Just outlawing the business cycle doesn't sound that bad at the moment.
Demanding that Chipotle provide reliable burrito service to every zip code in the US, including the far-flung territories, would really be pushing the envelope.
The reason the post office can't close branches is that they're prohibited from doing so, because back in a more naive time Congress believed that America was a first world country where even people who lived out in the sticks should be able to receive their mail daily.
This crazy notion is also why the post office keeps having to hike postage rates and why libertarian douchebags keep crowing about how the post office is inefficient.
how about we also implant a chip in people too old or poor to drive, which will set their social security checks on fire if they don't buy a chipotle's chicken wrap by a certain date?
Or how unprofitable city water offices should shut down, too. And sewage treatment centers.
I'm sure my grandfather the disabled veteran would have found working delivering delicious burritos to his town of 7,000 meaningful work after WWII.
Thsi Gregg Easterbrook post on the USPS is predictably dumb, but the comments are good.
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Woo, it's summer. Instead of listening to Megan's loud (or not so loud) music, I get my neighbors (young - late teens, early 20s) fighting. She just threatened to take away his custody rights for their very young child because he's angry about the way she views the finances and sent him storming down the stairs crying. (He hadn't exactly been pleasant to her, either, it should be noted). I thought people only fought like this on reality tv shows. (I feel bad for them and want to gently steer them towards some sort of counseling where they learn to actually talk to each other. Of course, I barely know them so that won't ever happen, but man, I wish people were nicer to each other.)
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I was disappointed by the lack of vaguely icky photos of cheerleaders and dumb-freshman comments about science and God, Apo, but I appreciate Easterbrook's call to stop the Post Office before they blitz again.
I hate it when giant monopolies exempt from competition face competition from business providing competing services.
I thought people only fought like this on reality tv shows.
How the other half lives and all that. At least it didn't get violent but give it time.
11: Yeah, I realized my reaction demonstrates some shocking naiveté after posting. (My family fought all the time but the character of it was quite different.)
8. Knock on their door and talk to them like a Dutch uncle. About ages and shoe sizes. If that's too hard, talk to them like a Dutch cookie.
I feel bad for them and want to gently steer them
... and, kids, that's how the Social Democratic Party was formed!
Dutch uncle
Reminds me: I recently saw a photo of a city street during the liberation of the Netherlands, showing a group of returning Jews, but in the background was a big sign in English: "THIS IS HOLLAND. REMEMBER! THE DUTCH ARE OUR ALLIES." The result of worries about what "Dutch" signified to the average GI, I surmised. And then I found three euros.
They shut down the self-service kiosk at the local USPS, maybe because it was too effective. Heck, they even removed the stamp vending machine. There's no reason those branches couldn't be rented out and used to sell other services, like the old MailBoxes Etc. Apparently that's the plan, but there's some debate whether it's too little and too late to save the USPS.
And the USPS is also required to prefund its pension scheme completely - unlike Chipotle.
There is also a certain lack of logic in the position "Well, this business won't be a success if you don't allow them to shut down branches and lay people off." Shutting down branches and laying people off is what failing businesses do. Successful businesses grow.
How about "In an era where we have 9% unemployment, what we need is to lay more people off. Good thinking there, Sparky."
Heck, they even removed the stamp vending machine.
They took out the stamp vending machine at my post office too. I asked an employee about it, and he said the machine had broken down, and the parts needed to fix it were no longer made.
USA! USA!
I'll just buy some postage online and drop the packages in the fast-drop at the post office ...
My local post office is accessible 24 hours per day. No vending machine, but you can weigh a package and it will print out postage for you.
I think our local post office has decided to only deliver the real mail three days a week. The other days always seem to be bulk mail only.
18 is a really good comeback. I vote for it.
but there's some debate whether it's too little and too late to save the USPS.
Save it from what?
1: postal unions prohibit laying off postal workers, entirely. 2: it is forbidden to close any postal office because of the economy.Those "facts" are misleading at best. As for layoffs, I just googled "post office layoff" and found lots of links, such as this and this. I didn't find anything about things that had happened, so maybe it's just a scare that goes around periodically and your Facebook friend is right that there can't be massive layoffs. However, even if not, there certainly can be people fired, made redundant due to closing offices (see below), and "encouraged" to take early retirement.
And as for closing offices, that's definitely misleading. It may be true that there's a requirement to always have mail delivery everywhere, I don't know. But there are lots of districts with an office in the back of the town office, or even the bank or general store, and probably some here and there that are run out of the mailman's house with no retail office at all. People in those areas want to mail something express or certified or a package that needs to be weighed, they have to drive out of town. Any economic concerns about "offices" in those places are just dumb.
Not pithy enough, I know. Here: "Yes, of course it's forbidden to stop mail service because of the economy. That would be ridiculous. But it's not forbidden at all to move the physical post office facility itself. Lots of towns already get their mail from private homes and space rented from businesses or the town. How much more inconvenient do you want it to be for people in rural areas?" Still not too pithy, but I think it gets the point across.
I'd take people who make such complaints more seriously if they were also worked up about the fact that the military, the coast guard, the CDC, FEMA, the Congress, the Executive Branch, the Judiciary, etc. don't turn a profit either.
27: Did Wilford Brimley get to you too?
28: Does Quaker Oats not turn a profit either? I had no idea.
25.1: Your first link there is from 2008. The postal workers union just agreed to a new labor contract that does indeed rule out any layoffs of USPS employees who were active when the last labor agreement expired in November. However, it also allows a greater percentage of the USPS workforce to be temporary workers.
29: I was making a Seinfeld reference.
Anyhow, if you pull down to the table under A Decade of Historic Significance, you'll see that the number of post offices has declined every year since 2001 (with the exception of 2008), and the number of career employees has also dropped every year (through attrition), going from 775903 in 2001 to 574000 in 2010.
32: Wow. That's a huge drop. Numbers are pithy, right?
The upshot: heebie's friends facts are technically correct, but I don't think he understands what they actually mean.
30: In other words, another union protects its elders at the cost of its future.
M/tch in 27 wins! It had the right dismissiveness to really capture my feelings of condescension.
I think that 18, while 100% correct, doesn't address the rightwing mythology that allows someone to say things like this. After all, the government never created any jobs, right?
I like 3 and 5. Maybe something like this:
Mail is a public service that's supposed to be universal. Should we shut down unprofitable roads, elementary schools, and sewage treatment centers?
Heebie friended bjk on Facebook?
the government never created any jobs, right?
I run into that all the time, and it's one goddamned weird thing to say about the United States' largest employer.
But 38.last IS something that a lot of right-wingers believe, because they can't imagine a world in which they and theirs are among those who might benefit from those things. This is especially true when they are precisely among those who _do_ benefit.
I'd never seen this person post anything political before. It's amazing that someone could plummet so fast in my esteem. I used to basically like her, and now I have palpable contempt.
Should we shut down unprofitable roads, elementary schools, and sewage treatment centers?
That reminds me. Urinetown is the only musical ever that I didn't regret the time I spent watching it.
Here's what they are up to in Wisconsin.
The University of Wisconsin would have to return nearly $40 million in federal funds - money intended to pay for community networks and improve broadband service for public entities - if a state budget provision aimed at protecting rural telecommunications providers becomes law.
UW officials say the proposal also would prevent research universities in the state from participating in a high-speed system that connects them with research universities nationwide....
In addition, the proposal would require the UW System to withdraw from WiscNet, "a private nonprofit cooperative that operates our research and education network in Wisconsin," Giroux said. "It's a high-speed broadband network that serves every UW campus, most of the technical colleges, most of the K-12 schools, most private schools including Marquette University, most of the hospitals. We would have to withdraw entirely from that."
The telecommunications companies do not object to UW's participation in nationwide high-speed systems that connect with other research institutions, Weller said. "It was never our intent to block the university from its research mission," he said. But they do object to WiscNet's providing service to K-12 schools.
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No more _____ (verb) to Leonard Stern
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Yeah, M/tch at 27 wins in the pithy "Fuck you, clown!" comeback, if you want to mimic the winger lengthy recitation of facts mode you could do worse than fn04zb's comment in the thread apo links:
What if you were the CEO of the nations third largest employer? What if your company controled 40% if the worlds mail volume. What if your company had $67 Billion in revenue last year more than Apple and Microsoft combined. What if your company was the backbone of a $1 Trillion year industry that employed 8 million americans and totaled 7% og the nations GDP. What if you were only paid $276,000 a year while your competion paid there CEO's $10 and $14 Million a year. What if your company was overgharged by Congress $78 Billion dollars in 2003 for pension payments. What if the pentagon and Congress overgharge your company $27 Billion in 2004 for military credits. What if your company was again overcharged by Congress %75 billion in 2010 for Civil Service pensions and $6.9 Billion for FERS pensions. What if in 2006 Congress decided to write a law that your company must turn over $5.5 billion a year to set in a trust fund for "future" employees health beinfets? Note* not employees that are currently working but for employees you may hire in 2050 and retire in 2075. What if Congress made your company fund this amount in less than 10 years. What if your company was the only company in the entire world that has to do that. What if your company was reuired by law to deliver to EVERY address in the nation while your competion could pick and choose. What if your company was required by law to have a retail office in every town in the nation regardless of population while you competion can have just one office in a 50 mile radius. What if your competion, knowing that your company goes to every address had you delivered 40 million of THEIR packages last year and looking at close to 70 million this year. What if you delivered 27% of your competions ground parcels last year. ...[and so on, actually pretty good stuff]Leaving the typos in might actually be more effective.
