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ILWU May Day Strike
Back in 2002, the Oakland longshoremen went on strike because they were against new technology which cut jobs as well as to protest the Iraq war. The issue was quite contentious, and it was a matter of “national security” the union get back to work according to many politicians. What I remember most clearly, however, were salary figures that just boggled my mind.
According to widely spread documentation at the time, the International Longshore and Warehouse Union (ILWU) required their longshoremen to work no longer than 35 hours a week. Furthermore, it was cited that the average income for an Oakland longshoreman was between $100,000-$120,000, with many senior employees earning $160,-190,000. When I read the news, it was about 8pm and I had been in the office since 5:45am. For that one day, I dreamt I was a longshoreman.
Right across the Bay, there are 448 San Francisco city workers who make over $100,000 a year, and that’s not from working. $100K+/year are their annual pensions! Top earner is retired Chief of Police, Heather Fong, who makes a tidy $229,000/year. Over at the Fire Department, 246 former employees or their survivors are receiving pensions of $100,000 a year or more – with 15 topping $150,000.
This is not a post to debate whether one type of job should make X amount of money or not. Frankly, I do believe anybody who is serving our country and helping others should deserve the world! Don’t get me started on our budget cuts in education, and teacher’s salaries. They deserve more. This post is simply to illustrate that A LOT of different careers allow people to make a lot of money, not just the stereotype engineer, banker, doctor, lawyer, or private equity person.
EQUALIZATION OF CAREERS
These past 18 months have illustrated the grace of pensions and the superiority of public sector jobs, or unionized labor over the private sector during crisis times. Think about it for a second. Take a Senior Vice President at Lehman Brothers, who amassed $3,000,000 in LEH stock over his 20 year career. One day the $3 mil literally disappears. All he’s left with are his savings, 401k, private equity investments and whatever else. Sure, the Lehman employee may have made on average $500,000/year during his career, but again, much of that was locked up in stock.
Meanwhile, compare the Lehman earner to a San Francisco policeman. The policeman is the turtle, making a steady on average $75,000/year for 30 years. Let’s say he puts away $250,000 in savings during his career and retires. Not only does he have a quarter million dollars, he also has a pension that pays him 75% of his highest year’s salary, every year, until he dies!
EXAMPLE
Let’s do the math, based off a real life example from a golfing buddy of mine who is retired from the police force.
- Highest working salary: $125,000.
- Pension: 75% of $125,000 = $93,750/year in pension money upon retirement.
- Retirement age: 60.
- Life Expectancy: 88.
- Value of Pension: $93,750/year X 28 = $2,625,000!
What’s more, pensions are adjusted for inflation, so let’s just round the number up to $3,000,000. The policeman blows away the banker in this time period, and matches the banker in any “normalized” time frame.
CONCLUSION
If you’re a car salesman, don’t look down on the prospective client dressed all shabby with flip flops. He could be the multi-millionaire cash buyer that you’ve dreamed about thanks to his pension. The client could even be a a famous personal finance blogger, with 70,000 readers, a book deal, and raking in $50,000/month from advertising revenue! Same goes for all you snooty Maitre D’s! You just never know, so you might as well treat everybody equally.
For all the parents out there, if little Nancy doesn’t want to be a Doctor, and little Timmy wants to be a fireman, that rocks! Immediately go out and celebrate over a vintage bottle of Chateauneuf du Pape knowing your children will be financially secure. I seriously wouldn’t fret about whatever career path they choose. There are so many different ways to make good money, chances are high your children will do just fine.
There’s more money out there than we can imagine. You may not have had the grades to enter that top law school to get that big corporate lawyer gig at Wachtell Lipton, but that’s ok. There are tons of jobs out there that will pay you a lot of money, provided you stick with it for the long haul. After realizing the plethora of opportunities out there, I rest easy knowing that Americans will earn their way out of this recession, and spend like the wind once more.
Readers, besides the examples above, any other high-paying jobs you’d like to highlight? Do you agree that a lot more people make a lot more money than perception?
If you want to know who the best paid government employee in America is, please read “Government Employee Entitled To A $100 Million Bonus!”
As today is 9/11, this post is dedicated to all the honest policemen and firefighters of the world! Thank you for your service!
Keigu,
Financial Samurai – “Slicing Through Money’s Mysteries”
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It just goes to show that if you stick with something over the long run, you will be rewarded. A good balance would be to give it a go in the private sector for 10-15 years, and then try out the public sector, and work for the pension. Perhaps you’ll make a good amount in the private sector first. Then, upon joining the public sector, you wouldn’t need to be stressed about the lower salary, b/c you’re working for security.
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Sickening. As our politicians try to “solve” problems like retirement, they know they will be making bank when they retire without having to worry about the market! This kind of stuff is hard for me to stomach, and a reason why I am so interested and involved in politics. There is a lot wrong with the “public sector” and it won’t change unless people start realizing it.
Thanks for the valuable information in this post.
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admin Reply:
September 11th, 2009 at 10:14 pm
I don’t know if it’s sickening, but I do know they make a very healthy coin. I had no idea, and now i know. The pensions for public service officers rock!
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Here, it make me thinking of an idea, should I work in US to get an income, like say average $100,000 and then retire in China or developing South East Asia countries, where cost of living is much cheaper than US.
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admin Reply:
September 12th, 2009 at 4:50 am
Hi Andy – It’s not a bad idea at all. In fact, that is what many from China and The Philippines do. They get a work visa, save up a lot of money, send it home and live like kings afterwards. In fact, the “overseas remittance” money is enormous for the Philippines, and their economy.
How did you find Financial Samurai, and what country are you from?
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Take a guess… you should not be far from it.
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“I don’t know if it’s sickening, but I do know they make a very healthy coin. I had no idea, and now i know. The pensions for public service officers rock!”
At everyone else’s expense…..
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N@andy@mindfinance No idea. Canada? That’s pretty close to the US :)
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This is a great post and even better point you have made FS! There are so many jobs and ways to make a buck out there that are non-traditional, pretty much anyone with a desire to make some can. I wrote a post about how in America, no one really has a justified reason for not building wealth if that’s what they want. Compound interest being the main reason and time being the other.
Great post man, thanks for citing it in your comment. I linked to it in that comment so others could find this post too. :)
Brad´s last blog ..People Need An Excuse To Spend Money, And They’re Eager To Find One
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admin Reply:
January 9th, 2010 at 2:08 pm
@ Brad – Cool man, glad you enjoyed the post. So many ways to make money, if someone really wants to, they can! Feel free to provide links or whatever in comments as you see fit. I don’t mind at all!
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i love the conclusions, particularly the rich blogger(most of how wear worn out jeans and t shirts) we could be internet multimillionaires!!
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And the missing variable is….it’s not what you make but what you keep. Given “friend inflation” or whatever you want to call it, a lot of white collar earners making 150k per year have much less to show for themseleves than a blue collar guy with a 90k salary with 60k in overtime. Different lifestyle, different neighborhood, different group they run with. Generalization, but in aggregate I see a lot of 6 figure white collar earners in over thri heads.
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Some people just don’t know what to do with their money. Some marry the wrong partners, some have expensive hobbies
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