Fighting Tooth and Nail, Unions Overstep
Their scorched-earth campaign against a city pension overhaul is unlikely to gain unions much public support
Michael Moritz, one of Silicon Valley’s most successful venture capitalists, keeps a low profile. An early backer of Yahoo and Google, Moritz avoids the press, though he was himself once a journalist. You never see him at industry conferences. While he has given money to President Obama and a few other politicians of both parties, he has no discernible political ambitions.
But he does apparently feel strongly about the need to change the public employee pension system in San Francisco — and his recent decision to contribute $245,000 to that cause has provoked a furious counterattack by public employee unions. Deriding Moritz as a “billionaire speculator,” a group of unions organized a noisy protest last week in front of his San Francisco home.
The demonstration followed the unions’ vituperative denunciation of an accountant named Craig Weber, who made the mistake of endorsing a pension overhaul while serving on a civil grand jury investigating the issue. Though Weber (no relation) had cleared his action with the grand jury’s presiding judge and the city attorney, union leaders have demanded a criminal investigation.
On one level, all of this simply underscores a political reality here: you cross the unions at your peril. (Moritz evidently missed the memo; after last week’s hoo-ha, he’s refusing to discuss the issue.)
But there is another political reality at play: public resentment of government employees’ job security and fat benefits at a time when many workers are suffering.
And that raises another question: Are union leaders shooting themselves in the foot?
Playing the class-war card against someone like Moritz is a questionable tactic. Sure, he’s very rich, but he got that way doing exactly what makes the local economy tick — investing in innovative companies that grow to create good jobs and wealth. In any case, none of the city workers I interviewed at last week’s protest had any idea who Moritz was.
The assault on Weber also seems over the top, given that there is no evidence he is anything other than a concerned citizen volunteering his time to wrestle with a difficult policy issue.
The unions contend that the voter initiative, known as Proposition B and spearheaded by the San Francisco public defender, Jeff Adachi, is really about slashing health benefits. City workers have already agreed to give-backs, union leaders note. Yet Proposition B, besides forcing bigger employee contributions to the pension plan, mandates large increases in their contributions for dependent health care premiums.
Bob Muscat, a local union leader who is heading the anti-Proposition B campaign, is unapologetic about the tactics. “There is nothing sincere in what they are saying or doing,” Muscat said, “so it does get very personal.” His anger at Adachi, who he believes is merely trying to advance his political career, is unconcealed.
While Proposition B will clearly save the city a lot of money, its specific long-term impacts depend on the investment performance of the pension funds, actuarial calculations and the cost of health care. Adachi says benefits, if not reined in, will lead to even more cuts in services and ultimately bankrupt the city. The unions disagree, and cite health care premium increases of as much as $350 a month.
Yet the fact remains that San Francisco city workers are among the best paid anywhere. The average salary is $93,000. Workers can retire at 55 in some cases, 62 in others, with pensions of up to 75 percent to 90 percent of their salaries.
This is not lost on voters, so it seems an inopportune time for the unions to go to war. Transit workers have already set themselves up for defeat this fall, when voters will most likely revoke a charter provision guaranteeing their high pay.
If the city unions were to make a more measured case against Proposition B, they might win more support. The health care rollbacks could garner sympathy. The unions could also show more clearly how they are sharing the pain.
But the scorched-earth approach of trying to intimidate the opposition into silence looks politically risky, and perhaps even desperate. “When you’re in court and you don’t have a good case, you attack your opponent,” Adachi said.
Surely San Francisco voters would be better served by an honest and civilized debate.
This article also appears in the Bay Area edition of The New York Times.








Seej Cane
Yes, the scorched earth approach is just garnering more "yes" on Prop B votes. San Franciscans are repulsed by the union's spoiled child-type behavior. Their sense of entitlement to benefits superior to the taxpayers who are funding them is repulsive.
In fact, Mr. Moritz has helped to give a voice to all the low paid PRIVATE SECTOR workers who are paid less than public employees, can can only dream about their benefits, and are seeing their vital City services cut to fund these benefits. THANK YOU Mr. Moritz.
Why didn't this reporter ask these City employee "protesters" if they actually live in San Francisco?? It's clear that they don't care that our streets are crumbling as their benefits gut the General Fund...Why won't any reporters print the fact that most City employees don't live in San Francisco so cuts to vital City services as a result of escalating benefit costs do not have impact on them...?
DroidRJ
Great Article! Not only do public sector workers make 20% more than private sector workers, the supposed lowest paid workers janitors and gardeners make 74k and 83k respectively!
