San Diego Want a job with a good salary and great benefits? Work for the government. Want a job with a very, very good salary and great benefits? Work for the City of San Diego. Yeah, that city teetering on the financial brink -- the one that looted the employees' pension fund and then appeased the workers by granting benefits it couldn't afford to pay.
It's a myth that government workers must live with salaries that are lower than those in the private sector and then make up for their penury by getting generous retirement benefits. All around the country, government pay has been growing rapidly, and so have excessive fringe benefits. Meanwhile, the private sector has been shipping jobs to low-wage countries, thus slicing average worker pay, and has also trimmed benefits severely. "While salaries and benefits are rising for government employees, we're seeing a squeezing in the private sector," says Alan Gin, economist at the University of San Diego.
Now, government pay is generally better -- often as much as 50 percent better -- than private-sector pay, while government benefits are more than twice as munificent, and employees can retire at younger ages. City of San Diego employees enjoy much higher salaries and benefits than their counterparts in the private sector and local and state government.
I asked Cheryl Mason, researcher for the San Diego Association of Governments, about average salary levels in San Diego County's private sector, local government, state government, and federal government. The last data she had were for 2005. Fasten your seat belt: the average pay for the private sector was $43,153, local government $44,409, state government $42,699, federal government (civilian only) $60,592. These average salaries include overtime, bonus pay, etc.
She did not have the figure for City of San Diego employees. Carl DeMaio of the Performance Institute has compiled average pay for City workers by taking information from the San Diego City Employees' Retirement System. Fasten that seat belt again: the average pay per City of San Diego employee is $60,099, says DeMaio. But that does not include overtime and other extras. "If we include these figures, we are talking roughly $65,000," he says. The last time I looked, $65,000 was higher than $43,000 -- and remember, these figures don't include retirement benefits.
Libertarian activist Richard Rider, who got figures directly from the City, says that the average City salary (not including overtime, bonuses, etc.) is $58,600. With overtime and bonuses, it goes up to $66,000 or $67,000, he estimates.
The generalization stands: using figures from the retirement system or from the City itself, private-sector workers on average need a 50 percent pay increase to match City of San Diego workers in salary.
Some could say that the comparison of average salaries is invidious. The City might need a higher percentage of well-trained, better-paid employees than the private sector, and that's why its average salary is higher. What's needed are studies of comparable jobs: say, what does a beginning plumber make working for the City versus what he or she makes in the private sector?
"That's the key statistic that no one has done any comprehensive research on," says Rider. "I have been advocating this type of wage-comparison study for San Diego for two years, but it will cost a lot of money." Such a study may be done by the end of the summer, he says.
DeMaio has made some fragmentary comparisons. He looked at certain 2004 City of San Diego jobs and compared them with average pay for the same jobs throughout the county, both public and private sector, as calculated by the federal government's Bureau of Labor Statistics. In 2004, a locksmith made $46,240 working for the City, compared with $32,500 in the overall county labor market. Machinists: $47,393 with the City, $33,480 countywide. Plumbers: $49,253 City, $43,120 countywide. Low-level administrative aide: $40,043 City, $29,870 countywide. "Labor unions put out misinformation; they are not taking a hit on the base salary," says DeMaio, pointing out that about 10 percent of City employees make $100,000 or more, including overtime.
"No serious observer would say that the private-sector benefits are anywhere near as good as the public sector, and the 'we're making up for our low salaries' excuse is a bogus assertion," says Rider, noting, "In the City of San Diego, it's hard to imagine a nonsafety employee retiring after 30 years with a pension of less than 110 percent of his or her highest salary during working years."
What about those benefits? According to a Bureau of Labor Statistics analysis, government employees earn more than $12 an hour in pension benefits, compared with $5 for private-sector workers. The bureau's tally of total compensation (including health care, pensions, etc.) shows that state and local government workers average $34.13 an hour, versus $23.41 in the private sector.
Donald Cohen, president of the liberal, labor-oriented Center on Policy Initiatives, points out that while City salaries may be better in low-paying jobs, they are much lower in the top jobs. "A janitor working for the City of San Diego makes $30,000, gets $5700 worth of health-care coverage, and gets a pension of $37,500 a year after 30 years of service," he points out. "A nonunion janitor makes $16,000, maybe $19,000 or $20,000. Pension? Forget about it." If City leaders set salaries by comparing them to what equivalent workers make in the private sector, "We head toward being Calcutta; we increase the jobs under the poverty level. It's a race to the bottom."
However, there is a huge gap at the top: the private sector does vastly better -- one reason upwardly mobile young people aiming for management go into the private sector. Last year, chief executives of the 500 largest U.S. companies raked in an average $15.2 million each, up 38 percent from the previous year, according to Forbes magazine. Four heads of hedge funds brought home more than $1 billion in just one year, and the top 20 hedge fund managers earned an average $658 million last year. "Obscene," says Cohen, and few sane persons would disagree. Top-level government jobs may pay less than one-tenth of bloated private-sector salaries. (Here's a sampling of what chief executives of some San Diego companies brought home last year: Qualcomm, $18.6 million; Sempra Energy, $12.18 million; Invitrogen, $5.4 million; Amylin Pharmaceuticals, $5 million; Jack in the Box, $3.5 million; Leap Wireless, $3.2 million.)
Traditionally, San Diego top executives bring in less than counterparts elsewhere, particularly in wealthy Silicon Valley. It's true of the average, too. "San Diego tends to be among the lowest in coastal California," says Gin. In 2005, the average San Diegan had a wage of $41,260, according to Bureau of Labor Statistics data. That compared with an average of $57,980 in San Jose and $37,870 nationally. But this means that City of San Diego employees bring in more than the average worker in San Jose, even though it's one of the top-paying areas of the nation.