Not all, and they are rarer today, pensions were totally insane back in the day.
One of my mothers friends, who is now in her 80's, has been retired on a pension for over 40 years. She started working for her municipality right out of high school at 18, and worked 25 years as a clerk to get a full pension. Retired at 43(!) with 75% final pay (annually adjusted) and lifelong medical benefits.
Its totally insane and completely unsustainable. Back in the day people usually keeled over at 65 and the US was viewed as having achieved infinite growth forever, so perhaps back then it was a reasonable but generous offer. Today however it's just straight up corruption and waste to offer benefits like that.
My Dad's friend is a retired fire chief, my Dad told me he makes $300K a year in retirement! That is beyond insane as it ends up costing (with a retirement at say 55) about 30 or so years of payments which adds up to $9M for the reminder of his life. This is clearly not sustainable and when you add up social security and 401k it ends up with a kings ransom for a public servant.
What about solidarity? Instead of criticizing another worker’s situation as “insane”, we should be asking: why can’t we also have this kind of retirement package? They’ve successfully pitted worker vs worker.
I don’t think that retired fire chief’s (or school teachers') retirement is what’s wrong: what’s wrong is that most of us will not have a retirement that good. Why is that? It is possible to answer that question without tearing down someone else’s situation.
It comes from crab bucket mentality and a pervasive fear that somebody somewhere might be getting something they don't "deserve".
Everyone who gives a company years of their life should be able to comfortably retire after decades of service, but companies have managed to convince workers that most of them should work until the day they die and only a small precious few deserve to retire and finally be allowed to spend time with their loved ones.
How does that work? That guy, pensioner, who has it slightly better than you, is a different way of saying that:
1) that guy gets your labor, for decades. 4 decades to be exact
2) for less than you'll get for that work
(that's what getting a higher pension actually means in the real world, with money being an abstraction and all that)
3) he (or she) doesn't get more because they worked harder or better, but because they were working when a random political vote needed to be made (paid for, really). And that, not only won't repeat, but there's absolutely nothing you can do to change the situation to your benefit, even just to equalize. That last part is of course what makes taking away their benefits attractive.
Sounds pretty unfair to me. At least with a CEO they did something to get what they got, and there is a way to get their position, even if most will never achieve that.
It's absolutely unfair. But the solution is to raise the rest of us up, not tear these people down. Why don't I have a retirement like that? Why don't you have a retirement like that? Those are the questions we should be asking. Not "He shouldn't make that much!" The people who earn literally 100X that pensioner are laughing at us as we fight each other
How would that work? Could you explain? Because the only way to do that is to lower the price of labor. To greatly increase the availability of labor. You can do this with a lot of births, and we're finding out you can't really do it with immigration even.
So how would that work? The children that would need to provide that labor for me when I'm 65 would have to have been born already (they start work at, say, 20 years old). This has already happened, therefore, and cannot be fixed.
... which is of course another argument to take the pension away ... after all that's the only way to make it fair. You can play games with money, but money is an abstraction. You cannot raise up the necessary amount of people, the amount of people politicians promised us in trade for votes. It's not a matter of priorities anymore either, we're past the point where using 100% of the labor force would work.
Only a select few can acquire that kind of retirement and it's borrowed from everyone else. It's selfish.
The pension generations over spent and borrowed heavily to fund their retirement and lifestyles. The subsequent generations pay for that. It's selfish and short sighted.
It's more sustainable than many other business practices. Nobody is worried about sustainability when CEOs are making hundreds of times more money than the average employee at the same company or when shareholders relentlessly enshitify everything so that they can keep getting more and more profit quarter after quarter.
pension plans were not only sustainable since they started in 1875, but the economy thrived and companies grew powerful while workers had them. Historically, some companies tried to screw over their workers and mismanaged their pension funds, resulting in problems down the line, but that was mostly greed.
Funny how, when they talk about executive compensation, platinum-plated perks, corporate parties with lobster stacks and vodka fountains for the top brass, and of course, dividends and stock buybacks--not a peep about how sustainable it is. But when you talk about pensions and employee salaries, all of a sudden, everyone's so concerned about it being sustainable...
US GDP per capita is ~80k. IF you eliminated every billionaire and leveled every salary, this is the max you could get. Much less in actuality, because you would have a universal tax rate of about 40% on that to support the federal government, so ~50k per person after taxes.
> Retired at 43(!) with 75% final pay (annually adjusted) and lifelong medical benefits.
I don't think that's insane at all. Sounds pretty reasonable in exchange for taking at least one third of her time for 43 years of her life (and over those years where she was young and most healthy).
Corporations used to offer similar pensions all the time. They started offering them in 1875 and they were extremely successful doing it. 401(k) plans were a scheme to shift the risk and responsibility from the employer to the employees and that change made already wealthy and successful companies a lot richer, but at the expense of making many people work right up until the day they die, or they become too sick to work at which point they become impoverished. The move from pensions to 401(k) plans was bad for the economy, and for local economies in particular.
The only thing I think is crazy about it is the lifelong medical benefits which shouldn't be on the employer at all since everyone should have universal coverage.
My mom has been retired from teaching for over 30 years — and she got a package to retire early.
Weird situation. Shrinking demographics in the 70’s led to layoffs. By their union contract layoffs were done strictly by seniority. Working on a contract that was stepped by seniority, this led to a very top heavy cohort of teachers 20 years later, who were being paid top of the scale. To redistribute the ages of service they offered a limited number of buyouts, which lowered their overall costs and normalize the pipeline.
This was also a legit and reasonably sustainable move as the NY State Teachers fund, is funded at 101% of liabilities.
If your mother's friend's situation actually unsustainable? It sounds like the pension actually has the money, since I'm assuming they're not able to print money (like what is necessary for certain old-age insurance programs). Or do you just mean that it's not sustainable for everyone to have that same situation?
It's not her fault. However, as a taxpayer, I don't want my money to be taken from me (postponing my own retirement) to fund her retirement. And that is absolutely going to happen with insolvent pension funds.
> as a taxpayer, I don't want my money to be taken from me (postponing my own retirement) to fund her retirement.
by that logic, sure, as shareholders in Meta (or any public tech co), we absolutely don't want employing expensive human devs to fund their retirement.
The difference is, of course, that investors can sell their shares if a compensation policy is overly generous. And, even if they hold onto them, if the company goes bankrupt because of labor expenses, the government doesn't grab investors' personal assets to allow employees to keep getting their compensation indefinitely.
It's not about fault, it's about providing better than you got for your children and grandchildren. If you - and the people compensated with the same equities that fund your pension - are putting substantial downward pressure on earnings for the current generation of laborers and it's having all sorts of knock-on effects, you're failing to provide better for those coming after you.
You can’t solve that by taking away existing pensions. If that’s your preferred method of balancing budgets then expect no sympathy when your company cancels your RSUs
> can’t solve that by taking away existing pensions
Of course you can. Pensions are a form of debt. If the state is bankrupt, it's reasonable to trim its creditors. Pensioners included. (The politically-savvy way to do this is probably to spin off the pension fund as its own entity and then default on bonds, which the pension fund would hold alongside others. Then leave it to the pensioners to figure out how they haircut themselves.)
I'll speak to this personally. In April 2021 New York City raised its top tax rates. I'm only moderately wealthy, but that prompted my moving out of the state.
> is an even better argument for universal pensions (which isn't Social Security, as was never meant to be treated as a pension to begin with)
That's one option. Another is better distributing productive capital. Building public housing so its occupants wind up owning it, for instance.