Seej, you're right that most city employees don't live in SF. Specifically, only 24 percent of police officers live in SF. It is sad that our city is being run bankrupt by people who don't even live here. This year their benefits comprise 20 percent of the city's budget. In 4-5 years, that number will be at 40%.
Jamie Whitaker
I have no doubt that our labor union leaders are shooting their members in the foot by attacking people instead of arguing why they believe Prop. B is bad for San Francisco. Their challenge is that Prop. B is in fact good for San Francisco ... A healthier diet, if you will.
Progressives cannot keep allowing our impoverished neighbors lose vital city services .... Many should be ashamed to be protecting their political allies' from giving a little instead of standing up to save our City's vital services.
Asking city workers to fund a portion of their own pension and to pay health insurance premiums for dependents at a levelmcloser to what the rest of us pay is a more social just option than completely cutting off people in San Francisco from vital city services. San Rrancisco needsnto do the most good for the most San Franciscans, not the most good for the most City employees at the expense of health and dignity of the general population.
I salute Jeff Adachi for leading!
Garry Bieringer
I attended the protest at Mr. Moritz' mansion last week (which was a fundraiser for Prop B - the anti-working family initiative). I am a city worker living in San Francisco: our entire house could fit in Mr. Moritz' foyer! Mr. Moritz and Jeff Adachi are have become the de-facto leaders of the "Tea Party Movement of San Francisco"; offering no solutions to problems except to attack working families. Prop B is an attempt to bring to San Francisco the Republican-led mantra of "squeezing government through the bathroom sink". Remember: SF city workers have contributed over 3/4 of a billion dollars in pay cuts over the past decade. These pay cuts were made necessary by the Bush led tax cuts for the wealthy; I'm sure that Mr. Moritz and Adache have benefited handsomely from these tax cuts.
Mr. G
Mr. Bieringer, you statement sounds as ridiculous as your union reps. The very idea that these city employees are so stubborn about their "entitlements" is an insult to real "working families". The idea that any of them should be crying "poor-mouth" is sickening. Do you have any idea how many people in this economy have lost their jobs? Do you have any idea how much money people have lost in their retirement funds? Do you have any idea what it is to live in the "real" world?
The voters will have their say in the next election, you better be prepared for the results, and in future elections there will be additional ballot measures until we get to the point that City employees are treated the same as everyone else.
Jeff Adachi should run for Mayor, because he is the only one that is trying to do something about the budget mess we have with the City budget, and it will only be worse next year and the year after that...
Garry Bieringer
Mr. G: Never let facts get in the way of your political views! It sounds as if you are arguing that you are in favor of having city employees treated the same as everyone else - surely you are not advocating that everyone be reduced to the same economic hardship as the people that were robbed of their retirement by the large corporations - (Enron, World.Com toname a few). I make the argument that every working person, whether they work for a government entity or a private business, be treated with dignity and respect, which include decent fringe benefits so children can grow up healthy and a stable retirement system so the parents won't have to rely on their children. Adachi is not doing anything positive to fix the economic situation we are in - he's going straight negative. Where are all the helpful ideas to get these people back their jobs and their retirement funds?
Andrew S
Many of us are indeed wondering whether this is all part of an agenda that will culminate in Jeff Adachi running for Mayor.
I have met Jeff Adachi a few times and know him to be quite articulate, and from what I can see - politically astute. That doesn't make what he's advocating the right thing to do.
Even in the private sector wages, pensions and health care are among the most significant costs a business comes up against.
This is a highly complex issue in which light is purposely only being focused on a part of the solution. A part that can be used as a vote getter.
Are our union officials less sanguine about this than Jeff? You bet - it's our livelihood unfairly at stake here.
Mr. G
Interesting comment Mr. B, but all you are really advocating for is yourself and your fellow co-workers. Have you any idea how many services for truly poor families have been cut by the City over the past two years just to feed your excessive pay and benefits? Do you know how many disabled programs have been cut?
Garry Bieringer
Mr. G: We're making some progress. I am well aware of the good services that have been cut the past few years due to fiscal reasons; it seems our primary difference is that you tend to feel this is the fault of city workers whereas I look at the tremendous tax=cuts to the rich and these tax-cut dwarf city employee expenses. Let's put the reasons for these service cuts where they belong and let fix the root of the problem, whioh is the 'wealthy keep getting wealthier' at the expense of services to the middle and lower classes.
voltairesmistress
This is a much needed overview by a respected journalist. I found it fair and balanced. (But not in the Fox news sense of that term!)
Public outrage at government pension packages may be part of a politics of envy, but were it only that, it would wither with the next economic upturn.
