Others Are Not?

When the Social Security Act was passed in the mid-1930s, most workers in commerce and industry did not have any type of retirement pension plan. Because they were expected to directly benefit from Social Security, they were covered by the new law. Over the next several decades, other large employee groups, such as farm workers and military personnel, were also covered under the Social Security umbrella. In the mid-1950s, the self-employed were added to the Social Security rosters.

Certain large employee groups, such as federal government employees and railroad workers, had already established pension plans before Social Security was added. Therefore, Congress decided to exclude them from Social Security. Also, at the time of Social Security's enactment, Congress felt it could not mandate a federal pension plan [[Social Security) on state and local government entities, so employees of these agencies were given the choice of participating in Social Security. Of course, many of these entities established their own pension plans intended to operate independently of Social Security.

While many small and large government agencies did not accept Social Security coverage, over the years a high percentage of all state and local public employees opted to join the Social Security system. In 1983, sweeping changes altered the Social Security landscape following the recommendations of a presidential commission. All federal employees hired after December 31, 1983 were included in Social Security as were members of Congress, the president and vice president. State and local government employees were forbidden to terminate Social Security coverage after April 20, 1983. So today, railroad workers, a diminishing number of older federal government employees and about 30% of state and local public employees are the only large groups of workers in the United States not covered by Social Security.

http://www.nagdca.org/content.cfm/id...ont_understand

[BEEAH]

I don't buy that. The typical city worker makes under $20 per hour. Even with Pension and health benefits, you are looking at another $20 per hour at worst. They must be counting less equipment, fuel, computers etc...

Right, the 250 million is not the total saving of only the pay of the people but all associated costs of the job they served as well.