But that's getting into top-down redistribution at the federal level, which isn't in the cards for now. Within the context of cities and states, pensions are no longer a good idea.
Morally, they shouldn’t. But practically: because old people vote—en masse and consistently, and young people don’t. Until that changes, our systems will continue to be designed to transfer wealth from the young to the old.
> You can’t solve that by taking away existing pensions.
Of course you can, especially when you look at the public debt racked up by the generation that is now retiring. Now, there will likely be consequences come election time, but math is math. The current generation of retirees spent too much and did too little to cover the costs over their working lives.
> If that’s your preferred method of balancing budgets then expect no sympathy when your company cancels your RSUs
I don't have RSUs at my current job. A significant plurality, if not majority, of laborers today don't either. If you're making $50k doing clerical work, have no RSUs at the company, and the company is having to make all sorts of cuts to meet pension obligations, what do you care about equities and their effects on current retirees?
At the job that I had that did have RSUs, I got about $3k, pre-tax, for all of them when the company was acquired by Oracle after about four years of cancelling raises, downsizing, and restructuring. I would have been far better off if that time had been spent by management giving COLA raises, if nothing else, given that this coincided with the COVID housing price and consumer goods inflation trend.
RSUs only really matter if you get a metric crapload of them, whether over decades or as a part of your compensation package, and only executives get that kind of volume.
> perhaps back then it was a reasonable but generous offer.
No, it was a trade. You would accept low pay, very little opportunity for career advancement, and even if you worked hard to advance you were never going to more than double what you were making when you were hired. Also, government jobs are political jobs, are often eliminated on a whim, or you're forced to work unpaid for a while because of a budget vote.
In return, you got a pension. A pension that everyone understood the yield of, and everybody understood about what it was worth. It was entirely sustainable. The problem was and is that invested pension funds become underfunded because if instead of depositing the money, you spend it somewhere else and promise to put it back later, it's basically a low-interest loan. If the budget is tight enough (so credit is probably bad enough) that a state or municipality is considering raiding pensions, then this represents a huge amount of savings. The problem is that you're never going to pay it back.
Another problem is that managing those funds became lucrative for the managers, and for the products that they would steer these institutions into buying, often in exchange for kickbacks or in a complex web of self-dealing: Somehow, the person managing pensions funds for your state has them all invested in products sold by a company his son works for. His son didn't directly profit from the trade, but for some reason makes $500K a year, barely graduated high school, and nobody knows what he actually does there.
That's not the fault of pensions, that's the fault of thieves. What's unsustainable is a government that promises a pension in return for a shitty boring career as a clerk, and then after you retire from sitting in a DMV window for 25 years, takes the pension back. Nobody would accept a government job cheaply then, because the state has ruined its reputation in the same way as if they had defaulted on their bonds.
Nothing wrong if that's how we want to pay government employees: a days work for a days pay. But we got a discount because we didn't pay like that, and if we had, that money would just have been spent at the time, rather than being stolen throughout their retirement. Pretending like pensions were an unreasonable demand or an absurd promise is just laying groundwork to justify stealing from people who worked for a living.
edit: If government jobs were so good, why weren't they in demand? Does supply and demand only break down when we need it to?
1) If pensions are so easily manipulated and stolen from, that's an argument against pensions, not an argument for them.
2) Although the factors you mention are real, they are much smaller than core issue, which is the state underfunding the pension, either explicitly or through unrealistic expectations of return.
3) Even granting that the present government should make sure that pensioners get their full benefits, why should current workers be the ones to bear the burden of past bad decisions by policymakers? You could just as well tax pension payments more highly, and use that revenue to fund the pensions.
> Retired at 43(!) with 75% final pay (annually adjusted) and lifelong medical benefits.
Some go on to another municipal job and get a second pension so they get paid twice as much to do nothing in retirement. I know someone who worked for the USPS then on to the NYC DoE as a janitor in a school. His wife worked for the public school system as well, then went on to work in a catholic school after retirement. Three pensions in one household. They invest a lot into long term investments such as bonds, CD's and the like. I hear they have millions in the bank.
The people who worked those jobs are all sitting pretty right now. I know plenty of people who made out like bandits in various NYC agencies, especially in the DoE. My aunt left her heirs 2.2 million and a house worth a million from her pension money she heavily invested and was still able to travel the world in retirement. She was a secretary in a middle school. Amazing what you can do with tons of free time and money.
I've got people in my family in similar situation. 25 years in an unskilled cushy job was enough to buy a lifetime of cushy retirement. Boomers were basically handed life on a platter.
I always see the words pensions in civic deficit news. I'm early 30s and pensions are a concept that nobody my age or younger will ever benefit from yet is footing the bill for.
You’ve already benefited from them, by getting government services at a lower up front cost by acquiring labor with the promise of them on the backend.
(And, barring those promises not being fulfilled, plenty of people your age and younger have already been working in jobs that qualify them for pensions when they reach a certain age, or have a relative with such a pension with survivorship benefits, and will benefit from them as beneficiaries.)
> Most of today is the result of stealing from the future, and that strategy is running out of steam
If you "calculate the net present value (NPV) of benefits received minus taxes paid for US generations born 1850 to 2090," you find "all generations 1950 to 2050 are net gainers, while many current elderly are losers" [1].
("There are two peaks in net benefits. The first peak was centered on the cohort born in 1908 which experienced the large windfall gains from the start-up of social security but missed much of the windfall losses from the expansion of public education funding. On net, the 1908 cohort received net transfers amounting to 5.7% of lifetime earnings. The second peak in net benefit is centered on the cohorts born in 1993-94 which experienced the positive benefits of the educational expansion funded by previous generations and which are projected to avoid the looming net costs of paying the social security and Medicare implicit debt. On net, these cohorts are forecast to receive net benefits amounting to 5.6% of lifetime earnings.
There are three sets of cohorts which experienced net losses through the transfer systems. Those born before 1880 experienced net losses due to the expansion of the public education system. Those born between 1930 and 1947 also experienced net losses. While these cohorts did receive large windfall gains associated with the start-up periods for Social Security and Medicare, these were more than offset by windfall losses from the expansion of the public education system. Cohorts born after 2060 are expected to incur increasingly large net losses via the public transfer systems as Social Security and Medicare overwhelm the gains through education.")
I would like to see an update, as this paper is ~15 years old. I also don't see it accounting for real estate costs outpacing wages, requiring younger cohorts to devote arguably unreasonable amounts of their current cashflows to housing. My statement does not scope solely to public transfer systems, but the economic system as a whole. Today wants returns, while issuing as much future obligation as possible (in various ways, debt instruments, higher future taxes, etc) for someone in the future to pay.
> don't see it accounting for real estate costs outpacing wages, requiring younger cohorts to devote arguably unreasonable amounts of their current cashflows to housing
"Millennials are now wealthier than previous generations were at their age" [1] on the back of home-price appreciation [2].
> By age 30, just 42% of millennials owned homes, compared to 48% of gen Xers and 51% of baby boomers, an analysis of government data by Apartment List found. This gap persists into their early 40s, with the oldest millennials still having a lower rate of ownership than previous generations when they were that age. ...
> But turbulent times may be ahead for millennials. Experts say that the window of improved affordability may have already closed.
> “They bought houses and they are active in the market,” said Lautz of the NAR, “just not at the rate that we should be seeing for this age category.” Housing affordability has declined steadily in 2023, according to the NAR, as has inventory, from 1.9m homes in June 2019 to 1m today. And this year, boomers are once again the largest group of homebuyers, often competing with millennials looking to buy their first home.
