One might argue that if public sector workers are paid over-market wages and benefits, then lowering their wages and benefits to levels comparable with private sector taxpayers might take away the need to push for higher taxes.
Less visible but equally relevant to taxpayers are the compensation packages provided to public utility workers. These public utilities are heavily regulated, they usually compel rate-payers to utilize their services, and their workers are unionized. If public utility workers are paid over-market wages and benefits, this translates into higher rates for gas electricity, water, sewage hookups, and garbage collection. These higher rates are hidden taxes.
Just how much utility workers make is a topic for further research. Most public utility workers in California, for example, get between 2.0% and 2.7% of their final salary accrued towards their pension (i.e., if a public utility worker puts in 30 years at 2.7% per year, they will get 30 x 2.7% x final salary as their retirement pension benefit, 81% of their final salary), PLUS they typically participate in social security as well, which effectively adds about another .7% in benefits. This is a better retirement formula that is awarded public safety employees.
The combination of union control of our public utility workforce, along with the mandates of the 2012 global warming act, promise to impose massive hidden taxes on California’s households and businesses in the coming years. Here is a recent example:
Union resisting reform of DWP
By Rick Orlov, Los Angeles Daily News, November 12, 2010
“The union representing [Los Angeles] Department of Water and Power workers has fired a warning shot to city officials over plans to reform the agency by creating a ratepayer advocate and inspector general.
In full page advertisements Thursday in the Daily News and Los Angeles Times, the union-backed political group calling itself Working Californians took out a “notice to ratepayers.”
The ads are seen as a signal that the unions are prepared to wage an expensive battle against the proposed City Charter reforms.”