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Costa Mesa City Employees Average $146,863 Annual Compensation

A recently released study by the California Public Policy Center (CPPC) entitled “Costa Mesa, California – City Employee Compensation Analysis,” using actual payroll data provided by the city, has calculated the average total annual compensation for an employee of that city to be $146,863 during 2011. Anyone wishing to review their calculations can download the spreadsheet by clicking on this link: Costa_Mesa_Total_Employee_Cost_2011.xlsx.

In earlier UnionWatch summaries of CPPC compensation studies, we’ve used headlines referencing total compensation of $175,000 per year, both for Anaheim and for San Jose. Those figures, even higher than Costa Mesa’s, were based on assuming that CalPERS will eventually have to lower their earnings projections from 7.5% per year to 4.5% per year, and if they do, the average total compensation the workers in those cities receive, around $150,000 per year, will have to be increased to at least $175,000 per year in order for them to meet their negotiated pension benefit obligations. Costa Mesa is in the same boat. Here is the unadjusted, current and exact total compensation averages for all three cities – and it is unlikely these three amounts are unrepresentative of most California’s cities:

San Jose: Average total compensation, all workers = $149,907
Anaheim: Average total compensation, all workers = $146,551
Costa Mesa: Average total compensation, all workers = $146,863

In all three cases, as documented in the CPPC studies, this average total compensation is more than twice the average household income earned by private sector taxpayers in each city.

It is important to reiterate the relevance of “total compensation.” To quote from the Costa Mesa study:

Journalists who dutifully report “base pay” rates for city workers that sound somewhat high, but not ridiculously unreasonable, are ignoring glaring facts about compensation: (1) “Other pay” now adds more than 50% to the current earnings of many city workers, and (2) The only honest measure of how much someone earns is their total compensation, i.e., everything the employer pays each year in direct pay and benefits for an employee. That is what they earn. That is what they cost taxpayers. That is the number that should be compared to what taxpayers themselves earn. In Costa Mesa, the average employee’s total compensation of $146,863 adds 69% on top of their base pay. This is real money, and journalists who continue to ignore total compensation statistics in favor reporting only base pay are doing their public a disservice.

Put another way, an independent contractor who manages to earn $70,000 per year, which happens to be the average base pay – almost certainly understated – reported by the U.S. Census Bureau for a state or local government worker in California, has a total compensation of $70,000 per year. This is because an independent contractor is self-employed. If they want health insurance, they buy it themselves. If they want to save for retirement, they spend their own money. There is no 3rd party employer kicking in more money.

As documented in a UnionWatch analysis, “Self-Employed Workers vs. Government Workers – A Financial Comparison,” here, using extremely conservative assumptions, after taxes and benefits, is the comparison between an independent private contractor and a government worker who both earn $70,000 per year:

A self-employed person making $70,000 per year, once they’ve paid their taxes. social security and insurance premiums, will enjoy compensation of $45,021 per year. A government worker making $70,000 per year, once they’ve paid their taxes, pension contribution and health insurance co-pays, with the value of the employer paid current and deferred benefits added back, will enjoy compensation of $74,781 per year, 66% more.

Let’s not forget that the self-employed person, who contributes 10.25% of their gross income to social security, will collect perhaps $20,000 per year from social security starting at age 67, whereas the government worker will collect, on average, a pension that averages well over $60,000 per year starting, on average, at age 61.

Once you accept the fact that total compensation is the only accurate way to compare rates of pay in the public sector vs. the private sector, it is fair to wonder why our public servants are earning more than twice as much as the taxpayers who serve them. Here then, drawing from the CPPC study, are the average rates of pay for Costa Mesa in greater detail:

As can be seen, the average for non-safety personnel, while still well above private sector norms, is not where the most surprising data lies. It is the police, who have total pay that averages $181,709 per year, and the firefighters, whose average pay averages $208,401 per year, where we see truly astonishing figures.

When compiling all this data, it is easy to stick to the numbers and avoid the equally controversial but far more debatable causes behind these numbers. Perhaps the most egregious example of this would have to be the “other pay” for firefighters in Costa Mesa, which averages $56,395 per employee, a number that includes $44,810 per year of overtime earnings per employee. Why did Costa Mesa pay this much overtime to their firefighters?

