Here’s a big hidden cost cranked into every Californian’s water bill — totally ignored

Richard Rider, Chairman, San Diego Tax Fighters Undesignated 29 Comments

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Buried in our California water bills are the inflated salaries and benefits of our public water works “public servants.”  The examples in the article below are instructive — and not that unusual.

It includes a chart that compares the pay of water department employees with the average pay for such work.  BTW, included in that average are our government workers, which thus skews the figure higher than the true private sector average.

The superiority of government pay can be breathtaking, contrary to what the public employee labor unions tell the press. And this example doesn’t plumb the depths of the benefits disparity, which is much greater.

One of the worst disparities in this comparison is “garage attendant.” The average private sector pay is $29,175 for this unskilled position.  This water department pays their attendants $68,130.  Not mentioned is the difference in pensions — most private sector garage attendants get only social security — with MAYBE a modest 401k plan.  A lowly 30 year government attendant will get an annual pension of $47,000 to $63,000 — after a career that included rock-solid job security.

Water districts fly below the radar, and fool people into thinking all price increases are water related.  They are not.  While water rates (and scarcity) are the biggest factor, excessive labor costs seldom are revealed — not covered by the press and NEVER broken out on one’s water bills.

Moreover, many water (and fire, sewer, irrigation, etc.) districts are run by part-time politicians, yokels who rely on the senior agency bureaucracy to tell these rubes what the district can financially support. The resulting abuse is widespread. BTW, many local district politicians are modestly paid, but too often receive FREE, LIFETIME family health coverage worth hundreds of thousands of dollars — even after serving short stints in office.

There are two other takeaways from this article:

1.  This abuse in CA occurs not only in water districts and departments — it’s found to varying degrees in every CA state an local government jurisdiction and agency.  Water districts can be — but are definitely not always — bigger abusers than other government employers.  And surely the LA Department of Water and Power is among the worst.

2.  Contrary to a widely held misconception, the biggest pay disparities are NOT at the top — they are in the middle and lower income areas.  While not as big a dollar amount per employee as the higher paid positions, the number of such employees makes this needless cost a major problem throughout California.  And then there’s the related pension thingy.

http://calwatchdog.com/2015/03/31/dwp-employees-paid-up-to-three-times-that-of-private-sector

CalWatchdog.com

DWP employees paid up to three times that of private sector

31Mar, 2015
John Seiler

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Los Angeles city hall wikimediaA new study by the California Policy Center found that employees at the Los Angeles Department of Water and Power make up to nearly three times the pay of their private-sector equivalents:

The largest premiums are found in generic jobs such as custodians, garage attendants, security officers, and the like. The average DWP security officer, for instance, makes 288 percent more than a non-DWP security officer working in the Los Angeles Metropolitan area. Overall, the weighted average wage premium for DWP employees performing generic jobs was 90 percent over their counterparts in the Los Angeles area. For all jobs, and including the value of benefits such as pensions and employer paid health insurance costs, the premium for DWP employees as estimated to be 155 percent higher – that is, 2.5 times as much – than for employees performing work with similar job descriptions in the Los Angeles area.

“Applying these premiums to the number of employees at the DWP, the total cost to rate-payers of the DWP paying above market wages is estimated to be $392.8 million a year.”

The result of the extra pay ends up being borne by ratepayers. As the Los Angeles Times reported:

“Meanwhile, residents of Los Angeles face yet another rate hike, only a couple of years after an 11.1 percent increase in electricity rates. DWP officials have recently suggested that they plan to seek recurring rate hikes of at least 2 percent per year beginning this year to fix infrastructure. But CityWatch is reporting that Angelenos should expect rate hikes of 5 percent to 8 percent a year, for each of the next five years. Residents in January paid 57 percent more for electricity than the national average, according to the BLS.”

Here’s the Table from the study showing the pay discrepancies.

