"Standards of Ethical Conduct" on iTunes!

For those who like to watch movies on your iPhone or iPod, you can now get the full movie and the trailer through iTunes. Click this link to open iTunes and download it. Or you can go to the download page and do the same.

Beware Firefox users, there is a known bug with iTunes links that causes a browser crash, so you might just want to type "Standards of Ethical Conduct" in the iTunes search. 

Let me know if you have any problems and be on the lookout for more clips soon!

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Public Employee Unions - Don't read if you pay taxes in California!

It's been a while since my last post, I wanted to update you on what I've been working on.  Last semester I one of my assignments was a research paper.  For a couple of reasons, I decided to dive into public sector unions.  First, there is a looming budget crisis at the state and local levels due to union-negotiated employee benefits (such as pensions) and second, there are some fascinating aspects of how public unions negotiate with public bureaucrats.  Fascinating if you're not paying the bill that is.

When I think of unions, I have memories from school of ruthless factory owners negotiating with unions, who were fighting for the little guy.  Or I think of the baseball or football player unions fighting with ownership over how much each party gets of the pie.  Either way, you have hardball negotiating sessions in smoke-filled rooms lasting deep into the night to pound out an agreement.  The owners are fighting to keep their profits and the unions are fighting for better pay, benefits and working conditions.

The story changes when you look at public sector unions.  The unions aren't negotiating with an owner, but a bureaucrat or an elected official.  That official isn't fighting to keep his profits; there are no profits or owners in the public sector. 

What are that official's motivations when negotiating?  Obviously he doesn't want to give away the farm or blow out the budget, as he'll be publicly flogged.  But there's another factor at play.  That union leader across the table can deliver him a lot of votes and dollars to keep him in office.  So he's got forces pulling both ways, one to limit pay to keep taxpayers happy, but another, to give the union what they want in exchange for their support.  Unlike an owner, who gets richer by limiting employee costs, the official can get re-elected by expanding employee costs, as long as he can keep the general taxpayer unaware (which isn't that hard to do). 

However, the role public unions play vary from state to state.  Some states mandate collective bargaining with public sector unions, meaning that pay and benefits are always negotiated by the union.  Other states ban collective bargaining, meaning that pay and benefits are decided individually, just as they are for most private, non-unionized, employees.

The purpose of my research was to compare how these laws affect public employee pay.  I chose two states on opposite ends of the spectrum, California and North Carolina, and compared how much their employees get paid.  California mandates collective bargaining and has high unionization rates among public employees.  North Carolina bans collective bargaining and has low unionization. 

Here are the highlights of my research.  You can read the full paper here. 

• Holy Sunshine State!  I should've been a firefighter in California!  I'd be making $200k in salary, and looking at retirement at 50 years old with a yearly pension of $180k per year!  Plus full health coverage.  Alas, I'm not the first person to realize this, and people literally camp out at the fire station for a chance to just file an application for a firefighter job.  Oakland recently opened up 23 positions in their fire department and had a measly 2,000 applicants.  Pushing and shoving ensued by those jockeying for position in line to get an application in.  Too bad for them, the line didn't matter, what did was whether you were a friend or relative of a current firefighter.  Details here.

• 401k?  What was I thinking?  I want a pension!  Over 12,000 public service retirees in California receive over $100k/year in pension payments.  On the high end you see pension payments in the $200s, and even one at over $500k.  Not bad, considering the retirement age is as early as 50.  How can that be?  Digging into the details reveals some fascinating machinations at play.  For one, state and local governments completely under-account for the costs of these pensions, meaning that the taxpayer bill doesn't look that high for current employees.  And even with that under-accounting, governments still don't fully fund the pension plans.  What does that mean?  There is a big bill coming down the pipe, i.e. there isn't nearly enough money in the pension funds to pay for the pension promises that have been made.  Also, public employees are good at rigging the pension calculation in their favor (called "pension spiking") - see this story on a California fire chief boosting his pension by $96k/year with some creative vacation buybacks.  You can see all 12,000 pension earners and how much they get here. 

• Wonder why you pay so much tax and get so little in return?  California overpays their public employees to the tune of $49 billion per year, or almost $4k for every individual taxpayer in the state.  After accounting for general pay differences between California and North Carolina, state employees are overpaid by about 9%, but local government employees are overpaid by over 42%! 

• Remember the town of Vallejo.  They recently filed bankruptcy due to their out of control public employee costs.  Not sure why, they're only paying $270k in compensation costs for each firefighter they have.  Seems reasonable to me.  Oh wait, you said firefighter?  I thought you said brain surgeon.  Vallejo is the canary in the coal mine.  More towns are in the same situation they are.  

