Cops, and Robbers
From the Aug. 30, 2010, issue of NR.


Daniel Foster

Throughout these crises, the unions have succeeded in casting the choice as one between public safety and layoffs, avoiding reductions in, or even talk of, their extravagant compensation packages.

According to the Bureau of Economic Analysis, in 2008, state and local governments spent $1.1 trillion on public-employee compensation, a number that accounts for fully one-half of their total spending. State and local employees earn, hour for hour, 34 percent more in wages than do workers in the private sector, and enjoy far more generous health-insurance, sick-leave, and pension benefits.

The public/private disparity is especially stark when one focuses on public-safety compensation in places such as Oakland; police and firemen have accounted for about 75 percent of expenditures from the city’s general fund over the last five years. Average total compensation for an officer in Oakland — a city in which the median family earns $47,000 — is $162,000 per year.

As with most public-sector workers, a major — and opaque — piece of emergency-services compensation comes in the form of lifelong pensions.

“Public-safety workers tend to receive the most generous public-employee pensions,” says Josh Barro, a Manhattan Institute fellow and expert on state and local finance. “They are based on a significantly shorter career — it is not atypical to see police and fire pensions based on 20 years of service — and they also tend to be more generous as a percentage of salary.”

Other laws make the payouts even more generous. In New York, for instance, a “presumptive disability” law makes it easy for firemen to secure lifetime, tax-free pensions at three-quarters pay; when examining a fireman for the purpose of determining whether he has a work-related disability, a doctor is required to start with the assumption that certain illnesses are job-related even if there is no evidence that they are. A fireman from a Bronx ladder company who develops a lung disorder will qualify for disability retirement even if it’s unclear whether he developed his impairment from smoke inhalation on the job, or from his two-pack-a-day cigarette habit.

The “presumptive disability” bonanza is sometimes exacerbated by abuse. In July, the New York Post told the story of John C. McLaughlin, a 55-year-old former FDNY lieutenant who retired in 2001 with an $86,000-a-year disability pension, after it was determined that he was an asthmatic with diminished lung capacity. This despite the fact that McLaughlin is an accomplished triathlete who regularly competes in long-distance races.

McLaughlin is hardly alone. An astonishing 80 percent of 2010 FDNY retirees have qualified for disability benefits.