Felching? Dude leaves it open-ended like that and who knows where it leads to.
"His ______ [noun], his _______[noun], his _____[noun] _____[transitive verb] the _____ [plural noun] of those who have had the privilege of _____ [verb] him."
@42
This is why I basically never friend anyone on Facebook (I only have an account on the off chance that some old acquaintance tries to get in touch). A big part of the Facebook experience seems to consist of discovering that casual acquaintances/coworkers who seemed like normal nice people are actually raving assholes.
On the whole I'd rather not know.
Significant omission in 47: What if you had to get approval from an executive branch agency to increase your prices? And what if said approval process resulted in your headline product costing 20% less in real terms than it did in 1975, even as it costs about half what consumers pay for a comparable product in other major industrial economies?
The Postal Service is consistently shrinking the number of employees it has, principally because of improved technology and a little bit because of 66the increase of electronic billpaying, etc. It definitely lays people off. A Postal Service layoff in 2009 had a significant effect on our local unemployment rate:
WASHINGTON - With the U.S. Postal Service preparing to close its Philadelphia Logistics and Distribution Center in Logan Township, NJ, U.S. Senator Robert Menendez is pressing the Postmaster General to detail plans to assist those who will lose their jobs and to explain how the closure decision was made. The Center employs 650 workers. Though they have not been given guidance as to whether they will be considered for employment in other USPS facilities, they have been told they are eligible for pre-retirement packages if they resign by November 1.
"This news has created serious anxiety and apprehension amongst the office's 650 workers and their families," wrote Menendez. "Other mass layoffs in the area have made an already difficult job market even worse, as the unemployment rate for Gloucester County climbs above the national average at 10 percent. I understand the need to cut costs in this difficult economy, however sudden layoffs of this magnitude will only serve to exacerbate and lengthen the economic predicament we are in."
"Many if not all of these workers are understandably scared about the uncertainty of their status and are wondering if they will be offered positions in surrounding facilities. While the USPS has stated that it will try to find jobs for these dislocated workers, no concrete plan has been presented on this matter. This lack of timely information not only adds to the anxiety of these workers, it also makes it nearly impossible for them to make plans for their future."
51: I did abridge the comment somewhat, they mentioned other controls and mandates, but they did not make that specific point.
Update:
(I can't imagine this is interesting, but) she responded twice:
The complaint isn't that they're not making a profit. It's that they're operating in the red, -13% profit margin, if I remember correctly, and that we are expected to foot the bill. The commentary was that part of the cause is rules that you can't lay off people, and that you can't close an office based on the current status of the economy. Any normal business, take Chipotle for example, would drown under such constraints.
and to someone else:
But the post office has to deliver mail to everywhere including rural Alaska no matter what, so the law preventing closing of offices doesn't have any effect on those people. It's preventing them from closing offices they don't need and the other law is preventing them from getting rid of people they don't need. Post mail is down by huge amounts in the us now (Internet, ups etc). They shouldn't have to pay for labor they don't need. Basic principles of economics.
and I responded:
A couple things: 1) The post office has shrunk every year since 2001, except for 2008: http://www.usps.com/communications/newsroom/postalfacts.htm, so your original assertion isn't correct. 2) If a government institution is operating in the red, it's equally true to say it's underfunded, as opposed to overproviding, 3) Ideologically, I personally believe that the post office should be categorized alongside access to clean water, sewage, public schools, etc: available to all Americans, regardless of location or income.
54: You should also make the point that if Chipotle is in the red, they get to raise prices.
I didn't deal with her point about the postal unions making a rule that postal workers can't be fired. That seemed exhausting to unpack.
Can we trade two days of residential mail delivery a week for money to fix the sewers?
No, but we can trade them for more upper-class tax cuts.
part of the cause is rules that you can't lay off people
Since that labor agreement has been in place for less than 60 days, we can safely assume it isn't part of the cause.
Any normal business, take Chipotle for example, would drown under such constraints.
Somehow, the notion that the government isn't a normal business just escapes people.
58: Then my apologies to St. Louis for burrito night.
Any normal business, take Chipotle for example, would drown under such constraints.
That's the crux of the biscuit. It's not a normal business, it's a public service.
Also, I should have thrown in the Veteran's Administration to the list of government "businesses" that are in the red. That way you could ask her why she hates our soldiers.
Curses, apownd.
But does the fact that I slyly referenced his blog while being pwned by Him somehow offset the penalty, or maybe create some type of space/time anomoly or something?
83: It's not normal! It's ANOMOLY!
43: Oh, go see Guys and Dolls, ya big lout.
66: I saw part of it on the TV. It was O.K., but then I flipped to "How It's Made."
64: http://www.usps.com/communications/newsroom/2011/pr11_058.htm
Less than a month, actually.
Her response:
1) nothing I said in first assertion is contradicted by what you posted. I even went back and read what I wrote, which Is a big step for me. 2) you can read on the same page that you pasted a link to that the post office is burdened with crazy high health benefits it has to pay it's employees, higher than any other institution. Also, surely you can't be claiming that any government agency losing money is underfunded, no matter what the conditions. Just because it's a government service means they can waste money and be inefficient? No room for improvement? No reason at all to even try to compare them to a successful business? Europe did it. Their post offices ate essentially privatized and functioning beautifully.
It makes me crazy to discuss things I care deeply about with people who disagree with me.
68: Probably a reading comprehension failure, but I can't find in the link where it talks about not being allowed to lay people off.
54
She seems to be making the perfectly sensible and correct point that providing the public service of universal service is costing more than necessary because of various political meddling into the operations of the postal service.
Oh, that link was just for the effective date of the agreement. The agreement details can be found here: http://www.apwu.org/news/nsb/2011/nsb01-110314-contract-tentative.htm
69
It makes me crazy to discuss things I care deeply about with people who disagree with me.
You care deeply about the organization of the postal service? It probably is difficult to discuss things with someone who appears to see everything as part of some massive battle between good and evil which good is losing.
you can read on the same page that you pasted a link to that the post office is burdened with crazy high health benefits it has to pay it's employees
Honestly I have no idea what health benefits the post office offers, or how they compare to private businesses.
I do know that my experiences with large corporations have been that they are ridiculously inefficient in all sorts of ways -- they're just don't have to publicize them.
I think, by larger it's well and good, for people to watchdog wasteful spending by publicly funded entities, but let's not pretend that they are in some way uniquely wasteful and inefficient. It is the nature of any large organization to waste money, we just have more avenues to follow waste in the post office.
someone who appears to see everything as part of some massive battle between good and evil which good is losing.
This is very much how I roll, when discussing politics. It feels like giving ground on the post office is equivalent to conceding the entire dismantling of social services. It makes me crazy, probably unnecessarily.
The thing is that the Post Office *IS* restructuring to save costs and reduce its workforce and physical infrastructure. If your friend would bother to read the details of the agreement instead of getting incensed that that the USPS isn't run like a burrito shack, that would be clear.
I responded:
Let me conceded a couple points: It's true that having employee-based health care has all kinds of wildly burdensome consequences. I'm in favor of 100% socialized healthcare, so when USPS provides 79% over average of 72% of costs, it's hard for me to agree that the *benefits* are crazy. The benefits are reasonable, but the cost on USPS is crazy.
Second, unions negotiate deals on behalf of their members. They get things like pensions and better health benefits and job security, by incurring more immediate costs like a lack of raises or COLAs. I agree that it is aggravating that pension and health care costs are somehow unforeseen costs, because that is just lazy, shortsighted passing-the-buck to the future. But blaming the pension/job security/health benefits is misplaced, because those were fairly traded for. Someone made a shortsighted deal years ago, but that should not imply that the workers lose out on their end of the bargain.
Finally, it does sound like the post office has been mismanaged, and could be more efficient.
Basically, I care very deeply about collective action and social services, and these are being dismantled at an alarming rate. Since the post office is an example of these, I get visceral reaction to the idea that it should be scaled back.
It feels like giving ground on the post office is equivalent to conceding the entire dismantling of social services.
What with the greater economic turmoil, I can kind of see that. On the other hand, by weight 95% of what the post office brings me goes straight into the recycling bin. Of the remaining 5%, at least 1/2 of things that could be handled online if I wasn't too lazy to figure out what to do. And half of the rest is Christmas cards.
I guess I'd like to know that I'm subsidizing something besides the Valu-Pak people. (And last I checked, I think I heard the Post Office was making a profit on bulk.)
Isn't the post office pretty efficient? I thought that's why the workers have the reputation for being likely to snap -- the pressure on them is immense.
Heebie, your response should be "So write a letter to your congressman demanding that they raise the rate for postage. Then they won't be in the red."
I'm guessing this is all coming from a recent glut of conservative articles about how the post office is about to go belly-up.
that is just lazy, shortsighted passing-the-buck to the future
No no no. The USPS is practically the *only* organization that has fully funded its pension obligations and was, in fact, overcharged for them by Congress to the tune of several billion dollars. See comment 47.