If you review the contract negotiated between Costa Mesa and their firefighters union, you will see that if firefighters work more than 56 hours per week (two and one-third 24 hour shifts per week), they earn overtime pay at a rate 50% greater than their base pay (“time and a half”). But the agreement is also written to require overtime pay if firefighters work any shift that isn’t their regularly scheduled shift. So if one firefighter calls in sick and another firefighter has to work that shift instead of their regular shift, voila, they earn overtime pay. Whatever the cause, firefighters in Costa Mesa increased their base pay by nearly 50% in 2011, simply by working overtime – and many times they received overtime pay not for putting in extra hours, but simply because they had to swap shifts.

When discussing the role of public sector unions in driving cities to negotiate unaffordable and excessive rates of compensation and benefits for public safety personnel, it is necessary to acknowledge legitimate reasons why their compensation has increased well beyond the rate of inflation for at least two decades. During that time our society has placed an increasing premium on maintaining public safety. During that time we have also come to appreciate more than ever the need to pay a premium to anyone who risks their safety to ensure our safety. And during that time the nature of crime and catastrophes have become more complex and challenging. Crime has become globalized, catastrophes are more diverse and fighting them requires more preparation, options for medical responders are more sophisticated and require more training. We should pay our public safety personnel more than we used to. That much is indisputable. But it is also becoming indisputable that if we don’t roll back the total annual direct compensation package for police and firefighters to something well south of today’s average that exceeds $200,000 per year, pretty much every city and county in California is going to go bankrupt.

Whether or not it is appropriate to unionize people who are empowered to protect and to rescue members of the public is a question that is inextricably tied to the issue of how citizens may ever reduce their pay and benefits in order to financially rescue our cities and counties. Because unionizing empowers public safety employees to consolidate and enhance what is already tremendous authority, granted with what is historically a precarious trust. Harassment of an elected official in Costa Mesa by a private investigator with ties to a law firm retained by police officer’s unions recently made national headlines. This shameful affair was not an isolated incident. Public sector unions have not only used their power to harass their political opponents, they protect the incompetent and the criminal among their members – often to the point of absurdity if not tragedy. In all these cases, the public interest is the victim.

Discussing matters as sensitive as rates of pay cannot be productive when reformers who are simply recognizing the financial constraints we live under face relentless demonizing, outright harassment, and political annihilation by deep-pocketed public sector unions whose primary agenda is to optimize the financial status of their organizations and their members. It is pertinent to wonder whether or not genuine reforms to the pay, benefits and work rules of public employees can ever be accomplished, without first introducing fundamental, game-changing restrictions on the activities of public sector unions.

Union Watch Highlights

Collective bargaining on a broad scale is more similar to an antitrust violation than to a civil liberty
By Robert Barro, February 28, 2011, Wall Street Journal
Labor unions like to portray collective bargaining as a basic civil liberty, akin to the freedoms of speech, press, assembly and religion. For a teachers union, collective bargaining means that suppliers of teacher services to all public school systems in a state—or even across states—can collude with regard to acceptable wages, benefits and working conditions. An analogy for business would be for all providers of airline transportation to assemble to fix ticket prices, capacity and so on. From this perspective, collective bargaining on a broad scale is more similar to an antitrust violation than to a civil liberty. (read article)

New union could represent the city of Sacramento’s managers
By Loretta Kalb and Ryan Lillis, February 28, 2011, Sacramento Bee
Hundreds of Sacramento’s managers – including city charter officers and police and fire chiefs – are among those who could be represented by a new union seeking to protect them from furloughs and budget cuts. The move to create a bargaining unit for 700 managers in city government comes as organized labor around the nation faces increased pressures for wage, benefit and pension concessions, including – in Wisconsin – the right to collective bargaining. In addition to top public safety officials, others on a list provided by City Hall include the city manager, city clerk, city attorney and city treasurer – the city’s four charter officers. The city’s labor relations and human resources managers also could be represented by the new union, meaning City Council members would have to negotiate labor contracts with management unions directly or hire a consultant to do it for them, said city spokesman Maurice Chaney. (read article)

Ohio, Wisconsin shine spotlight on new union battle: Government workers vs. taxpayers
By Peter Whoriskey and Amy Gardner, February 28, 2011
Across Ohio last week, the legislative push to restrict the union rights of government workers was greeted again and again by noisy protests. But in this state dotted with manufacturing plants and their locals, this may have been more striking: At least some elected officials normally sympathetic to industrial unions were questioning whether they should side with government workers. (read article)