• Public sector unions are uberpowerful.  The American Federation of State, County & Municipal Employees has been the second largest political donor in the U.S. since 1989.  The head of the Service Employees International Union (SEIU) was the most frequent visitor to President Obama during the first half of 2009, and was recently named to the Deficit Commission.  These and other unions are backing a bill in Congress to change the legal environments for all states similar to what California has.

• What to do?  Even if California remedied their overpayment today, they are still facing years of budgetary crunch.  Pension promises are guaranteed, either through state constitutions or contract law.  The best that governments can do is change the pension plans going forward - they are still on the hook for all the promises they've made to their current employees.  Even with an immediate fix, they probably won't see any budget relief for many years as current employees retire, collect their benefits and eventually pass away. 

• Is your state overpaying?  That would be the next step in this research, to examine more states.  However, union density is a good indicator of strong union laws which likely means overpayment of public employees.  Table 1 below lists all the states in the order of union density.  If you're in the Northeast, North Central or West, you're likely having money sucked out of your wallet by union interests.  If you're in the Southeast, Southwest or Central states, you're doing better. 

Table 1 – Estimated Union Shares of State/Local Government Employment, Ordered by Union Share, Grouped by Bargaining Rights, 2008

Rank	Collective Bargaining for All Public Employees	Collective Bargaining for Select Groups	No Guaranteed Collective Bargaining	Collective Bargaining Prohibited
1	New York 75.5%
2	Rhode Island 68.8%
3	Hawaii 68.1%
4	New Jersey 67.3%
5	Connecticut 66.7%
6	Alaska 66.4%
7	Massachusetts 65.9%
8	Oregon 65.1%
9	California 61.9%
10	Michigan 61.4%
11	Pennsylvania 58.5%
12	Minnesota 58.2%
13	Washington 55.9%
14	Illinois 53.8%
15	New Hampshire 51.4%
16	Wisconsin 49.8%
17	Maine 48.2%
18	Vermont 42.5%
19	Montana 42.3%
20	Ohio 42.2%
21	Delaware 40.2%
22		Nevada 37.9%
23		Maryland 33.0%
24	Iowa 31.6%
25			Alabama 30.2%
26	Florida 27.9%
27		Indiana 27.3%
28	Nebraska 27.2%
29			West Virginia 24.8%
30		Missouri 22.1%
31			Colorado 20.7%
32			Arizona 17.3%
33		Oklahoma 15.5%
34		Kansas 14.6%
35		Idaho 14.3%
36		Kentucky 14.2%
37			Arkansas 14.1%
38		North Dakota 13.9%
39		Tennessee 13.4%
40	South Dakota 13.4%
41			Texas 12.6%
42			New Mexico 12.5%
43	Utah 12.3%
44		Wyoming 10.8%
45			Louisiana 10.8%
46				North Carolina 8.2%
47			South Carolina 8.2%
48			Mississippi 6.0%
49				Virginia 5.2%
50		Georgia 4.2%

Source: Chris Edwards, based on BLS data compiled by www.unionstats.org [4]. Legal information provided by the GAO and Washington Post [18] [19]. 

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"Standards of Ethical Conduct" Available for Download

I know YouTube can play choppy at times, so you now have the option to download "Standards of Ethical Conduct".  Click the Download Movie link on the menu bar above.

I am also planning a follow-up Q&A with Rob, to discuss the philosophy of chasing the dream vs. enjoying what you've got.  I enjoyed a related piece published by Study Hacks, called "Corrupted Callings: The Subtle Difference Between Finding Your Life’s Work and Loving Your Life". 

If you have any thoughts, topics or questions you'd like to discuss, post them in the comments.  The Q&A should post sometime next week.

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In other news, ReelLoop and Denver Metblogs gave Standards of Ethical Conduct some love.  Thanks to Eric and Nicole.    

I also posted some more "behind the scene" production stills of our office scenes on the Facebook page.  Here's a sample of our setup in the cube farm.

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Chasing Your Dream vs. Enjoying What You've Got Part 2

http://www.flickr.com/photos/tedmurphy/ / CC BY 2.0

In my last blog post, I looked at one of life's interesting dilemmas.  Is it better to sacrifice your enjoyment to chase a dream, or should you instead focus on enjoying what you have?  For better or worse, I've often chosen the former path, and I thought it would be interesting to get the point-of-view from the other side.  I recruited my good friend Rob to give us the perspective from someone who literally drinks in life's goodness (note: that picture isn't Rob).  Read Part 1 here. 