47 is impossible for me to read.
Also, this gswift comment that ought to be tattooed on the forehead of anybody bitching about public sector benefits.
71: She seems to be making the perfectly sensible and correct point that providing the public service of universal service is costing more than necessary because of various political meddling into the operations of the postal service.
Her little piece of the massive societal-level terrorism scheme being currently practiced by the right-wing is of course "perfectly sensible and correct" at some level, just as once it gets to that juncture, the guy who points out that if you pay him some money his boss won't burn down your business is making a "perfectly sensible and correct point".
Europe did it. Their post offices ate essentially privatized and functioning beautifully.
How much is it to mail a first class letter in your countries, Euro-Mineshaft?
I've got to run in a few minutes, but I'm definitely missing the piece reconciling all those conservative articles hysterically shrieking that USPS is going belly up, if it's not pensions and health care benefits, per comments 47 and 81.
conservative articles hysterically shrieking
That's all you really need to know right there.
First class postage in France is 0.56 euro, and in the UK is 0.46 pounds. In Switzerland it's 1 CHF. I didn't check the exchange rates but France is like 50% more expensive, while the UK and Switzerland are double.
But is this just a total lie?
"The federal government will then have to choose between letting the agency default on its massive pension obligations or bailing it out to the tune of more than $50 billion."
88: Thanks, Walt.
And those are all much smaller countries. Getting a letter from Paris to Provence isn't quite the same as getting one from Key West to Nome. *And* their postal services don't bear the costs of health care or pensions. Put that in your privatization pipe and smoke it, heebie's grrr-inducing friend.
79: Isn't the post office pretty efficient?
Yes, it is, from what I understand. It charges significantly less than its competitors, is remarkably reliable (despite all the bitching people engage in about delivery), and provides universal service. 79.2 is right: postal rates would have to be higher for the USPS to get out of the red. The answer is certainly not to scale back on services/employees.
And here's another thing that jacks me up about the suburban/exurban societal terrorists (see Waukesha County, Wisconsin's role in Wisconsin elections): Very many of them are manifestly aware of the shortcomings of large private organization both as consumers and employees of same; if you are not already known to them as a political "enemy", and the topic is not otherwise explicitly political, they will fill your ears with righteous rants about buying from and working for those same mega-organizations which they so vigorously support in the abstract. Their overblown Earth-destroying sense of personal entitlement ("I thought if I ever made six figures I'd be rich!") is merely been exploited to this more explicitly political end.
Europe did it. Their post offices ate essentially privatized and functioning beautifully
Ahem.
Just because it's a government service means they can waste money and be inefficient?
Aargh. There's inefficient and there's inefficient. It's inefficient to hand sort mail when it can be done mechanically. This inefficiency can and is being addressed, by postal services everywhere. But, and this if far more relevant, it's also "inefficient" to guarantee regular mail delivery everywhere in the country. It is literally impossible to improve efficiency in this area, short of developing teleportation technology. That's why private companies don't do it, and why Fed-Exing something even the slightest bit remote is exorbitantly expensive and slow. Seriously: I once sent a box of documents from London to Ukraine's second largest city via UPS and it cost GBP 300 and took five days.
http://blogs.federaltimes.com/federal-times-blog/2011/03/18/usps-pension-puzzle-revisited/
Note comment 2 on that post as well.
83: That gswift comment really is great.
She seems to be making the perfectly sensible and correct point that providing the public service of universal service is costing more than necessary because of various political meddling into the operations of the postal service.
But her actual assertion is that the Post Office is "in the red", which is a category error.
Regarding the relative cheapness of USPS -- and I carry on about this in particular because our bookshop does ship tens of thousands of books annually -- there's this on costs:
That standard $3.99 you pay for shipping of a book ordered via Amazon? The same package shipped by UPS from Baltimore to Beverly Hills, CA would cost $15.
95. Thanks for finding that, I was just looking for it.
Shorter every fucking position the Republicans have taken for the last 20 years: "Our ability to destroy democratic governance and government services in a self-fulfilling manner, let us show it to you." The Post Office is but one small exhibit out of thousands of examples.
95
... But, and this if far more relevant, it's also "inefficient" to guarantee regular mail delivery everywhere in the country. It is literally impossible to improve efficiency in this area, short of developing teleportation technology. ...
This is ridiculous, of course it is possibly to improve efficiency even with constraints like universal service.
75
This is very much how I roll, when discussing politics. It feels like giving ground on the post office is equivalent to conceding the entire dismantling of social services. It makes me crazy, probably unnecessarily.
Well, if for example, you feel because unions are embattled you have to defend every union perk no matter how extravagant you won't influence many people who don't already agree with you about everything.
No, really it isn't. Or rather there are hard constraints. Obviously there are things you can do at the margins, but if you're guaranteeing regular delivery to the remotest, least populated places in the country, you're going to be far less "efficient" than a company which can focus on the most populated/closely connected areas and hence maximise the productivity of its employees and capital. The universal service is going to have idle resources sometimes, to ensure that it can utilise them when it needs to. Yet it'll be providing a much better service for those remote customers.
103, 104: But your "terrorism of the commons" buddies are not discussing union perks or the organization for any legitimate reason. Engage with them and their terrorism wins. That does not mean that there are not legitimate conversations to be had on those points; in a reasonable world we could (and should) have them! But the amalgamated cunts and dickwads of the contemporary right have poisoned the well on that one.
Thanks for fighting the good fight, heebie. I used my lunch hour today to try to write as middle-of-the-road, reasonable a letter to the editor as possible about the mandatory-photo-ID voting bill that the PA legislature is considering.
I have so utterly lost perspective on this issue that I have no idea if it comes off as hopelessly partisan.
Hey fellow Pennsylvanians, call your representatives! And talk to your neighbors. One person, one vote. An expensive law addressing a problem that doesn't exist.
105
I could be wrong but I doubt the universal service constraint is the postal services biggest problem. What percent of costs do you think it amounts to? I think their problem is that rates and wages are politically constrained with the result that rates are too low and wages are too high. Which is a recipe for losing money.
Hey fellow Pennsylvanians, call your representatives! And talk to your neighbors.
If I talk to them, they'll just complain about my yard again.
109: Record what you want to say and play through your open dining room window about 11 PM tonight. I suspect they won't complain about your yard.
Speaking of which, I am revising my advice to Di Kotimy. If bees won't work for her, maybe she could raise chickens! Should serve all of the same purposes, except for wax and honey. But eggs are nice too. She could escalate and get a goat, but I wouldn't want to commit someone else to a twice a day milking schedule.
106
... Engage with them and their terrorism wins. ...
Don't engage with them and people assume you have no answer to their arguments.
I actually did talk to a neighbor this morning about public services. Nobody picked up our trash and some guys were walking around with clip boards. Apparently, they had to do a survey of our trash before it was collected. I'm glad mine was neatly bagged.
111: How often do you have to feed chickens? They seem like more work than bees, assuming you want to be humane about it.
James B. Shearer, I assume you'll be writing to your Congressperson about raising postal rates.
113: I bet those guys with the clipboards are overpaid and can't be fired. If only sanitation services were run like Chipotle.
116: Now that I think of it, they were probably doing the report on how many households recycle. I had a full blue bag of Yuengling, so that will help the count.
I expect "if only ______ were run like Chipotle" to gain a foothold here over the coming months. Or I would expect it, if this grossly inefficient blog were run like Chipotle.
Is Chipotle more efficient that Qdoba? I like the salso better at Chipotle, but Qdoba has a liquor license.
this grossly inefficient blog
It is inordinately hard to fire commenters.
Salso is the more manly version of salsa.
Even commenters who can't spell stay on.
119: Liquor license the other way around in my experience. This varies location to location?
Also, look at all those bloggers listed in the sidebar, still drawing salaries and pensions without even bothering to comment anymore. Typical.
think their problem is that rates and wages are politically constrained with the result that rates are too low and wages are too high.
Under the Bush administration, rules regarding how often USPS can raise rates were gutted substantially loosened. Try again.
123: Could be. I'm going by the ones in Oakland because I never go anywhere.
Can you believe Unfogged, Inc. is paying me $5 for this worthless comment?
125: Then why don't they raise rates? Or have they?
117: Probably, and good. Our mayor here was on the radio not long ago saying, quite helpfully: "If you want to keep taxes lower, recycle. It costs the city x amount more to dispose of y pounds of trash than it does to send y pounds to recycling."
Good work, mayor! Keep talking!
127: Even worse, you get $6 for a pun.
What percent of costs do you think it amounts to? I think their problem is that rates and wages are politically constrained with the result that rates are too low and wages are too high. Which is a recipe for losing money.
Of course. But constrained rates don't make them inefficient. And the losing money part is, as has been said before, a category error. The purpose of the postal service isn't to make money. It's to provide a universal service at a cheap (geographically uniform) cost to the end user. By all means disagree with the policy objective, and by all means encourage the USPS to fulfil the objective as efficiently as possible, but the USPS does fulfil it and a privatised, deregulated service wouldn't.
Clearly the US government needs to raise more revenue.
It wouldn't hurt to scale down the warmaking costs.