A History of Union Murder and Sabotage
By Daniel Sayani, February 28, 2011, The New American
The raging union-led protests in Wisconsin have resulted in many Americans taking a closer, more critical look at labor unions and their political clout and influence in shaping policy. With the ubiquitous announcement from AFL-CIO president Richard Trumka that he is granted an audience at the White House “nearly every day,” the American people have become more skeptical of unions and the role that they play in the political process. Spawning this renewed attention to organized labor are reports that Democratic politicians have been endorsing violence as a legitimate means of protest and political expression. (read article)

Cuomo’s Bargain: The governor’s attitude toward labor depends on the union, and the season
By Jimmy Vielkind, February 28, 2011, CapitolNewYork.com
“I would like to get some sort of resounding expression of support for those brave men and women that are filling up the statehouse in Wisconsin fighting for their rights and our rights,” Denis Hughes, president of the New York State AFL-CIO, began a speech earlier this month to the Association of Black and Puerto Rican Legislators. “Let’s hear it! They are truly, truly patriots.” He went on to decry what is happening in Wisconsin, where Gov. Scott Walker has made himself a conservative darling by trying to repeal the collective bargaining rights of the state’s public employees. Hughes did not mention Gov. Andrew Cuomo. It’s not that Cuomo has been a great friend to labor in this time of crisis, particularly: Facing the same set of fiscal circumstances that have prompted governors like Walker, Ohio’s John Kasich, Indiana’s Mitch Daniels and New Jersey’s Chris Christie to declare open war on unionized public employees, Cuomo has pushed for major concessions from the unions. (read article)

Will Facebook Replace Labor Unions?
By Tom Hayes, February 28, 2011, Huffington Post
If anyone in the world should be paying close attention to the grassroots political unrest in the Middle East, it is Big Business and Big Labor in America. The rise of self-organized groups of people toppling once-entrenched regimes is a harbinger of things to come here in the U.S. too. For now, traditional battle lines are more immediate. In Wisconsin, Governor Scott Walker’s attempt to break the public employee union there is being characterized by some as a last gasp test for Labor. It is not. The fate of big unions has already been cast. (read article)

Chicken Obama breaks campaign promise to union workers
By William Kelly, February 28, 2011, Washington Times
Mark Twain famously once said, “I must have a prodigious quantity of mind; it takes me as much as a week sometimes to make it up.” Twain could have been speaking of President Obama. While campaigning in South Carolina in 2007, President Obama proclaimed his support for workers being denied collective bargaining rights. “I’d put on a comfortable pair of shoes myself, I’ll will walk on that picket line with you as President of the United States of America,” said then candidate Barack Obama. Yet, with an eye towards the 2012 elections, Obama’s promise to join the picket line has yet to materialize. Is it indecision? Is it fear? Is it political calculation? Is it all of the above? This morning, the President finally spoke up for unions in his speech to governors around the country, warning them not vilify public workers, in wake of big labor protests in Wisconsin and Ohio. “I don’t think it does anybody any good when public employees are denigrated or vilified or when their rights are infringed upon,” he said. (read article)

Limit Pay, Not Unions
By Michael Bloomberg, February 27, 2011, New York Times
In Ohio, Wisconsin and other states facing budget deficits, some elected officials assert that closing those gaps requires achieving labor savings and weakening labor unions. They are half-right. Private sector workers were herded into 401(k)-style plans long ago. Why should new government employees keep their traditional pensions? Across the country, taxpayers are providing pensions, benefits and job security protections for public workers that almost no one in the private sector enjoys. Taxpayers simply cannot afford to continue paying these costs, which are growing at rates far outpacing inflation. Yes, public sector workers need a secure retirement. And yes, taxpayers need top-quality police officers, teachers and firefighters. It’s the job of government to balance those competing needs. But for a variety of reasons, the scale has been increasingly tipping away from taxpayers. (read article)

Unions Debate What to Give to Save Bargaining
By Michael Cooper and Steven Greenhouse, February 27, 2011, New York Times
As Wisconsin’s governor and public employees square off in the biggest public sector labor showdown since Ronald Reagan fired striking air traffic controllers in 1981, government employees’ unions in a range of states are weighing whether to give ground on wages, benefits and work rules to preserve basic bargaining rights. (read article)

