When non-Californians think about what’s wrong with our lovely but dysfunctional state, they tend to think of some of the wackier stuff that routinely makes headlines here. The San Francisco Chronicle reported Tuesday, for instance, about a proposed new downtown San Francisco condominium complex and the Rube-Goldberg-like political maze the developer had to go through to gain the requisite approvals.
LGBTQ activists finally gave their blessing to the project, after securing concessions. “On Monday, developer Group I agreed to pay $300,000 into a fund that will be used to establish a transgender community center, to create a transgender historic and cultural district, and to support transgender-serving businesses and nonprofits in the district,” reported the Chronicle. “The Mayor’s Office of Economic and Workforce Development will administer the fund, with a board of directors made up of community members.”
Leaving aside the “transgender” issue, the project sheds light on why housing is so unaffordable in the Bay Area and why the government is sprawling out of control. Imagine not being able to build a simple condo project unless you agree to fund a new historic and cultural district, which will be created and implemented by city bureaucrats and directed by community activists. Why go through this hassle when you can just build strip malls outside Wichita?
Meanwhile, as I wrote for the Spectator last week, our capital is ground zero for a national resistance movement, with Gov. Jerry Brown vying with others (Senate President Pro Tempore Kevin De Leon, Assembly Speaker Anthony Rendon, U.S. Sen. Kamala Harris and billionaire environmentalist Tom Steyer, to name a few) to defy the Trump administration. We’ll soon see whether it’s empty bluster or the underpinnings of Alabama, circa 1963.
This is all quite entertaining, from a reportorial standpoint. But the more enlightening news — for those interested in the continuing cause of the California crisis — can be found in a banal report issued last week by the U.S. Bureau of Labor Statistics. It’s typical government stuff. The statement looks like it was printed on an IBM Selectric typewriter and it has the attention-grabbing headline: “UNION MEMBERS — 2016.” It’s a look at union-membership data nationwide.
The data isn’t broken down in a particularly meaningful way, but the key statistic is that union membership continues to grow in California, even as it falls nationwide. The percentage of union households is stable here. “California is a comparative union town, with 2.55 million members statewide in 2016, highest in the nation,” concluded Orange County Register columnist Jon Lansner. Chalk the big numbers up in part to our big population, but unions are powerful here.
The main reason for California’s union dominance is not some resurgence of the steel or aerospace industries, but the role of the government sector. California isn’t so much a union “town,” but a government “town” — and government workers are almost always represented by unions or union-like associations. Nationwide, BLS pins union membership at 6.4 percent of the private sector and 34.4 percent of the public sector. California has a middle-of-the-road number of government employees per capita, but they are highly unionized (at least 60 percent) and their unions are among the most powerful political players in the state capital.
That brings us to an even more significant report. The well-respected California Policy Center in Tustin analyzed payroll data from the California state controller and found total compensation for full-time government employees here is roughly double the total compensation for full-time private-sector workers.
“[T]he average pay and benefits for California’s active state and local public employees totals at least $139,691 if they expect to collect their retirement benefits without reductions,” explains CPC Vice President Ed Ring. “What they currently make on average, $121,843 per year, almost certainly does not include sufficient pension fund contributions to allow them to actually get the benefits they were promised. So depending on which number you pick, the average private-sector worker in California, whose pay and benefits are at best estimated to be $62,475 per year, makes between 45 percent and 51 percent of what their public servants make.”
The old trade-off — public employees earn less, but have more security and better benefits — has long been dead. They earn more, get far better benefits, and have unparalleled job security. Try firing a public employee for any reason. Good luck with that. Average “public-safety” compensation packages top $170,000 a year in California cities and counties, according to the report. Public employees in California are paid 39 percent more than public employees in other states. Our public-safety officials are paid 78 percent more than those in other states.
So even as the California Public Employees’ Retirement System (CalPERS) faces chilling levels of underfunding to pay for all these grandiose pension promises, there is zero appetite in the state Capitol to make even modest reforms.
The craziness continues. “There’s one big upside to being an outsider taking over a police department — you get to keep the pension from your last job,” according to a Chronicle report. “And in the case of new San Francisco Police Chief William Scott, it’s quite a boost. As chief, Scott will earn about $316,000 a year. Add in the roughly $152,000 annual pension he’s due to collect from the Los Angeles Police Department, where he worked for 27 years, and he’ll be pulling down a total of $468,000 a year.”
This is totally typical, especially among law-enforcement officials who have often figured out how to game the system (“disabilities” that protect half the retirement from taxation, double-dipping, bizarre pension-spiking gimmicks). As a result, the state faces constant pressure to find more tax revenue, to run up more debt, and to ignore the growing size of the state’s unfunded liabilities for pensions and public-employee retiree medical care.
The result is obvious. California’s roads and other infrastructure are crumbling, even as we spend far more than other states per road mile. Our education system is among the worst in the nation, as unions clamp down on competitive alternatives. The unfunded liability problem imposes soaring costs on local governments, which leads to cutbacks in services. And the state budget grows in part because of this spending pressure.
Meanwhile, the price to live here keeps going up because, well, every time a developer wants to build some new housing, they’re forced to endure a host of union-backed California Environmental Quality Act (CEQA) lawsuits or fund a new cultural district for you name it.