It also wouldn't hurt to scale back the corporate subsidies.
133, 134: You could do both by ending the Chipotle "Food for bombs" program.
Also, those death panels we were promised would help tremendously.
128
Then why don't they raise rates? Or have they?
Because Witt's comment is at best misleading. See here .
136: Especially if they send a great deal of mail.
Has the Washington Post been loading slower than hell for anybody else? All day today, the headline will come up, but then takes something like 2-3 minutes to load the article text.
131
... And the losing money part is, as has been said before, a category error. ...
I don't know about "category error". The postal service could be run so it provided universal service and didn't lose money (and in fact politicians have claimed that it would be) but it isn't because of political pressure to pay too much, charge too little and organize work in inefficient ways.
127: Even worse, you get $6 for a pun.
I'm paid by the word.
139
Has the Washington Post been loading slower than hell for anybody else? All day today, the headline will come up, but then takes something like 2-3 minutes to load the article text.
Yes, I had a similar problem with my link in 137.
I by 'pay too much' you mean: a decent level of pay which doesn't leave people debt-ridden or in poverty, and which provides decent medical care and a well-looked after retirement then that's just what we _ought_ to be paying.
136: Do we really have to kill people? Maybe we could just return the tax rates to their pre-Bush-tax-cut levels and begin to withdraw from Afghanistan. That wouldn't solve the problem in one fell swoop, but we might not have to kill people, at least.
Do we really have to kill people?
You're making it sound like a bad thing!
Also, I'm counting on getting a cushy gig sitting on one of those death panels. Great benefits, too!
Parsimon, I'm sorry, but we really do have to start killing people. Prudence demands it, and sometimes you just face hard choices.
I'll support death panels, but only if they're run like Chipotle.
147: "Would you like to be crushed with black beans or pinto beans?"
We could just feed everybody Pad Thai and see who dies.
146: I refuse to accept this, Halford! I realize that you threw up yesterday after your Pad Thai, but I think you are not considering all the options here! We could increase revenue, for one thing.
I will remain stubborn on this matter to the very end.
I will remain stubborn on this matter to the very end.
Being stubborn often leads to being disgruntled. Have you considered looking for work at the post office?
That's an irritating remark, Moby.
143
I by 'pay too much' you mean: a decent level of pay which doesn't leave people debt-ridden or in poverty, and which provides decent medical care and a well-looked after retirement then that's just what we _ought_ to be paying.
I mean much more than the market rate for similar work. And delivered in a very inefficient way (benefits instead of straight wages which workers would prefer) in order to disguise the true costs.
152: That's it. Let the rage build up.
Watch out, parsimon is about to go postal Chipotlé!
(benefits instead of straight wages which workers would prefer)
Clearly the best way to get rid of this problem is to promise the workers benefits instead of preferrable wages, and then not pay the benefits. Everyone wins.
benefits instead of straight wages which workers would prefer
What makes you think this, oh voice of the workers?
155: Sorry. I'm fully aware post office employees aren't especially likely to be murderous and that you can less murderous than postal employees by far.
Chipaustal! Chili Pepper Incorporated!!
160: I hear that Amazon only charges a flat $3.99 per body for murderous rampages.
I suck at apologizing, I guess. Should be "you are less murderous."
Ten bodies or more and you get Super Slayer Shipping rates.
160: Mutually sorry, I suppose. I was talking about killing people, and some Republican-led states' newly adopted policies actually will increase suffering and potentially death in those states, so I'm not inclined to joke about it. Sometimes your inclination to joke about every goddamned thing gets on my nerves. Sorry.
I had a hard time deciding between "Chili Pepper" and "Habanero".
In the end I did it my, yes my way, and made all my dreams come true. For me and you.
Every day, Chipotle employees are murdering people. By wrapping foods in a grain-filled tortilla.
By wrapping foods in a grain-filled tortilla.
This is kind of confusing me. Is the tortilla the problem or the rice or both?
Why, both, of course. this infographic most definitely does not make thebpaloe diet seem like a fad engaged in by insane people.
158
What makes you think this, oh voice of the workers?
When I worked for IBM they got rid of their defined benefit pension plan. The HR people told us that one reason for this was the cost of the plan to IBM was much greater than the perceived value to the workers. Hence IBM could save money and provide a more attractive (to employees) benefits package by shifting to a 401k type system. I found this easy to believe as I didn't value the traditional pension portion of my compensation very highly and had no idea what it was worth (quite a bit as things turned out).
In general workers like cash now.
I was wondering whether Halford is attributing his nausea to eating outside Paleo or to food poisoning. Because eating a diet that leaves one vomiting, chilled and heading home for the day when exposed to foods outside the diet strikes me as verging on "specialized". Your gut is also part of your overall physique. If it can't handle a very common task, it hasn't been trained to be generally robust or strong.
That said, I'm picking a fight and running off.
In general workers like cash now.
Having argued this one with you before, I'm coming around to believe that this is a reasonably true statement (I think that workers also like security but, as you say, I believe that there are many who don't see their pension as security).
I that's potentially a problem, but I am convinced that I can't defend the claim that most workers would, as you say, value the older pension plan at or above it's actuarial value.
Some workers, as for example me and my coworkers, liked security and benefits when we could rely on them. If we find that the things are were told were part of our compensation will be yanked, then we would retrospectively prefer cash.
172 -- pretty sure it was food poisoning; the Pad Thai of Death came from a street vendor at our local office park "farmers market" at the very end of the lunch hour when they were closing up shop.
It charges significantly less than its competitors, is remarkably reliable (despite all the bitching people engage in about delivery), and provides universal service.
And it still delivers on Saturdays (which Canada Post stopped doing years and years ago).
I find it unbelievable depressingly predictable that the politics of resentment can extend even to the public provision of postal service.
Just to be clear, I'm not conceding that "workers prefer cash" is always a true statement. I just believe that it is true in enough cases that I can't claim, "workers prefer the employer to fund a pension plan" is an accurate generalization either.
Like many things I suspect there's a wide range of opinions. I am also sure that the motives of the IBM HR department were not purely generous, but I believe that they were pleased to realize that they could move away from defined benefit pensions without angering the employees.
Now I'm being trolled (same thread, different acquaintance):
What's the difference between the post office and academia? Plenty of old tenured deadwood that cannot be fired NO MATTER WHAT. I'm a firm believer in job security, but sometimes it goes outrageously overboard (and the costs are simply shifted elsewhere - job security for 80 year olds, no jobs for 30 year olds)
and I'm happily going to wash my hands of that stupid thread.
I find it depressingly predictable that the politics of resentment can extend even to the public provision of postal service.
It not anything new -- http://en.wikipedia.org/wiki/Lysander_Spooner
:
170: That's some impressive anecdata, James.
In general workers like cash now.
What makes you think this, besides your own HR department's convenient spin, oh voice of the workers?
Almost on topic.
A few weeks ago I received the most amazing piece of unsolicited commercial mail. It was a catalog for the coming season at Salle Pleyel in Paris. International junk mail! Par Avion!
180: If you can't believe your very own HR department when they're telling you why they are doing away with an existing benefit, who can you trust?
that cannot be fired NO MATTER WHAT
Somebody has no idea how tenure works.
This story obviously involves someone who reads here.
186: And yet they stuck with "Weasel" in the headline.
the attacker answered, "It's not a weasel, it's a marten," then punched him in the nose and fled.
Clearly a descendent of Ferdinand von Zeppelin.
177
Like many things I suspect there's a wide range of opinions. I am also sure that the motives of the IBM HR department were not purely generous, but I believe that they were pleased to realize that they could move away from defined benefit pensions without angering the employees.
The HR people didn't emphasize that the changes would save IBM money but did admit it when asked. And there was some anger (including a lawsuit ) among the existing employees as the changes amounted to a paycut.
Reflecting this the changes were made more rapidly for new employees. A company has every incentive to offer compensation packages that offer the most perceived value to the worker for each employer dollar and I see no reason to believe IBM was being stupid when making these changes.
180
What makes you think this, besides your own HR department's convenient spin, oh voice of the workers?
Because as I said it was consistent with my own feelings and experience. They could have saved the same amount of money by cutting everybody's salary. I doubt this would gone over as well.
170: James, no doubt others are like you: They didn't value their pension so highly because they didn't understand it. Employers can cut compensation in ways employees don't understand, but it's perverse to suggest that by doing so, they are giving employees more value.
What makes you think this, besides your own HR department's convenient spin, oh voice of the workers?
Looking for "discount rate experiemnt" I found this paper (pdf) which is very readable and and interesting. It looks like they found that, for a short time horizon, people had, on average, an individual discount rate of 40%.
That would suggest that it's very likely that people would undervalue future pension payments.
an individual discount rate of 40%.
Uh, sorry, 28%.
Thinko.
192
James, no doubt others are like you: They didn't value their pension so highly because they didn't understand it. Employers can cut compensation in ways employees don't understand, but it's perverse to suggest that by doing so, they are giving employees more value.
This is silly. Suppose no pension plan existed. Would you recommend that employers introduce an expensive benefit that employees would not understand or appreciate?
193
That would suggest that it's very likely that people would undervalue future pension payments.
