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2/23/2010
WHAT DO WE OWE PUBLIC EMPLOYEES?

This is the kind of post that could easily degenerate into a swirl of numbers, percentages, tables and graphs - in short, all the boring stuff that causes us to roll our eyes and click away to something else.

I will try to keep that kind of thing to a minimum - if only to define the universe we will be looking at. The real thrust of this post will be philosophical; asking questions to which there may not be any answers, but should cause us to think about government, it’s expanding role in our lives, and the very nature of public service.

After remaining steady for 28 years - 1980-2008 - at between 1.1 and 1.2 million, the number of civilian federal workers in 2010 will have grown to 2.15 million. Some 80,000 of those are temporary census workers, but even once they are off the payroll in 2011, the federal government will still be paying more than 1.35 million employees - the largest number ever and a number that only promises to go up if some kind of national health insurance reform is passed.

State and local government employee increases have been even more remarkable. The number of state workers since 2000 has tripled.

Let’s leave the numbers for a moment and ask an obvious question; is more necessarily bad? There is a direct correlation between the increase in the size of government (i.e., the tasks that government has decreed it has a duty/right to perform) and the increase in public employees at all levels of government. There are some increases that may, indeed, be beneficial. More policemen means safer streets, generally speaking. More firemen is also a good idea. As long as there is reasonable justification to believe that increasing the number of public safety employees will improve the lives of citizens, there aren’t too many who would turn up their nose at that kind of increase in the size of government.

More teachers? If increases in the education bureaucracy was confined to adding educators to the rolls, that too, would be beneficial. But schools and their districts have become so bloated with unnecessary bureaucrats that any add ons there would be counterproductive.

Other increases in employment, such as more service employees at departments that have extensive contact with the public (D.L. Bureaus, state aid agencies) may also be justified. The point is, not all of the increase in the size of federal, state, and local government is necessarily bad. Making a blanket condemnation of the growth in the number of public employees then, is relatively meaningless.

This graph from the Census Bureau lists the total number and total salaries of state employees for 2008. The total is about 14.5 million full and part time employees drawing salaries totaling a little over $49 billion.

Here’s the census data from 2000. Back then, there were about 4.9 million employees being paid $13.2 billion. This represents a tripling in the size of government over 8 years. Even with the caveat that many of those employees may be necessary to the functioning of good government, or are needed to protect and serve us, no one can reasonably make the argument that the need for government by the American people has tripled in 8 years.

Along with the increase in the number of employees has come the uncomfortable idea that government employees have not only increased their share of total US employment, but have surpassed the private sector in average salary and benefits.

This is my second question; should the idea of public service mean that public employees must make sacrifices that include making an inferior salary to those in the private sector?

Let us agree to recognize the reality that in order to attract and keep good employees, the public sector must at least offer competitive wages to those paid in the private sector. But this equation affects a relatively small number of technocrats. What about the bulk of public workers?

One problem with trying to make that determination is that many jobs in government have no counterpart in the private sector. Career Builders carried out this survey a couple of years ago but might cause a few raised eyebrows:

Attorney
Government average: $105,577
Nationwide average: $110,520

Financial Manager
Government average: $95,257
Nationwide average: $96,620

Economist
Government average: $89,441
Nationwide average: $80,900

Microbiologist:
Government average: $80,798
Nationwide average: $63,360

Architect
Government average: $80,777
Nationwide average: $68,560

Accountant
Government average: $74,907
Nationwide average: $58,020

Librarian
Government average: $74,630
Nationwide average: $49,110

Human Resources Manager
Government average: $71,232
Nationwide average: $89,950

Nurse
Government average: $60,935
Nationwide average: $56,880

Tax examiner
Government average: $36,963
Nationwide average: $49,460

Medical Technician
Government average: $35,526
Nationwide average: $33,170

The trouble with averages in this case is that most government jobs are in high cost of living urban areas that tend to bump up the total while private sector data includes ex-urban and rural areas with a far lower cost of living. Still, when you think about the fact that the public employees get an extremely generous benefit package along with a competitive salary, it is a legitimate question to ask if the old fashioned idea of stressing the “service” part of government service hasn’t been lost in some respects.

I don’t want to trash public employees, nor minimize the importance of their work. But at what point is it injurious to the republic that employees of the taxpayer see more benefit in working for themselves than the people? For a couple of hundred years, the idea of working for the government meant service to a higher cause. This was considered a greater reward than being paid on par with private sector workers. It was a matter of sacrificing personal gain for public service.

That idea has been turned upside down today. More than the number of public employees, it is this change in the nature of public employment that is the real threat to liberty. There is no talk of “sacrifice” today. In fact, with the incredible growth in power and influence of public employee unions, there is concentration only on what public employees can rip from politicians representing the taxpayer in the form of gold plated pensions, health care plans, and other extras including outsized vacation packages, overly generous sick day provisions, and holidays not granted to most in the private sector. (Note: Most federal employees are not unionized.)

How does AFSCME, SEIU, NEA, and other public employee unions manage this? Public sector unions gave nearly $400 million to Obama and the Democrats in 2008 in campaign contributions, not to mention many millions more in in-kind contributions such as manning telephone banks, door to door canvassing, get out the vote activities, and other election-related assistance.

