Contrasting Benny’s with State Bennies

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While sympathetic to the plight of Benny’s employees whose jobs are disappearing out from under them, I can’t help but wonder how many people actually enter retail expecting benefits like severance pay.  Kim Kalunian and Ted Nesi’s WPRI article on the impending closure of all Benny’s stores makes it seem as that must be a thing, but even with a good bit of retail experience, I’ve never heard of it.

Presumably, workers were satisfied with the terms of their employment while it was ongoing.  It would be generous of the company’s owners to offer employees who happen to be working for the stores now that they’re closing an additional, unexpected bonus, but it would be above and beyond what tends to happen in the private sector.

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Now contrast that situation with Kathy Gregg’s Providence Journal follow-up article on Democrat Governor Gina Raimondo’s incentive offer to near-retirees on the state’s payroll:

The retirement plan hinges on the one-time payment of an amount twice the “longevity” bonus that each worker, already eligible for retirement, is receiving. Until this bonus-pay program was frozen in 2011, the state automatically gave state workers 5-percent, 10-percent, 15-percent, 17.5-percent and 20-percent pay increases at milestones in their career, such as the 5-year, 10-year or 20-year mark. The cap on Raimondo’s offer: $40,000. …

More assumptions: the departing workers would leave with $8.94 million in retirement-incentive payments and $4.57 million in “severance payments” for all of the unused vacation days and sick time they were allowed to bank over the course of their careers. Assuming the administration replaced 252 of these workers by the end of this budget year — at substantially lower salaries — the Budget Office projected $2,608,406 in state-dollar savings this year.

We really do have two classes in Rhode Island, whose lived experiences and expectations about the world are entirely separate, and politicians (rather than workers’ talents) are the ultimate gatekeepers to the more-desirable one.  In one class, we work by mutual agreement, and all parties are tasked with assessing their own financial needs and adjusting accordingly, seeking the best deals we can as we go.  The other class collects what it needs from taxpayers and makes decisions based on the political clout of special interests (notably labor unions) before considering financial viability.

As Kalunian and Nesi report, the financial reality of defined-benefit retirement plans forced an end to the benefit at Benny’s in 2007.  The state’s, on the other hand, still stands available as another bucket of money and liability into and out of which officials can slop cash so as to create the appearance of fiscal viability in any given year.



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