Social security benefits aren't transferable . Do any of you doubt that if you could sell your future benefits that many workers would (and likely get ripped off in the process)?
192: How exactly do you think pensions came into existence, James? Were they foisted upon hapless workers by evil unions?
192: No, that's not what I'm proposing. I'm proposing that differentials in information between bagaining parties often result in various types of market failures, as in this case. These failures ought to be something we regret, not celebrate..
The postal service could be run so it provided universal service and didn't lose money (and in fact politicians have claimed that it would be) but it isn't because of political pressure to pay too much, charge too little and organize work in inefficient ways.
It certainly is because of political pressure to charge too little. If they charged more, they wouldn't lose money. Look, a completely privatised and deregulated postal service could offer universal service (although I think it very unlikely that it would), but it would charge an absolute fortune to provide that service to the remotest areas. Congress (hell, according to the Supreme Court, the founding fathers) decided they didn't want that to happen.
197
How exactly do you think pensions came into existence, James? Were they foisted upon hapless workers by evil unions?
An interesting question to which I don't know the answer. Some speculation follows.
There is an important tax advantage to pension plans (which 401k type plans share) in that contributions are with pretax dollars. In a world (like the past) with high marginal tax rates and no 401k type plans workers might value defined benefit pensions more highly.
The true cost of defined benefit plans (like retiree health care plans) was often drastically underestimated. When private employers came to realize the true costs and risks involved they became less inclined to offer them.
Employers were less profit maximizing and more willing to act paternalistically with respect to their workforce.
199
It certainly is because of political pressure to charge too little. If they charged more, they wouldn't lose money. Look, a completely privatised and deregulated postal service could offer universal service (although I think it very unlikely that it would), but it would charge an absolute fortune to provide that service to the remotest areas. Congress (hell, according to the Supreme Court, the founding fathers) decided they didn't want that to happen.
You could not lose money and still subsidize service to remote areas by using some of the monopoly profits potentially available. At least they use to be available, the postal service seems doomed to lose a lot of volume to the internet and this is a big problem.
How exactly do you think pensions came into existence, James?
You know, I realized that I hadn't thought about that question, beyond assuming that they came out of the labor movement. Quickly wikipedia it says that defined benefit pensions started in the public sector:
Public pensions got their start with various 'promises', informal and legislated, made to veterans of the Revolutionary War and, more extensively, the Civil War. They were expanded greatly, and began to be offered by a number of state and local governments during the early Progressive Era in the late nineteenth century.[citation needed
Federal civilian pensions were offered under the Civil Service Retirement System (CSRS), formed in 1920. CSRS provided retirement, disability and survivor benefits for most civilian employees in the US Federal government, until the creation of a new Federal agency, the Federal Employees Retirement System (FERS), in 1987.
Pension plans became popular in the United States during World War II, when wage freezes prohibited outright increases in workers' pay. The defined benefit plan had been the most popular and common type of retirement plan in the United States through the 1980s; since that time, defined contribution plans have become the more common type of retirement plan in the United States and many other western countries.
A few things strike me about that. (1) If defined benefit pensions only became popular in the private sector via the wage controls of WWII, that's relatively recent. It suggests that they're hardly inevitable as an arrangement. (2) It makes sense that the government would be in the best position to offer defined benefit pensions, because it has few obstacles to taking on obligations over a long time period. (3) This got me to read about the bonus army again.
Honestly, I'm coming around to the MY position on retirement:
Consider an alternative model of financing widespread retirement. Instead of a fraction of your wages going (or not) into a 401(k) fund, a fraction of your wages could be sucked up by the government. The idea would be to set this fraction at roughly the "right" level, what people would be saving did they not suffer from shortsightedness, akrasia, and (justified) fear that most savings vehicles are scams designed to extract management fees. Then upon reaching retirement age, you'd be paid a defined benefit pension by the government that's supposed to offer roughly 100 percent of what a normal elderly person needs to live on. In order to make this tax-and-pension system incentive-compatible, the level of benefits you get would be proportional to the amount of money you paid in. Earn more as a worker and you'll pay more in taxes, but then get more in benefits at the end. . . .
This hypothetical program I'm describing is, of course, basically just what Social Security is right now. Except that Social Security taxes are a bit too low and the program is a bit too stingy.
198
No, that's not what I'm proposing. I'm proposing that differentials in information between bagaining parties often result in various types of market failures, as in this case. These failures ought to be something we regret, not celebrate..
I don't really see this as a market failure.
79
Isn't the post office pretty efficient? I thought that's why the workers have the reputation for being likely to snap -- the pressure on them is immense.
This is one of the hazards of grossly overpaying your workers. Most people who really hate their job (and/or their boss) find a different job. But overpaid workers may find themselves locked in (particularly with backloaded compensation schemes).
Ah, that explains why teachers would be more effective and more pleasant to be around if their wages were cut by 50%.
This is one of the hazards of grossly overpaying your workers. Most people who really hate their job (and/or their boss) find a different job. But overpaid workers may find themselves locked in (particularly with backloaded compensation schemes).
The argument for going back to a ninety eight percent capital gains tax, at least for corporate compensation plans with equity components.
I'm locked into this low stress, high paying job and I can't take it anymore!
But overpaid workers may find themselves locked in (particularly with backloaded compensation schemes).
One could argue the same w/r/t many backloaded compensation schemes, whether overpaying or not. I suspect there are cogent distinctions to be drawn between Silicon Valley-style equity upsides and public-school employee deferred compensation at both the negotiation and execution stages, though.
OT: At a tailor's today I was shown a pair of pants made for Leonardo DiCaprio to wear in The Great Gatsby. He must be a very slim fellow.
111: Glad I checked in on this thread! I'm gonna hafta check out the zoning and all that, but chickens would be awesome and hardly scary at all. We just bought a dozen fresh from the nest, cage-free eggs from my friend's organic farm and I am so very pleased. Grabbing those from the back yard instead of driving half an hour would rock.
The rest of the thread is validating my decision to deactivate FB.
Chickens can be pretty high maintenance if you want them to produce eggs. A friend of mine had urban chickens, and the first couple of years with them he was constantly learning new things he hadn't known that chickens require.
A friend of mine had urban chickens, and the first couple of years with them he was constantly learning new things he hadn't known that chickens require.
And then he gave them up, as a giant pain in the ass.
Said friend is pretty advanced in his willingness to do PITA stuff like that, too. He is now very happy to buy the godawfully expensive eggs at the farmers market.
Chickens can be pretty high maintenance if you want them to produce eggs.
Can they be low maintenance if you're only wanting them to annoy other people?
213: Their mournful death cackles, the stench of the carcasses.
I think if the guy is complaining about uncut grass, you could do fine with living chickens, even if they don't give eggs.
Not even uncut grass. Uncleared brush. He needs to live next to GWB and the Crawford ranch.
Not even uncut grass. Uncleared brush. He needs to live next to GWB and the Crawford ranch.
We had chickens when I was a kid. There's even video of me feeding them when I was about 18 months old. (Obviously this was before my ornithophobia began to manifest itself.)
Chickens produce a lot of shit and wander all over the place. Not recommended. You live in Chicago, isn't there a farmer's market somewhere close to you?
We may get chickens this summer. One of our tenant's landscaping clients is going out of town and hasn't found a chicken-sitter. Apparently these are great chickens. Get along with cats.
My wife's family have chickens which grub about the yard and eat scraps. The cat and the chickens seem to have some sort of truce going. I can't say they seem that obtrusive or noisy, although they are behind a high fence so you don't see them much anyway.
Chickens produce a lot of shit garden manure and wander all over the place can be easily contained in runs. Not recommended.
In general workers like cash now.
Good god, this is ignorant even for you, James. Millions -- quite literally -- of workers have repeatedly voted for maintaining or increasing pension benefits in lieu of wage increases. "Voted," as in "chose democratically rather than having conditions unilaterally foisted on them by an employer."
As for your IBM anecdata, I know some of the IBM workers who resisted the elimination of the defined benefit pension plan. They absolutely understood that employers move to 401(k) and similar plans because doing so shifts the risk from the employer to the employee. (More on that in the next comment so this one isn't hideously long.)
One of the legacies of the fight was "Somebody Robbed the Glendale Train" rewritten as "Somebody Robbed the Pension Plan (Over at IBM)."
Under a traditional defined benefit plan, what we generally think of when we hear "pension plan," the employer has to pay out a certain amount when the employee retires, based on years at the company and wages in his/her final years at the company. So the employer has to manage the pension plan investments in such a way that the funding is available as promised.
With a defined contribution plan, the employee has to manage the investment. Guess who has a better shot at being able to maintain the value of the account? A single amateur investor or highly specialized money managers who have a huge pot of money to diversify and hedge?
One of the big reasons that many pension plans are in trouble today is that employers -- including state governments -- took huge gambles with pension plan investments instead of investing them prudently in order to be able to meet their obligations. When an individual does that and loses, many people will think it's her/his own damn fault. When employers do it, it's somehow the fault of greed workers.
Furthermore (woe be unto you all when there's a subject I actually know something about), during the fat '90's, many companies padded their bottom lines with excess funds generated by high investment returns on pension plans, which made them look better to shareholders and which jacked up compensation for executives whose pay is based on profits.