Gov. Walker’s Coolidge moment
By Amity Shlaes, February 26, 2011, Orange County Register
Targeting public unions is unwise, rash and retrograde. That’s the take in some quarters on Republican Gov. Scott Walker’s plan to curtail collective bargaining for public-sector unions in his state, Wisconsin. In a tone reminiscent of a Madison professor pouring cold water over an ill-judged dissertation, President Barack Obama recently admonished: “It’s important not to vilify them or suggest somehow all these budget problems are due to public employees.” On Salon.com, contributor Stephanie Taylor described Walker’s effort to strip away long-standing public-sector bargaining rights as “a step backward, not forward, in the march of American progress.” Such analysis has it backward. Walker’s decision to reduce public-union powers isn’t rash. It is overdue. (read article)

Partisan Welfare: Public-sector unions perpetuate the worst kind of cronyism
By James Taranto, February 25, 2011, Wall Street Journal
The Washington Examiner’s Tim Carney had an astute column the other day in which he argued that President Obama and other liberals, “looking to tap into the populist current of today’s politics,” have failed to grasp its true nature: It’s their guys who are living inside the castle today. Specifically, public-sector unions–by many measures the most entrenched special interest in American politics–are not fighting against The Man, which is to say the entrenched powers of government. In this struggle, The Man is the government unions, which are sitting in the smoky back room divvying up the spoils of a crooked racket. And cronyism–not wealth–is the object of today’s populist ire. (read article)

Labor brute force rules
By Michael Graham, February 25, 2011, Boston Herald
If I were in organized labor, I’d seriously think about starting a P.R. union. The only person who had worse press coverage this week than organized labor was Moammar Gadhafi — and he had to bomb his own people to get it. As of this writing, union-owned Democratic state senators are still hiding out in cheap hotels across state lines in Illinois. These Wisconsin “flee-baggers” can’t find the courage to show up for work, but they’re on cable news every hour whining about Gov. Scott Walker. What do you think of the showdown over public unions and collective bargaining? Join in the Friday Throwdowntoday, 12-1. Meanwhile, our own U.S. Rep. Mike Capuano (D-Somerville) was forced to apologize for his comment that “every once and awhile you need to get out on the streets and get a little bloody” — comments he made after pointing out that my fellow Tea Partiers were at the back of the crowd ready to (ahem) donate a few pints. (read article)

Bogus statistic from Wisconsin union backers spreads in media despite being debunked
By Hans Bader, February 25, 2011, Washington Examiner
“A lie can make it half way around the world before the truth has time to put its boots on” – like a false statistic recently disseminated by supporters of Wisconsin’s government-employee unions.  Despite being debunked by PolitiFact, it has since been widely repeated in multiple letters to the editor, and it remains uncorrected on the web sites of publications like The Economist. On Wednesday, PolitiFact debunked the claim by Wisconsin union supporters that Virginia, which bans collective bargaining in state agencies, ranks 44th in the nation in ACT/SAT scores, compared to Wisconsin ranking 2nd. For example, it noted that in 2009, Virginia ranked 22nd in ACT scores, while Wisconsin ranked 13th.  As PolitiFact notes, this claim was originally disseminated by the Wisconsin Democratic Party, which has now retracted it. Although PolitiFact didn’t note this, in 2010, Virginia actually beat Wisconsin in ACT scores, with Virginia ranked 12th and Wisconsin ranked 17th. Collective bargaining with government employee unions is currently mandated in Wisconsin, but banned in Virginia). (read article)

Commission’s plan rolls back pensions for current workers

By Jon Ortiz, February 24, 2011, Sacramento Bee
The bipartisan Little Hoover Commission recommended today that California state and local governments roll back pensions for existing employees, dump guaranteed retirement payouts and put more of the pension burden on workers. Although any attempt to reduce pensions for current workers would prompt a legal battle, the commission says that public pension funds are in such dire financial straits that they’ll never right themselves by reducing benefits for new hires. The recommendation would not affect current retirees. The most controversial Hoover proposal would allow state and local governments to freeze existing employee pension benefits and then lower them for future years worked. (read article)

Wisconsin’s labor issues are not new to San Diego
By Matthew T. Hall, February 23, 2011, Associated Press