Third question: Should public employee unions be allowed to influence politicians by contributing to their campaigns when these same politicians will be making decisions on their salary and benefit packages?

Here’s where the first amendment bumps up directly against what should be considered “good government” practices. In a perfect world, public employee unions would probably voluntarily refrain from such political activity. Until that world arrives, the courts have come down on the side of first amendment protections for the unions rather than common sense, good government policy. Hence, the spectacle of public employee unions basically buying protection from politicians who are only too glad to maintain the status of their ruinously expensive pension and health insurance plans, not to mention virtually guaranteeing job security to the point that even gross inefficiency and illegal behavior will not cause a public sector employee to lose their job.

We have allowed public employees to ascend to a privileged place - a pedestal that they were never intended to occupy by the Founders - to the point where their influence over politicians, especially at the state and local level, have made them a force unto themselves in growing the size of government. More public employees means more union members, which means more dues money, which translates into more political contributions to friendly politicians who will gladly repeat the cycle.

This vicious circle must be ended. The biggest reason is that it is bankrupting us:

Despite the lofty promises made by policymakers, public employee retirement plans have been neglected over the years and have become huge liabilities that severely threaten the financial health of many states. If legislators do not properly address the crisis in public pensions, they will make current state budget problems look trivial. In fact, as of 2006, states had accumulated nearly $360 billion in unfunded pension obligations, according to a new 50 state study conducted for the American Legislative Exchange Council (ALEC). The report entitled “State Pension Funds Fall Off a Cliff,” is co-authored by Dr. Barry Poulson of the University of Colorado and Dr. Arthur P. Hall of the University of Kansas.

Much of the current data regarding liabilities in public employee pensions was taken before the recent economic downturn, and the study’s authors warn the problem is much worse today since stock market losses have not been fully realized in many official government pension statistics. Other estimates with recent data place the unfunded pension liabilities at $1 trillion nationally.

Already, the seams are bursting as some towns have been forced into insolvency as a result of public employee pension and health care plans. Many more will certainly follow unless the idea of “sacrifice” when working for the people once again becomes part of the idea of public service. Are these hugely expensive pension plans necessary to get and keep good employees? Pension plans that pay up to 80% of the average salary for the last three years of an employee’s work history - years in which the employee’s salary sometimes triples?

There aren’t too many Americans who would answer yes to that question. Until the philosophy and culture of public employee unions changes to reflect the principles of our Founders about working for the government, the public sector will only continue to grow at the expense of the private sector to the detriment of our economy and our liberty.

By: Rick Moran at 11:12 am
8 Responses to “WHAT DO WE OWE PUBLIC EMPLOYEES?”
  1. 1
    busboy33 Said:
    3:04 pm 

    “For a couple of hundred years, the idea of working for the government meant service to a higher cause. This was considered a greater reward than being paid on par with private sector workers. It was a matter of sacrificing personal gain for public service.”

    No. You are not distinguishing between public employment and public service. The guy who picks up your trash? He’s not doing it because its a selfless way to honor and serve the community — he’s doing it because it’s a job. He’d be doing it if the trash collection was run by GloboTrash LLC just as likely as he would be doing it if his paycheck is signed Springfield Municipal Sanitation.

    “Already, the seams are bursting as some towns have been forced into insolvency as a result of public employee pension and health care plans.”

    Well clearly the problem is with the workers trying to get their healthcare needs met, and not with the health insurance companies charging too much. Stupid employees. Thank god we don’t want National Health care! This is America, and in America you should be rewarded for working hard. If you aren’t lazy, your health care insurance is covered by your job. OhMiGod! Look at these workers getting health insurance from their employer! Bastards.

    I got that bit of conservative logic about right?

    They are getting tax payer funded gold plated, above and beyond anything available to the people who are paying their salaries health insurance. It doesn’t matter how much it costs because the taxpayer is paying for it, right? Do I have that bit of liberal logic about right?

    And their defined contribution pension funds are totally and completely unecessary - breathtaking in their outright robbery of the taxpayer. Imagine having a pension where you received 80% of the salary you made for the last three years - and saw your salary triple over that time because of rules written in by powerful, out of control unions to guarantee that your pension did not reflect the first 20 years you were vested but rather the artificially inflated amount you got because politicians are terrified of your union?

    A garbage collector is in service to the people as any other public employee is (most garbage is picked up by private companies like Waste Management now). Anyone who receives a salary courtesy of the taxpayer is in public service - despite your stupid, cynical, and ridiculous attempt to separate public employees from “public service.” Taxpayers have every right to demand that their employees are not treated better than the taxpayers themselves.

    You fail to address any of the questions I posed - all perfectly legitimate and absolutely vital to the future of this country - unless, as I suspect you might - want a state where government is the final arbiter of everything and “public employees” becomes a meaningless designation because we all will be working for the government.

    ed.

