Sacramento's City Manager, John Shirey, threatened that 100 city employees would be laid off, unless all city employees paid more money towards their pensions. Currently, most city employees pay four percent of their paycheck to their pension; Shirey wants that raised to seven percent. If Shirey's proposal is enacted it would save the city $14.2 million. Seems like a simple enough solution right?
But what Shirey is leaving out of the story is that raising pension contributions is another word for pay cuts. Years ago the city bargained with its employees to cover a portion of employee's pension contributions in exchange for receiving no pay increase. In essence, a pay raise would result from the city covering a portion of the employee's pension contribution. So to now go back on that promise, to force city employees to pay the full employee contribution, would be to reverse those pay raises. Reversing pay raises means city employee's pay will be cut.
This understanding of the issue reveals that John Shirey is trying to control the debate by using misleading language. Shirey uses language such as "employees need to pay their fair share" and "the city can't afford to continue paying for city employee pension contributions". That language implies the city is currently doing a favor to city employees, and the city can no longer afford this luxury. Notice how the sentence "city employees need to pay their fair share for pensions" is drastically different from the sentence "city employees need to take a pay cut". The two sentences mean the same thing, but one is much more loaded to generate public and city council sentiment for cutting city employee pay.
So why would John Shirey want to phrase the debate in one way rather than another? It could have to do with the fact that John Shirey is currently receiving the largest salary of any city manager in the region. John Shirey certainly doesn't have to worry about any pay cuts. But the story doesn't end with Shirey. If Shirey used the language of pay cuts and opened a discussion of city employee pay, then a debate could be had over the fact that layoffs have focused on those making less than $100,000 while those making over $100,000 has grown. In 2010, Sacramento had 3,800 employees making over $100,000, an 80 percent increase from 2009. But these aren't the city employees Shirey wants to contribute more to the pension plan. Shirey is threatening the police, firefighters, and average city employees such as the park service with layoffs if they don't agree to pay cuts. Police, firefighters, and park service workers aren't making $100,000. So if Shirey was serious about sustainable budget reform, shouldn't he be lobbying to cut the pay of these $100,000 plus paychecks?
So why doesn't John Shirey want to use the word "pay cut"? Not only does he want to protect his own salary, but he doesn't want to threaten those city employees making six figure salaries like him. Rather, he'd like to bully and threaten city employees making $40,000 or $50,000 to take a pay cut, so that the city can continue to pay these handsome salaries.
But some will point out that pay cuts are better than layoffs. That's true. But that assumes John Shirey is also being honest when he says this is an "either-or" situation. We should remember what happened to state prison workers just last year. State prison workers agreed to a number of concessions, including pay cuts via a cut to overtime pay, and then still ended up with layoffs. While pay cuts may, or may not, be the answer to the budget shortfall we need to have an honest debate on the issue, not one that is slanted with loaded and misleading language. Language that hides the true pay problem.
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