In politics, what goes unmentioned is often more interesting than what is mentioned. That’s especially true of the California debate over public employee pensions.
The pension debate, for the left, is about preserving retirement security and union power. The pension debate, for the right, is about the size of government and union power. But pensions are a form of payment for work. Pensions are about jobs.
And it may very well be that public employee pensions have a connection to jobs – and California’s peculiar employment problems.
When you look at jobs data in California, you see big job losses in two areas. One is the construction/housing sector, which has been decimated for reasons all of us know too well. The other big area of job loss is in government.
Why has government been shedding jobs – and not hiring back even with some modest economic recovery? The obvious answers to that question are the economy, declining revenues and bad budgets. But could fear of out-of-control pension costs be another reason?
There’s no hard data connecting government job loss to fears of pensions. But there is evidence connecting job loss in mature private industries with pension costs. And, anecdotally, I’ve been hearing from city managers in Southern California that pensions are one reason why they’re not hiring. They are afraid of adding to their local governments’ long-term fiscal problems.
One city manager explained he would like to hire but won’t unless something like Gov. Jerry Brown’s plan were to pass; the potential long-term fiscal danger to his already distressed city is too great. He’s making do by adding duties to existing employees and using contractors and part-timers.
This begs the question: if pension costs could be brought under control, would it spur governments – particularly local governments – to do more hiring?
Would pension cutbacks be good for the jobs picture?
It’s a vital question. But it’s not part of the pension debate because the politics are bad for both sides. The folks on the right who want pension rollbacks want smaller government, not more hiring. Defenders of public pensions on the left are wary of being depicted of encouraging more government.
But for those interested in improving the employment picture in California, the pension debate offers an opportunity to talk about jobs, and whether, by putting governments on a sounder financial footing, changes in pensions could help put more people to work.