> The personal savings rate is now 4.3% compared to an unusually high rate of 33.8% in April 2020. And Experian expects student loan payments – on pause during the pandemic – to resume in October at more than $200 a month on average.
> Matt Kinghorn, a senior demographer at the Indiana Business Research Center at Indiana University, said the increase in home ownership among young adults over the last few years “could potentially be short-lived, driven by those really low mortgage interest rates and a surge in personal savings during the first year of the pandemic”.
> One commonly used (though also criticized) benchmark for housing affordability is that no more than 30% of household income should go toward housing costs. Households that spend more than that are considered “cost burdened” by the U.S. Department of Housing and Urban Development.
> By that standard, 31.3% of American households were cost burdened in 2023, including 27.1% of households with a mortgage and 49.7% of households that rent, according to 1-year estimates from the Census Bureau’s American Community Survey (ACS). (Many more people own than rent: In the second quarter of 2024, 65.6% of occupied housing units were owned while 34.4% were rented, according to the most recent estimates from the Census Bureau’s Current Population Survey/Housing Vacancy Survey.)
NPV of deferred payment being less than the equivalent payment is not sufficient to demonstrate savings. 1) you must know the market clearing rate of the up front payment. 2) This sidesteps the difference in payer.
$100 today and $100 is cheaper than $200 today, but not if the alternative is $101 today. Similarly, you might not agree is a good deal if I offer $100 today instead of $200 and leave you the $100 debt. Beneficiaries are not the same as the debt holders.
Lastly, deferred payment is a good deal if I invest the present savings. If I dont, the NPV calculation benefit calculation isn't applicable.
Now financial instruments like pensions are stealing? In what way? Those workers worked for that pension. It’s funny how the top wealth owners have vacuumed up more and more wealth and you’re mad at the regular Joe working a 9-5.
My city, Chicago, is one of the ones mentioned in TFA. We had about 15 years of pension holidays, where contributions were not paid and the the catch up payments were scheduled far into the future. It is now the future and the people who had their taxes artificially lowered have long ago retired to Florida. The workers are owed a pension but it's being paid by current workers not those who got the tax breaks.
Chicago is a very poor example... the city is terribly run and horribly corrupt and has been or decades. There are reasons the rest of Illinois has tried to secede from them.
Most of the revenue that funds programs in counties outside of Cook comes from the Chicagoland MSA, so I guess they can be our guests; we can use the money.
Let me expound so I can be exceptionally clear. I fall firmly in the "billionaires should not exist" bucket. They are a bug in the economic system. Bernie Sanders is my North Star from a policy and nation state social system perspective (its also more financially efficient, but I digress). I do not blame workers for our current fiscal crisis predicament.
Pensions are not stealing from the future. When done properly, invested prudently, and managed to a fiduciary standard, they are an effective mechanism to invest those worker capital earned at that time into productive investments to provide returns in the future when those workers approach retirement. Through the 401k attempt, we have shown this policy to be a failure. The human cannot be relied on to financially prepare for retirement, this must be done with systems and at scale.
When I say "stealing from the future," I mean where pensions were promised and now they're being marketed as "too expensive" when what would've gone into pensions over the last 40 years was vacuumed up by the very wealthy through management compensation and shareholder returns. I mean sovereign debt that has been issued, to be paid back by future workers who in no way consented to having to work to pay that debt back. I mean infrastructure and climate expenses that will rapidly approach $1T/year in costs, because we did not have the will to pay for these things today.
Capitalism stole from the future, and it will never be enough. Someone is going to be left holding the bag, and everyone is going to be unhappy the future is not as bright as the past was.
> Through the 401k attempt, we have shown this policy to be a failure.
401ks are a terrible on their own. It has thrown everybody for the wolves and tied people's financial wellbeing to the vagaries of the market. But there's still a flipside. Pensions should not be used to provide a level of income to maintain a lifestyle (cue anecdotes of boomers packing up and leaving for florida). Pensions should be to provide a baseline level of financial support for the essentials, perhaps a little above, say like social security but a little more. But they are not that, generally speaking. Retiring at 58 with 80% of wages - or whatever absurdities sometimes occurred - _is_ theft from the young.
It should be like a layer cake. Social Security on the bottom, this keeps you from destitution. It is insurance, not an investment. Pensions are the next layer on the cake. This provides additional income from investments made during your working career, with employer contributions mandated, and with it very difficult to touch this before retirement. Australia's Superannuation system [1] is my mental model for this. You have to have strong governance around reasonable returns and payments to prevent from the absurdities you mention. It is not tied to a single employer. The final cake layer should be personal savings and investments made by someone.
This derisks everyone's risk of the usual human failing (lack of financial sophistication, adverse events, etc), while enabling those who want to invest above and beyond a mechanism to do so. Right now, it's Mad Max with some Social Security scraps [2].
They're beneficial to younger generations, provided that there's enough value generated by the younger generations to cover the cost of the pension.
The problem is, this new wave of retirees - the Baby Boomers - did not have enough children. Their children's generation - the Millennials - can thus charge more for their labor. The Millennials also aren't having enough children.
This means that the people generating the value are taking more of the value for themselves to live on (though not relative to inflation, but that's a different conversation), and there's fewer of them contributing to pensions through various government revenue schemes.
Also, anecdotally, my parents have far more expensive plans for their retirement than my grandparents ever did.
Are you mad at the pensioners, who worked for decades on the agreement they’d get a pension, or are you mad at the oligarchs and businesses who lobbied to make pensions a thing of the past so that you’re not protected as well?
You should be mad at the Capitalists not the workers.
Patrick Boyle did a segment recently on pensions that I cannot locate. He pointed out that the private industry in the US that granted generous pensions in the mid-20th century all went bankrupt, and that is why there are not private-sector US pensions anymore. It coincided with globalization, but is more a symptom of the countercyclical nature of pension expenses. They cost most when a business can bear the costs least.
This is one of many ways that folks aged 70+ had it much better than folks in the workforce now, and represents generational inequality that you should not minimize or attribute to "capitalists."
You may, if you like, attribute it to "generosity" by individuals indifferent to "math."
It's more-- you build a tidy SaaS business. It's stable for a while. You want to be generous and skilled workers are in demand, so you offer a pension. This is good for a while, maybe a long while, and you "invest forward" as appropriate.
Then, a competitor disrupts your segment. The competitor is new, and for whatever reason does not have the same legacy pension expense. In order to compete, you must invest. But your pension expense in particular does not allow this.
What does the legacy enterprise do in this situation? In many cases in the 20th century, per Patrick, the business lost relevancy and slowly went bankrupt.
It's worth noting that a lot of shares in publicly traded companies are held by retirement and pension funds.
Money paid to a shareholder is money not paid to the person doing the labor and vice-versa.
That's not to say that pension funds are the sole reason that wages haven't kept up with costs over the last 50-ish years, but it doesn't help, particularly when management/the oligarchs are compensated mainly using the same shares that those retirement and pension funds use to generate revenues for the people they cover.
800,000 is also larger than the population of several states, and local cost of labor is a lot higher in SF, driving the cost of pretty much everything other than buying commodity goods a government might do higher.
15 billion is more than the respective budgets of Alabama, Oklahoma, New Mexico, North Dakota, Iowa, West Virginia, Montana, Wyoming, Alaska, Mississippi, Rhode Island, Arkansas, Delaware, Idaho, Vermont, New Hampshire, and South Dakota. Of these, only North Dakota, Wyoming, Alaska, and Vermont have populations lower than 800,000.
Seattle has roughly the same population as San Francisco and roughly the same labor costs, and has an annual budget of $8.3 billion. At some point you have to just face facts that it's gross mismanagement and incompetence.