Reform of public job compensation packages will continue as a part of a larger re-tooling of retirement in the developed world. Social Security, pensions, and other retirement instruments are up for change. Some of those changes will include a portable types of pensions (like the 401k), the creation of mandatory savings programs and new investment/savings tools, and working well past age 65, to name a few. Government compensation packages will come to resemble what goes on in the private sector, not vice versa.
Governments and union leaders would do well to look at the bigger picture and reshape retirement packages that reflect the changing economy.
Mr. G
Mr. B, I have no problems taxing the rich, I might even favor a sales/consumption tax instead of an income tax, because the income tax system is broken and far too complex, so only the rich can abuse. However, I do not favor enriching the pockets of public employees. There are far too many people that live in poverty or just manage to get by, and until they are able to enjoy financial security, I cannot favor the pay and benefits government workers are enjoying these days. While it is nice for you to claim that you want to help others, its only talk, as you sit in your catbird seat, saying "tax the rich" but that would primarily benefit you more than anyone else...
Jennifer Lemus
I live in Vallejo, where this type of union drama has been playing out for years.
I've not seen much in the press about Vallejo's success, but a truly grass roots effort to change Vallejo's charter to make it easier to govern union contracts won last June. I believe the union had raised ~100K to defeat the measure (mostly from out of town unions with similar measures in their charters) compared to a tiny $12K (??) raised locally. A local home was even vandalized with paint for supporting the measure. The union's technical campaign spending didn't include a couple issues of a glossy mailer called "Your Town" that highlight fired cops and thugs on the loose, and has yet to run again since the election.
The unions will fight tooth and nail against any reforms. Don't be surprised if you see billboards popping up adverting that there are fewer cops around or will be. But they can be beaten back.
Andrew S
Let's not let the fact that payroll, pensions and health costs are a significant portion of the city's budget, lead to the mistaken assumption that it is because we city employees are getting rich. We aren't.
City positions and salaries/benefits are part of the public record (sfgov.org). Thoughtful examination will show that while the private and public sectors are not mirror-images, they are not so disparate as proponents of Jeff Adachi's measure would like to believe.
Myself as an example: I qualified for a highly competitive position (#8173) through civil service exam and interviews (no one 'handed' me my job as an entitlement). I earned $10 an hour more in my last private sector job - with no medical care or pension. I now have both, but the savings in health insurance costs is exceeded by the 7.5% payroll deduction for my pension.
We didn't cause the budget deficits - we're doing our share to help resolve them. Just don't put that burden entirely on us.
Patrick Monette-Shaw
Part 3:
(Parts 1 and 2 are on the “Chinese Hospital Workers Say No …” article on The Bay Citizen.)
The comment by voltairemistrss on 8/17 claiming Jonathan Weber’s piece was “fair and balanced” is inaccurate. Journalists — members of the Fourth Estate — are supposed to report facts, not serve as a megaphone for misguided measures like Adachi’s.
Weber repeating the nonsense average San Francisco city salaries are $93,000 is shocking, coming from a “respected journalist.”
Had Weber done his homework, he’d know that dividing the City’s 2009 $2.36 billion base pay payroll by the 37,277 full- and part-time total employees results in a $63,401 average salary, not $93,000.
More, even if you toss in “other pay” and overtime, approximately half (17,508) of City employees earn less than $60,000 in total pay, averaging just $28,417 each (since so many are already part-time employees). In stark contrast, of the 11,981 employees who earn $90,000 in total pay, their average salary is $123,767.
Patrick Monette-Shaw
Part 4:
Further, Weber calls it “public resentment” over fat pension benefits; in truth, it is pension envy (which doesn’t rhyme with another kind of envy).
DroidRJ’s comment on 8/14 wrongly reports janitors and gardeners each $74K and $83K, respectively, an outright lie.
Even tossing in overtime and “other pay,” the 479 janitors averaged $47,541 and the 317 gardeners averaged just $51,843 in total pay in 2009. Base pay without overtime averaged $4K less for each classification.
Seej Cane’s 8/14 comment claims employee benefits “gut the General Fund,” but fails mentioning which employees cause the problem.
Mr. G’s 8/16 comment claims employees cry “poor mouth” is sickening. What’s really sickening is the 779 additional employees earning over $90K between 2008 and 2009 added another $115 million payroll expense in base pay alone. Mr. G ignores the 2,000 fewer employees earning less than $60K in base pay saved the City $70.8 million … then awarded to those earning over $90K.
Patrick Monette-Shaw
Part 5:
Mr. G’s additional comments on 8/17 are equally troubling. There are truly city employees who ARE the “working-poor,” and they are not being “fed excessive pay and benefits,” and not being “enriched as public employees,” as he wrongly claims.