WARNING:  SPOILER ALERT!  Rob mentions the ending of "Standards of Ethical Conduct" in his post, so if you haven't seen the movie, he will ruin the ending for you.  




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by Rob

Roman sets up an interesting question above: Whether it is better to chase one's dreams, or whether it is better in some sense to settle, to be content with what one already has.

Roman puts it out there that he has, at least for the past 10 years or so, embodied the chase one's dreams angle, and that I, for the past, oh, probably 32 years, have embodied more of the be-okay-with-what-you-got and maximize your personal enjoyment angle. (I think it's worth noting that from a sociologist's point-of-view, Roman and I are probably indistinguishable.  We grew up together, we both went to good east coast colleges, we both have professional careers, we make similar amounts of
money, we both follow NFC east football teams, etc., etc.  But I think this is actually a really, really useful for the point I'm about to make.)

I don't see the difference between me and Roman so much as one of chasing one's dream v. settling, but more of a difference of constantly reaching for what might be v. trying to appreciate what can be, and enjoying that.  Roman has always kind of had an itch.  He's always wanted to do something big and different and, in a way, very substantial.  I've never had such lofty dreams.  I'm one of the most capable people I know but, at the same time, I'm also the person I know with the least amount of ambition.  My bosses usually love me and, at the same time, are probably fundamentally disappointed that I don't aspire to more.  It's a conundrum.  But I don't primarily think of that as the difference between big dreams and settling, I think of that as being very clear eyed about what you are capable of and enjoying, to the maximum extent possible, that version of your life, and not spending time lamenting that your life isn't different, or it isn't more.

Imagine two professional golfers.  One is the best in the world.  He has played golf since he was 18 months old, he has won at every level, he was famous as a teenager, and from the time he became a professional golfer he was a success.  He is famous all over the world.  When he retires, he will probably be regarded as the greatest golfer that ever lived.  He is also rich beyond anyone's realistic understanding.  He is the face of various corporations and he is, at all times, the most important, famous person in any room he is in.

Now imagine a second golfer.  He played golf religiously until he was 14 years old, at which time he got burnt out and quit the game entirely. Not being very gifted at school, he bummed around, ultimately ending up out West.  He spent his early 20's living in a van, working odd jobs, snowboarding as much as he could in the winter and kayaking as much as he could in the summer.  Then, in his late 20's, he decided to take up golf again.  He ultimately made it all the way to the PGA Tour, but, even during his best years, it would be a stretch to call him one of the top 100 golfers on that tour.  

Will MacKenzie

Now, the first golfer is Tiger Woods.  The second golfer, however, is a guy named Will MacKenzie.  There are a lot of ways to look at the lives of Tiger and Will MacKenzie, but I think the most relevant distinction is this: Tiger will certainly have a more consequential life (perhaps immeasurably so), but I think Will MacKenzie will have a better one.  I really know only a couple of "personal" facts about either guy, and the couple of facts I know about Will MacKenzie are that he still likes to snowboard and that he met his wife by asking her to a Trick Pony show. The couple of "personal" facts that I know about Tiger Woods are that his is a really, really bad tipper and that he had double-digit extra marital affairs once his dad passed away and stopped calling the shots for him.  I suspect in some fundamental way, even before Tiger got publicly outed, Will MacKenzie was much, much happier than Tiger Woods. But is the consequential thing enough to overcome that?    

Regarding "Standards of Ethical Conduct", I think the difference might play out this way: I'm not so sure the difference between me and Roman is the difference between Heff and Binger.  Rather, I think the difference between us is the difference between the guy who made Standards of Ethical conduct and where Heff ultimately ends up. Remember, at the end of Standards, Heff does not end up king of a bebovka corporation, nor does that seem particularly important.  He ends up working with his mom, making some food and enjoying, as much as possible, the tactile sensation of working outside, interacting with people, etc.  There is a way to think of that life -- pushing a food cart -- as pathetic or annoying but, for Heff, what changed was a point of view such that he was now excited about what he was doing.  In terms of life lessons, I think what might be worth considering is whether you, yourself, as a person, finds the most comfort and happiness (a) being Binger and hanging out as much as possible, (b) being early Heff, with the material comforts of a "normal" job and a somewhat pre-scripted life, (c) being later Heff who, although he is not doing something glamorous, nevertheless tries, as much as possible, to find the enjoyment in that, or (d) being the guy who made an independent movie exploring these issues and who, also like later Heff maybe, holds out hope for much bigger things.      

For me, for my part, I'm not so sure it's a difference in following your dreams that matters; I think what matters most is how you think about the quality of what you have, regardless of the relative importance of what you might end up accomplishing.

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