For anybody interested in politics here in California--and, now that the state is in such a mess, that's nearly everyone who lives here--reading up on the pension crisis is like forcing down Robitussin. You know you've got to do it, but...yuck. Now Mark Paul and Micah Weinberg of the New America Foundation have published a thoughtful, well-written, concise analysis--as un- unpleasant a way of boning up on the subject as I've encountered. A couple of excerpts about the trouble we're in:
California's public pensions are complex and multiple....But one generalization applies: benefits in California are, by almost all measures, the highest in the country....
An average-wage employee who retires from the state at Social Security retirement age (66) with 30 years of service receives a pension equal to 75 percent of final compensation, along with Social Security benefits that replace about 42 percent of career average earnings.
Not that Paul and Weinberg aren't talking here about state employees who perform especially important jobs, running, say, entire state agencies, or who perform especially dangerous or unpleasant jobs, such as, for example, prison guards. They're talking about ordinary joes.
And whereas state employees face cushy retirements, Californians facing retirement in the private sector now have reason to feel the jitters:
In the past, California families counted on the equity in their homes as a key source of retirement saving....[But i]n the first quarter of 2010, 34 percent of all mortgage holders in the state had near zero or negative equity....Sixty-five percent of the mortgages in Stockton were in a negative or near-negative position, 62 percent in Modesto, and 60 percent in Vallejo-Fairfield.
My fellow Californians, read it and weep.