Seattle is a city, San Francisco is a combined city and county; it literally has a lot of functions that Seattle doesn't. Add a population based pro-rata share of King County’s budget to Seattle’s budget and you get something not all that much less than the budget of the City and County of San Francisco.
Also, California has realigned a number of what were previously (and are still in other states) state functions to counties, including some felony incarceration that would otherwise be in state prisons, so, even compared to out-of-state city and county combined functions, SF has more it is required to do.
"King County provides local and regional services to nearly 2.4 million residents, with a 2025 Proposed Budget of $10.2 billion and nearly 17,700 employees."[1]
Seattle's population is around 755,000. 755,000 / 2,400,000 ≈ 0.315. 10,200,000,000 * 0.315 = 3,213,000,000.
3.2 billion + 8.3 billion = 11.5 billion.
15 billion (San Francisco budget) - 11.5 billion (Seattle budget) = 3.5 billion.
So San Francisco's budget is around 3.5 billion dollars higher.
It is not that simple. San Francisco budget includes the SFO airport but Seattle budget doesn’t include that. That’s part of Port of Seattle, which is not part of city of Seattle.
Also, sound transit provides much transportation services in Seattle, but it is not part of city of Seattle. On the other hand, SFMTA is a department of city and county of San Francisco.
Since their populations, economies, and geographies are comparable, it seems like the play is to compare cost-to-effect ratios between the two cities on a service-for-service basis. I've done this with my own city before and was surprised to find that there wasn't anything particularly egregious in the budget outside of some cultural events I wouldn't have chosen to support. I suspect you probably find comparable levels of bloat in comparable municipalities, though, so even two municipalities being similar wouldn't necessarily be a good indication that they were using resources effectively.
Can you provide some insight into the differences as you see them? And where, just in broad brushstrokes, the mismanagement and incompetence primarily manifests itself? At the high level you cite, assuming those are accurate numbers, my knee jerk is to agree with you, but if you have insight would love to know whether the difference is actually attributable to mismanagement/incompetence/corruption/other bad thing.
I think you are probably not comparing apple to apple. I think San Francisco is both a city and a county, while Seattle is a city within a county. Also, the San Francisco International Airport is managed by the city & county of San Francisco, while Seattle Tacoma international airport is managed by Port of Seattle, which is also separate from city of Seattle. The budget if city of San Francisco also includes Municipal Transportation Agency but city of Seattle budget doesn’t include king county metro and sound transit which are separate entity.
San Francisco is both a city and a county so the budgets aren’t actually comparable… SF owns the port and the Airport as well. “Facing facts” is great when you actually understand the basic facts before making proclamations.
I'm sorry for being unkind, but lazy comments like this really frustrate me. I can't imagine you've done any real research or thinking on this, but still think others have to "face facts" which are coincidentally just exactly whatever you've already decided they are.
Now, I don't know if San Francisco has a bloated, runaway budget or not – it might! But I do at least know that it's both a city and a county; I expect that San Francisco's budget includes operating the ports and public hospitals – that could be $5bn in spending right there!
Endless time is wasted by not even doing the most basic thinking before spouting off.
GDP is just more people spending more money for more expensive things. It's kind of a failed metric for economic productivity unless you think an $8 Big Mac is twice as productive to the economy than a $4 Big Mac.
> unless you think an $8 Big Mac is twice as productive to the economy than a $4 Big Mac.
It literally straightforwardly is. It provides the same number of calories, to a worker who is twice as productive in the $8-per-big-Mac city as the $4-per-Big-Mac city. Differences in per-capita productivity between supercities and hinterlands are vast.
In my opinion, climate change causing more and more overwhelming* weather events, this issue is going to get worse.
*overwhelming in the sense of responders/budgets/planners unable to mitigate the effects of worse weather.
It's partly why I'm so "doomer" about climate change. The secondary effects of these weather events are already difficult to manage. What happens when we experience mass migration of humanity, or even worse storms?
For example, Kentucky USA has an average year-to-date precipitation of 6 inches. In 2025, that has increased to 12 inches. Yes that's one year, but it only takes one major event to wreak havoc on a poorer town or state.
I just finished the book “On The Move” about the coming climate driven migration and yea, I don’t see any part of the US prepared for being either the source or destination in these problems.
https://bookshop.org/p/books/unlivable-abrahm-lustgarten/199...
Ladies and Gentleman's: cities cost MORE than spread living despite the many PR who state the contrary with ONLY APPARENT logic. Under-utilize large buildings for less than 12h/day commuting between them was needed in the past but it's a nonsense today. Small buildings consume much less raw materials than bigger one for equivalent usable space for humans because we have to sustain the mere structure, with anti-seismic norms, fire safety norms, elevators, ... who cost MUCH. They are inefficient to heat and cool with modern heat-pumps as well. They pollute more.
Cities are nowadays only needed to push 2030 Agenda where the inmates do not own nothing and live consuming anything, no matter how they earn, to be always at zero and such need is not practically sustainable.
Not all, and they are rarer today, pensions were totally insane back in the day.
One of my mothers friends, who is now in her 80's, has been retired on a pension for over 40 years. She started working for her municipality right out of high school at 18, and worked 25 years as a clerk to get a full pension. Retired at 43(!) with 75% final pay (annually adjusted) and lifelong medical benefits.
Its totally insane and completely unsustainable. Back in the day people usually keeled over at 65 and the US was viewed as having achieved infinite growth forever, so perhaps back then it was a reasonable but generous offer. Today however it's just straight up corruption and waste to offer benefits like that.
My Dad's friend is a retired fire chief, my Dad told me he makes $300K a year in retirement! That is beyond insane as it ends up costing (with a retirement at say 55) about 30 or so years of payments which adds up to $9M for the reminder of his life. This is clearly not sustainable and when you add up social security and 401k it ends up with a kings ransom for a public servant.
What about solidarity? Instead of criticizing another worker’s situation as “insane”, we should be asking: why can’t we also have this kind of retirement package? They’ve successfully pitted worker vs worker.
I don’t think that retired fire chief’s (or school teachers') retirement is what’s wrong: what’s wrong is that most of us will not have a retirement that good. Why is that? It is possible to answer that question without tearing down someone else’s situation.
It comes from crab bucket mentality and a pervasive fear that somebody somewhere might be getting something they don't "deserve".
Everyone who gives a company years of their life should be able to comfortably retire after decades of service, but companies have managed to convince workers that most of them should work until the day they die and only a small precious few deserve to retire and finally be allowed to spend time with their loved ones.
Exactly. "Look at that guy, who has it slightly better than you. He's really the problem!"
How does that work? That guy, pensioner, who has it slightly better than you, is a different way of saying that:
1) that guy gets your labor, for decades. 4 decades to be exact
2) for less than you'll get for that work
(that's what getting a higher pension actually means in the real world, with money being an abstraction and all that)
3) he (or she) doesn't get more because they worked harder or better, but because they were working when a random political vote needed to be made (paid for, really). And that, not only won't repeat, but there's absolutely nothing you can do to change the situation to your benefit, even just to equalize. That last part is of course what makes taking away their benefits attractive.
Sounds pretty unfair to me. At least with a CEO they did something to get what they got, and there is a way to get their position, even if most will never achieve that.
It's absolutely unfair. But the solution is to raise the rest of us up, not tear these people down. Why don't I have a retirement like that? Why don't you have a retirement like that? Those are the questions we should be asking. Not "He shouldn't make that much!" The people who earn literally 100X that pensioner are laughing at us as we fight each other
How would that work? Could you explain? Because the only way to do that is to lower the price of labor. To greatly increase the availability of labor. You can do this with a lot of births, and we're finding out you can't really do it with immigration even.
