In a story that should be a wake up call to policy-makers, outsourcing has gone public. As David Barboza of The New York Times reported on Saturday, seeking out low-wage workers off shore isn’t just for iconic American brands such as Apple, General Electric and Levi-Strauss; the phenomenon is increasingly prevalent among public agencies across the nation. (more…)
Gutting the pensions of public employees has become something of an Internet meme in California, where tired talking points about coddled public sector employees appear in comments following almost every story about the state’s budget problems. Meanwhile, John Fensterwald of Thoughts On Public Education writes that reeling in benefits to public employees — especially teachers — may prove more complicated and save less money than those demanding reform imagine. (more…)
As California insurance regulators await responses from major health insurers as to whether or not they’ll comply with a voluntary 60-day delay on their latest rate hike applications, holders of those policies are dumbfounded by the newest in a series of rapid-fire rate hikes and wondering how they can absorb the higher costs. (more…)
Governor Jerry Brown has promised to pull back the curtain exposing the gory details in California’s fiscal chamber of horrors, but the real question is whether lobbyists, legislators and voters are willing to confront reality.
As Shane Goldmacher reports in the Los Angeles Times, every demographic is being asked to shoulder some of the pain. The initial budget plan, rolled out at a press conference this morning, calls for cuts to the salaries of state workers and depends on voter approval of an extension of temporary tax increases put in place by Brown’s predecessor, Arnold Schwarzenegger. (more…)
Math and accounting errors have led several state agencies in California to exaggerate the number of jobs created or saved as the result of federal stimulus funding.
A California State Bureau of Audits report found errors in figures submitted by five different state agencies totaling 617 phantom jobs, reports Deio de Brito of CaliforniaWatch.
It’s unclear from the story how many existing jobs were saved or new jobs created at the various agencies, though according to the story, the American Reinvestment and Reconstruction Act, known more commonly as the stimulus bill, created or saved a total of 54,000 jobs statewide. (more…)
The California Inspector General’s office says a contractor hired to weatherize homes, and paid for by federal stimulus funds, overbilled the state agency overseeing the money by $34,803, Timothy Sandoval of CaliforniaWatch reports.
The report also notes that workers and supervisors performing weatherization renovations on homes have not been adequately trained, (more…)
As Ian Talley and Stephen Power report in the Wall Street Journal, the Energy Department has expended only 7% of stimulus funds the Department received in 2008 — funds that are supposed to go to job creation and innovative energy projects. The tension at Energy is between vetting proposals carefully and getting money out the door quickly. Officials want to avoid even the appearance of waste or haste in the selection process, something the Obama administration takes seriously. But jobs are not being created even as other major programs at the DOE are also experiencing a slow rollout. What’s the problem?
Talley and Power sum it up as follows: “department offices were still too short-staffed and under-trained to handle such a massive increase in funding authority.”
Congress usually hates to fund new government hires, but in this case it’s understandable that more hands are needed. Spending billions of dollars effectively isn’t easy. So for future projects of this kind, Congress should include funding for temporary, project-related hires and training programs. If they had set aside even a small portion of the billions in funding for temporary hires, contracts, and training, we’d have more funding going to clean energy projects and more people employed.
Most coverage of General Motors’ future has focused on the Obama administration’s 60 percent ownership of a post-bankruptcy GM. But the United Autoworkers, which represents almost all GM workers, will own 18 percent of the company through their retiree health fund. And UAW gets 55 percent of Chrysler. With the Obama administration pledging a light hand in GM management, does that mean UAW will make management decisions? No, reports the New York Times’ Steven Greenhouse:
…[T]he Obama administration structured the G.M. and Chrysler plans to lessen the union’s voice in management. The retirees’ health fund has six public-appointed trustees and five union-appointed trustees. Though the union health trust owns 55 percent of Chrysler, it will hold just one seat on the Chrysler board. And at both automakers, the health fund’s shares will be nonvoting.
The UAW has often not been the most farsighted union. And other employee-owned ventures, like United Airlines, have ended in bankruptcy. It’s strange, though, that a bailout whose purpose is to lessen layoffs would not empower workers. It’s up to the workers still at GM and Chrysler to show they can make cars that people will buy and won’t ruin the environment. The UAW members have the most incentive — more than the new Obama-approved management team — to show that GM and Chrysler are still relevant.-MB
Things are going to get worse before they get better. And that applies to the news we’re getting from reporters around the country, too. But the quality of that reporting — and the story it tells about public officials who bury the truth about their mistakes and misteps — is still very high, as Sydney Freedberg and Connie Humburg’s solid story in the St. Petersburg Times makes clear.
The reporters tell the unfortunate citizens of Florida a story that should make people all over the country pick up the phone and start calling their state pension fund administrators. It turns out it’s pretty easy to hide the loss of hundreds of millions of dollars — as long as you "[cloud] . . . public statements in complicated language and corporate speak that obscures the truth" or provide answers "that [are] technically correct but [give] a distorted picture."
In Florida, the State Board of Administration (SBA), which includes Governor Charlie Crist as a trustee, has lost money due to investments in collateralized debt obligations and other risky vehicles. Actually, pension funds across the country have been hit hard. But Florida’s pension fund managers appear to be standouts for misinforming and stonewalling worried citizens and local government officials from around the state who called in to find out where their money was after credit markets began to crumble. Jefferson County, for example, had invested with the Florida SBA and then found it could not meet an $850,000 payroll because, as an SBA representative told the county, "the board took control out of our hands, so there is really nothing I can do."
The city of Stuart was a bit more fortunate, removing their $26 million from SBA control one day before their investment pool was frozen and withdrawals were blocked. Their administrator, Dorothy Zaharatko, had been calling the SBA "for two weeks" but "no satisfactory response was forthcoming." Those with money still invested were stuck when Governor Crist moved to freeze the Local Government Investment Pool.
This problem is widespread and requires both citizen and government action before it’s too late. Understanding Government will continue to track this issue and would appreciate hearing from readers who have encountered similar problems around the country. -NH
You’ve heard about the Army’s rising and falling success rates in getting new recruits. You’ve heard about the suicides of soldiers coming back from Iraq and Afghanistan. But one thing you might not know about our all-volunteer army is the stress and strain it puts on the Army’s own professional recruiters. Mark Thompson of TIME delivers a vivid and insightful look at the hellish lives of Army recruiters, who work "15 to 19 hours . . . daily" and head over in the middle of the night to Wal-Mart Superstores to snag candidates "because they’re open for 24 hours."
Rules get bent, signatures get forged, and standards get ignored as the Army presses its recruiters to get the 80,000 men and women needed every year to fill the ranks. And those recruiting offers who don’t "make mission" — in the Houston area it was two signups per month — get dressed down in front of their fellow officers and face derision from CO’s. Some of them end up crying and broken (having survived firefights in Iraq, they fall apart when faced with the ugly realities of office life in the Army back home). The result is four suicides among Houston-based recruiters since 2005.
Even when recruiters are showing signs of extreme fatigue and mental strain, they seldom get treatment or sympathy, echoing the Army’s treatment of PTSD victims. Since the latest recruiting slogan is "Army Strong," it would be good if the Department of Defense found the strength to be more humane in the way it treats career employees who have already given so much. -NH
