$4 Million A Year Meter Readers

By George Noga

Today’s College Degrees are Worth Much Less Than Before

If you want an example that encapsulates the pervasive extortion by public sector unions, look no further than paying $4 million per year for a meter reader.

That is just so much bushwa, you may be thinking; surely that could never happen in America. Think again. I take you step-by-step to demonstrate how it costs local governments $4 million for only one active meter reader position.

“You don’t believe a $4 million per year meter
reader is possible in your city; think again!”

A ubiquitous feature of public pension plans is for employees to receive 3% of their final year’s pay for each year worked. In this case I assumed the final year salary was $78,000 – not an unreasonable assumption for a public sector union employee after 30 years of government work including merit raises, promotions and cost-of-living adjustments.

Of course, overtime is included in computing the pension. If our unionized meter reader begins work immediately after high school and works for 30 years, he receives 90% (30 years at 3%) of his pay for his life and also, in many cases, for the life of his spouse.

George Noga

Moreover, his pension is indexed for inflation and often includes retiree medical benefits. Thus, our meter reader retires at age 48 and collects his public pension until age 91 inasmuch as the joint life expectancy of him and his spouse at age 48 is 43 more years. And then there is the disability. The system is rigged to permit a large number (in some cases, 90%) of workers to qualify for disability, which adds 30% to the cost of the pension.

Okay – our enterprising meter reader graduated high school at age 18, got married and had a child at 20, retired at 48 and (jointly) lived to 91. His patriarchal family was traditional and they knew a good thing when they saw it. Therefore, the meter reader’s son, grandson, and great-grandson followed in his footsteps – doing everything he did at exactly the same ages.

Each, in turn, maximized overtime during his final year on the job, a practice with which everyone was complicit; it even has a name – spiking. I assumed they spiked only 60% of their base salary although frequently spiking can be well over 100% with even 300% being possible. They also qualified for disability; like spiking, this is a fraud in which all are complicit. I assumed inflation was 3.75%, a reasonable long-term average. All the numbers used herein are on an Excel worksheet and I will email it upon request. The numbers are breathtaking.

“For each active employee, government must pay four
people – three retirees and one on-the-job worker.”

There comes a time when the original meter reader and his son and grandson all are retired and collecting pensions; the great-grandson is still active reading meters. Therefore, for one active employee who is performing one job, the city must pay four people – three retirees and one worker.

The total cost using the assumptions disclosed herein is $3 million. The number approaches $4 million if retiree (and, of course, spousal) medical benefits are included and/or the employees spike at a rate significantly higher than 60%.

This bears repeating. The government’s cost for one active meter reader position is $3-$4 million per year depending on the level of spiking and whether or not there are medical benefits. In our story, four generation of the same family can make $4 million a year for doing one job. Now you know how corrupt unions (oxymoron) game the system at our expense.

“Instead of $4 million annually in the out years for unionized public sector employees, the comparable amount for a private sector company would under $300,000 – this is 93% less!”

Let’s compare the $4 million government union price tag to comparable non-union private sector employees. There are humongous (highly technical economic term) differences.

1. Private sector employees have defined contribution pension plans (which they mostly pay for) like 401(k)s rather than costly defined benefit plans.

2. Once private sector employees retire, the employer has no ongoing pension obligation.

3. Private sector employees retire at age 65 not 48.

4. It is rare for private sector employees to qualify for disability.

5. Defined contribution plans are not indexed for inflation nor based on joint lives.

6. Seldom do private companies provide retiree health benefits.

Instead of $4 million for someone employed in a unionized government job, the comparable cost for a private sector job is less than $300,000, or a staggering 93% less.

College Degrees Have Become Vastly Overvalued

A basic college degree no longer conveys intellect or knowledge now that government has decreed everyone should have one. Since successful folks tend to have college degrees, the way to raise people up is for them to have a degree; right?

But college degrees aren’t causes of success; they’re simply markers or societal totems for possessing the traits and skills needed for success, i.e. mental acuity, discipline and deferred gratification. Having the traits always must precede obtaining the markers. Getting the markers doesn’t produce the traits any more than a designer suit makes a gentleman of a Neanderthal.

“Having the traits must precede obtaining the markers.”

Note: Another common marker for middle class success is home ownership. Government therefore assumes that if people who can’t afford homes are given homes through government programs (Freddie, Fannie, etc.) they will rise into a higher economic class. Just as with college degrees, government confuses markers with traits and causes. Giving a home to someone who can’t save for a down payment, make the monthly payment, pay taxes, insurance and utilities or even maintain the home will not improve their economic position. Habitat for Humanity learned this lesson long ago. Despite Habitat’s generous terms, rigorous screening and education of putative homeowners and insistence on investment of considerable sweat equity, they still have failures. Again, the traits needed for home ownership must precede the marker.

“Getting markers doesn’t produce the traits any more than a designer suit makes a gentleman of a Neanderthal. . . . Most motivation comes from Bluto rather than Plato.”

Moreover, college frequently is a bad deal. Forty percent don’t graduate. Many that do, obtain degrees that are of no market value. Graduates are saddled with debt that lasts decades. Much of college is pursuit of a totem and results in no increase in human capital.

Nor are graduates well-rounded. Instead of being inspired by Plato, most motivation comes from Bluto. College actually discourages freedom of thought; instead, it initiates young people for life into an emotional, unthinking tribe of liberal orthodoxy from which precious few ever escape.


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