Did they then put that excess aside and invest it safely in bonds? That is, the excess generated from workers' deferred compensation? No, reader, they gambled it away.
How exactly do you think pensions came into existence, James? Were they foisted upon hapless workers by evil unions?
An interesting question to which I don't know the answer. Some speculation follows.
Allow me to substitute facts for your spurious speculation. Employer-based pension and health care benefits came into existence because of WW II-era wage controls. (We can debate the wisdom of wage and price controls some other time.) Since employers couldn't raise wages and labor was scarce, they began offering pension and health care benefits to compete for workers. Workers quickly realized the value of these benefits and negotiated over them in union contracts.
Paying for benefits with pretax dollars certainly encouraged the system later on, but didn't create it.
I fully endorse the last three comments. I suspect the assertion that "In general workers like cash now" is a false generalisation from various parts of the IT industry, especially software which are disproportionately populated by borderline sociopaths who don't think beyond the end of next week. Most people I know tend to regard the pension arrangements as actually more important than the basic wage in evaluating a remuneration package (assuming the basic wage isn't taking the piss).
Most of my pension has gone down the rabbit hole due to the company taking "pension holidays" repeatedly during the 90s and later. Fortunately, in Britain we have this arrangement, which means I will eventually get most of it back. I strongly advise you to campaign for something similar.
165: Sometimes your inclination to joke about every goddamned thing gets on my nerves quite often makes my day.
231.last: We do have the Pension Benefits Guaranty Corporation, but it provides only partial protection.
So does ours. 90% and no inflation increases if these were in the terms of the original plan. That actually looks quite similar. Good.
I don't really see this as a market failure.
Well, whatever you want to call it, it is what it is: A big player using information asymmetries to take advantage of a little players in a bargaining situation. This sort of situation is properly regretted, not celebrated.
One of the big reasons that many pension plans are in trouble today is that employers --including state governments --took huge gambles with pension plan investments instead of investing them prudently in order to be able to meet their obligations.
Pittsburgh invested the city workers pension in chickens, and not even good chickens.
All chickens are good chickens, in their own bended ways.
227
Good god, this is ignorant even for you, James. Millions -- quite literally -- of workers have repeatedly voted for maintaining or increasing pension benefits in lieu of wage increases. "Voted," as in "chose democratically rather than having conditions unilaterally foisted on them by an employer."
I don't know what you mean by this. Most unions are run from the top down and union elections make little differnce. Workers generally can only vote contracts up or down. They aren't given a choice between contracts one of which offers a pension and another which offers the same value in increased wages. If they were I expect they would vote for the money now.
227
As for your IBM anecdata, I know some of the IBM workers who resisted the elimination of the defined benefit pension plan. They absolutely understood that employers move to 401(k) and similar plans because doing so shifts the risk from the employer to the employee. (More on that in the next comment so this one isn't hideously long.)
I said there was some resistance but as far as I could tell none of my immediate coworkers cared. I prefer a 401k plan to a defined benefit plan of the same value and suspect that is true of most workers.
228
One of the big reasons that many pension plans are in trouble today is that employers -- including state governments -- took huge gambles with pension plan investments instead of investing them prudently in order to be able to meet their obligations. When an individual does that and loses, many people will think it's her/his own damn fault. When employers do it, it's somehow the fault of greed workers.
When numerous organizations make the same error this indicates a systematic problem as opposed to individual instances of bad character.
The main problem is that the accounting rules for defined benefit pension plans are defective, they do not require that they be adequately funded and they encourage reckless behavior.
I believe IBMs plans are in reasonably good shape funding wise. Gerstner was a financial engineering type who did show some profits by fiddling with the pension fund assumptions but Palmisano tightened them up and removed temptation by freezing the plans which I think was absolutely the right thing to do from a shareholders perspective.
231
I fully endorse the last three comments. I suspect the assertion that "In general workers like cash now" is a false generalisation from various parts of the IT industry, especially software which are disproportionately populated by borderline sociopaths who don't think beyond the end of next week. Most people I know tend to regard the pension arrangements as actually more important than the basic wage in evaluating a remuneration package (assuming the basic wage isn't taking the piss)
Sure if the basic wage is the same then people will look at pensions. Suppose the basic wage is 20% less?
235
Well, whatever you want to call it, it is what it is: A big player using information asymmetries to take advantage of a little players in a bargaining situation. This sort of situation is properly regretted, not celebrated.
Different discount rates is not an information asymmetry. An employee preference for 401k type plans is not an information asymmetry.
I prefer a 401k plan to a defined benefit plan of the same value
What do you mean by "same value"? Same amount of money invested now? I wouldn't bet on my ability to manage the investment better than a pension fund.
243
What do you mean by "same value"? Same amount of money invested now? I wouldn't bet on my ability to manage the investment better than a pension fund.
I mean the same cost to the employer (assuming the defined benefit plan is correctly funded). The main benefit of 401k plans from an employee point of view is they are more transparent and flexible. There aren't penalties for changing employers or retiring early or late. And the value is easy to see and compare.
223: I live in 'burbs. My particular 'burb, though quite large, has what must be the world's saddest farmer's market. It's tragic.
There's a self-fulfilling prophecy issue with pensions, same as with Social Security. An assured income in retirement is very valuable to people. But if you can convince them that there's no practical way to safeguard the existence of that income in the future, that it's going to be stolen somehow before they can get to it, then its value drops like a rock, and a much less valuable 401K plan (I don't think I've ever heard of a 401K plan with an actuarial value equivalent to a defined benefit pension. In practice, they always seem to be much stingier) looks like a better deal.
So the more a company can make itself look untrustworthy and unstable, the less they can get away with paying their employees.
I find it hard to believe what my employer pays into a 401k can grow enough to be equivalent to a typical pension eventually. Of course, I'm in a temporary job, so the 401k (it's not actually a 401k, but some roughly equivalent thing I forget the name of) is ideal for me for now. But I'd prefer a pension in the long run....
Sure if the basic wage is the same then people will look at pensions. Suppose the basic wage is 20% less?
Every one of the engineers working for the CA state government (and there are a couple tens of thousands of them) chose a 20% lower wage and better security and pensions. There are risk averse people out there, Shearer. Even as you type here, you are addressing one of them.
I find it hard to believe what my employer pays into a 401k can grow enough to be equivalent to a typical pension eventually.
It won't. Basically no chance.
James of 242, please note that I wasn't talking to you, I was talking to the James of 170, who explained that ignorance was a key part of the formation of his own preference.
246, especially 246.last, captures something quite important. Considering the rhetoric we're hearing lately about Medicare and Social Security ('These programs are going bankrupt; they're not going to be around for your retirement; it's not even worth trying to maintain them, therefore; we should just privatize them'), the ownership class has understood this for some time. For some reason I hadn't formulated the maneuver myself in those terms.
250
James of 242, please note that I wasn't talking to you, I was talking to the James of 170, who explained that ignorance was a key part of the formation of his own preference.
My unawareness of the value of my defined benefit pension wasn't due to a lack of information exactly. I had all the information necessary to compute the value but was too lazy to do so. And there was no real reason to because I wasn't comparing job offers. And as I have said before an advantage of 401k plans is they are more transparent, you don't have to spend many hours to compute their value.
As I believe I've mentioned here before, the most workable scheme I'm personally familiar with is Australia's Superannuation system. Of course, Australia is a dictatorship; people would never willingly submit to such a scheme.
246
So the more a company can make itself look untrustworthy and unstable, the less they can get away with paying their employees.
It is not actually an advantage in general for an employer to appear untrustworthy and unstable.
I have to think that if computing the value of a defined benefit pension is an onerous enough task for someone with a doctorate in mathematics that he never got around to it despite a strong personal interest in the answer, that it's a significant obstacle for the average employee, even in the absence of culpable laziness.
253
As I believe I've mentioned here before, the most workable scheme I'm personally familiar with is Australia's Superannuation system. Of course, Australia is a dictatorship; people would never willingly submit to such a scheme.
This just looks like a compulsory 401k to which employers are required to contribute 9% of the base wage. Is this wrong?
255
I have to think that if computing the value of a defined benefit pension is an onerous enough task for someone with a doctorate in mathematics that he never got around to it despite a strong personal interest in the answer, that it's a significant obstacle for the average employee, even in the absence of culpable laziness.
As I have said in several places above, an advantage of 401k type plans is that they are more transparent. By which I mean it is easier for the average employee to compute their value.
Not to be too fat-headed here, but would hope to see some, "NickS gets it right"'s in this thread . . .
Seriously, I suspect that you may be better off arguing with me than with James here because I believe James is doing the thing where he doesn't actually take a policy position , he just nitpicks generalizations and assumptions (I don't think he's ever said that Defined-benefit pensions aren't good, just that (a) they aren't as popular as their defenders make them out to be and (b) he personally is indifferent towards them). Unfortunately I also think his nitpicks are correct to some degree.
I say this hoping that my credentials as somebody who believes strongly enough in pensions that I can work myself up to incoherent rants on the subject are strong enough that I won't be taken as trying to further the conservative rhetoric about Social Security.
Employer-based pension and health care benefits came into existence because of WW II-era wage controls. (We can debate the wisdom of wage and price controls some other time.)