The unrest in Wisconsin over limiting government workers’ collective-bargaining rights has spread to Indiana, Ohio and a growing list of other states. But will the protests and power struggles in the Midwest erupt here? Conventional wisdom says no because California’s Democratic governor and Legislature were largely elected with labor’s help, which means bills like one proposed Tuesday by an Orange County legislator to end collective bargaining for pension benefits are likely to be dead on arrival. (read article)

Costa Mesa eyes private paramedics
By Frank Mickadeit, February 23, 2011, Orange County Register
Has the political outrage over public-employee unions and the desire to cut the cost to taxpayers reached the tipping point? Events of the last week suggest it has – at the national, state and local levels. It’s almost impossible to keep up: In Wisconsin, you have Democrats so afraid, they’re willing to winter in Illinois. In Sacramento, a flurry of bills (albeit by conservative lawmakers) would severely curtail union bargaining power in this state. Under a proposal being floated by City Councilman Jim Righeimer, the city would use at least some privately contracted paramedics. (read article)

GOP bill would end California pension bargaining Share
By Don Thompson, February 22, 2011, Associated Press
Following the lead of Wisconsin’s governor, a Republican state assemblyman announced legislation Tuesday intended to eliminate collective bargaining for pension benefits by California’s public employees. The bill by Assemblyman Allan Mansoor of Costa Mesa attempts to address the soaring costs of retired public employees, but has little chance in a Legislature controlled by Democrats. (read article)

Taxpayers Provide $170 Million Support to Federal Unions
Editorial, February 22, 2011, Free Enterprise Nation
The Free Enterprise Nation (FEN) today announced that it has found and posted on its website an apparently suppressed 2009 report by the U.S. Office of Personnel Management that indicates that in excess of $170 million in federal tax dollars were used in 2008 to pay federal workers to pursue union activities. Entitled, “Official Time Usage in the Federal Government”, the March 2009 report details that 2,893,922 hours of “official” time was clocked in 2008 by federal workers doing union business. (read article)

Public unions must go
By Jonah Goldberg, February 22, 2011, Los Angeles Times
The protesting public school teachers with fake doctor’s notes swarming the Capitol building in Madison, Wis., insist that Gov. Scott Walker is hell-bent on “union busting” in their state. Walker denies that his effort to reform public sector unions in Wisconsin is anything more than an honest attempt at balancing the state’s books. I hope the protesters are right. Public unions have been a 50-year mistake. A crucial distinction has been lost in the debate over Walker’s proposals: Government unions are not the same thing as private sector unions. (read article)

GOP bill would end California pension bargaining
By Don Thompson, February 22, 2011, Sacramento Bee
Following the lead of Wisconsin’s governor, a Republican state assemblyman announced legislation Tuesday intended to eliminate collective bargaining for pension benefits by California’s public employees. The bill by Assemblyman Allan Mansoor of Costa Mesa attempts to address the soaring costs of retired public employees, but has little chance in a Legislature controlled by Democrats. (read article)

Government pensions, an obesity epidemic
By Richard Cohen, February 21, 2011, Washington Post
In New York City, the No. 2 guy in the fire department retired on a pension worth $242,000 a year. In New York State, a single official holding two jobs and one pension took in $641,000. A lieutenant with the Port Authority police retired with an annual pension of $196,767, and 738 of the city’s teachers, principals and such have pensions worth more than $100,000 a year. Their former employer, it goes almost without saying, is steamed. Their former employer is me. (read article)

48% Back GOP Governor in Wisconsin Spat, 38% Side With Unions
Scott Rasmussen, February 21, 2011, Rasmussen Reports
A sizable number of voters are following new Wisconsin Governor Scott Walker’s showdown with unionized public employees in his state, and nearly half side with the governor. A new Rasmussen Reports national telephone survey finds that 48% of Likely U.S. Voters agree more with the Republican governor in his dispute with union workers. Thirty-eight percent (38%) agree more with the unionized public employees, while 14% are undecided. (read article)

Jack Dean is editor of PensionTsunami.com, formed to monitor developments in all three pension spheres nationwide — public employees, corporations and social security. PensionTsunami, like UnionWatch, is a project of the California Public Policy Center. Dean is a former newspaper editor and a past executive director of the Reason Foundation. He has been active in politics for more than three decades and currently serves as president of the Fullerton Association of Concerned Taxpayers.