News that the University of California system faces a $20 billion pension shortfall underscores one sobering truth to consider on Labor Day: Public sector jobs are not a free ride.
Every job in the public sector is paid for with taxes, fees, tuition or other levies on private enterprise. Public-sector employees have a certain amount of leverage in that they get to vote up or down on their own overseers — but they don’t really have a vote on whether the economy will provide enough tax revenue to sustain them.
In the case of the UC system, it spent 20 years in denial that pensions would ever be a problem — skipping out on cash payments and relying on an ever-rising stock market to close a looming gap.
We tend to think that the investment climate will improve and that the gap won’t be as large as it looks today. But getting California’s public-sector house in order on the employment front requires a lot of tough measures.
Getting the UC pension system back on track is just one of them.