Silver Tsunami — There is a slow-moving crisis, called the silver tsunami, that is paralyzing states, counties, cities, and towns across the U.S., leaving governments unable to provide the most basic services due to public worker shortages. Services like trash pickup and school bus rides are not getting done. The situation is worse for the public sector than for the private sector which has already caught up with pre-pandemic employment levels. There are 885,000 more private industry workers now compared to February 2020, marking the pre-pandemic level. Public sector workers are down a net 647,000 since February 2020. About half of this decline is in education from teacher shortages and the rest is spread across the public sector.
Baby Boomers — After the 2008 Great Recession, the level of government employment took over a decade to recover. To ensure the delivery of public services during the pandemic, Congress appropriated hundreds of billions of dollars. Governments have the cash to hire but still have not recovered. Many baby boomers are retiring and older workers comprise a larger share of the government workforce, compared with the private sector. Older public workers are leaving and taking their “institutional knowledge” with them.
Less Pay — An even larger issue is that government does not pay as much as the private sector. Government jobs already paid less than private ones before the pandemic. In response to the tight labor market, the private sector quickly raised wages. Governments were slower to act, as they faced public opposition and waited for budget authorization to fill jobs. When a budget surplus occurs, it may be used for tax cuts, rather than pay raises. With public harassment and distrust from the public on the rise, it is harder to fill these jobs that pay less. Reliable hours and job security, that once attracted workers to government, have given way to long hours and layoffs during recessions. Taking on more work, from multiple vacancies, leads to burn out and resignations.
Pension Incentive — See the 2019 graph from the National Institute for Retirement Security showing that public workers highly value their pensions. It is an important tool for attracting and retaining public employees. Pensions and health care in retirement were incentives lost when Michigan closed the door to the defined benefit plan in 1997. It is important to note that as the rewards for these jobs wane, many essential government functions that the public has taken for granted will be at risk for years to come.
Benefits Keeping Up — Count your blessings as your Social Security (SS) Cost of Living Adjustment (COLA) of 8.7 percent, starting January 1, will be the highest increase in 40 years. In Michigan, 2.2 million residents will receive about $140 more per month, impacting 34.5 percent of households receiving benefits. The average Michigan household receives benefits of just over $22,000 a year with the 2023 COLA increase adding about $1,900 annually.
Vote Your Interest —The future of these essential SS benefits cannot be taken for granted. Recently, GOP Congressional lawmakers were visibly talking about cuts to SS and Medicare. Republican Senators Ron Johnson of Wisconsin and Rick Scott of Florida proposed changing SS and Medicare from mandatory to discretionary spending, making budget cuts easier. These reductions could affect the benefits paid to 66 million Americans receiving SS and the 64 million Americans covered by Medicare. There are other responsible ways to address SS and Medicare funding deficits like raising revenue by extending the SS payroll tax to the highest wage earners so they pay their fair share.
Dental Coverage Breakthrough — In November, the federal administration broadened Medicare’s coverage of medically necessary dental care. This action will improve patient outcomes and health equity. Until now, Medicare has not included dental benefits despite the fact dental care may be integral to the success of medical treatments. Original Medicare Part B currently pays for certain dental services but under very narrow circumstances that are medically necessary to treat a primary medical condition, leaving patients with few options. Some Medicare Advantage plans include dental coverage, but it is usually very limited. Michigan State employee retirees have been fortunate to receive dental benefits through Delta Dental insurance, with an annual cap on coverage of $1,500 in 2022.
Dental Infections — Under the federal administration’s new policy in 2023, Medicare will begin paying for selected dental services to identify and eliminate oral and dental infections for patients receiving an organ transplant, heart valve replacement, or valvuloplasty or vein procedure. In 2024, similar coverage will be extended to patients for dental care needed for head and neck cancer treatment. An annual process will begin that includes public input for covered dental services. Historic changes like this do not just happen. Thanks to the tireless efforts of many advocacy groups, as well as the Centers for Medicare and Medicaid Services, for their work in moving this common-sense policy forward.
New Utility Portal — Want to reduce energy use, save money on utility bills, or obtain financial assistance? Search the web for “Michigan Public Service Commission utility program portal.”
Hurricane Relief —Individuals Impacted by Hurricane Ian that reside or have a business in Florida, North Carolina, and South Carolina can ask for more time to file state of Michigan tax returns and pay state of Michigan tax bills, with penalties and interest waived. Individuals call (517) 636-4486. Businesses call 517 (636) 6925.
Pension Reports — In a routine audit, the Office of the Auditor General (OAG) was on the job, finding that the Department of Technology, Management, and Budget (DTMB) did not correct problems pertaining to the Michigan State Employee Retirement System’s allocations and schedules of pension and other benefits. DTMB did not have sufficient internal control to ensure the proper allocation of benefits for fiscal year 2021. It did not include $189 million of wages, and $37.8 million and $43.6 million of required pension and other post-employment benefit contributions, respectively. This omission resulted in improper allocation of benefit liabilities between employers. DTMB has corrected these problems and said it would expand efforts to establish more effective controls.
Return to top of page