The ONLY reason that they shed public service jobs is to continue the stream of payments to the legacy sector. It's why we continue to see service cuts, while states scramble to find "innovative" new ways to pick the pockets of the taxpayer to fund the transfer payments to the underfunded pension system.
Down Down Down Goes Obama Job Approval
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The ONLY reason that they shed public service jobs is to continue the stream of payments to the legacy sector. It's why we continue to see service cuts, while states scramble to find "innovative" new ways to pick the pockets of the taxpayer to fund the transfer payments to the underfunded pension system.
There's a great article about this that recently appeared in Vanity Fair Magazine.
The article uses San Jose (California) as an example. Over 50% of their budget is consumed by retirement/pension benefits, and it will soon be over 75%. They've had no choice but to lay off over 2000 city workers.
The article is long and rambles a bit, but it accurately describes the bleak economic picture in California. I'm sure it's a similar in story a lot of other states.
California and Bust
http://www.vanityfair.com/business/features/2011/11/michael-lewis-201111
It shows that the cityâs [San Joseâs] pension costs when he first became interested in the subject were projected to run $73 million a year. This year they would be $245 million: pension and health-care costs of retired workers now are more than half the budget. In three yearsâ time pension costs alone would come to $400 million, though âif you were to adjust for real life expectancy it is more like $650 million.â Legally obliged to meet these costs, the city can respond only by cutting elsewhere. As a result, San Jose, once run by 7,450 city workers, was now being run by 5,400 city workers. The city was back to staffing levels of 1988, when it had a quarter of a million fewer residents⦠By 2014, Reed had calculated, a city of a million people, the 10th-largest city in the United States, would be serviced by 1,600 public workers.