So how would that work? The children that would need to provide that labor for me when I'm 65 would have to have been born already (they start work at, say, 20 years old). This has already happened, therefore, and cannot be fixed.
... which is of course another argument to take the pension away ... after all that's the only way to make it fair. You can play games with money, but money is an abstraction. You cannot raise up the necessary amount of people, the amount of people politicians promised us in trade for votes. It's not a matter of priorities anymore either, we're past the point where using 100% of the labor force would work.
Because it isn't sustainable.
Only a select few can acquire that kind of retirement and it's borrowed from everyone else. It's selfish.
The pension generations over spent and borrowed heavily to fund their retirement and lifestyles. The subsequent generations pay for that. It's selfish and short sighted.
It's more sustainable than many other business practices. Nobody is worried about sustainability when CEOs are making hundreds of times more money than the average employee at the same company or when shareholders relentlessly enshitify everything so that they can keep getting more and more profit quarter after quarter.
pension plans were not only sustainable since they started in 1875, but the economy thrived and companies grew powerful while workers had them. Historically, some companies tried to screw over their workers and mismanaged their pension funds, resulting in problems down the line, but that was mostly greed.
Funny how, when they talk about executive compensation, platinum-plated perks, corporate parties with lobster stacks and vodka fountains for the top brass, and of course, dividends and stock buybacks--not a peep about how sustainable it is. But when you talk about pensions and employee salaries, all of a sudden, everyone's so concerned about it being sustainable...
US GDP per capita is ~80k. IF you eliminated every billionaire and leveled every salary, this is the max you could get. Much less in actuality, because you would have a universal tax rate of about 40% on that to support the federal government, so ~50k per person after taxes.
> Retired at 43(!) with 75% final pay (annually adjusted) and lifelong medical benefits.
I don't think that's insane at all. Sounds pretty reasonable in exchange for taking at least one third of her time for 43 years of her life (and over those years where she was young and most healthy).
Corporations used to offer similar pensions all the time. They started offering them in 1875 and they were extremely successful doing it. 401(k) plans were a scheme to shift the risk and responsibility from the employer to the employees and that change made already wealthy and successful companies a lot richer, but at the expense of making many people work right up until the day they die, or they become too sick to work at which point they become impoverished. The move from pensions to 401(k) plans was bad for the economy, and for local economies in particular.
The only thing I think is crazy about it is the lifelong medical benefits which shouldn't be on the employer at all since everyone should have universal coverage.
Just ballparking...
That's ~3.75 million dollars, plus probably another ~$250k benefits from when she turned 18 to today.
So $4 million dollars for 25 years of entry level work.
It works out to roughly paying a secretary at the municipal building $150k/yr to answer the phone? Do data entry? Collect payment for tickets?
You don't think $150k is insane pay for a municipal secretary?
Not only that, but sometimes the municipality hires them back on a consulting basis to get them a paycheck and a pension for the same work.
My mom has been retired from teaching for over 30 years — and she got a package to retire early.
Weird situation. Shrinking demographics in the 70’s led to layoffs. By their union contract layoffs were done strictly by seniority. Working on a contract that was stepped by seniority, this led to a very top heavy cohort of teachers 20 years later, who were being paid top of the scale. To redistribute the ages of service they offered a limited number of buyouts, which lowered their overall costs and normalize the pipeline.
This was also a legit and reasonably sustainable move as the NY State Teachers fund, is funded at 101% of liabilities.
If your mother's friend's situation actually unsustainable? It sounds like the pension actually has the money, since I'm assuming they're not able to print money (like what is necessary for certain old-age insurance programs). Or do you just mean that it's not sustainable for everyone to have that same situation?
It’s not her fault that she lucked out
It's not her fault. However, as a taxpayer, I don't want my money to be taken from me (postponing my own retirement) to fund her retirement. And that is absolutely going to happen with insolvent pension funds.
> as a taxpayer, I don't want my money to be taken from me (postponing my own retirement) to fund her retirement.
by that logic, sure, as shareholders in Meta (or any public tech co), we absolutely don't want employing expensive human devs to fund their retirement.
.. see where this is going
> see where this is going
No? Shareholders don't want expensive devs, they want the profits expensive devs happen to produce.
The difference is, of course, that investors can sell their shares if a compensation policy is overly generous. And, even if they hold onto them, if the company goes bankrupt because of labor expenses, the government doesn't grab investors' personal assets to allow employees to keep getting their compensation indefinitely.
It's not about fault, it's about providing better than you got for your children and grandchildren. If you - and the people compensated with the same equities that fund your pension - are putting substantial downward pressure on earnings for the current generation of laborers and it's having all sorts of knock-on effects, you're failing to provide better for those coming after you.
You can’t solve that by taking away existing pensions. If that’s your preferred method of balancing budgets then expect no sympathy when your company cancels your RSUs
> can’t solve that by taking away existing pensions
Of course you can. Pensions are a form of debt. If the state is bankrupt, it's reasonable to trim its creditors. Pensioners included. (The politically-savvy way to do this is probably to spin off the pension fund as its own entity and then default on bonds, which the pension fund would hold alongside others. Then leave it to the pensioners to figure out how they haircut themselves.)
You could also raise taxes as an alternative. I realize this won't be popular with some, however its not unreasonable, depending on how you do it.
> You could also raise taxes as an alternative
The tax base is mobile in a way expenses are not.
I'll speak to this personally. In April 2021 New York City raised its top tax rates. I'm only moderately wealthy, but that prompted my moving out of the state.
This is an even better argument for universal pensions (which isn't Social Security, as was never meant to be treated as a pension to begin with)
Same as universal healthcare, seems like you net benefit by removing these burdens from localities and businesses.
> is an even better argument for universal pensions (which isn't Social Security, as was never meant to be treated as a pension to begin with)
That's one option. Another is better distributing productive capital. Building public housing so its occupants wind up owning it, for instance.
But that's getting into top-down redistribution at the federal level, which isn't in the cards for now. Within the context of cities and states, pensions are no longer a good idea.
Why should young workers be asked to work more to provide a lifestyle to others that they can't themselves achieve?
Morally, they shouldn’t. But practically: because old people vote—en masse and consistently, and young people don’t. Until that changes, our systems will continue to be designed to transfer wealth from the young to the old.
> You can’t solve that by taking away existing pensions.
Of course you can, especially when you look at the public debt racked up by the generation that is now retiring. Now, there will likely be consequences come election time, but math is math. The current generation of retirees spent too much and did too little to cover the costs over their working lives.
> If that’s your preferred method of balancing budgets then expect no sympathy when your company cancels your RSUs
I don't have RSUs at my current job. A significant plurality, if not majority, of laborers today don't either. If you're making $50k doing clerical work, have no RSUs at the company, and the company is having to make all sorts of cuts to meet pension obligations, what do you care about equities and their effects on current retirees?
At the job that I had that did have RSUs, I got about $3k, pre-tax, for all of them when the company was acquired by Oracle after about four years of cancelling raises, downsizing, and restructuring. I would have been far better off if that time had been spent by management giving COLA raises, if nothing else, given that this coincided with the COVID housing price and consumer goods inflation trend.
RSUs only really matter if you get a metric crapload of them, whether over decades or as a part of your compensation package, and only executives get that kind of volume.
Of course not, but that doesn't make it a sustainable practice long term.
> perhaps back then it was a reasonable but generous offer.