I was thinking about this after I posted something similar. I believe that the standard lefty position on health benefits is that it was an unfortunate that the historical path in the US lead to employee-provided health insurance being dominant because it worked against the creation of a strong nation system of health care. Why couldn't the same be true of pensions? Why couldn't we believe that the rise, during WWII of employee-provided pensions weakens any push for an expansions of SS, and tends to create two tiers of employees, ones with a pension and ones without?
I'm certainly not going to advocate for dismantlement of current pensions but, as long as it's happening anyways in the private sector, why not see it as an opportunity to try to expand SS?
Millions -- quite literally -- of workers have repeatedly voted for maintaining or increasing pension benefits in lieu of wage increases. "Voted," as in "chose democratically rather than having conditions unilaterally foisted on them by an employer."
I am aware of that, and I think that some of that may be a judgement about risk as well as value -- the unions may, correctly in my opinion, believe that if they give up benefits that they will never be able to get them back, whereas if they give up wages they may be able to negotiate for higher wage increases in the future.
I made a similar argument in the opposite direction when people were surprised that teacher's unions would be unhappy with higher wages in exchange for decreased job security -- I believed, and still believe, that it would be much easier to lose the wages in future negotiations than to get back the job security.
I'm confused, it seems like a defined benefits plan is more transparent. You immediately know the benefits that it's giving you per year without doing any calculations at all! Whereas for a 401k you need to work out some exponential growth, then figure out how long you're likely to live, and you have to figure out what rate to remove money. If you mess up the calculation then you lose a bunch of money. And if you're an outlier in terms of dying than you run into trouble. Furthermore you have to work out issues like how much risk avoidance is worth to you and the relationship of money now to money in the future. These are all really complicated!
The 401k is only more transparent if all you care about is "how can I maximize the amount of money I gain over the course of my life" not "how much money am I going to have when I'm retired."
Certainly 401k's are more transparent *for employers*, but I just don't see why that's the same issue as transparent *for employees*.
260
Certainly 401k's are more transparent *for employers*, but I just don't see why that's the same issue as transparent *for employees*.
They are more transparent for employees because it is easier to determine how much you were paid. You received a certain amount of direct cash and a certain amount of deferred cash that goes into an account that you control and that you can access when you reach retirement age (and under certain other conditions). If you have job offers from two employers both of which offer 401k plans the relative value is fairly obvious.
In contrast if part of your compensation is in the form of a defined benefit pension, it is not at all easy for the average person to evaluate the value.
258: I'm certainly not going to advocate for dismantlement of current pensions but, as long as it's happening anyways in the private sector, why not see it as an opportunity to try to expand SS?
Good idea; I'm in favor. It's unlikely to happen, of course, but if nothing else, it would encourage the much-vaunted small business entrepreneurship that's supposed to drive our economy. As it stands, people are driven to seek employment with larger companies or the government because that's the only way to secure decent benefits, including pension.
By the way, in the paragraph previous to the one I quote from 258, for "employee-provided health insurance" I think you mean employer-provided, right?
258
Seriously, I suspect that you may be better off arguing with me than with James here because I believe James is doing the thing where he doesn't actually take a policy position , he just nitpicks generalizations and assumptions (I don't think he's ever said that Defined-benefit pensions aren't good, just that (a) they aren't as popular as their defenders make them out to be and (b) he personally is indifferent towards them). Unfortunately I also think his nitpicks are correct to some degree.
My policy position is that defined benefit pension plans should be required to use honest accounting and that employers should be required to keep them fully funded at all times. This seems politically impossible so I think public entities shouldn't be allowed to offer defined benefit pension plans at all.
258
I am aware of that, and I think that some of that may be a judgement about risk as well as value -- the unions may, correctly in my opinion, believe that if they give up benefits that they will never be able to get them back, whereas if they give up wages they may be able to negotiate for higher wage increases in the future.
I think the popularity of retirement pay (and health benefits) in public sector contracts is mainly an artifact of dishonest accounting. Politicians can promise benefits and stick future politicians with the problem of paying them.
By the way, in the paragraph previous to the one I quote from 258, for "employee-provided health insurance" I think you mean employer-provided, right?
Yes, thank you. I was typing quickly as I was running out the door (to the farmer's market). It's also been a long week and my attention to detail is starting to slip.
One of the big reasons that many pension plans are in trouble today is that employers -- including state governments -- took huge gambles with pension plan investments instead of investing them prudently in order to be able to meet their obligations.
Or like with New Jersey they just pretty openly just stopped paying into the thing to balance the budget and now that the inevitable has happened it's time for employees to "tighten their belts".
Our current wage negotiations here locally are as follows. Impasse because the mayor's offer is that in return for getting a *raise this summer at the start of the new fiscal year we are to totally give up the current system of yearly merit increases and COLA's for a new compensation plan TBD under which we might make more. No numbers or anything, we're just to sign away everything on his good word that we might make more in the future.
*To really put the shitiness in perspective, what the mayors office is calling a raise is an offer of 4 percent. We didn't get last years merit increase or a COLA and the current offer would of course get rid of this years merit step. The two merits I'm owed come July would be close to a 13 percent increase. "Hey, how about you sign away all raises under the current system in exchange for a 1/3 of what you're currently owed". Naturally our greedy union's response was "you've got to be fucking kidding me". And this is from a supposedly liberal Democrat mayor. Awesome.
265: Have your neighbors been assholes? That's so uncool.
You're right that it's hard to compare defined benefits offers to other offers. But that doesn't tell you which is more complicated, only that translating from one to the other is hard. I don't actually care that much what someone is paying me, I just care that it's enough to have a comfortable life. That's easier to tell with defined benefits.
I'm not really arguing with your real claim that people undervalue defined benefits plans relative to their actuarial value. That seems plausible to me. but I think that's because 401ks are less transparent and people overestimate their worth.
268
You're right that it's hard to compare defined benefits offers to other offers. But that doesn't tell you which is more complicated, only that translating from one to the other is hard. ...
This is getting silly. The purpose of a common medium of exchange like the dollar is to make things simpler. There is a reason that doctors don't want to be paid in chickens and it is the same reason workers would rather be paid in cash (all other things being equal).
269
I'm not really arguing with your real claim that people undervalue defined benefits plans relative to their actuarial value. That seems plausible to me. but I think that's because 401ks are less transparent and people overestimate their worth.
I don't see how anyone can plausibly argue that defined benefit pension plans are more transparent (easier to value) than 401k plans.
The IBM defined benefit plan was backloaded in that the value of the benefits earned was much greater in your later years of employment than in your early years of employment. (I believe this is typical of defined benefit plans). But this made it very hard to value. As well as the standard issue of what discount rate is appropriate to value future cash payments you had to estimate how likely you were to remain with IBM, the oppportunity cost of commiting to IBM, possible changes IBM might make to the plan in the future and their associated probabilities and effects on you etc.
The IBM plan had some step function threshholds. If I had been laid off a few months earlier my benefit would have been about 20% less. Employees don't like this sort of uncertainly and they appropriately discount the value of plans which have such pitfalls.
401k plans are much easier to value. You get a certain amount of additional cash to which you have restricted access.
268
... I don't actually care that much what someone is paying me, I just care that it's enough to have a comfortable life. That's easier to tell with defined benefits.
You sound like you have tenure. Most people do care what they are being paid.
265: Have your neighbors been assholes? That's so uncool.
(checks to make sure that I linked to the correct comment).
No, not at all. I was just referring to the fact that I was working last Sunday (which was incidentally one of the first really nice weekends of the year) scrambling to finish things up for a deadline on Wednesday which, as it turned out, was mostly my work.
It went well, nothing broke, but I'm a little loopy today.
Glad you got it all done. Hope you get to unwind a bit.
266: Naturally our greedy union's response was "you've got to be fucking kidding me".
In Union Heaven, all the contract negotiators are from the cops' union.
The thread has moved on, but since I once knew something about this (I almost took a job once doing financial projections for USPS) I thought I'd chime in. I'm too lazy, though, to google to make sure this is all still correct.
1) The USPS has not been a long-run money-losing enterprise. In general, it has roughly broken even.
2) The basic financial model is that bulk mail -- all of the stuff that you throw right in the trash -- is priced above cost, and subsidizes first-class mail which is priced below cost.
3) It has been clear for at least 10 years that that model is threatened by the internet, as bulk mail volumes seem almost certain to shrink.
4) The USPS has long recognized this, and has (among other things) tried to move into the profitable overnight delivery market. But they've been hobbled by Congress, which tends to listen to the UPS and FedEx lobbyists telling it how terrible it would be for them to have to compete with USPS.
5) My impression is that the current USPS losses are largely a result of the recession, which has caused losses in _lots_ of companies. The recession probably hit USPS worse than other enterprises, both because advertising was hit particularly hard (hence all the newspaper layoffs) and because USPS was less inclined than most private companies to lay off thousands of workers in order to maintain its profit margins.