DPW salary study chart

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Comments 29

  1. From Pew Research (http://www.pewresearch.org/fact-tank/2014/10/09/for-most-workers-real-wages-have-barely-budged-for-decades/):

    “But after adjusting for inflation, today’s average hourly wage has just about the same purchasing power as it did in 1979, following a long slide in the 1980s and early 1990s and bumpy, inconsistent growth since then. In fact, in real terms the average wage peaked more than 40 years ago: The $4.03-an-hour rate recorded in January 1973 has the same purchasing power as $22.41 would today.”

    Considering that these numbers include government workers, the private sector workforce has fared even worse over the last 35 years.

    Perhaps, just perhaps, the truth is that the private sector working class is grossly under-compensated.

  2. Post
    Author

    For many reasons, private sector workers are more productive today than in 1973. But usually not because they work harder or are more skillful.

    The increased productivity is largely because of capital investments and technological improvements paid for by the business owners. Stated simply, labor is less valuable today in many endeavors.

    But that being said, there’s ZERO case for mindlessly increasing government employee pay at the EXPENSE of private sector workers — unless, of course, you are a government worker (or employed by one of their labor unions). This is particularly true in that government workers AND THEIR MANAGERS are not motivated to improve productivity — that’s the nature of government work.

    And it’s all the more true today with the rise of the powerful public employee labor unions since 1980 — unions that vehemently oppose productivity incentives and competitive bidding — and protect workers from substandard performance. Featherbedding is a way of life in public employment.

    Moreover, coercion establishes the pay levels of government employees — and their pensions. The private sector uses VOLUNTARY contracts between those who do the work and those who pay their wages. Nothing voluntary about government.

  3. Richard –

    Have you decided which of the four firefighters who died fighting the fires in California and Washington deserve to be called heroes?

  4. Sam: I thought the discussion was about the rip-off salaries of the water departments? No heroes there. These are the same self-important people who proposed giving themselves a 25% raise a few years ago in San Diego.

    This prima donna attitude is why I have told the City Council members to just say NO to water rate increases. If the water revenue falls 10%, cut their budget 10%. This is what happens in private industry. Why shouldn’t the water department have to play by the same rules?!

  5. Richard,

    Just to be clear, you believe that the American worker is not at all responsible for the tremendous gains in productivity and it is perfectly acceptable that the average worker is making less today than he/she did 40 years ago.

    Thanks for the reminder as to why you were never successful in gaining elected office.

  6. Sam:
    You want to have a discussion, have one. But, we don’t tolerate allegations without proof. Your last comment was disapproved.

  7. TA – You are absolutely right.

    Please see Richard’s comment on Michael Schwartz’s column on Ferguson, posted on this site last year:
    “Like no other group, blacks venerate the “gangsta” culture, coupled with a remarkable disdain for “bitches.” It’s almost “bad form” for a black man to marry a woman he’s impregnated.”

    or some of the comments noted in the linked article:
    http://sdcitybeat.com/blog-15732-Richard-Rider-Race-relations-expert.html

  8. 1. It’s essential to look at “job duties” when looking at salaries. I can’t speak for LADWP, but I bet its’ garage attendants do more than simply stare, slack-jawed, at a fleet of hybrids. Point is, a simple salary comparison is insufficient to determine waste of taxpayer funds. BLS does try to compare apples to apples, but this isn’t always possible, particularly with a unique agency like LADWP.

    2. Assuming the salaries are inflated because the private/public job description involves the very same work, subtracting the difference in salary, including the attendant benefits, is not going to shave much of anything off necessary rate increases. It really is just a red herring.

    P.S. I hate unions, RR.

  9. Wow Sam and Hypocrisy, is this beat up Richard Rider week? I thought it was a discussion about the extravagant salaries and benefits of the public water workers.

    What the private sector pays workers is none of our business. But the public water workers are paid from our hard earned tax money. It is our business. Ask any normal citizen about this. When you tell them what the water workers earn, they’ll tell you it is outrageous , completely unjustified, and needs to be stopped. There is no way to put lipstick on this pig.

