For leaders of communities across the state, if not the country, the main outlines of a study of Baton Rouge city-parish employees’ pay structure is familiar: Public employees tend to make lower salaries, but get generous benefit packages that help to make up the difference.
What’s wrong with the way it’s always been? Things are different, and government has not been as quick to adjust to new realities as has the private sector.
For one thing, the idea of launching a career as a city worker and staying for 30 years to retirement is out of sync with the rapidly changing workforce in the United States. That, too, is a familiar argument for anyone who has been involved in local government, whether in Louisiana or elsewhere.
“Research predicts that employees are no longer going to work for an organization with the intent of staying for even 10 years, much less 25 years or more,” the Baton Rouge consultants’ report stated. “Any adjustment to the city-parish compensation structure must consider this change in employee values as the city-parish works to attract and retain a multigenerational workforce.”
Virtually the same sentence could be written in a report in New Orleans, Lafayette or indeed in many other cities in the country.
We agree with Baton Rouge’s top administrator, William Daniel: “Employees can no longer wait 20 years to get 50 percent of their total compensation,” he said, responding to the new report. “No one thinks that’s a good model.”
Not exactly, though. Many people have built their lives around the existing model, so change can be wrenching.
The long-term costs of benefits is an issue, too.
These problems would be easier to fix politically if they were easier to fix in terms of math: One example is Louisiana’s retirement systems, which have a serious liability going forward.
A lot of the reason for the problem is that politicians of years ago decided that putting up the cash for the retirement systems was less important than other priorities. As any investor knows, even solid investment returns cannot make up for persistent failure to invest enough on the front end.
And, as New Orleans has found in wrestling with early retirements for public-safety workers, it is politically difficult to bring the actuarial tables into line with workers’ expectations.
We hope the Baton Rouge report kicks off a thoughtful discussion of how employee compensation is handled in city-parish government. It is a discussion that many other communities need to have, too.