My cousin recently retired early from San Jose's city government for a simple reason. If she left now, she would not have to face the drastic cut in pensions and medical benefits she would incur if she stayed a year longer.
San Jose is in the news yesterday as the latest municipality that is trying to deal with all the benefit promises made to its municipal workers. While Medical care and pension for life made sense 50 years ago when people died 5 years after retirement and a birth cost $5.00, ($5.50 including circumcision), these benefits are not sustainable today. People are working 20 years and then retiring with these expensive benefits and living another 40 years.
The unions who negotiated these benefits were not negotiating with a management team who was trying to keep the company profitable but with the elected official they supported in the first place. As a result, these ridiculously generous benefits are bankrupting cities, states and soon the nation.
Those of us in the private sector watch pensions transform into self-directed 401(k) plans and our share of medical medical coverage soar to $600 a month. It's time government workers took on the same burden.
Where are the leaders who are going to take the reins of these troubled communities and make the tough choices to bring them back to financial solvency?
Read today's NY Times article to see how this problem is affecting a large, middle-class, tech-savvy city like San Jose. Soon it will be affecting you. Get ready.