  10. Dan,

    Richard’s claim is that public workers pay is outrageously high and he makes his argument by comparing that pay to the private sector. My pointing out that private sector pay is outrageously low is certainly a legitimate response and is worthy of discussion. To that point, do you (like Richard) also believe that it is perfectly acceptable that the average worker is making less today than he/she did 40 years ago.

  11. Here’s two more startling points I’ve added to the article:
    1. The water department has no less than 73 “Clerk Typists,” making an average of $58,816, 88% higher than the average clerk typist in the area. Indeed, why does a computerized operation such as LA DWP need so many clerk typists?
    But wait!! There’s MORE!!! In ADDITION, the department has 367 SENIOR Clerk Typists, earning an average $72,191 (more than the average CA teacher). That’s FIVE Senior Clerk Typists for every Clerk Typist. Top-heavy bureaucracy?? Ya think???

    2. BOTTOM LINE: On average, the LA DWP is paying two-and-a-half times more (total compensation) for employees than is the region average. But of course, while LA DWP writes the checks, the department DOESN’T pay the cost. Their captive customers do. And they are almost all unaware of the ruse.

  12. HQ, in your workers’ paradise, everyone gets government employee wages. OKAAAAYYYYYYY.

    So, the government just magically requires all companies to pay such wages and benefits? In your utopia, how do you plan to make this happen? Where does the money come from to pay the wages and benefits? What happens to prices whens such compensation is mandated? Can we consumers still buy products from countries that produce products at less cost, or do you (like Trump) see mandating all counties pay U.S. wages — reimposing the Smoot-Hawley tariffs on steroids?

    After all, excessive government wages and benefits are ONLY possible with coercion, so naturally we’ll have to impose such government coercion on every aspect of the economy. Tell us how exactly your workers’ paradise operates. I’m genuinely curious.

  13. Sam Ward — You are skilled at embarrassing yourself.

    How much did those deceased firefighters get paid? Were they getting six-figure California wages, or quite a bit less? Were they urban “firefighters” who seldom fight a fire (averaging 3% of their time on the job), or were they forest firefighters who are paid a relative pittance to go out into rough country and fight fires full-time? THOSE forest fighters are heroes — our grossly overpaid CA urban BarcaLounger riders? — not so much.

    Check out who the firefighters were who died, and get back to us. And then tell us again what heroes our urban, union firefighters are.

    Oh, BTW, I presume you think that being a government garage attendant is dangerous work, as they put their lives on the line every day — yada, yada, yada. SURELY that’s why you brought up firefighters in response to my article.

  14. Really, Really? Government garage attendants have some super complicated job requiring what — a college degree in making change? — compared to the private sector garage attendants? Any proof? You’re being silly.

    But come back to my suggestion: Let LA DWP ADVERTISE “Garage attendant” (listing duties) $72,000 salary, generous holidays, great health insurance, rock-solid job security and a huge pension. Then stand back and watch half the city apply for the job. And I think you’ll find that, once someone lands such a job, they NEVER leave — except for a promotion or retirement. That tells us all we need to know about the excessive nature of government compensation for most positions.

  15. Richard,

    I don’t remember saying anything even remotely similar to suggesting that private sector workers and public sector workers need to be paid the same. In fact, I think it is you that keeps suggesting that.

    What I did do was state (based on what you have written) that you believe that the American worker is not at all responsible for the tremendous gains in productivity and it is perfectly acceptable that the average worker is making less today than he/she did 40 years ago.

    Please correct me if I am wrong.

  16. As usual, HQ, you put words in my mouth. I didn’t state that the American worker is “not at all responsible” for the productivity gains. What I said was “The increased productivity is largely because of capital investments and technological improvements paid for by the business owners.”

    Perhaps you can’t grasp the difference. Or perhaps that doesn’t play well with your union agenda.

    But to your issue. You assert that private labor is underpaid, which I guess justifies CHARGING these underpaid workers more for the OVERPAID government workers. Makes sense — if you’re a union guy.

    What’s your magic solution to the low private wages? Step up to the plate. If they are “too low,” how do YOU rectify this problem?

    And tell us why you want to use force to take money from these suffering folks to pay your government workers. We’d all like to know your rationale.

  17. Richard,

    Short of rolling back the clock (usually more of a Republican idea) to a time when we had strong private sector unions, a minimum wage that was much higher in today’s dollars and solid tariffs, I have to admit that I don’t know what to do. I do know that we cannot continue on and we will continue to see more civil unrest as long as only a very small percent see economic gains.

    All that aside, my original point was simply to challenge your premise that if one number (public employee compensation) is larger than another (private employee compensation), then tha problem is necessarily with the bigger number. I tried to point out that the problem could also be with the smaller number.

  18. HQ, you’re right about one thing — telling the unvarnished truth as one see’s it won’t get one elected. I am indeed unelectable. Doesn’t mean I’m wrong.

    Donald Trump understands that fact, as you do you. Both of you tell folks that they “deserve” more, which resonates well with everyone. But you take it a step further and use that perceived injustice to support ANOTHER injustice — the overpayment of government employees.

    But let me concede the point — I’m wrong and you’re right. Private sector workers deserve more. They’ve “earned” it (however you define “earned”).

    So why do you bring it up, if not to justify the absurdly high compensation of government employees? Why should these suckers in the private sector pay for these above-market salaries and benefits?

    It’s like me complaining about Bernie Madoff’s ill-gotten gains, and then an apologist like yourself coming along and saying “Well, everyone should run their own Ponzi scheme — it’s their fault for not doing so.” Granted, what the unions do to get their ill-gotten gains is largely protected by law, but the Ponzi nature of the the gains have the same morality underlying them.

    Given that you have no answer why the downtrodden should pay premium prices for your government workers, it’s apparent that you have no defense of this injustice. I feel your pain.

  19. SOLID work, Really! I stand corrected on this category.

    Sorta.

    The “garage attendant” category in the study is an approximation, as disclosed in the more comprehensive write-up of the comparison below. A “parking lot attendant” mean salary is only $21,320, according to BLS. The presented $29,175 figure is an attempt to include the additional functions of a DWP “garage attendant” — comparable to the private sector. But this figure is indeed not very reliable, as apparently no “garage attendant” category is tracked by BLS.
    http://californiapolicycenter.org/examining-public-pay-in-california-the-los-angeles-department-of-water-and-power/

    Still, as you and I agree, we taxpayers pay much more than such a position necessitates — especially when one factors in the pensions and other benefits. Such minor repairs (oil changes, fan belts, washing and waxing cars(!) does not merit such pay — though the differential is arguably less than the study indicated.

    One point seldom considered is that the AVERAGE salary is not the salary on which the pension is calculated. It’s the FINAL salary. Your solid DWP source gives the range, as it should, but we must keep this difference in mind. Also note that retirement for such a DWP employee is available at age 55, many years before the normal retirement age in the private sector.

    Hence the 30 year government employee is almost surely at the top of the “garage attendant” pay scale, and the formula uses that pay for pension calculating purposes.

  20. Sam Ward didn’t respond to my comment on his sneering “question” on the firefighters who tragically died in Oregon and California. Not surprising.

    From what I’ve found, all the dead firefighters worked for the Dept of Forestry. None were our astonishingly overpaid California union “firefighters” — the ones who seldom fight fires.

    The DOF firefighters’ MAIN job is to go into the TEETH of forest and brush fires, working in incredibly difficult and dangerous conditions for under $15 an hour. These are gutsy guys who merit our highest admiration.

    These true firefighters are not like our CA union firefighters — comfortably ensconced in ye old fire station, responding primarily to medical calls and treed cats (well, that seldom happens any more).

    Yes, urban firefighting is more dangerous than an office job. But surprisingly, not by nearly as much as Sam Ward ET AL would have us believe. And not compared to many other “outside” jobs which include a higher mortality and injury risk.

