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Patt Morrison Asks: Benefit buster Lanny Ebenstein

Jobs and WorkplacePoliticsCompensation and BenefitsRetirementUnionsPension and WelfarePublic Employees

Lanny Ebenstein wants you to vote to kneecap the state's public workers unions by banning their right to collective bargaining. Other measures scrambling to qualify for the November 2012 ballot would drop the hammer specifically on public employees' pensions or increase their retirement age, but Ebenstein's may be the most uncompromising. Ebenstein, a lecturer in economics at UC Santa Barbara, believes that it's too cozy for unions to be bargaining with bosses they've likely campaigned to elect -- and the state's economic doldrums are one result. An eight-year veteran of the Santa Barbara school board and the author of volumes about conservative economists Milton Friedman and Friedrich Hayek, he's now got a metaphorical book he wants to throw at public employee unions.

Your father fled Nazi Germany and wound up teaching at Princeton and then at UC Santa Barbara.

My father was a political scientist, and some of his textbooks sold hundreds of thousands of copies. [At Princeton] we lived a few blocks from Albert Einstein. We sometimes got his mail; my mom would take the mail over.

At the London School of Economics you studied some "classical liberal" economists who would now be considered conservatives.

Adam Smith, Hayek, Friedman -- and John Maynard Keynes, a strong critic of socialism at the time. Keynes' view was, how do you make a capitalistic system work in modern circumstances? It requires more government, and that's why, although my interest has been libertarian economists and political philosophers, I'm much more moderate [than libertarians] in my outlook. There's a strong role for government in society, and though it may be fun to talk about a libertarian utopia, that's not the real world in which we live.

What shaped your political viewpoint?

Practical involvement in the system. On a school board, you see teachers teaching every day, you see principals administering. It may not be the perfect system, but to ascribe ill motives to the people in it is just inaccurate. I've always tried to resolve differences on policies with facts.

Some people disagree with your numbers, and with your dislike of collective bargaining in the public sector. You cite a 1937 letter from FDR: "The process of collective bargaining, as usually understood, cannot be transplanted into the public service."

I believe the principle of collective bargaining was never meant to pertain to public employees. The public sector unions have been able to exert undue influence on the political system to receive an undue share of resources from government.

I am not one who would say we're paying public sector teachers too much -- that's an area where it may be of benefit to pay more. But, for example, the average [Santa Barbara County] employee this year, including all aspects of remuneration [healthcare, future pension, Medicare benefits, disability and unemployment protections], is receiving $129,000.

But those costs include future benefits too. If you do private sector paycheck calculations in the same way, those paychecks would look big too.

That's true, but gardeners and custodians and truck drivers in the private sector aren't costing a total of $80,000 to $100,000 a year, as is the case in the county. [A UC Berkeley] study, "The Truth About Public Employees in California," [says] health, life and disability insurance [costs] state and local governments about 11.8%, [as compared with] about 8% in the private sector. So even someone who starts out with a low salary, they're going to have great benefits, great sick leave and pension and job security, great working conditions, and it's this that's really unsustainable.

Do unions have a right to organize public employees?

Definitely. That's freedom of association. [Then those] unions could lobby government agencies and others on public policy. They could provide services to their members that their members wish them to perform. They would not, however, be allowed to represent government employees in any capacity related to their work, compensation or employment.

It's truly exorbitant, the share of resources public employees are receiving in many municipalities. It's standard for [them] to be able to retire between 50 and 55 with as much as 90% of their final salary indexed for inflation. A Santa Barbara [city] police officer can go out at age 50 with $100,000 a year. In the city of Los Angeles, they get the equivalent of 15 full days of sick leave a year. These are benefits nobody receives in the private sector.

Why shouldn't all Americans have more sick days and a defined-benefits pension? Why not work to raise everyone else up?

The reason is the benefits and salaries and working conditions that public sector workers receive are unsustainable in the private sector. [They] are exceeding what can be afforded. The remuneration [for] public sector employees is taking away from everybody else in society.

Voters have historically supported generous retirement for police and firefighters.

Wisconsin Gov. Scott Walker left out public safety [employees] from his reforms primarily for political reasons, and I think that's the wrong approach. There's fewer dollars available for public safety because of the funds going into pensions. That reduces public safety [because] there aren't as many employed; that makes it less safe to be a public safety officer. Depending on the jurisdiction, more than half of the $100,000 club [those receiving $100,000 annual pensions] are public safety officers. It makes more sense to give every retired public safety officer a million dollar annuity -- it would be money-saving.

Are you mismatching cause and effect? Taxpayers are making up the defined-benefit pension differences because the markets the pension funds were invested in flopped. Isn't it the markets' fault, not the unions?

If, as I believe, you don't think the market is going to grow at the 3% or 4% rate, then there has to be a recalibration. But the crucial question is whether public employees are overcompensated, and I believe unequivocally is that they are.

The trope is that public employees get smaller salaries than comparable private sector jobs in exchange for job security and secure pensions.

In California, the public sector was probably equal with the private sector by the 1970s and started to pull ahead in the '80s and '90s. It's really been in the last 10 years that they have received the additional salaries and benefits and pensions. And if it were just a little bit better on the back end, that would be one thing. But if you project another 10, 15 years, we're going to have more than 100,000 people with pensions of more than $100,000 a year.

There was a time that liberals and progressives were for government spending other than public employees' pensions. They were for more roads, more schools, more parks. I'm for all those things, but we're not going to have [them] if we continue the pay and benefit packages we have now. Pay public sector workers a fair wage comparable to the private sector and there'd be enough for lower taxes and increased services.

You're raising money so you can begin to collect signatures to put this on the ballot.

We need $2 million. We are trying to get commitments of a million dollars. We only need two of those, but it's more like getting individuals to commit $100,000. We have several people who've committed $100,000 if we can get a million dollars.

Are you asking the Koch brothers? They controversially put money against public employee unions in Wisconsin.

We haven't gone to the Koch brothers yet, but we may. In the same way that the problem was created by Democrats and Republicans, the solution is going to be created by Democrats and Republicans. You have to unite Republicans who are concerned about taxes with Democrats who are concerned about public services.

Did your father get a pension from UCSB?

He died at 65, so I don't believe he ever did.

Do you get one for the time you taught at Santa Barbara Community College?

I do.

Would that be a defined benefit?

It depends on what happens with reform of the system. At this point in time it would be a defined benefit, so what I'm advocating may not be in my personal interest!

patt.morrison@latimes.com

This interview is edited and excerpted from a longer taped transcript. An archive of past interviews is at latimes.com/pattasks.

Copyright © 2014, Los Angeles Times
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