No, it was a trade. You would accept low pay, very little opportunity for career advancement, and even if you worked hard to advance you were never going to more than double what you were making when you were hired. Also, government jobs are political jobs, are often eliminated on a whim, or you're forced to work unpaid for a while because of a budget vote.
In return, you got a pension. A pension that everyone understood the yield of, and everybody understood about what it was worth. It was entirely sustainable. The problem was and is that invested pension funds become underfunded because if instead of depositing the money, you spend it somewhere else and promise to put it back later, it's basically a low-interest loan. If the budget is tight enough (so credit is probably bad enough) that a state or municipality is considering raiding pensions, then this represents a huge amount of savings. The problem is that you're never going to pay it back.
Another problem is that managing those funds became lucrative for the managers, and for the products that they would steer these institutions into buying, often in exchange for kickbacks or in a complex web of self-dealing: Somehow, the person managing pensions funds for your state has them all invested in products sold by a company his son works for. His son didn't directly profit from the trade, but for some reason makes $500K a year, barely graduated high school, and nobody knows what he actually does there.
That's not the fault of pensions, that's the fault of thieves. What's unsustainable is a government that promises a pension in return for a shitty boring career as a clerk, and then after you retire from sitting in a DMV window for 25 years, takes the pension back. Nobody would accept a government job cheaply then, because the state has ruined its reputation in the same way as if they had defaulted on their bonds.
Nothing wrong if that's how we want to pay government employees: a days work for a days pay. But we got a discount because we didn't pay like that, and if we had, that money would just have been spent at the time, rather than being stolen throughout their retirement. Pretending like pensions were an unreasonable demand or an absurd promise is just laying groundwork to justify stealing from people who worked for a living.
edit: If government jobs were so good, why weren't they in demand? Does supply and demand only break down when we need it to?
1) If pensions are so easily manipulated and stolen from, that's an argument against pensions, not an argument for them.
2) Although the factors you mention are real, they are much smaller than core issue, which is the state underfunding the pension, either explicitly or through unrealistic expectations of return.
3) Even granting that the present government should make sure that pensioners get their full benefits, why should current workers be the ones to bear the burden of past bad decisions by policymakers? You could just as well tax pension payments more highly, and use that revenue to fund the pensions.
> Retired at 43(!) with 75% final pay (annually adjusted) and lifelong medical benefits.
Some go on to another municipal job and get a second pension so they get paid twice as much to do nothing in retirement. I know someone who worked for the USPS then on to the NYC DoE as a janitor in a school. His wife worked for the public school system as well, then went on to work in a catholic school after retirement. Three pensions in one household. They invest a lot into long term investments such as bonds, CD's and the like. I hear they have millions in the bank.
The people who worked those jobs are all sitting pretty right now. I know plenty of people who made out like bandits in various NYC agencies, especially in the DoE. My aunt left her heirs 2.2 million and a house worth a million from her pension money she heavily invested and was still able to travel the world in retirement. She was a secretary in a middle school. Amazing what you can do with tons of free time and money.
I've got people in my family in similar situation. 25 years in an unskilled cushy job was enough to buy a lifetime of cushy retirement. Boomers were basically handed life on a platter.
[dead]
"No, $400k total comp is entirely reasonable for being able to center the ReactJS divs."
I always see the words pensions in civic deficit news. I'm early 30s and pensions are a concept that nobody my age or younger will ever benefit from yet is footing the bill for.
You’ve already benefited from them, by getting government services at a lower up front cost by acquiring labor with the promise of them on the backend.
(And, barring those promises not being fulfilled, plenty of people your age and younger have already been working in jobs that qualify them for pensions when they reach a certain age, or have a relative with such a pension with survivorship benefits, and will benefit from them as beneficiaries.)
Most of today is the result of stealing from the future, and that strategy is running out of steam.
> Most of today is the result of stealing from the future, and that strategy is running out of steam
If you "calculate the net present value (NPV) of benefits received minus taxes paid for US generations born 1850 to 2090," you find "all generations 1950 to 2050 are net gainers, while many current elderly are losers" [1].
("There are two peaks in net benefits. The first peak was centered on the cohort born in 1908 which experienced the large windfall gains from the start-up of social security but missed much of the windfall losses from the expansion of public education funding. On net, the 1908 cohort received net transfers amounting to 5.7% of lifetime earnings. The second peak in net benefit is centered on the cohorts born in 1993-94 which experienced the positive benefits of the educational expansion funded by previous generations and which are projected to avoid the looming net costs of paying the social security and Medicare implicit debt. On net, these cohorts are forecast to receive net benefits amounting to 5.6% of lifetime earnings.
There are three sets of cohorts which experienced net losses through the transfer systems. Those born before 1880 experienced net losses due to the expansion of the public education system. Those born between 1930 and 1947 also experienced net losses. While these cohorts did receive large windfall gains associated with the start-up periods for Social Security and Medicare, these were more than offset by windfall losses from the expansion of the public education system. Cohorts born after 2060 are expected to incur increasingly large net losses via the public transfer systems as Social Security and Medicare overwhelm the gains through education.")
[1] https://pmc.ncbi.nlm.nih.gov/articles/PMC2840408/
I would like to see an update, as this paper is ~15 years old. I also don't see it accounting for real estate costs outpacing wages, requiring younger cohorts to devote arguably unreasonable amounts of their current cashflows to housing. My statement does not scope solely to public transfer systems, but the economic system as a whole. Today wants returns, while issuing as much future obligation as possible (in various ways, debt instruments, higher future taxes, etc) for someone in the future to pay.
> don't see it accounting for real estate costs outpacing wages, requiring younger cohorts to devote arguably unreasonable amounts of their current cashflows to housing
"Millennials are now wealthier than previous generations were at their age" [1] on the back of home-price appreciation [2].
[1] https://www.wsj.com/personal-finance/millennials-personal-fi...
[2] https://www.stlouisfed.org/on-the-economy/2024/feb/millennia...
https://www.theguardian.com/us-news/2023/aug/17/millennial-h...
> By age 30, just 42% of millennials owned homes, compared to 48% of gen Xers and 51% of baby boomers, an analysis of government data by Apartment List found. This gap persists into their early 40s, with the oldest millennials still having a lower rate of ownership than previous generations when they were that age. ...
> But turbulent times may be ahead for millennials. Experts say that the window of improved affordability may have already closed.
> “They bought houses and they are active in the market,” said Lautz of the NAR, “just not at the rate that we should be seeing for this age category.” Housing affordability has declined steadily in 2023, according to the NAR, as has inventory, from 1.9m homes in June 2019 to 1m today. And this year, boomers are once again the largest group of homebuyers, often competing with millennials looking to buy their first home.
> The personal savings rate is now 4.3% compared to an unusually high rate of 33.8% in April 2020. And Experian expects student loan payments – on pause during the pandemic – to resume in October at more than $200 a month on average.
> Matt Kinghorn, a senior demographer at the Indiana Business Research Center at Indiana University, said the increase in home ownership among young adults over the last few years “could potentially be short-lived, driven by those really low mortgage interest rates and a surge in personal savings during the first year of the pandemic”.
https://www.pewresearch.org/short-reads/2024/10/25/a-look-at...
> One commonly used (though also criticized) benchmark for housing affordability is that no more than 30% of household income should go toward housing costs. Households that spend more than that are considered “cost burdened” by the U.S. Department of Housing and Urban Development.