Jonathan Weber, as a member of the Fourth Estate, must surely know this. Which makes me conclude they’re both full of hubris.
What we have here is a plutocracy in City government — where the rich get richer and the poorer employees get poorer.
Between 2003 and 2009, the payroll for employees earning over $90K has grown from a scant $314.1 million, to $1.48 billion, increasing the number of employees earning over $90K to 11,981, a 9,063 increase. They represent one-third of the workforce, but consume $1.5 billion (56 percent) of annual payroll, and drive up pensions for higher-paid employees because the City hasn’t restrained excessive management salaries.
Patrick Monette-Shaw
Part 6:
To pay for this, the City has converted many positions to part-time positions so it doesn’t have to pay the same level of benefits to the working poor.
Everybody’s ignoring the elephant in the room: While the Mayor likes to assert all employee unions have stepped up to the plate and are “sharing the pain,” that’s not really true for the policy, firefighters, nurses, and probably the managers represented by the Management Executive Association.
They just keep “deferring” their raises, kicking the can down the road for the next Mayor to deal with, by simply postponing raises they expect to eventually collect. This stands in stark contrast to lower-paid City employees who have permanently given up “concessions” they will never recover, while cops enjoy “deferrals” of raises.
For instance, 1,840 San Francisco police officers averaged $111,924 in total pay in 2009. Another 386 police sergeants and lieutenants averaged $153,308 in total pay in 2009.
Patrick Monette-Shaw
Part 7:
Without controlling salaries of so-called “safety employees,” San Francisco is domed to follow in the footsteps of Vallejo, which went bankrupt in large measure due to salaries and pensions for police officers.
Ask Oakland, whose laid-off police officers came crawling back on their knees. Ask San Jose, whose firefighters realized they had to negotiate real “concessions,” and not kick-the-can-down-the-road “deferrals” of raises.
Adachi isn’t brave enough to attack the root problem, and is sticking it to San Francisco’s lowest-paid employees. He knows he won’t become mayor if he cuts salaries of those earning over $90K.
Mr. Weber failed to educate readers that those who earn a 90 percent pension are cops and firefighters. Police officers averaging $91K in base pay will earn a $82K annual pension; sergeants and lieutenants averaging $123K in base salary will earn $110K pensions.
Patrick Monette-Shaw
Part 8:
A secretary earning $54K in base pay will only earn 75% retirement, a $40K pension (if they serve the full period to earn retirement). A food service worker at Laguna Honda Hospital like Zeng Jing earning $40K nay get just $30K as a pension, if she reaches the full period, and if she’s lucky.
Mr. Weber reports none of this, so “fair and balanced,” as commenter “voltairemistress” claimed, escapes me. Instead, Weber seems to be a mouthpiece for the plutocrats running City Hall.
Proposition B doesn’t address any of this, since Adachi, like the Board of Supervisors and the Mayor, won’t reign in “management fat” salaries.
If Adachi’s measure addressed the root of the problem — 17% annual increases in healthcare costs by the pharmaceutical and insurance industries that are spiking healthcare liability to the City and making working families in the private sector and public sector poorer, or if Adachi addressed the bloated management salaries — I’d support his measure.
Patrick Monette-Shaw
Part 9:
Mr. Weber should have been able to see through the City’s specious claim average City employee salaries are $93K. But he relied on the nonsense of converting part-time employees into so-called “full-time equivalents.” Journalism suffers for Mr. Weber’s laziness.
Adachi’s Proposition B also contains a “poison pill” preventing pay raises for five years, ignoring inflation will erode lower-paid workers’ take-home pay. What worker in the private sector or public sector can tolerate NOT getting raises until the year 2015 at the earliest?
Weber had a journalistic duty to report this, but withheld the information.
California’s constitution permits collective bargaining only between employers and recognized bargaining unions, and protects retirees already receiving vested family healthcare benefits. Voters can’t set raises or change vested rights.
Weber didn’t report that, either.
Adachi has to know this, even if “DroidRJ,” Mr. “G” and “voltairesmistress” don’t.
Mr. G
Here we go again, Mr. Monette-Shaw seems to want to make the increases in healthcare costs the main focus of discussion, when the real issues are the pensions and excessive salaries.
Mr. Monette-Shaw, raising healthcare costs effect everyone, not just government workers, this is not something unique to city employees, most people have had to deal with this problem for many years, its about time the government workers realize this...
You quote many figures for lower paid employees, however, it would be nice to have some official statistics form the City to back up your numbers...
