Think long term
The article that was published a couple of weeks ago about non-union public employees working for the city of Tiffin needs some background information. First of all, the term “payout” is incorrectly used in this article. The proper term would be severance pay. Reducing the amount of leave an employee can accumulate before severance (retirement, resignation) may be a way to save a little amount of money in the short term. However, please consider the long-term implications.
First of all, it would only be sensible for these city employees to use up their time before they lose it – resulting in interruption to service to the public because there is seldom anyone to fill in when public employees are absent.
Also, we should also consider the hit to all public employee retirement systems throughout Ohio – as much as 25 percent (or an additional 10 percent with reversion for their spouse) of them are blessed to be able to work at least 30 years, starting in 2015. That doesn’t include the reduction in cost of living, which is coming up in July.
Then, as a result of these retirement system changes, a couple of obvious possibilities: this public employee may want to work more years or, when they retire, want to work part time elsewhere – both situations reducing the possibility of younger workers finding employment in addition to their purchasing fewer things when they do retire. Retirees are potential consumers.
Also, we need to please consider one very major reason why all of the public retirement systems in Ohio are in their present financial circumstances. As I recall, when the governor worked for a private company, he was one of the persons who advised the state of Ohio to invest in his firm and the result of that was the loss of millions of dollars to various public employee retirement systems in Ohio. Many Ohio public employees’ jobs have been cut or are combined into other job titles, or the employees have had to relocate or commute long distances to have a job. This does not include pay freezes that have been occurring off and on for the past few years.
The ordinary workers’ wages and benefits are being eroded. It is going to be difficult to bring back a robust economy when ordinary workers have less money to spend, even if taxes on small businesses are reduced.