Pensions, pay raises should help S.D. keep, hire workers
Big pay raises, revived pensions, an increasingly diverse workforce.
The city of San Diego has seriously upped its game, not just to benefit existing workers but, importantly, to attract new ones.
These tools should help the city sell itself in the employment market, where it has struggled for years. Nearly 13 percent of the jobs in the city’s workforce are vacant, according to Mayor Todd Gloria, who said that has resulted in delays of some city services for residents.
The vacancies in some areas — such as engineering — are about double that figure.
Offering better pay and the court-ordered resumption of pensions for new workers seem likely incentives for potential employees, but they cost a lot of money. Whether taxpayers will notice improved services over the long haul remains to be seen.
As the coronavirus pandemic winds down, many businesses complain they can’t hire enough workers and some are coming to the realization that they may have to pay higher wages. That is something the city of San Diego has faced for years, since long before the deadly scourge of COVID-19 hit the world.
A pension scandal nearly bankrupted the city some 15 years ago. The resulting budget cuts drastically reduced various services — libraries and recreation programs were among those hit hard. Many of the services were restored in recent years, before the coronavirus shutdowns, as city finances improved.
Still, compensation never caught up for most city employees. Further, the city raised the retirement age for some workers and closed loopholes that potentially reduced pension payouts. Then pensions were done away with altogether for new hires except police officers under Proposition B. The 2012 voter-approved initiative banned those pensions moving forward and enacted a general fiveyear pay freeze for city employees. A 401(k)-style program was established to replace the guaranteed pensions.
That made San Diego the only city in California not to offer pensions to newly hired workers.
Despite overwhelming voter support for Proposition B, the courts ruled the ballot measure was illegal and required the city to bring back pensions for those employees denied them and for future workers. The retirement benefit will go to new employees beginning this month, while the city continues to figure out how to make existing and former affected workers whole, according to David Garrick of The San Diego Union-Tribune.
After 2012, the city of San Diego experienced substantial turnover which included the loss of some longtime employees and their institutional knowledge.
There are many reasons why people change jobs. But studies have said the loss of pensions and low pay put San Diego at a competitive disadvantage with even some considerably smaller municipalities. Mayor Todd Gloria referred to a 2020 compensation audit when announcing contract agreements with some labor organizations in April.
“For example, City of San Diego white-collar workers with five years of experience made 26 percent less than
their counterparts in other cities,” according to a statement from Gloria’s office.
The number of current and former city employees who will start getting pensions further illustrates the exodus. Of the 5,400 people affected by the change, nearly 1,600 no longer work for the city. The city has a workforce of about 11,000 people.
Pressure to improve employee pay had been building for years when Gloria, a labor-friendly Democrat, was elected in November. In recent months, he has reached a series of salary agreements with city employee unions.
As the U-T’s Garrick reported, deputy city attorneys received 12 percent raises over the next two years, blue-collar workers got 8 percent raises over two years and white-collar workers got 9 percent over two years.
But within those broad ranges, there were some huge increases in areas where San Diego has been well behind other cities. For example, 640 city engineers received 29 percent increases.
“We are setting the City on a path to attract and retain top-notch public servants who provide the everyday services San Diegans rely on,” Gloria said in an April statement. “For too long, past City leaders sat idly by while workers were underpaid, leading to some of our most promising and experienced employees leaving for better-paying jobs at other agencies in the region.”
The implicit criticism by Gloria of his Republican predecessor, Kevin Faulconer, is pretty familiar these days. Regardless, there’s no disputing other government agencies offered better pay and retirement benefits than San Diego.
Under Faulconer, however, the city substantially increased police officer pay to address retention and recruitment problems. San Diego was having trouble competing with other law enforcement agencies. In 2017, the city negotiated a pay package including a more than 30 percent increase for officers.
The city also hired an outside marketing firm to wage a social media campaign to encourage young people to join the police force.
Meanwhile, the city is touting its effort to make the Police Department’s ethnic makeup more in line with San Diego’s population, and recently pointed to its most diverse police academy class in history.
The city says the combined effort has helped improve recruitment and retention in the Police Department, though it remains shy of filling its full allotment of officer positions.
With San Diego police in a more competitive pay position, the city recently agreed to a 3.2 percent salary increase for its 1,900 officers this year. That might suggest some other city employees who recently received big pay boosts will be in line for smaller increases next time around.
This is not inexpensive. The pay raises eventually are expected to add $100 million to the city’s $1.7 billion operating budget.
The cost of the renewed pensions — which will be boosted by the pay raises — is still unclear. But the retirement system’s shortfall has continued to grow and now stands at $3.34 billion.
Still, San Diego is betting that its big workforce investment will pay off in the long run.