One thing we can agree on, there are far too many managers and others making excessive amounts of pay. It really blows my mind how people making salaries in excess of $100K can also be paid so much overtime. I got my first managerial job back in 1985 and I have not earned one dime of overtime pay since then. Have you ever heard of exempt vs. non-exempt status?
Patrick Monette-Shaw
Part 10
Adachi’s measure purports to focus on both retirement and the healthcare costs, “Mr. G,” but Francisco’s retirement system is currently funded at approximately 97%.
At best, Adachi’s healthcare changes may save $30 million (which the City could easily save reigning in management salaries).
Yes, management salaries contribute to the problem, but Adachi’s ballot measure doesn’t address it. Nor does Adachi go after health insurance and big PHARMA companies, the real culprits affecting rising healthcare costs for both private- and public-sector employees.
The data I cite is payroll data I acquired from the Controller’s Office in Excel which I yanked into an Access database. It’s the same data the Chronicle obtained and reported on; the data is available to Mr. Weber as well, who chose not to analyze it, nor has the Chronicle analyzed it in great detail.
I haven’t made up data.
Patrick Monette-Shaw
Part 11
I had no way of knowing the 38,298 City full-time + part-time employees in 2008 dropped to 37,277 in 2009, a 1,021 reduction if not through placing a public records request. I also wouldn’t have known there are 802 fewer employees earning less than $40K, or 1,461 fewer employees earning less than $60 in total pay in 2009. Nor could I make up there are an additional 779 employees earning over $90K in base pay in 2009.
A Police Officers Association flier from last year indicates when they deferred a raise for the FY 09-10, their 25.4% pay raises over a four year contract received a 3% “bump,” pushing their five-year contract to a 28.4% raise as a reward for agreeing to delay one raise.
I presented written public testimony to the Board of Supervisors’ Public Safety Committee on June 27, 2007 regarding the police contract; I was the sole San Franciscan who presented oral testimony opposing their contract in the Board’s chambers packed with pistol-packing cops at my back.
Patrick Monette-Shaw
Part 12
Their previous contract awarded 16% pay raises over three years; with 28% pay raises between FY 2008-and 2011), they’ve netted a 44.5% in just 8 years. When will it end? When they’ve lead us to Vallejo’s fate, perdition?
By comparison, lower-paid miscellaneous employees received a total of 6% in raises (2% each year) between FY 2003-2006, well below the rate of inflation, and only 8.25% raises for FY 2007-2010 (the City tried to make SEIU forgo the 3.75% raise in April 2009, after awarding cops their 3% “thank you for deferring” bump). To get the 3.75% raise, SEIU received a one year extension through June 2011 with no further raise. While cops received 44.5%, SEIU received 14.25%.
As I testified in June 2007, the 30% disparity between “safety” and “miscellaneous” employees can only be considered obscene, which Adachi can’t see.
It isn’t so much the overtime, it’s the “other pay” paid to those earning over $90K in base pay of great concern.
Patrick Monette-Shaw
Part 13
Of 1,034 employees with the word “manager” in their job classification titles (there are many more with creative titles like “Deputy Controller”), they racked up $4.5 million in “other pay” in 2009. For the 9,480 who earned over $90,000 in base pay in 2009 (irrespective of job titles, including police offers), they racked up $64.2 million in overtime, plus a staggering additional $76 million in “other pay.”
A psychiatrist at Laguna Honda Hospital received $141,331 in base pay plus $56,617 in “other pay,” for a total of $197,948. The other pay is thought because he carries an “on-call” pager while off duty. It’s not known how many times he’s called back off duty, but it’s known he’is a 50% psychiatrist, and a 50% “Chief Medical Informatics Officer.” Sadly, it’s not known how many psychiatric patients he sees or treats, or how often. There’s many more employees like him who Adachi turns a blind eye towards.
Before pension reform, we need management salary reform.
voltairesmistress
Patrick M-S wrote in part#13 that, "Before pension reform, we need management salary reform."
We have to start somewhere, and that's what Adachi's Proposition B does. It is the start, not the finish of reforming municipal administration in San Francisco.
Why not have two more reforms in the following year two?
1)A Review of the compensation and sheer number of compensation packages for city management positions; this could then entail cutting redundant positions and scaling salaries to be competitive with but a bit less than their private sector equivalents. (I think this is one thing P M-S urges.)
2) The same as #1, but looking at non-management positions.
Those working in the public sector SHOULD be paid less than in the private sector, because they don't have to work as hard or worry as much about layoffs, firings, or retirement.
voltairesmistress
Sorry for the typos above.