  2. 2
    Boy 0 Said:
    5:09 pm 

    So I saw two major points, one is the pensions need to go - put the workers into a 401k or IRA (considering how we’ve seen pension funds go bust or be defaulted on by the companies that were to fund them I don’t see this as a bad thing). Pensions are usually what I hear about in regards to state employees, especially in Massachusetts where plenty of public employees use all kinds of loopholes to increase their payouts. Let them have the same as the rest of us, pensions are an anachronism in this day and age anyway.

    As to Health Care, I’d love to have whatever Congress gets, but we know that won’t happen, so why not put everyone into the same pool. Sure Unions have negotiated all kinds of nice perks there, and I guess that is what they do, but honestly, no one in government is about to change ANYTHING in health care until they feel the same pain (or see it) as the rest of us.

    Public Service is something I would not want to be in, let’s face it most people who come into a government office do so to complain more than they do to congratulate. I give some credit to the people in the office, make sure I am polite and do my homework, and I have found most encounters have been ok. Some offices are where hacks go, and unless you can make the hiring process more transparent that won’t change, so we will continue to get useless dorks who don’t know how to do anyone’s job never mind whatever one they are shoved into.

    A government job doesn’t need to be a honeypot to be competitive and get people to do the job, most people have such a negative view on those who work in the public sector anyway that anyone who wants to do it should probably have their head examined.

  3. 3
    Brad Said:
    5:20 pm 

    Rick,

    Good analysis. I’m a federal worker (and a veteran) as are about 25% of the 2.2 million federal workers. Just to state it up front so you know I have a selfish interest in this…

    I am not familiar with how each state is doing their plans but in Louisiana 80% sounds about right. However the salaries are considerably lower than the federal rates. For example a teacher who works 30 years in Louisiana collects about 25K a year for life and the average annual pay for teachers is 40K.

    To try to answer a couple of your questions I’d say more is bad - from the federal side we need badly to go back to numbers of the 1980’s. There are a couple of ways to do this: (1) first cut the Senior Executive Service in half (political appts with no union protection) (2) change regulations so that required grade for levels of responsibility is lowered by one grade (3) Put a five year plan (sounds communist I know) in place that reduces the number of federal positions by at least a third across all departments (4) plan for a second five year look that cuts another 25% of positions

    This could be done through attrition and some reorganizations and would force the politicians to decide which departments were more necessary if the cuts were too much.
    There is a fifth step which although I wouldn’t like it might be helpful and that would be to cap ALL federal/state entitlements for five years with no Cost of living increases. But not pay cuts - over five years the private sector averages would rise and govt wages stay static. But I would only advocate this one if all entitlements (social security, medicare, welfare, etc.) were frozen for the same five year period.

    No good answer as to how to stop the unions from doing what they do but if the number of workers is reduced the amount of money they have to peddle influence would drop.

    “Are these hugely expensive pension plans necessary to get and keep good employees?” I would say they are not needed but think those are more at the state levels (have seen some in Ca mentioned in other stories). The fed pension bases its retirement on the average of the last three years of service. Someone who does 30 years federal civil service and makes 65K the last three years (which is usually the same unless they promote to a different grade) will get roughly 25K a year the rest of their life. They do match up to 5% for 401K plans which is not counted in the retirement equation. But 80% for federal? just cannot find an example and that is why I think that is for some states.

    The politician.. check that… leader who can successfully get the majority of Americans on board that some shared sacrifices are needed to get the deficit and entitlement spending and future growth under control will be the one who can get us out of the mess we are in. Sacrifice is a dirty word and needs to be explained in terms such as you talked about with Rep Ryan’s suggestions about some entitlement reform.

    To control the state levels we need leadership that refuses to bail out any states — let the state citizens make the choices of what should and should not be budgeted for.

  4. 4
    Larry Said:
    6:28 pm 

    Just a note - I am not a math major, but I think you mis-subtracted. 2.15 million-80,000 = 2,070,000. Good article.

  5. 5
    cranston Said:
    5:42 am 

    I am surprised that you think that the intentions and principles of the Founders have any relevance. Surely they could not have anticipated the problems of our time which can only be addressed with, among other things, a living and breathing public employment policy.

  6. 6
    Ronald Ellis Said:
    9:15 am 

    Hi Rick:

    The article you cite was interesting, but it presented the numbers in a misleading fashion.

    Most importantly, sometimes it included the military, and sometimes it only discussed civilians.

    Your focus seems to be on civilians. It said the total civilian work force for the Federal government was 1.2 million in 2009, and 1.28 million in 2010. That increase would appear to be the 80,000 census workers. So there does not appear to have been any significant increase.

    Thanks,

    Ron

  7. 7
    Maggie's Farm Trackbacked With:
    12:37 pm 

    Big government payrolls and big government unions…

    I do not know the history of how government unions came to be, but I deplore them. Who are they defending those employees from? Their neighbors who pay their salaries and their benefits?
    The days of fat-cat evil Capitalists oppressing workers are long…

  8. 8
    JustIce Said:
    1:09 pm 

    Nice post, Rick. As always you do take an interesting point of view. Keeps the discussion on a more relevant (less emotional) level. Look forward to more.

    Brad: Great ideas. When you run for office, you got my vote.

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