California has an 11.1 percent unemployment rate.
California also has massive perennial deficits.
That deficit could be a little bit lower and the unemployment could drop a bit too if the California Legislature did one simple thing: Prohibit any state employee including those working at the university systems to work in any capacity for the state or universities after they retire.
Right now, such retirees can work 960 hours a year for the state or the university systems and still collect their retirement benefits.
State employee labor union bigwigs and the entourage of elected officials that bow before them contend that such a move would be foolish and would actually cost taxpayers more money.
Their logic is wrapped not just in selfish motives but it underscores just how bad of a job performance that state must actually be getting from some employees who retire.
Those sounds a bit harsh but consider this: It is sound business to have contingency plans in place including someone who can step in when someone retires. Nothing the state does - even rocket scientists who are on the payroll - is so highly specialized in this job market or a labor pool so shallow that someone can’t be promoted from within and trained to do the job. And it can be done in a timely manner assuming, of course, state bureaucracies are well managed.
We are told repeatedly that the state saves money by bringing these people back on a limited basis as they don’t have to pay into their retirement funds.
It’s a false savings. Someone at the top tier in pay range is significantly more than someone starting out on the bottom step. And even if the dollar amount doesn’t end up being massive once a prohibition is put in place, if the job needs to be done it will create employment opportunities.
Like most other enterprises the state should promote from within first and then fill entry level positions as the impact of employee movements trickle through a bureaucracy.
This is being more than reasonable. Most local government agencies - just like most private firms - have had to deal with expenses exceeding revenue by either rethinking what they do or by shifting work around to those remaining as they shed positions. Such a prohibition on retirees from being hired back certainly doesn’t increase workload per se. So instead of trimming back the state bureaucracy - which one can make an extremely strong argument to do - you are simply reducing the cost of salaries to get the job done while reducing the need to impose more compensation reductions.
At the same time you take people off the unemployment rolls and get them back to work paying taxes. And since a lot of state pensions are fairly generous, you will have retirees paying taxes on that income and the newly employed paying taxes as well. This in turn will generate revenue for the state so it can help bridge the deficit.
It’s straightforward and simple. You are either retired from state employment or you’re not.
It really doesn’t matter “how much” retirees contribute in such an arrangement. They are essentially taking jobs away from others and compounding the unemployment problem.
This column is the opinion of managing editor, Dennis Wyatt, and does not necessarily represent the opinion of The Bulletin or Morris Newspaper Corp. of CA. He can be contacted at email@example.com or 209-249-3519.