California’s Crippling Brain Drain

by CalWatchdog Staff | December 5, 2010 4:31 pm

DEC. 5, 2010


Three articles caught my eye Sunday morning, and what a tale they tell!

The first article[1] said that Donald Lamm, 57, has announced his retirement as city manager of Westminster, an Orange County city of 88,000, where he was taking down a $207,000 annual salary.  Lamm said he was going to start his own business.

The second article[2] said David Freeland has announced his retirement as deputy Ppolice chief of Irvine, which is routinely rated as one of the safest large cities (pop. 208,000) in America.  Freeland, 59, appears to have been paid close to $200,000 a year.  Now he plans to teach martial arts, write a book and spend time with his family.

Freedland and Lamm are something of anomalies in California’s public sector, since both worked longer than they had to in order to get their maximum pension benefit.  Still, in the terms of the entrepreneurial private sector, Freedland left at least 11 productive years on the table, and Lamm left at least 13, assuming entrepreneurs retire at 70 – a generous assumption, given what I’ll get to in a moment.  The cities had invested much in these men’s expertise, not just paying their salaries year after year, but also spending generously to train them – and keep them healthy and well-rested with generous health and vacation benefits.  They were at the top of their games, in a position to pay Irvine and Westminster back handsomely on their investments, but instead the manager and the cop collected their chips and left their cities.

And they had plenty of chips to take with them, given California’s generous public employee pensions, which currently have mounted a half-trillion-dollar unfunded liability[3] for the state.  Both men will receive a lifetime annual income from their pensions roughly equal to their last-year salary.  No wonder most public employees retire the moment they’re fully vested.

And that brings us to the third article[4], about how debt is forcing Baby Boomers to reconsider retirement. The article shows how many private sector retirees are looking at bankruptcy as their only retirement option, and says:

“We may be entering several generations of a depression era for future U.S. retirees,” said Thomas J. Mackell, former chairman of the Richmond Federal Reserve Bank.

“The problem is 50 percent of baby boomers are ill-prepared financially to retire,” he said. “They just don’t have enough money, and many of them are in debt.” …

For a variety of reasons — from medical bills to limited retirement income to relatives in need — a growing number of older people have been turning to the bankruptcy courts for relief in recent years. …

“With the job environment the way it is and the problems people age 50 and over are having finding employment, the continuation of their problems could increase dramatically if the economy doesn’t turn around,” [bankruptcy attorney Theodore Connolly] said.

No such worries will plague Freedland and Lamm, or any of the other thousands of California public employees who will leave working behind this year to enjoy many, many golden years at the people’s expense.  Since they enjoy fixed benefits, they know they’ll be covered no matter what the economy does.

So we have public employees retiring in their 50s to follow their dreams, while those in the private sector – who paid the salaries of Freedland, Lamm and the others – are looking down the barrel of something that feels very much like a Great Depression. They have no fixed, permanent public benefit awaiting them, other than Social Security, which may well turn out to be neither “fixed” nor “permanent.” As a result, they’re putting off their retirement plans and are hoping to stay healthy enough to work well into their seventies.

You’d think the very least our public sector cohorts could do would be to give their all for another 10 years or so, since it’s going to require all the brain power we’ve got to get California through the next decade.  They did their part in getting us into this mess, so why are we paying them so generously to not take part in getting us out of it?

  1. first article:
  2. second article:
  3. half-trillion-dollar unfunded liability:
  4. third article:

Source URL: