There's growing focus on public employee pensions and concern that those liabilities are unsustainable.

For example, today several California newspapers focus on budget horrors befalling California counties with large pension liabilities.

The Fresno Bee's piece by Philip Reese and Brad Branan notes that San Mateo county's pension liabilities exceed its public works spending, that San Luis Obispo County spends more on pensions that prosecuting criminals, and that "Fresno County will pay nearly as much into its pension plan as it does for it's Sheriff's office, which can't afford to keep inmates locked up."

Reese and Branan write:
"The initial logic of increasing retirement benefits to retain quality employees has been turned on its head: Paying for those benefits is forcing local governments to lay off employees-and cut programs."

The Bee study claims that a review of the state's 80 largest city and county governments reveals $28 billion in unfunded liabilities.

I know many of us are anesthetized to talk of budget shortfalls and long term deficits. But that's $28 billion.

Here's the Bee piece:
http://www.fresnobee.com/2010/04/10/189 ... ments.html

In Stanislaus County (which has had nearly 20% unemployment and thus a great need for social services), the pension system is only 71% funded, leaving a shortfall that is more than twice the size of the county's general fund budget:
http://www.modbee.com/2010/04/11/112320 ... -cant.html

Governor Schwarzenegger requested a study of public pension liabilities. Here's the report by the Stanford Institute for Economic Policy
Research:
http://www.stanford.edu/group/siepr/cgi ... oke_pb.pdf

It's very unlikely that we'll see the federal government or the state coming up with bailouts. The money is not there.

Chatting the other day, one colleague remarked that his investment banking contacts are worried about a wave of defaults by some major state or municipal governmental entities. Another noted that the bond insurer market has been decimated.

The focus on the pension issues may well be perceived by some in public employee unions as merely another well-orchestrated attack upon those in public service. But if these projected numbers are even close to accurate, then this is an issue which is not going to go away.

Some public entities have considered outsourcing:
http://calpensions.com/2010/04/02/outso ... ion-costs/

Readers who are aware of other studies or projections are invited to send them to me so they can be posted. This will be an issue in this year's governor's race. (UPDATE: CalPERS AND CalSTRS have responded to the Stanford study:
CalPERS:
http://www.calpersresponds.com/issues.p ... licy-brief
See also this analysis:
http://calpensions.com/2010/04/12/stanf ... ion-funds/

The reality is that many in public service either forgo more lucrative careers elsewhere or assume great personal safety risk on behalf of the public. They need to be paid fairly.

It's just another piece in the puzzle of the conundrum of what services we the people need and are willing to tax ourselves to pay.

Stay tuned.

Julius Young
www.boxerlaw.com

We're all living in a trend-driven society.

If you don't know the latest trend, your bratty teen ager will tweet you with it. Or your social network friends who you never see and never talk to will show off their trend-driven lifestyle for your facebooking pleasure.

Oh, well, it's better than losing sleep over Greece or some U.S. municipality defaulting on bond obligations, touching off another worldwide financial spiral:
http://www.sfgate.com/cgi-bin/article.c ... =printable

For those of you who can't get enough, there's always the "Look at This Fucking Hipster" site:
http://www.latfh.com/

Laptops computing is so yesterday with the arrival of tablets. You can keep checking out what Karl Lagerfeld and Phillipe Starck are designing and the latest electronic gizmo on engadget.com, but leave the trendspotting in matters work-related to workerscompzone.

Got ya covered.

Here are a few for your weekend cogitation:

-many young workers are being offered unpaid internships, raising questions about whether they are being exploited in violation of labor laws:
http://www.nytimes.com/2010/04/03/busin ... ef=general

-credit checks are being used by employers to screen job applicants, but there is pushback against the use of credit checks as a pre-hiring strategy, as there is some question whether credit problems correlate with job performance problems:
http://www.nytimes.com/2010/04/10/busin ... it.html?hp

-in this economy there may be a correlation between being overqualified and unemployed:
http://www.modbee.com/2008/12/30/547750 ... d-job.html

-and lo and behold, despite the Whitman campaign's threat to thin the ranks of California state employees, California actually has one of the lowest state employee to population ratios in the nation. So much for the big government shibboleth::
http://www.capitolweekly.net/article.ph ... n5l6zf57oq

Go grab a bottle of Ouzo, help that Greek economy, and enjoy your weekend.

Stay tuned.

Julius Young
www.boxerlaw.com

Clint Reilly is one of California's most distinguished political veterans.
Reilly has managed and done PR for many of California's top politicians and a number of initiative campaigns.

Reilly was hired in the Spring of 1994 to handle the gubernatorial campaign of Kathleen Brown, Jerry Brown's sister. Reilly managed to help Kathleen Brown to a solid Democratic primary victory over John Garamendi.

But in the Fall 1994 election Brown was never able to catch up with Republican Pete Wilson.

In a piece on today's California Progress Report, Reilly posts a recollection of the choices the 1994 Kathleen Brown campaign faced. In the summer of 1994 he had the choice of whether to spend heavily to close the lead held by Wilson, or whether to conserve cash for the home stretch.

In the Schwarzenegger vs. Angelides matchup, Angelides held his cash but was too far behind to benefit from a fall blitz.

Reilly notes that Jerry Brown may soon be facing the same choice.

The Democratic constituency that favors Brown is going to have to dig deep to keep Brown competitive. And I mean deep.......

Reilly's piece, "Alms for Jerry", can be found here"
http://www.californiaprogressreport.com ... =node/7635

Stay tuned.

Julius Young
www.boxerlaw.com

This year's California governor's race will have vast consequences for the workers' comp system and the comp community.

The California Chamber of Commerce is already putting their foot down.
The Chamber, very active on workers' comp issues during the Schwarzenegger era, is now going up on the air with anti-Jerry Brown ads:
"Enough is Enough", claiming that he is for high taxes and out of control spending:
http://latimesblogs.latimes.com/califor ... -wink-and-

We'll be seeing an orgy of independent expenditure ads this political season. Workers' comp will be an issue, but an issue dwarfed by calls for public employee pension reform and tax and spending issues.

Meanwhile, Jerry Brown now has a "progressive" challenger, Peter Schurman of San Francisco, a former Moveon.org executive. There are a number of bloggers and netroots activists who are skeptical of the Brown campaign. Whether this will sap much needed energy from the Brown campaign or whether Brown can turn the fire from the left into more acceptance by independent voters remains to be seen. Meanwhile, here is Schurman's website:
http://peterschurman.org/

Meanwhile, eMeg Whitman has made a pit stop, refueling her campaign with $20 million more in cash.

Just when are those Poizner ads finally going to run?

Stay tuned.

Julius Young
www.boxerlaw.com

This week was the end of the line for NUUMI, the Fremont, California joint venture of General Motors and Toyota.

With NUMMI's closing, thousands of good blue collar jobs are gone. As they go, so the jobs of most of the suppliers and transport people who kept this huge plant going.

Like Mack Trucks and Peterbilt and Caterpillar and so many other heavy industries that once were sited in the Bay Area, NUUMI has moved on.

Over the years my firm handled hundreds of workers' comp claims for NUUMI workers. By most measures, those were good jobs that paid well for blue collar work. In my experience, injured workers from NUUMI were anxious to return to work. They knew that they had a good job in a declining manufacturing economy.

Many of those blue collar workers feel that the deck is stacked against them. It's a wonder that there's not more anger than we see.

The reasons for the decline in heavy manufacturing in California go far beyond workers' comp costs. Transit congestion, water issues, outsourcing overseas, energy pricing, foreign exchange rates, lower wages in some states...the factors are legion.

Yes, California may lose some jobs to Alabama & Tennesee, but ultimately this is a national problem.

We need a certain amount of folks asking whether you want fries with that hamburger.

We can employ lots of people in the service economy just to fight off claims by other folks.

One example is the business model of Talx, featured in a Sunday New York Times front page story today, "Contesting Jobless Claims Becomes a Boom Industry":
http://www.nytimes.com/2010/04/04/us/04 ... wanted=all

Free traders will argue that a national industrial policy is a ruse for more government intervention in the markets, propping up inefficient enterprises. Even progressive economists such as Paul Krugman and Robert Reich have differed over the concept, however.

For example, look at this flashback to 1983, before NAFTA and the acceleration of outsourcing to Asia:
http://www.time.com/time/magazine/artic ... 30,00.html

From my window I can see the Port of Oakland. Those container ships may not be calling in port as often as before the financial meltdown. But they are still laden with manufactured goods, particularly from Asia.

Dealing with currency valuation imbalances will help, but the USA needs to recommit to manufacturing. If ever there was an issue that could be bipartisan, this should be it.

Without a viable manufacturing economy, we are in trouble.

Julius Young
www.boxer;aw.com