yeah, but to fix a road, you've gotta pay market rates for labor.
median income in Jacksonville FL: $47,424
median income in Dallas, TX: $56,498
Median income in San Jose, CA: $77,000
So... you're gonna pay more to get anything done in San Jose... not just for the guy with the shovel, but for the whole bureaucracy.
>Like most of CA, it has fallen into a pension liability trap. Wringing more money out of people who have lived there for decades will only drag it on for a few more years until they have to stop making fully-funded pension promises they can not keep long-term.
The thing to understand about pensions is that they are essentially annuities. Promising someone a pension in the '80s, when you could simply back such things up with T-bills or inflation protected T-bills, was a pretty reasonable thing to do. Interest rates were high. The real return on investment was high. You would get a reasonable return from buying an annuity, it was not a crazy thing to do at all.
The problem is that the risk-corrected rate of return of money is dramatically lower now, as one would expect in a situation with negative interest rates, so pension promises made to people like my parents, who worked for the state and negotiated those pensions in the '80s, look ridiculous now. I actually looked into getting the same jobs they had... I could do the job, but the pensions they'd offer me if I signed up now are shit compared to what my dad got.
I guess my point is that at least for the jobs I have researched (state-funded computer-nerd gigs) their new promises line up with the current economic reality.
Certainly, if the city is still offering defined-benefit pensions, that ought to be stopped, because annuities are simply something that aren't supportable in the current economic situation... but considering the situation at the state, I kinda doubt that the city is offering defined-benefit pensions.
median income in Jacksonville FL: $47,424
median income in Dallas, TX: $56,498
Median income in San Jose, CA: $77,000
So... you're gonna pay more to get anything done in San Jose... not just for the guy with the shovel, but for the whole bureaucracy.
>Like most of CA, it has fallen into a pension liability trap. Wringing more money out of people who have lived there for decades will only drag it on for a few more years until they have to stop making fully-funded pension promises they can not keep long-term.
The thing to understand about pensions is that they are essentially annuities. Promising someone a pension in the '80s, when you could simply back such things up with T-bills or inflation protected T-bills, was a pretty reasonable thing to do. Interest rates were high. The real return on investment was high. You would get a reasonable return from buying an annuity, it was not a crazy thing to do at all.
The problem is that the risk-corrected rate of return of money is dramatically lower now, as one would expect in a situation with negative interest rates, so pension promises made to people like my parents, who worked for the state and negotiated those pensions in the '80s, look ridiculous now. I actually looked into getting the same jobs they had... I could do the job, but the pensions they'd offer me if I signed up now are shit compared to what my dad got.
I guess my point is that at least for the jobs I have researched (state-funded computer-nerd gigs) their new promises line up with the current economic reality.
Certainly, if the city is still offering defined-benefit pensions, that ought to be stopped, because annuities are simply something that aren't supportable in the current economic situation... but considering the situation at the state, I kinda doubt that the city is offering defined-benefit pensions.