> By that standard, 31.3% of American households were cost burdened in 2023, including 27.1% of households with a mortgage and 49.7% of households that rent, according to 1-year estimates from the Census Bureau’s American Community Survey (ACS). (Many more people own than rent: In the second quarter of 2024, 65.6% of occupied housing units were owned while 34.4% were rented, according to the most recent estimates from the Census Bureau’s Current Population Survey/Housing Vacancy Survey.)
It’s crazy that half of renters in this country are cost-burdened.
NPV of deferred payment being less than the equivalent payment is not sufficient to demonstrate savings. 1) you must know the market clearing rate of the up front payment. 2) This sidesteps the difference in payer.
$100 today and $100 is cheaper than $200 today, but not if the alternative is $101 today. Similarly, you might not agree is a good deal if I offer $100 today instead of $200 and leave you the $100 debt. Beneficiaries are not the same as the debt holders.
Lastly, deferred payment is a good deal if I invest the present savings. If I dont, the NPV calculation benefit calculation isn't applicable.
Now financial instruments like pensions are stealing? In what way? Those workers worked for that pension. It’s funny how the top wealth owners have vacuumed up more and more wealth and you’re mad at the regular Joe working a 9-5.
My city, Chicago, is one of the ones mentioned in TFA. We had about 15 years of pension holidays, where contributions were not paid and the the catch up payments were scheduled far into the future. It is now the future and the people who had their taxes artificially lowered have long ago retired to Florida. The workers are owed a pension but it's being paid by current workers not those who got the tax breaks.
Chicago is a very poor example... the city is terribly run and horribly corrupt and has been or decades. There are reasons the rest of Illinois has tried to secede from them.
https://www.forbes.com/sites/edwardsiedle/2021/09/03/chicago...
Most of the revenue that funds programs in counties outside of Cook comes from the Chicagoland MSA, so I guess they can be our guests; we can use the money.
Sounds more like that makes it a particularly good example.
pensions are defined benefits. if they truly worked for that pension, it'd be defined contribution.
Let me expound so I can be exceptionally clear. I fall firmly in the "billionaires should not exist" bucket. They are a bug in the economic system. Bernie Sanders is my North Star from a policy and nation state social system perspective (its also more financially efficient, but I digress). I do not blame workers for our current fiscal crisis predicament.
Pensions are not stealing from the future. When done properly, invested prudently, and managed to a fiduciary standard, they are an effective mechanism to invest those worker capital earned at that time into productive investments to provide returns in the future when those workers approach retirement. Through the 401k attempt, we have shown this policy to be a failure. The human cannot be relied on to financially prepare for retirement, this must be done with systems and at scale.
When I say "stealing from the future," I mean where pensions were promised and now they're being marketed as "too expensive" when what would've gone into pensions over the last 40 years was vacuumed up by the very wealthy through management compensation and shareholder returns. I mean sovereign debt that has been issued, to be paid back by future workers who in no way consented to having to work to pay that debt back. I mean infrastructure and climate expenses that will rapidly approach $1T/year in costs, because we did not have the will to pay for these things today.
Capitalism stole from the future, and it will never be enough. Someone is going to be left holding the bag, and everyone is going to be unhappy the future is not as bright as the past was.
(i am once again asking you to think in systems)
McKinsey: Dependency and depopulation? Confronting the consequences of a new demographic reality - https://www.mckinsey.com/mgi/our-research/dependency-and-dep... - January 15th, 2025
US Treasury Fiscal Data: What is the national debt? - https://fiscaldata.treasury.gov/americas-finance-guide/natio... ($36.22T as of this comment)
Climate change could erase $1.4 trillion in real estate value - https://www.axios.com/2025/02/03/climate-change-insurance-co... - February 3rd, 2025
Climate crisis costs the world 12% in GDP for every 1°C temperature rise - https://www.weforum.org/stories/2024/06/nature-climate-news-... - September 10th, 2024
HN Search: climate change cost - https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...
The cost to fix America’s crumbling infrastructure? Nearly $2.6 trillion, engineers say - https://www.cnn.com/2021/03/30/politics/infrastructure-us-in... - March 30th, 2021
https://news.ycombinator.com/item?id=42052544 (401k failure citations)
> Through the 401k attempt, we have shown this policy to be a failure.
401ks are a terrible on their own. It has thrown everybody for the wolves and tied people's financial wellbeing to the vagaries of the market. But there's still a flipside. Pensions should not be used to provide a level of income to maintain a lifestyle (cue anecdotes of boomers packing up and leaving for florida). Pensions should be to provide a baseline level of financial support for the essentials, perhaps a little above, say like social security but a little more. But they are not that, generally speaking. Retiring at 58 with 80% of wages - or whatever absurdities sometimes occurred - _is_ theft from the young.
It should be like a layer cake. Social Security on the bottom, this keeps you from destitution. It is insurance, not an investment. Pensions are the next layer on the cake. This provides additional income from investments made during your working career, with employer contributions mandated, and with it very difficult to touch this before retirement. Australia's Superannuation system [1] is my mental model for this. You have to have strong governance around reasonable returns and payments to prevent from the absurdities you mention. It is not tied to a single employer. The final cake layer should be personal savings and investments made by someone.
This derisks everyone's risk of the usual human failing (lack of financial sophistication, adverse events, etc), while enabling those who want to invest above and beyond a mechanism to do so. Right now, it's Mad Max with some Social Security scraps [2].
[1] https://en.wikipedia.org/wiki/Superannuation_in_Australia
[2] https://www.gao.gov/financial-security-older-americans
agreed 100%
> Mad Max with some Social Security scraps
haha! sadly
The person that worked for 25 years starting at 18 for a full pension benefited me? Nah, I think they benefited far far more.
They're beneficial to younger generations, provided that there's enough value generated by the younger generations to cover the cost of the pension.
The problem is, this new wave of retirees - the Baby Boomers - did not have enough children. Their children's generation - the Millennials - can thus charge more for their labor. The Millennials also aren't having enough children.
This means that the people generating the value are taking more of the value for themselves to live on (though not relative to inflation, but that's a different conversation), and there's fewer of them contributing to pensions through various government revenue schemes.
Also, anecdotally, my parents have far more expensive plans for their retirement than my grandparents ever did.
Are you mad at the pensioners, who worked for decades on the agreement they’d get a pension, or are you mad at the oligarchs and businesses who lobbied to make pensions a thing of the past so that you’re not protected as well?
You should be mad at the Capitalists not the workers.
Patrick Boyle did a segment recently on pensions that I cannot locate. He pointed out that the private industry in the US that granted generous pensions in the mid-20th century all went bankrupt, and that is why there are not private-sector US pensions anymore. It coincided with globalization, but is more a symptom of the countercyclical nature of pension expenses. They cost most when a business can bear the costs least.
This is one of many ways that folks aged 70+ had it much better than folks in the workforce now, and represents generational inequality that you should not minimize or attribute to "capitalists."
You may, if you like, attribute it to "generosity" by individuals indifferent to "math."
> They cost most when a business can bear the costs least.
Shouldn't a reasonable business have been investing forward to avoid this problem? IE, you don't use todays dollars, you use yesterdays dollars.
Its seems the flaw is that they lacked sufficient savvy to invest the pensions in a way where it would be able to build upon itself.
It's more-- you build a tidy SaaS business. It's stable for a while. You want to be generous and skilled workers are in demand, so you offer a pension. This is good for a while, maybe a long while, and you "invest forward" as appropriate.
Then, a competitor disrupts your segment. The competitor is new, and for whatever reason does not have the same legacy pension expense. In order to compete, you must invest. But your pension expense in particular does not allow this.
What does the legacy enterprise do in this situation? In many cases in the 20th century, per Patrick, the business lost relevancy and slowly went bankrupt.
