I have debated publishing this since I wrote it a couple of weeks ago.  I fear it will be taken the wrong way.  I know it is broad brush and will offend some.  It is a fictionalized account of a real situation.  The couple I describe are teachers but I know nothing more about them.  I chose to show them in a light that may be nothing like their true selves.  Having said this, I think this event is illustrative of a direction our country is taking, one which I think favors those who play it safe over those who are willing to take risks; that favors those who work the system over those who simply work hard.  I fear that this trend will have a very chilling effect on the risk takers who innovate and create and make our country better in doing so.  I used the example of Teachers but it could have been government employees or employees of major international companies.  The point is that to improve compensation for a group that many thought was not adequately compensated a trend began which has gotten out of hand.

Balancing Act

My wife and I have worked for over 40 years.  We’ve taken lots of risks.  We have been very fortunate but we’ve had some not so good luck as well.  We raised two kids and got them through college and happily married.  Over that period of time, I probably averaged 55-60 hours of work a week on my main job.  We have also taken time to be active in our communities.  For most of that time, our business employed 40-50 people.  Twice, we almost lost everything, but we persisted and made it through each time.    We have saved and invested.   I’m over 65 and still work every day and plan to continue working for quite a while longer.  I know how much it costs to retire and I understand the cost of health care.  I would not feel comfortable retiring right now.   In fact, we’ve just started another new business – we have to find something that will work in this economy.  I love to fish but have not been able to for the past four or five years – too busy keeping businesses, home and community in order.  We have made a very good living and had a great life – still do.  No regrets.

I give all this background because we have recently found it necessary to sell our beach home.  Having the means to own a second home has been a wonderful thing.  The fact that the slowdown in the economy has hurt our construction-related business is a reality and we have to deal with it.  One thing we chose to do was to sell the beach house we have owned for the past 6 years.  It took a year plus to find a buyer.  We lost a fair amount of equity in the sale.  Why and how we sold the second home is really not the point here.  The point is that the profile of the folks to whom we sold makes an interesting comment on where our society is today.

The couple who bought the house are retired and in their mid 50s, quite a bit younger than we are.  They can afford the beach house because they have a guaranteed retirement income and a health plan that is better than we could create out of our business.  They worked for just over 30 years, about 8 months a year, most weeks working fewer than 40 hours.   They had time for their hobbies and travel and, as teachers, did not feel comfortable joining service clubs or being involved in the community – too many parents of students out there to bump into/possibly offend.  Their jobs were virtually guaranteed as were the pay increases and the excellent benefits.  They never had to mortgage their home to pay a payroll nor sign personal guarantees on a loan to invest in machinery to stay competitive.  If they were smart and lived within their budget, there was no risk and no need to work extra to keep their jobs.  They had summers for extended vacations and traveled most of the world.  They raised no children so it did not cost a lot to live or to travel.  And, their pay was far better than the NEA and AFT would lead you to believe.

If the actuaries are right, they will both live to be 80 or more.  If inflation continues at its current rate, they will earn more money in 25+ years of retirement than they did in their careers.  This makes them the ‘new rich.’  Don’t get me wrong.  They may have been good teachers and may have helped many students from their classes become better people, better citizens.  But, because they were members of Teacher’s Unions, all they had to do was to keep from committing a felony on school grounds and they kept their jobs.  As to their pay, it was predetermined by how many years they had worked and what college degrees they had. Performance played almost no part.  As long as they stayed within the box and did nothing new or innovative, they were guaranteed good pay, a secure job, and a ripe retirement plan.

Much the same could be said of firefighters or police officers, though they do take physical risks.  Most folks in Government Service probably fall in this category.  And the folks who work for large multinational bureaucracies.  I have no facts at my fingertips to prove this, but my bet would be that the average teacher, firefighter, police officer or government employee in the 21st century will retire with a better pension than the average private sector executive.  The private sector employee was at risk every day of losing his or her position and the only way he or she got ahead was to work harder and take more risks.  Small business owners likely end up with the worst retirement packages of any group and probably have less security and work more hours than the vast majority of folks.

It still concerns me that we have our incentive system in disarray.  We tax productive people more than those who are not.  We pay some people more in unemployment than they would earn taking an available minimum wage job.  We tax the earnings of the thrifty but forgive the debt of the spendthrift through bankruptcy.  We lend money to people who don’t qualify so they can realize the American Dream and buy a house beyond their means.  Yet a businessman who wants to build a new store and employ 5 more people can’t get a loan regardless the fact that his business plan is solid.

Want to be part of the “New Rich?”  Look for a government job and keep your nose clean.  Disagree?  Let me have it in the comments section.

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