6) Not really relevant to this discussion, but nevertheless interesting: Absent world-historical recessions, USPS profits/losses have a very clear cycle, with large profits that then decline over the next few years and turn into large losses, before turning into profits again. The problem is that their main price variable is a first-class stamp, which can only go up in increments of 1 cent. Each penny that a stamp costs translates into, if I remember correctly, 100s of millions of annual revenue. So when they raise stamp prices, they show big profits the next year, which then erode as the real value of the stamp is eaten away by inflation. When the losses get big enough, they raise stamp prices again. This is becoming less of a problem as the price of stamps rises -- instead of 1 cent being a 4% increase when stamps are 25 cents, it is now closer to a 2% increase. But it is still a problem, in part because the need to print hundreds of millions of stamps and give people time to use up their old stamps means that price increases have to be decided several years in advance.
Needless to say, 1-5 suggest that James Shearer's complaints about overpaid USPS workers are a red herring. The problem at USPS isn't the costs, its the revenue. And that revenue problem doesn't have much to do with political restrictions (except those preventing USPS from eating FedEx's lunch); it mostly comes from a shitty economy and a technological shift that isn't exactly USPS's fault.
276: I recall many, many years ago having an external auditor briefly question our use of e-mail to other companies as potentially violating the postal monopoly. I am not sure if that was ever. This 1999 c-net article is from when the GAO began to really project a first-class mail decline (while noting the increase in item shipping from Amazon et al). Interesting to note: The GAO's gloomy outlook further contrasts with the fact that the USPS expects to announce a record fifth consecutive year of profits on record revenues of $62 billion.
276
The USPS has not been a long-run money-losing enterprise. In general, it has roughly broken even.
So how come it has $100 billion in unfunded pension and retiree health care obligations?
The basic financial model is that bulk mail -- all of the stuff that you throw right in the trash -- is priced above cost, and subsidizes first-class mail which is priced below cost.
You sure about this? Lots of people think it is the other way around. Although allocation of fixed costs between bulk and first class is going to be somewhat arbitrary.
... But it is still a problem, in part because the need to print hundreds of millions of stamps and give people time to use up their old stamps means that price increases have to be decided several years in advance.
The forever stamp is supposed to alleviate this problem.
Needless to say, 1-5 suggest that James Shearer's complaints about overpaid USPS workers are a red herring. The problem at USPS isn't the costs, its the revenue. And that revenue problem doesn't have much to do with political restrictions (except those preventing USPS from eating FedEx's lunch); it mostly comes from a shitty economy and a technological shift that isn't exactly USPS's fault
Historically the USPS has used its large potential monopoly profits to pay more than it had to and charge less than it could. Now that technological change is reducing this margin something has to give.
to pay more than it had to and charge less than it could
Holy shit, they must have been insane or Marxists. Max prices and minimum wages with as much of the profit as possible going to the top. Anything else is communism (or maybe Costco, I forget which).
270: But dollars now and dollars in the future are not nearly as simple as dollars and chickens.
272: Not yet, though I fully intend to someday. But this is of course the point, obviously defined benefits plans are more appealing for people with job security than for people without job security. I don't think IBM switched because 401ks are better in general, but instead because they were switching from a model where they employed people for their entire life (like my grandfather-in-law) to a model where workers don't have much job security where 401ks are more appealing.
It is almost as if the purpose of the Post Office is to provide a valuable service to everyone in the country at a reasonable cost rather than to generate the maximum profits for shareholders.
Also, thanks Spysander. You should comment more often.
You sound like you have tenure. Most people do care what they are being paid.
The reason people care about what they are being paid, beyond it being sufficient to live comfortably, is that they have to save like pack rats to survive in retirement. Unless they have a decent pension scheme, QED.
(There is, admittedly, a minority who are insatiably avid for higher and higher salaries, because they actually believe that he who dies with the most toys wins, but most people aren't really playing that game, and it's questionable whether those who are count as people anyway.)
I haven't commented on this thread because I am such an irrational squealing fan of the USPS that it's hard for me to write grammatical sentences about this love. The French and German postal services are teh suxxor in comparison. FedEx and UPS are incredibly expensive in comparison, without necessarily offering faster service.
But this is of course the point, obviously defined benefits plans are more appealing for people with job security than for people without job security.
Only if you don't have laws providing for transferability of accumulated pensions. They do, or at least did, in Switzerland plus provisions allowing for the switching of pension obligations into 401k type plans, all at the discretion of the employee.
279
... Holy shit, they must have been insane or Marxists. ...
Nah, that's just how government works. Surplusses are unnatural and are dissipated by increasing spending (on wages in the case of the USPS) or cutting revenues (keeping prices low in the case of the USPS). The problem is the pot of money from which politicians have been doling out goodies (generous wages and cheap postal rates) is disappearing. According to this revenue per delivery has gone from $1.80 in 2000 to $1.40 now (2010). There is no reason to expect this trend to stop any time soon.
280
But dollars now and dollars in the future are not nearly as simple as dollars and chickens.
Which makes dollars in the future an even more problematic form of payment than chickens.
285
Only if you don't have laws providing for transferability of accumulated pensions. ...
I don't know what this means. In the US if you change jobs you generally don't lose any pension benefit you have earned with the first employer but because the formulas are back loaded you don't do as well as working for one employer continuously.
In the US if you change jobs you generally don't lose any pension benefit you have earned with the first employer but because the formulas are back loaded you don't do as well as working for one employer continuously.
And in Switzerland that isn't or wasn't the case. If you, for example, had gone from IBM to another company, your previous years of service would transfer to the new pension plan. IBM would be required to pay that new company money to account for that.
290
And in Switzerland that isn't or wasn't the case. If you, for example, had gone from IBM to another company, your previous years of service would transfer to the new pension plan. IBM would be required to pay that new company money to account for that.
I don't see how this would work unless every company was required to offer exactly the same pension deal.
288: But both 401k's and defined benefits are money that you only get far in the future. So they're both money in the future.
Anyway 283 does a better job making the point I've been trying to make.
They didn't have to be exactly the same, and there was some sort of uniform accounting calculation rule to deal with the conversion. They were also backloaded, while the conversion to a 401k type thing didn't take that into account. So for someone like my mom, who started working in the Swiss private sector in her early forties, converting the pension into money was clearly advantageous if you did it at the right point in time.
292
But both 401k's and defined benefits are money that you only get far in the future. So they're both money in the future.
No, 401ks are money you get now with some restrictions on what you can do with it. They are much closer to cash than defined benefit pensions.
294: That is so facile a definition as to be almost inconceivable as anything but a deliberate obfuscation. The entire ideology which is used to promote 401(k) accounts is that you will contribute to them for a reasonably long period time (on the order of at least two decades), so as to maximize your leveraging of their tax-deferred status. If you are looking at them as "money you get now", then you have to take into account that any time you want to use that money "now", you will lose the tax-deferral and pay the 10% penalty on top of that. Any rational actor who was able to negotiate from a position of strength (e.g. as a member of a union), would prefer a guaranteed defined-benefit pension over the crap shoot of a 401(k) account. The only reason people choose to put money in 401(k) accounts is that they do not have the option of a defined-benefit pension.
295
401k type accounts are replacing defined benefit pensions in the private sector because workers prefer them. Sure you pay a penalty to access the money immediately but you have no way of accessing a defined benefit pension immediately at all. Note another advantage of 401k type pensions is that you can choose your savings level. Defined benefit pensions depend on phoney accounting to hide the true costs. With honest accounting they are clearly inferior to 401k type arrangements.
401k type accounts are replacing defined benefit pensions in the private sector because workers prefer them.
Bullshit. DB systems are simply being closed to new entrants by management. You can't join a pension scheme that doesn't exist. ISTR one consequence of the new supposedly "honest" FRS17 accounting standard was that a large UK manufacturing company (R-R, I think) was told it had to pre fund its DB scheme's notional infinite horizon deficit although the actuaries expected it to be in surplus within 15 years as the retirement pig passed through the python.
Further, as TKM points out, transfer of undertakings is entirely possible and is in fact done all the damn time.
207: I'm locked into this low stress, high paying job and I can't take it anymore!
My work environment is not low-stress, but my job has less responsibility than others, so it's not as stressful as some, though by no means easy.
The thing is, though, that I'm starting to get really bored, and I'm looking for a new job. I was trying to think through the other day how much money I would need to be paid to want to keep my current job. There was a kind of complicated balance between how much more career advancing a potential job was (if it were a lot, I'd leave in a heartbeat, a little bit more advancing, I'm less sure) and how readily I would leave my position. I think that at around $100K I was unsure. $250K I'd stay for a while to pay off loans and save, but since those are totally unrealistic in human services, I know that I want out ASAP.
Anyone w/ info on medical researchers doing clinical/translational work or better yet economics types who need research assistants, let me know.
Sir Kraab, I'm a little bit confused by your comments. One of the things I thought that I had learned about ERISA was that when investments were really highly valued, a company could *not* contribute more to its pension plan--even if actuaries knew that the current returns were unsustainable and the plan would then be underfunded.
Then, during more difficult times (when a company might be meeting current obligations and its assets might reasonably be viewed as udnerfunded) it had to top up contributions considerably.
via Ezra Klein a good article about the USPS.
さり気なくオシャレに、それがグッチ 財布＆GUCCI バッグの世界！定番人気のグッチ ショルダーは、上品さ薫る至高のGGスタイル！！