  21. Richard,

    I don’t remember disagreeing with your premise that government employees (or at least some) are overpaid. I simply pointed out the logical fallacy in your statement that the proof that government employees are overpaid is that they make more than their counterparts in the private sector.

    I then tried to take the conversation a step further than your normal rant that (to paraphrase) “the world would be a better place if (government) employees would just accept less pay.” In fact, I think the ever-growing inequality between the corporate bosses and the workers is the major cause for most of increasing social unrest we have been witnessing.

    If you don’t believe that the inequality is growing, run the numbers. If the average private worker had received percentage increases over the last 40 years equivalent to what the average corporate boss received, you wouldn’t be able to rant because the private sector workers would be making significantly more that his/her public sector counterpart.

    One last point: What you call coercion, others call evening the playing field through collective bargaining. Without collective bargaining, it is the corporate bosses who have 100% of the power to coerce.

  22. HQ, I have no problem with collective bargaining — in the PRIVATE sector. Yeah, I DO think the private unions have too strong a position, thanks to the NLRB rulings and other government-imposed impediments to businesses (including PLA agreements), but overall such negotiations can certainly be part of the compensation-setting process.

    But when government has MONOPOLY power — and the unions can elect management with whom they “negotiate,” that’s hardly a “level playing field.” Government workers should not be able to unionize.

  23. Richard,

    Sounds like we both agree that there has to be some balance of power between management and labor and it might surprise you, but I agree that that balance has swung too far in favor of the public employees.

    I do not, however, believe that fact is as detrimental to our society as is the fact that the balance has swung so far to the corporate bosses that average private sector workers not only haven’t seen a real increase in wages over the last 40 years, they have actually seen a decrease in wages on top of a loss of benefits.

  24. Richard –
    This is why I asked for your help when you first discussed your theory of pay-contingent heroism. So I’ll ask again, if a volunteer firefighter is more heroic than a union firefighter, what happens to your theory if the volunteer firefighter is a unionized government employee?
    And, given your bilious views on race – is a black firefighter less heroic than a white firefighter? What if the black firefighter is a volunteer and the white firefighter is unionized?

  25. Post
    Author

    Sam Ward — It’s not whether the employee is unionized or not. It’s how much risk they take on, how many people want the job, and how much they get paid for their services. CA urban/suburban firefighters seldom fight fires any more, while getting paid FAR more than the position merits (supply/demand tells us that).

    Paid firefighters are unionized all over the country, but our CA firefighters make 60% more than they do on average in the other 49 states. THAT and the resulting pensions are the problem — not the fact that they are unionized, or paid for their service.

    As to your race baiting, that’s beneath contempt, though it DOES demonstrate that you have no coherent argument to present for CA government employees being grossly overpaid. You are wise to try to smear me — what other option do you have?

  26. Richard – My calling out your pernicious bigotry is race baiting? Try again, its shameful that so many Rostra readers give you a pass. I won’t. Quoting you isn’t smearing you. If you don’t want to be called out as a bigot, stop talking like one.

  27. HQ: I agree with you that the public employees have far too much power. The out of control wages, benefits, and pensions need to be reined in. That’s why I appreciated Carl DeMaio for his strong stand against wage and benefit abuse.

    As for the wages of the average worker, immigration, both legal and illegal suppresses wages in my opinion. Just a personal observation, but what I saw over my long career in Silicon Valley, is that every time there was a downsizing, the highly paid American-born engineers were axed. When things got better, the American-born engineers were not called back, they were replaced by cheaper immigrant engineers. This would not have been possible without a tremendous number of immigrant engineers. The result? Wages suppressed.

    In retrospect, if I wanted to get rich, I should have avoided start-up Silicon Valley companies and gone into public service.

  28. Dan,

    You have a point about immigrant labor suppressing wages (supply and demand). However, even if they didn’t import the labor, the corporate bosses would simply export the work.

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