I think they're mad at a society that promised generous pensions in exchange for lower wages, and then (for various reasons) didn't deliver them.
It's worth noting that a lot of shares in publicly traded companies are held by retirement and pension funds.
Money paid to a shareholder is money not paid to the person doing the labor and vice-versa.
That's not to say that pension funds are the sole reason that wages haven't kept up with costs over the last 50-ish years, but it doesn't help, particularly when management/the oligarchs are compensated mainly using the same shares that those retirement and pension funds use to generate revenues for the people they cover.
San Francisco's budget is around $15 billion, which is larger than that of many states, for a population of around 800,000
800,000 is also larger than the population of several states, and local cost of labor is a lot higher in SF, driving the cost of pretty much everything other than buying commodity goods a government might do higher.
15 billion is more than the respective budgets of Alabama, Oklahoma, New Mexico, North Dakota, Iowa, West Virginia, Montana, Wyoming, Alaska, Mississippi, Rhode Island, Arkansas, Delaware, Idaho, Vermont, New Hampshire, and South Dakota. Of these, only North Dakota, Wyoming, Alaska, and Vermont have populations lower than 800,000.
Seattle has roughly the same population as San Francisco and roughly the same labor costs, and has an annual budget of $8.3 billion. At some point you have to just face facts that it's gross mismanagement and incompetence.
Seattle is a city, San Francisco is a combined city and county; it literally has a lot of functions that Seattle doesn't. Add a population based pro-rata share of King County’s budget to Seattle’s budget and you get something not all that much less than the budget of the City and County of San Francisco.
Also, California has realigned a number of what were previously (and are still in other states) state functions to counties, including some felony incarceration that would otherwise be in state prisons, so, even compared to out-of-state city and county combined functions, SF has more it is required to do.
"King County provides local and regional services to nearly 2.4 million residents, with a 2025 Proposed Budget of $10.2 billion and nearly 17,700 employees."[1]
Seattle's population is around 755,000. 755,000 / 2,400,000 ≈ 0.315. 10,200,000,000 * 0.315 = 3,213,000,000.
3.2 billion + 8.3 billion = 11.5 billion.
15 billion (San Francisco budget) - 11.5 billion (Seattle budget) = 3.5 billion.
So San Francisco's budget is around 3.5 billion dollars higher.
[1] - https://kingcounty.gov/en/dept/executive/governance-leadersh...
It is not that simple. San Francisco budget includes the SFO airport but Seattle budget doesn’t include that. That’s part of Port of Seattle, which is not part of city of Seattle.
Also, sound transit provides much transportation services in Seattle, but it is not part of city of Seattle. On the other hand, SFMTA is a department of city and county of San Francisco.
Since their populations, economies, and geographies are comparable, it seems like the play is to compare cost-to-effect ratios between the two cities on a service-for-service basis. I've done this with my own city before and was surprised to find that there wasn't anything particularly egregious in the budget outside of some cultural events I wouldn't have chosen to support. I suspect you probably find comparable levels of bloat in comparable municipalities, though, so even two municipalities being similar wouldn't necessarily be a good indication that they were using resources effectively.
Can you provide some insight into the differences as you see them? And where, just in broad brushstrokes, the mismanagement and incompetence primarily manifests itself? At the high level you cite, assuming those are accurate numbers, my knee jerk is to agree with you, but if you have insight would love to know whether the difference is actually attributable to mismanagement/incompetence/corruption/other bad thing.
P.s. Your "about" checks out!
I think you are probably not comparing apple to apple. I think San Francisco is both a city and a county, while Seattle is a city within a county. Also, the San Francisco International Airport is managed by the city & county of San Francisco, while Seattle Tacoma international airport is managed by Port of Seattle, which is also separate from city of Seattle. The budget if city of San Francisco also includes Municipal Transportation Agency but city of Seattle budget doesn’t include king county metro and sound transit which are separate entity.
San Francisco is both a city and a county so the budgets aren’t actually comparable… SF owns the port and the Airport as well. “Facing facts” is great when you actually understand the basic facts before making proclamations.
I'm sorry for being unkind, but lazy comments like this really frustrate me. I can't imagine you've done any real research or thinking on this, but still think others have to "face facts" which are coincidentally just exactly whatever you've already decided they are.
Now, I don't know if San Francisco has a bloated, runaway budget or not – it might! But I do at least know that it's both a city and a county; I expect that San Francisco's budget includes operating the ports and public hospitals – that could be $5bn in spending right there!
Endless time is wasted by not even doing the most basic thinking before spouting off.
It also has 20x the GDP of Wyoming.
GDP is just more people spending more money for more expensive things. It's kind of a failed metric for economic productivity unless you think an $8 Big Mac is twice as productive to the economy than a $4 Big Mac.
> GDP is just more people spending more money for more expensive things. It's kind of a failed metric for economic productivity
It's a good metric for a tax base.
> unless you think an $8 Big Mac is twice as productive to the economy than a $4 Big Mac
Which is why we consider both nominal and real GDP. (In your example, the former represents 2x nominal GDP. They're equivalent in terms of real GDP.)
> unless you think an $8 Big Mac is twice as productive to the economy than a $4 Big Mac.
It literally straightforwardly is. It provides the same number of calories, to a worker who is twice as productive in the $8-per-big-Mac city as the $4-per-Big-Mac city. Differences in per-capita productivity between supercities and hinterlands are vast.
That's 10x the budget of Indianapolis which has a larger population (GDP is around $200B for ref).
What message are you trying to communicate? Are you implying that this is too high? Too low? Poorly spent?
In my opinion, climate change causing more and more overwhelming* weather events, this issue is going to get worse.
*overwhelming in the sense of responders/budgets/planners unable to mitigate the effects of worse weather.
It's partly why I'm so "doomer" about climate change. The secondary effects of these weather events are already difficult to manage. What happens when we experience mass migration of humanity, or even worse storms?
For example, Kentucky USA has an average year-to-date precipitation of 6 inches. In 2025, that has increased to 12 inches. Yes that's one year, but it only takes one major event to wreak havoc on a poorer town or state.
I just finished the book “On The Move” about the coming climate driven migration and yea, I don’t see any part of the US prepared for being either the source or destination in these problems. https://bookshop.org/p/books/unlivable-abrahm-lustgarten/199...
US will need better wall. Something like Maginot Line should do.
No, but it is hilarious that you are proposing a famous failed attempt as the inspiration.
I just find it funny, US has biggest army in the world. "But there is nothing, they can do to stop migration".
Ukraine is in bad shape, yet they still manage to keep their borders (even with EU) pretty tightly secured!
Ukraine's border security might not be the best recent example.
If Ukraine had 10 million Russians penetrating the front and having freedom of movement, the war would a different story.
Yes, and with the current admin. cutting everything, it will not be pretty.
But except for Police and Fire, I thought pensions were gone for all other City Employees, replaced by a 401k.
Ladies and Gentleman's: cities cost MORE than spread living despite the many PR who state the contrary with ONLY APPARENT logic. Under-utilize large buildings for less than 12h/day commuting between them was needed in the past but it's a nonsense today. Small buildings consume much less raw materials than bigger one for equivalent usable space for humans because we have to sustain the mere structure, with anti-seismic norms, fire safety norms, elevators, ... who cost MUCH. They are inefficient to heat and cool with modern heat-pumps as well. They pollute more.
Cities are nowadays only needed to push 2030 Agenda where the inmates do not own nothing and live consuming anything, no matter how they earn, to be always at zero and such need is not practically sustainable.
That's is. The rest is noise.